[Title 7 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 2000 Edition]
[From the U.S. Government Printing Office]




F8091
�1�I017 
I03Part 2000 to end 
I34Revised as of January 1, 2000 
I02Agriculture 
I09I10Containing a Codification of documents of general applicability and future effect
I11As of January 1, 2000
I11T3With Ancillaries

I20Published by: 
I20Office of the Federal Register 
I20National Archives and Records 
I20Administration
I21A Special Edition of the Federal Register

F80927I97?
�?ii�I25Q99Q99Q99Q84I25U.S. GOVERNMENT PRINTING OFFICE 
I25WASHINGTON : 2000 
I96
I26For sale by U.S. Government Printing Office
I26Superintendent of Documents, Mail Stop: SSOP, Washington, DC 20402�099328

F80928
�iii�I01Table of Contents 
I05T3Page 


I40Explanation 
I41vi

Q10I42Title 7: 

I44Subtitle B_Regulations of the Department of Agriculture (Continued): 

I45Chapter XVIII_Rural Housing Service, Rural Business-Cooperative Service, Rural Utilities Service, and Farm Service Agency, Department of Agriculture (Continued)
I415 
I45Chapter XXVI_Office of Inspector General, Department of Agriculture
I4123
I45Chapter XXVII_Office of Information Resources Management, Department of Agriculture
I4131
I45Chapter XXVIII_Office of Operations, Department of Agriculture
I4137
I45Chapter XXIX_Office of Energy, Department of Agriculture
I4145

I45Chapter XXX_Office of the Chief Financial Officer, Department of Agriculture
I4153

I45Chapter XXXI_Office of Environmental Quality, Department of Agriculture
I41217

I45Chapter XXXII_Office of Procurement and Property Management, Department of Agriculture
I41225

I45Chapter XXXIII_Office of Transportation, Department of Agriculture
I41231
I45Chapter XXXIV_Cooperative State Research, Education, and Extension Service, Department of Agriculture
I41245
I45Chapter XXXV_Rural Housing Service, Department of Agriculture
I41363
�iv�I45Chapter XXXVI_National Agricultural Statistics Service, Department of Agriculture
I41463
I45Chapter XXXVII_Economic Research Service, Department of Agriculture
I41469
I45Chapter XXXVIII_World Agricultural Outlook Board, Department of Agriculture
I41475
I45xlChapter XLI_[Reserved]
I45Chapter XLII_Rural Business-Cooperative Service and Rural Utilities Service, Department of Agriculture
I41481

I42Finding Aids: 
I43Table of CFR Titles and Chapters
I41561
I43Alphabetical List of Agencies Appearing in the CFR
I41579
I43List of CFR Sections Affected
I41589

F80927
�v�I11Q99Q17I55I56Cite this Code:T1CFRG1T3
I56To cite the regulations in this volume use title, part and section number. Thus, T1 7 CFR 2003.1G1T3 refers to title 7, part 2003, section 1.I55



F80087
�vi�I06G4T1Explanation
S8092I11The Code of Federal Regulations is a codification of the general and permanent rules published in the Federal Register by the Executive departments and agencies of the Federal Government. The Code is divided into 50 titles which represent broad areas subject to Federal regulation. Each title is divided into chapters which usually bear the name of the issuing agency. Each chapter is further subdivided into parts covering specific regulatory areas. 
I11Each volume of the Code is revised at least once each calendar year and issued on a quarterly basis approximately as follows: 
Q02
I37Title 1 through Title 16 Las of January 1 
I37Title 17 through Title 27 Las of April 1 
I37Title 28 through Title 41 Las of July 1 
I37Title 42 through Title 50 Las of October 1 
Q02I11The appropriate revision date is printed on the cover of each volume. 

Q02I10LEGAL STATUS 
Q02I11The contents of the Federal Register are required to be judicially noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie evidence of the text of the original documents (44 U.S.C. 1510). 

Q02I10HOW TO USE THE CODE OF FEDERAL REGULATIONS 
Q02I11The Code of Federal Regulations is kept up to date by the individual issues of the Federal Register. These two publications must be used together to determine the latest version of any given rule. 
I11To determine whether a Code volume has been amended since its revision date (in this case, January 1, 2000), consult the ``List of CFR Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative List of Parts Affected,'' which appears in the Reader Aids section of the daily Federal Register. These two lists will identify the Federal Register page number of the latest amendment of any given rule. 

Q02I10EFFECTIVE AND EXPIRATION DATES 
Q02I11Each volume of the Code contains amendments published in the Federal Register since the last revision of that volume of the Code. Source citations for the regulations are referred to by volume number and page number of the Federal Register and date of publication. Publication dates and effective dates are usually not the same and care must be exercised by the user in determining the actual effective date. In instances where the effective date is beyond the cut-off date for the Code a note has been inserted to reflect the future effective date. In those instances where a regulation published in the Federal Register states a date certain for expiration, an appropriate note will be inserted following the text.

Q02I10OMB CONTROL NUMBERS
Q02I11The Paperwork Reduction Act of 1980 (Pub. L. 96�09511) requires Federal agencies to display an OMB control number with their information collection request. �vii�Many agencies have begun publishing numerous OMB control numbers as amendments to existing regulations in the CFR. These OMB numbers are placed as close as possible to the applicable recordkeeping or reporting requirements. 

Q02I10OBSOLETE PROVISIONS 
Q02I11Provisions that become obsolete before the revision date stated on the cover of each volume are not carried. Code users may find the text of provisions in effect on a given date in the past by using the appropriate numerical list of sections affected. For the period before January 1, 1986, consult either the List of CFR Sections Affected, 1949�091963, 1964�091972, or 1973�091985, published in seven separate volumes. For the period beginning January 1, 1986, a ``List of CFR Sections Affected'' is published at the end of each CFR volume. 

Q02I10CFR INDEXES AND TABULAR GUIDES 
Q02I11A subject index to the Code of Federal Regulations is contained in a separate volume, revised annually as of January 1, entitled CFR T4Index and Finding Aids.G1T1 This volume contains the Parallel Table of Statutory Authorities and Agency Rules (Table I). A list of CFR titles, chapters, and parts and an alphabetical list of agencies publishing in the CFR are also included in this volume. 
I11An index to the text of ``Title 3_The President'' is carried within that volume.
I11The Federal Register Index is issued monthly in cumulative form. This index is based on a consolidation of the ``Contents'' entries in the daily Federal Register. 
I11A List of CFR Sections Affected (LSA) is published monthly, keyed to the revision dates of the 50 CFR titles. 

Q02I10REPUBLICATION OF MATERIAL
Q02I11There are no restrictions on the republication of material appearing in the Code of Federal Regulations.

Q02I10INQUIRIES 
Q02I11For a legal interpretation or explanation of any regulation in this volume, contact the issuing agency. The issuing agency's name appears at the top of odd�09numbered pages.
I11For inquiries concerning CFR reference assistance, call 202�09523�095227 or write to the Director, Office of the Federal Register, National Archives and Records Administration, Washington, DC 20408 or e�09mail info@fedreg.nara.gov. 

Q02I10SALES
Q02I11The Government Printing Office (GPO) processes all sales and distribution of the CFR. For payment by credit card, call 202�09512�091800, M�09F 8 a.m. to 4 p.m. e.s.t. or fax your order to 202�09512�092233, 24 hours a day. For payment by check, write to the Superintendent of Documents, Attn: New Orders, P.O. Box 371954, Pittsburgh, PA 15250�097954. For GPO Customer Service call 202�09512�091803. 



Q02I10ELECTRONIC SERVICES
Q02I11The full text of the Code of Federal Regulations, the LSA (List of CFR Sections Affected), The United States Government Manual, the Federal Register, Public Laws, Weekly Compilation of Presidential Documents and the Privacy Act Compilation are available in electronic format at www.access.gpo.gov/nara (``GPO Access''). For more information, contact Electronic Information Dissemination Services, U.S. Government Printing Office. Phone 202�09512�091530, or 888�09293�096498 (toll�09free). E�09mail, gpoaccess@gpo.gov.

�viii�I11The Office of the Federal Register also offers a free service on the National Archives and Records Administration's (NARA) World Wide Web site for public law numbers, Federal Register finding aids, and related information.  Connect to NARA's web site at www.nara.gov/fedreg. The NARA site also contains links to GPO Access.



I16Raymond A. Mosley,
I17Director, 
I18Office of the Federal Register. 
I19January 1, 2000.







F80928
�ix�I02THIS TITLE 
I11Title 7_T4AgricultureG1T1 is composed of fifteen volumes. The parts in these volumes are arranged in the following order: parts 1�0926, 27�0952, 53�09209, 210�09299, 300�09399, 400�09699, 700�09899, 900�09999, 1000�091199, 1200�091599, 1600�091899, 1900�091939, 1940�091949, 1950�091999, and part 2000 to end. The contents of these volumes represent all current regulations codified under this title of the CFR as of January 1, 2000. 

Q06I11The Food and Nutrition Service current regulations in the volume containing parts 210�09299, include the Child Nutrition Programs and the Food Stamp Program. The regulations of the Federal Crop Insurance Corporation are found in the volume containing parts 400�09699.

Q06I11All marketing agreements and orders for fruits, vegetables and nuts appear in the one volume containing parts 900�09999. All marketing agreements and orders for milk appear in the volume containing parts 1000�091199. Part 900_General Regulations is carried as a note in the volume containing parts 1000�091199, as a convenience to the user.

Q06I11Redesignation tables appear in the Finding Aids section of the volumes containing parts 210�09299 and parts 1600�091899. 

Q06I11For this volume, Cheryl E. Sirofchuck was Chief Editor. The Code of Federal Regulations publication program is under the direction of Frances D. McDonald, assisted by Alomha S. Morris. 










�x�gs,ic,w348,d532,r1I92CFRORDR.FRM



F8008I327 CFR Ch. XVIII (1�091�0900 Edition)
I33RHS, RBS, RUS, FSA, USDA
�1�I01Title 7_Agriculture 
I08(This book contains part 2000 to End)I03
I55T4SUBTITLE B_Regulations of the Department of Agriculture_G1T1Continued 
I88Part
Q08I50T4chapter xviii_G1T1Rural Housing Service, Rural Business-Cooperative Service, Rural Utilities Service, and Farm Service Agency, Department of Agriculture (Continued)
I592003
Q04I50T4chapter xxvi_G1T1Office of Inspector General, Department of Agriculture 
I592610 
Q04I50T4chapter xxvii_G1T1Office of Information Resources Management, Department of Agriculture 
I592700 
Q04I50T4chapter xxviii_G1T1Office of Operations, Department of Agriculture
I592810
Q04I50T4chapter xxix_G1T1Office of Energy, Department of Agriculture
I592900

Q04I50T4chapter xxx_G1T1Office of the Chief Financial Officer, Department of Agriculture
I593010

Q04I50T4chapter xxxi_G1T1Office of Environmental Quality, Department of Agriculture
I593100

Q04I50T4chapter xxxii_G1T1Office of Procurement and Property Management, Department of Agriculture
I593200


Q04I50T4chapter xxxiii_G1T1Office of Transportation, Department of Agriculture
I593300

Q04I50T4chapter xxxiv_G1T1Cooperative State Research, Education, and Extension Service, Department of Agriculture
I593400

Q04I50T4chapter xxxv_G1T1Rural Housing Service, Department of Agriculture
I593550

Q04I50T4chapter xxxvi_G1T1National Agricultural Statistics Service, Department of Agriculture
I593600

Q04I50T4chapter xxxvii_G1T1Economic Research Service, Department of Agriculture
I593700
�2�Q04I50T4chapter xxxviii_G1T1World Agricultural Outlook Board, Department of Agriculture
I593800
I65T4chapter xli_G1T1[Reserved]
Q04I50T4chapter xlii_G1T1Rural Business-Cooperative Service and Rural Utilities Service, Department of Agriculture
I594274
F8008I327 CFR Ch. XVIII (1�091�0900 Edition)
I33RHS, RBS, RUS, FSA, USDA

�3�I02Subtitle B_Regulations of the Department of Agriculture_(Continued) 

F8008I327 CFR Ch. XVIII (1�091�0900 Edition)
I33RHS, RBS, RUS, FSA, USDA


�5�I04CHAPTER XVIII_RURAL HOUSING SERVICE, RURAL BUSINESS-COOPERATIVE SERVICE, RURAL UTILITIES SERVICE, AND FARM SERVICE AGENCY, DEPARTMENT OF AGRICULTURE (Continued)  
I03
Q06Q04I21T5Editorial Note: T1Nomenclature changes to chapter XVIII appear at 59 FR 66443, Dec. 27, 1994; 61 FR 1109, Jan. 16, 1996; and 61 FR 2899, Jan. 30, 1996.
I327 CFR Ch. XVIII (1�091�0900 Edition)
I33RHS, RBS, RUS, FSA, USDA
I05SUBCHAPTER I_ADMINISTRATIVE REGULATIONS 
I87Part
I88Page
I482003
I49Organization
I597
I482018
I49General
I5917
I482045
I49General
I5919


F80103
�7�I327 CFR Ch. XVIII (1�091�0900 Edition)
I33RHS, RBS, RUS, FSA, USDA
I05SUBCHAPTER I_ADMINISTRATIVE REGULATIONS 
S8010
I95Pt. 2003
I52PART 2003_ORGANIZATION


I86Subpart A_Functional Organization of the Rural Development Mission Area
S8006I18Sec.
S8010I262003.1Definitions.
I262003.2General.
I262003.3�092003.4[Reserved]
I262003.5Headquarters organization.
I262003.6Office of the Under Secretary.
I262003.7�092003.9[Reserved]
I262003.10Rural Development State Offices.
I262003.11�092003.13[Reserved]
I262003.14Field Offices.
I262003.15�092003.16[Reserved]
I262003.17Availability of information.
I262003.18Functional organization of RHS.
I262003.19�092003.21[Reserved]
I262003.22Functional organization of RUS.
I262003.23�092003.25[Reserved]
I262003.26Functional organization of RBS.
I262003.27�092003.50[Reserved]







Q04I21T5Authority: T15 U.S.C. 301; 7 U.S.C. 6941; and 7 CFR 2.17.


Q04I21T5Source: T162 FR 67259, Dec. 24, 1997, unless otherwise noted.



I56Subpart A_Functional Organization of the Rural Development Mission Area




I80�1A2003.1
I89Definitions.
I11T3EEOG1T1_the Equal Employment Opportunity Act of 1972, 42 U.S.C. �1A2000e T3et seq.G1T1
I11T3O&MG1T1_Operations and Management.
I11T3P&PG1T1_Policy and Planning.
I11T3RBSG1T1_Rural Business-Cooperative Development Service, USDA, or any successor agency.
I11T3RHSG1T1_Rural Housing Service, USDA, or any successor agency.
I11T3RTBG1T1_Rural Telephone Bank authorized by 7 U.S.C. 944.
I11T3Rural DevelopmentG1T1_Rural Development mission area of USDA.
I11T3RUSG1T1_Rural Utilities Service, USDA, or any successor agency.
I11T3SecretaryG1T1_the Secretary of USDA.
I11T3USDAG1T1_the United States Department of Agriculture.


I80�1A2003.2
I89General.
I11The Rural Development mission area of the Department of Agriculture was established as a result of the Department of Agriculture Reorganization Act of 1994, Title II of Pub.L. 103�09354. Rural Development's basic organization consists of Headquarters in Washington, D.C. and 47 State Offices. Headquarters maintains overall planning, coordination, and control of Rural Development agency programs. Administrators head RHS, RBS, and RUS under the direction of the Under Secretary for Rural Development. State Directors head the State Offices and are directly responsible to the Under Secretary for the execution of all Rural Development agency programs within the boundaries of their states.


I80�1A2003.3�092003.4
I89[Reserved]


I80�1A2003.5
I89Headquarters organization.
I11(a) The Rural Development Headquarters is comprised of:
I11(1) The Office of the Under Secretary;
I11(2) Two Deputy Under Secretaries; and,
I11(3) Three Administrators and their staffs.
I11(b) The Rural Development Headquarters is located at 1400 Independence Avenue, SW., Washington, DC. 20250�090700


I80�1A2003.6
I89Office of the Under Secretary.
I11In accordance with 7 CFR �1A2.17 the Secretary has delegated to the Under Secretary, Rural Development, authority to manage and administer programs and support functions of the Rural Development mission area.
I11(a) T3Office of the Deputy Under Secretary for P&P.G1T1 This office is headed by the Deputy Under Secretary for P&P. The Under Secretary, Rural Development, has delegated to the Deputy Under Secretary for P&P, responsibility for formulation and development of short-and long-range rural development policies of the Department in accordance with 7 CFR �1A2.45. The Deputy Under Secretary for P&P reports directly to the Under Secretary, Rural Development, and provides guidance and supervision for research, policy analysis and development, strategic planning, partnerships and special initiatives. For budget and accounting �8�purposes, all of the staff offices under the Deputy Under Secretary for P&P are housed in RBS.
I11(1) The Budget Analysis Division assesses potential impacts of alternative policies on the mission area's programs and operations and develops recommendations for change. The units are headed by the Chief Budget Officer, who individually serves as the top policy advisor to the Under Secretary and Deputy Under Secretary on all matters relating to mission area budget policy.
I11(2) The Research, Analysis and Information Division analyzes information on rural conditions and the strategies and techniques for promoting rural development. The division performs, or arranges to have conducted, short-term and major research studies needed to formulate policy.
I11(3) The Reinvention and Capacity Building Division coordinates the mission area's strategic planning initiatives, both at the National level and in the State Offices. The division assists the Rural Development agencies in their implementation of the Government Performance and Results Act (GPRA) and special initiatives of the Administration, USDA, and the Office of the Under Secretary.
I11(4) The Rural Initiatives and Partnership Division manages the mission area's involvement and coordination with other Federal and state departments and agencies to assess rural issues and develop model partnerships and initiatives to achieve shared rural development goals. The division is responsible for managing the National Rural Development Partnership and providing support and oversight of 37 State Rural Development Councils.
I11(b) T3Office of the Deputy Under Secretary for O&M.G1T1 In accordance with 7 CFR 2.45, the Under Secretary, Rural Development, has delegated to the Deputy Under Secretary for O&M responsibility for providing leadership in planning, developing, and administering overall administrative management program policies and operational activities of the Rural Development mission area. The Deputy Under Secretary for O&M reports directly to the Under Secretary, Rural Development.
I11(1) T3Office of the Deputy Administrator for O&M.G1T1 Headed by the Deputy Administrator for O&M, this office reports directly to the Deputy Under Secretary for O&M, and is responsible for directing and coordinating the consolidated administrative and financial management functions for Rural Development. This office provides overall guidance and supervision for budget and financial management, human resources management and personnel services, administrative and procurement services, information resources management and automated data systems. For budget and accounting purposes, all of the staff offices under the Deputy Administrator for O&M are housed in RHS.
I11(i) T3Office of the Controller.G1T1 Headed by the Chief Financial Officer, this office supports the Deputy Administrator for O&M in executing Rural Development requirements related to compliance with the Chief Financial Officers Act of 1990 and provides leadership, coordination, and oversight of all financial management matters and financial execution of the budget for the Rural Development agencies. This office also has full responsibility for Rural Development agencies' accounting, financial, reporting, and internal controls. The office provides direct oversight to the Headquarters Budget Division, Financial Management Division, and the Office of the Assistant Controller, located in St. Louis, Missouri.
I11(ii) T3Office of Assistant Administrator for Procurement and Administrative Services.G1T1 Headed by the Assistant Administrator for Procurement and Administrative Services, this office is responsible to the Deputy Administrator for O&M for overseeing the Procurement Management Division, the Property and Supply Management Division, and the Support Services Division:
I11(A) The Procurement Management Division is responsible for developing, implementing, and interpreting procurement and contracting policies for the Rural Development mission area. Major functions include planning outreach efforts and goals for small and disadvantaged businesses, providing staff assistance reviews in State and Local Offices, administering the Contracting Officer Professionalism Warrant program for Rural Development �9�agencies, and coordinating the development of Rural Development's acquisition plans.
I11(B) The Property and Supply Management Division is responsible for developing office space acquisition and utilization policies, providing training to field office leasing officers, administering the Leasing Officer Warrant program, assuring accessibility compliance in Rural Development's work sites, administering Rural Development's Physical Security program, and establishing and providing oversight to the worksite Energy Conservation program. This office operates a nationwide supply warehousing and distribution program, and oversees a nationwide Personal Property Management and Utilization Program, manages the U.S. Department of Agriculture (USDA) Excess Personal Property Program for field level activities, and provides direct support services to Rural Development's St. Louis facilities.
I11(C) The Support Services Division has responsibility for designing, developing, administering, and controlling Rural Development's directives management and issuance system, coordinating Rural Development's Regulatory Agenda and Regulatory Program submissions to USDA and OMB, serving as T4Federal RegisterG1T1 liaison, and analyzing and coordinating regulatory work plans for the Under Secretary. This office submits Paperwork Reduction Act public burden clearances to OMB, administers all printing programs, manages Rural Development travel policies and programs, and manages Freedom of Information Act, Privacy Act and Tort Claims programs.
I11(iii) T3Office of Information Resources Management (IRM).G1T1 Headed by the Chief Information Officer, this office is responsible to the Deputy Administrator for O&M for developing Rural Development's IRM policies, regulations, standards and guidelines. This office provides overall leadership and direction to activities assigned to the following four major divisions:
I11(A) The Customer Services Division is responsible for direct customer and technical support (hardware and software).
I11(B) The Management Services Division coordinates all IRM acquisition, budget, and policy and planning activities in support of Rural Development automation.
I11(C) The Information Technology Division provides support technical services in the areas of data administration, system integrity management, research and development, and telecommunications.
I11(D) The Systems Services Division is responsible for planning, directing, and controlling activities related to Rural Development's Automated Information Systems.
I11(iv) T3Office of the Assistant Administrator for Human Resources.G1T1 Headed by the Assistant Administrator for Human Resources, this office is responsible to the Deputy Administrator for O&M for the overall development, implementation, and management, of personnel and human resources support services for Rural Development. The office provides direction to the Headquarters Personnel Services, Human Resources Training and Mission Area Personnel Services Division, and Labor Relations Staff offices. The office is also responsible for the establishment of recruitment, retention, and development policies and programs supporting workforce diversity and affirmative action.
I11(2) T3Office of Civil Rights Staff.G1T1 Headed by a staff director, this staff has primary responsibility for providing leadership and administration of the Civil Rights Program for the Rural Development mission area. The staff conducts on-site reviews of borrowers and beneficiaries of Federal financial assistance to ensure compliance with Titles VI and VII of the Civil Rights Act of 1964, as amended, Title VIII of the Civil Rights Act of 1968, as amended, Section 504 of the Rehabilitation Act, the Americans with Disabilities Act, and prepares compliance reports. The staff conducts and evaluates Title VII compliance visits to insure that EEO programs are adequately implemented. In addition, the office develops, monitors, and evaluates Affirmative Employment programs for minorities, women and persons with disabilities, and coordinates and conducts community outreach activities at historically black colleges and universities. It also has oversight of special emphasis programs �10�such as the Federal Women's Program, Hispanic Emphasis Program, and Black Emphasis Program. The staff director reports directly to the Deputy Under Secretary for O&M.
I11(3) T3Office of Communications.G1T1 Headed by a director who reports directly to the Deputy Under Secretary for O&M, this office has primary responsibility for tracking legislation and development and institution of policies to provide public communication and information services related to the Rural Development. The office maintains a constituent data base and conducts minority outreach efforts and administers a public information and media center responsible for media inquiries, news releases, program announcements, media advisories, and information retrieval. This office also serves as a liaison with Office of Congressional Relations (OCR), Office of the General Counsel (OGC), and other Departmental units involved in Congressional relations and public information. This office drafts testimony, prepares witnesses, and provides staff for hearings and markups. In addition, the office briefs Congressional members and staff on the Rural Development matters, coordinates Rural Development's legislative activities with other USDA agencies and OMB and develops and implements legislative strategy. The staff also coordinates development and production of brochures, press releases, and other public information materials.


I80�1A2003.7�092003.9
I89[Reserved]


I80�1A2003.10
I89Rural Development State Offices.

I11(a) Headed by State Directors, State Offices report directly to the Under Secretary, Rural Development, and are responsible to the three Rural Development agency Administrators for carrying out agency program operations at the State level, ensuring adherence to program plans approved for the State by the Under Secretary, and rendering staff advisory and manpower support to Area and Local offices. The Rural Development State Directors, for budget and accounting purposes, are housed in the RHS agency.
I11(b) Program Directors within the State Office provide oversight and leadership on major program functions. Major program functions include: Single Family and Multi-Family Housing loans and grants, Community Facility, Water and Waste Disposal, Business and Cooperative, and the Empowerment Zones and Enterprise Communities (EZ/EC) programs.
I11(c) The USDA Rural Development State Office locations are as follows:

c2,L2,tp0,i1,s25,r25 I95  h1State h1Location
j
I01Alabama DMontgomery, AL
I01Alaska  DPalmer, AK
I01Arizona  DPhoenix, AZ
I01Arkansas  DLittle Rock, AR
I01California  DWoodland, CA
I01Colorado  DLakewood, CO
I01Delaware  DCamden, DE
I01Florida  DGainesville, FL
I01Georgia  DAthens, GA
I01Hawaii  DHilo, HI
I01Idaho  DBoise, ID
I01Illinois  DChampaign, IL
I01Indiana  DIndianapolis, IN
I01Iowa  DDes Moines, IA
I01Kansas  DTopeka, KS
I01Kentucky  DLexington, KY
I01Louisiana  DAlexandria, LA
I01Maine  DBangor, ME
I01Massachusetts  DAmherst, MA
I01Michigan  DEast Lansing, MI
I01Minnesota  DSt. Paul, MN
I01Mississippi  DJackson, MS
I01Missouri  DColumbia, MO
I01Montana  DBozeman, MT
I01Nebraska  DLincoln, NE
I01Nevada  DCarson City, NV
I01New Jersey  DMt. Holly, NJ
I01New Mexico  DAlbuquerque, NM
I01New York  DSyracuse, NY
I01North Carolina  DRaleigh, NC
I01North Dakota  DBismarck, ND
I01Ohio  DColumbus, OH
I01Oklahoma  DStillwater, OK
I01Oregon  DPortland, OR
I01Pennsylvania  DHarrisburg, PA
I01Puerto Rico  DHato Rey, PR
I01South Carolina  DColumbia, SC
I01South Dakota  DHuron, SD
I01Tennessee  DNashville, TN
I01Texas  DTemple, TX

I01Utah  DSalt Lake City, UT

I01Vermont  DMontpelier, VT
I01Virginia  DRichmond, VA
I01Washington  DOlympia, WA
I01West Virginia  DCharleston, WV
I01Wisconsin DStevens Point, WI
I01Wyoming DCasper, WY

e


Q04I20[62 FR 67259, Dec. 24, 1997; 63 FR 3256, Jan. 22, 1998]





I80�1A2003.11�092003.13
I89[Reserved]



I80�1A2003.14
I89Field Offices.
I11Rural Development field offices report to their respective State Director �11�and State Office Program Directors. State Directors may organizationally structure their offices based on the program workloads within their respective State. Field offices generally are patterned in a three or two tier program delivery structure. In a three tier system, Local offices report to an Area office, that reports to the State Office. In a two tier system, a ``Local'' or ``Area'' office reports to the State Office. Locations and telephone numbers of Area and Local Offices may be obtained from the appropriate Rural Development State Office.


I80�1A2003.15�092003.16
I89[Reserved]


I80�1A2003.17
I89Availability of information.
I11Information concerning Rural Development programs and agencies may be obtained from the Office of Communications, Rural Development, U. S. Department of Agriculture, STOP 0705, 1400 Independence Avenue SW., Washington, DC 20250�090705.


I80�1A2003.18
I89Functional organization of RHS.

I11(a) T3GeneralG1T1. The Secretary established RHS pursuant to �1A233 of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6943).

I11(b) T3Office of the AdministratorG1T1. According to 7 CFR 2.49, the Administrator has responsibility for implementing programs aimed at delivering loans and grant assistance to rural Americans and their communities in obtaining adequate and affordable housing and community facilities, in accordance with Title V of the Housing Act of 1949 (42 U.S.C. 1471 T3et seq.G1T1) and the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 T3et seq.G1T1).
I11(1) T3Legislative Affairs Staff.G1T1 The duties and responsibilities of this staff have now been aligned under the Office of Communication, headed by a director who reports directly to the Under Secretary for O&M. The Office of Communication is responsible for providing and carrying out legislative, public communication, and information services for the Rural Development mission area.
I11(2) T3Office of Program Support Staff.G1T1 The Program Support Staff is headed by a staff director who is responsible to the Administrator for monitoring managerial and technical effectiveness of RHS programs. The staff coordinates review and analysis of legislation, Executive Orders, OMB circulars, and Department regulations for their impact on Agency programs. The staff develops, implements, and reports on architectural and environmental policies, in cooperation with the Department. Staff responsibilities also include managing RHS's Hazardous Waste Management Fund, coordinating the Debarment and Suspension process for RHS, tracking the use of Program Loan Cost Expense funds, and maintaining the RHS Internet ``Home Page.''
I11(3) T3Office of Deputy Administrator, Single Family Housing.G1T1 Headed by the Deputy Administrator, Single Family Housing, this office is responsible to the Administrator for the development and implementation of RHS's Single Family Housing programs, which extend supervised housing credit to rural people of limited resources, for adequate, modest, decent, safe, and sanitary homes. The office is responsible for administering and managing sections 502 and 504 Rural Housing direct and guaranteed loan and grant programs, Rural Housing and Self-Help Site loans, the Self-Help Technical Assistance grant program, Housing Application Packaging and Technical and Supervisory Assistance grants, and Home Improvement and Repaid loans and grants. The office directs the following three divisions: Single Family Housing Processing Division, Single Family Housing Servicing and Property Management Division, and Single Family Housing Centralized Servicing Center in St. Louis, Mo.
I11(i) T3Office of Single Family Housing Processing Division.G1T1 Headed by a division director, this division is responsible for development and nationwide implementation of policies on processing Single Family Housing direct and guaranteed program loans. In addition, the division provides direction on the following: the Rural Housing Targeted Area Set-Aside program, debarments, payment assistance, title clearance and loan closing, site/subdivision development, Deferred Mortgage Payment Program; construction �12�defects, credit reports, appraisals, Manufactured Housing, coordinated assessment reviews, Home Buyer's Counseling/Education Program, and allocation of loan and grant program funds.
I11(ii) T3Office of Single Family Housing Servicing and Property Management Division.G1T1 Headed by a division director, this division is responsible for the development and implementation of nationwide policies for servicing RHS's multi-billion dollar portfolio of Single Family Housing loans, and managing and selling Single Family Housing inventory properties. The division also conducts state program evaluations, identifies program weaknesses, makes recommendations for improvements, and identifies corrective actions.
I11(iii) T3Office of Single Family Housing Centralized Servicing Center (CSC)_St. Louis, Missouri.G1T1 Headed by a director, CSC is responsible for centrally servicing RHS's multi-billion dollar portfolio of Single Family Housing loans. CSC provides interest credit or payment assistance renewals, performs escrow activities for real estate taxes and property hazard insurance, oversees collection of loan payments, and grants interest credit, payment assistance, and moratoria.
I11(4) T3Office of the Deputy Administrator, Multi-Family Housing Division.G1T1 Headed by the Deputy Administrator, Multi-Family Housing, this office is responsible for the development and nationwide implementation of RHS's Multi-Family Housing programs, which extend supervised housing credit to rural residents an opportunity to have decent, safe, and sanitary rental housing. The following programs are administered and managed by this office: Section 515 Rural Rental Housing, Rural Cooperative and Congregate Housing Programs, Section 521 Rental Assistance, Farm Labor Housing loan and grant programs, Housing Preservation Grants, rural housing vouchers, and Housing Application Packaging Grants. This office directs the following two divisions:
I11(i) T3Multi-Family Housing Processing Division.G1T1 Headed by a division director, this division is responsible for the development and nationwide implementation of policies on processing Multi-Family Housing program loans. The division manages the following program areas: elderly and family rental housing, Farm Labor Housing loans and grants, outreach contacts, congregate facilities, Housing Preservation Grants, cooperative housing, rural housing vouchers, appraisals, Congregate Housing Services Grants, Rental Assistance, Housing Application Packaging Grants, targeted area and nonprofit set asides, Multi-Family Housing suspensions and debarments, title clearance and loan closing, allocation and monitoring of loan and grant funds, adverse decisions and appeals, commercial credit reports, individual credit reports, and, site development.
I11(ii) T3Multi-Family Housing Portfolio Management Division.G1T1 Headed by a division director, this division is responsible for the development and institution of policies on the management and servicing of the nationwide Multi-Family Housing programs. The Division implements current and long range plans for servicing Rural Rental Housing loans, Labor Housing loans and grants, and Rental Assistance or similar tenant subsidies.


I11(5) T3Office of the Deputy Administrator, Community Programs.G1T1 Headed by the Deputy Administrator, Community Programs, this office is responsible for overseeing the administration and management of Community Facilities loans and grants to hospitals and nursing homes, police and fire stations, libraries, schools, adult and child care centers, etc. The office monitors and evaluates the administration of loan and grant programs on a nationwide basis and provides guidance and direction for community programs through two divisions, Community Programs Loan Processing Division and Servicing and Special Authorities Division.

I11(i) T3Community Programs Loan Processing Division.G1T1 Headed by a director, this division is responsible for the overall administration, policy development, fund distribution, and processing of Community Facilities loans and grants  and other loan and grant programs assigned to the Division.


I11(ii) T3Servicing and Special Authorities Division.G1T1 Headed by a division director, this division is responsible for the overall administration, policy development, and servicing of the Community �13�Facilities loan and grant programs. The division conducts program evaluations, identifies program weaknesses, makes recommendations for improvements, and identifies corrective actions. The division also administers and services Nonprofit National Corporation loans and grants.

Q04I20[62 FR 67259, Dec. 24, 1997, as amended at 64 FR 32388, June 17, 1999]




I80�1A2003.19�092003.21
I89[Reserved]


I80�1A2003.22
I89Functional organization of RUS.
I11(a) T3General.G1T1 The Secretary established RUS pursuant to �1A232 of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6942).
I11(b) T3Office of the Administrator.G1T1 According to 7 CFR 2.47, the Administrator has responsibility for managing and administering the programs and support functions of RUS to provide financial and technical support for rural infrastructure to include electrification, clean drinking water, telecommunications, and water disposal systems, pursuant to the Consolidated Farm and Rural Development Act, as amended (7 U.S.C. 1921 T3et seq.G1T1), and the Rural Electrification Act of 1936, as amended (7 U.S.C. 901 T3et seq.G1T1). The office develops and implements strategic plans concerning the Rural Electrification Act of 1936, as amended. The Administrator serves as Governor of the Rural Telephone Bank (RTB) with a 13-member board of directors, and exercises and performs all functions, powers, and duties of the RTB in accordance with 7 U.S.C. 944.
I11(1) T3Borrower and Program Support Services.G1T1 Borrower and Program Support Services consist of the three following staffs which are responsible to the Administrator for planning and carrying out a variety of program and administrative services in support of all RUS programs, and providing expert advice and coordination for the Administrator:
I11(i) T3Administrative Liaison Staff.G1T1 Headed by a staff director, this staff advises the Administrator on management issues and policies relating to human resources, EEO, labor-management partnership, administrative services, travel management, automated information systems, and administrative budgeting and funds control.
I11(ii) T3Program Accounting Services Division.G1T1 Headed by a division director, this division develops and evaluates the accounting systems and procedures of Electric, Telecommunications, and Water and Wastewater borrowers; assures that accounting policies, systems, and procedures meet regulatory, Departmental, General Accounting Office, OMB, and Treasury Department requirements; examines borrowers' records and operations, and reviews expenditures of loans and other funds; develops audit requirements; and approves Certified Public Accountants to perform audits of borrowers.
I11(iii) T3Program and Financial Services Staff.G1T1 Headed by a staff director, this staff evaluates the financial conditions of troubled borrowers, negotiates settlements of delinquent loans, and makes recommendations to program Assistant Administrators on ways to improve the financial health of borrowers.
I11(2) T3Office of Assistant Administrator_Electric Program.G1T1 Headed by the Assistant Administrator_Electric Program, this office is responsible to the Administrator for directing and coordinating the Rural Electrification program of RUS nationwide. This office develops, maintains, and implements regulations and program procedures on processing and approving loans and loan-related activities for rural electric borrowers. The office directs the following three divisions:
I11(i) T3Electric Regional Divisions.G1T1 Headed by division directors, these two divisions are responsible for administering the Rural Electrification program in specific geographic areas and serving as the single point of contact for all distribution borrowers. The divisions provide guidance to borrowers on RUS loan policies and procedures, maintain oversight of borrower rate actions, and make recommendations to the Administrator on borrower applications for RUS financing. The divisions also assure that power plant, distribution, and transmission systems and facilities are designed and constructed in accordance with the terms of the loan and proper engineering practices and specifications.
�14�I11(ii) T3Power Supply Division.G1T1 Headed by a division director, this division is responsible for administering the Rural Electrification program responsibilities with regard to power supply borrowers nationwide and serves as primary point of contact between RUS and all such borrowers. The division develops and maintains a loan processing program for Rural Electrification Act purposes, and develops and administers engineering and construction policies related to planning, design, construction, operation, and maintenance for power supply borrowers.
I11(iii) T3Electric Staff Division.G1T1 Headed by a division director, this division is responsible for engineering activities related to the design, construction, and technical operations and maintenance of power plants; distribution of power; and transmission systems and facilities, including load management and communications. The division develops criteria and techniques for evaluating the financing and performance of electric borrowers and forecasting borrowers' future power needs; and maintains financial expertise on the distribution and power supply loan program, and retail and wholesale rates.
I11(3) T3Office of Assistant Administrator_Telecommunications Program.G1T1 Headed by the Assistant Administrator_Telecommunications Program, this office is responsible to the Administrator for directing and coordinating the National Rural Telecommunications, Distance Learning, and Telemedicine programs of RUS. The Assistant Administrator, Telecommunications Program, serves as Assistant Governor of the RTB and is responsible for the day-to-day activities of the RTB. The office develops, maintains, and implements regulations and program procedures on the processing and approval of grants, loans, and loan-related activities for all rural telecommunications borrowers and grant recipients. The office directs the following three divisions:
I11(i) T3Telecommunications Standards Division.G1T1 Headed by a division director, this division is responsible for engineering staff activities related to the design, construction, and technical operation and maintenance of rural telecommunications systems and facilities. The office develops engineering practices, policies, and technical data related to borrowers' telecommunications systems; and evaluates the application of new communications network technology, including distance learning and telemedicine, to rural telecommunications systems.
I11(ii) T3Advanced Telecommunications Services Staff.G1T1 Headed by a staff director, this staff primarily serves the Assistant Administrator, Telecommunications Program in the role of the Assistant Governor of the RTB. The office performs analyses and makes recommendations to the AAT on issues raised by the RTB Governor, Board of Directors, or RTB borrowers. This staff maintains official records for the RTB Board and prepares minutes of RTB Board meetings. The staff director serves as the Assistant Secretary to the RTB. The staff performs the calculations necessary to determine the cost of money rate to RTB borrowers and recommends and develops program- wide procedures for loan and grant programs. The office is responsible for the Telecommunications Program's home page on the Internet.
I11(iii) T3Telecommunications Area Offices.G1T1 Headed by area directors, these four offices are responsible for administering the Telecommunications, Distance Learning, and Telemedicine programs for specific geographic areas, and serving as the single point of contact for all program applicants and borrowers within their respective areas. The offices provide guidance to applicants and borrowers on RUS and RTB loan policies and procedures, and make recommendations to the Administrator on applications for loans, guarantees, and grants. The offices assure that borrower systems and facilities are designed and constructed in accordance with the terms of the loan, acceptable engineering practices and specifications, and acceptable loan security standards.
I11(4) T3Office of the Assistant Administrator_Water and Environmental Programs.G1T1 Headed by the Assistant Administrator, Water and Environmental Programs, this office is responsible to the Administrator for directing and coordinating a nationwide Water and �15�Waste Disposal Program for RUS as authorized under Section 306 of the Consolidated Farm and Rural Development Act, as amended (7 U.S.C. 1926). The office oversees administration of RUS policies on making and servicing loans and grants for water and waste facilities in rural America, and the development of engineering policies, and practices related to the construction and operation of community water and waste disposal systems. This office is responsible for development and coordination of environmental programs with regard to the Water and Waste Disposal Program and directs the following two divisions:
I11(i) T3Water Programs Division.G1T1 Headed by the division director, this division is responsible for administering the Water and Waste Disposal loan and grant making and servicing and special authorities activities nationwide. This office also makes allocation of loan and grant funds to field offices and manages National Office reserves.
I11(ii) T3Engineering and Environmental Staff.G1T1 Headed by a staff director, this staff is responsible for engineering activities at all stages of program implementation, including: review of preliminary engineering plans and specifications, procurement practices, contract awards, construction monitoring, and system operation and maintenance. The staff also develops Agency engineering practices, policies, and technical data related to the construction and operation of community water and waste disposal systems. The staff is responsible for coordinating environmental policy and providing technical support in areas such as: hazardous waste, debarment and suspension, flood insurance, drug free workplace requirements, and computer program software.


I80�1A2003.23�092003.25
I89[Reserved]


I80�1A2003.26
I89Functional organization of RBS.
I11(a) T3General.G1T1 The Secretary established RBS pursuant to �1A234 of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6944).
I11(b) T3Office of the Administrator.G1T1 According to 7 CFR 2.48, the Administrator is responsible for managing and administering the programs and support functions of RBS to provide assistance to disadvantaged communities through grants and loans and technical assistance to businesses and communities for rural citizens and cooperatives, pursuant to the following authorities: the Rural Electrification Act of 1936, as amended (7 U.S.C. 940c and 950aa T3et seq.G1T1), the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 T3et seq.G1T1), the Cooperative Marketing Act of 1926 (7 U.S.C. 451�09457), the Agricultural Marketing Act of 1946 (7 U.S.C. 1621�091627), and the Food Security Act of 1985 (7 U.S.C. 1932). These grants, loans, and technical assistance improve community welfare by enhancing organizational and management skills, developing effective economic strategies, and expanding markets for a wide range of rural products and services.
I11(1) T3Resources Coordination Staff.G1T1 Headed by the staff director, this staff is responsible to the Administrator for preparing legislative initiatives and modifications for program enhancement. The staff monitors legislative and regulatory proposals that potentially impact RBS functions. The staff serves as liaison on budgetary and financial management matters between RBS staff and the Office of the Controller, and assists the Administrator in presenting and supporting RBS's budget and program plans. The staff also advises the Administrator and RBS officials on management issues and policies related to: human resources, labor relations, civil rights, EEO, space, equipment, travel, Senior Executive Service and Schedule C activities, contracting, automated information systems, and accounting. The staff provides analysis and recommendations on the effectiveness of administrative and management activities, and performs liaison functions between RBS and the Office of the Deputy Under Secretary for O&M on a wide variety of administrative functions.
I11(2) T3Office of the Deputy Administrator, Business Programs.G1T1 Headed by the Deputy Administrator, Business Programs, this office is responsible to the Administrator for overseeing and coordinating the Business and Industry Guaranteed and Direct Loan programs, Intermediary Relending Program �16�loans, Rural Business Enterprise grants, Rural Business Opportunity grants, Rural Economic Development loan and grant programs, and the Rural Venture Capital Demonstration Program. The office participates in policy planning, and program development and evaluation. It also directs the following three divisions:
I11(i) T3Processing Division.G1T1 Headed by the division director, this division is responsible for developing and maintaining loan processing regulations, and directs the processing and approval of guaranteed and direct business and industry loans, and the Rural Venture Capital Demonstration Program. It provides technical assistance to field employees and borrowers on loan processing and develops approval criteria and performance standards for loans. The division recommends plans, programs, and activities related to business loan programs and provides environmental guidance and support.
I11(ii) T3Servicing Division.G1T1 Headed by the division director, this office is responsible for developing and maintaining servicing regulations. It directs and provides technical assistance to field employees and borrowers on servicing business loans and grants. The division reviews large, complex, or potentially controversial loan and grant dockets related to loan servicing and recommends servicing plans, programs, and activities related to business loan and grant programs.
I11(iii) T3Specialty Lenders Division.G1T1 Headed by the division director, this office is responsible for directing and developing and maintaining regulations concerning the processing and approval of Intermediary Relending loans, Rural Business Enterprise grants, Rural Business Opportunity grants, and Rural Economic Development loan and grant programs. The division provides technical assistance to field employees and borrowers on loan and grant processing and other activities. It also develops approval criteria and performance standards and recommends plans, programs, and activities related to business loan and grant programs.
I11(3) T3Office of the Deputy Administrator, Cooperative Services Programs.G1T1 Headed by the Deputy Administrator, Cooperative Services Programs, this office is responsible to the Administrator for providing service to cooperative associations by administering a program of research and analysis of economic, social, legal, financial, and other related issues concerning cooperatives. The office administers programs to assist cooperatives in the organization and management of their associations and a program for economic research and analysis of the marketing aspects of cooperatives. The division administers and monitors activities of the National Sheep Industry Improvement Center and the Appropriate Technology Transfer to Rural Areas Program, and the Rural Cooperative Development Grant Program. The office directs the following three divisions:
I11(i) T3Cooperative Marketing Division.G1T1 Headed by the division director, this division is responsible for participating in the formulation of National policies and procedures on cooperative marketing. The division conducts research and analysis and gives technical assistance to farmer cooperatives on cooperative marketing of certain crops, livestock, aquaculture, forestry, poultry, semen, milk, and dairy products to improve their market performance and economic position.
I11(ii) T3Cooperative Development Division.G1T1 Headed by the division director, this division is responsible for participating in the formulation of National policies and procedures on cooperative development. The office conducts evaluations and analysis of proposed new cooperatives to develop plans for implementing feasible operations, and advises and assists rural resident groups and developing cooperatives in implementing sound business plans for new cooperatives. It provides research, analysis, and technical assistance to rural residents on cooperative development initiatives and strategies to improve economic conditions through cooperative efforts.
I11(iii) T3Cooperative Resource Management Division.G1T1 Headed by the division director, this division is responsible for participating in the formulating of National policies and procedures on cooperative resource management. The division conducts research and analysis and gives technical assistance to cooperatives on their overall structure, �17�strategic management and planning, financial issues, and operational characteristics to improve their use of resources, financial policies, and ability to adapt to market conditions. The division conducts research and analysis of policy, taxation, Federal laws, State statutes, and common laws that apply to cooperative incorporation, structure, and operation to assist cooperatives in meeting legal requirements.
I11(4) T3Office of the Deputy Administrator, Community Development.G1T1 Headed by the Deputy Administrator, Community Development, this office is responsible to the Under Secretary, Rural Development, for coordinating and overseeing all functions in the Community Outreach and Empowerment Program areas. The office assists in providing leadership and coordination to National and local rural economic and community development efforts. For appropriation and accounting purposes, this office is located under RBS. The office directs the following two divisions:
I11(i) T3Empowerment Program Division.G1T1 Headed by the division director, this division is responsible for formulating policies and developing plans, standards, procedures, and schedules for accomplishing RBS activities related to ``community empowerment programs'', including EZ/EC, AmeriCorps, and other initiatives. The office develops informational materials and provides technical advice and services to support States on community empowerment programs. It also generates information about rural conditions and strategies and techniques for promoting rural economic development for community empowerment programs.
I11(ii) T3Community Outreach Division.G1T1 Headed by the division director, this division is responsible for designing and overseeing overall systems and developing resources to support State and community level implementation activities for RBS programs. The office designs program delivery systems and tools, removes impediments to effective community-level action, supports field offices with specialized skills, and establishes partnerships with National organizations with grass-roots membership to assure that programs and initiatives are designed and implemented in a way that empowers communities. It develops methods for working with rural business intermediaries to assist them in providing technical assistance to new, small business, and provides Internet-based services to 1890 Land-grant universities, EZ/EC, and AmeriCorps volunteers, linking RBS information support to communities with high levels of need.
I11(5) T3Alternative Agricultural Research and Commercialization Corporation.G1T1 Headed by a director, this Corporation is responsible for providing and monitoring financial assistance for the development and commercialization of new nonfood and nonfeed products from agricultural and forestry commodities in accordance with 7 U.S.C. 5901 T3et seq.G1T1 The Corporation acts as a catalyst in forming private and public partnerships and promotes new uses of agricultural materials. It expands market opportunities for U.S. farmers through development of value-added industrial products and promotes environmentally friendly products. For budget and accounting purposes, this office is assigned to RBS. The director of the Corporation is responsible to the Office of the Secretary.


I80�1A2003.27�092003.50
I89[Reserved]





I95Pt. 2018
I52PART 2018_GENERAL
S8006I86Subparts A�09E[Reserved]
S8010
I86Subpart F_Availability of Information
S8006I18Sec. 
S8010I262018.251General statement. 
I262018.252Public inspection and copying. 
I262018.253Indexes. 
I262018.254Requests for records. 
I262018.255Appeals. 
I262018.256�092018.300[Reserved] 

Q04I21T5Authority:  T15 U.S.C. 552.
S8006I56Subparts A�09E[Reserved]
S8010
I56Subpart F_Availability of Information 
Q04I21T5Source:  T161 FR 32645, June 25, 1996, unless otherwise noted.

�18�I80�1A2018.251
I89General statement. 
I11In keeping with the spirit of the Freedom of Information Act (FOIA), the policy of Rural Development and its component agencies, Rural Housing Service (RHS), Rural Utilities Service (RUS), and Rural Business-Cooperative Service (RBS), governing access to information is one of nearly total availability, limited only by the countervailing policies recognized by the FOIA. 

I80�1A2018.252
I89Public inspection and copying. 
I11Facilities for inspection and copying are provided by the Freedom of Information Officer (FOIO) in the National Office, by the State Director in each State Office, by the Rural Development Manager (formerly, District Director) in each District Office, and by the Community Development Manager (formerly, County Supervisor) in each County Office. A person requesting information may inspect such materials and, upon payment of applicable fees, obtain copies. Material may be reviewed during regular business hours. If any of the Rural Development materials requested are not located at the office to which the request was made, the request will be referred to the office where such materials are available. 

I80�1A2018.253
I89Indexes. 
I11Since Rural Development does not maintain any materials to which 5 U.S.C. 552(a)(2) applies, it maintains no indexes. 

I80�1A2018.254
I89Requests for records. 
I11Requests for records are to be submitted in accordance with 7 CFR 1.3 and may be made to the appropriate Community Development Manager, Rural Development Manager, State Administrative Management Program Director (formerly, State Administrative Officer), State Director, Freedom of Information/Privacy Act Specialist, or Freedom of Information Officer. The last two positions are located in the Rural Development Support Services Division, Washington, DC 20250. The phrase ``FOIA REQUEST'' should appear on the outside of the envelope in capital letters. The FOIA requests under the Farm Credit Programs (formally FmHA Farmer Programs) should be forwarded to the Farm Service Agency (FSA), Freedom of Information Officer, Room 3624, South Agriculture Building, 14th & Independence Avenue, SW., Washington, DC 20250�090506. Requests should be as specific as possible in describing the records being requested. The FOIO, Freedom of Information/Privacy Act Specialist, each State Administrative Management Program Director, each State Director, each Rural Development Manager, and each Community Development Manager are delegated authority to act respectively at the national, state, district, or county level on behalf of Rural Development to: 
I11(a) Deny requests for records determined to be exempt under one or more provisions of 5 U.S.C. 552(b); 
I11(b) Make discretionary releases (unless prohibited by other authority) of such records when it is determined that the public interests in disclosure outweigh the public and/or private ones in withholding; and 
I11(c) Reduce or waive fees to be charged where determined to be appropriate. 

I80�1A2018.255
I89Appeals. 
I11If all or any part of an initial request is denied, it may be appealed in accordance with 7 CFR 1.7 to that particular Agency possessing the documents. Please select the appropriate Agency to forward your FOIA appeal from the following addresses: Administrator, Rural Housing Service, Room 5014, AG Box 0701, 14th & Independence Avenue, SW._South Building, Washington, DC 20250�090701; Administrator, Rural Business-Cooperative Service, Room 5045, AG Box 3201, 14th & Independence Avenue, SW._South Building, Washington, DC 20250�093201 and Administrator, Rural Utilities Service, Room 4501, AG Box 1510, 14th & Independence Avenue, SW._South Building, Washington, DC 20250�091510. The phrase ``FOIA APPEAL'' should appear on the front of the envelope in capital letters. 

�19�I80�1A2018.256�092018.300
I89[Reserved] 

I95Pt. 2045
I52PART 2045_GENERAL
S8006I86Subparts A�09II[Reserved]
S8010
I86Subpart JJ_Rural Development_Utilization of Gratuitous Services
S8006I18Sec.
S8010I262045.1751General.
I262045.1752Policy.
I262045.1753Authority to accept gratuitous services.
I262045.1754Scope of gratuitous services performed.
I262045.1755Preparation and disposition of agreement forms.
I262045.1756Records and reports.
Q02I26T5T4Exhibit A to Subpart JJ_Agreement FormG1T5


Q04I21T5Authority:  T17 U.S.C. 1989; 42 U.S.C. 1480; delegation of authority by the Secretary of Agriculture, 7 CFR 2.23; delegation of authority by the Assistant Secretary for Rural Development, 7 CFR 2.70.
Q04I21T5Source:  T143 FR 3694, Jan. 27, 1978, unless otherwise noted. 
S8006I56Subparts A�09II[Reserved] 
S8010
I56Subpart JJ_Rural Development_Utilization of Gratuitous Services

I80�1A2045.1751
I89General.
I11Section 331(b) of the Consolidated Farm and Rural Development Act (Pub. L. 92�09419), and section 506(a) of the Housing Act of 1949, empower the Secretary of Agriculture to accept and utilize voluntary and uncompensated services in carrying out the provisions of the above cited Acts. The Secretary has delegated those authorities to the Administrator of the Farmers Home Administration (FmHA) or its successor agency under Public Law 103�09354 in 7 CFR 2.70(a) (1) and (2).

I80�1A2045.1752
I89Policy.
I11Voluntary and uncompensated (gratuitous) services may be accepted with the consent of the agency concerned, from the following sources under the conditions set forth in Exhibit A, ``Agreement for Utilization of Employee of T3(Enter Official Title of Governing Body or Other Authorized Organization)G1T1 By the Farmers Home Administration or its successor agency under Public Law 103�09354'' (Agreement Form).
I11(a) Any agency of State government or of any territory or political subdivision.
I11(b) Non-profit, educational, and charitable organizations, provided that no partisan, political, or profit motive is involved either explicitly or implicitly.

I80�1A2045.1753
I89Authority to accept gratuitous services.
I11(a) State Directors, Director, Personnel Division, and Director, Finance Office, are hereby authorized to accept and utilize gratuitous services offered by the governmental agencies listed in �1A2045.1752(a).
I11(b) An offer received by an FmHA or its successor agency under Public Law 103�09354 State or County Office from a source listed in �1A2045.1752(b) shall be transmitted to the National Office, Attention: Director, Personnel Division, for decision. The offer will be accompanied by copies of the Articles of Incorporation and By-laws (if the organization is incorporated), a statement that the organization accepts the conditions set forth in the Agreement Form, and evidence that the organization is financially able to meet the required fiscal obligations of the agreement. 

I80�1A2045.1754
I89Scope of gratuitous services performed.
I11(a) Gratuitous services accepted in accordance with this subpart may be utilized to perform any function performed by regular FmHA or its successor agency under Public Law 103�09354 employees (excluding Committee members). Such services must not result in the displacement of employees. Most of the gratuitous services should be performed at the County Office level and conform to a standard FmHA or its successor agency under Public Law 103�09354 position description. A nonstandard position description may be developed and used, depending on current agency needs in a particular office and gratuitous skills available.
I11(b) Orientation and other training will be provided by FmHA or its successor agency under Public Law 103�09354 so that gratuitous services may be performed in accordance with current FmHA or its successor agency under Public Law 103�09354 procedure.
�20�I11(c) Persons performing authorized gratuitous services will be held to the same standard as regular FmHA or its successor agency under Public Law 103�09354 employees performing similar duties. The issuance of, and accountability for, identification cards and clearance of employee accountability will be as prescribed in FmHA or its successor agency under Public Law 103�09354 Instruction 2024�09B which is available in all FmHA or its successor agency under Public Law 103�09354 Offices. Such persons, except Construction Inspectors may, when under direct supervision of County Supervisors, act as Collection Officers and be allowed to use receipt books in accordance with FmHA or its successor agency under Public Law 103�09354 Instructions 2024�09C and 451.2 (part 1862 of this chapter and other applicable regulations available in all FmHA or its successor agency under Public Law 103�09354 Offices).

I80�1A2045.1755
I89Preparation and disposition of agreement forms.
I11(a) Agreements to accept and utilize gratuitous services must be identical to the attached Exhibit A (Agreement Form) with such exceptions as may be authorized by the Office of the General Counsel, Department of Agriculture.
I11(b) Two copies of each signed Agreement Form will be forwarded to the Personnel Division. One copy will be retained in the State or Finance Office.

I80�1A2045.1756
I89Records and reports.
I11The FmHA or its successor agency under Public Law 103�09354 official signing the Agreement Form will maintain records to show the names, duty assignments, time worked and work locations of all persons performing gratuitous services. Copies of time reports submitted to the persons' employers should suffice. These records will be necessary to respond to occasional requests for reports on the acceptance and utilization of gratuitous services in the FmHA or its successor agency under Public Law 103�09354.
I95Pt. 2045, Subpt. JJ, Exh. A

I81Exhibit A to Subpart JJ_Agreement Form

I74for utilization of employees of (official title of governing body or other authorized organization, i.e., pickens county, ala., board of commissioners)
I74by the Farmers Home Administration or its successor agency under Public Law 103�09354
I211. This Agreement, date G7T2XG1T1G7T2XG1T1G7T2XG1T1 between, G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1, a (political subdivision), (educational), (charitable), (or nonprofit) an organization of the State ofG7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1(hereinafter called the Agency) and the United States of America acting through Farmers Home Administration or its successor agency under Public Law 103�09354, U.S. Department of Agriculture (hereinafter called the Administration) is entered into for the purpose of permitting certain employees of the Agency (hereinafter called the Agency employees) to assist in the Administration's effort to provide agricultural, housing and other assistance for rural people of the State ofG7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1in accordance with Section 331(b) of the Consolidated Farm and Rural Development Act and Section 506(a), Title V of the Housing Act of 1949.
I212. The Administration certifies that it is empowered by the current Federal laws cited above, and related rules and regulations, to accept personnel assistance from the Agency as provided in paragraphs 4 and 5 below; and that the work assigned to Agency employees will be useful, in the public interest, could not otherwise be provided, and will not result in the displacement of employed workers.
I213. The Agency certifies that it has the authority under the laws of the State ofG7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1to enter into this Agreeement and to provide the services agreed upon in the manner provided for.
I214. The Administration hereby supplies the Agency with a narrative description which is made a part of this Agreement as Attachment ``A,'' explicitly setting forth the duties, knowledge, skills, and abilities to be required of Agency employees.
I215. The Administration agrees to:
I21(a) Provide training for and responsible supervision of qualified and acceptable Agency employees in accordance with Attachment ``A.''
I21(b) Provide work within the State ofG7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1for qualified and acceptable Agency employees for periods not to exceed eight hours per day and 40 hours per week.
�21�I21(c) Provide the office space, tools, equipment, and supplies to be used by Agency employees in performing work for the Administration.
I21(d) Report in the Agency, as required, the time worked by and work accomplishments of Agency employees.
I21(e) Consult with the Agency, as necessary, on situations involving delinquency, misconduct, neglect of work, and apparent conflicts of interest of Agency employees.
I21(f) Reimburse Agency employees for proper and reasonable travel and per diem expenses incurred in performing official duties for the Administration, in accordance with Administration travel regulations.
I21(g) Consider Agency employees to be Federal employees for the purposes of the Federal Employees Compensation Act (5 U.S.C. 8101) and of the Federal Tort Claims Act (28 U.S.C. 2671�092680).
I216. The Agency agrees to:
I21(a) Not discriminate against any employee or applicant for employment because of race, color, religion, sex, age, marital status, physical handicap, or national origin. The Agency will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, age, marital status, physical handicap, or national origin. Such action shall include, but not be limited to, the following Employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training including apprenticeship. The Agency will post in conspicuous places, available to employees and appliants for employment, notices setting forth the provisions of this nondiscriminating clause.
I21(b) Obtain fingerprints, police records, and work qualifications checks on potential assignees, and divulge the results to the Administration or permit the Administration to obtain this information.
I21(c) Assign only Agency employees who are acceptable to the Administration in terms of meeting the same ability and suitability standards which are applied to Federal employment.
I21(d) Pay all salaries and other expenses of Agency employees and comply with Federal, State, and local minimum wage statutes. No monies will be paid by the Administration under this agreement, either to the Agency or its employees.
I21(e) Consider any Tort claims by third parties under applicable laws and regulations.
I21(f) Reassign or terminate the assignment of Agency employees upon request of the Administration.
I217. The Agency and the Administration mutually understand and agree that the reasons for determining that an Agency employee is unacceptable or unsuitable for initial or continued assignment to Administration work may include but shall not be limited to the following:
I21(a) Practicing or appearing to practice discrimination for reasons of race, color, religion, sex, age, marital status, physical handicap, or national origin.
I21(b) Being or becoming involved in real or apparent conflicts of interest, such as, engaging directly or indirectly in business transactions with Administration applicants or borrowers, or using or appearing to use the Administration work assignment for private gain.
I21(c) Engaging in or having engaged in criminal, dishonest, or immoral conduct, or conducting himself in a manner which might embarrass or cause criticism of the Administration.
I21(d) Being absent from duty without authorization.
I21(e) Engaging in partisan political activity prohibited to Federal employees doing similar work.
I21(f) Lack of work.
I21(g) Inability of the employee to perform the duties of the assignment.
I218. The term of this Agreement shall commence on the date thereof. It shall end onG7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1, unless extended by mutual agreement, or unless terminated earlier by at least (30) days advanced written notice by either party to the other.
I219. The Agency and the Administration respectively certify, each for itself, that its officer signing this Agreement is duly authorized thereto.
I74(Enter Official Title of Agency, i.e., City Council, Modesto, Calif.)
I74BY
I74Chairman, City Council,
I74Modesto, Calif.
I74FARMERS HOME
I74ADMINISTRATION or its successor agency under Public Law T1103�09354G1T5
I74BY
I74FmHA or its successor agency under Public Law T1103�09354G1T5T4 State Director for ()G1T5



F8008I327 CFR Ch. XXVI (1�091�0900 Edition)
I33Office of Inspector General, USDA


�23�I04CHAPTER XXVI_OFFICE OF INSPECTOR GENERAL, 
I04DEPARTMENT OF AGRICULTURE 
I03
I87Part
I88Page
I482610
I49Organization, functions, and delegations of authority
I5925
I482620
I49Availability of information to the public
I5928


F80103I327 CFR Ch. XXVI (1�091�0900 Edition)
I33Office of Inspector General, USDA

�25�I95Pt. 2610
I52PART 2610_ORGANIZATION, FUNCTIONS, AND DELEGATIONS OF AUTHORITY
S8006I18Sec.
S8010I262610.1General statement.
I262610.2Headquarters organization.
I262610.3Regional organization.
I262610.4Requests for service.
I262610.5Delegations of authority.

Q04I21T5Authority:  T15 U.S.C. 301 and 552, Pub. L. 95�09452, 5 U.S.C. App., and Pub. L. 97�0998, 7 U.S.C. 2270.
Q04I21T5Source:  T160 FR 52840, Oct. 11, 1995, unless otherwise noted.

I80�1A2610.1 
I89General statement.
I11(a) The Inspector General Act of 1978 as amended, Pub. L. 95�09452, 5 U.S.C. App., establishes an Office of Inspector General (OIG) in the U.S. Department of Agriculture (USDA) and transfers to it the functions, powers, and duties of offices referred to in the Department as the ``Office of Investigation'' and the ``Office of Audit,'' previously assigned to the OIG created by the Secretary's Memoranda 1915 and 1727, dated March 23, 1977, and October 5, 1977, respectively. Under this Act, OIG is established as an independent and objective unit, headed by the Inspector General (IG), who is appointed by the President and reports to and is under the general supervision of the Secretary.
I11(b) The mission of OIG is to provide policy direction; to conduct, supervise, and coordinate audits and investigations of USDA programs and operations to determine efficiency and effectiveness; to prevent and detect fraud and abuse in such programs and operations; and to keep the Secretary and the Congress informed of problems and deficiencies relative to the programs and operations.
I11(c) The Secretary has made the following delegations of authority to the IG (7 CFR 2.33):
I11(1) Advise the Secretary and General Officers in the planning, development, and execution of Department policies and programs.
I11(2) Provide for the personal security of the Secretary and Deputy Secretary.
I11(3) Serve as liaison official for the Department for all audits of USDA performed by the General Accounting Office.
I11(4) In addition to the above delegations of authority, the IG, under the general supervision of the secretary, has specific duties, responsibilities, and authorities pursuant to the Act, including:
I11(i) Conduct and supervise audits and investigations relating to programs and operations of the Department.
I11(ii) Provide leadership, coordination, and policy recommendations to promote economy, efficiency, and effectiveness, and to prevent and detect fraud and abuse in the administration of the Department's program and operations.
I11(iii) Keep the Secretary and the congress fully and currently informed about problems and deficiencies and the necessity for and progress of corrective actions in the administration of the Department's programs and operations.
I11(iv) Make such investigations and reports relating to the administration of programs and operations of the Department as are in the judgment of the IG, necessary or desirable.
I11(v) Review existing and proposed legislation and regulations and make recommendations to the Secretary and the Congress on the impact such laws or regulations will have on the economy and efficiency of program administration or in the prevention and detection of fraud and abuse in the programs and operations of the Department.
I11(vi) Have access to all records, reports, audits, reviews, documents, papers, recommendations, or other material available to the Department which relate to programs and operations for which the IG has responsibility.
I11(vii) Report expeditiously to the Attorney General any matter where there are reasonable grounds to believe there has been a violation of Federal criminal law.
I11(viii) Issue subpoenas to other than Federal agencies for the production of information, documents, reports, answers, records, accounts, papers, and other data and documentary evidence necessary in the performance of functions assigned by the Act.
I11(ix) Receive and investigate complaints or information from any Department employee concerning possible �26�violations of laws, rules or regulations, or mismanagement, gross waste of funds, abuse of authority, or substantial and specific dangers to the public health and safety.
I11(x) Select, appoint, and employ necessary officers and employees in OIG in accordance with laws and regulations governing the civil service, including an Assistant Inspector General for Auditing and an Assistant Inspector General for Investigations.

I11(xi) Obtain services as authorized by Section 3109 of Title 5, United States Code.
I11(xii) Enter into contracts and other arrangements for audits, inspections, studies, analyses, and other services with public agencies and private persons, and make such payments as may be necessary to carry out the provisions of the Act to the extent and in such amounts as may be provided in an appropriation act.
I11(d) The IG, under the Agriculture and Food Act of 1981, Pub. L. 97�0998, 7 U.S.C. 2270, and pursuant to rules issued by the Secretary in 7 CFR part 1a, has the authority to:
I11(1) Designate employees of the Office of Inspector General who investigate alleged or suspected felony criminal violations of statutes administered by the Secretary of Agriculture or any agency of USDA, when engaged in the performance of official duties to:
I11(i) Execute and serve a warrant for an arrest, for the search of premises, or the seizure of evidence when issued under authority of the United States upon probable cause to believe that such a violation has been committed;
I11(ii) Make an arrest without a warrant for any such violation if such violation is committed or if the employee has probable cause to believe that such violation is being committed in his/her presence; and
I11(iii) Carry a firearm.
I11(2) Issue directives and take the actions prescribed by the Secretary's rules.

I80�1A2610.2 
I89Headquarters organization.
I11(a) The OIG has a headquarters office in Washington, DC, and regional offices throughout the United States. The headquarters office consists of the immediate office of the IG and three operational units.
I11(b) T3Operational units.G1T1 (1) The Assistant Inspector General for Policy Development and Resources Management (AIG/PD&RM) formulates OIG policies and procedures; develops, administers and directs comprehensive programs for the management, budget, financial, personnel, systems improvement, and information activities and operations of OIG; and is responsible for OIG automated date processing (ADP) and OIG information management systems. The staff maintains OIG's directives system; Departmental Regulations and Federal Register issuances; administers the Freedom of Information and Privacy Acts, which includes requests received from the Congress, other Federal agencies, intergovernmental organizations, the news media, and the public; and provides for the administration of an OIG EEO program, including affirmative action. The immediate office of the AIG/PD&RM and two divisions carry out these functions.
I11(2) The Assistant Inspector General for Audit (AIG/A) carries out the OIG's domestic and foreign audit operations through a headquarters office, a Financial Management and ADP Audit Operations staff located in Kansas City, Missouri, and six regional offices shown in �1A2610.3(a). The staff provides a continual audit review of ADP security throughout USDA. Auditing officials conduct operational liaison on audit matters; schedule and conduct audits; release audit reports to management; follow agency action to assure that audit reports have been properly acted upon through review of Department management follow up system; monitor the quality of OIG audit reports; and coordinate activities with the Assistant inspector General (AIG) for Investigations. The staff also provides an integrated approach to fraud prevention and detection and management improvement in USDA programs and operations; reviews Department legislation and regulations through the involvement and cooperation of the Department's principal officers and program managers; coordinates analyses and reports on the conduct of fraud �27�vulnerability assessments; and recommends policies and provides technical assistance for investigative and audit operations. The Auditing headquarters office consists of the immediate office of the AIG/A and four staff divisions.
I11(3) The Assistant Inspector General for Investigations (AIG/I) carries out the OIG's domestic and foreign investigative operations through a headquarters office and the seven regional offices shown in �1A2610.3(b). Investigations officials conduct operational and intelligence liaison on investigative matters with the FBI, Secret Service, Internal Revenue Service (IRS), Interpol, and other Federal and State law enforcement organizations; determine the need for investigative action; conduct investigations; prepare factual reports of investigative findings; refer reports for appropriate administrative or legal action; followup on agency actions to assure that OIG investigative reports have been properly acted upon; monitor the quality of investigative reports; and coordinate activities with the AIG/A. The staff also conducts special investigations of major programs, operations, and high level officials; provides for the protection of the Secretary and Deputy Secretary; receives and processes employee complaints concerning possible violations of laws, rules, regulations or mismanagement. The Investigations headquarters office consists of the immediate office of the AIG/I and three staff divisions.

I80�1A2610.3 
I89Regional organization.
I11(a) Each Regional Inspector General for Audit (RIG/A) is responsible to the IG and to the AIG/A for supervising the performance of all OIG auditing activities relating to the Department's domestic and foreign programs and operations within an assigned geographic area. The addresses and telephone numbers of the six Audit Regional Offices and the territories served are as follows:

I74Audit Region, Address, Telephone Number, and Territory
I25Northeast Region, ATTN: Suite 5D06, 4700 River Road, Unit 151, Riverdale, Maryland 20737�091237, (301) 734�098763; Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, Rhode Island, Virgin Islands, Vermont, Virginia, and West Virginia.
I25Southeast Region, 401 W. Peachtree Street NW., Room 2328, Atlanta, Georgia 30365�093520, (404) 730�093210; Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee.
I25Midwest Region, 111 N. Canal Street, Suite 1130, Chicago, Illinois 60606�097295, (312) 353�091352; Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin.
I25Southwest Region, 101 South Main, Room 324, Temple, Texas 76501, (817) 774�091430; Arkansas, Louisiana, New Mexico, Oklahoma, and Texas.
I25Great Plains Region, 9435 Holmes, Room 233, Kansas City, Missouri 64131, Mailing address: PO Box 293, Kansas City, Missouri 64141, (816) 926�097667; Colorado, Iowa, Kansas, Missouri, Montana, Nebraska, North Dakota, South Dakota, Wyoming, and Utah.
I25Western Region, 600 Harrison Street, Suite 225, San Francisco, California 94107, (415) 744�092851; Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Territory of Guam, Trust Territories of the Pacific, and Washington.
Q04
I11(b) Each RIG/I is responsible to the IG and to the AIG/I for supervising the performance of all OIG investigative activities relating to the Department's domestic and foreign programs and operations within an assigned geographic area. The addresses and telephone numbers of the seven Investigations Regional Offices and the territories served are as follows: 

I74Investigations Region, Address, Telephone Number, and Territory 
I26North Atlantic Region, 26 Federal Plaza, Room 1409, New York, New York 10278, (212) 264�098400; Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Puerto Rico, Rhode Island, Vermont, and Virgin Islands. 
I26Northeast Region, ATTN: Suite 5D06, 4700 River Road, Unit 151, Riverdale, Maryland 20737�091237, (301) 734�098850; Delaware, District of Columbia, Maryland, Pennsylvania, Virginia, and West Virginia. 
I26Southeast Region, 401 W. Peachtree Street NW., Room 2329, Atlanta, Georgia 30365�093520, (404) 730�092170; Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee. 
I26Midwest Region, 111 N. Canal Street, Suite 1130, Chicago, Illinois 60606�097295, (312) 353�091358; Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin. 
I26Southwest Region, 101 South Main, Room 311, Temple, Texas 76501, (817) 774�091351; �28�Arkansas, Louisiana, New Mexico, Oklahoma, and Texas. 
I26Great Plains Region, 9435 Holmes, Room 210, Kansas City, Missouri 64131, Mailing address: PO Box 293, Kansas City, Missouri 64141, (816) 926�097606: Colorado, Iowa, Kansas, Missouri, Montana, Nebraska, North Dakota, South Dakota, Wyoming, and Utah. 
I26Western Region, 600 Harrison Street, Room 225, San Francisco, California 94107, (415) 744�092887; Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Territory of Guam, Trust Territories of the Pacific, and Washington. 


I80�1A2610.4
I89Requests for service. 
I11(a) Heads of USDA agencies will direct requests for audit or investigative service to the AIG/A, AIG/I, RIG/A, RIG/I, or to other OIG audit or investigation officials responsible for providing service of the type desired in the geographical area where service is desired. 
I11(b) Agency officials or other employees may, at any time, direct to the personal attention of the IG any audit or investigation matter that warrants such attention. 
I11(c) Other persons may address their communications regarding audit or investigative matters to: The Inspector General, U.S. Department of Agriculture, Ag Box 2301, Washington, DC 20250. Additionally, persons may call or write the hotline office at 202�09690�091622, 1�09800�09424�099121, TDD 202�09690�091202, or Office of Inspector General, PO Box 23399, Washington, DC 20026. Bribes involving USDA programs may be reported using the 24 hour bribery hotline number at 202 720�097257. 

I80�1A2610.5
I89Delegations of authority. 
I11(a) AIG's listed in �1A2610.2; and RIG's listed in �1A2610.3, are authorized to take whatever actions are necessary to carry out their assigned functions. This authority may be redelegated. 
I11(b) The IG reserves the right to establish audit and investigation policies, program, procedures, and standards; to allocate appropriated funds; to determine audit and investigative jurisdiction; and to exercise any of the powers or functions or perform any of the duties referenced in the above delegation. 

I95Pt. 2620
I52PART 2620_AVAILABILITY OF INFORMATION TO THE PUBLIC
S8006I18Sec.
S8010I262620.1General statement.
I262620.2Public inspection and copying.
I262620.3Requests.
I262620.4Denials.
I262620.5Appeals.

Q04I21T5Authority:  T15 U.S.C. 301 and 552; 5 U.S.C. App.
Q04I21T5Source:  T160 FR 52842, Oct. 11, 1995, unless otherwise noted.

I80�1A2620.1
I89General statement.
I11This part is issued in accordance with, and subject to, the regulations of the Secretary of Agriculture �1A1.1 through �1A1.23 (and appendix A of subpart A of part 1) of this title, implementing the Freedom of Information Act, 5 U.S.C. 552, and governs the availability of records of the Office of Inspector General (OIG) to the public upon request.

I80�1A2620.2
I89Public inspection and copying.
I115 U.S.C. 522(a)(2) requires that certain materials be made available for public inspection and copying, and that a current index of these materials be published quarterly or otherwise made available. OIG does not maintain any materials within the scope of these requirements.

I80�1A2620.3
I89Requests.
I11(a) Requests for OIG records shall be in writing in accordance with �1A1.6(a) of this title and addressed to the Assistant Inspector General for Policy Development and Resources Management (AIG/PD&RM), Office of Inspector General, U.S. Department of Agriculture, Ag Box 2310, Washington, DC 20250. The above official is hereby delegated authority to make determinations regarding such requests in accordance with �1A1.3(a)(3) of this title.
I11(b) Requests should be reasonably specific in identifying the record requested and should include the name, address, and telephone number of the requester.
I11(c) Available records may be inspected and copied in the office of the AIG/PD&RM, from 8 a.m. to 4:30 p.m. local time on regular working days or may be obtained by mail. Copies will �29�be provided upon payment of applicable fees, unless waived or reduced, in accordance with the Department's fee schedule as set forth in appendix A of subpart A of part 1 of this title.

I80�1A2620.4
I89Denials.
I11If the AIG/PD&RM determines that a requested record is exempt from mandatory disclosure and that discretionary release would be improper, the AIG/PD&RM shall give written notice of denial in accordance with �1A1.8(a) of this title.

I80�1A2620.5
I89Appeals.
I11The denial of a requested record may be appealed in accordance with �1A1.6(e) of this title. Appeals shall be addressed to the Inspector General, U.S. Department of Agriculture, Ag Box 2301, Washington, DC 20250. The Inspector General will give prompt notice of the determination concerning an appeal in accordance with �1A1.8(d) of this title.



F8008I327 CFR Ch. XXVII (1�091�0900 Edition)
I33Off. of Info. Resources Mgt., USDA


�31�I04CHAPTER XXVII_OFFICE OF INFORMATION RESOURCES MANAGEMENT, DEPARTMENT OF AGRICULTURE
I03
Q12 
I87Part
I88Page
I482700 
I49Organization and functions 
I5933
I482710 
I49Availability of information to the public 
I5933


F80103I327 CFR Ch. XXVII (1�091�0900 Edition)
I33Off. of Info. Resources Mgt., USDA

�33�I95Pt. 2700

I52PART 2700_ORGANIZATION AND FUNCTIONS
S8006I18Sec.
S8010I262700.1General statement.
I262700.2Organization.
I262700.3Functions.

Q04I21T5Authority:  T15 U.S.C. 301, 552; 7 CFR 2.81.
Q04I21T5Source:  T147 FR 39128, Sept. 7, 1982, unless otherwise noted.

I80�1A2700.1
I89General statement.
I11This part is issued in accordance with 5 U.S.C. 552(a) to provide guidance for the general public as to the organization and functions of the Office of Information Resources Management.

I80�1A2700.2
I89Organization.
I11The Office of Information Resources Management (OIRM) was established on January 12, 1982. Delegations of authority to the Director, OIRM appear at 7 CFR 2.81. The organization is comprised of five headquarters divisions, an administrative staff and three computer centers to serve the Department. The organization is headed by the Director or, in the Director's absence, by the Deputy Director or, in the absence of both, by the Director's desginee.

I80�1A2700.3
I89Functions.
I11(a) T3Director.G1T1 Provides executive direction for OIRM. Develops and recommends Departmental information resources management principles, policies, and objectives; develops and disseminates Departmental information resources management standards, guidelines, rules, and regulations necessary to implement approved principles, policies, and programs; designs, develops, implements, and revises systems, processes, work methods, and techniques to improve the management of information resources and the operational effectiveness of the Department; provides telecommunications and automated data processing services to the Department's agencies and staff offices.
I11(b) T3Deputy Director.G1T1 Assists the Director and, in the absence of the Director, serves as the Acting Director.
I11(c) T3Administrative Management Staff.G1T1 Provides support for agency management regarding budget, accounting, personnel, and other administrative matters.
I11(d) T3Planning Division.G1T1 Defines, develops, guides, and administers the Department's long-range planning process for information resources.
I11(e) T3Information Management Division.G1T1 Develops policy, standards and guidelines for collection, protection, access, use and management of information.
I11(f) T3Review and Evaluation Division.G1T1 Reviews and evaluates information resources programs and activities of Department agencies and staff offices for conformance with plans, policies, and standards.
I11(g) T3Agency Technical Services Division.G1T1 Advises and consults with and assists Department agencies and staff offices on activities related to the development and implementation of automated information systems.
I11(h) T3Operations and Telecommunications Division.G1T1 Coordinates the development and implementation of programs for ADP and telecommunications resource planning within Departmental computer centers and the National Finance Center, and for the acquisition and use of Department-wide telecommunications facilities and services.
I11(i) T3Departmental Computer Centers.G1T1 The following centers provide ADP facilities and services to agencies and staff offices of the Department.
I11(1) Washington Computer Center, 14th and Independence Ave., SW., Rm. S�09107�09South, Washington, DC 20250.
I11(2) Fort Collins Computer Center, 3825 E. Mulberry Street (P.O. Box 1206), Fort Collins, CO 80524.
I11(3) Kansas City Computer Center, 8930 Ward Parkway (P.O. Box 205), Kansas City, MO 64141. 

I95Pt. 2710
I52PART 2710_AVAILABILITY OF INFORMATION TO THE PUBLIC
S8006I18Sec.
S8010I262710.1General statement.
I262710.2Public inspection and copying.
I262710.3Indexes.
I262710.4Initial request for records.
I262710.5Appeals.
Q02I26T5T4Appendix A to PartG1T5 2710T4_List of AddressesG1T5

Q04I21T5Authority:  T15 U.S.C. 301, 552; 7 CFR 1.1�091.16.
Q04I21T5Source:  T147 FR 39129, Sept. 7, 1982, unless otherwise noted.

�34�I80�1A2710.1
I89General statement.
I11This part is issued in accordance with 7 CFR 1.4 of the U.S. Department of Agriculture regulations governing the availability of records (7 CFR 1.1�091.16 and Appendix A) under the Freedom of Information Act (5 U.S.C. 552). The Department's regulations, as supplemented by the regulations in this part, provide guidance for any person wishing to request records from the Office of Information Resources Management (OIRM).

I80�1A2710.2
I89Public inspection and copying.
I11(a) T3Background.G1T1 5 U.S.C. 552(a)(2) required that each agency make certain kinds of records available for public inspection and copying.
I11(b) T3Procedure.G1T1 Persons wishing to gain access to OIRM records should contact the Information Access & Disclosure Officer by writing to the address shown in 2710.4(b)(2).

I80�1A2710.3
I89Indexes.
I11(a) T3Background.G1T1 5 U.S.C. 552(a)(2) also required that each agency maintain and make available for public inspection and copying current indexes providing identifying information for the public with regard to any records which are made available for public inspection and copying.
I11(b) T3Procedure.G1T1 Persons wishing to get an index may contact the division or center that maintains the records. Publication of these indexes as a separate document is unnecessary and impractical.

I80�1A2710.4
I89Initial request for records.
I11(a) T3Background.G1T1 The Information Access and Disclosure Officer is authorized to:
I11(1) Grant or deny requests for OIRM records.
I11(2) Make discretionary releases of OIRM records when it is determined that the public interests in disclosure outweigh the public and/or private ones in withholding.
I11(3) Reduce or waive fees to be charged where determined to be appropriate.
I11(b) T3Procedure.G1T1 Persons wishing to request records from the Office of Information Resources Management may do so as follows:
I11(1) T3How.G1T1 Submit each initial request for OIRM records as prescribed in 7 CFR 1.3(a).
I11(2) T3Where.G1T1 Submit each initial request to the Information Access and Disclosure Officer, Office of Information Resources Management, USDA, 14th and Independence Ave., SW., Room 407�09W, Washington, DC 20250.

I80�1A2710.5
I89Appeals.
I11T3Procedure.G1T1 Any person whose initial request is denied in whole or in part may appeal that denial, in accordance with 7 CFR 1.3(e) and 1.7, to the Director, Office of Information Resources Management, by sending the appeal to the Information Access and Disclosure Officer, Office of Information Resources Management, USDA, 14th and Independence Ave., SW., Room 407�09W, Washington, DC 20250. The Director, Office of Information Resources Management, will make the determination on the appeal.
S8002
I95Pt. 2710, App. A
I85Appendix A to Part T12710G1T5T4_List of AddressesG1T5

I73Section 1. General
I21This list provides the titles and mailing addresses of officials who have custody of OIRM records. This list also identifies the normal working hours, Monday through Friday, excluding holidays, during which public inspection and copying of certain kinds of records, and indexes to those records, is permitted.
I73Section 2. List of Addresses
I25Director, Office of Information Resources Management, 14th and Independence Ave., SW., Rm. 113�09W, Washington, DC 20250; Hours: 8:30 a.m.�095:00 p.m.
I25Chief, Planning Division, OIRM, 14th and Independence Ave., SW., Rm. 446�09W, Washington, DC 20250; Hours: 8:30 a.m.�095:00 p.m.
I25Chief, Review and Evaluation Division, OIRM, 14th and Independence Ave., SW., Rm. 442�09W, Washington, DC 20250; Hours: 8:30 a.m.�095:00 p.m.
I25Chief, Agency Technical Services Division, OIRM, 14th and Independence Ave., SW., Rm. 416�09W, Washington, DC 20250; Hours: 8:30 a.m.�095:00 p.m.
I25Chief, Operations and Telecommunications Division, OIRM, 14th and Independence Ave., SW., Rm. 419�09W, Washington, DC 20250; Hours: 8:30 a.m.�095:00 p.m.
I25Chief, Information Management Division, OIRM, 14th and Independence Ave., SW., Rm. 404�09W, Washington, DC 20250; Hours: 8:30 a.m.�095:00 p.m.
�35�I25Chief, St. Louis Computer Center, OIRM, 1520 Market Street, Rm. 3441, St. Louis, MO 63101; Hours: 8:00 a.m.�094:40 p.m.
I25Director, Kansas City Computer Center, OIRM, 8930 Ward Parkway, (P.O. Box 205), Kansas City, MO 64141; Hours: 8:00 a.m.�094:45 p.m.
I25Director, Fort Collins Computer Center, OIRM, 3825 E. Mulberry Street, (P.O. Box 1206), Fort Collins, CO 80521; Hours: 8:00 a.m.�094:30 p.m. 
I25Director, Washington Computer Center, OIRM, 14th and Independence Ave., SW., Rm. S�09107�09S, Washington, DC 20250; Hours: 8:30 a.m.�095:00 p.m. 
I25Information Access and Disclosure Officer, OIRM, 14th and Independence Ave., SW., Rm. 407�09W, Washington, DC 20250; Hours: 8:30 a.m.�095:00 p.m.
S8010
F8008I327 CFR Ch. XXVIII (1�091�0900 Edition)
I33Office of Operations, USDA


�37�I04CHAPTER XXVIII_OFFICE OF OPERATIONS,
I04DEPARTMENT OF AGRICULTURE
I03
I87Part
I88Page
I482810
I49Organization and functions_Office of Operations
I5939
I482811
I49Availability of information to the public
I5939
I482812
I49Department of Agriculture guidelines for the donation of excess research equipment under 15 U.S.C. 3710(i)
I5941


F80103I327 CFR Ch. XXVIII (1�091�0900 Edition)
I33Office of Operations, USDA

�39�I95Pt. 2810
I52PART 2810_ORGANIZATION AND FUNCTIONS_OFFICE OF OPERATIONS
S8006I18Sec.
S8010I262810.1General statement.
I262810.2Organization.
I262810.3Functions.

Q04I21T5Authority:  T15 U.S.C. 301 and 552; 7 CFR 2.76.
Q04I21T5Source:  T154 FR 52013, Dec. 20, 1989, unless otherwise noted.

I80�1A2810.1
I89General statement.
I11This part is issued in accordance with 5 U.S.C. 552(a) to provide guidance for the general public as to Office of Operations (OO) organization and functions.

I80�1A2810.2
I89Organization.
I11The Office of Operations (OO) was established January 12, 1982. Delegations of authority to the Director, OO, appear at 7 CFR 2.76. The organization is comprised of six divisions and one staff located at Department headquarters. Description of the functions of these organizational units are in the following section. The organization is headed by a Director.

I80�1A2810.3
I89Functions.
I11(a) T3Director.G1T1 Provides executive direction for OO. Develops and promulgates overall policies and provides general direction, leadership, oversight, and coordination of USDA management of procurement, real and personal property activities, mail and copier management. Provides executive services to the Office of the Secretary and operates activities providing consolidated USDA administrative functions and services.
I11(b) T3Deputy Director.G1T1 Assists the Director, and in the absence of the Director, serves as Acting Director.
I11(c) T3Administrative Unit.G1T1 Provides support for agency management regarding budget, accounting, personnel, and other administrative matters.
I11(d) T3Executive Services Division.G1T1 Provides executive services to the Office of the Secretary in travel arrangements, supplies, furnishings, communications, equipment, and records. Operates the central USDA DC imprest fund.
I11(e) T3Facilities Management Division.G1T1 Operates and maintains the USDA DC headquarters building complex, including headquarters parking. Oversees management and operation of USDA buildings nationwide, and provides DC area labor services.
I11(f) T3Mail and Reproduction Management Division.G1T1 Oversees USDA mail, copier, and duplicating programs. Operates DC area central activities in these areas.
I11(g) T3Personal Property Management Division.G1T1 Oversees USDA supply, motor vehicle, and personal property programs. Operates centralized warehouse and property rehabilitation facilities.
I11(h) T3Procurement Division.G1T1 Oversees USDA procurement programs. Operates centralized purchasing operations for ADP and Washington area activities.
I11(i) T3Real Property Management Division.G1T1 Oversees USDA real property management programs.


I95Pt. 2811
I52PART 2811_AVAILABILITY OF INFORMATION TO THE PUBLIC
S8006I18Sec.
S8010I262811.1General statement.
I262811.2Public inspection and copying.
I262811.3Indexes.
I262811.4Initial requests for records.
I262811.5Appeals.
I262811.6Fee schedule.
Q02I26T5T4Appendix A to PartG1T5 2811T4_List of AddressesG1T5

Q04I21T5Authority:  T15 U.S.C. 301 and 552 (as amended); 7 CFR 1.3. 
Q04I21T5Source:  T154 FR 52014, Dec. 20, 1989, unless otherwise noted.

I80�1A2811.1
I89General statement.
I11This part is issued in accordance with 7 CFR 1.3 of the Department of Agriculture regulations governing the availability of records (7 CFR 1.1�091.23 and Appendix A) under the Freedom of Information Act (FOIA), 5 U.S.C. 552. The Department's regulations, as supplemented by the regulations in this part, provide guidance for any person wishing to request records from Office of Operations.

I80�1A2811.2
I89Public inspection and copying.
I11(a) T3Background.G1T1 5 U.S.C. 552(a)(2) requires that each agency maintain and make available for public inspection and copying certain kinds of records.
�40�I11(b) T3Procedure.G1T1 To gain access to OO records that are available for public inspection, contact the division that maintains them. See Appendix A, List of Addresses, for the location and hours of operation.

I80�1A2811.3
I89Indexes.
I11(a) T3Background.G1T1 15 U.S.C. 552(a)(2) also requires that each agency maintain and make available for public inspection and copying current indexes provided identifying information for the public with regard to any records which are made available for public inspection and copying. OO does not maintain any materials within the scope of these requirements.

I80�1A2811.4
I89Initial requests for records.
I11(a) T3Background.G1T1 The head of each OO division, each OO contracting officer, each OO leasing officer, and the OO FOIA officer is authorized to:
I11(1) Grant or deny requests for OO records.
I11(2) Make discretionary release of OO records when it is determined that the public interest in disclosure outweighs the public and/or private ones in withholding.
I11(3) Reduce or waive fees to be charged where determined to be appropriate.
I11(4) Refer a request to the OO FOIA Officer for determination. 
I11(b) T3Procedures.G1T1 Persons wishing to request records from the Office of Operations may do so as follows:
I11(1) How. Submit each initial request for OO records as prescribed in 7 CFR 1.6.
I11(2) Where. Submit each initial request to the head of the unit that maintains the records. See Appendix A, List of Addresses. Contact the FOIA Officer for guidance as needed. Or, submit the request to the FOIA Officer for forwarding to the proper officials: FOIA Officer, Office of Operations, USDA, Room 134�09W Administration Building, 14th & Independence Avenue SW., Washington, DC 20250.

I80�1A2811.5
I89Appeals.
I11T3Procedure.G1T1 Any person whose initial request is denied in whole or in part may appeal that denial, in accordance with 7 CFR 1.6(e) and 1.8, to the Director, Office of Operations, USDA, Room 113�09W Administration Building, 14th & Independence Avenue SW., Washington, DC 20250.

I80�1A2811.6
I89Fee schedule.
I11Department regulations provide for a schedule of reasonable standard charges for document search and duplication. See 7 CFR 1.2(b). Fees to be charged are set forth in 7 CFR part 1, subpart A, appendix A.
S8002
I95Pt. 2811, App. A
I85Appendix A to Part T12811G1T5T4_List of AddressesG1T5
I71T3Section 1.G1T1 General
I21This list provides the titles and mailing address of officials who have custody of OO records. The normal working hours of these offices are 8:30 a.m. to 5:00 p.m., Monday through Friday, exclusing holidays, during which public inspection and copying of certain kinds of records is permitted.
I74T3Section 2.G1T5 List of Addresses
I21All of the following addresses are located at 14th Street and Independence Avenue, Washington, DC. Address mail as follows:
Q02
I25Director, Office of Operations, USDA, Room 113�09W Administration Building, Washington, DC 20250.
I25FOIA Officer, Office of Operations, USDA, Room 134�09W Administration Building, Washington, DC 20250.
I25Chief, Administrative Unit, Office of Operations, USDA, Room 134�09W, Washington, DC 20250.
I25Chief, Executive Services Division, Office of Operations, USDA, Room 10�09A, Administration Building, Washington, DC 20250.
I25Chief, Facilities Management Division, Office of Operations, USDA, Room S�09313 South Building, Washington, DC 20250.
I25Chief, Mail and Reproduction Management Division, Office of Operations, USDA, Room 1540 South Building, Washington, DC 20250.
I25Chief, Personal Property Management Division, Office of Operations, USDA Room 1524 South Building, Washington, DC 20250.
I25Chief, Procurement Division, Office of Operations, USDA, Room 1550 South Building, Washington, DC 20250.
I25Chief, Real Property Management Division, Office of Operations, USDA, Room 1566, South Building, Washington, DC 20250.
S8010
�41�I95Pt. 2812
I52PART 2812_DEPARTMENT OF AGRICULTURE GUIDELINES FOR THE DONATION OF EXCESS RESEARCH EQUIPMENT UNDER 15 U.S.C. 3710(i)
S8006I18Sec.
S8010I262812.1Purpose.
I262812.2Eligibility.
I262812.3Definitions.
I262812.4Procedures.
I262812.5Restrictions.
I262812.6Title.
I262812.7Costs.
I262812.8Accountability and recordkeeping.
I262812.9Disposal.
I262812.10Liabilities and losses.
Q02I26T5T4Appendix A to PartG1T5 2812_T4Gift/Acceptance Agreement: Educational Institution or NonProfit Organization and the United States Department of AgricultureG1T5 

Q04I21T5Authority: T15 U.S.C. 301.
Q04I21T5Source: T160 FR 34456, July 3, 1995, unless otherwise noted.

I80�1A2812.1 
I89Purpose.
I11This part sets forth the procedures to be utilized by USDA agencies and laboratories in the donation of excess research equipment to educational institutions and non-profit organizations for the conduct of technical and scientific education and research activities as authorized by 15 U.S.C. 3710(i). Title to excess research equipment donated pursuant to 15 U.S.C. 3710(i), shall pass to the donee.

I80�1A2812.2 
I89Eligibility.
I11Eligible organizations are educational institutions or non-profit organizations involved in the conduct of technical and scientific educational and research activities.

I80�1A2812.3
I89Definitions.
I11(a) T3Cannibalization.G1T1 The dismantling of equipment for parts to repair or enhance other equipment. The residual is reported for disposal. Cannibalization is only authorized if the property value is greater when cannibalized than retention in the original condition.
I11(b) T3Education-related Federal equipment.G1T1 Equipment that is appropriate for educational purposes.
I11(c) T3Excess personal property.G1T1 Items of personal property no longer required by the controlling Federal agency. 
I11(d) T3Research equipment.G1T1 Federal property determined to be essential to conduct scientific or technical educational research.
I11(e) T3Technical and scientific education and research activities.G1T1 Non-profit tax exempt public educational institutions or government sponsored research organizations which serve to conduct technical and scientific education and research.

I80�1A2812.4
I89Procedures.
I11(a) Prior to receipt of excess personal property/equipment under this part, the donee shall enter into a gift/acceptance agreement with the donor agency. A copy of that agreement is attached as appendix A to this part.
I11(b) Each agency head will designate in writing an authorized official to approve donations of excess property/equipment under this part.
I11(c) Property targeted for donation under this part will first be screened as excess by USDA agencies through the Departmental Excess Personal Property Coordinator (DEPPC) using the PMIS/PROP system.
I11(d) Upon reporting property for excess screening, if the pertinent USDA agency has an eligible organization in mind for donation under this part, enter ``P.L. 102�09245'' in the note field. The property will remain in the excess system approximately 30�0945 days and, if no agency in USDA requests it during the excess cycle, DEPPC will send the agency a copy of the excess report stamped ``DONATION AUTHORITY TO THE HOLDING AGENCY IN ACCORDANCE WITH P.L. 102�09245.''
I11(e) Donations under this Part will be accomplished by preparing a Standard Form (SF) 122, ``Transfer Order-Excess Personal Property'' and a written justification statement (submitted by the recipient) explaining why the property is needed.
I11(f) The SF�09122 should be signed by both an authorized official of the agency and the Agency Property Management Officer. The following information should also be provided.
Q02
I11(1) Name and address of Donee Institution (Ship to)
�42�I11(2) Agency name and address (holding Agency)
I11(3) Location of property
I11(4) Shipping instructions (Donee contact person)
I11(5) Complete description of property, including acquisition amount, serial no., condition code, quantity, and agency order no.
I11(6) This statement needs to be added following property descriptions. ``The property requested hereon is certified to be used for the conduct of technical and scientific education and research activities. This donation is pursuant to the provisions of Pub. L. 102�09245.''
Q02
I11(g) Once the excess personal property/equipment is physically received, the donee is required to immediately return a copy of the SF�09122 to the donating agency indicating receipt of requested items. Cancellations should be reported to DEPPC so the property can be reported to the General Services Administration (GSA).
I21T5Note: T1The USDA agency shall send an informational copy of the transaction to GSA.

I80�1A2812.5 
I89Restrictions.
I11(a) The authorized official (see �1A2812.4(b)) will approve the donation of excess personal property/equipment in the following groups to educational institutions or nonprofit organizations for the conduct of technical and scientific educational and research activities.
c2,L2,i1,s25,r100  I95T4Eligible Groups
h1FSC group  h1Name
j
I0119DShips, Small Craft, Pontoons, and Floating Docks.
I0123DVehicles, Trailers and Cycles.
I0124DTractors.
I0137DAgricultural Machinery and Equipment.
I0143DPumps, Compressors.
I0148DValves.
I0158DCommunication, Detection, and Coherent Radiation Equipment.
I0159DElectrical and Electronic Equipment Components.
I0165DMedical, Dental, and Veterinary Equipment and Supplies.
I0166DInstruments and Laboratory Equipment.
I0167DPhotographic Equipment.
I0168DChemicals and Chemical Products.
I0170DGeneral Purpose Automatic Data Processing Equipment, Software Supplies, and Support Equipment.
I0174DOffice Machines and Visible Record Equipment.
e


I21T5Note: T1Requests for items in FSC Groups or Classes other than the above should be referred to the agency head for consideration and approval.
I11(b) Excess personal property/equipment may be donated for cannibalization purposes, provided the donee submits a supporting statement which clearly indicates that cannibalizing the requested property for secondary use has greater potential benefit than utilization of the item in its existing form.

I80�1A2812.6 
I89Title.
I11Title to excess personal property/equipment donated under this Part will automatically pass to the donee once the sponsoring agency receives the SF�09122 indicating that the donee has received the property.

I80�1A2812.7 
I89Costs.
I11Donated excess personal property/equipment is free of charge. However, the donee must pay all costs associated with packaging and transportation, unless the sponsoring agency has made other arrangements. The donee should specify the method of shipment.

I80�1A2812.8 
I89Accountability and recordkeeping.
I11USDA requires that property requested by a donee be placed into use by the donee within a year of receipt and used for at least 1 year thereafter. Donees must maintain accountable records for such property during this time period.

I80�1A2812.9 
I89Disposal.
I11When the property is no longer needed by the donee, it may be used in support of other Federal projects or sold and the proceeds used for technical and scientific education and research activities.

I80�1A2812.10 
I89Liabilities and losses.
I11USDA assumes no liability with respect to accidents, bodily injury, illness, or any other damages or loss related to excess personal property/equipment donated under this part. The donee is advised to insure or otherwise protect itself and others as appropriate.
S8002
�43�I95Pt. 2812, App. A
I85Appendix A to Part T12812_G1T5T4Gift/Acceptance Agreement: Educational Institution or NonProfit Organization and the United States Department of AgricultureG1T5
I21Gift/Acceptance Agreement (Agreement) between (USDA Agency) and (Educational Institution or NonProfit Organizations).
I21(1) T3Purpose.G1T1 The purpose of the Agreement is to establish a relationship between the U.S. Department of Agriculture (USDA Agency) and (Educational Institution or NonProfit Organization) concerning the transfer of excess research equipment to this educational institution or nonprofit organization for the conduct of technical and scientific education and research activities. Title of ownership transfers to the recipient.
I21(2) T3Authority.G1T1 Pub. L. 102�09245, Sec. 303, amended, Section 11 of the Stevenson-Wydler Technology Innovation Act of 1980, by adding subsection (i), Research Equipment, which provides that ``the Director of the laboratory, or the head of any Federal agency or department, may give research equipment that is excess to the needs of the laboratory, agency, or department to an educational institution or non-profit organization for the conduct of technical and scientific education and research activities.''
I21(3) T3Objectives and program elements.G1T1 This Agreement is intended to provide a mechanism for the transfer of excess research equipment from USDA to the (Educational Institution or Nonprofit Organization) in accordance with the procedures set out in the regulations implementing Pub. L. 102�09245.
I21(4) T3Management.G1T1 In order to enable close collaboration, it is agreed that the (Educational Institution or NonProfit Organization) will provide to (USDA Agency) an annual inventory listing of property acquired under Pub. L. 102�09245.
I21The (USDA Agency) and (Educational Institution or NonProfit Organization) will each identify a coordinator to implement this Agreement. These coordinators shall meet when necessary to review new Federal property regulations.
I21The coordinators shall seek to resolve any disputes concerning the Agreement through good faith discussions.
I21(5) T3Effective date and revision or termination.G1T1 The Agreement shall enter into effect upon signature and shall remain in effect for 3 years. It may be extended or amended by written agreement of the parties at any time prior to its expiration or termination. The Agreement may be terminated at any time upon 60 days written notice by either party to the other. The termination of the Agreement shall not affect the validity of any property transactions under the Agreement which were initiated prior to such termination.
I73Property Coordinators
I21The property coordinators for this Agreement are:
Q02
I77Name
S8003I20(Educational Institution/NonProfit Organization)
S8002Q02
I77
S8003I20(Complete Address and Phone Number)
S8002Q02
I77Name
S8003I20(USDA Coordinator)
S8002Q02
I77
S8003I20(Complete Address and Phone Number)
S8002Q02
S8003I20Approved:
S8002Q02
I77
S8003I20(Educational Institution/NonProfit Organization)
S8002Q02
I77
S8003I20Date
S8002Q02
I77
S8003I20(USDA Agency Head)
S8002Q02
I77
S8003I20Date
S8010
F8008I327 CFR Ch. XXIX (1�091�0900 Edition)
I33Office of Energy, USDA


�45�I04CHAPTER XXIX_OFFICE OF ENERGY,
I04DEPARTMENT OF AGRICULTURE
I03
I87Part
I88Page
I482900
I49Essential agricultural uses and volumetric requirements_Natural Gas Policy Act
I5947
I482901
I49Administrative procedures for adjustments of natural gas curtailment priority
I5948



F80103I327 CFR Ch. XXIX (1�091�0900 Edition)
I33Office of Energy, USDA

�47�I95Pt. 2900
I52PART 2900_ESSENTIAL AGRICULTURAL USES AND VOLUMETRIC REQUIREMENTS_NATURAL GAS POLICY ACT
S8006I18Sec.
S8010I262900.1General.
I262900.2Definitions.
I262900.3Essential agricultural uses.
I262900.4Natural gas requirements.
I262900.6Effective date.

Q04I21T5Authority:  T1Pub. L. 95�09621, Nov. 9, 1978.
Q04I21T5Source:  T144 FR 28786, May 17, 1979, unless otherwise noted.

I80�1A2900.1
I89General. 
I11Section 401(c) of the Natural Gas Policy Act of 1978 (NGPA) requires the Secretary of Agriculture to determine the essential uses of natural gas, and to certify to the Secretary of Energy and the Federal Energy Regulatory Commission (FERC) the natural gas requirements, expressed either as volumes or percentages of use, of persons, or classes thereof, for essential agricultural uses in order to meet requirements of full food and fiber production. This rule covers establishments performing functions classed as essential agricultural uses whose natural gas supplies are distributed through the interstate pipeline systems even though such establishments may receive such gas directly from an intrastate pipeline or local distribution company. The rule provides to the Secretary of Energy (for purposes of Section 401(a) of the NGPA) and to the Federal Energy Regulatory Commission the following certifications: 
I11(a) Essential agricultural T3usesG1T1 of natural gas, expressed as classes of establishments that use gas for essential agricultural purposes; and 
I11(b) Essential agricultural current T3requirementsG1T1 of natural gas, expressed as percentages of use. 

I80�1A2900.2
I89Definitions. 
I11(a) T3Full food and fiber productionG1T1 means the entire output of food and fiber produced for the domestic market, and for export, for building of reserves, and crops for soil building or conservation. This term also includes the processing of food and fiber into stable and storable products, and the maintenance of food quality after processing. 
I11(b) T3EstablishmentG1T1 means an economic unit, generally at a single physical location where business is conducted or where service or industrial operations are performed (for example, a factory, mill, store, mine, farm, sales office, or warehouse). (Note: This is the same definition used in the Standard Industrial Classification Manual, 1972 edition). 
I11(c) T3Essential Agricultural Use EstablishmentG1T1 means any Establishment, or the portion of an Establishment, which performs (or has the capability to perform) activities specified in �1A2900.3. 
I11(d) T3Current Natural Gas RequirementsG1T1 means the amount of natural gas required by an Essential Agricultural Use Establishment to perform the activities devoted to full food and fiber production. 
Q04
S8003I20(Pub. L. 95�09621, Nov. 8, 1979, 92 Stat. 3350, 15 U.S.C. 3301 T3et seq.G1T1)
S8010
Q04I20[44 FR 28786, May 17, 1979, as amended at 46 FR 47216, Sept. 25, 1981]

I80�1A2900.3 
I89Essential agricultural uses. 
I11For purposes of Section 401(c) of the NGPA the following classes or portions of classes are certified as essential agricultural uses in order to meet the requirements of full food and fiber production: 

I82Essential Agricultural Uses 
I73Industry SIC No. and Industry Description 
I74Food and Natural Fiber Production
I2101Agricultural Production_Crops 
I2102Agricultural Production_Livestock Excluding 0272_Horses and Other Equines, and Nonfood Portions of 0279_Animal Specialties, Not Elsewhere Classified. 
I210723Crop Preparation Services for Market, Except Cotton Ginning (see fiber processing). 
I214971Irrigation Systems. 
I74Fertilizer and Agricultural Chemicals 
I74(Process and Feedstock Use Only) 
I211474Potash, Soda, and Borate Materials. 
I211475Phosphate Rock. 
I211477Sulfur. 
I212819Industrial Inorganic Chemicals, n.e.c. (Agricultural related only). 
I212865Cyclic Crudes and Cyclic Intermediates, Dyes and Organic Pigments (Agricutural related only). 
�48�I212869Industrial Organic Chemicals, n.e.c. (Agricutural related only). 
I21287Agricultural Chemicals. 
I212899Chemicals and Chemical Preparations, n.e.c. (Salt_Feed grade only). 
I213274Lime (Agricultural lime only). 
I74Food and Natural Fiber Processing-Food 
I2120Food and Kindred Products Except 2047Dog, Cat and Other Pet Food, and 2048Prepared Feeds and Feed Ingredients for Animals and Fowls, Not Elsewhere Classified. 
I212869Industrial Organic Chemicals (Monosodium Glutamate, Food-grade Citric Acid and Food-grade Enzymes only). 
I212899Chemicals and Chemical Preparations, n.e.c. (Salt for food use only).I74Animal Feeds, and Food 
I71(Process and Feedstock Use Only)
I212047Dog, Cat and Other Pet Food. 
I212048Prepared Feeds and Feed Ingredients for Animals and Fowls, Not Elsewhere Classified. 
I74Natural Fiber 
I210724Cotton Ginning. 
I212141Tobacco Stemming and Redrying. 
I212299Textile Goods, n.e.c. (wool tops, combing and converting). 
I213111Leather Tanning and Finishing. 
I74Food Quality Maintenance_Food Packaging 
I212641Paper Coating and Glazing (food related only). 
I212643Bags, Except Textile (food related only). 
I212645Die Cut Paper and Paperboard (food related only). 
I212646Pressed and Molded Pulp Goods (food related only). 
I212649Converted Paper Products (food related only). 
I212651Folding Paperboard Boxes (food related only). 
I212653Corrugated and Solid Fiber Boxes (food related only). 
I212654Sanitary Food Containers. 
I212655Fiber Cans, Tubes, Drums, and Similar Products (food related only). 
I213079Miscellaneous Plastic Products (food related only). 
I213221Glass Containers (food related only). 
I213411Metal Cans (food related only). 
I213412Metal Shipping Barrels, Drums, Kegs, and Pails (food related only).
I213466Metal Crowns and Closures (Food Related Only).
I213497Metal Foil and Leaf (food related only). 
I21Petroleum wax, synthetic petroleum wax and polyethylene wax (food grade only) as food containers. 
I74Marketing and Distribution 
I214221Farm Product Warehousing and Storage. 
I214222Refrigerated Warehousing. 
I21514Groceries and Related Products. 
I215153Farm Product Raw Materials_Grain. 
I2154Food Stores. 
I74Energy Production 
I21(1) Agricultural production on set-aside acreage or acreage diverted from the production of a commodity (as provided under the Agricultural Act of 1949) to be devoted to the production of any commodity for conversion into alcohol or hydrocarbons for use as motor fuel or other fuels; 
I21(2) Sugar refining for production of alcohol; and 
I21(3) Distillation of fuel-grade alcohol from food grains and other biomass by facilities in existence on June 30, 1980 which do not have the installed capability to burn coal lawfully, for a period ending June 29, 1985.
Q02
S8003I20(Pub. L. 95�09621, Nov. 8, 1978, 92 Stat. 3350; 15 U.S.C. 3301 T3et seq.G1T1) 
S8010
Q04I20[44 FR 28786, May 17, 1979, as amended at 45 FR 5298, Jan. 23, 1980; 45 FR 45887, 45888, July 8, 1980; 45 FR 50550, July 30, 1980; 47 FR 25320, June 11, 1982; 48 FR 43670, Sept. 26, 1983; 49 FR 37733, Sept. 26, 1984]

I80�1A2900.4 
I89Natural gas requirements. 
I11For purposes of Section 401(c), NGPA, the natural gas requirements for each Essential Agricultural Use Establishment, whether such Essential Agricultural Use Establishment is in existence on the effective date of this rule or comes into existence thereafter, are certified to be 100 percent of Current Natural Gas Requirements. 

I80�1A2900.6 
I89Effective date. 
I11This rule shall become effective on May 14, 1979. 

I95Pt. 2901
I52PART 2901_ADMINISTRATIVE PROCEDURES FOR ADJUSTMENTS OF NATURAL GAS CURTAILMENT PRIORITY
S8006I18Sec.
S8010I262901.1Purpose and scope.
I262901.2Definitions.
I262901.3Oral presentation.
I262901.4Interpretations.
I262901.5Modifications and rescissions.
I262901.6Exceptions and exemptions.
I262901.7Review of denials.
I262901.8Judicial review.
I262901.9Effective date.

Q04
�49�I21T5Authority:  T1Secs. 502, 507. Pub. L. 95�09621, 92 Stat. 3397, 3405, Nov. 9, 1978.
Q04I21T5Source:  T144 FR 55803, Sept. 28, 1979, unless otherwise noted.

I80�1A2901.1
I89Purpose and scope.
I11The purpose of this part 2901 is to provide procedures for the making of certain adjustments to the Secretary of Agriculture's Essential Agricultural Uses and Requirements regulations in accordance with section 502(c) of the Natural Gas Policy Act of 1978, in order to prevent special hardship, inequity, or an unfair distribution of burdens. The procedures in this part 2901 apply to any person seeking an interpretation of, modification of, rescission of, exception of, or exemption from the Essential Agricultural Uses and Requirements regulations in part 2900 of this chapter. 

I80�1A2901.2 
I89Definitions.
I11(a) T3PersonG1T1 means any individual, firm, sole proprietorship, partnership, association, company, joint venture or corporation.
I11(b) T3DirectorG1T1 means the Director of the Office of Energy, U.S. Department of Agriculture.
I11(c) T3SecretaryG1T1 means the Secretary of the U.S. Department of Agriculture.
I11(d) T3AdjustmentG1T1 means an interpretation, modification, rescission of, exception to or exemption from the Essential Agricultural Uses and Requirements regulations, part 2900 of this chapter. 
I11(e) T3NGPAG1T1 means the Natural Gas Policy Act of 1978, Pub. L. 95�09621.
I11(f) T3PetitionerG1T1 means any person seeking an adjustment under this part 2901.

I80�1A2901.3 
I89Oral presentation.
I11Any person seeking an adjustment under this part 2901 shall be given an opportunity to make an oral presentation of data, views and arguments in support of the request for an adjustment, provided that a request to make an oral presentation is submitted in writing with the request for the adjustment. An official of the Department of Agriculture shall preside at such oral presentation.

I80�1A2901.4 
I89Interpretations.
I11(a) T3Request for an interpretation.G1T1 (1) Any person seeking an interpretation of the Essential Agricultural Uses and Requirements regulations in part 2900 shall file a formal written request with the Director. The request should contain a full and complete statement of all relevant facts pertaining to the circumstances, act or transaction that is the subject of the request and to the action sought, and should state the special hardship, inequity, or unfair distribution of burdens that will be prevented by the interpretation sought and why the interpretation is consistent with the purposes of NGPA. The Director shall publish a notice in the T4Federal RegisterG1T1 advising the public that a request for an interpretation has been received and that written comments will be accepted with respect thereto, if received within 20 days of the notice. The T4Federal RegisterG1T1 notice will provide that copies of the request for interpretation from which confidential information has been deleted in accordance with paragraph (a)(2) of this section may be obtained from the petitioner.
I11(2) If the petitioner wishes to claim confidential treatment for any information contained in the request or other documents submitted under this part 2901, such person shall file together with the document a second copy of the document from which has been deleted the information for which such person wishes to claim confidential treatment. The petitioner shall indicate in the original document that it is confidential or contains confidential information and may file a statement specifying the justification for non-disclosure of the information for which non-disclosure is sought. The Director shall consider such requests, and subject to the Freedom of Information Act, 5 U.S.C. 552 and other applicable laws and regulations, shall treat such information as confidential.
I11(b) T3Investigations.G1T1 The Director may initiate an investigation of any statement in a request and utilize in his evaluation any relevant facts obtained in such investigation. The Director may accept submissions from third persons relevant to any request for interpretation provided that the petitioner �50�is afforded an opportunity to respond to all such submissions. In evaluating a request for interpretation, the Director may consider any other source of information.
I11(c) T3Applicability.G1T1 Any interpretation issued hereunder shall be issued on the basis of the information provided on the request, as supplemented by other information brought to the attention of the Director during the consideration of the request. The interpretation shall, therefore, depend for its authority on the accuracy of the factual statement and may be relied upon only to the extent that the facts of the actual situation correspond to those upon which the interpretation was based. 
I11(d) T3Issuance of an interpretation.G1T1 Upon consideration of the request for interpretation and other relevant information received or obtained by the Director, the Director may issue a written interpretation. A copy of the written interpretation shall be provided to FERC and the Secretary of Energy. Notice of the issuance of the written interpretation shall be published in the T4Federal Register.G1T1 The granting of a request for issuance of an interpretation shall be considered final agency action for purposes of judicial review under �1A2901.8.
I11(e) T3Denial of an interpretation.G1T1 An interpretation shall be considered denied for purpose of review of such denial under �1A2901.7 only if:
I11(1) The Director notifies the petitioner in writing that the request is denied and that an interpretation will not be issued; or
I11(2) The Director does not respond to a request for an interpretation, by (i) issuing an interpretation, or (ii) giving notice of when an interpretation will be issued within 45 days of the date of receipt of the request, or within such extended time as the Director may prescribe by written notice within the 45-day period.
I11(f) For purposes of this part 2901 the word T3interpretationG1T1 shall not be deemed to include a simple clarification of an actual or purported ambiguity in part 2900. The Director reserves the right to determine whether a request involves simple clarification and shall advise the requester of his decision.

I80�1A2901.5
I89Modifications and rescissions.
I11(a) T3Request for modification or rescission.G1T1 (1) Any person seeking a modification or a rescission of the Essential Agricultural Uses and Requirements regulations of part 2900 shall file a formal written request with the Director. The request shall contain a full and complete statement of all relevant facts pertaining to the circumstance, act or transaction that is the subject of the request and to the action sought. The request should state the special hardship, inequity or unfair distribution of burdens that will be prevented by making the modification or rescission.
I11(2) If the petitioner wishes to claim confidential treatment for any information contained in the request or other documents submitted under this part 2901, such person shall file together with the document a second copy of the document from which has been deleted the information for which such person wishes to claim confidential treatment. The petitioner shall indicate in the original document that it is confidential or contains confidential information and may file a statement specifying the justification for non-disclosure of the information for which non-disclosure is sought. The Director shall consider such requests, and subject to the Freedom of Information Act, 5 U.S.C. 552 and other applicable laws and regulations, shall treat such information as confidential.
I11(3) The request shall be filed as a petition for rulemaking and treated in accordance with the procedures, as applicable, of 7 CFR part 1, subpart B.
I11(b) T3Institution of rulemaking.G1T1 Upon consideration of the request for modification or rescission and other relevant information received or obtained by the Director, the Director may institute rulemaking proceedings in accordance with the Administrative Procedures Act 5 U.S.C. 551 T3et seq.G1T1 and applicable regulations. 
I11(c) T3Denial of a modification or rescission.G1T1 If the Director (1) denies the request for modification or rescission in writing by notifying the petitioner that he does not intend to institute rulemaking proceedings as proposed and stating the reasons therefor, or (2) does not respond to a request for a �51�modification or rescission in accordance with paragraph (b) of this section or (3) notifies the petitioner in writing that the matter is under continuing consideration and that no decision can be made at that time because of the inadequacy of available information, changing circumstances or other reasons as set forth therein, within 45 days of the date of the receipt thereof, or within such extended time as the Director may prescribe by written notice within that 45-day period, the request shall be considered denied for the purpose of review of such denial under �1A2901.7. 

I80�1A2901.6
I89Exceptions and exemptions.
I11(a) T3Request for exception or exemption.G1T1 (1) Any person seeking an exception or exemption from the Essential Agricultural Uses and Requirements regulations in part 2900 shall file a formal written request with the Director. The request shall contain a full and complete statement of all relevant facts pertaining to the circumstance, act, or transaction that is the subject of the request and to the action sought. The request should state the special hardship, inequity or unfair distribution of burdens that will be prevented by making the exception or exemption. The Director shall publish a notice in the T4Federal RegisterG1T1 advising the public that a request for an exception or exemption has been received and that written comments will be accepted with respect thereto if received within 20 days of the notice. The T4Federal RegisterG1T1 notice will provide that copies of the request from which confidential information has been deleted in accordance with paragraph (a)(2) of this section may be obtained from the petitioner. The Petitioner shall be afforded an opportunity to respond to such submissions.
I11(2) If the petitioner wishes to claim confidential treatment for any information contained in the request or other documents submitted under this part 2901, such person shall file together with the document a second copy of the document from which has been deleted the information for which such person wishes to claim confidential treatment. The petitioner shall indicate in the original document that it is confidential or contains confidential information and may file a statement specifying the justification for non-disclosure of the information for which non-disclosure is sought. The Director shall consider such requests, and subject to the Freedom of Information Act, 5 U.S.C. 552 and other applicable laws and regulations, shall treat such information as confidential.
I11(b) T3Decision and order.G1T1 Upon consideration of the request for an exception or exemption and other relevant information received or obtained during the proceedings, the Director shall issue an order granting or denying the request. The Director shall publish a notice in the T4Federal RegisterG1T1 of the issuance of a decision and order on the request. The granting of a request for an exception or exemption shall be considered final agency action for purposes of judicial review under �1A2901.8.
I11(c) T3Denial of an exception or exemption.G1T1 A request for an exception or exemption shall be considered denied for purposes of review of such denial under �1A2901.7 only if: 
I11(1) The Director has notified the petitioner in writing that the request is denied under paragraph (b) of this section; or
I11(2) The Director does not respond to a request for an exception or exemption by (i) granting the request for an exception or exemption under paragraph (b) of this section or (ii) giving notice of when a decision will be made within 45 days of the receipt of the request, or with such extended time as the Director may prescribe by written notice within the 45-day period.

I80�1A2901.7
I89Review of denials.
I11(a) T3Request for review.G1T1 (1) Any person aggrieved or adversely affected by a denial of a request for any interpretation under �1A2901.4 may request a review of the denial by the Secretary, within 30 days from the date of the denial.
I11(2) Any person aggrieved or adversely affected by a denial of a request for a modification or rescission under �1A2901.5, may request a review of the denial by the Secretary within 30 days from the date of the denial.
I11(3) Any person aggrieved or adversely affected by a denial of a request for an exception or an exemption under �52��1A2901.6, may request a review of the denial by the Secretary within 30 days from the date of the denial. 
I11(b) T3Procedures.G1T1 Any request for review under �1A2901.7(a) shall be in writing and shall set forth the specific ground upon which the request is based. There is no final agency action for purposes of judicial review under �1A2901.8 until that request has been acted upon. If the request for review has not been acted upon within 30 days after it is received, the request shall be deemed to have been denied. That denial shall then constitute final agency action for the purpose of judicial review under �1A2901.8.

I80�1A2901.8
I89Judicial review.
I11Any person aggrieved or adversely affected by a final agency action taken on a request for an adjustment under this section may obtain judicial review in accordance with section 506 of the Natural Gas Policy Act of 1978.

I80�1A2901.9
I89Effective date.
I11This rule shall become effective on October 29, 1979. 



F8008I327 CFR Ch. XXX (1�091�0900 Edition)
I33Office of Chief Financial Officer, USDA


�53�I04CHAPTER XXX_OFFICE OF 
I04THE CHIEF FINANCIAL OFFICER, 
I04DEPARTMENT OF AGRICULTURE
I03
I87Part
I88Page
I483010
I46[Reserved]
Q02
I483011
I49Availability of information to the public
I5955
I483015
I49Uniform Federal assistance regulations
I5956
I483016
I49Uniform administrative requirements for grants and cooperative agreements to State and local governments
I59106
I483017
I49Governmentwide debarment and suspension (nonprocurement) and governmentwide requirements for drug�09free workplace (grants)
I59133
I483018
I49New restrictions on lobbying
I59155
I483019
I49Uniform administrative requirements for grants and agreements with institutions of higher education, hospitals, and other non-profit organizations
I59167
I483052
I49Audits of States, local governments, and non-profit organizations
I59194

F80103I327 CFR Ch. XXX (1�091�0900 Edition)
I33Office of Chief Financial Officer, USDA

�55�I52PART 3011_AVAILABILITY OF INFORMATION TO THE PUBLIC
S8006I18Sec.
S8010I263011.1General statement.
I263011.2Public inspection and copying.
I263011.3Indexes.
I263011.4Initial requests for records.
I263011.5Appeals.
I263011.6Fee schedule.

Q04I21T5Authority:  T15 U.S.C. 301 and 522; 7 CFR 1.3.
Q04I21T5Source:  T154 FR 51869, Dec. 19, 1989, unless otherwise noted.

I80�1A3011.1 
I89General statement.
I11This part is issued in accordance with 7 CFR 1.3 of the Department of Agriculture regulations governing the availability of records (7 CFR 1.1_1.23 and Appendix A) under the Freedom of Information Act (5 U.S.C. 552, as amended). These regulations supplement the Department's regulations by providing guidance for any person wishing to request records from the Office of Finance and Management (OFM).

I80�1A3011.2 
I89Public inspection and copying.
I11(a) T3Background.G1T1 5 U.S.C. 552(a)(2) requires each agency to maintain and make available for public inspection and copying certain kinds of records.
I11(b) T3Procedure.G1T1 To gain access to OFM records that are available for public inspection, contact the Freedom of Information Act Officer by writing to the address shown in �1A3011.4(b) of this title.


I80�1A3011.3
I89Indexes.
I115 U.S.C. 552(a)(2) also requires that each agency maintain and make available for public inspection and copying current indexes providing identifying information for the public with regard to any records which are made available for public inspection and copying. OFM does not maintain any materials within the scope of these requirements.

I80�1A3011.4
I89Initial requests for records.
I11(a) T3Background.G1T1 The Freedom of Information Act Officer is authorized to: 
I11(1) Grant or deny requests for OFM records,
I11(2) Make discretionary release of OFM records when the benefit to the public in releasing the document outweighs any harm likely to result from disclosure,
I11(3) Reduce or waive fees to be charged where determined to be appropriate.
I11(b) T3Procedures.G1T1 This part provides the titles and mailing address of officials who are authorized to release records to the public. The normal working hours of these offices are 8:30 a.m. to 5:00 p.m., local time, Monday through Friday, excluding holidays, during which public inspection and copying of certain kinds of records is permitted. Persons wishing to request records from the Office of Finance and Management may do so by submitting each initial written request for OFM records to the appropriate OFM official shown below:
I11(1) For records held at the Washington, DC Headquarters units, submit initial requests to the Freedom of Information Act Officer, Office of Finance and Management, USDA, 14th and Independence Ave., SW., Room 117�09W, Administration Building, Washington, DC 20250�099000.
I11(2) For records held at the National Finance Center in New Orleans, Louisiana, submit initial requests to the Freedom of Information Act Officer, National Finance Center, OFM, USDA, 13800 Old Gentilly Road, Building 350, (P.O. Box 60,000, New Orleans, LA 70160), New Orleans, Louisiana 70129.
Q02I10If the requester is unable to determine the official to whom the request should be addressed, it should be submitted to the Headquarters Freedom of Information Act Officer who will refer such requests to the appropriate officials.

I80�1A3011.5
I89Appeals.
I11Any person whose initial request is denied in whole or in part may appeal that denial, in accordance with 7 CFR 1.6(e) and 1.8, to the Director, Office of Finance and Management, USDA, Room 117�09W, Administration Building, 14th and Independence Ave., Washington, DC 20250�099000.

I80�1A3011.6
I89Fee schedule.
I11Departmental regulations provide for a schedule of reasonable standard charges for document search and duplication. See 7 CFR 1.2(b). Fees to be charged are set forth in 7 CFR part 1, subpart A, Appendix A.


�56�I95Pt. 3015
I52PART 3015_UNIFORM FEDERAL ASSISTANCE REGULATIONS 


I86Subpart A_General
S8006I18Sec. 
S8010I263015.1Purpose and scope of this part. 
I263015.2Applicability. 
I263015.3Conflicting policies and deviations. 
I263015.4Special restrictive terms. 

I86Subpart B_Cash Depositories 
I263015.10Physical segregation and eligibility. 
I263015.11Separate bank accounts. 
I263015.12Moneys advanced to recipients. 
I263015.13Minority and women-owned banks. 

I86Subpart C_Bonding and Insurance 
I263015.15General. 
I263015.16Construction and facility improvement. 
I263015.17Fidelity bonds. 
I263015.18Source of bonds. 

I86Subpart D_Record Retention and Access Requirements 
I263015.20Applicability. 
I263015.21Retention period. 
I263015.22Starting date of retention period. 
I263015.23Microfilm. 
I263015.24Access to records. 
I263015.25Restrictions to public access. 

I86Subpart E_Waiver of ``Single'' State Agency Requirements 
I263015.30Waiver of ``single'' State agency requirements. 

I86Subpart F_Grant Related Income 
I263015.40Scope. 
I263015.41General program income. 
I263015.42Proceeds from sale of real property and from sale of equipment and supplies acquired for use. 
I263015.43Royalties and other income earned from a copyrighted work. 
I263015.44Royalties or equivalent income earned from patents or from inventions. 
I263015.45Other program income. 
I263015.46Interest earned on advances of grant funds. 

I86Subpart G_Cost-Sharing or Matching 
I263015.50Scope. 
I263015.51Acceptable contributions and costs. 
I263015.52Qualifications and exceptions. 
I263015.53Valuation of donated services. 
I263015.54Valuation of donated supplies and loaned equipment or space. 
I263015.55Valuation of donated equipment, buildings, and land. 
I263015.56Appraisal of real property. 

I86Subpart H_Standards for Financial Management Systems 
I263015.60Scope. 
I263015.61Financial management standards. 
S8006I86Subpart I[Reserved] 
S8010
I86Subpart J_Financial Reporting Requirements 
I263015.80Scope and applicability. 
I263015.81General. 
I263015.82Financial status report. 
I263015.83Federal cash transactions report. 
I263015.84Request for advance or reimbursement. 
I263015.85Outlay report and request for reimbursement for construction programs. 

I86Subpart K_Monitoring and Reporting Program Performance 
I263015.90Scope. 
I263015.91Monitoring by recipients. 
I263015.92Performance reports. 
I263015.93Significant developments. 
I263015.94Site visits. 
I263015.95Waivers, extensions and enforcement actions. 

I86Subpart L_Payment Requirements
I263015.100Scope.
I263015.101General.
I263015.102Payment methods.
I263015.103Withholding payments.
I263015.104Requesting advances or reimbursements.
I263015.105Payments to subrecipients.

I86Subpart M_Programmatic Changes and Budget Revisions
I263015.110Scope and applicability.
I263015.111Cost principles.
I263015.112Approval procedures.
I263015.113Programmatic changes.
I263015.114Budgets_general.
I263015.115Budget revisions.
I263015.116Construction and nonconstruction work under the same grant, subgrant, or cooperative agreement.

I86Subpart N_Grant and Subgrant Closeout, Suspension and Termination
I263015.120Closeout.
I263015.121Amounts payable to the Federal government.
I263015.122Violation of terms.
I263015.123Suspension.
I263015.124Termination.
I263015.125Applicability to subgrants.
S8006I86Subparts O�09P [Reserved]
S8010
�57�I86Subpart Q_Application for Federal Assistance
I263015.150Scope and applicability.
I263015.151Authorized forms.
I263015.152Preapplication for Federal assistance.
I263015.153Notice of preapplication review action.
I263015.154Application for Federal assistance (nonconstruction programs).
I263015.155Application for Federal assistance (construction programs).
I263015.156Application for Federal assistance (short form).
I263015.157Authorized form for nongovernmental organizations.
I263015.158Competition in the awarding of discretionary grants and cooperative agreements. 

I86Subpart R_Property
I263015.160Scope and applicability.
I263015.161Additional requirements.
I263015.162Title to real property, equipment and supplies.
I263015.163Real property.
I263015.164Statutory exemptions for equipment and supplies.
I263015.165Rights to require transfer of equipment.
I263015.166Use of equipment.
I263015.167Replacement of equipment.
I263015.168Disposal of equipment.
I263015.169Equipment management requirements.
I263015.170Damage, loss, or theft of equipment.
I263015.171Unused supplies.
I263015.172Federal share of real property, equipment, and supplies.
I263015.173Using or returning the Federal share.
I263015.174Subrecipient's share.
I263015.175Intangible personal property.

I86Subpart S_Procurement
I263015.180Scope and applicability.
I263015.181Standards of conduct.
I263015.182Open and free competition.
I263015.183Access to contractor records.
I263015.184Equal employment opportunity.

I86Subpart T_Cost Principles
I263015.190Scope.
I263015.191Governments.
I263015.192Institutions of higher education.
I263015.193Other non-profit organizations.
I263015.194For-profit organizations.
I263015.195Subgrants and cost-type contracts.
I263015.196Costs allowable with approval.

I86Subpart U_Miscellaneous
I263015.200Acknowledgement of support on publications and audiovisuals.
I263015.201Use of consultants.
I263015.202Limits on total payments to the recipient.
I263015.203[Reserved]
I263015.204T4Federal RegisterG1T1 publications.
I263015.205General provisions for grants and cooperative agreements with institutions of higher education, other nonprofit organizations, and hospitals. 

I86Subpart V_Intergovernmental Review of Department of Agriculture Programs and Activities
I263015.300Purpose.
I263015.301Definitions.
I263015.302Applicability.
I263015.303Secretary's general responsibilities.
I263015.304Federal interagency coordination.
I263015.305State selection of programs and activities.
I263015.306Communication with State and local elected officials.
I263015.307State comments on proposed Federal financial assistance and direct Federal development.
I263015.308Processing comments.
I263015.309Accommodation of intergovernmental concerns.
I263015.310Interstate situations.
I263015.311Simplification, consolidation, or substitution of State plans.
I263015.312Waivers.
Q02I26T5T4Appendix A to PartG1T5 3015T4_DefinitionsG1T5
I26T5T4Appendix B to PartG1T5 3015T4_OMB Circular A�09G1T5128, T4``Audits of State and Local Governments''G1T5

Q04I21T5Authority:  T15 U.S.C. 301, Subpart I, 31 U.S.C. 7505, unless otherwise noted.
Q04I21T5Source:  T146 FR 55639, Nov. 10, 1981, unless otherwise noted. 

I56Subpart A_General 


I80�1A3015.1
I89Purpose and scope of this part. 

I11(a)(1) This part establishes USDA-wide uniform requirements for the administration of open-ended entitlement grants and specifies the set of principles for determining allowable costs under USDA grants and cooperative agreements to State and local governments, universities, non-profit and for-profit organizations as set forth in OMB Circulars A�0987, A�0921, A�09122, and 48 CFR 31.2, respectively. This Part also contains the general provisions that �58�apply to all grants and cooperative agreements made by USDA.

I11(2) Additionally, this part establishes intergovernmental review provisions required by Executive Order 12372 for any programs listed in the T4Federal RegisterG1T1 as covered, and policy on competition in awarding discretionary grants and cooperative agreements. 


I11(3) Rules for nonentitlement grants and cooperative agreements to State and local governments are found in part 3016. 
I11(4) Rules for nonentitlement grants and cooperative agreements to institutions of higher education, hospitals, and other non-profit organizations are found in part 3019.
I11(b) These rules supersede and take precedence over any individual USDA agency regulations and directives dealing with the administration of grants and cooperative agreements to the extent such regulations and directives are inconsistent with this part, unless such inconsistency is based on a statutory provision or an exception has been obtained from OMB. (See �1A3015.3.) Definitions for the terms used in this part are set forth in Appendix A. Definitions for the implementation of standard audit requirements for State and local governments and Indian Tribal governments are contained in Subpart I_Audits. 
I11(c) The purpose of this part is to simplify, standardize, and improve the administration of USDA grants and cooperative agreements. 
I11(d) Responsibility for developing and interpreting the material for this part and in keeping it up-to-date is assigned to the Office of the Deputy Director, Finance, a component of the Office of Operations and Finance (O&F), which reports to the Assistant Secretary for Administration. 


Q04I20[46 FR 55639, Nov. 10, 1981, as amended at 53 FR 8043, Mar. 11, 1988; 60 FR 44124, Aug. 24, 1995; 62 FR 45949, Aug. 29, 1997]


I80�1A3015.2
I89Applicability. 
I11(a) T3Grants and cooperative agreements.G1T1 This part applies to USDA grants and cooperative agreements. For each substantive provision in this part, either the words of the provision itself or other words in the same subpart tell whether the provision applies to subgrants. Exemptions to this part may be applicable to certain kinds of recipients. (See paragraph (d) of this section.) 
I11(b) T3Terminology applicable to this part.G1T1 This part's substantive rules are the same for grants and cooperative agreements. Many of the rules are also the same for subgrants. Therefore, certain simplified terminology is used in the text. Specifically in all portions of this part: 
I11(1) Each provision that applies to T3grantsG1T1 also applies to T3cooperative agreements,G1T1 even though the latter term does not appear in the provisions. 
I11(2) Each provision that applies to T3recipients of grantsG1T1 applies to T3recipients of cooperative agreements,G1T1 even though the latter term does not appear in the provision. 
I11(3) The term T3recipientG1T1 refers equally to recipients of grants and recipients of cooperative agreements. 
I11(4) The term T3awarding agencyG1T1 refers equally to a USDA agency that awards a grant and to one that awards a cooperative agreement. 
I11(5) The term T3subgrantG1T1 refers equally to certain awards under grants and to the same kinds of awards under cooperative agreements. 
I11(c) T3Public institutions of higher education and hospitals.G1T1 Grants, cooperative agreements and subgrants awarded to institutions of higher education and hospitals operated by a government are subject only to the provisions of this part that apply to non-governmental organizations.
I11(d) T3Recipients to which this part does not automatically apply.G1T1 This part does not automatically apply to the kinds of recipients listed below unless other conditions set forth in the grant, cooperative agreement, subgrant, or specific subpart in this part make all or specified portions apply: 
I11(1) Foreign governments or organizations, 
I11(2) International organizations, such as the United Nations,
I11(3) Agencies or instrumentalities of the Federal government, and 
I11(4) Individuals.
I11(5) State and local governments, except open-ended entitlements to State and local governments. 
�59�I11(6) Institutions of higher education, hospitals and other non-profit organizations except open-ended entitlements to those entities.
I11(e) T3Collaborative arrangements.G1T1 (1) Where permitted by the terms of the award, a recipient may enter into collaborative arrangements with other organizations to jointly carry out activities with grant or cooperative agreement funds. In this kind of situation, the arrangement between the recipient and each collaborating organization is subject to the rules in this part that apply to subgrants awarded by the recipients. (See the example shown in �1A3015.195.)
I11(2) This paragraph (e) does not apply to arrangements where the organizations receive an award jointly. In this case, they are not a recipient and subrecipient but, as the award notice states, joint recipients.
Q04I20[46 FR 55639, Nov. 10, 1981, as amended at 53 FR 8044, Mar. 11, 1988; 60 FR 44124, Aug. 24, 1995]

I80�1A3015.3 
I89Conflicting policies and deviations. 
I11(a) T3Statutory provisions.G1T1 Federal statutes that apply to some USDA grant programs may contain provisions that conflict with this part. Those statutory provisions take precedence over this part. 
I11(b) T3Nonstatutory provisions.G1T1 USDA awarding agencies occasionally develop grant provisions that are inconsistent with this part. USDA attempts to keep these provisions to a minimum by internal procedures that require these provisions to be justified to appropriate officials of USDA and OMB. If the conflicting provisions are of long-term and general applicability, O&F may require that the awarding agency (1) publish the conflicting provision as a notice in the T4Federal RegisterG1T1 and (2) give the public an opportunity to comment before making the regulations final. 
I11(c) T3Nonstatutory provisions-subgrants.G1T1 If a provision of a subgrant conflicts with this part, the recipient is considered as violating the provisions of the grant, unless the subgrant provision is authorized in writing, by the awarding agency. 
I11(d) T3OMB exceptions.G1T1 In some cases, OMB grants exceptions from the requirements of the Circulars, when permissible under existing laws. In those instances where a program receives an exception to a particular provision of a Circular, the exception takes precedence over this part. 

I80�1A3015.4
I89Special restrictive terms. 
I11(a) Occasionally an awarding agency, or a recipient awarding a subgrant, may find that a particular recipient: 
I11(1) Is financially unstable, 
I11(2) Has a history of poor performance, or 
I11(3) Has a management system that does not meet the standards in this part.
Q02I10In these cases the awarding agency may impose special conditions that are more restrictive than otherwise permitted by this part. If so, the awarding agency must tell the recipient in writing why it is imposing the special conditions and what corrective action is needed. 
I11(b) At the time an awarding agency imposes a special grant condition under paragraph (a) of this section, the awarding agency, through O&F, shall notify OMB and other interested parties. 
I11(c) At the time a recipient imposes a special restrictive subgrant condition under paragraph (a) of this section, it must notify the awarding agency, giving full particulars. The awarding agency, through O&F, shall then notify OMB and other interested parties. 
I11(d) A special restrictive grant or subgrant condition under paragraph (a) of this section is considered consistent with this part. 

I56Subpart B_Cash Depositories 

I80�1A3015.10
I89Physical segregation and eligibility. 
I11Except as provided in �1A3015.11, awarding agencies shall not impose grant or subgrant conditions which: 
I11(a) Require the recipient to use a separate bank account for the deposit of grant or subgrant funds, or 
I11(b) Establish any eligibility requirements for banks or other financial institutions in which recipients deposit grant or subgrant funds. 

�60�I80�1A3015.11
I89Separate bank accounts. 
I11A separate bank account shall be required when applicable letter of credit agreements provide that funds will not be drawn until the recipient's checks are presented to the bank for payment. 

I80�1A3015.12
I89Moneys advanced to recipients. 
I11Any moneys advanced to recipients which are subject to the control or regulation of the United States or any of its officers, agents, or employees (public moneys as defined in Treasury Circular 176, as amended), must be deposited in a bank with Federal Deposit Insurance Corporation (FDIC) insurance coverage and the balance exceeding the FDIC coverage must be collaterally secured. 

I80�1A3015.13
I89Minority and women-owned banks. 
I11Consistent with the national goal of expanding opportunities for minority business enterprises, recipients, and subrecipients are encouraged to use minority and women-owned banks. Upon request, awarding agencies will furnish a listing of minority and women-owned banks to recipients. 

I56Subpart C_Bonding and Insurance 

I80�1A3015.15
I89General. 
I11In administering grants, subgrants, and cooperative agreements, recipients shall observe their regular requirements and practices with respect to bonding and insurance. No additional bonding and insurance requirements, including fidelity bonds, shall be imposed by the provisions of the grant, subgrant, or cooperative agreement except as provided in �1A3015.16 through 3015.18. 

I80�1A3015.16
I89Construction and facility improvement. 
I11(a) T3Scope.G1T1 This section covers requirements for bid guarantees, performance bonds, and payment bonds when the recipients will contract or subcontract for construction or facility improvement (including alterations and renovations of real property) under a grant or subgrant. 
I11(b) T3Bids and contracts or subcontracts of $100,000 or less.G1T1 Unless otherwise required by law, the recipients shall follow its own requirements and practices relating to bid guarantees, performance bonds, and payment bonds. 
I11(c) T3Bids and contracts or subcontracts exceeding $100,000.G1T1 Unless otherwise required by law, the recipient may follow its own regular policy and requirements if the USDA awarding agency has decided that the Federal government's interest will be adequately protected. If this decision has not been made, the minimum requirements shall be as follows: 
I11(1) A bid guarantee from each bidder equivalent to 5 percent of the bid price; 
I11(2) A performance bond on the part of the contractor for 100 percent of the contract price; and 
I11(3) A payment bond on the part of the contractor for 100 percent of the contract price.

I80�1A3015.17
I89Fidelity bonds.
I11(a) If the recipient is not a unit of government, the awarding agency may require the recipient to carry adequate fidelity bond coverage where the absence of coverage for the grant-supported activity is considered as created an unacceptable risk.
I11(b) If the subrecipient is not a unit of government, the awarding agency or the recipient may require that the subrecipient carry adequate fidelity bond coverage where the absence of coverage for the subgrant-supported activity is considered as creating an unacceptable risk.

I80�1A3015.18
I89Source of bonds.
I11Any bonds required under �1A3015.16(c) (1) through (3) or �1A3015.17 shall be obtained from companies holding certificates of authority as acceptable sureties (31 CFR part 223). A list of these companies is published annually by the Department of the Treasury in its Circular 570. 

I56Subpart D_Record Retention and Access Requirements

I80�1A3015.20
I89Applicability.
I11(a) This subpart applies to all financial records, supporting documents, �61�statistical records and other records of recipients, which are:
I11(1) Required to be maintained by the provisions of a USDA grant or cooperative agreement, or
I11(2) Otherwise reasonably considered as pertinent to a USDA grant or cooperative agreement.
I11(b) This subpart does not apply to the records of contractors and subcontractors under grants, subgrants and cooperative agreements. For a requirement to place a provision concerning these records in certain kinds of contracts, see Subpart S of this part.

I80�1A3015.21
I89Retention period.
I11(a) Except as provided in paragraphs (b) and (c) of this section, records shall be kept for 3 years from the starting date specified in �1A3015.22.
I11(b) If any litigation, claim, negotiation, audit or other action involving the records has been started before the end of the 3-year period, the records shall be kept until all issues are resolved, or until the end of the regular 3-year period, whichever is later.
I11(c) In order to avoid dual recordkeeping, awarding agencies may make special arrangements for recipients to keep any records which are continuously needed for joint use. The awarding agency shall request a recipient to transfer records to its custody when the awarding agency decides that the records possess long-term retention value. When the records are transferred to or maintained by the awarding agency the 3-year retention requirement shall not apply to the recipient.
I11(d) Records for nonexpendable property acquired in whole or in part, with Federal funds shall be retained for three years after its final disposition.

I80�1A3015.22
I89Starting date of retention period.
I11(a) T3General.G1T1 The retention period starts from the date of the submission of the final expenditure report or, where USDA grant support is continued or renewed at annual or other intervals, the 3-year retention period for the records of each funding period starts on the day the recipient submits to USDA its annual or final expenditure report for that period. If an expenditure report has been waived, the 3-year retention period starts on the day the report would have been due. Exceptions to this paragraph are contained in paragraphs (b) through (d) of this section.
I11(b) T3Equipment records.G1T1 The 3-year retention period for the equipment records required by Subpart R starts from the date of the equipment's disposition, replacement, or transfer at the direction of the awarding agency.
I11(c) T3Records for income transactions after grant or subgrant support.G1T1 (1) In cases where USDA requires that program income (as defined in Appendix A) be applied to costs incurred after expiration or termination of grant or subgrant support, the 3-year retention period for these cost records starts from the end of the recipient's fiscal year in which the costs are incurred.
I11(2) Where USDA requires the disposition of copyright royalties or other program income earned after expiration or termination of grant or subgrant support, the 3-year retention period for those income records starts from the end of the recipient's fiscal year in which the income was earned. (See Subpart F, �1A3015.44.)
I11(d) T3Indirect cost rate proposals, cost allocation plans, etc._G1T1(1) T3Applicability.G1T1 This paragraph applies to the following types of documents and their supporting records:
I11(i) Indirect cost rate computations or proposals;
I11(ii) Cost allocation plans; and
I11(iii) Any similar accounting computations of the rate at which a particular group of costs is chargeable (such as computer usage chargeback rates or composite fringe benefit rates).
I11(2) T3If submitted for negotiation.G1T1 If the Federal government requires submission of the proposal; plan, or other computation for negotiation of the rate chargeable for particular costs, then the 3-year retention period for the plan, proposal or other computation and the supporting records starts from the date of such submission.
I11(3) T3If not submitted for negotiation.G1T1 If the Federal government does not require submission of the proposal, plan, or other computation for negotiation of the rate chargeable for particular costs, then the 3-year retention period �62�for the proposal, plan, or other computation and the supporting records starts from the end of the fiscal year covered by such proposal, plan, or other computation.

I80�1A3015.23
I89Microfilm.
I11Copies made by microfilming, photocopying, or similar methods may be substituted for the original records.

I80�1A3015.24
I89Access to records.
I11(a) T3Records of recipients.G1T1 USDA and the Comptroller General of the United States, or any of their authorized representatives, shall have the right of access to any books, documents, papers, or other records of the recipient which are pertinent in a specific USDA award in order to make audit, examination, excerpts, and transcripts.
I11(b) T3Records of subrecipients.G1T1 USDA and the Comptroller General of the United States, and the recipient, or any of their authorized representatives, shall have the right of access to any books, documents, papers, or other records of the subrecipient which are pertinent to a specific USDA grant or cooperative agreement, in order to make audit, examination, excerpts, and transcripts.
I11(c) T3Expiration of right of access.G1T1 The rights of access in this section shall not be limited to the required retention period but shall last as long as the records are kept.

I80�1A3015.25
I89Restrictions to public access.
I11Unless required by law, no awarding agency shall impose grant or subgrant conditions which limit public access to records covered by this subpart, except when the awarding agency determines that such records must be kept confidential and would have been excepted from disclosure pursuant to USDA's ``Freedom of Information'' regulations if the records had belonged to USDA (7 CFR 1.1�091.16). 

I56Subpart E_Waiver of ``Single'' State Agency Requirements

I80�1A3015.30
I89Waiver of ``single'' State agency requirements.
I11Section 204 of the Intergovernmental Cooperation Act of 1968 authorizes Federal agencies to waive ``single'' State agency requirements on request of the Governor or other duly constituted State authorities.
I11(a) T3Approval authority.G1T1 The awarding agency has approval authority for waiver requests, and shall handle them as quickly as feasible. Approval should be given whenever possible.
I11(b) T3Refusal procedures.G1T1 When it is necessary to refuse a request for waiver of the ``single'' State agency requirements under section 204, the awarding agency shall, through O&F, advise OMB that the request cannot be granted. Such advice should indicate the reasons for the denial of the request. Notification, through O&F, to OMB shall occur prior to informing the State of the refusal.

I56Subpart F_Grant Related Income

I80�1A3015.40
I89Scope.
I11This subpart contains policies and requirements related to program income and interest and other investment income earned on advances of grant funds. Appendix A defines the term ``program income.'' There are five categories of program income covered in this subpart. Each is treated in a separate section. The categories are:
I11(a) General program income;
I11(b) Proceeds from sale of real property and from sale of equipment and supplies acquired for use;
I11(c) Royalties and other income earned from a copyrighted work;
I11(d) Royalties or equivalent income earned from patents or inventions; and
I11(e) Income after the period of grant or subgrant support not otherwise treated.

I80�1A3015.41
I89General program income.
I11(a) T3Applicability.G1T1 This section applies to ``general program income'' as defined in Appendix A.
I11(b) T3Use.G1T1 (1) General program income shall be retained by the recipient and used in accordance with one or a combination of the alternatives in paragraphs (c), (d), and (e) of this section, as follows: The alternative in paragraph (c) may always be used by recipients and must be used if neither of the other two alternatives is permitted by the provisions of the grant award. The alternatives in paragraph (d) or (e) of �63�this section may be used only if expressly permitted by the provisions of the grant award. In specifying alternatives that may be used, the provisions of the grant award may distinguish between income earned by the recipient and income earned by subrecipients and between the sources, kinds, or amounts of income.
I11(2) The provisions of a subgrant award may restrict the use of general program income earned by the subrecipient to only one or some of the alternatives permitted by the provisions of the grant, but the alternative in paragraph (c) of this section shall always be permitted.
I11(c) T3Deduction alternative.G1T1 (1) Under this alternative, the income is used for allowable costs of the project or program. If there is a cost-sharing or matching requirement, costs supported by the income may not count toward satisfying that requirement. Therefore, the maximum percentage of Federal cost-sharing is applied to the net amount determined by deducting the income from total allowable costs and third party in-kind contributions. The income shall be used for current costs unless the awarding agency authorizes the income to be used in a later period.
I11(2) To illustrate this alternative, assume a project in which the recipient incurs $100,000 of allowable costs and receives no third party in-kind contributions. If the recipient earns $10,000 in general program income and this alternative applies, that $10,000 must be deducted from the $100,000 before applying the maximum percentage of Federal cost-sharing. If that percentage is 90 percent, the most that could be paid to the recipient would therefore be $81,000 (90 percent times $90,000).
I11(d) T3Cost-sharing or matching alternative.G1T1 (1) Under this alternative, the income is used for allowable costs of the project or program but, in this case, the costs supported by the income may count toward satisfying a cost-sharing or matching requirement. Therefore, the maximum percentage of Federal cost-sharing is applied to total allowable costs and third party in-kind contributions. The income shall be used for current costs unless the awarding agency authorizes its use in a later period.
I11(2) To illustrate this alternative, assume the same situation as in paragraph (c)(2) of this section. Under this alternative, the 90 percent maximum percentage of Federal cost-sharing would be applied to the full $100,000, and $90,000 could therefore be paid to the recipient.
I11(e) T3Additional costs alternative.G1T1 Under this alternative, the income is used for costs which are in addition to the allowable costs of the project or program but which nevertheless further the objectives of the Federal statute under which the grant was made. Provided that the costs supported by the income further the broad objectives of that statute, they need not be of a kind that would be permissible as charges to Federal funds. Examples of purposes for which the income may be used are:
I11(1) Expanding the project or program.
I11(2) Continuing the project or program after grant or subgrant support ends.
I11(3) Supporting other projects or programs that further the broad objectives of the statute.
I11(4) Obtaining equipment or other assets needed for the project or program or for other activities that further the statute's objectives.

I80�1A3015.42
I89Proceeds from sale of real property and from sale of equipment and supplies acquired for use.
I11The following kinds of program income shall be governed by Subpart R of this part:
I11(a) Proceeds from the sale of real property purchased or constructed under a grant or subgrant.
I11(b) Proceeds from the sale of equipment and supplies created or purchased under a grant or subgrant and intended primarily for use in the grant or subgrant-supported project or program rather than for sale or rental.

I80�1A3015.43
I89Royalties and other income earned from a copyrighted work.
I11(a) This section applies to royalties, license fees, and other income earned by a recipient from a copyrighted work developed under the grant or subgrant. Income of that kind is covered by this �64�section whether a third party or the recipient acts as the publisher, seller, exhibitor, or performer of the copyrighted work. In some cases the recipient incurs costs to earn the income but does not charge these costs to USDA grant funds, to required cost-sharing or matching funds, or to other program income. Costs of that kind may be deducted from the gross income in order to determine how much must be treated as program income.
I11(b) The provisions of the grant award govern the disposition of income subject to this section. If the provisions of the grant award do not treat this kind of income, there are no USDA requirements governing its disposition. A recipient is not prohibited from imposing requirements of its own on the disposition of this kind of income which is earned by its subrecipients provided those requirements are in addition to, and not inconsistent with, any requirements imposed by the provisions of the grant award.

I80�1A3015.44
I89Royalties or equivalent income earned from patents or from inventions.
I11Disposition of royalties or equivalent income earned on patents or inventions arising out of activities assisted by a grant or subgrant shall be governed by the provisions of the grant or subgrant agreement. If the agreement does not provide for the disposition of the royalties or equivalent income, the disposition shall be in accordance with the recipient's own policies. 

I80�1A3015.45
I89Other program income.
I11(a) This section applies to program income not treated elsewhere in this part which subsequently results from an activity supported by a grant or subgrant but which does not accrue until after the period of grant or subgrant support. An example is proceeds from the sale or rental of a residual inventory of merchandise created or purchased by a grant-supported workshop during the period of support.
I11(b) The provisions of the grant award govern the disposition of income subject to this section. If the provisions do not treat this kind of income, there are no USDA requirements governing its disposition. A recipient may impose requirements of its own on the disposition of this kind of income which is earned by its subrecipients provided those requirements are in addition to and not inconsistent with any requirements imposed by the provisions of the grant award. 

I80�1A3015.46
I89Interest earned on advances of grant funds.
I11(a) Except when exempted by Federal statute (see paragraph (b) of this section for the principal exemption), recipients shall remit to the Federal government any interest or other investment income earned on advances of USDA grant funds. This includes any interest or investment income earned by subrecipients and cost-type contractors on advances to them that result from advances of USDA grant funds to the recipient. Unless the recipient receives other instructions from the responsible USDA awarding agency, the recipient shall remit the amount due by check or money order payable to the awarding agency. This requirement may not be administratively waived.
I11(b) In accordance with the Intergovernmental Cooperation Act of 1968 (42 U.S.C. 4213), States, as defined in the Act, shall not be accountable to the Federal government for interest or investment income earned by the State itself, or by its subrecipents, where this income is attributable to grants-in-aid, as defined in the Act.\1\T1N

I28NG2T11G1T1�1A``State'' is defined in the Act to include any agency or instrumentality of a State, and the definition does not exclude a hospital or institution of higher education which is such an agency or instrumentality. ``Grant-in-aid'' is defined in the Act to exclude payments under research and development contracts or grants which are awarded directly and on similar terms to all qualifying organizations, whether public or private. (42 U.S.C. 4201)

I11(c) Recipients are cautioned that they are subject to the provisions of Subpart L for minimizing the time between the transfer of advances and their disbursement. Those provisions apply even if there is no accountability to the Federal government for interest or other investment income earned on the advances.

�65�I56Subpart G_Cost-Sharing or Matching

I80�1A3015.50
I89Scope.
I11This subpart contains rules reflecting Federal requirements for cost-sharing or matching. These rules apply whether cost-sharing or matching is required by Federal statute, awarding agency regulations, or by other provisions established by the specific grant agreement.

I80�1A3015.51
I89Acceptable contributions and costs.
I11A cost-sharing or a matching requirement may be satisfied after qualifications and exceptions are met in �1A3015.52 and by satisfying either or both of the following:
I11(a) Allowable costs incurred by the recipient or by any subrecipient under the grant or subgrant. This includes allowable costs supported by non-Federal grants or by cash donations from non-Federal third parties. Allowable costs shall be determined in accordance with the cost principles set forth in Subpart T.
I11(b) The value of third party in-kind contributions applicable to the same period when a cost-sharing or matching requirement applies. 

I80�1A3015.52
I89Qualifications and exceptions.
I11(a) T3Costs supported by other Federal grants.G1T1 (1) A cost-sharing or a matching requirement shall not be met by costs supported by another Federal grant, except as provided by Federal statute. This exception however, does not apply to costs supported by general program income earned from a contract awarded under another Federal grant.
I11(2) For the purpose of this part, funds provided under General or Countercyclical Revenue Sharing Programs (31 U.S.C. 1221 T3et seq.G1T1 and 42 U.S.C. 6721 T3et seq.G1T1) are not considered Federal grants. Therefore, allowable costs supported by these funds may be used to satisfy a cost-sharing or a matching requirement.
I11(b) T3Costs or contributions applied towards other Federal cost-sharing requirements.G1T1 Recipient costs or the value of third party in-kind contributions shall not count towards satisfying a cost-sharing or matching requirement of a USDA grant if they are or will be counted towards satisfying a cost-sharing or matching requirement of another Federal grant, a Federal procurement contract, or any other award of Federal funds.
I11(c) T3Costs financed by general program income.G1T1 Costs financed by general program income as defined in Appendix A shall not count towards satisfying a cost-sharing or matching requirement of a USDA grant supporting the activity unless the provisions of the grant award expressly permit the income to be used for cost-sharing or matching purposes. (This is the alternative for use of general program income described in �1A3015.41).
I11(d) T3Services or property financed by income earned by contractors.G1T1 Contractors under a grant or subgrant may earn income from the activities carried out under the contract in addition to the amounts earned from the party awarding the contract. No costs of services or property supported by this income may count toward satisfying a cost-sharing or matching requirement unless other provisions of the grant award expressly permit this kind of income to be used to meet the requirement.
I11(e) T3Records.G1T1 In order to count cost and third party in-kind contributions towards satisfying a cost-sharing or a matching requirement, there must be verification and accurate documentation from the records of recipients or cost-type contractors. These records shall show how the value placed on third party in-kind contributions was decided. Special standards and procedures for calculating these contributions are discussed in paragraph (f) of this section. Volunteer services, to the extent possible, shall be supported by the same pay procedures and rates employed by the organization when paying for similar work performed by its personnel.
I11(f) T3Special standards for third party in-kind contributions_G1T1(1) T3Contributions to recipients or cost-type contractors.G1T1 A third party in-kind contribution to a recipient or cost-type contractor may count towards satisfying a cost-sharing or matching requirement only where, if the recipient or cost-type contractor �66�were to pay for it, the payment would be an allowable cost.
I11(2) T3Contributions to fixed-price contractors.G1T1 A third party in-kind contribution to a fixed-price contractor may count towards satisfying a cost-sharing or matching requirement only if it results in:
I11(i) An increase in the services or property provided under the contract (without additional cost to the recipient or subrecipient), or
I11(ii) A cost savings to the recipient or subrecipient.

I80�1A3015.53
I89Valuation of donated services.
I11(a) T3Volunteer services.G1T1 Unpaid services provided to a recipient by an individual shall be valued at rates consistent with the rates normally paid for similar work in the recipient organization. If there is no similar work in the recipient organization, the rate of pay for volunteer services should be consistent with those regular rates paid for similar work in the same labor market. In either case, a reasonable amount for fringe benefits may be included in the valuation.
I11(b) T3Employees of other organizations.G1T1 When an employer, other than a recipient or cost-type contractor, furnishes the services of an employee without cost to perform the employee's normal line of work, the services shall be valued at the employee's regular rate of pay, exclusive of the employer's fringe benefits and overhead cost. If the services are in a different line of work, paragraph (a) of this section shall apply.

I80�1A3015.54
I89Valuation of donated supplies and loaned equipment or space.
I11(a) If a third party donates supplies, the contributions shall not exceed the cost of the supplies to the donor or the market value of the supplies, at the time of the donation, whichever is less.
I11(b) If a third party donates the use of equipment or space in a building but retains the title, the contribution shall be valued at the fair rental rate of the equipment or space.

I80�1A3015.55
I89Valuation of donated equipment, buildings, and land.
I11When a third party donates equipment, buildings or land, and the title is given to the recipient, the treatment of this donated property shall depend upon the purpose of the grant or subgrant as follows:
I11(a) T3Awards for capital expenditures.G1T1 If the purpose of the grant or subgrant is to assist the recipient in acquiring property, such as equipment, buildings, and land, then the market value of that property at the time of donation may be counted as cost-sharing or matching.
I11(b) T3Other awards.G1T1 If the nature of the grant or subgrant is not for the purpose of acquiring property, the following rules shall apply:
I11(1) If approval is obtained from the awarding agency, the market value at the time of donation of the equipment or buildings and the fair rental rate of the donated land may be counted as cost-sharing or matching. In the case of a subgrant, the provisions of the USDA grant should require that the approval be obtained from the awarding agency as well as the recipient. In all cases, the approval may be given only if a purchase of the equipment or rental of the land would be approved as an allowable direct cost.
I11(2) If approval is not obtained under paragraph (b)(1) of this section, no amount shall be counted for donated land. Instead, only depreciation or use allowances may be counted for donated equipment and buildings and treated as costs incurred by the recipient. They are computed and allocated (usually as indirect costs) in accordance with the cost principles specified in Subpart T of this part. They will thus be handled in the same way as depreciation or use allowances for purchased equipment and buildings. The amount of depreciation or use allowances for donated equipment and buildings is based on the property's market value at the time it was donated.

I80�1A3015.56
I89Appraisal of real property.
I11In some cases, it will be necessary to establish the market value of land or a building or the fair rental rate of land or of space in a building. In these cases, the awarding agency must require that �67�the market value or fair rental rate be set by an independent appraiser (or by a representative of the U.S. General Services Administration, if available) and that the value or rate be certified by a responsible official of the party to which the property or its use is donated. This requirement must also be imposed by the recipient on subgrants.

I56Subpart H_Standards for Financial Management Systems

I80�1A3015.60
I89Scope.
I11This subpart contains standards for financial management systems of recipients. No additional financial management standards or requirements shall be imposed by awarding agencies. Awarding agencies will, however, provide recipients with suggestions and assistance on establishing or improving financial management systems when such assistance is needed or requested.

I80�1A3015.61
I89Financial management standards.
I11The following standards shall be met by recipients and subrecipients in managing their financial management system.
I11(a) T3Financial reporting.G1T1 Complete, accurate, and current disclosure of the financial results of each USDA sponsored project or program shall be made in accordance with the financial reporting requirements set forth in the grant or subgrant. When a USDA awarding agency requires reporting on an accrual basis, the recipient shall not be required to establish an accrual accounting system, but shall develop such accrual data for its reports on the basis of an analysis of the documentation on hand.
I11(b) T3Accounting records.G1T1 The source and application of funds shall be readily identified by the continuous maintenance of updated records. Records, as such, shall contain information pertaining to grant or subgrant awards, authorizations, obligations, unobligated balances, assets, outlays, and income. When the recipient is a governmental entity, the records shall also contain liabilities.
I11(c) T3Internal control.G1T1 Effective control over and accountability for all USDA grant or subgrant funds, real and personal property assets shall be maintained. Recipients shall adequately safeguard all such property and shall ensure that it is used solely for authorized purposes. In cases where projects are not 100 percent Federally funded, recipients must have effective internal controls to assure that expenditures financed with Federal funds are properly chargeable to the grant supported project.
I11(d) T3Budgetary control.G1T1 The actual and budgeted amounts for each grant or subgrant shall be compared. If appropriate, or required by the awarding agency, financial information shall be related to performance and unit cost data. When unit cost data is required, estimates based on available documentation may be accepted whenever possible.
I11(e) T3Advance payments.G1T1 There shall be specific procedures established to minimize the time elapsing between the advance of Federal grant or subgrant funds and their subsequent disbursement by the recipient. When advances are made by a letter of credit method, the recipients shall make drawdowns as close as possible to the time of making the disbursements. This same procedure shall be followed by recipients who advance cash to subrecipients to ensure that timely fiscal transactions and reporting requirements are conducted.
I11(f) T3Allowable costs.G1T1 Established procedures shall be used for determining the reasonableness, allowability, and allocability of costs in accordance with the cost principles prescribed by Subpart T of this part and the provisions of the grant award.
I11(g) T3Source documentation.G1T1 Accounting records shall be supported by source documentation. These documentations include, but are not limited to, cancelled checks, paid bills, payrolls, contract and subgrant award documents.
I11(h) T3Audit resolution.G1T1 A systematic method shall be employed by each recipient to assure timely and appropriate resolution of audit findings and recommendations. 

S8006I56Subpart I[Reserved]
S8010
�68�I56Subpart J_Financial Reporting Requirements

I80�1A3015.80 
I89Scope and applicability.
I11(a) This subpart prescribes requirements and forms for recipients to report financial information to USDA and to request grant payments when a letter of credit is not used.
I11(b) This subpart need not be applied by recipients in dealing with their subrecipients. Recipients are encouraged not to impose on subrecipients more burdensome requirements than USDA imposes on them.

I80�1A3015.81 
I89General.
I11(a) Except as provided in paragraphs (d) and (e) of this section, recipients shall use only the forms specified in �1A3015.82 through 3015.85, and such other forms as may be authorized by OMB for: 
I11(1) Submitting grant financial reports to awarding agencies, or 
I11(2) Requesting grant payments when letters of credit or automatic prescheduled Treasury check advances are not used.
I11(b) Recipients shall follow all applicable standard instructions issued by OMB for use in connection with the forms specified in �1A3015.82 through 3015.85. Awarding agencies may not issue substantive supplementary instructions that are inconsistent with this subpart or impose additional requirements on recipients without the approval of O&F and OMB. However, awarding agencies may shade out or instruct the recipient to disregard any line item that the awarding agency finds unnecessary for its decision-making purposes.
I11(c) Recipients shall not be required to submit more than one original and two copies of the forms required under this subpart. 
I11(d) Awarding agencies may provide computer outputs to recipients to expedite or contribute to the accuracy of reporting. Awarding agencies may accept the required information from recipients in machine readable form or computer printouts instead of prescribed formats.
I11(e) When an awarding agency determines that a recipient's accounting system does not meet the standards for financial management systems contained in Subpart H of this part, it may require more frequent financial reports or more detail (or both) upon written notice to the recipient (without regard to �1A3015.4) until such time as the standards are met. 
I11(f) Awarding agencies may waive any report required by this subpart, if not needed.
I11(g) Awarding agencies may extend the due date for any financial report upon receiving a justified request from the recipient. The recipient should not wait until the due date if an extension is to be requested, but should submit the request as soon as the need becomes known. Failure by a recipient to submit a report by its due date may result in severe enforcement actions by USDA. These may include withholding of further grant payments, suspension or termination of the grant, etc. Therefore recipients are urged to submit reports on time.

I80�1A3015.82
I89Financial status report.
I11(a) T3Form.G1T1 Recipients shall use Standard Form 269, Financial Status Report, to report the status of funds for all nonconstruction projects or programs.
I11(b) T3Accounting basis.G1T1 Unless specified in the provisions of the grant or subgrant each recipient shall report program outlays and program income on the same accounting basis, i.e., cash or accrual, which it uses in its accounting system.
I11(c) T3Frequency.G1T1 The awarding agency may prescribe the frequency of the report for each project or program. However, the report shall not be required more frequently than quarterly except as provided in �1A3015.4, 3015.81(e), or by statute. If the awarding agency does not specify the frequency of the report, it shall be submitted annually. Upon expiration or termination of the grant or cooperative agreement, if a period of time remains not covered by a periodic report (i.e., a quarterly, semi-annual or annual report), a final report shall be required.
I11(d) T3Due date.G1T1 When reports are required on a quarterly or semiannual basis, they shall be due 30 days after the reporting period. When required on an annual basis, they shall be due 90 days after the end of the grant or �69�agreement period. In addition, final reports as defined in �1A3015.82(c) shall be due 90 days after the expiration or termination of grant or agreement support, except in those instances where an extension has been granted.
I11(e) T3Final reports.G1T1 (1) Final reports (i.e., the last report submitted) must not show any unpaid obligations.
I11(2) If the recipient will still have unpaid obligations when the final report is due, the recipient shall submit a provisional final report (showing the unpaid obligations) by the due date, and a true final report when all obligations have been paid. When submitting a provisional final report, the recipient shall tell the awarding agency when it expects to submit a true final report.
I11(3) As provided in �1A3015.81(f), awarding agencies may waive provisional final reports.

I80�1A3015.83
I89Federal cash transactions report.
I11(a) T3Form.G1T1 (1) For grants or cooperative agreements paid by letters of credit (or Treasury check advances) through any USDA payment office, the recipient shall submit to USDA a Standard Form 272, Federal Cash Transactions Report, and, when necessary, its continuation sheet, SF�09272a. Recipients under the Regional Disbursing Office (RDO) system shall not be required to submit a SF�09272. For these recipients, awarding agencies shall use information contained in the Request for Payment to monitor recipient cash balances and to get disbursement information.
I11(2) The SF�09272 will be used by USDA to monitor cash advanced to recipients and to obtain disbursement or outlay information from recipients for each grant or cooperative agreement. The format of the report may be adapted, as appropriate, when reporting is to be accomplished with the assistance of automatic data processing equipment, provided that the identical information is submitted.
I11(b) T3Forecasts of Federal cash requirements.G1T1 Awarding agencies may require that forecasts of Federal cash requirements be provided in the ``Remarks'' section of the report.
I11(c) T3Cash in hands of subrecipients or contractors.G1T1 When considered necessary and feasible by the responsible USDA awarding agency, recipients may be required to:
I11(1) Show in the ``Remarks'' section of the report the amount of cash advances exceeding three days needs in the hands of their subrecipients or contractors, and 
I11(2) Provide short narrative explanations or actions taken by the recipient to reduce such excess balances.
I11(d) T3Frequency and due date.G1T1 Recipients shall submit the report no later than 15 working days following the end of each quarter. However, the USDA payment office may require recipients receiving advances of one million dollars or more per year to submit a report within 15 working days following the end of each month. Awarding agencies may waive the requirement for submission of the SF�09272 when monthly advances do not exceed $10,000 per recipient, provided that such advances are monitored through other forms contained in this subpart, or if, in the awarding agency's opinion, the recipient's accounting controls are adequate to minimize excessive Federal advances.

I80�1A3015.84
I89Request for advance or reimbursement.
I11(a) T3Advance payments.G1T1 Recipients of nonconstruction grants or cooperative agreements shall request Treasury check advance payments on Standard Form 270, Request for Advance or Reimbursement. This form is not used for letter of credit drawdowns or predetermined automatic advance payments.
I11(b) T3Reimbursements.G1T1 Recipients of nonconstruction grants or cooperative agreements shall request reimbursement on Standard Form 270, Request for Advance or Reimbursement (for reimbursement request under construction grants or cooperative agreements, see �1A3015.85).
I11(c) The frequency for submitting payment requests on SF�09270 is treated in �1A3015.104.

I80�1A3015.85
I89Outlay report and request for reimbursement for construction programs.
I11(a) T3Construction grants paid by reimbursement method.G1T1 (1) Requests for reimbursement under construction grants shall be submitted on Standard Form �70�271, Outlay Report and Request for Reimbursement for Construction Programs. Awarding agencies may, however, prescribe the Request for Advance or Reimbursement form specified in �1A3015.84 instead of this form.
I11(2) The frequency for submitting reimbursement requests is treated in �1A3015.104.
I11(b) T3Construction grants paid by letter of credit or Treasury check advance.G1T1 (1) When a construction grant or a cooperative agreement is paid by letter of credit or Treasury check advances, the recipient shall report its outlays to the awarding agency using Standard Form 271, Outlay Report and Request for Reimbursement for Construction Programs. The awarding agency will provide any necessary special instructions. However, frequency and due date shall be governed by �1A3015.82 (c) and (d).
I11(2) When a construction grant or cooperative agreement is paid by Treasury check advances based on periodic requests from the recipient, the advances shall be requested on the form specified in �1A3015.84.
I11(3) The awarding agency may substitute the Financial Status Report specified in �1A3015.82 for the Outlay Report and Request for Reimbursement.
I11(c) T3Accounting basis.G1T1 The accounting basis for the Outlay Report and Request for Reimbursement for Construction Programs shall be governed by �1A3015.82(b).

I56Subpart K_Monitoring and Reporting Program Performance

I80�1A3015.90
I89Scope.
I11This subpart establishes procedures for monitoring and reporting program performance of recipients. These procedures place responsibility on recipients to manage the day-to-day operations of their grant and subgrant supported activities.

I80�1A3015.91
I89Monitoring by recipients.
I11Recipients shall monitor the performance of grant and subgrant-supported activities to assure that performance goals are being achieved. Recipient monitoring shall cover each program, function, or activity.

I80�1A3015.92
I89Performance reports.
I11(a) T3Nonconstruction.G1T1 The awarding agency shall, if it decides that performance information available from subsequent applications contains sufficient information to meet its programmatic needs, require the recipient to submit a performance report only upon expiration or termination of grant support. Unless waived by the awarding agency this report will be due on the same date as the final Financial Status Report (as provided in �1A3015.82 (d) and (e)).
I11(1) Recipients shall submit annual peformance reports unless the awarding agency requires quarterly or semi-annual reports or unless covered under paragraph (a) of this section. Annual reports shall be due 90 days after the grant year; quarterly or semi-annual reports shall be due 30 days after the reporting period. The final performance report shall be due 90 days after the expiration or termination of grant support. If a justified request is submitted by a recipient, the awarding agency may extend the due date for any performance report. Additionally, requirements for unnecessary performance reports may be waived by the awarding agency.
I11(2) Performance reports shall contain, for each grant, brief information on the following:
I11(i) A comparison of actual accomplishments to the goals established for the period. Where the output of the project can be readily expressed in numbers, a computation of the cost per unit of output may be required if that information will be useful.
I11(ii) The reasons for slippage if established goals were not met.
I11(iii) Additional pertinent information including, when appropriate, analysis and explanation of cost overruns or high unit costs.
I11(3) Recipients shall not be required to submit more than the original and two copies of performance reports.
I11(4) Recipients shall adhere to the standards in paragraph (a) of this section in prescribing performance reporting requirements for subrecipients.
I11(b) T3Construction.G1T1 For the most part, on-site technical inspections and certified percentage-of-completion data �71�are relied on heavily by awarding agencies to monitor progress under construction grants and subgrants. The awarding agency shall require additional formal performance reports only when considered necessary, and never more frequently than quarterly.

I80�1A3015.93
I89Significant developments.
I11Events may occur between the scheduled performance reporting dates which have significant impact upon the grant or subgrant supported activity. In such cases, the recipient shall inform the awarding agency as soon as the following types of conditions become known:
I11(a) Problems, delays, or adverse conditions which will materially impair the ability to meet the objective of the award. This disclosure shall include a statement of the action taken, or contemplated, and any assistance needed to resolve the situation.
I11(b) Favorable developments which enable meeting time schedules and goals sooner or at less cost than anticipated or producing more beneficial results than originally planned.

I80�1A3015.94
I89Site visits.
I11The awarding agency shall make site visits as frequently as practicable to:
I11(a) Review program accomplishments and manage control systems.
I11(b) Provide such technical assistance as may be required.

I80�1A3015.95
I89Waivers, extensions and enforcement actions.
I11(a) T3Reports from recipients.G1T1 USDA may waive any performance report required by this subpart if not needed.
I11(b) T3Reports from subrecipients.G1T1 The recipient may waive any performance report from a subrecipient when not needed. The recipient may extend the due date for any performance report from a subrecipient if the recipient will still be able to meet its performance reporting obligations to the USDA awarding agency.

I56Subpart L_Payment Requirements

I80�1A3015.100
I89Scope.
I11This subpart prescribes the basic standards and methods under which a USDA awarding agency will make grant payments to recipients, and recipients will make subgrant payments to their subrecipients.

I80�1A3015.101
I89General.
I11Methods and procedures for making payments to recipients shall minimize the time elapsing between the transfer of funds and the recipient's disbursements.

I80�1A3015.102
I89Payment methods.
I11(a) T3Non-construction.G1T1 (1) Letters of credit will be used to pay USDA recipients when all the following conditions exist:
I11(i) There is or will be a continuing relationship between the recipient and the USDA awarding agency for at least a 12 month period and the total amount of advances to be received within that period from the awarding agency is $120,000 or more per year.
I11(ii) The recipient has established or demonstrated to the USDA awarding agency the willingness and ability to establish procedures that will minimize the time elapsing between the transfer of funds from the Treasury and their disbursement by the recipient.
I11(iii) The recipient's financial management system meets the standards for fund control and accountability prescribed in Subpart H of this part.
I11(2) Advances by Treasury check will be used, in accordance with Treasury Circular No. 1075, when the recipient does not meet the requirements in paragraph (a)(1)(i) of this section but does meet the requirements in paragraphs (a)(1) (ii) and (iii) of this section.
I11(3) Reimbursement by Treasury check shall be the preferred method when the recipient does not meet the requirements specified in either paragraph (a)(1)(ii) or paragraph (a)(1)(iii) of this section. This method may also be used when USDA financial assistance makes up only a minor portion of the program and where the major portion of the program is accomplished through private financing or Federal loans.
I11(b) T3Construction.G1T1 (1) Reimbursement by Treasury check shall be the preferred method when the recipient does not meet the requirements specified in �72��1A3015.102(a)(1) (ii) or (iii), and may be used for any USDA construction grant unless USDA has entered into an agreement with the recipient to use a letter of credit for all USDA grants, including construction grants.
I11(2) When the reimbursement by Treasury check method is not used, �1A3015.102(a) (1) and (2) shall apply to the construction grants. Implementing procedures under �1A3015.102(a) (1) and (2) will be the same for construction grants as for nonconstruction grants awarded to the same recipient, insofar as possible.
I11(3) USDA awarding agencies will not use the percentage-of-completion method to pay its construction grants. The recipient may use that method to pay its construction contractor, but if it does, USDA payments to the recipient will nevertheless be based on the recipient's actual rate of disbursements.

I80�1A3015.103
I89Withholding payments.
I11(a) Unless otherwise required by Federal statute, payments for proper charges incurred by recipients will not be withheld at any time during the grant period unless (1) the recipient has failed to comply with the program objectives, grant award conditions, or Federal reporting requirements, or (2) the recipient is indebted to the United States and collection of the indebtedness will not impair accomplishment of the objectives of any grant program sponsored by the United States, or (3) the grant is suspended pursuant to Subpart N of this part.
I11(b) Payments withheld for failure of a recipient to comply with reporting requirements, but without suspension of the grant, will be released to the recipient upon subsequent compliance. When a grant is suspended, payment adjustments will be made in accordance with Subpart N of this part. When a debt is to be collected, USDA awarding agencies may withhold payments or require appropriate accounting adjustments to recorded cash balances for which the recipient is accountable to the Federal government, in order to liquidate the indebtedness.

I80�1A3015.104
I89Requesting advances or reimbursements.
I11(a) T3Advances.G1T1 If advance payments are by Treasury check and are not prescheduled, the recipient shall submit its payment requests at least monthly. Less frequent requests are not permitted for they result in advances covering excessive periods of time. Recipient requests for advances shall not be made in excess of the Federal share of reasonable estimates of outlays for the month covered. These estimates shall be made on a cash basis, even if the recipient uses an accrual accounting system.
I11(b) T3Reimbursements.G1T1 If payments are made through reimbursement or by Treasury check:
I11(1) Requests for reimbursements may be submitted monthly or more frequently if authorized to do so by the awarding agency. Ordinarily, payment will be made within 30 days after receipt of a proper request for reimbursement.
I11(2) The recipient shall not request reimbursement for the Federal share of amounts withheld from contractors to ensure satisfactory completion of work until after it makes those payments.
I11(c) T3Forms.G1T1 The forms for requesting advances or reimbursements are identified in Subpart J of this part.

I80�1A3015.105
I89Payments to subrecipients.
I11Recipients shall observe the requirements of this subpart in making (or withholding) payments to subrecipients, with the following exceptions:
I11(a) Advance payment by Treasury check may be used instead of letter of credit;
I11(b) The forms specified in Subpart J of this part for requesting advances and reimbursements are not required to be used by subrecipients; and
I11(c) The reimbursement by check method may be used to pay any construction subgrant.

I56Subpart M_Programmatic Changes and Budget Revisions

I80�1A3015.110
I89Scope and applicability.
I11(a) T3Scope.G1T1 This subpart deals with prior approval requirements for post-�73�award programmatic changes and budget revisions by recipients.
I11(b) T3Exemption of mandatory or formula grants.G1T1 Sections 3015.113 through 3015.115 do not apply to programmatic changes or budget revisions made by recipients under State plans or other grants which the awarding agency is required by law to award if the applicant meets all applicable requirements for entitlement.
I11(c) T3Exemption of certain subgrants.G1T1 Sections 3015.113 through 3015.115 do not apply to subgrants from States to their local governments under a mandatory or formula grant, if the local government is not required to apply for the subgrant on a project basis. Generally, such exempt subgrants will occur under a State plan which provides for local administration of a State-wide program under State supervision.

I80�1A3015.111 
I89Cost principles.
I11(a) The cost principles prescribed by subpart T of this part require prior approval of certain types of costs. Except when waived, those prior approval requirements apply to all grants and subgrants, whether or not �1A3015.113 through 3015.115 apply.
I11(b) Procedures for prior approvals required by the cost principles are in �1A3015.196. Procedures for prior approvals required by this subpart are in �1A3015.112.

I80�1A3015.112 
I89Approval procedures.
I11(a) T3For grants or cooperative agreements.G1T1 When requesting a prior approval required by this subpart, recipients shall address their requests to the responsible official of the awarding agency. Approvals shall not be valid unless they are in writing and signed by either the responsible officer, the head of the awarding agency, or the head of the awarding agency's regional office.
I11(b) T3For subgrants.G1T1 Recipients shall be responsible for reviewing requests from their subrecipients for the approvals required by this subpart and for giving or denying the approval. A recipient shall not approve any action which is inconsistent with the purpose or terms of the Federal grant or cooperative agreement. If an action by a subrecipient will result in a change in the overall grant project or budget requiring approval from the awarding agency, the recipient shall obtain that approval before giving its approval to the subrecipient. Approvals shall not be valid unless they are in writing and signed by an authorized official of the recipient organization.
I11(c) T3Timing.G1T1 Within 30 days from the date of receipt of a request for approval, the approval authority shall review the request and notify the recipient of its decision. If the request for approval is still under consideration at the end of 30 days, the approval authority shall inform the recipient in writing as to when to expect the decision.

I80�1A3015.113 
I89Programmatic changes.
I11(a) T3Scope.G1T1 This section contains requirements for prior approval of departures, other than budget revisions, from approved project plans. In addition to the requirements in this section, awarding agencies may require prior approval for other kinds of programmatic changes to an approved cooperative agreement, grant, or subgrant project.
I11(b) T3Changes to project scope or objectives.G1T1 The recipient shall obtain prior approval for any change to the scope or objectives of the approved project. (For construction projects, any material change in approved space utilization or functional layout shall be considered a change in scope).
I11(c) T3Changes in key people.G1T1 This section applies to grants, subgrants, and cooperative agreements for research. This section does not apply to other types of grants, subgrants, or cooperative agreements unless other terms of the award make it apply. The recipient shall obtain prior approval:
I11(1) To continue the project during any continuous period of more than three months without the active direction of an approved project director or principal investigator;
I11(2) For its selection of a replacement for the project director of principal investigator;
I11(3) For its selection of a replacement for any other persons named and expressly designated as key project people in the grant, subgrant, or cooperative agreement award document; or
�74�I11(4) To permit the project director or principal investigator (or anyone covered by paragraph (c)(3) of this section) to devote substantially less effort to the project than was anticipated when the award was made.
I11(d) T3Transferring work and providing financial assistance to others.G1T1 Recipients shall obtain prior approval for transferring to another party the actual performance of the substantive programmatic work, and for providing any form of financial assistance to another party.
I11(e) T3Audiovisual activities.G1T1 (1) Except to the extent explicitly included in the project plan approved at the time of award, using grant support for any of the following requires prior approval: 
I11(i) Producing an audiovisual.
I11(ii) Buying ownership of any of the rights in the work embodied in the audiovisual. (This does not apply to merely buying a license in any of the rights. For the remainder of this section, buying ownership of the rights is referred to simply as buying or purchasing an audiovisual).
I11(iii) Presenting or distributing to the general public an audiovisual that was produced or bought with grant support. 
I11(2) Prior approval is not required for:
I11(i) Any audiovisual activity under a subgrant.
I11(ii) Any audiovisual whose direct production or purchase cost to the recipient is $5,000 or less.
I11(iii) The production or purchase of an audiovisual as a research instrument or for documenting experimentation or findings, if the audiovisual is not intended for presentation or distribution to the general public.
I11(3) Following are examples of presentation or distribution of an audiovisual to the general public.
I11(i) Broadcast on commercial, cable, or educational television, or radio.
I11(ii) Showing in commercial motion picture theaters.
I11(iii) Showing in public places such as airports, waiting rooms, bus or railroad depots, and vacation resorts.
I11(iv) Showing to civic associations, schools (except when used as a teaching tool in a classroom setting), clubs, fraternal organizations, or similar lay groups. 

I80�1A3015.114 
I89Budgets_general.
I11(a) T3Research and non-research project budgets.G1T1 For research and non-research projects which involve cost-sharing or matching, approved budgets shall ordinarily consist of a single set of figures covering total project cost (the sum of the awarding agency's share and the recipient's share). However, the awarding agency may specify that the recipient's share not be included in the approved budget. In no case, however, shall the approved budget be in the form of a separate set of figures for each share.
I11(b) T3Subdivision by programmatic segments.G1T1 Some grants, subgrants, and cooperative agreements contain two or more programmatic segments (such as discrete programs, projects, functions, or types of activities). In these cases, the awarding agency may require that the approved budget be subdivided to show the anticipated cost of each programmatic segment.

I80�1A3015.115
I89Budget revisions.
I11(a) T3Nonconstruction projects.G1T1 (1) Except as provided in paragraph (a)(2) of this section, the recipient of a grant, subgrant, or cooperative agreement having an approved budget shall obtain prior approval for any budget revision which will:
I11(i) Involve transfer of amounts budgeted for indirect costs to absorb increases in direct costs, or
I11(ii) Involve transfer of amounts previously budgeted for training allowances (direct payments to trainees), or
I11(iii) Result in a need for the award of additional funds, e.g., an increase in the base upon which indirect costs are calculated which will increase allocable indirect costs and result in a claim for a supplementary award.
I11(2) Any or all of the prior approval requirements in paragraph (a) of this section may be waived by the awarding agency.
I11(3) Except as provided in �1A3015.116 other budget changes under nonconstruction grants do not require approval.
I11(b) T3Construction projects.G1T1 Unless provided otherwise by the terms of the grant, subgrant, or cooperative agreement, revisions to construction project budgets do not require approval. 

�75�I80�1A3015.116
I89Construction and nonconstruction work under the same grant, subgrant, or cooperative agreement.
I11When a grant, subgrant, or cooperative agreement provides support for both construction and nonconstruction work, the awarding agency may require prior approval for any fund or budget transfers between the two types of work. 

I56Subpart N_Grant and Subgrant Closeout, Suspension and Termination

I80�1A3015.120
I89Closeout.
I11(a) Each grant or subgrant shall be closed out as soon as possible after expiration or notice of termination.
I11(b) The following shall apply when closing out USDA grants:
I11(1) Upon request from the recipient, any allowable reimbursable cost not covered by previous payments shall be promptly paid by USDA.
I11(2) Any unobligated balance of cash advanced to the recipient shall be immediately refunded to the awarding agency or managed in accordance with USDA instructions.
I11(3) Within a maximum period of 90 days following the date of expiration or termination of a grant, all financial performance and related reports required by the terms of the agreement shall be submitted to the awarding agency by the recipient. USDA reserves the option of extending the due date for any report and may waive any report that it considers to be unnecessary.
I11(4) The provisions formally expressed and agreed to within the grant arrangement shall dictate the settlement of any upward or downward adjustments of the Federal share of costs.
I11(c)(1) A grant closeout shall not affect the retention period for, or Federal rights of access to, grant records. (See Subpart D of this part).
I11(2) The closeout of a grant does not affect the recipient's responsibilities regarding property under Subpart R of this part or with respect to any program income the recipient is still accountable for under Subpart F of this part.
I11(3) Final audits (See Attachment L, Circular A�09102 and Attachment K of Circular A�09110) are not a required part of the grant or subgrant closeout procedures. Normally, a final audit should not be needed unless there are problems with a grant or subgrant that require audit attention. If a USDA agency considers a final audit to be necessary, it shall contact the OIG Region within which the recipient or subrecipient is located and inform OIG of the situation. OIG shall be responsible for assuring that necessary final audits are performed and for any necessary coodination with other Federal cognizant audit agencies, recipients or State and local auditors. Audits performed in accordance with Subpart I may serve as final audits providing such audits meet the needs of the requesting agency. 
I11(4) If a grant is closed out without audit, the awarding agency reserves the right to disallow and recover an appropriate amount after fully considering any recommended disallowances resulting from an audit which may be conducted later.

I80�1A3015.121
I89Amounts payable to the Federal government.
I11The following outstanding sums for each grant shall be considered as a debt or debts owed by the recipient to the Federal government. They shall, if not paid upon demand, be subject to recovery by the awarding agency from the recipient or its successor or assignees by set off or other action provided by law:
I11(a) Any grant funds paid to the recipient by the Federal government which exceed the amount the recipient is finally determined to be entitled to under the provisions of the grant award;
I11(b) Any interest or other investment income earned on advances of grant funds which is due the Federal government; 
I11(c) Any royalties or other special classes of program income which, under the provisions of the grant award, are required to be returned to the Federal government;
I11(d) Any amount the Federal government is entitled to under Subpart R of this part; and 
�76�I11(e) Under the provisions of the grant award, any other amounts finally determined to be due to the Federal government.

I80�1A3015.122
I89Violation of terms.
I11(a) Whenever it is determined that the recipient has materially failed to comply with the provisons of the grant award, the awarding agency may suspend or terminate, in accordance with �1A3015.123 and 3015.124, any grant in whole, or in part, at any time before the date of completion, or take such other remedies as may be legally available and appropriate.
I11(b) A grant may be suspended or terminated in the current period for failure to submit a report still due from a prior period. This action is applicable when a project or program is supported over two or more funding periods.

I80�1A3015.123
I89Suspension.
I11(a) When a recipient has materially failed to comply with the provisions prescribed in the grant agreement, the awarding agency may, after reasonable notice to the recipient, suspend the grant in whole or in part. A suspension notice shall be issued by the awarding agency stating the reasons for the suspension, any corrective action required of the recipient, and the effective date. Suspension may go into effect immediately if the awarding agency deems it necessary to protect its interest and if a delayed effective date would be unreasonable considering the awarding agency's responsibilities to protect the Federal government's interest. Suspension shall remain in effect until the recipient has taken corrective action satisfactory to the awarding agency, or given evidence that such corrective action will be taken, or until the awarding agency terminates the grant.
I11(b) Unless specifically authorized by the awarding agency in the notice of suspension or subsequently expressed in an amendment to it, new obligations incurred by the recipient during the suspension period shall not be allowed. Necessary and otherwise allowable costs which the recipient could not reasonably avoid during the suspension period will be allowed, if they result from obligations properly incurred by the recipient before the effective date of the suspension and not in anticipation of suspension or termination. If the awarding agency approves, third party in-kind contributions applicable to the suspension period may be allowed in satisfaction of cost-sharing or matching requirements.
I11(c) During the suspension period, appropriate adjustments to payments under the suspended grant will be made by not giving credit to the recipient for disbursements made in payment of unauthorized obligations incurred during the suspension period or by withholding subsequent payments.

I80�1A3015.124
I89Termination.
I11(a) T3Termination for cause.G1T1 The awarding agency may terminate any grant or other agreement in whole, or in part, at any time before the date of expiration, whenever it is determined that the recipient has materially failed to comply with the conditions of the agreement. The awarding agency shall promptly notify the recipient in writing of the determination and reasons for the termination, together with the effective date.
I11(b) T3Termination by mutual agreement.G1T1 Except as provided in paragraph (a) of this section, grants may be terminated in whole, or in part, only as follows:
I11(1) When the awarding agency and recipient agree upon the termination conditions, including the effective date and, in the case of partial termination, the portion to be terminated.
I11(2) By written notification by the recipient to the awarding agency setting forth the reasons for termination, the effective date, and in the case of partial termination, the portion to be terminated. In the case of a partial termination, if the awarding agency decides that the remaining portion of the grant will not accomplish the purposes for which the grant was made, the awarding agency may terminate the award in its entirety under either paragraph (a) or paragraph (b)(1) of this section.
I11(c) T3Termination settlements.G1T1 Upon termination of a grant, the recipient shall not incur any new obligations for the terminated portion of the agreement after the effective date, and shall cancel as many outstanding obligations as �77�possible. The awarding agency, however, shall allow full credit to the recipient for the Federal share of the non-cancellable obligations properly incurred by the recipient prior to termination.

I80�1A3015.125
I89Applicability to subgrants.
I11Recipient subgrants shall be subjected to the same standards regarding closeout, suspension, and termination of subgrants as prescribed in this subpart for awarding agencies.
S8006I56Subparts O�09P [Reserved]
S8010
I56Subpart Q_Application for Federal Assistance

I80�1A3015.150
I89Scope and applicability.
I11(a) This subpart prescribes forms and instructions to be used by governmental organizations (except hospitals, non-profit organizations, and institutions of higher education operated by a government) in applying to USDA for discretionary grants. This subpart is not applicable, however, to mandatory or formula grants or programs which do not require applicants to apply to USDA for funds on a project basis.
I11(b) This subpart permits awarding agencies to prescribe the form of applications by nongovernmental organizations (including hospitals, non-profit organizations and institutions of higher education operated by a government), but prescribes the use of a standard facesheet for certain of these applications.
I11(c) This subpart applies only to applications for grants or cooperative agreements and is not required to be applied by recipients in dealing with applicants for subgrants. However, recipients are encouraged not to adopt more detailed or burdensome application requirements for subgrants.
I11(d) This subpart also prescribes standards for competition to be used by USDA agencies in awarding discretionary cooperative agreements and grants. (This subpart is not applicable to cooperative agreements awarded pursuant to the provisions of sections 1472(b) and 1473C of the National Agricultural Research, Extension and Teaching Policy Act of 1977, as amended.) 
Q04I20[46 FR 55639, Nov. 10, 1981, as amended at 51 FR 17172, May 9, 1986]

I80�1A3015.151
I89Authorized forms. 
I11(a) Sections 3015.152 through 3015.156 specify the forms that governmental organizations shall use to apply to USDA for a discretionary grant.
I11(b) Governments need not submit more than the original and two copies of application forms. When less will suffice, the awarding agency shall notify potential applicants.
I11(c) When a government agency amends a previously submitted application or applies for additional funding (such as a continuation or supplemental award) only the facesheet and any other affected pages are required to be submitted. Previously submitted pages whose information is still current may be resubmitted, but are not required to be resubmitted.

I80�1A3015.152
I89Preapplication for Federal assistance.
I11(a) When a government submits a preapplication, it shall use the Preapplication for Federal Assistance form prescribed by Circular A�09102. The purposes of these preapplications shall be to:
I11(1) Establish communication between the potential applicant and the awarding agency;
I11(2) Determine the potential applicant's eligibility;
I11(3) Identify projects which have little or no chance for Federal funding before applicants incur significant costs for preparing an application.
I11(b) Preapplication is always required if the potential applicant is a government and the proposed project (1) is for construction, land acquisition, or land development, and (2) would require more than $100,000 of Federal funding. If these conditions are not present, potential applicants need not submit preapplications unless required to do so by the awarding agency. Any government may submit a preapplication even when not required.

�78�I80�1A3015.153
I89Notice of preapplication review action.
I11Awarding agencies shall inform governmental applicants of the results of their review of preapplications by using the Notice of Preapplication Review Action form prescribed by Circular A�09102. If the review cannot be completed within 45 days, the awarding agency shall inform the applicant, in writing, when it will complete the review.

I80�1A3015.154
I89Application for Federal assistance (nonconstruction programs).
I11Governments shall use the Application for Federal Assistance (Nonconstruction Programs) form prescribed by OMB Circular A�09102 in applying for discretionary grants unless a form specified in �1A3015.155 or �1A3015.156 is to be used.

I80�1A3015.155
I89Application for Federal assistance (construction programs). 
I11Governments shall use the Application for Federal Assistance (for Construction Programs) form prescribed by Circular A�09102 in applying for any grant whose purpose is solely or primarily construction, land acquisition, or land development.

I80�1A3015.156
I89Application for Federal assistance (short form). 
I11Governments shall use the Application for Federal Assistance (Short Form) form prescribed by Circular A�09102 in applying for any single-purpose, one-time grant of less than $10,000 not requiring Circular A�0995 clearinghouse review, an environmental impact statement, or the relocation of persons, businesses, or farms. Awarding agencies may, at their discretion, authorize or require this form for applications for larger amounts.

I80�1A3015.157
I89Authorized form for nongovernmental organizations.
I11Nongovernmental organizations shall use application forms prescribed by the awarding agency. The facesheet of these applications shall be Standard Form 424.

I80�1A3015.158
I89Competition in the awarding of discretionary grants and cooperative agreements. 
I11(a) T3Standards for competition.G1T1 Except as provided in paragraph (d) of this section, awarding agencies shall enter into discretionary grants and cooperative agreements only after competition. An awarding agency's competitive award process shall adhere to the following standards: 
I11(1) Potential applicants must be invited to submit proposals through publications such as the T4Federal Register,G1T1 professional trade journals, agency or program handbooks, the Catalog of Federal Domestic Assistance, or any other appropriate means of solicitation. In so doing, awarding agencies should consider the broadest dissemination of project solicitations in order to reach the highest number of potential applicants. 
I11(2) Proposals are to be evaluated objectively by independent reviewers in accordance with written criteria set forth by the awarding agency. Reviewers should make written comments, as appropriate, on each application. Independent reviewers may be from the private sector, another agency, or within the awarding agency, as long as they do not include anyone who has approval authority for the applications being reviewed or anyone who might appear to have a conflict of interest in the role of reviewer of applications. A conflict of interest might arise when the reviewer or the reviewer's immediate family members have been associated with the applicant or applicant organization within the past two years as an owner, partner, officer, director, employee, or consultant; has any financial interest in the applicant or applicant organization; or is negotiating for, or has any arrangement, concerning prospective employment. 
I11(3) An unsolicited application, which is not unique and innovative, shall be competed under the project solicitation it comes closest to fitting. Awarding agency officials will determine the solicitation under which the application is to be evaluated. When the awarding agency official decides that the unsolicited application does not fall under a recent, current, or planned solicitation, a noncompetitive award �79�may be made, if appropriate to do so under the criteria of this section. Otherwise, the application should be returned to the applicant. 
I11(b) T3Project solicitations.G1T1 A project solicitation by the awarding agency shall include or reference the following, as appropriate: 
I11(1) A description of the eligible activities which the awarding agency proposes to support and the program priorities; 
I11(2) Eligible applicants; 
I11(3) The dates and amounts of funds expected to be available for awards; 
I11(4) Evaluation criteria and weights, if appropriate, assigned to each; 
I11(5) Methods for evaluating and ranking applications; 
I11(6) Name and address where proposals should be mailed and submission deadline(s); 
I11(7) Any required forms and how to obtain them; 
I11(8) Applicable cost principles and administrative requirements; 
I11(9) Type of funding instrument intended to be used (grant or cooperative agreement); and 
I11(10) The T3Catalog of Federal Domestic AssistanceG1T1 number and title. 
I11(c) T3Approval of applications.G1T1 The final decision to award is at the discretion of the awarding/approving official in each agency. The awarding/approving official shall consider the ranking, comments, and recommendations from the independent review group, and any other pertinent information before deciding which applications to approve and their order of approval. Any appeals by applicants regarding the award decision shall be handled by the awarding agency using existing agency appeal procedures or good administrative practice and sound business judgment. 
I11(d) T3Exceptions.G1T1 The awarding/approving official may make a determination in writing that competition is not deemed appropriate for a particular transaction. Such determination shall be limited to transactions where it can be adequately justified that a noncompetitive award is in the best interest of the Government and necessary to the accomplishment of the goals of the program. Reasons for considering noncompetitive awards may include, but are not necessarily limited to, the following: 
I11(1) Nonmonetary awards of property or services; 
I11(2) Awards of less than $75,000; 
I11(3) Awards to fund continuing work already started under a previous award; 
I11(4) Awards which cannot be delayed due to an emergency or a substantial danger to health or safety; 
I11(5) Awards when it is impracticable to secure competition; or 
I11(6) Awards to fund unique and innovative unsolicited applications. 
Q04I20[51 FR 17172, May 9, 1986]

I56Subpart R_Property

I80�1A3015.160 
I89Scope and applicability.
I11(a) Except as explained in paragraphs (c), (d), and (e) of this section, this subpart applies to real property, equipment (including ADP) and supplies whose acquisition is supported by a grant.
I11(b) Also contained in this subpart are standards covering inventions, patents, and copyrights arising out of activities supported by a grant.
I11(c) This subpart does not apply to:
I11(1) Property for which only depreciation or use allowances are charged;
I11(2) Property donated entirely as a third party in-kind contribution; or
I11(3) Equipment or supplies acquired primarily for sale or rental, rather than for use.
I11(d) This subpart applies to equipment or supplies acquired by a contractor under a grant or subgrant only if, by terms of the contract, title vests in the recipient or subrecipient.
I11(e) For research grants that are subject to an institutional cost-sharing agreement, real property, equipment, and supplies shall be subject to this subpart only if at least some part of the acquisition cost is supported as a direct cost by Federal grant funds.

I80�1A3015.161 
I89Additional requirements.
I11Provided they observe the requirements of this subpart, recipients may follow their own property management policies and procedures. Unless specifically required by Federal statutes or Executive Orders, awarding agencies �80�may not impose on recipients property requirements (including property reporting requirements) not authorized by this subpart.

I80�1A3015.162 
I89Title to real property, equipment and supplies.
I11Subject to the obligations and conditions specified in this subpart, title to real property, equipment, and supplies acquired under a grant or subgrant shall vest, upon acquisition, in the recipient or subrecipient, respectively. In certain cases, money due the Federal government upon disposition of real property may be authorized to be used for allowable costs rather than paid to USDA. (See �1A3015.173.)

I80�1A3015.163 
I89Real property.
I11Except as stated otherwise by Federal statutes, real property applicable to this subpart shall be subject to the following requirements, in addition to any other requirements imposed by the provisions of the grant award:
I11(a) T3Use.G1T1 The property shall be used for the originally authorized purpose as long as needed for that purpose. When no longer so needed, the awarding agency may approve the use of the property for other purposes. These uses shall be limited to:
I11(1) Projects or programs supported by other Federal grants or assistance agreements.
I11(2) Activities not supported by other Federal grants or assistance agreements but having purposes consistent with those of the legislation under which the original grant was made.
I11(b) T3Transfer of title.G1T1 In accordance with paragraph (a) of this section, approval may be requested from the awarding agency to transfer title to an eligible third party for continued use for authorized purposes. If approval is permissible under Federal statutes, and is given, the terms of the transfer shall provide that the transferee shall assume all the rights and obligations of the transferor set forth in this subpart or in other terms of the grant or subgrant.
I11(c) T3Disposition.G1T1 When the real property is no longer to be used as provided in paragraphs (a) and (b) of this section, the disposition instructions of the awarding agency shall be followed. Those instructions will provide for one of the following alternatives:
I11(1) The property shall be sold and the Federal government shall have a right to an amount computed by multiplying the Federal share of the property times the proceeds from sale (after deducting actual and reasonable selling and fix-up expenses, if any, from the sales proceeds). Proper sales procedures shall be followed which provide for competition to the extent practicable and result in the highest possible return.
I11(2) The recipient shall have the option either of selling the property in accordance with paragraph (c)(1) of this section or of retaining title. If title is retained, the Federal government shall have a right to an amount computed by multiplying the market value of the property by the Federal share of the property.
I11(3) The recipient shall transfer the title to either the Federal government or an eligible non-Federal party named by the awarding agency. The recipient shall be entitled to be paid an amount computed by multiplying the market value of the property by the non-Federal share of the property. In cases where the property belonged to a subrecipient, see �1A3015.172 for the subrecipient's share.

I80�1A3015.164
I89Statutory exemptions for equipment and supplies.
I11(a) In certain circumstances some Federal statutes permit title to equipment or supplies acquired with grant funds to vest in the recipient without further obligation to the Federal government or on such terms and conditions set forth in the grant award, as deemed appropriate. The Federal Grant and Cooperative Agreement Act of 1977, Pub. L. 95�09224, is an example of such a statute. It provides this authority for equipment and supplies purchased with the funds of grants (and Federal contracts and cooperative agreements) for the conduct of basic or applied scientific research at non-profit institutions of higher education or at non-profit organizations whose primary purpose is the conduct of scientific research.
I11(b) If equipment is subject to a statute of the kind described in paragraph (a) of this section, it shall be exempt �81�from the requirements in the remaining sections of this subpart. However, when an equipment item has a unit acquisition cost of $1,000 or more, it shall be subject to �1A3015.165 concerning rights to require transfer, and, while subject to such a right, to the rules on replacement in �1A3015.167.
I11(c) If supplies are subject to a statute of the kind described in paragraph (a) of this section, they shall be exempt from all provisions of the remainder of this subpart which would otherwise apply.

I80�1A3015.165
I89Rights to require transfer of equipment.
I11(a) T3USDA right.G1T1 The awarding agency shall have the right to require the transfer of equipment (including title) for items of equipment having a unit cost of $1,000 or more to the Federal government or to an eligible non-Federal party named by the awarding agency. Normally, USDA agencies will only exercise this right if the project or program for which the equipment was acquired is transferred from one recipient to another. The following conditions shall govern this right:
I11(1) The property shall be appropriately identified in the grant award.
I11(2) In order for the awarding agency to exercise the right, disposition instructions must be issued no later than 120 days after the end of USDA grant support for the project or program for which the equipment was acquired. Furthermore:
I11(i) If the equipment is eligible for the exemptions in �1A3015.164 and ceases to be needed for the project or program for which it was acquired while the project or program is still being performed by the recipient, the disposition instructions must have been received by the recipient while the equipment was still needed for that project or program.
I11(ii) If the equipment is not eligible for those exemptions, disposition instructions must have been received by the recipient before other permissible disposition of the equipment took place in accordance with �1A3015.168.
I11(3) If the right is exercised, the recipient shall be entitled to be paid any reasonable, resulting shipping or storage costs incurred, plus an amount computed by multiplying the market value of the equipment by the non-Federal share of the equipment.
I11(b) T3Right of parties awarding subgrants.G1T1 A recipient may reserve for itself, when awarding a subgrant, rights similar to those found in paragraph (a) of this section which covers items of equipment having a unit acquisition cost of $1,000 or more which are acquired under that subgrant. Without the approval of the awarding agency, the right may be exercised only if the project or program for which the equipment was acquired is transferred to another subrecipient and only for the purpose of transferring the equipment to the new subrecipient for continued use in the project or program.
I11(c) T3Equipment lists.G1T1 If at any time an awarding agency is considering exercising its right to require transfer of equipment, it may require the recipient to furnish it with a list of all items of equipment that are subject to the right. As such, the awarding agency will decide which items, if any, should be transferred.

I80�1A3015.166
I89Use of equipment.
I11(a) T3Basic rule.G1T1 Whenever the equipment is not transferred under the provisions set forth in �1A3015.165, it shall be used by the recipient in the project or program for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds. When the equipment is no longer needed for the original project or program the recipient shall use the equipment, if needed, in other projects or programs currently or previously funded by the Federal government, in the following order of priority:
I11(1) Projects or programs currently or previously funded by the same USDA awarding agency.
I11(2) Projects or programs currently or previously funded by any USDA awarding agency.
I11(3) Projects or programs currently or previously funded by other Federal agencies.
I11(b) T3Shared use.G1T1 When equipment is used less than full time in the original project or program, the recipient shall make it available for use in other �82�projects or programs currently or previously funded by the Federal government. Provided, such other use will not interfere with the work on the original project or program. First preference for such use, however, shall be given to other projects or programs funded by the same USDA awarding agency.
I11(c) T3Use by other recipients.G1T1 When the recipient can no longer use the equipment as required by paragraph (a) of this section, it may voluntarily make the equipment available for use on projects or programs currently or previously funded by the Federal government which the recipient is supporting through subgrants or through non-Federal grants. A subrecipient may also voluntarily make the equipment available for use in projects or programs currently or previously funded by the Federal government which are being conducted or supported by the recipient.
I11(d) T3Other uses.G1T1 Unless the awarding agency provides otherwise, while equipment is being used as described in the preceding paragraphs of this section, it may also be used part-time for other purposes. The use as described in the previous paragraphs, however, shall be given priority over other uses.

I80�1A3015.167 
I89Replacement of equipment.
I11(a) If needed, equipment may be exchanged for replacement equipment. Replacement of equipment may be done either through trade-in or through sale and application of the proceeds to the acquisition cost of replacement equipment. In either case, the transaction must be one which a prudent person would make in like circumstances.
I11(b) If an additional outlay to acquire the replacement equipment is charged as a direct cost to either Federal funds or required cost-sharing or matching under a Federal award, the replacement equipment shall be subject to whatever property requirements or exemptions are applicable to that award. If the award is a grant from USDA, the full acquisition cost of the replacement equipment shall determine which provisions of this subpart apply.
I11(c) For any replacement not covered by paragraph (b) of this section, the provisions of this subpart applicable to the equipment replaced shall carry over to the replacement equipment. None of the provisions of this subpart shall carry over if (1) the Federal share of the equipment replaced was 10 percent or less or (2) the product of that share times the amount received for trade-in or sale is $100 or less. 

I80�1A3015.168 
I89Disposal of equipment.
I11When original or replacement equipment is no longer to be used in projects or programs currently or previously sponsored by the Federal government, disposal of the equipment shall be made as follows:
I11(a) Equipment with a unit acquisition cost of less than $1,000 may be sold, retained or otherwise disposed of with no further obligation to the Federal government.
I11(b) All other equipment may be retained or sold. The Federal government shall have a right to an amount calculated by multiplying the current market value or proceeds from sale by the Federal share of the equipment (see �1A3015.172). If part of the Federal share of the equipment came from an award under which the exemptions in �1A3015.164 were applicable, the amount due shall be reduced pro rata. In any case, if the equipment is sold, $100 or 10 percent of the total sales proceeds, whichever is greater, may be deducted and retained from the amount otherwise due for selling and handling expenses. If the recipient's project or program for which or under which the equipment was acquired is still receiving grant support from the same Federal program and if the awarding agency approves, the net amount due may be used for allowable costs of that project or program. Otherwise, the net amount must be returned to the awarding agency by check or money order. 

I80�1A3015.169 
I89Equipment management requirements.
I11Recipient procedures for managing equipment shall, as a minimum, meet the following requirements (including replacement equipment) until such actions as transfer, replacement or disposal takes place:
I11(a) Property records shall be maintained accurately. (Subpart D of this �83�part contains retention and access requirements for these records.) The records shall include for each item of equipment the following:
I11(1) A description of the equipment including manufacturer's serial numbers.
I11(2) An identification number, such as the manufacturer's serial number.
I11(3) Identification of the grant under which the recipient acquired the equipment.
I11(4) The information needed to calculate the Federal share of the equipment (see �1A3015.172).
I11(5) Acquisition date and unit acquisition cost.
I11(6) Location, use and condition of the equipment and the date the information was reported.
I11(7) All pertinent information on the ultimate transfer, replacement, or disposal of the equipment.
I11(b) Every two years, at a minimum, a physical inventory shall be conducted and the results reconciled with the property records to verify the existence, current utilization, and continued need for the equipment. Any discrepancies between quantities determined by the physical inspection and those shown in the accounting records shall be investigated to determine the causes of the differences.
I11(c) In order to insure adequate safeguards to prevent loss, damage or theft of equipment, a control system shall be used. Any loss, damage or theft of equipment shall be investigated and fully documented. The awarding agency may require a report of the circumstances involving the loss, damage, or theft of equipment.
I11(d) In order to keep the equipment in good condition, adequate maintenance procedures shall be implemented.
I11(e) Where equipment is to be sold and the Federal government is to have a right to part or all of the proceeds, selling procedures shall be established which will provide for competition to the extent practicable and result in the highest possible return.

I80�1A3015.170
I89Damage, loss, or theft of equipment.
I11(a) T3Applicability.G1T1 This section applies to equipment with a unit acquisition cost of $1,000 or more that, before disposal (see �1A3015.168), is damaged beyond repair, lost, or stolen.
I11(b) T3Recipient at fault_G1T1(1) T3Applicability.G1T1 This paragraph applies if:
I11(i) At the time of the damage, loss, or theft, the recipient does not have a control system in effect as required by �1A3015.169, and
I11(ii) The damage, loss, or theft is not due to an act of God.
I11(2) T3Equipment replaced.G1T1 If the equipment is replaced, the replacement is governed by �1A3015.167. When that happens, the market value of the original equipment at the time it was damaged, lost, or stolen is used instead of the amount received for trade-in or sale.
I11(3) T3Equipment not replaced.G1T1 If the equipment is not replaced, the Federal government has a right to an amount calculated by multiplying the Federal share in the equipment by its market value at the time of damage, loss, or theft. The amount is reduced pro rata if part of the Federal share of the equipment comes from an award under which the exemption in �1A3015.164 applied.
I11(4) T3Other remedies.G1T1 The provisions in this paragraph (b) are in addition to other remedies available to the awarding agency if a recipient acquires equipment with grant support but fails to establish the control system required by �1A3015.169.
I11(c) T3Recipient not at fault_G1T1(1) T3Applicability.G1T1 This paragraph applies if:
I11(i) At the time of the damage, loss, or theft, the recipient does have a control system in effect as required by �1A3015.169(c) or
I11(ii) The damage, loss, or theft is due to an act of God.
I11(2) T3Recipient not compensated.G1T1 If the recipient is not compensated for the damage, loss, or theft, through insurance or some other means, there is no obligation to USDA for the equipment.
I11(3) T3Recipient compensated.G1T1 If the recipient is compensated for the damage, loss, or theft and replaces the equipment, �1A3015.167 applies to the replacement equipment. If the recipient is compensated but does not replace the equipment, �1A3015.168 applies as though the recipient had sold the equipment. (All of �1A3015.168 applies including the rule permitting the amount due the Federal government to be reduced by 10 �84�percent of the proceeds or $100, whichever is greater.) The amount received for trade-in or sale is considered the lesser of (i) the amount of compensation or (ii) the market value of the equipment at the time it was damaged, lost, or stolen.
I11(d) T3Waivers.G1T1 The awarding agency may waive in whole or in part any provision of this section. 

I80�1A3015.171
I89Unused supplies.
I11(a) If unused supplies exceeding $1,000 in total aggregate market value are left over upon termination or expiration of the grant or subgrant for which they were acquired and the supplies are not needed for any project or program currently or previously funded by the Federal government, the grant shall be credited by an amount computed by multiplying the Federal share of the supplies times the current market value or, if the supplies are sold, the proceeds from sale. If the supplies are sold, 10 percent of the proceeds may be deducted and retained from the credit, for selling and handling expenses.
I11(b) For possible exemptions from this section, see �1A3015.164.

I80�1A3015.172
I89Federal share of real property, equipment, and supplies. 
I11This subpart contains principles necessary to determine the Federal (or non-Federal) share of real property, equipment or supplies.
I11(a) T3General.G1T1 (1) Except as explained in the following paragraphs of this section, the Federal share of the property shall be the same percentage as the Federal share of the acquiring party's total cost under the grant during the grant or subgrant year (or other funding period) to which the acquisition cost of the property was charged. For this purpose, ``costs under the grant'' means allowable costs which are either supported by the grant or counted toward satisfying a cost-sharing or matching requirement of the grant.
I11(2) If the property is acquired by a subrecipient, the Federal share of the subrecipient's costs under the grant and hence of the property shall be calculated by multiplying the Federal share of the recipient's costs by the latter's share of the subrecipient's costs. (For example, if the Federal share of the recipient's costs is 50 percent and the subgrant bears only 50 percent of a subrecipient's costs, then the Federal share of that subrecipient's costs (and of the property acquired by that subrecipient) is 25 percent.)
I11(3) The provisions of some grant awards set different maximum percentages of Federal financial participation for different categories of costs. In these cases, for the purposes of this section, the costs in each category are considered as costs under a separate grant. If two categories have the same maximum percentage of Federal participation and costs in one category are permitted to count toward satisfying a cost-sharing or matching requirement of the other, they are a single category for the purposes of this rule. Also, all categories with a 100 percent rate are considered a single category for the purposes of this rule.
I11(b) T3Property acquired only partly under a grant.G1T1 (1) Sometimes only a part of the acquisition cost of an item of property is supported as a direct cost by the grant or counted as a direct cost towards a cost-sharing or matching requirement. Occasionally, the amount paid for the property is only a part of its value. The remainder is donated as an in-kind contribution by the party that provided the property.
I11(2) To determine the Federal share of such property, first calculate the Federal share of the acquiring party's total costs under the grant as explained in paragraph (a) of this section. Next multiply that share by the percentage of the property's acquisition cost (or its market value, if the item was partly donated) which was supported as a direct cost by the grant or counted as a direct cost towards a cost-sharing or matching requirement.
I11(c) T3Replacement equipment.G1T1 To calculate the Federal share of replacement equipment the following procedures shall be followed:
I11(1) T3Step 1:G1T1 Determine the Federal share (percentage) of the equipment replaced.
I11(2) T3Step 2:G1T1 Determine the percentage of the replacement equipment's costs that was covered by the amount received for trade-in or the sale proceeds from the equipment replaced.
�85�I11(3) T3Step 3:G1T1 Multiply the step 1 percentage by the step 2 percentage.
I11(4) T3Step 4:G1T1 If an additional outlay for the replacement equipment was charged as a direct cost either to USDA grant funds or to required cost-sharing or matching funds, calculate the Federal share attributable to that additional outlay as explained in paragraph (b)(2) of this section. Add that additional percentage to the step 3 percentage.

I80�1A3015.173
I89Using or returning the Federal share.
I11(a) This section applies when, under �1A3015.163, 3015.168 or 3015.170, the Federal government has a right to an amount of money upon disposal or loss, theft, or damage of property.
I11(b) If the recipient's project or program for which the property was acquired is still receiving grant support from the same Federal program, the awarding agency may authorize use of the net money due for allowable costs of that project or program.
I11(c) Otherwise, the net amount must be returned to the awarding agency by check or money order.

I80�1A3015.174
I89Subrecipient's share.
I11Where this subpart requires a sharing of the market value or sale proceeds of property acquired under a subgrant, the non-Federal share shall be proportionally divided between the recipient and the subrecipient. The subrecipient shall be entitled to the amount it would have received or retained if the award to it had been made directly by the Federal government. The remainder of the non-Federal share shall belong to the recipient.

I80�1A3015.175 
I89Intangible personal property.
I11(a) T3Inventions and Patents.G1T1 (1) If the recipient is a small business or nonprofit organization (including universities and other institutions of higher education), the allocation of rights in inventions produced under a grant or cooperative agreement shall be determined in accordance with the provisions of sections 200 through 206 of Pub. L. 96�09517 (35 U.S.C. 200�09206) and OMB Circular A�09124.
I11(2) For all other recipients, the allocation of rights in inventions shall be determined in accordance with the ``Government Patent Policy'' (President's Memorandum for Heads of Executive Departments and Agencies, February 18, 1983) and OMB Circular A�09124.
I11(b) T3Copyrights_G1T1(1) T3Applicability.G1T1 This section applies to the copyright in any original work of authorship prepared with grant support. Additionally, if ownership of a copyright or of any of the exclusive rights comprising a copyright are purchased with grant support, this section applies to the purchased copyright or rights.
I11(2) T3Basic rules.G1T1 (i) USDA reserves a royalty-free, nonexclusive, and irrevocable license to exercise, and to authorize others to exercise, the rights for Federal Government purposes. Subject to this license, the owner is free to exercise, preserve, or transfer all its rights. The recipient shall ensure that no agreement is entered into for transferring the rights which would conflict with the nonexclusive license of USDA.
I11(ii) One way that USDA may exercise its nonexclusive license is to authorize exercise of the rights in another project or activity that receives or has received grant support from the Federal Government.
I11(iii) A recipient awarding a subgrant is allowed to impose subgrant terms reserving a nonexclusive license for itself, similar to the one reserved by this section for USDA, with respect to any copyright or rights subject to this section that arise under the subgrant.
Q04I20[48 FR 35875, Aug. 8, 1983] 

I56Subpart S_Procurement

I80�1A3015.180
I89Scope and applicability.
I11(a) This subpart contains information for complying with Attachment 0, ``Procurement Standards'', of OMB Circulars A�09102 and A�09110. Circular A�09102 covers grant and cooperative agreement programs with State and local governments and Indian Tribal governments. Circular A�09110 covers grant and cooperative agreement programs with institutions of higher education, hospitals, and other nonprofit organizations. Copies of both Circulars may be obtained from O&F.
�86�I11(b) This subpart applies to recipient procurements (by purchase, rental, or barter) of supplies, equipment, and services (including construction).
I11(c) This subpart applies only to procurements that are supported in whole or in part by a grant or cooperative agreement.
I11(d) This subpart does not apply to procurements of land, existing land improvements or structures, or any other existing real property.
I11(e) The Attachment 0 of Circulars A�09102 and A�09110 apply to procurements under subgrants as well as grants.

I80�1A3015.181
I89Standards of conduct.
I11(a) Recipients shall maintain a written code or standards of conduct governing the performance of their officers, employees or agents engaged in awarding and administering contracts supported by Federal funds:
I11(1) No employee, officer or agent shall participate in the selection, award, or administration of contracts using Federal funds where to his knowledge, such employee, officer or agent or his immediate family, partners or organizations has a financial interest in, is negotiating with, or has any arrangements concerning prospective employment with the proposed contractor.
I11(2) The recipient's officers, employees or agents shall neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or proposed contractors.
I11(3) Provisions shall be made for disciplinary actions against the recipient's officers, employees, or agents or by contractors or their agents violating the standards of conduct.
I11(b) Awarding agencies may review the written standards of conduct to determine if they meet the minimum standards of Attachment 0 of OMB Circulars A�09110 and A�09102. Recipients will be notified of deficiencies and make corrective action.

I80�1A3015.182
I89Open and free competition.
I11All procurement transactions, regardless of whether by sealed bids or by negotiation and without regard to dollar value shall be conducted in a manner that provides maximum open and free competition.

I80�1A3015.183
I89Access to contractor records.
I11The Attachment 0 requires recipients to include in specified kinds of contracts a provision for access to the contractor's records by the recipient and the Federal government. The following applies to the provision:
I11(a) The provision must require the contractor to place the same provision in any subcontract which would have to have the provision were it awarded by the recipient.
I11(b) The provision must require retention of records for three years after final payment is made under the contract or subcontract and all pending matters are closed. The provision must also require that, if any audit, litigation, or other action involving the records is started before the end of the three year period, the records must be retained until all issues arising out of the action are resolved or until the end of the three year period, whichever is later.
I11(c) In contracts and subcontracts under a subgrant, the provision must require that access to the records be provided to the recipient as well as the subrecipient and the Federal government.

I80�1A3015.184
I89Equal employment opportunity.
I11(a) The Attachment 0 requires recipients to include in contracts in excess of $10,000 a provision requiring compliance with Executive Order 11246, concerning equal employment opportunity as amended by Executive Order 11375, and as supplemented in Department of Labor regulations (41 CFR Chapter 60).
I11(b) If construction is to be assisted by a grant or subgrant, the Executive Order and the Department of Labor supplementing regulations apply, unless an exemption is granted by or under those regulations. Recipients shall observe all applicable requirements of the Order and regulations and include in their nonexempt construction contracts the specific clauses prescribed by 41 CFR 60�091.4(b) and, if applicable, 41 CFR 60�094.3.

�87�I56Subpart T_Cost Principles

I80�1A3015.190
I89Scope.
I11This subpart makes the allowable costs incurred by the recipient the maximum amount of money a recipient is entitled to receive from USDA. In addition, this subpart identifies the principles to be used in determining allowable costs. These cost principles shall apply to transactions and activities conducted under grants, subgrants, cooperative agreements, cost-type contracts and cost-type subcontracts under grants.
I11(a) T3Allowable costs.G1T1 Grant funds may be used only for allowable costs of the activities for which the grant was awarded. This means that the total amount of money that the recipient is entitled to receive from USDA may not exceed the allowable costs incurred by the recipient for those activities.
I11(b) The following rules apply in computing maximum allowable costs:
I11(1) T3Third party in-kind contributions.G1T1 Because they are not allowable costs of the party that receives them, the value of third party in-kind contributions received may not be included in determining maximum allowable costs. However, as provided in Subpart G of this part, third party in-kind contributions may count towards satisfying a cost-sharing or matching requirement of the Federal grant.
I11(2) T3Costs supported by another grant.G1T1 Allowable costs incurred by the recipient and supported by another Federal grant (or by a non-Federal grant) awarded to the recipient may not be included in determining maximum allowable costs. The basic intent of this rule is to prevent double compensation. It does not, however, prevent proration of costs that are allowable under two or more awards.
I11(3) T3Costs used to match another Federal grant.G1T1 A cost that the recipient uses to meet a cost-sharing or matching requirement of one Federal grant may not count towards determining maximum allowable costs under another Federal grant, unless specifically authorized by a Federal statute.
I11(4) T3Costs supported by general program income.G1T1 A grant may not pay for a cost which is supported by general program income earned by the recipient or by a subrecipient under the grant. Therefore, these costs may not be included in determining maximum allowable costs. 
I11(5) T3Use of money due Federal government.G1T1 In accordance with �1A3015.173, an awarding agency, under certain circumstances, may authorize a recipient to use certain money due the Federal government for allowable costs of the project or programs, instead of returning the money to the Federal Government. Costs supported by the money may not be included as part of the maximum allowable costs charged to USDA.
I11(6) T3Subgrant and contract costs.G1T1 The recipient's allowable costs include allowable outlays, if any, to its subrecipients and contractors. If the recipient pays a subrecipient more than the allowable costs incurred by the subrecipient, the excess is not an allowable cost of the recipient and may not be included as part of the maximum allowable costs charged to USDA. However, for cost-type contracts a reasonable fee or profit paid by the recipient to the contractor, in addition to the contractor's allowable costs, may be included in this maximum unless prohibited by the provisions of the grant award.

I80�1A3015.191
I89Governments.
I11(a) OMB Circular No. A�0987, and any subsequent amendments to this Circular published in the T4Federal RegisterG1T1 by OMB, shall be used in determining the allowable costs of activities conducted by governments.
I11(b) Additional amendments to the Circular, unless otherwise prescribed by OMB, shall go into effect at the start of a government's first fiscal year following the amendment's publication in the T4Federal Register.G1T1

I80�1A3015.192
I89Institutions of higher education.
I11(a) OMB Circular No. A�0921, including any amendments to the Circular published in the T4Federal RegisterG1T1 by OMB, shall be used in determining the allowable costs of activities conducted by institutions of higher education (other than for-profit institutions).
I11(b) Additional amendments to the Circular, unless otherwise prescribed by OMB, shall go into effect at the start of an institution's first fiscal �88�year following the amendment's publication in the T4Federal Register.G1T1

I80�1A3015.193
I89Other non-profit organizations.
I11(a) OMB Circular No. A�09122, including any subsequent amendments to the Circulars published in the T4Federal RegisterG1T1 by OMB, shall be used in determining the allowable costs of activities conducted by nonprofit organizations under grants, cooperative agreements, cost reimbursement contracts, and other contracts in which costs are used in pricing, administration, or settlement. It does not apply to colleges or universities which are covered by Circular A�0921; State, local and federally recognized Indian Tribal governments which are covered by Circular A�0987, or hospitals.
I11(b) Future amendments to the Circular, unless otherwise prescribed by OMB, shall go into effect at the time the initial award is made to the recipient.

I80�1A3015.194 
I89For-profit organizations.
I11The principles to be used when determining the allowable costs of activities conducted by for-profit organizations are contained in the Federal Acquisition Regulation at 48 CFR Subpart 31.2. Exception: Independent research and development costs including any indirect costs allocable to them are unallowable. Independent research and development are defined in the Federal Acquisition Regulation at 48 CFR 31.205�0918.
Q04I20[60 FR 44124, Aug. 24, 1995]

I80�1A3015.195
I89Subgrants and cost-type contracts.
I11USDA cost principles applicable to a cost-type contractor or a subrecipient will not necessarily be the same as those applicable to the recipient. For example, where a State government awards a subrecipient or cost-type contract to an institution of higher education, OMB Circular A�0921 would apply to the costs incurred by the institution of higher education even though OMB Circular A�0987 would apply to the costs incurred by the State.

I80�1A3015.196
I89Costs allowable with approval.
I11Each set of cost principles specifically identifies certain costs that, in order to be allowable, must be approved by the awarding agency. Other costs do not require approval. The following procedures govern approval of these costs:
I11(a) When costs are allocated in accordance with a government-wide cost allocation plan or when treated as indirect costs, acceptance of the costs as part of the indirect cost rate or cost allocation plan shall constitute approval.
I11(b)(1) All direct costs must be approved in advance by the awarding agency.
I11(2) When costs are specified in the budget, approval of the budget shall constitute approval of the cost.
I11(3) Specific prior approval in writing from the awarding agency is required if the costs are not specified in the budget, or if there is no approved budget. For this purpose the prior approval procedures of Subpart M shall be followed, except that, for formula or mandatory grants, the awarding agency's written approval may be signed by any authorized official of the awarding agency.
I11(c) The awarding agency may waive or conditionally waive the requirement for its approval of the costs. A waiver, as such, shall be applicable only to the requirement for approval. If it is determined, by audit or otherwise, that the costs do not meet other requirements or tests for allowability specified by the applicable cost principles, such as reasonableness and necessity, the costs may be disallowed.
I11(d) In the case of subgrants and cost-type contracts, no approval shall be given which is inconsistent with the purpose or the provisions of the Federal grant. 

I56Subpart U_Miscellaneous 

I80�1A3015.200
I89Acknowledgement of support on publications and audiovisuals. 
I11(a) T3Definitions.G1T1 Appendix A defines ``audiovisual,'' ``production of an audiovisual,'' and ``publication.'' 
�89�I11(b) T3Publications.G1T1 Recipients shall have an acknowledgement of awarding agency support placed on any publications written or published with grant support and, if feasible, on any publication reporting the results of, or describing, a grant-supported activity. 
I11(c) T3Audiovisuals.G1T1 Recipients shall have an acknowledgement of awarding agency support placed on any audiovisual which is produced with grant support and which has a direct production cost to the recipient of over $5,000. Unless the other provisions of the grant award make it apply, this requirement does not apply to: 
I11(1) Audiovisuals produced under mandatory or formula grants or under subgrants. 
I11(2) Audiovisuals produced as research instruments or for documenting experimentation or findings and not intended for presentation or distribution to the general public. 
I11(d) T3Waivers.G1T1 Awarding agencies may waive any requirement of this section. 

I80�1A3015.201
I89Use of consultants. 
I11(a) T3Definition.G1T1 Appendix A defines ``consultant.'' 
I11(b) T3Applicability.G1T1 This section applies only to the use of consultants whose fees are supported by a grant, subgrant, or cost-type contract. 
I11(c) T3Basic policy_G1T1(1) T3Prior approval.G1T1 Awarding agencies shall not require prior approval for the use of consultants. 
I11(2) T3Exceptions.G1T1 (i) In unusual cases, using a consultant may constitute a transfer of substantive programmatic work, which requires prior approval under discretionary grants. 
I11(ii) Consulting fees paid by an organization to its own employees require prior approval. 
I11(d) T3Use of an organization's own employees_G1T1(1) T3Faculty members of education institutions.G1T1 Charges representing extra compensation (above base salary) paid by an educational institution to a salaried member of its faculty for consulting work are allowable only in unusual cases, and only if both of the following conditions exist: 
I11(i) The consultation is across departmental lines or involves a separate or remote operation; and 
I11(ii) The work performed by the consultant is in addition to his or her regular departmental load. 
I11(2) T3All other cases.G1T1 In all other cases, consulting fees paid in addition to salary by recipients or cost-type contractors to people who are also their employees may be supported by a grant, subgrant, or cost-type contract only in unusual cases, and only if all of the following three conditions exist: 
I11(i) The policies of the recipient or contractor permit such consulting fee payments to its own employees regardless of whether Federal grant funds are involved; 
I11(ii) The work involved is clearly outside the scope of the person's salaried employment; and 
I11(iii) It would be inappropriate or not feasible to compensate for the additional work by paying additional salary to the employee. 
I11(3) T3Requirement for approval.G1T1 Consulting fees paid under this section must have a specific prior approval in writing from the Head of the recipient or contractor or from his or her designated representative. If the recipient or contractor is a government, the approval may be given by the Head (or a designated representative of the Head) of the government agency which is primarily responsible for administering or carrying out the project or program. If the designated representative is personally involved in the project or program under consideration, the approval may be given only by the Head. If the Head is personally involved in the project or program under consideration, prior approval from the awarding agency is required. Such prior approval must include a determination that the applicable requirements in paragraph (d) (1) or (2) of this section are present. 
I11(e) T3Documentation standards.G1T1 (1) Charges for consulting payments must be supported in the records of the recipient or cost-type contractor by an invoice from the consultant and a copy of the written report (if a report is appropriate) or other documented evidence of the work performed from the consultant. 
I11(2) If any of the following information is not shown on the invoice and/or �90�report from the consultant, the information must be shown in a memorandum or other document prepared by the recipient or contractor for its files, or noted in handwriting on the consultant's invoice by the recipient or contractor. The memorandum, other document, or handwritten notation must be signed by an official of the recipient or contractor and show: 
I11(i) The name of the consultant; 
I11(ii) The nature of the services provided (such as statistical analysis of data, participation on project advisory committee, or specified medical services to eligible beneficiaries); 
I11(iii) The relevance of the services to the project or program, if not apparent from the nature of the services; and 
I11(iv) Whichever of the following is applicable: 
I11(A) (If the fee was based on a rate per day or hours worked) the rate and the dates and/or hours worked; 
I11(B) (If the fee was based on a rate per unit of service provided, such as the number of patients examined by a physician) the rate, the number of units of service provided, and the beginning and ending dates of the overall period of service; or
I11(C) (If the fee was determined on some other basis) the basis for determining the fee and the beginning and ending dates of the period in which services were provided. 

I80�1A3015.202
I89Limits on total payments to the recipient.
I11(a) This section summarizes the four most widely applicable limits on the total amount of money the recipient is entitled to receive from USDA as a result of a grant. It is permissible for the terms of a grant to provide one or more additional limits. 
I11(b) For each grant, the lowest of the applicable limits is the one that governs the final settlement upon expiration or termination of the grant. 
I11(c) The following two limits apply to every grant: 
I11(1) The amount of Federal funds authorized. 
I11(2) The Federal share of the allowable costs incurred by the recipient. 
I11(d) Grants that require a specified percentage of cost-sharing or matching are subject to the limit described in Subpart G. 
I11(e) For each budget period of an incrementally funded discretionary grant, the Federal share of that period's approved budget is a limit.

I80�1A3015.203
I89[Reserved] 

I80�1A3015.204
I89Federal Register publications.
I11(a) T3Program regulations.G1T1 Most grant programs have program-specific regulations, which are published in the T4Federal RegisterG1T1 and codified in the T3Code of Federal Regulations.G1T1 In some cases the program-specific regulations are promulgated in the form of agency directives or manuals which may be obtained from the awarding agency.
I11(b) T3Program announcements.G1T1 For each program, the awarding agency may publish in the T4Federal RegisterG1T1 one or more program announcements. Program announcements invite applications for one or more stated program objectives. They include at least the following information:
I11(1) An estimate of how much money will be available for competing awards, and the expected size of the awards, broken down by subprogram or priority area when appropriate;
I11(2) Who is eligible;
I11(3) How to obtain application kits;
I11(4) Where to submit applications; and
I11(5) The deadline for submitting applications.
I11(c) T3Cooperative agreements.G1T1 If any or all of the awards are likely to be cooperative agreements rather than grants, the program announcement so states. In that case, if feasible, the program announcement also describes the anticipated substantial Federal involvement in performance. (This paragraph does not prevent the award of cooperative agreements under a program announcement that mentioned only grants. Nor does it prevent the award of grants under a program announcement that mentioned only cooperative agreements.)
I11(d) T3Evaluation criteria.G1T1 The awarding agency publishes its criteria for evaluating grant applications either in the program regulations or the program announcement. If the criteria are not all equal in importance, their relative �91�weights are also published. The criteria cover at least the following factors (except where the nature of the eligible projects makes one or more of these factors irrelevant):
I11(1) How well qualified the project's personnel will be;
I11(2) The adequacy of the applicant's facilities and resources;
I11(3) The adequacy of the project plan or methodology;
I11(4) The cost-effectiveness of the project; and
I11(5) How closely the project objectives fit the objectives for which applications were invited.
I11(e) T3Funding priorities.G1T1 If the awarding agency will give priority to one or more particular kinds of projects, the priority (and how it will be applied in deciding which applications to fund) is described in the program announcement.
I11(f) T3Competing continuations vs. ``new'' projects.G1T1 If the awarding agency will give a preference to competing continuation applications over applications for projects not already receiving support under the program, or vice versa, the preference is described in the program announcement.
I11(g) T3Programs with few potential applicants.G1T1 In some programs the number of potential applicants is relatively small. (For example, in some programs only the States are eligible.) In these situations the awarding agency may send a copy of the program announcement directly to every potential applicant instead of publishing it in the T4Federal Register.G1T1
I11(h) T3Register_Other information which is available.G1T1 In addition to the items specified above, each awarding Agency makes available to the public the following information and materials for each program:
I11(1) A copy of, or reference to, the authorizing statutes for the program;
I11(2) All guidelines of general applicability for administration of the program;
I11(3) A description of the procedures the awarding agency will use for evaluating applications; and
I11(4) Any other information that the awarding agency believes will be helpful.
I11(i) T3Consulting with applicants.G1T1 Each awarding agency publishes as much information as practicable to reduce the need for consultation by applicants. If the awarding agency does provide consultation, its staff members try to give consistent interpretations and fair treatment to all requestors.

I80�1A3015.205
I89General provisions for grants and cooperative agreements with institutions of higher education, other nonprofit organizations, and hospitals.
I11(a) T3Scope.G1T1 This section sets forth general provisions which apply, in whole or in part, to grants and cooperative agreements awarded by USDA to institutions of higher education, other nonprofit organizations, and hospitals. (General provisions applicable to grants and cooperative agreements with State and local governments are set forth in the Office of Management and Budget (OMB) Circular A�09102, Attachment M and are made a condition of each grant or cooperative agreement awarded to such recipients). Any statutory provisions that apply to the particular agreement at hand, that are not included herein, shall be made a part of the award document. All administrative requirements contained in subparts A through U of 7 CFR part 3015 shall apply, as appropriate.
I11(b) T3Assurances and compliance.G1T1 It shall be a condition of every USDA grant or cooperative agreement awarded to institutions of higher education, other nonprofit organizations and hospitals that the recipient assure and certify compliance with the following general requirements to the extent applicable:
I11(1) It will comply with the following provisions regarding the rights and welfare of human subjects:
I11(i) The recipient organization is responsible for safeguarding the rights and welfare of any human subjects involved in research, development, and related activities supported by this agreement. The recipient organization may conduct research involving human subjects only as described in the proposal and as approved by the recipient organization's cognizant Institutional Review Board. Prior to conducting such research, the recipient organization shall obtain and document a legally sufficient informed consent from �92�each human subject involved. No such informed consent shall include any exculpatory language through which the subject is made to waiver, or to appear to waiver, any of his or her legal rights, including any release of the recipient organization or its agents from liability for negligence.
I11(ii) The recipient organization agrees to comply with U.S. Department of Health and Human Services' regulations regarding human subjects, appearing in 45 CFR part 46 (as amended).
I11(iii) It will comply with USDA policy which is to assure that the risks do not outweigh either potential benefits to the subjects or the expected value of the knowledge sought.
I11(iv) Selection of subjects or groups of subjects shall be made without regard to sex, race, color, religion, or national origin unless these characteristics are factors to be studied.
I11(2) It will comply with the Animal Welfare Act, as amended, 7 U.S.C. 2131, T3et seq.,G1T1 and the regulations promulgated thereunder by the Secretary of Agriculture (9 CFR, Subchapter A) pertaining to the care, handling, and treatment of warm-blooded animals held or used for research, teaching, or other activities supported by Federal funds. Recipient organizations may request registration of facilities and a current listing of licensed dealers from the Regional Office of the Animal and Plant Health Inspection Service (APHIS), USDA, for the Region in which their facility is located. The location of the appropriate APHIS Regional Office, as well as information concerning this requirement, may be obtained by contacting the Senior Staff Officer, Animal Care Staff, USDA/APHIS, Federal Center Building, Hyattsville, Maryland 20782.
I11(3) It will assume primary responsibility for implementing proper conduct or recombinant DNA research and it will comply with the national Institute of Health Guidelines for Recombinant DNA Research, as revised.
I11(4) It will comply with Section 5 of the International Air Transportation Fair Competitive Practices Act of 1974, 49 U.S.C. 1517, which requires:
I11(i) Any air transportation to, from, between, or within a country, other than the U.S., of persons or property, the expense of which will be assisted by USDA funding, to be performed on a U.S.-flag carrier if service provided by such carrier is ``available.''
I11(ii) For the purposes of this requirement:
I11(A) Passenger or freight service by a certificated air carrier is considered ``available'' even though:
I11(T31G1T1) Comparable or a different kind of service by a noncertificated air carrier costs less; or
I11(T32G1T1) Service by a noncertificated air carrier can be paid for in excess foreign currency; or
I11(T33G1T1) Service by a noncertificated air carrier is preferred by the recipient organization contractor or traveler needing air transportation.
I11(B) Passenger service by a certificated air carrier is considered to be ``unavailable'':
I11(T31G1T1) When the traveler, while enroute, has to wait six hours or more for an available U.S. carrier; or
I11(T32G1T1) When any flight by a U.S. carrier interrupted by a stop anticipated to be six hours or more for refueling, reloading repairs, etc., and no other flight by a U.S. carrier is available during the six-hour period; or 
I11(T33G1T1) When the flight by a U.S. carrier takes 12 or more hours longer than a foreign carrier.
I11(5) It possesses legal authority to enter into the agreement; that a resolution, motion or similar action has been duly adopted or passed as an official act of its governing body, authorizing the acceptance of the agreement including all understandings and assurances contained therein and directing and authorizing the person identified as the official representative of the recipient organization to act in connection with the agreement and to provide such additional information as may be required.
I11(6) It will comply with Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d, and in accordance with Title VI of that Act, no person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity �93�for which the recipient receives Federal financial assistance and will immediately take any measures necessary to effectuate this agreement.
I11(7) It will establish safeguards to prohibit employees from using their positions for a purpose that is or gives the appearance of being motivated by a desire for private gain for themselves or others, particularly those with whom they have family, business, or other ties.
I11(8) It will give USDA, the awarding agency or the Comptroller General, through any authorized representative, access to and the right to examine all records, books, papers or documents related to the award.
I11(9) It will comply with all requirements imposed by the awarding agency concerning special requirements of law, program requirements, and other administrative requirements.
I11(10) It will insure that the facilities under its ownership, lease or supervision which shall be utilized in the accomplishment of the project are not listed on the Environmental Protection Agency's (EPA) list of violating facilities and that it will notify the awarding agency of the receipt of any communication from the Director of the EPA, Office of Federal Activities, indicating that a facility to be utilized in the project is under consideration for listing by the EPA.
I11(11) It will comply with the flood insurance purchase requirements of the National Flood Insurance Act of 1968, as amended, and the Flood Disaster Protection Act of 1973, 42 U.S.C. 4001�094127. Section 102(a) requires, on and after March 2, 1975, the purchase of flood insurance in communities where such insurance is available as a condition for construction or acquisition purposes for use in any area that has been identified by the Secretary of the Department of Housing and Urban Development as an area having special flood hazards.
I11(12) It will assist the awarding agency in its compliance with Section 106 of the National Historic Preservation Act of 1966, 16 U.S.C. 470, Executive Order 11593, and the Archaeological and Historic Preservation Act of 1974, 16 U.S.C. 496a�091, T3et. seq.,G1T1 by (i) consulting with the State Historic Preservation Officer on the conduct of investigations, as necessary, to identify properties listed in or eligible for inclusion in the National Register of Historic Places that are subject to adverse effects (see 36 CFR 800.8) by the activity, and notifying the awarding agency of the existence of any such properties, and by (ii) complying with all requirements established by the awarding agency to avoid or mitigate adverse effects upon such properties.
I11(13) It will comply with Title IX of the Education Amendments of 1972, 20 U.S.C. 1681, T3et. seq.,G1T1 which prohibits discrimination on the basis of sex in Federally assisted education programs.
I11(14) It will comply with Section 504 of the Rehabilitation Act of 1973, as amended, 29 U.S.C. 794. Section 504 provides that no otherwise qualified handicapped individual shall solely by reason of his handicap, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.
I11(15) It will comply with the Age Discrimination Act of 1975, 42 U.S.C. 6101�096107, which prohibits unreasonable discrimination based on age, in programs or activities receiving Federal financial assistance.
I11(16) It is in compliance with the Clean Air Act of 1970, 42 U.S.C. 7401 T3et seq.,G1T1 which requires federally assisted activities to be in conformance with State (Clean Air) Implementation Plan.
I11(17) It will establish safeguards to ensure that USDA funds are properly spent. In particular, except nonprofit organizations which are subject to the lobbying provisions of paragraph B.21. of OMB Circular A�09122, it will assure that funds are not used for partisan or political activity purposes.
I11(c) USDA awarding agencies shall obtain the required assurances and certifications by including the following clause in each grant or cooperative agreement awarded to institutions of higher education, other nonprofit organizations and hospitals:
Q04
I21As a condition of this grant or cooperative agreement, the recipient assures and certifies that it is in compliance with and will comply in the course of the agreement with all applicable laws, regulations, Executive �94�Orders and other generally applicable requirements, including those set out in 7 CFR 3015.205(b), which hereby are incorporated in this agreement by reference, and such other statutory provisions as are specifically set forth herein.
Q04I20[48 FR 27222, June 14, 1983, as amended at 49 FR 38534, Oct. 1, 1984] 

I56Subpart V_Intergovernmental Review of Department of Agriculture Programs and Activities
Q04I21T5Authority:  T1E. O. 12372, July 14, 1982 (47 FR 30959), as amended Apr. 8, 1983 (48 FR 15887): Sec. 401 of the Intergovernmental Cooperation Act of 1968, as amended (31 U.S.C. 6506); sec. 204 of the Demonstration Cities and Metropolitan Development Act of 1966, as amended (42 U.S.C. 3334).
Q04I21T5Source:  T148 FR 29112, June 24, 1983, unless otherwise noted.

I80�1A3015.300 
I89Purpose.
I11(a) The regulations in this part implement Executive Order 12372, ``Intergovernmental Review of Federal Programs'', issued July 14, 1982, and amended on April 8, 1983. These regulations also implement applicable provisions of section 401 of the Intergovernmental Cooperation Act of 1968 and section 204 of the Demonstration Cities and Metropolitan Development Act of 1966.
I11(b) These regulations are intended to foster an intergovernmental partnership and a strengthened Federalism by relying on State processes and on State, arewide, regional and local coordination for review of proposed Federal financial assistance and direct Federal development.
I11(c) The regulations are intended to aid the internal management of the Department, and are not intended to create any right or benefit enforceable at law by a party against the Department or its officers.

I80�1A3015.301 
I89Definitions.
I11T3DepartmentG1T1 means the U.S. Department of Agriculture.
I11T3OrderG1T1 means Executive Order 12372, issued July 14, 1982, and amended April 8, 1983, and titled T3Intergovernmental Review of Federal Programs.G1T1
I11T3SecretaryG1T1 means the Secretary of the U.S. Department of Agriculture or an official or employee of the Department acting for the Secretary under a delegation of authority.
I11T3StateG1T1 means any of the 50 states, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, American Samoa, the U.S. Virgin Island, or the Trust Territory of the Pacific Islands.

I80�1A3015.302 
I89Applicability.
I11The Secretary publishes in the T4Federal RegisterG1T1 a list of the Department's programs and activities that are subject to these regulations and identifies which of these are subject to the requirements of section 204 of the Demonstration Cities and Metropolitan Development Act.

I80�1A3015.303 
I89Secretary's general responsibilities.
I11(a) The Secretary provides opportunities for consultation by elected officials of those State and local governments that would provide the non-Federal funds for, or that would be directly affected by, proposed Federal financial assistance from, or direct Federal development by, the Department.
I11(b) If a State adopts a process under the Order to review and coordinate proposed Federal financial assistance and direct Federal development, the Secretary, to the extent permitted by law:
I11(1) Uses the State process to determine official views of State and local elected officials;
I11(2) Communicates with State and local elected officials as early in a program planning cycle as is reasonably feasible to explain specific plans and actions;
I11(3) Makes efforts to accommodate State and local elected officials' concerns with proposed Federal financial assistance and direct Federal development that are communicated through the State process;
I11(4) Allows the States to simplify and consolidate existing Federally required State plan submissions;
I11(5) Where State planning and budgeting systems are sufficient and where �95�permitted by law, encourages the substitution of State plans for Federally required State plans;
I11(6) Seeks the coordination of views of affected State and local elected officials in one State with those of another State when proposed Federal financial assistance or direct Federal development has an impact on interstate metropolitan urban centers or other interstate areas; and 
I11(7) Supports State and local governments by discouraging the reauthorization or creation of any planning organization which is Federally-funded, which has a limited purpose, and which is not adequately representative of, or accountable to, State or local elected officials.

I80�1A3015.304 
I89Federal interagency coordination.
I11The Secretary, to the extent practicable, consults with and seeks advice from all other substantially affected Federal departments and agencies in an effort to assure full coordination between such agencies and the Department regarding programs and activities covered under these regulations.

I80�1A3015.305 
I89State selection of programs and activities.
I11(a) A State may select any program or activity published in the T4Federal RegisterG1T1 in accordance with �1A3015.302 of this subpart for intergovernmental review under these regulations. Each State, before selecting programs and activities, shall consult with local elected officials.
I11(b) Each State that adopts a process shall notify the secretary of the Department's programs and activities selected for that process.
I11(c) A State may notify the Secretary of changes in its selections at any time. For each change, the State shall submit to the Secretary an assurance that the State has consulted with elected local officials regarding the change. The Department may establish deadlines by which States are required to inform the Secretary of changes in their program selections.
I11(d) The Secretary uses a State's process as soon as feasible, depending on individual programs and activities, after the Secretary is notified of its selections.

I80�1A3015.306 
I89Communication with State and local elected officials.
I11(a) The Secretary provides notice to directly affected State, areawide, regional, and local entities in a State of proposed Federal financial asssistance or direct Federal development if:
I11(1) The State has not adopted a process under the Order; or
I11(2) The assistance or development involves a program or an activity that is not covered under the State process.
I11(b) This notice may be made by publication in the T4Federal RegisterG1T1 or other appropriate means, which the Department in its discretion deems appropriate.
I11(c) In order to facilitate communication with State and local officials the Secretary has established an office within the Department to receive all communications pertinent to this Order. All communications should be sent to the Office of Finance and Management, Room 143�09W, Administration Building, Washington, DC 20250, Attention: E.O. 12372.

I80�1A3015.307 
I89State comments on proposed Federal financial assistance and direct Federal development.
I11(a) Except in unusual circumstances, the Secretary gives State processes or directly affected State, areawide, regional, and local officials and entities:
I11(1) At least 30 days from the date established by the Secretary to comment on proposed Federal financial assistance in the form of noncompeting continuation awards; and
I11(2) At least 60 days from the date established by the Secretary to comment on proposed direct Federal development or Federal financial assistance other than noncompeting continuation awards.
I11(b) This section also applies to comments in cases in which the review, coordination and communication with the Department have been delegated.
I11(c) Applicants for programs and activities subject to section 204 of the Demonstration Cities and Metropolitan Development Act shall allow areawide agencies a 60-day opportunity for review and comment.

�96�I80�1A3015.308 
I89Processing comments.
I11(a) The Secretary follows the procedures in �1A3015.309 if:
I11(1) A State office or official is designated to act as a single point of contact between a State process and all Federal agencies; and
I11(2) That office or official transmits a State process recommendation for a program selected under �1A3015.305.
I11(b)(1) The single point of contact is not obligated to transmit comments form State, areawide, regional or local officials and entities where there is no State process recommendation.
I11(2) If a State process recommendation is transmitted by a single point of contact, all comments from State, areawide, regional, and local officials and entities that differ from it must also be transmitted.
I11(c) If a State has not established a process, or is unable to submit a State process recommendation, State, areawide, regional and local officials and entities may submit comments either to the applicant or to the Department.
I11(d) If a program or activity is not selected by a State process, State, areawide, regional and local officials and entities may submit comments either to the applicant or to the Department. In addition, if a State process recommendation for a non-selected program or activity is transmitted to the Department by the single point of contact, the Secretary follows the procedures of �1A3015.309 of this subpart.
I11(e) The Secretary considers comments which do not constitute a State process recommendation submitted under these regulations and for which the Secretary is not required to apply the procedures of �1A3015.309 of this subpart, when such comments are provided by a single point of contact by the applicant, or directly to the Department by a commenting party.

I80�1A3015.309 
I89Accommodation of intergovernmental concerns.
I11(a) If a State process provides a State process recommendation to the Department through its single point of contact, the Secretary either_
I11(1) Accepts the recommendations;
I11(2) Reaches a mutually agreeable solution with the State process; or
I11(3) Provides the single point of contact with a written explanation of the decision, as the Secretary in his or her discretion deems appropriate. The Secretary may also supplement the written explanation by also providing the explanation to the single point of contact by telephone, other telecommunication, or other means.
I11(b) In any explanation under paragraph (a)(3) of this section, the Secretary informs the single point of contact that:
I11(1) The Department will not implement its decision for at least ten days after the single point of contact receives the explanation; or
I11(2) The Secretary has reviewed the decision and determined that, because of unusual circumstances, the waiting period of at least ten days is not feasible.
I11(c) For purposes of computing the waiting period under paragraph (b)(1) of this section, a single point of contact is presumed to have received written notification five days after the date of mailing of such notification.

I80�1A3015.310 
I89Interstate situations.
I11(a) The Secretary is responsible for:
I11(1) Identifying proposed Federal financial assistance and direct Federal development that have an impact on interstate areas;
I11(2) Notifying appropriate officials in States which have adopted a process and which selected the Department's program or activity;
I11(3) Making efforts to identify and notify the affected State, areawide, regional, and local officials and entities in those States that have not adopted a process under the Order or do not select the Department's program or activity; and
I11(4) Responding, pursuant to �1A3015.309 of this subpart, if the Secretary receives a recommendation from a designated areawide agency transmitted by a single point of contact, in cases in which the review, coordination, and communication with the Department have been delegated.
I11(b) The Secretary uses the procedures in �1A3015.309 if a State process provides a State process recommendation to the Department through a single point of contact.

�97�I80�1A3015.311 
I89Simplification, consolidation, or substitution of State plans.
I11(a) As used in this section:
I11(1) T3SimplifyG1T1 means that a State may develop its own format, choose its own submission date, and select the planning period for a State plan.
I11(2) T3ConsolidateG1T1 means that a State may meet statutory and regulatory requirements by combining two or more plans into one document and that the State can select the format, submission date, the planning period for the consolidated plan.
I11(3) T3SubstituteG1T1 means that a State may use a plan or other document that it has developed for its own purposes to meet Federal requirements.
I11(b) If not inconsistent with law, a State may decide to try to simplify, consolidate, or substitute Federally required State plans without prior approval by the Secretary.
I11(c) The Secretary reviews each State plan a State has simplified, consolidated or substituted and accepts the plan only if its contents meet Federal requirements.

I80�1A3015.312 
I89Waivers.
I11In an emergency, the Secretary may waive any provision of these regulations. 
S8002
I95Pt. 3015, App. A
I85Appendix A to Part T13015G1T5T4_DefinitionsG1T5
I21Section IT3``Grant'' and ``Cooperative Agreement''G1T1
Q02
I21(a) ``Grant'' unless qualified by ``non-Federal'' means an award by the Federal government of money, property instead of money, services, or anything of value, to the State or other recipient, with the following characteristics:
I21(1) The principal purpose of the award is to accomplish a public purpose of support or stimulation authorized by Federal statute, rather than acquisition, by purchase, lease, or barter, of property or services for the direct benefit or use of the Federal government; and
I21(2) At the time the award is made, no substantial involvement is anticipated between the executive agency, acting for the Federal government, and the State or local government or other recipient during performance of the contemplated activity.
I21(b) ``Cooperative agreement'' has the same meaning as ``grant,'' except that, at the time a cooperative agreement is awarded, substantial involvement is anticipated between the executive agency, acting for the Federal government, and the State or local government or other recipient during performance of the contemplated activity.
I21(c) ``Grants'' and ``cooperative agreements'' do not include technical assistance, which provides services instead of money; revenue sharing; loans; loan guarantees; capital contributions to loan funds; interest subsidies; insurance; or direct appropriations. (See the definition of ``Non-Federal grant'' in Section II of this appendix.)
Q02
I21Section IIT3Other Definitions.G1T1
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I21``Acquisition'' of property includes purchase, construction, or fabrication of property. It does not include rental of property or alterations and renovations of real property.
I21``Acquisition cost'' of an item of purchased equipment means the net invoice price of the equipment. It includes the cost of modifications, attachments, accessories, or auxiliary apparatus necessary to make the equipment useable for the purpose for which it was acquired. Other charges, such as the cost of installation, transportation, taxes, duty, or protective in-transit insurance shall be included in or excluded from the unit acquisition cost in accordance with the regular accounting practices of the organization purchasing the equipment.
I21If an item of equipment is acquired by trading in another item and paying an additional amount, ``acquisition cost'' means the amount received for trade-in plus the additional outlay. (See the definition of ``amount received for trade-in.'')
I21For purposes of the rules on equipment and supplies, ``acquisition cost'' of a copy of a work of authorship (such as a book, print of a motion picture, or tape of a television program) refers to the cost of fabricating or purchasing the individual copy, considered as a material object. It does not include the cost of developing, or acquiring rights to, the work embodied in the copy.
I21``Advance by Treasury check'' is a payment made by a Treasury check to a recipient of a grant or cooperative agreement, before payments are made by the recipient of the grant or cooperative agreement. Advances by Treasury check are based on either a periodic request from the recipient or a predetermined payment schedule.
I21``Amount received for trade-in'' of an item of equipment traded in for replacement equipment means the amount that would have been paid for the replacement equipment without a trade-in, minus the amount paid with the trade-in. The term refers to the actual difference, not necessarily the trade-in value, shown on an invoice. For example, suppose that a recipient can buy a new machine for $5,000 in cash. The recipient actually buys this machine by trading in a used machine and paying $3,000 in cash. In this case, the amount received for trade-in �98�would be $2,000 ($5,000 minus $3,000) regardless of the trade-in allowance shown on the invoice.
I21``Approved budget'' means a budget (including any revised budget) which has been approved in writing by the awarding agency. (See the definition of ``budget.'')
I21``Audiovisual'' means a product containing visual imagery or sound or both. Examples of audiovisuals are motion pictures, live or prerecorded radio or television programs, slide shows, filmstrips, audio recordings, and multimedia presentations.
I21``Awarding agency'' means (1) for grants and cooperative agreements, the USDA agency making the award, and (2) for subgrants, the recipient.
I21``Bid guarantee'' means a firm commitment such as a bid bond, certified check, or other negotiable instrument, accompanying a bid as assurance that the bidder will, if its bid is accepted, execute the required contractual documents within the time specified.
I21``Budget'' means the recipient's financial expenditure plan approved by the awarding agency to carry out the purposes of the Federally-supported project. The budget is comprised of both the Federal share and any non-Federal share of such plan and any subsequent authorized rebudgeting of funds.
I21For those programs that do not involve Federal approval of the non-Federal share of costs, such as research grants, the term ``budget'' means the financial expenditure plan approved by the awarding agency including any subsequent authorized rebudgeting of funds, for the use of Federal funds only. Any expenditures charged to an approved budget consisting of Federal and non-Federal shares are deemed to be supported by the grant in the same proportion as the percentage of Federal/non-Federal participation in the overall budget.
I21``Budget period'' means the period specified in the grant or cooperative agreement during which Federal funds awarded are authorized to be expended, obligated, or firmly committed by the recipient for the purposes specified in the agreement.
I21``Closeout'' of a grant or cooperative agreement means the process by which an awarding agency determines that all applicable administrative actions and all required work of the grant or cooperative agreement have been completed by the recipient and the awarding agency.
I21``Consultant'' means a person who gives advice or services for a fee, but not as an employee. The term includes guest speakers when not acting as employees of the party that engages them. Note that in unusual cases it is possible for a person to be both an employee and a consultant at the same time. (See �1A3015.201.)
I21``Contract'' means a procurement contract awarded under a grant, cooperative agreement, or subgrant; and ``subcontract'' means a procurement subcontract under such a contract. Procurement contracts and subcontracts are ones which place the parties in a buyer-seller relationship, regardless of the label used by the parties to describe the relationship (e.g., purchase-of-service agreement). The terms ``contract'' and ``subcontract'' do not include any agreements between organizational components of the same legal entity, even if one of the components provides property or services to or for the other. (See definitions of ``subgrant,'' ``cost-type contract,'' and ``fixed price contract.'')
I21``Cost-sharing'' and ``matching'' each mean the value of third party in-kind contributions plus that portion of the allowable costs of recipients not supported by the Federal Government. (The terms ``cost-sharing'' and ``matching,'' in this part, are synonymous.)
I21``Cost-type contract'' means a contract or subcontract in which the contractor or subcontractor is paid on the basis of the costs it incurs. The term includes cost-plus-fixed-fee contracts and subcontracts. (However, the term does not include any subcontracts under a ``fixed-price contract.'')
I21``Discretionary'' grants and cooperative agreements are ones which a Federal statute authorizes but does not require USDA to award.
I21``Equipment'' means an article of tangible personal property that has a useful life of more than two years and acquisition cost of $500 or more. Any recipient may use its own definition of equipment if its definition would at least include all items of equipment as defined here.
I21``Expenditure report'' means (1) for nonconstruction awards, the ``Financial Status Report'' (or other equivalent report); (2) for construction awards, the ``Outlay Report and Request for Reimbursement for Construction Programs'' (or other equivalent report).
I21``Federal funds authorized'' means the total amount of Federal funds obligated by the Federal Government for use by the recipient. This amount is a limit on the total amount of money that the recipient is entitled to receive from the Federal Government as a result of the award. In addition to this limit, there are other limits. Refer to �1A3015.202 for a summary of these.
I21``Federally recognized Indian Tribal government'' means the governing body or a governmental agency of any Indian tribe, band, nation, or other organized group or community (including any Native village as defined in section 3 of the Alaska Native Claims Settlement Act, 85 Stat. 688) certified by the Secretary of the Interior as eligible for the special programs and services provided by him or her through the Bureau of Indian Affairs.
I21``Fidelity bond'' means a bond indemnifying the recipient against losses resulting �99�from the fraud or lack of integrity, honesty or fidelity of one or more employees, officers or other persons holding a position of trust.
I21``Fixed-price contract'' means any contract except a cost-type contract. The term includes firm-fixed price contracts. It also includes contracts under which the contractor is paid at a fixed rate per unit of service or unit of labor time. (See the definitions of ``contract'' and ``cost-type contract.'')
I21``General program income'' means all program income except the special categories treated in �1A3015.43 through 3015.46. The term ``general program income'' is limited to amounts that accrue to a recipient of grant or cooperative agreement during the period of Federally assisted support, or to a subrecipient during the period of sub-award support.
I21``Local government'' means a local unit of government including specifically, a county, municipality, city, town, township, local public authority, school district, special district, intra-state district, council of governments (whether or not incorporated as a nonprofit corporation under State law), sponsor or sponsoring local organization of a watershed project (as defined in 7 CFR 620.2, 40 FR 12472, March 19, 1974), any other regional or interstate government entity, or any agency or instrumentality of a local government.
I21``Mandatory'' or ``formula'' grants and cooperative agreements are ones which a Federal statute requires USDA to award if the applicant meets specified conditions.
I21``Non-Federal grant'' means an award of financial assistance in the form of money which includes no Federal funds, and for which the recipient must account to the donor on an actual cost basis. The term does not include any award that would be excluded from the definitions of ``grant'' and ``cooperative agreement'' if it were made by the Federal government.
I21``Obligations'' means the amounts of orders placed, contracts and subgrants awarded, services received, and similar transactions during a given period, which will require payment during the same or future period.
I21``O&F'' means the Office of Operations and Finance, which is an organizational component in USDA reporting to the Assistant Secretary for Administration.
I21``OMB'' means the Office of Management and Budget in the Executive Office of the President.
I21``Outlays'' means charges made to the grant project or program. Outlays may be reported on a cash or accrual basis.
I21``Payment bond'' means a bond executed in connection with a contract, to assure payment as required by law of all persons supplying labor and materials in the execution of the work provided in the contract.
I21``Percentage-of-completion method'' refers to a system under which payments are made for construction work according to the percentage of completion of the work, instead of the recipient's rate of disbursements.
I21``Performance bond'' means a bond executed in connection with a contract to secure fulfillment of all the contractor's obligations under the contract.
I21``Personal property'' means property of any kind except real property. It may be tangible_having physical existence, or intangible_having no physical existence, such as patents, inventions, and copyrights.
I21``Production of an audiovisual'' means any of the steps that lead to a finished audiovisual, including design, layout, script-writing, filming, editing, fabrication, sound recording, or taping. The term does not include the placing of captions for the hearing impaired on films or videotapes not originally produced for use with the hearing impaired.
I21``Program income'' means gross income earned by a recipient from activities supported by a grant or cooperative agreement. (See definition of ``supported by a grant or cooperative agreement.'') It includes but is not limited to income in the form of fees for services performed during the life of the grant, cooperative agreement, or subgrant, proceeds from sale of tangible personal or real property, usage or rental fees, and patent or copyright royalties. If income meets this definition, it shall be considered program income regardless of the method used to calculate the amount paid to the recipient whether, for example, by a cost-reimbursement method or fixed price arrangement. Nor will the income's classification as program income be affected by the fact that the recipient earns it from a procurement contract awarded to the recipient (1) by the Federal government or (2) by another recipient acting under another Federal grant, cooperative agreement, or subgrant.
Q02
S8003I20The following are not considered program income:
S8002I21(1) ``Revenues'' raised by a government recipient under its governing powers, such as taxes, special assessments, levies, and fines. (However, the receipt and expenditure of these revenues shall be recorded as a part of the transactions of the Federally-assisted project or program when the revenues are specifically earmarked for the project in accordance with the terms of the grant, cooperative agreement, or subgrant.)
I21(2) Tuition and related fees received by an institution of higher education for a regularly offered course taught by an employee performing under a grant, cooperative agreement, or subgrant.
I21(3) Income earned by contractors or subcontractors.
I21(4) Internal reimbursements or transfers of funds between organizational components of the same legal entity (e.g., between agencies of the same government).
I21(5) Third party in-kind contributions.
�100�I21(6) Gifts or financial assistance from another source, such as (i) a non-Federal grant, (ii) another Federal grant, and (iii) charitable contributions (whether or not for a restricted purpose), and
I21(7) Interest or other investment income earned from investing advances of Federal cash. (This kind of income is treated in �1A3015.46.)
I21``Project period'' means the total time for which the recipient's project or program is approved for support including any extensions. Project periods may consist of one or more budget periods.
I21``Publication'' means a published book, periodical, pamphlet, brochure, flier, or similar item. It does not include any audiovisuals.
I21``Real property'' means land, land improvements, structures, and things attached to them so as to become a part of them. Movable machinery and other kinds of equipment are not real property. If a question comes up about whether certain property should be classified as real property, the law of the State or foreign country in which the property is located governs.
I21``Recipient'' means a State or local government, Federally recognized Indian Tribe, university, non-profit, for profit, or other organization that is a recipient of grants or cooperative agreements from a USDA agency.
I21``Replacement equipment'' means property acquired to take the place of other equipment. To qualify as replacement equipment, it must serve the same function as the equipment replaced and must be of the same nature or character, although not necessarily the same model, grade, or quality.
I21``State'' means any of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory, possession, or trust territory of the United States, or any agency or instrumentality of a State. The term does not include local governments.
I21``Subgrant'' means an award of money, or property instead of money, which:
I21(1) Is made under a grant or cooperative agreement by the recipient of the grant or cooperative agreement; and
I21(2) Is made principally to accomplish a purpose of support of stimulation rather than to establish a buyer-seller relationship between the two parties.
I21Any award which meets that definition is a subgrant even if the parties to the award use some other label such as ``grant,'' ``agreement,'' ``cooperative agreement,'' ``contract,'' ``allotment,'' or ``delegation agreement.'' Also, if the award meets that definition, it is a subgrant whether or not the awarding agency is expected to be substantially involved in its performance. However, the term ``subgrant'' does not include any type of assistance which is excluded from the definitions of ``grant'' and ``cooperative agreement'' by Section I(c) of this Appendix.
I21``Supplies'' means all tangible personal property other than equipment.
I21``Supported by a grant or cooperative agreement,'' as applied to a cost or an activity, means that the cost or the cost of the activity is entirely or partly (1) treated as a direct cost under a grant, cooperative agreement, subgrant, or cost-type contract, and (2) either supported by Federal funds or counted towards a Federal cost-sharing or matching requirement.
I21``Suspension'' of an award means temporary withdrawal of the recipient's authority to obligate the funds awarded pending corrective action by the recipient or a decision to terminate the award.
I21``Termination'' of an award means permanent withdrawal of the recipient's authority to obligate previously awarded funds before that authority would otherwise expire. It also means the voluntary relinquishment of that authority by the recipient.
I21``Termination'' does not include:
I21(a) Withdrawal of the unobligated balance upon expiration of award;
I21(b) Refusal by the awarding agency to extend an award or to award additional funds (such as refusal to make a competing or noncompeting continuation, renewal, extension, or supplemental award);
I21(c) Annulment, i.e., voiding of an award upon determination that the award was obtained fraudulently or was otherwise illegal or invalid from inception;
I21(d) Withdrawal of surplus Federal funds from a discretionary grant or any analogous withdrawal of funds by a recipient from a subrecipient; or
I21(e) Withdrawal from a mandatory or formula grant of surplus Federal funds authorized which the recipient will not obligate during the fiscal year, or any analogous withdrawal of funds by a recipient from a subrecipient.
I21``Terms'' of a grant, cooperative agreement, subgrant, or contract means all rights and duties created by the award, whether stated in statute, this part or other regulations, the award document itself, or any other document.
I21``Third party'' means, with respect to a grant or cooperative agreement, any entity except (1) the Federal government, (2) the recipient of the cooperative agreement, and (3) subrecipients under that grant or cooperative agreement. Note that contractors of recipients are third parties under this definition, although subrecipients are not.
I21``Third party in-kind contributions'' means property or services benefiting the federally assisted project or program which are contributed by third parties without charge. Note that the term does not include any costs incurred by the recipient or subrecipient.
I21``Unliquidated obligations,'' means, for financial reports prepared on a cash basis, the �101�amount of obligations incurred by the recipient that has not been paid. For reports prepared on an accrued expenditure basis, they are the amount of obligations incurred by the recipient for which an outlay has not been recorded.
I21``Unobligated balance'' is the portion of Federal funds authorized which has not been obligated by the recipient. It is calculated by subtracting the Federal share of the recipient's cumulative obligations from the cumulative Federal funds authorized.
S8002
I95Pt. 3015, App. B
I85Appendix B to Part T13015G1T5T4_OMB Circular A�09G1T5G1T5128G1T5T4, ``Audits of State and Local Governments''G1T5
I74Executive Office of the President
I73Office of Management and Budget
I71Circular No. A�09128
I71April 12, 1984
I26To the Heads of Executive Departments and Establishments.
I26Subject: Audits of State and Local Governments.
Q04
I211. T3Purpose.G1T1 G1T1This Circular is issued pursuant to the Single Audit Act of 1984, Pub. L. 98�09502. It establishes audit requirements for State and local governments that receive Federal aid, and defines Federal responsibilities for implementing and monitoring those requirements.G1T1
I212. T3Supersession.G1T1 G1T1The Circular supersedes Attachment P, ``Audit Requirements,'' of Circular A�09102, ``Uniform requirements for grants to State and local governments.''G1T1
I213. T3Background.G1T1 G1T1The Single Audit Act builds upon earlier efforts to improve audits of Federal aid programs. The Act requires State or local governments that receive $100,000 or more a year in Federal funds to have an audit made for that year. Section 7505 of the Act requires the Director of the Office of Management and Budget to prescribe policies, procedures and guidelines to implement the Act. It specifies that the Director shall designate ``cognizant'' Federal agencies, determine criteria for making appropriate charges to Federal programs for the cost of audits, and provide procedures to assure that small firms or firms owned and controlled by disadvantaged individuals have the opportunity to participate in contracts for single audits.G1T1
I214. T3Policy.G1T1 G1T1The Single Audit Act requires the following:G1T1
I21a. State or local governments that receive $100,000 or more a year in Federal financial assistance shall have an audit made in accordance with this Circular.
I21b. State or local governments that receive between $25,000 and $100,000 a year shall have an audit made in accordance with this Circular, or in accordance with Federal laws and regulations governing the programs they participate in.
I21c. State or local governments that receive less than $25,000 a year shall be exempt from compliance with the Act and other Federal audit requirements. These State and local governments shall be governed by audit requirements prescribed by State or local law or regulation.
I21d. Nothing in this paragraph exempts State or local governments from maintaining records of Federal financial assistance or from providing access to such records to Federal agencies, as provided for in Federal law or in Circular A�09102, ``Uniform requirements for grants to State or local governments.''
I215. T3Definitions.G1T1 G1T1For the purposes of this Circular the following definitions from the Single Audit Act apply:G1T1
I21a. T3Cognizant agencyG1T1 means the Federal agency assigned by the Office of Management and Budget to carry out the responsibilities described in paragraph 11 of this Circular.
I21b. T3Federal financial assistanceG1T1 means assistance provided by a Federal agency in the form of grants, contracts, cooperative agreements, loans, loan guarantees, property, interest subsidies, insurance, or direct appropriations, but does not include direct Federal cash assistance to individuals. It includes awards received directly from Federal agencies, or indirectly through other units of State and local governments.
I21c. T3Federal agencyG1T1 has the same meaning as the term `agency' in section 551(1) of Title 5, United States Code.
I21d. T3Generally accepted accounting principlesG1T1 has the meaning specified in the generally accepted government auditing standards.
I21e. T3Generally accepted government auditing standardsG1T1 means the T3Standards For Audit of Government Organizations, Programs, Activities, and Functions,G1T1 G1T1developed by the Comptroller General, dated February 27, 1981.G1T1
I21f. T3Independent auditorG1T1 means:
I21(1) A State or local government auditor who meets the independence standards specified in generally accepted government auditing standards; or
I21(2) A public accountant who meets such independence standards.
I21g. T3Internal controlsG1T1 means the plan of organization and methods and procedures adopted by management to ensure that:
I21(1) Resource use is consistent with laws, regulations, and policies;
I21(2) Resources are safeguarded against waste, loss, and misuse; and
I21(3) Reliable data are obtained, maintained, and fairly disclosed in reports.
I21h. T3Indian tribeG1T1 means any Indian tribe, band, nations, or other organized group or community, including any Alaskan Native village or regional or village corporations (as defined in, or established under, the Alaskan �102�Native Claims Settlement Act) that is recognized by the United States as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.
I21i. T3Local governmentG1T1 means any unit of local government within a State, including a county, a borough, municipalitity, city, town, township, parish, local public authority, special district, school district, intrastate district, council of governments, and any other instrumentality of local government.
I21j. T3Major Federal Assistance Program,G1T1 as defined by Pub. L 98�09502, is described in the Attachment to this Circular.
I21k. T3Public accountantsG1T1 means those individuals who meet the qualification standards included in generally accepted government auditing standards for personnel performing government audits.
I21l. T3StateG1T1 means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam American Samoa, the Commonwealth of the Northern Mariana Islands, and the Trust Territory of the Pacific Islands, any instrumentality thereof, and any multi-State, regional, or interstate entity that has governmental functions and any Indian tribe.
I21m. T3SubrecipientG1T1 means any person or government department, agency, or establishment that receives Federal financial assistance to carry out a program through a State or local government, but does not include an individual that is a beneficiary of such a program. A subrecipient may also be a direct recipient of Federal financial assistance.
I216. T3Scope of audit.G1T1 G1T1The Single Audit Act provides that:G1T1
I21a. The audit shall be made by an independent auditor in accordance with generally accepted government auditing standards covering financial and compliance audits.
I21b. The audit shall cover the entire operations of a State or local government or, at the option of that government, it may cover departments, agencies or establishments that received, expended, or otherwise administered Federal financial assistance during the year. However, if a State or local government receives $25,000 or more in General Revenue Sharing Funds in a fiscal year, it shall have an audit of its entire operations. A series of audits of individual departments, agencies, and establishments for the same fiscal year may be considered a single audit.
I21c. Public hospitals and public colleges and universities may be excluded from State and local audits and the requirements of this Circular. However, if such entities are excluded, audits of these entities shall be made in accordance with statutory requirements and the provisions of Circular A�09110, T3Uniform requirements for grants to universities, hospitals, and other nonprofit organizations.G1T1
I21d. The auditor shall determine whether:
I21(1) The financial statements of the government, department, agency or establishment present fairly its financial position and the results of its financial operations in accordance with generally accepted accounting principles;
I21(2) The organization has internal accounting and other control systems to provide reasonable assurance that it is managing Federal financial assistance programs in compliance with applicable laws and regulations; and
I21(3) The organization has complied with laws and regulations that may have material effect on its financial statements and on each major Federal assistance program.
I217. T3Frequency of audit.G1T1 Audits shall be made annually unless the State or local government has, by January 1, 1987, a constitutional or statutory requirement for less frequent audits. For those governments, the cognizant agency shall permit biennial audits, covering both years, if the government so requests. It shall also honor requests for biennial audits by governments that have an administrative policy calling for audits less frequent than annual, but only for fiscal years beginning before January 1, 1987.
I218. T3Internal control and compliance reviews.G1T1 The Single Audit Act requires that the independent auditor determine and report on whether the organization has internal control systems to provide reasonable assurance that it is managing Federal assistance programs in compliance with applicable laws and regulations.
I21a. T3Internal control review.G1T1 In order to provide this assurance the auditor must make a study and evaluation of internal control systems used in administering Federal assistance programs. The study and evaluation must be made whether or not the auditor intends to place reliance on such systems. As part of this review, the auditor shall:
I21(1) Test whether these internal control systems are functioning in accordance with prescribed procedures.
I21(2) Examine the recipient's system for monitoring subrecipients and obtaining and acting on subrecipient audit reports.
I21b. T3Compliance review.G1T1 The law also requires the auditor to determine whether the organization has complied with laws and regulations that may have a material effect on each major Federal assistance program.
I21(1) In order to determine which major programs are to be tested for compliance, State and local governments shall identify in their accounts all Federal funds received and expended and the programs under which they were received. This shall include funds received directly from Federal agencies and through other State and local governments.
�103�I21(2) The review must include the selection and testing of a representative number of charges from each major Federal assistance program. The selection and testing of transactions shall be based on the auditor's professional judgment considering such factors as the amount of expenditures for the program and the individual awards; the newness of the program or changes in its conditions; prior experience with the program, particularly as revealed in audits and other evaluations (e.g., inspections, program reviews); the extent to which the program is carried out through subrecipients; the extent to which the program contracts for goods or services; the level to which the program is already subject to program reviews of other forms of independent oversight; the adequacy of the controls for ensuring compliance; the expectation of adherence or lack of adherence to the applicable laws and regulations; and the potential impact of adverse findings.
I21(a) In making the test of transactions, the auditor shall determine whether:

Q02
I26_The amounts reported as expenditures were for allowable services, and
I26_The records show that those who received services or benefits were eligible to receive them.

Q02
I21(b) In addition to transaction testing, the auditor shall determine whether:

Q02
I26_Matching requirements, levels of effort and earmarking limitations were met,
I26_Federal financial reports and claims for advances and reimbursements contain information that is supported by the books and records from which the basic financial statements have been prepared, and
I26_Amounts claimed or used for matching were determined in accordance with OMB Circular A�0987, ``Cost principles for State and local governments,'' and Attachment F of Circular A�09102, ``Uniform requirements for grants to State and local governments.''

Q02
I21(c) The principal compliance requirements of the largest Federal aid programs may be ascertained by referring to the T3Compliance Supplement for Single Audits of State and Local Governments,G1T1 issued by OMB and available from the Government Printing Office. For those programs not covered in the Compliance Supplement, the auditor may ascertain compliance requirements by researching the statutes, regulations, and agreements governing individual programs.
I21(3) Transactions related to other Federal assistance programs that are selected in connection with examinations of financial statements and evaluations of internal controls shall be tested for compliance with Federal laws and regulations that apply to such transactions.
I219. T3Subrecipients.G1T1 State or local governments that receive Federal financial assistance and provide $25,000 or more of it in a fiscal year to a subrecipient shall:
I21a. Determine whether State or local subrecipients have met the audit requirements of this Circular and whether subrecipients covered by Circular A�09110, ``Uniform requirements for grants to universities, hospitals, and other nonprofit organizations,'' have met that requirement;
I21b. Determine whether the subrecipient spent Federal assistance funds provided in accordance with applicable laws and regulations. This may be accomplished by reviewing an audit of the subrecipient made in accordance with this Circular, Circular A�09110, or through other means (e.g., program reviews) if the subrecipient has not yet had such an audit;
I21c. Ensure that appropriate corrective action is taken within six months after receipt of the audit report in instances of noncompliance with Federal laws and regulations;
I21d. Consider whether subrecipient audits necessitate adjustment of the recipient's own records; and
I21e. Require each subrecipient to permit independent auditors to have access to the records and financial statements as necessary to comply with this Circular.
I2110. T3Relation to other audit requirements.G1T1 The Single Audit Act provides that an audit made in accordance with this Circular shall be in lieu of any financial or financial compliance audit required under individual Federal assistance programs. To the extent that a single audit provides Federal agencies with information and assurances they need to carry out their overall responsibilities, they shall rely upon and use such information. However, a Federal agency shall make any additional audits which are necessary to carry out its responsibilities under Federal law and regulation. Any additional Federal audit effort shall be planned and carried out in such a way as to avoid duplication. 
I21a. The provisions of this Circular do not limit the authority of Federal agencies to make, or contract for audits and evaluations of Federal financial assistance programs, nor do they limit the authority of any Federal agency Inspector General or other Federal audit official. 
I21b. The provisions of this Circular do not authorize any State or local government or subrecipient thereof to constrain Federal agencies, in any manner, from carrying out additional audits. 
I21c. A Federal agency that makes or contracts for audits in addition to the audits made by recipients pursuant to this Circular shall, consistent with other applicable laws and regulations, arrange for funding the cost of such additional audits. Such additional audits include economy and efficiency audits, program results audits, and program evaluations. 
�104�I2111. T3Cognizant agency responsibilities.G1T1 The Single Audit Act provides for cognizant Federal agencies to oversee the implementation of this Circular. 
I21a. The Office of Management and Budget will assign cognizant agencies for States and their subdivisions and larger local governments and their subdivisions. Other Federal agencies may participate with an assigned cognizant agency, in order to fulfill the cognizance responsibilities. Smaller governments not assigned a cognizant agency will be under the general oversight of the Federal agency that provides them the most funds whether directly or indirectly. 
I21b. A cognizant agency shall have the following responsibilities: 
I21(1) Ensure that audits are made and reports are received in a timely manner and in accordance with the requirements of this Circular. 
I21(2) Provide technical advice and liaison to State and local governments and independent auditors. 
I21(3) Obtain or make quality control reviews of selected audits made by non-Federal audit organizations, and provide the results, when appropriate, to other interested organizations. 
I21(4) Promptly inform other affected Federal agencies and appropriate Federal law enforcement officials of any reported illegal acts or irregularities. They should also inform State or local law enforcement and prosecuting authorities, if not advised by the recipient, of any violation of law within their jurisdiction. 
I21(5) Advise the recipient of audits that have been found not to have met the requirements set forth in this Circular. In such instances, the recipient will be expected to work with the auditor to take corrective action. If corrective action is not taken, the cognizant agency shall notify the recipient and Federal awarding agencies of the facts and make recommendations for followup action. Major inadequacies or repetitive substandard performance of independent auditors shall be referred to appropriate professional bodies for disciplinary action. 
I21(6) Coordinate, to the extent practicable, audits made by or for Federal agencies that are in addition to the audits made pursuant to this Circular; so that the additional audits build upon such audits. 
I21(7) Oversee the resolution of audit findings that affect the programs of more than one agency. 
I2112. T3Illegal acts or irregularities.G1T1 If the auditor becomes aware of illegal acts or other irregularities, prompt notice shall be given to recipient management officials above the level of involvement. (See also paragraph 13(a)(3) below for the auditor's reporting responsibilities.) The recipient, in turn, shall promptly notify the cognizant agency of the illegal acts or irregularities and of proposed and actual actions, if any. Illegal acts and irregularities include such matters as conflicts of interest, falsification of records or reports, and misappropriations of funds or other assets. 
I2113. T3Audit Reports.G1T1 Audit reports must be prepared at the completion of the audit. Reports serve many needs of State and local governments as well as meeting the requirements of the Single Audit Act. 
I21a. The audit report shall state that the audit was made in accordance with the provisions of this Circular. The report shall be made up of at least:
I21(1) The auditor's report on financial statements and on a schedule of Federal assistance; the financial statements; and a schedule of Federal assistance, showing the total expenditures for each Federal assistance program as identified in the T3Catalog of Federal Domestic Assistance.G1T1 Federal programs or grants that have not been assigned a catalog number shall be identified under the caption ``other Federal assistance.'' 
I21(2) The auditor's report on the study and evaluation of internal control systems must identify the organization's significant internal accounting controls, and those controls designed to provide reasonable assurance that Federal programs are being managed in compliance with laws and regulations. It must also identify the controls that were evaluated, the controls that were not evaluated, and the material weaknesses identified as a result of the evaluation. 
I21(3) The auditor's report on compliance containing: 
I26_A statement of positive assurance with respect to those items tested for compliance, including compliance with law and regulations pertaining to financial reports and claims for advances and reimbursements;
I26_Negative assurance on those items not tested; 
I26_A summary of all instances of noncompliance; and 
I26_An identification of total amounts questioned, if any, for each Federal assistance award, as a result of noncompliance.
Q02
I21b. The three parts of the audit report may be bound into a single report, or presented at the same time as separate documents. 
I21c. All fraud abuse, or illegal acts or indications of such acts, including all questioned costs found as the result of these acts that auditors become aware of, should normally be covered in a separate written report submitted in accordance with paragraph 13f. 
I21d. In addition to the audit report, the recipient shall provide comments on the findings and recommendations in the report, including a plan for corrective action taken or planned and comments on the status of corrective action taken on prior findings. If corrective action is not necessary, a statement �105�describing the reason it is not should accompany the audit report. 
I21e. The reports shall be made available by the State or local government for public inspection within 30 days after the completion of the audit. 
I21f. In accordance with generally accepted government audit standards, reports shall be submitted by the auditor to the organization audited and to those requiring or arranging for the audit. In addition, the recipient shall submit copies of the reports to each Federal department or agency that provided Federal assistance funds to the recipient. Subrecipients shall submit copies to recipients that provided them Federal assistance funds. The reports shall be sent within 30 days after the completion of the audit, but no later than one year after the end of the audit period unless a longer period is agreed to with the cognizant agency.
I21g. Recipients of more than $100,000 in Federal funds shall submit one copy of the audit report within 30 days after issuance to a central clearinghouse to be designated by the Office of Management and Budget. The clearinghouse will keep completed audits on file and follow up with State and local governments that have not submitted required audit reports.
I21h. Recipients shall keep audit reports on file for three years from their issuance.
I2114. T3Audit Resolution.G1T1 As provided in paragraph 11, the cognizant agency shall be responsible for monitoring the resolution of audit findings that affect the programs of more than one Federal agency. Resolution of findings that relate to the programs of a single Federal agency will be the responsibility of the recipient and that agency. Alternate arrangements may be made on case-by-case basis by a case-by-case basis by agreement among the agenices concerned.
I21Resolution shall be made within six months after receipt of the report by the Federal departments and agencies. Corrective action should proceed as rapidly as possible.
I2115. T3Audit workpapers and reports.G1T1 Workpapers and reports shall be retained for a minimum of three years from the date of the audit report, unless the auditor is notified in writing by the cognizant agency to extend the retention period. Audit workpapers shall be made available upon request to the cognizant agency or its designee or the General Accounting Office, at the completion of the audit.
I2116. T3Audit Costs.G1T1 The cost of audits made in accordance with the provisions of this Circular are allowable charges to Federal assistance programs.
I21a. The charges may be considered a direct cost or an allocated indirect cost, determined in accordance with the provision of Circular A�0987, ``Cost principles for State and local governments.''
I21b. Generally, the percentage of costs charged to Federal assistance programs for a single audit shall not exceed the percentage that Federal funds expended represent of total funds expended by the recipient during the fiscal year. The percentage may be exceeded, however, if appropriate documentation demonstrates higher actual cost.
I2117. T3Sanctions.G1T1 The Single Audit Act provides that no cost may be charged to Federal assistance programs for audits required by the Act that are not made in accordance with this Circular. In cases of continued inability or unwillingness to have a proper audit, Federal agencies must consider other appropropriate sanctions including:
Q02
I26_Withholding a percentage of assistance payments until the audit is completed satisfactorily,
I26_Withholding or disallowing overhead costs, and 
I26_Suspending the Federal assistance agreement until the audit is made.

Q02
I2118. T3Auditor Selection.G1T1 In arranging for audit services State and local governments shall follow the procurement standards prescribed by Attachment O of Circular A�09102, ``Uniform requirements for grants to State and local governments.'' The standards provide that while recipients are encouraged to enter into intergovernmental agreements for audit and other services, analysis should be made to determine whether it would be more economical to purchase the services from private firms. In instances where use of such intergovernmental agreements are required by State statutes (e.g., audit services) these statutes will take precedence.
I2119. T3Small and Minority Audit Firms.G1T1 Small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals shall have the maximum practicable opportunity to participate in contracts awarded to fulfill the requirements of this Circular. Recipients of Federal assistance shall take the following steps to further this goal:
I21a. Assure that small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals are used to the fullest extent practicable.
I21b. Make information on forthcoming opportunities available and arrange timeframes for the audit so as to encourage and facilitate participation by small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals.
I21c. Consider in the contract process whether firms competing for large audits intend to subcontract with small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals.
I21d. Encourage contracting with small audit firms or audit firms owned and controlled by �106�socially and economically disadvantaged individuals which have traditionally audited government programs and, in such cases where this is not possible, assure that these firms are given consideration for audit subcontracting opportunities.
I21e. Encourage contracting with consortiums of small audit firms as described in paragraph (a) above when a contract is too large for an individual small audit firm or audit firm owned and controlled by socially and economically disadvantaged individuals.
I21f. Use the services and assistance, as appropriate, of such organizations as the Small Business Administration in the solicitation and utilization of small audit firms or audit firms owned and controlled by socially and economically disadvantaged individuals.
I2120. T3Reporting.G1T1 Each Federal agency will report to the Director of OMB on or before March 1, 1987, and annually thereafter on the effectiveness of State and local governments in carrying out the provisions of this Circular. The report must identify each State or local government or Indian tribe that, in the opinion of the agency, is failing to comply with the Circular.
I2121. T3Regulations.G1T1 Each Federal agency shall include the provisions of this Circular in its regulations implementing the Single Audit Act.
I2122. T3Effective date.G1T1 This Circular is effective upon publication and shall apply to fiscal years of State and local governments that begin after December 31, 1984. Earlier implementation is encouraged. However, until it is implemented, the audit provisions of Attachment P to Circular A�09102 shall continue to be observed.
I2123. T3Inquiries.G1T1 All questions or inquiries should be addressed to Financial Management Division, Office of Management and Budget, telephone number 202/395�093993.
I2124. T3Sunset review date.G1T1 This Circular shall have an independent policy review to ascertain its effectiveness three years from the date of issuance.
Q02
S8003I20David A. Stockman,
S8002I21Director.
I73Definition of Major Program as Provided in Pub. L. 98�09502
I21``Major Federal Assistance Program,'' for State and local governments having Federal assistance expenditures between $100,000 and $100,000,000, means any program for which Federal expenditures during the applicable year exceed the larger of $300,000, or 3 percent of such total expenditures.
I21Where total expenditures of Federal assistance exceed $100,000,000, the following criteria apply:
c3,L1,tp0,i1,xls50,r40,10 I95   h1Total expenditures of Federal financial assistance for all programs h2More than h2But less than h1Major federal assistance program means any program that exceeds
j
I01$100 million D$1 billion D$3 million
I011 billion D2 billion D4 million
I012 billion D3 billion D7 million
I013 billion D4 billion D10 million
I014 billion D5 billion D13 million
I015 billion D6 billion D16 million
I016 billion D7 billion D19 million
I01Over 7 billion D D20 million
e


Q04I20[50 FR 28763, July 16, 1985] 
S8010
I95Pt. 3016
I52PART 3016_UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND COOPERATIVE AGREEMENTS TO STATE AND LOCAL GOVERNMENTS 


I86Subpart A_General
S8006I18Sec. 
S8010I263016.1Purpose and scope of this part. 
I263016.2Scope of subpart. 
I263016.3Definitions. 
I263016.4Applicability. 
I263016.5Effect on other issuances. 
I263016.6Additions and exceptions. 

I86Subpart B_Pre-Award Requirements 
I263016.10Forms for applying for grants. 
I263016.11State plans. 
I263016.12Special grant or subgrant conditions for ``high-risk'' grantees. 

I86Subpart C_Post-Award Requirements 
I74Financial Administration 
I263016.20Standards for financial management systems. 
I263016.21Payment. 
I263016.22Allowable costs. 
I263016.23Period of availability of funds. 
I263016.24Matching or cost sharing. 
I263016.25Program income. 
I263016.26Non-Federal audit. 
I74Changes, Property, and Subawards 
I263016.30Changes. 
I263016.31Real property. 
I263016.32Equipment. 
I263016.33Supplies. 
I263016.34Copyrights. 
I263016.35Subawards to debarred and suspended parties. 
I263016.36Procurement. 
I263016.37Subgrants. 
�107�I74Reports, Records, Retention, and Enforcement 
I263016.40Monitoring and reporting program performance. 
I263016.41Financial reporting. 
I263016.42Retention and access requirements for records. 
I263016.43Enforcement. 
I263016.44Termination for convenience. 

I86Subpart D_After-the-Grant Requirements 
I263016.50Closeout. 
I263016.51Later disallowances and adjustments. 
I263016.52Collection of amounts due. 
S8006I86Subpart E_Entitlement [Reserved]
S8010
Q04I21T5Authority:  T15 U.S.C. 301. 
Q04I21T5Source:  T153 FR 8044, 8087, Mar. 11, 1988, unless otherwise noted.
Q04I21T5Editorial Note: T1For additional information, see related documents published at 49 FR 24958, June 18, 1984, 52 FR 20178, May 29, 1987, and 53 FR 8028, March 11, 1988.

I56Subpart A_General

I80�1A3016.1
I89Purpose and scope of this part.
I11This part establishes uniform administrative rules for Federal grants and cooperative agreements and subawards to State, local and Indian tribal governments.

I80�1A3016.2
I89Scope of subpart.
I11This subpart contains general rules pertaining to this part and procedures for control of exceptions from this part.

I80�1A3016.3
I89Definitions.
I11As used in this part:
I11T3Accrued expendituresG1T1 mean the charges incurred by the grantee during a given period requiring the provision of funds for: (1) Goods and other tangible property received; (2) services performed by employees, contractors, subgrantees, subcontractors, and other payees; and (3) other amounts becoming owed under programs for which no current services or performance is required, such as annuities, insurance claims, and other benefit payments.
I11T3Accrued incomeG1T1 means the sum of: (1) Earnings during a given period from services performed by the grantee and goods and other tangible property delivered to purchasers, and (2) amounts becoming owed to the grantee for which no current services or performance is required by the grantee.
I11T3Acquisition costG1T1 of an item of purchased equipment means the net invoice unit price of the property including the cost of modifications, attachments, accessories, or auxiliary apparatus necessary to make the property usable for the purpose for which it was acquired. Other charges such as the cost of installation, transportation, taxes, duty or protective in-transit insurance, shall be included or excluded from the unit acquisition cost in accordance with the grantee's regular accounting practices.
I11T3AdministrativeG1T1 requirements mean those matters common to grants in general, such as financial management, kinds and frequency of reports, and retention of records. These are distinguished from T3programmaticG1T1 requirements, which concern matters that can be treated only on a program-by-program or grant-by-grant basis, such as kinds of activities that can be supported by grants under a particular program.
I11T3Awarding agencyG1T1 means (1) with respect to a grant, the Federal agency, and (2) with respect to a subgrant, the party that awarded the subgrant.
I11T3Cash contributionsG1T1 means the grantee's cash outlay, including the outlay of money contributed to the grantee or subgrantee by other public agencies and institutions, and private organizations and individuals. When authorized by Federal legislation, Federal funds received from other assistance agreements may be considered as grantee or subgrantee cash contributions.
I11T3ContractG1T1 means (except as used in the definitions for T3grantG1T1 and T3subgrantG1T1 in this section and except where qualified by T3FederalG1T1) a procurement contract under a grant or subgrant, and means a procurement subcontract under a contract.
I11T3Cost sharing or matchingG1T1 means the value of the third party in-kind contributions and the portion of the costs of a federally assisted project or program not borne by the Federal Government.
�108�I11T3Cost-type contractG1T1 means a contract or subcontract under a grant in which the contractor or subcontractor is paid on the basis of the costs it incurs, with or without a fee.
I11T3EquipmentG1T1 means tangible, nonexpendable, personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit. A grantee may use its own definition of equipment provided that such definition would at least include all equipment defined above.
I11T3Expenditure reportG1T1 means: (1) For nonconstruction grants, the SF�09269 T3Financial Status ReportG1T1 (or other equivalent report); (2) for construction grants, the SF�09271 T3Outlay Report and Request for ReimbursementG1T1 (or other equivalent report).
I11T3Federally recognized Indian tribal governmentG1T1 means the governing body or a governmental agency of any Indian tribe, band, nation, or other organized group or community (including any Native village as defined in section 3 of the Alaska Native Claims Settlement Act, 85 Stat 688) certified by the Secretary of the Interior as eligible for the special programs and services provided by him through the Bureau of Indian Affairs.
I11T3GovernmentG1T1 means a State or local government or a federally recognized Indian tribal government.
I11T3GrantG1T1 means an award of financial assistance, including cooperative agreements, in the form of money, or property in lieu of money, by the Federal Government to an eligible grantee. The term does not include technical assistance which provides services instead of money, or other assistance in the form of revenue sharing, loans, loan guarantees, interest subsidies, insurance, or direct appropriations. Also, the term does not include assistance, such as a fellowship or other lump sum award, which the grantee is not required to account for.
I11T3GranteeG1T1 means the government to which a grant is awarded and which is accountable for the use of the funds provided. The grantee is the entire legal entity even if only a particular component of the entity is designated in the grant award document.
I11T3Local governmentG1T1 means a county, municipality, city, town, township, local public authority (including any public and Indian housing agency under the United States Housing Act of 1937) school district, special district, intrastate district, council of governments (whether or not incorporated as a nonprofit corporation under state law), any other regional or interstate government entity, or any agency or instrumentality of a local government.
I11T3ObligationsG1T1 means the amounts of orders placed, contracts and subgrants awarded, goods and services received, and similar transactions during a given period that will require payment by the grantee during the same or a future period.
I11T3OMBG1T1 means the United States Office of Management and Budget.
I11T3OutlaysG1T1 (expenditures) mean charges made to the project or program. They may be reported on a cash or accrual basis. For reports prepared on a cash basis, outlays are the sum of actual cash disbursement for direct charges for goods and services, the amount of indirect expense incurred, the value of in-kind contributions applied, and the amount of cash advances and payments made to contractors and subgrantees. For reports prepared on an accrued expenditure basis, outlays are the sum of actual cash disbursements, the amount of indirect expense incurred, the value of inkind contributions applied, and the new increase (or decrease) in the amounts owed by the grantee for goods and other property received, for services performed by employees, contractors, subgrantees, subcontractors, and other payees, and other amounts becoming owed under programs for which no current services or performance are required, such as annuities, insurance claims, and other benefit payments.
I11T3Percentage of completion methodG1T1 refers to a system under which payments are made for construction work according to the percentage of completion of the work, rather than to the grantee's cost incurred.
I11T3Prior approvalG1T1 means documentation evidencing consent prior to incurring specific cost.
I11T3Real propertyG1T1 means land, including land improvements, structures and appurtenances thereto, excluding movable machinery and equipment.
�109�I11T3ShareG1T1, when referring to the awarding agency's portion of real property, equipment or supplies, means the same percentage as the awarding agency's portion of the acquiring party's total costs under the grant to which the acquisition costs under the grant to which the acquisition cost of the property was charged. Only costs are to be counted_not the value of third-party in-kind contributions.
I11T3StateG1T1 means any of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any agency or instrumentality of a State exclusive of local governments. The term does not include any public and Indian housing agency under United States Housing Act of 1937.
I11T3SubgrantG1T1 means an award of financial assistance in the form of money, or property in lieu of money, made under a grant by a grantee to an eligible subgrantee. The term includes financial assistance when provided by contractual legal agreement, but does not include procurement purchases, nor does it include any form of assistance which is excluded from the definition of T3grantG1T1 in this part.
I11T3SubgranteeG1T1 means the government or other legal entity to which a subgrant is awarded and which is accountable to the grantee for the use of the funds provided.
I11T3SuppliesG1T1 means all tangible personal property other than T3equipmentG1T1 as defined in this part.
I11T3SuspensionG1T1 means depending on the context, either (1) temporary withdrawal 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.
I11T3TerminationG1T1 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. T3TerminationG1T1 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.
I11T3Terms of a grant or subgrantG1T1 mean all requirements of the grant or subgrant, whether in statute, regulations, or the award document.
I11T3Third party in-kind contributionsG1T1 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.
I11T3Unliquidated obligationsG1T1 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.
I11T3Unobligated balanceG1T1 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 obligations from the cumulative funds authorized.

I80�1A3016.4
I89Applicability.
I11(a) T3General.G1T1 Subparts A�09D of this part 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 �1A3016.6, or:
I11(1) Grants and subgrants to State and local institutions of higher education or State and local hospitals.
I11(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 �110�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�09III 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).
I11(3) Entitlement grants to carry out the following programs of the Social Security Act:
I11(i) Aid to Needy Families with Dependent Children (Title IV�09A 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 part);
I11(ii) Child Support Enforcement and Establishment of Paternity (Title IV�09D of the Act);
I11(iii) Foster Care and Adoption Assistance (Title IV�09E of the Act);
I11(iv) Aid to the Aged, Blind, and Disabled (Titles I, X, XIV, and XVI�09AABD of the Act); and
I11(v) Medical Assistance (Medicaid) (Title XIX of the Act) not including the State Medicaid Fraud Control program authorized by section 1903(a)(6)(B).
I11(4) Entitlement grants under the following programs of The National School Lunch Act:
I11(i) School Lunch (section 4 of the Act),
I11(ii) Commodity Assistance (section 6 of the Act),
I11(iii) Special Meal Assistance (section 11 of the Act),
I11(iv) Summer Food Service for Children (section 13 of the Act), and
I11(v) Child Care Food Program (section 17 of the Act).
I11(5) Entitlement grants under the following programs of The Child Nutrition Act of 1966:
I11(i) Special Milk (section 3 of the Act), and
I11(ii) School Breakfast (section 4 of the Act).
I11(6) Entitlement grants for State Administrative expenses under The Food Stamp Act of 1977 (section 16 of the Act).
I11(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; 
I11(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�09422, 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; 
I11(9) Grants to local education agencies under 20 U.S.C. 236 through 241�091(a), and 242 through 244 (portions of the Impact Aid program), except for 20 U.S.C. 238(d)(2)(c) and 240(f) (Entitlement Increase for Handicapped Children); and 
I11(10) Payments under the Veterans Administration's State Home Per Diem Program (38 U.S.C. 641(a)).
I11(b) T3Entitlement programs.G1T1 Entitlement programs enumerated above in �1A3016.4(a) (3)�09(8) are subject to Subpart E.

I80�1A3016.5
I89Effect on other issuances. 
I11All other grants administration provisions of codified program regulations, program manuals, handbooks and other nonregulatory materials which are inconsistent with this part are superseded, except to the extent they are required by statute, or authorized in accordance with the exception provision in �1A3016.6.

I80�1A3016.6
I89Additions and exceptions.
I11(a) For classes of grants and grantees subject to this part, Federal agencies may not impose additional administrative requirements except in codified regulations published in the T4Federal RegisterG1T1. 
I11(b) Exceptions for classes of grants or grantees may be authorized only by OMB. 
I11(c) Exceptions on a case-by-case basis and for subgrantees may be authorized by the affected Federal agencies. 

�111�I56Subpart B_Pre-Award Requirements 

I80�1A3016.10
I89Forms for applying for grants. 
I11(a) T3Scope.G1T1 (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. 
I11(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. 
I11(b) T3Authorized forms and instructions for governmental organizations.G1T1 (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. 
I11(2) Applicants are not required to submit more than the original and two copies of preapplications or applications. 
I11(3) Applicants must follow all applicable 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�09424 facesheet, Federal agencies may shade out or instruct the applicant to disregard any line item that is not needed. 
I11(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. 

I80�1A3016.11
I89State plans.
I11(a) T3Scope.G1T1 The statutes for some programs 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.
I11(b) T3Requirements.G1T1 A State need meet only Federal administrative or programmatic requirements for a plan that are in statutes or codified regulations.
I11(c) T3Assurances.G1T1 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:
I11(1) Cite by number the statutory or regulatory provisions requiring the assurances and affirm that it gives the assurances required by those provisions,
I11(2) Repeat the assurance language in the statutes or regulations, or
I11(3) Develop its own language to the extent permitted by law.
I11(d) T3Amendments.G1T1 A State will amend a plan whenever necessary to reflect:
I11(1) New or revised Federal statutes or regulations or
I11(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.

I80�1A3016.12
I89Special grant or subgrant conditions for ``high-risk'' grantees.
I11(a) A grantee or subgrantee may be considered ``high risk'' if an awarding agency determines that a grantee or subgrantee:
I11(1) Has a history of unsatisfactory performance, or
I11(2) Is not financially stable, or
I11(3) Has a management system which does not meet the management standards set forth in this part, or 
�112�I11(4) Has not conformed to terms and conditions of previous awards, or
I11(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.
I11(b) Special conditions or restrictions may include:
I11(1) Payment on a reimbursement basis;
I11(2) Withholding authority to proceed to the next phase until receipt of evidence of acceptable performance within a given funding period;
I11(3) Requiring additional, more detailed financial reports;
I11(4) Additional project monitoring;
I11(5) Requiring the grantee or subgrantee to obtain technical or management assistance; or 
I11(6) Establishing additional prior approvals.
I11(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:
I11(1) The nature of the special conditions/restrictions;
I11(2) The reason(s) for imposing them;
I11(3) The corrective actions which must be taken before they will be removed and the time allowed for completing the corrective actions; and
I11(4) The method of requesting reconsideration of the conditions/restrictions imposed.

I56Subpart C_Post-Award Requirements
I84Financial Administration

I80�1A3016.20
I89Standards for financial management systems.
I11(a) A State must expand and account for grant funds in accordance with State laws and procedures for expending and accounting for its own funds. Fiscal control and accounting procedures of the State, as well as its subgrantees and cost-type contractors, must be sufficient to_
I11(1) Permit preparation of reports required by this part and the statutes authorizing the grant, and 
I11(2) Permit the tracing of funds to a level of expenditures adequate to establish that such funds have not been used in violation of the restrictions and prohibitions of applicable statutes.
I11(b) The financial management systems of other grantees and subgrantees must meet the following standards:
I11(1) T3Financial reporting.G1T1 Accurate, current, and complete disclosure of the financial results of financially assisted activities must be made in accordance with the financial reporting requirements of the grant or subgrant.
I11(2) T3Accounting records.G1T1 Grantees and subgrantees must maintain records which adequately identify the source and application of funds provided for financially-assisted activities. These records must contain information pertaining to grant or subgrant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays or expenditures, and income.
I11(3) T3Internal control.G1T1 Effective control and accountability must be maintained for all grant and subgrant cash, real and personal property, and other assets. Grantees and subgrantees must adequately safeguard all such property and must assure that it is used solely for authorized purposes.
I11(4) T3Budget control.G1T1 Actual expenditures or outlays must be compared with budgeted amounts for each grant or subgrant. Financial information must be related to performance or productivity data, including the development of unit cost information whenever appropriate or specifically required in the grant or subgrant agreement. If unit cost data are required, estimates based on available documentation will be accepted whenever possible.
I11(5) T3Allowable cost.G1T1 Applicable OMB cost principles, agency program regulations, and the terms of grant and subgrant agreements will be followed in determining the reasonableness, allowability, and allocability of costs.
I11(6) T3Source documentation.G1T1 Accounting records must be supported by such source documentation as cancelled checks, paid bills, payrolls, time and attendance records, contract and subgrant award documents, etc.
I11(7) T3Cash management.G1T1 Procedures for minimizing the time elapsing between �113�the transfer of funds from the U.S. Treasury and disbursement by grantees and subgrantees must be followed whenever advance payment procedures are used. Grantees must establish reasonable procedures to ensure the receipt of reports on subgrantees' cash balances and cash disbursements in sufficient time to enable them to prepare complete and accurate cash transactions reports to the awarding agency. When advances are made by letter-of-credit or electronic transfer of funds methods, the grantee must make drawdowns as close as possible to the time of making disbursements. Grantees must monitor cash drawdowns by their subgrantees to assure that they conform substantially to the same standards of timing and amount as apply to advances to the grantees.
I11(c) An awarding agency may review the adequacy of the financial management system of any applicant for financial assistance as part of a preaward review or at any time subsequent to award.

I80�1A3016.21 
I89Payment. 
I11(a) T3Scope.G1T1 This section prescribes the basic standard and the methods under which a Federal agency will make payments to grantees, and grantees will make payments to subgrantees and contractors. 
I11(b) T3Basic standard.G1T1 Methods and procedures for payment shall minimize the time elapsing between the transfer of funds and disbursement by the grantee or subgrantee, in accordance with Treasury regulations at 31 CFR part 205. 
I11(c) T3Advances.G1T1 Grantees and subgrantees shall be paid in advance, provided they maintain or demonstrate the willingness and ability to maintain procedures to minimize the time elapsing between the transfer of the funds and their disbursement by the grantee or subgrantee. 
I11(d) T3Reimbursement.G1T1 Reimbursement shall be the preferred method when the requirements in paragraph (c) of this section are not met. Grantees and subgrantees may also be paid by reimbursement for any construction grant. Except as otherwise specified in regulation, Federal agencies shall not use the percentage of completion method to pay construction grants. The grantee or subgrantee may use that method to pay its construction contractor, and if it does, the awarding agency's payments to the grantee or subgrantee will be based on the grantee's or subgrantee's actual rate of disbursement. 
I11(e) T3Working capital advances.G1T1 If a grantee cannot meet the criteria for advance payments described in paragraph (c) of this section, and the Federal agency has determined that reimbursement is not feasible because the grantee lacks sufficient working capital, the awarding agency may provide cash or a working capital advance basis. Under this procedure the awarding agency shall advance cash to the grantee to cover its estimated disbursement needs for an initial period generally geared to the grantee's disbursing cycle. Thereafter, the awarding agency shall reimburse the grantee for its actual cash disbursements. The working capital advance method of payment shall not be used by grantees or subgrantees if the reason for using such method is the unwillingness or inability of the grantee to provide timely advances to the subgrantee to meet the subgrantee's actual cash disbursements. 
I11(f) T3Effect of program income, refunds, and audit recoveries on payment.G1T1 (1) Grantees and subgrantees shall disburse repayments to and interest earned on a revolving fund before requesting additional cash payments for the same activity. 
I11(2) Except as provided in paragraph (f)(1) of this section, grantees and subgrantees shall disburse program income, rebates, refunds, contract settlements, audit recoveries and interest earned on such funds before requesting additional cash payments. 
I11(g) T3Withholding payments.G1T1 (1) Unless otherwise required by Federal statute, awarding agencies shall not withhold payments for proper charges incurred by grantees or subgrantees unless_ 
I11(i) The grantee or subgrantee has failed to comply with grant award conditions or 
I11(ii) The grantee or subgrantee is indebted to the United States. 
I11(2) Cash withheld for failure to comply with grant award condition, but without suspension of the grant, shall �114�be released to the grantee upon subsequent compliance. When a grant is suspended, payment adjustments will be made in accordance with �1A3016.43(c). 
I11(3) A Federal agency shall not make payment to grantees for amounts that are withheld by grantees or subgrantees from payment to contractors to assure satisfactory completion of work. Payments shall be made by the Federal agency when the grantees or subgrantees actually disburse the withheld funds to the contractors or to escrow accounts established to assure satisfactory completion of work. 
I11(h) T3Cash depositories.G1T1 (1) Consistent with the national goal of expanding the opportunities for minority business enterprises, grantees and subgrantees are encouraged to use minority banks (a bank which is owned at least 50 percent by minority group members). A list of minority owned banks can be obtained from the Minority Business Development Agency, Department of Commerce, Washington, DC 20230. 
I11(2) A grantee or subgrantee shall maintain a separate bank account only when required by Federal-State agreement. 
I11(i) T3Interest earned on advances.G1T1 Except for interest earned on advances of funds exempt under the Intergovernmental Cooperation Act (31 U.S.C. 6501 T3et seq.G1T1) and the Indian Self-Determination Act (23 U.S.C. 450), grantees and subgrantees shall promptly, but at least quarterly, remit interest earned on advances to the Federal agency. The grantee or subgrantee may keep interest amounts up to $100 per year for administrative expenses. 

I80�1A3016.22 
I89Allowable costs.
I11(a) T3Limitation on use of funds.G1T1 Grant funds may be used only for:
I11(1) The allowable costs of the grantees, subgrantees and cost-type contractors, including allowable costs in the form of payments to fixed-price contractors; and
I11(2) Reasonable fees or profit to cost-type contractors but not any fee or profit (or other increment above allowable costs) to the grantee or subgrantee.
I11(b) T3Applicable cost principles.G1T1 For each kind of organization, there is a set of Federal principles for determining allowable costs. Allowable costs will be determined in accordance with the cost principles applicable to the organization incurring the costs. The following chart lists the kinds of organizations and the applicable cost principles.
c2,L2,tp0,i1,s25,r25 I95   h1For the costs of a_ h1Use the principles in_
j
I01State, local or Indian tribal governmentDOMB Circular A�0987.
I01Private nonprofit organization other than an (1) institution of higher education, (2) hospital, or (3) organization named in OMB Circular A�09122 as not subject to that circularDOMB Circular A�09122.
I01Educational institutions.DOMB Circular A�0921.
I01For-profit organization other than a hospital and an organization named in OMB Circular A�09122 as not subject to that circularD48 CFR part 31. Contract Cost Principles and Procedures, or uniform cost accounting standards that comply with cost principles acceptable to the Federal agency.
e



I80�1A3016.23 
I89Period of availability of funds.
I11(a) T3General.G1T1 Where a funding period is specified, a grantee may charge to the award only costs resulting from obligations of the funding period unless carryover of unobligated balances is permitted, in which case the carryover balances may be charged for costs resulting from obligations of the subsequent funding period.
I11(b) T3Liquidation of obligations.G1T1 A grantee must liquidate all obligations incurred under the award not later than 90 days after the end of the funding period (or as specified in a program regulation) to coincide with the submission of the annual Financial Status Report (SF�09269). The Federal agency may extend this deadline at the request of the grantee.

I80�1A3016.24 
I89Matching or cost sharing.
I11(a) T3Basic rule: Costs and contributions acceptable.G1T1 With the qualifications and exceptions listed in paragraph (b) of this section, a matching or cost sharing requirement may be satisfied by either or both of the following:
I11(1) Allowable costs incurred by the grantee, subgrantee or a cost-type contractor under the assistance agreement. This includes allowable costs borne by non-Federal grants or by others cash donations from non-Federal third parties.
�115�I11(2) The value of third party in-kind contributions applicable to the period to which the cost sharing or matching requirements applies.
I11(b) T3Qualifications and exceptionsG1T1_(1) T3Costs borne by other Federal grant agreements.G1T1 Except as provided by Federal statute, a cost sharing or matching requirement may not be met by costs borne by another Federal grant. This prohibition does not apply to income earned by a grantee or subgrantee from a contract awarded under another Federal grant.
I11(2) T3General revenue sharing.G1T1 For the purpose of this section, general revenue sharing funds distributed under 31 U.S.C. 6702 are not considered Federal grant funds.
I11(3) T3Cost or contributions counted towards other Federal costs-sharing requirements.G1T1 Neither costs nor the values of third party in-kind contributions may count towards satisfying a cost sharing or matching requirement of a grant agreement if they have been or will be counted towards satisfying a cost sharing or matching requirement of another Federal grant agreement, a Federal procurement contract, or any other award of Federal funds.
I11(4) T3Costs financed by program income.G1T1 Costs financed by program income, as defined in �1A3016.25, shall not count towards satisfying a cost sharing or matching requirement unless they are expressly permitted in the terms of the assistance agreement. (This use of general program income is described in �1A3016.25(g).)
I11(5) T3Services or property financed by income earned by contractors.G1T1 Contractors under a grant may earn income from the activities carried out under the contract in addition to the amounts earned from the party awarding the contract. No costs of services or property supported by this income may count toward satisfying a cost sharing or matching requirement unless other provisions of the grant agreement expressly permit this kind of income to be used to meet the requirement.
I11(6) T3Records.G1T1 Costs and third party in-kind contributions counting towards satisfying a cost sharing or matching requirement must be verifiable from the records of grantees and subgrantee or cost-type contractors. These records must show how the value placed on third party in-kind contributions was derived. To the extent feasible, volunteer services will be supported by the same methods that the organization uses to support the allocability of regular personnel costs.
I11(7) T3Special standards for third party in-kind contributions.G1T1 (i) Third party in-kind contributions count towards satisfying a cost sharing or matching requirement only where, if the party receiving the contributions were to pay for them, the payments would be allowable costs.
I11(ii) Some third party in-kind contributions are goods and services that, if the grantee, subgrantee, or contractor receiving the contribution had to pay for them, the payments would have been an indirect costs. Costs sharing or matching credit for such contributions shall be given only if the grantee, subgrantee, or contractor has established, along with its regular indirect cost rate, a special rate for allocating to individual projects or programs the value of the contributions.
I11(iii) A third party in-kind contribution to a fixed-price contract may count towards satisfying a cost sharing or matching requirement only if it results in:
I11(A) An increase in the services or property provided under the contract (without additional cost to the grantee or subgrantee) or
I11(B) A cost savings to the grantee or subgrantee.
I11(iv) The values placed on third party in-kind contributions for cost sharing or matching purposes will conform to the rules in the succeeding sections of this part. If a third party in-kind contribution is a type not treated in those sections, the value placed upon it shall be fair and reasonable.
I11(c) T3Valuation of donated servicesG1T1_(1) T3Volunteer services.G1T1 Unpaid services provided to a grantee or subgrantee by individuals will be valued at rates consistent with those ordinarily paid for similar work in the grantee's or subgrantee's organization. If the grantee or subgrantee does not have employees performing similar work, the rates will be consistent with those ordinarily paid by other employers for similar �116�work in the same labor market. In either case, a reasonable amount for fringe benefits may be included in the valuation.
I11(2) T3Employees of other organizations.G1T1 When an employer other than a grantee, subgrantee, or cost-type contractor furnishes free of charge the services of an employee in the employee's normal line of work, the services will be valued at the employee's regular rate of pay exclusive of the employee's fringe benefits and overhead costs. If the services are in a different line of work, paragraph (c)(1) of this section applies.
I11(d) T3Valuation of third party donated supplies and loaned equipment or space.G1T1 (1) If a third party donates supplies, the contribution will be valued at the market value of the supplies at the time of donation.
I11(2) If a third party donates the use of equipment or space in a building but retains title, the contribution will be valued at the fair rental rate of the equipment or space.
I11(e) T3Valuation of third party donated equipment, buildings, and land.G1T1 If a third party donates equipment, buildings, or land, and title passes to a grantee or subgrantee, the treatment of the donated property will depend upon the purpose of the grant or subgrant, as follows:
I11(1) T3Awards for capital expenditures.G1T1 If the purpose of the grant or subgrant is to assist the grantee or subgrantee in the acquisition of property, the market value of that property at the time of donation may be counted as cost sharing or matching,
I11(2) T3Other awards.G1T1 If assisting in the acquisition of property is not the purpose of the grant or subgrant, paragraphs (e)(2) (i) and (ii) of this section apply:
I11(i) If approval is obtained from the awarding agency, the market value at the time of donation of the donated equipment or buildings and the fair rental rate of the donated land may be counted as cost sharing or matching. In the case of a subgrant, the terms of the grant agreement may require that the approval be obtained from the Federal agency as well as the grantee. In all cases, the approval may be given only if a purchase of the equipment or rental of the land would be approved as an allowable direct cost. If any part of the donated property was acquired with Federal funds, only the non-federal share of the property may be counted as cost-sharing or matching.
I11(ii) If approval is not obtained under paragraph (e)(2)(i) of this section, no amount may be counted for donated land, and only depreciation or use allowances may be counted for donated equipment and buildings. The depreciation or use allowances for this property are not treated as third party in-kind contributions. Instead, they are treated as costs incurred by the grantee or subgrantee. They are computed and allocated (usually as indirect costs) in accordance with the cost principles specified in �1A3016.22, in the same way as depreciation or use allowances for purchased equipment and buildings. The amount of depreciation or use allowances for donated equipment and buildings is based on the property's market value at the time it was donated.
I11(f) T3Valuation of grantee or subgrantee donated real property for construction/acquisition.G1T1 If a grantee or subgrantee donates real property for a construction or facilities acquisition project, the current market value of that property may be counted as cost sharing or matching. If any part of the donated property was acquired with Federal funds, only the non-federal share of the property may be counted as cost sharing or matching.
I11(g) T3Appraisal of real property.G1T1 In some cases under paragraphs (d), (e) and (f) of this section, it will be necessary to establish the market value of land or a building or the fair rental rate of land or of space in a building. In these cases, the Federal agency may require the market value or fair rental value be set by an independent appraiser, and that the value or rate be certified by the grantee. This requirement will also be imposed by the grantee on subgrantees.

I80�1A3016.25 
I89Program income. 
I11(a) T3General.G1T1 Grantees are encouraged to earn income to defray program costs. Program income includes income from fees for services performed, from the use or rental of real or personal property acquired with grant funds, from the sale of commodities or items fabricated under a grant agreement, �117�and from payments of principal and interest on loans made with grant funds. Except as otherwise provided in regulations of the Federal agency, program income does not include interest on grant funds, rebates, credits, discounts, refunds, etc. and interest earned on any of them. 
I11(b) T3Definition of program income.G1T1 Program income means gross income received by the grantee or subgrantee directly generated by a grant supported activity, or earned only as a result of the grant agreement during the grant period. ``During the grant period'' is the time between the effective date of the award and the ending date of the award reflected in the final financial report. 
I11(c) T3Cost of generating program income.G1T1 If authorized by Federal regulations or the grant agreement, costs incident to the generation of program income may be deducted from gross income to determine program income. 
I11(d) T3Governmental revenues.G1T1 Taxes, special assessments, levies, fines, and other such revenues raised by a grantee or subgrantee are not program income unless the revenues are specifically identified in the grant agreement or Federal agency regulations as program income. 
I11(e) T3Royalties.G1T1 Income from royalties and license fees for copyrighted material, patents, and inventions developed by a grantee or subgrantee is program income only if the revenues are specifically identified in the grant agreement or Federal agency regulations as program income. (See �1A3016.34.) 
I11(f) T3Property.G1T1 Proceeds from the sale of real property or equipment will be handled in accordance with the requirements of �1A3016.31 and 3016.32. 
I11(g) T3Use of program income.G1T1 Program income shall be deducted from outlays which may be both Federal and non-Federal as described below, unless the Federal agency regulations or the grant agreement specify another alternative (or a combination of the alternatives). In specifying alternatives, the Federal agency may distinguish between income earned by the grantee and income earned by subgrantees and between the sources, kinds, or amounts of income. When Federal agencies authorize the alternatives in paragraphs (g) (2) and (3) of this section, program income in excess of any limits stipulated shall also be deducted from outlays. 
I11(1) T3Deduction.G1T1 Ordinarily program income shall be deducted from total allowable costs to determine the net allowable costs. Program income shall be used for current costs unless the Federal agency authorizes otherwise. Program income which the grantee did not anticipate at the time of the award shall be used to reduce the Federal agency and grantee contributions rather than to increase the funds committed to the project. 
I11(2) T3Addition.G1T1 When authorized, program income may be added to the funds committed to the grant agreement by the Federal agency and the grantee. The program income shall be used for the purposes and under the conditions of the grant agreement. 
I11(3) T3Cost sharing or matching.G1T1 When authorized, program income may be used to meet the cost sharing or matching requirement of the grant agreement. The amount of the Federal grant award remains the same. 
I11(h) T3Income after the award period.G1T1 There are no Federal requirements governing the disposition of program income earned after the end of the award period (i.e., until the ending date of the final financial report, see paragraph (a) of this section), unless the terms of the agreement or the Federal agency regulations provide otherwise.


I80�1A3016.26 
I89Non-Federal audit. 


I11(a) T3Basic rule.G1T1 Grantees and subgrantees are responsible for obtaining audits in accordance with the Single Audit Act Amendments of 1996 (31 U.S.C. 7501�097507) and revised OMB Circular A�09133, ``Audits of States, Local Governments, and Non-Profit Organizations.'' The audits shall be made by an independent auditor in accordance with generally accepted government auditing standards covering financial audits.

I11(1) In USDA, revised OMB Circular A�09133 is implemented in 7 CFR part 3052, ``Audits of States, Local Governments, and Non-Profit Organizations.''

I11(2) [Reserved]


I11(b) T3Subgrantees.G1T1 State or local governments, as those terms are defined for �118�purposes of the Single Audit Act Amendments of 1996, that provide Federal awards to a subgrantee, which expends $300,000 or more (or other amount as specified by OMB) in Federal awards in a fiscal year, shall:

I11(1) Determine whether State or local subgrantees have met the audit requirements of the Act and whether subgrantees covered by OMB Circular A�09110, ``Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations,'' have met the audit requirements of the Act. Commercial contractors (private for-profit and private and governmental organizations) providing goods and services to State and local governments are not required to have a single audit performed. State and local governments should use their own procedures to ensure that the contractor has complied with laws and regulations affecting the expenditure of Federal funds;


I11(2) Determine whether the subgrantee spent Federal assistance funds provided in accordance with applicable laws and regulations. This may be accomplished by reviewing an audit of the subgrantee made in accordance with the Act, Circular A�09110, or through other means (e.g., program reviews) if the subgrantee has not had such an audit; 
I11(3) Ensure that appropriate corrective action is taken within six months after receipt of the audit report in instance of noncompliance with Federal laws and regulations; 
I11(4) Consider whether subgrantee audits necessitate adjustment of the grantee's own records; and 
I11(5) Require each subgrantee to permit independent auditors to have access to the records and financial statements. 
I11(c) T3Auditor selection.G1T1 In arranging for audit services, �1A3016.36 shall be followed.

Q04I20[53 FR 8044, 8087, Mar. 11, 1988, as amended at 62 FR 45939, Aug. 29, 1997]


I84Changes, Property, and Subawards

I80�1A3016.30
I89Changes.
I11(a) T3GeneralG1T1. Grantees and subgrantees are permitted to rebudget within the approved direct cost budget to meet unanticipated requirements and may make limited program changes to the approved project. However, unless waived by the awarding agency, certain types of post-award changes in budgets and projects shall require the prior written approval of the awarding agency.
I11(b) T3Relation to cost principles.G1T1 The applicable cost principles (see �1A3016.22) contain requirements for prior approval of certain types of costs. Except where waived, those requirements apply to all grants and subgrants even if paragraphs (c) through (f) of this section do not.
I11(c) T3Budget changes.G1T1 (1) T3Nonconstruction projects.G1T1 Except as stated in other regulations or an award document, grantees or subgrantees shall obtain the prior approval of the awarding agency whenever any of the following changes is anticipated under a nonconstruction award:
I11(i) Any revision which would result in the need for additional funding. 
I11(ii) Unless waived by the awarding agency, cumulative transfers among direct cost categories, or, if applicable, among separately budgeted programs, projects, functions, or activities which exceed or are expected to exceed ten percent of the current total approved budget, whenever the awarding agency's share exceeds $100,000.
I11(iii) Transfer of funds allotted for training allowances (i.e., from direct payments to trainees to other expense categories).
I11(2) T3Construction projects.G1T1 Grantees and subgrantees shall obtain prior written approval for any budget revision which would result in the need for additional funds.
I11(3) T3Combined construction and nonconstruction projects.G1T1 When a grant or subgrant provides funding for both construction and nonconstruction activities, the grantee or subgrantee must obtain prior written approval from the awarding agency before making any fund or budget transfer from nonconstruction to construction or vice versa.
I11(d) T3Programmatic changes.G1T1 Grantees or subgrantees must obtain the prior approval of the awarding agency whenever any of the following actions is anticipated:
�119�I11(1) Any revision of the scope or objectives of the project (regardless of whether there is an associated budget revision requiring prior approval).
I11(2) Need to extend the period of availability of funds.
I11(3) Changes in key persons in cases where specified in an application or a grant award. In research projects, a change in the project director or principal investigator shall always require approval unless waived by the awarding agency. 
I11(4) Under nonconstruction projects, contracting out, subgranting (if authorized by law) or otherwise obtaining the services of a third party to perform activities which are central to the purposes of the award. This approval requirement is in addition to the approval requirements of �1A3016.36 but does not apply to the procurement of equipment, supplies, and general support services.
I11(e) T3Additional prior approval requirements.G1T1 The awarding agency may not require prior approval for any budget revision which is not described in paragraph (c) of this section.
I11(f) T3Requesting prior approval.G1T1 (1) A request for prior approval of any budget revision will be in the same budget formal the grantee used in its application and shall be accompanied by a narrative justification for the proposed revision.
I11(2) A request for a prior approval under the applicable Federal cost principles (see �1A3016.22) may be made by letter.
I11(3) A request by a subgrantee for prior approval will be addressed in writing to the grantee. The grantee will promptly review such request and shall approve or disapprove the request in writing. A grantee will not approve any budget or project revision which is inconsistent with the purpose or terms and conditions of the Federal grant to the grantee. If the revision, requested by the subgrantee would result in a change to the grantee's approved project which requires Federal prior approval, the grantee will obtain the Federal agency's approval before approving the subgrantee's request.

I80�1A3016.31
I89Real property.
I11(a) T3Title.G1T1 Subject to the obligations and conditions set forth in this section, title to real property acquired under a grant or subgrant will vest upon acquisition in the grantee or subgrantee respectively.
I11(b) T3Use.G1T1 Except as otherwise provided by Federal statutes, real property will be used for the originally authorized purposes as long as needed for that purposes, and the grantee or subgrantee shall not dispose of or encumber its title or other interests.
I11(c) T3Disposition.G1T1 When real property is no longer needed for the originally authorized purpose, the grantee or subgrantee will request disposition instructions from the awarding agency. The instructions will provide for one of the following alternatives:
I11(1) T3Retention of title.G1T1 Retain title after compensating the awarding agency. The amount paid to the awarding agency will be computed by applying the awarding agency's percentage of participation in the cost of the original purchase to the fair market value of the property. However, in those situations where a grantee or subgrantee is disposing of real property acquired with grant funds and acquiring replacement real property under the same program, the net proceeds from the disposition may be used as an offset to the cost of the replacement property.
I11(2) T3Sale of property.G1T1 Sell the property and compensate the awarding agency. The amount due to the awarding agency will be calculated by applying the awarding agency's percentage of participation in the cost of the original purchase to the proceeds of the sale after deduction of any actual and reasonable selling and fixing-up expenses. If the grant is still active, the net proceeds from sale may be offset against the original cost of the property. When a grantee or subgrantee is directed to sell property, sales procedures shall be followed that provide for competition to the extent practicable and result in the highest possible return.
I11(3) T3Transfer of title.G1T1 Transfer title to the awarding agency or to a third-party designated/approved by the �120�awarding agency. The grantee or subgrantee shall be paid an amount calculated by applying the grantee or subgrantee's percentage of participation in the purchase of the real property to the current fair market value of the property.

I80�1A3016.32
I89Equipment.
I11(a) T3Title.G1T1 Subject to the obligations and conditions set forth in this section, title to equipment acquired under a grant or subgrant will vest upon acquisition in the grantee or subgrantee respectively.
I11(b) T3States.G1T1 A State will use, manage, and dispose of equipment acquired under a grant by the State in accordance with State laws and procedures. Other grantees and subgrantees will follow paragraphs (c) through (e) of this section.
I11(c) T3Use.G1T1 (1) Equipment shall be used by the grantee or subgrantee in the program or project for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds. When no longer needed for the original program or project, the equipment may be used in other activities currently or previously supported by a Federal agency.
I11(2) The grantee or subgrantee shall also make equipment available for use on other projects or programs currently or previously supported by the Federal Government, providing such use will not interfere with the work on the projects or program for which it was originally acquired. First preference for other use shall be given to other programs or projects supported by the awarding agency. User fees should be considered if appropriate.
I11(3) Notwithstanding the encouragement in �1A3016.25(a) to earn program income, the grantee or subgrantee must not use equipment acquired with grant funds to provide services for a fee to compete unfairly with private companies that provide equivalent services, unless specifically permitted or contemplated by Federal statute.
I11(4) When acquiring replacement equipment, the grantee or subgrantee may use the equipment to be replaced as a trade-in or sell the property and use the proceeds to offset the cost of the replacement property, subject to the approval of the awarding agency.
I11(d) T3Management requirements.G1T1 Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part with grant funds, until disposition takes place will, as a minimum, meet the following requirements:
I11(1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the cost of the property, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property.
I11(2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years.
I11(3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft shall be investigated.
I11(4) Adequate maintenance procedures must be developed to keep the property in good condition.
I11(5) If the grantee or subgrantee is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return.
I11(e) T3Disposition.G1T1 When original or replacement equipment acquired under a grant or subgrant is no longer needed for the original project or program or for other activities currently or previously supported by a Federal agency, disposition of the equipment will be made as follows:
I11(1) Items of equipment with a current per-unit fair market value of less than $5,000 may be retained, sold or otherwise disposed of with no further obligation to the awarding agency.
I11(2) Items of equipment with a current per unit fair market value in excess of $5,000 may be retained or sold and the awarding agency shall have a right to an amount calculated by multiplying the current market value or proceeds from sale by the awarding agency's share of the equipment.
�121�I11(3) In cases where a grantee or subgrantee fails to take appropriate disposition actions, the awarding agency may direct the grantee or subgrantee to take excess and disposition actions.
I11(f) T3Federal equipment.G1T1 In the event a grantee or subgrantee is provided federally-owned equipment:
I11(1) Title will remain vested in the Federal Government.
I11(2) Grantees or subgrantees will manage the equipment in accordance with Federal agency rules and procedures, and submit an annual inventory listing.
I11(3) When the equipment is no longer needed, the grantee or subgrantee will request disposition instructions from the Federal agency.
I11(g) T3Right to transfer title.G1T1 The Federal awarding agency may reserve the right to transfer title to the Federal Government or a third part named by the awarding agency when such a third party is otherwise eligible under existing statutes. Such transfers shall be subject to the following standards:
I11(1) The property shall be identified in the grant or otherwise made known to the grantee in writing.
I11(2) The Federal awarding agency shall issue disposition instruction within 120 calendar days after the end of the Federal support of the project for which it was acquired. If the Federal awarding agency fails to issue disposition instructions within the 120 calendar-day period the grantee shall follow �1A3016.32(e).
I11(3) When title to equipment is transferred, the grantee shall be paid an amount calculated by applying the percentage of participation in the purchase to the current fair market value of the property.

I80�1A3016.33
I89Supplies.
I11(a) T3Title.G1T1 Title to supplies acquired under a grant or subgrant will vest, upon acquisition, in the grantee or subgrantee respectively.
I11(b) T3Disposition.G1T1 If there is a residual inventory of unused supplies exceeding $5,000 in total aggregate fair market value upon termination or completion of the award, and if the supplies are not needed for any other federally sponsored programs or projects, the grantee or subgrantee shall compensate the awarding agency for its share.

I80�1A3016.34
I89Copyrights.
I11The Federal awarding agency reserves a royalty-free, nonexclusive, and irrevocable license to reproduce, publish or otherwise use, and to authorize others to use, for Federal Government purposes:
I11(a) The copyright in any work developed under a grant, subgrant, or contract under a grant or subgrant; and
I11(b) Any rights of copyright to which a grantee, subgrantee or a contractor purchases ownership with grant support.

I80�1A3016.35
I89Subawards to debarred and suspended parties.
I11Grantees and subgrantees must not make any award or permit any award (subgrant or contract) at any tier to any party which is debarred or suspended or is otherwise excluded from or ineligible for participation in Federal assistance programs under Executive Order 12549, ``Debarment and Suspension.''

I80�1A3016.36
I89Procurement.
I11(a) T3States.G1T1 When procuring property and services under a grant, a State will follow the same policies and procedures it uses for procurements from its non-Federal funds. The State will ensure that every purchase order or other contract includes any clauses required by Federal statutes and executive orders and their implementing regulations. Other grantees and subgrantees will follow paragraphs (b) through (i) in this section.
I11(b) T3Procurement standards.G1T1 (1) Grantees and subgrantees will use their own procurement procedures which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this section.
I11(2) Grantees and subgrantees will maintain a contract administration system which ensures that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.
I11(3) Grantees and subgrantees will maintain a written code of standards of �122�conduct governing the performance of their employees engaged in the award and administration of contracts. No employee, officer or agent of the grantee or subgrantee shall participate in selection, or in the award or administration of a contract supported by Federal funds if a conflict of interest, real or apparent, would be involved. Such a conflict would arise when:
I11(i) The employee, officer or agent, 
I11(ii) Any member of his immediate family,
I11(iii) His or her partner, or 
I11(iv) An organization which employs, or is about to employ, any of the above, has a financial or other interest in the firm selected for award. The grantee's or subgrantee's officers, employees or agents will neither solicit nor accept gratuities, favors or anything of monetary value from contractors, potential contractors, or parties to subagreements. Grantee and subgrantees may set minimum rules where the financial interest is not substantial or the gift is an unsolicited item of nominal intrinsic value. To the extent permitted by State or local law or regulations, such standards or conduct will provide for penalties, sanctions, or other disciplinary actions for violations of such standards by the grantee's and subgrantee's officers, employees, or agents, or by contractors or their agents. The awarding agency may in regulation provide additional prohibitions relative to real, apparent, or potential conflicts of interest.
I11(4) Grantee and subgrantee procedures will provide for a review of proposed procurements to avoid purchase of unnecessary or duplicative items. Consideration should be given to consolidating or breaking out procurements to obtain a more economical purchase. Where appropriate, an analysis will be made of lease versus purchase alternatives, and any other appropriate analysis to determine the most economical approach.
I11(5) To foster greater economy and efficiency, grantees and subgrantees are encouraged to enter into State and local intergovernmental agreements for procurement or use of common goods and services.
I11(6) Grantees and subgrantees are encouraged to use Federal excess and surplus property in lieu of purchasing new equipment and property whenever such use is feasible and reduces project costs.
I11(7) Grantees and subgrantees are encouraged to use value engineering clauses in contracts for construction projects of sufficient size to offer reasonable opportunities for cost reductions. Value engineering is a systematic and creative analysis of each contract item or task to ensure that its essential function is provided at the overall lower cost.
I11(8) Grantees and subgrantees will make awards only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources.
I11(9) Grantees and subgrantees will maintain records sufficient to detail the significant history of a procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.
I11(10) Grantees and subgrantees will use time and material type contracts only_
I11(i) After a determination that no other contract is suitable, and 
I11(ii) If the contract includes a ceiling price that the contractor exceeds at its own risk.
I11(11) Grantees and subgrantees alone will be responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements. These issues include, but are not limited to source evaluation, protests, disputes, and claims. These standards do not relieve the grantee or subgrantee of any contractual responsibilities under its contracts. Federal agencies will not substitute their judgment for that of the grantee or subgrantee unless the matter is primarily a Federal concern. Violations of law will be referred to the local, State, or Federal authority having proper jurisdiction. 
�123�I11(12) Grantees and subgrantees will have protest procedures to handle and resolve disputes relating to their procurements and shall in all instances disclose information regarding the protest to the awarding agency. A protestor must exhaust all administrative remedies with the grantee and subgrantee before pursuing a protest with the Federal agency. Reviews of protests by the Federal agency will be limited to: 
I11(i) Violations of Federal law or regulations and the standards of this section (violations of State or local law will be under the jurisdiction of State or local authorities) and 
I11(ii) Violations of the grantee's or subgrantee's protest procedures for failure to review a complaint or protest. Protests received by the Federal agency other than those specified above will be referred to the grantee or subgrantee. 
I11(c) T3CompetitionG1T1. (1) All procurement transactions will be conducted in a manner providing full and open competition consistent with the standards of �1A3016.36. Some of the situations considered to be restrictive of competition include but are not limited to: 
I11(i) Placing unreasonable requirements on firms in order for them to qualify to do business, 
I11(ii) Requiring unnecessary experience and excessive bonding, 
I11(iii) Noncompetitive pricing practices between firms or between affiliated companies, 
I11(iv) Noncompetitive awards to consultants that are on retainer contracts, 
I11(v) Organizational conflicts of interest, 
I11(vi) Specifying only a ``brand name'' product instead of allowing ``an equal'' product to be offered and describing the performance of other relevant requirements of the procurement, and 
I11(vii) Any arbitrary action in the procurement process. 
I11(2) Grantees and subgrantees will conduct procurements in a manner that prohibits the use of statutorily or administratively imposed in-State or local geographical preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference. Nothing in this section preempts State licensing laws. When contracting for architectural and engineering (A/E) services, geographic location may be a selection criteria provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract. 
I11(3) Grantees will have written selection procedures for procurement transactions. These procedures will ensure that all solicitations: 
I11(i) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description shall not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured, and when necessary, shall set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a ``brand name or equal'' description may be used as a means to define the performance or other salient requirements of a procurement. The specific features of the named brand which must be met by offerors shall be clearly stated; and 
I11(ii) Identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals. 
I11(4) Grantees and subgrantees will ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, grantees and subgrantees will not preclude potential bidders from qualifying during the solicitation period. 
I11(d) T3Methods of procurement to be followed.G1T1 (1) Procurement by T3small purchase proceduresG1T1. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the simplified acquisition threshold fixed at 41 U.S.C. 403(11) (currently set at �124�$100,000). If small purchase procedures are used, price or rate quotations shall be obtained from an adequate number of qualified sources. 
I11(2) Procurement by T3sealed bidsG1T1 (formal advertising). Bids are publicly solicited and a firm-fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bid method is the preferred method for procuring construction, if the conditions in �1A3016.36(d)(2)(i) apply. 
I11(i) In order for sealed bidding to be feasible, the following conditions should be present: 
I11(A) A complete, adequate, and realistic specification or purchase description is available; 
I11(B) Two or more responsible bidders are willing and able to compete effectively and for the business; and 
I11(C) The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price. 
I11(ii) If sealed bids are used, the following requirements apply: 
I11(A) The invitation for bids will be publicly advertised and bids shall be solicited from an adequate number of known suppliers, providing them sufficient time prior to the date set for opening the bids; 
I11(B) The invitation for bids, which will include any specifications and pertinent attachments, shall define the items or services in order for the bidder to properly respond; 
I11(C) All bids will be publicly opened at the time and place prescribed in the invitation for bids; 
I11(D) A firm fixed-price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs shall be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and 
I11(E) Any or all bids may be rejected if there is a sound documented reason. 
I11(3) Procurement by T3competitive proposals.G1T1 The technique of competitive proposals is normally conducted with more than one source submitting an offer, and either a fixed-price or cost-reimbursement type contract is awarded. It is generally used when conditions are not appropriate for the use of sealed bids. If this method is used, the following requirements apply: 
I11(i) Requests for proposals will be publicized and identify all evaluation factors and their relative importance. Any response to publicized requests for proposals shall be honored to the maximum extent practical; 
I11(ii) Proposals will be solicited from an adequate number of qualified sources; 
I11(iii) Grantees and subgrantees will have a method for conducting technical evaluations of the proposals received and for selecting awardees; 
I11(iv) Awards will be made to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered; and 
I11(v) Grantees and subgrantees may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby competitors' qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms are a potential source to perform the proposed effort. 
I11(4) Procurement by T3noncompetitive proposalsG1T1 is procurement through solicitation of a proposal from only one source, or after solicitation of a number of sources, competition is determined inadequate. 
I11(i) Procurement by noncompetitive proposals may be used only when the award of a contract is infeasible under small purchase procedures, sealed bids or competitive proposals and one of the following circumstances applies: 
I11(A) The item is available only from a single source; 
I11(B) The public exigency or emergency for the requirement will not permit a �125�delay resulting from competitive solicitation; 
I11(C) The awarding agency authorizes noncompetitive proposals; or 
I11(D) After solicitation of a number of sources, competition is determined inadequate. 
I11(ii) Cost analysis, i.e., verifying the proposed cost data, the projections of the data, and the evaluation of the specific elements of costs and profits, is required. 
I11(iii) Grantees and subgrantees may be required to submit the proposed procurement to the awarding agency for pre-award review in accordance with paragraph (g) of this section. 
I11(e) T3Contracting with small and minority firms, women's business enterprise and labor surplus area firms.G1T1 (1) The grantee and subgrantee will take all necessary affirmative steps to assure that minority firms, women's business enterprises, and labor surplus area firms are used when possible.
I11(2) Affirmative steps shall include:
I11(i) Placing qualified small and minority businesses and women's business enterprises on solicitation lists;
I11(ii) Assuring that small and minority businesses, and women's business enterprises are solicited whenever they are potential sources;
I11(iii) Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by small and minority business, and women's business enterprises;
I11(iv) Establishing delivery schedules, where the requirement permits, which encourage participation by small and minority business, and women's business enterprises;
I11(v) Using the services and assistance of the Small Business Administration, and the Minority Business Development Agency of the Department of Commerce; and
I11(vi) Requiring the prime contractor, if subcontracts are to be let, to take the affirmative steps listed in paragraphs (e)(2) (i) through (v) of this section.
I11(f) T3Contract cost and price.G1T1 (1) Grantees and subgrantees must perform a cost or price analysis in connection with every procurement action including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, grantees must make independent estimates before receiving bids or proposals. A cost analysis must be performed when the offeror is required to submit the elements of his estimated cost, e.g., under professional, consulting, and architectural engineering services contracts. A cost analysis will be necessary when adequate price competition is lacking, and for sole source procurements, including contract modifications or change orders, unless price reasonableness can be established on the basis of a catalog or market price of a commercial product sold in substantial quantities to the general public or based on prices set by law or regulation. A price analysis will be used in all other instances to determine the reasonableness of the proposed contract price.
I11(2) Grantees and subgrantees will negotiate profit as a separate element of the price for each contract in which there is no price competition and in all cases where cost analysis is performed. To establish a fair and reasonable profit, consideration will be given to the complexity of the work to be performed, the risk borne by the contractor, the contractor's investment, the amount of subcontracting, the quality of its record of past performance, and industry profit rates in the surrounding geographical area for similar work.
I11(3) Costs or prices based on estimated costs for contracts under grants will be allowable only to the extent that costs incurred or cost estimates included in negotiated prices are consistent with Federal cost principles (see �1A3016.22). Grantees may reference their own cost principles that comply with the applicable Federal cost principles.
I11(4) The cost plus a percentage of cost and percentage of construction cost methods of contracting shall not be used.
I11(g) T3Awarding agency review.G1T1 (1) Grantees and subgrantees must make available, upon request of the awarding agency, technical specifications on proposed procurements where the awarding agency believes such review is needed to ensure that the item and/or �126�service specified is the one being proposed for purchase. This review generally will take place prior to the time the specification is incorporated into a solicitation document. However, if the grantee or subgrantee desires to have the review accomplished after a solicitation has been developed, the awarding agency may still review the specifications, with such review usually limited to the technical aspects of the proposed purchase. 
I11(2) Grantees and subgrantees must on request make available for awarding agency pre-award review procurement documents, such as requests for proposals or invitations for bids, independent cost estimates, etc. when: 
I11(i) A grantee's or subgrantee's procurement procedures or operation fails to comply with the procurement standards in this section; or 
I11(ii) The procurement is expected to exceed the simplified acquisition threshold and is to be awarded without competition or only one bid or offer is received in response to a solicitation; or 
I11(iii) The procurement, which is expected to exceed the simplified acquisition threshold, specifies a ``brand name'' product; or 
I11(iv) The proposed award is more than the simplified acquisition threshold and is to be awarded to other than the apparent low bidder under a sealed bid procurement; or 
I11(v) A proposed contract modification changes the scope of a contract or increases the contract amount by more than the simplified acquisition threshold. 
I11(3) A grantee or subgrantee will be exempt from the pre-award review in paragraph (g)(2) of this section if the awarding agency determines that its procurement systems comply with the standards of this section. 
I11(i) A grantee or subgrantee may request that its procurement system be reviewed by the awarding agency to determine whether its system meets these standards in order for its system to be certified. Generally, these reviews shall occur where there is a continuous high-dollar funding, and third-party contracts are awarded on a regular basis. 
I11(ii) A grantee or subgrantee may self-certify its procurement system. Such self-certification shall not limit the awarding agency's right to survey the system. Under a self-certification procedure, awarding agencies may wish to rely on written assurances from the grantee or subgrantee that it is complying with these standards. A grantee or subgrantee will cite specific procedures, regulations, standards, etc., as being in compliance with these requirements and have its system available for review. 
I11(h) T3Bonding requirements.G1T1 For construction or facility improvement contracts or subcontracts exceeding the simplified acquisition threshold, the awarding agency may accept the bonding policy and requirements of the grantee or subgrantee provided the awarding agency has made a determination that the awarding agency's interest is adequately protected. If such a determination has not been made, the minimum requirements shall be as follows: 
I11(1) T3A bid guarantee from each bidder equivalent to five percent of the bid price.G1T1 The ``bid guarantee'' shall consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder will, upon acceptance of his bid, execute such contractual documents as may be required within the time specified. 
I11(2) T3A performance bond on the part of the contractor for 100 percent of the contract price.G1T1 A ``performance bond'' is one executed in connection with a contract to secure fulfillment of all the contractor's obligations under such contract. 
I11(3) T3A payment bond on the part of the contractor for 100 percent of the contract price.G1T1 A ``payment bond'' is one executed in connection with a contract to assure payment as required by law of all persons supplying labor and material in the execution of the work provided for in the contract. 
I11(i) T3Contract provisions.G1T1 A grantee's and subgrantee's contracts must contain provisions in paragraph (i) of this section. Federal agencies are permitted to require changes, remedies, changed conditions, access and records retention, suspension of work, and other �127�clauses approved by the Office of Federal Procurement Policy. 
I11(1) Administrative, contractual, or legal remedies in instances where contractors violate or breach contract terms, and provide for such sanctions and penalties as may be appropriate. (Contracts more than the simplified acquisition threshold) 
I11(2) Termination for cause and for convenience by the grantee or subgrantee including the manner by which it will be effected and the basis for settlement. (All contracts in excess of $10,000) 
I11(3) Compliance with Executive Order 11246 of September 24, 1965, entitled ``Equal Employment Opportunity,'' as amended by Executive Order 11375 of October 13, 1967, and as supplemented in Department of Labor regulations (41 CFR chapter 60). (All construction contracts awarded in excess of $10,000 by grantees and their contractors or subgrantees) 
I11(4) Compliance with the Copeland ``Anti-Kickback'' Act (18 U.S.C. 874) as supplemented in Department of Labor regulations (29 CFR Part 3). (All contracts and subgrants for construction or repair) 
I11(5) Compliance with the Davis-Bacon Act (40 U.S.C. 276a to 276a�097) as supplemented by Department of Labor regulations (29 CFR Part 5). (Construction contracts in excess of $2000 awarded by grantees and subgrantees when required by Federal grant program legislation) 
I11(6) Compliance with Sections 103 and 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327�09330) as supplemented by Department of Labor regulations (29 CFR Part 5). (Construction contracts awarded by grantees and subgrantees in excess of $2000, and in excess of $2500 for other contracts which involve the employment of mechanics or laborers) 
I11(7) Notice of awarding agency requirements and regulations pertaining to reporting. 
I11(8) Notice of awarding agency requirements and regulations pertaining to patent rights with respect to any discovery or invention which arises or is developed in the course of or under such contract. 
I11(9) Awarding agency requirements and regulations pertaining to copyrights and rights in data. 
I11(10) Access by the grantee, the subgrantee, the Federal grantor agency, the Comptroller General of the United States, or any of their duly authorized representatives to any books, documents, papers, and records of the contractor which are directly pertinent to that specific contract for the purpose of making audit, examination, excerpts, and transcriptions. 
I11(11) Retention of all required records for three years after grantees or subgrantees make final payments and all other pending matters are closed. 
I11(12) Compliance with all applicable standards, orders, or requirements issued under section 306 of the Clean Air Act (42 U.S.C. 1857(h)), section 508 of the Clean Water Act (33 U.S.C. 1368), Executive Order 11738, and Environmental Protection Agency regulations (40 CFR part 15). (Contracts, subcontracts, and subgrants of amounts in excess of $100,000) 
I11(13) Mandatory standards and policies relating to energy efficiency which are contained in the state energy conservation plan issued in compliance with the Energy Policy and Conservation Act (Pub. L. 94�09163, 89 Stat. 871). 
Q04I20[53 FR 8044, 8087, Mar. 11, 1988, as amended at 60 FR 19639, 19641, Apr. 19, 1995]

I80�1A3016.37
I89Subgrants.
I11(a) T3States.G1T1 States shall follow state law and procedures when awarding and administering subgrants (whether on a cost reimbursement or fixed amount basis) of financial assistance to local and Indian tribal governments. States shall:
I11(1) Ensure that every subgrant includes any clauses required by Federal statute and executive orders and their implementing regulations;
I11(2) Ensure that subgrantees are aware of requirements imposed upon them by Federal statute and regulation;
I11(3) Ensure that a provision for compliance with �1A3016.42 is placed in every cost reimbursement subgrant; and
I11(4) Conform any advances of grant funds to subgrantees substantially to the same standards of timing and �128�amount that apply to cash advances by Federal agencies.
I11(b) T3All other grantees.G1T1 All other grantees shall follow the provisions of this part which are applicable to awarding agencies when awarding and administering subgrants (whether on a cost reimbursement or fixed amount basis) of financial assistance to local and Indian tribal governments. Grantees shall:
I11(1) Ensure that every subgrant includes a provision for compliance with this part;
I11(2) Ensure that every subgrant includes any clauses required by Federal statute and executive orders and their implementing regulations; and
I11(3) Ensure that subgrantees are aware of requirements imposed upon them by Federal statutes and regulations.
I11(c) T3Exceptions.G1T1 By their own terms, certain provisions of this part do not apply to the award and administration of subgrants:
I11(1) Section 3016.10;
I11(2) Section 3016.11;
I11(3) The letter-of-credit procedures specified in Treasury Regulations at 31 CFR part 205, cited in �1A3016.21; and
I11(4) Section 3016.50.
I84Reports, Records, Retention, and Enforcement

I80�1A3016.40
I89Monitoring and reporting program performance.
I11(a) T3Monitoring by grantees.G1T1 Grantees are responsible for managing the day-to-day operations of grant and subgrant supported activities. Grantees must monitor grant and subgrant supported activities to assure compliance with applicable Federal requirements and that performance goals are being achieved. Grantee monitoring must cover each program, function or activity.
I11(b) T3Nonconstruction performance reports.G1T1 The Federal agency may, if it decides that performance information available from subsequent applications contains sufficient information to meet its programmatic needs, require the grantee to submit a performance report only upon expiration or termination of grant support. Unless waived by the Federal agency this report will be due on the same date as the final Financial Status Report.
I11(1) Grantees shall submit annual performance reports unless the awarding agency requires quarterly or semi-annual reports. However, performance reports will not be required more frequently than quarterly. Annual reports shall be due 90 days after the grant year, quarterly or semi-annual reports shall be due 30 days after the reporting period. The final performance report will be due 90 days after the expiration or termination of grant support. If a justified request is submitted by a grantee, the Federal agency may extend the due date for any performance report. Additionally, requirements for unnecessary performance reports may be waived by the Federal agency.
I11(2) Performance reports will contain, for each grant, brief information on the following:
I11(i) A comparison of actual accomplishments to the objectives established for the period. Where the output of the project can be quantified, a computation of the cost per unit of output may be required if that information will be useful.
I11(ii) The reasons for slippage if established objectives were not met.
I11(iii) Additional pertinent information including, when appropriate, analysis and explanation of cost overruns or high unit costs.
I11(3) Grantees will not be required to submit more than the original and two copies of performance reports.
I11(4) Grantees will adhere to the standards in this section in prescribing performance reporting requirements for subgrantees.
I11(c) T3Construction performance reports.G1T1 For the most part, on-site technical inspections and certified percentage-of-completion data are relied on heavily by Federal agencies to monitor progress under construction grants and subgrants. The Federal agency will require additional formal performance reports only when considered necessary, and never more frequently than quarterly.
I11(d) T3Significant developments.G1T1 Events may occur between the scheduled performance reporting dates which have significant impact upon the grant or subgrant supported activity. In such �129�cases, the grantee must inform the Federal agency as soon as the following types of conditions become known:
I11(1) Problems, delays, or adverse conditions which will materially impair the ability to meet the objective of the award. This disclosure must include a statement of the action taken, or contemplated, and any assistance needed to resolve the situation.
I11(2) Favorable developments which enable meeting time schedules and objectives sooner or at less cost than anticipated or producing more beneficial results than originally planned.
I11(e) Federal agencies may make site visits as warranted by program needs.
I11(f) T3Waivers, extensions.G1T1 (1) Federal agencies may waive any performance report required by this part if not needed.
I11(2) The grantee may waive any performance report from a subgrantee when not needed. The grantee may extend the due date for any performance report from a subgrantee if the grantee will still be able to meet its performance reporting obligations to the Federal agency. 

I80�1A3016.41
I89Financial reporting.
I11(a) T3General.G1T1 (1) Except as provided in paragraphs (a) (2) and (5) of this section, grantees will use only the forms specified in paragraphs (a) through (e) of this section, and such supplementary or other forms as may from time to time be authorized by OMB, for:
I11(i) Submitting financial reports to Federal agencies, or
I11(ii) Requesting advances or reimbursements when letters of credit are not used.
I11(2) Grantees need not apply the forms prescribed in this section in dealing with their subgrantees. However, grantees shall not impose more burdensome requirements on subgrantees.
I11(3) Grantees shall follow all applicable standard and supplemental Federal agency instructions approved by OMB to the extent required under the Paperwork Reduction Act of 1980 for use in connection with forms specified in paragraphs (b) through (e) of this section. Federal agencies may issue substantive supplementary instructions only with the approval of OMB. Federal agencies may shade out or instruct the grantee to disregard any line item that the Federal agency finds unnecessary for its decisionmaking purposes. 
I11(4) Grantees will not be required to submit more than the original and two copies of forms required under this part. 
I11(5) Federal agencies may provide computer outputs to grantees to expedite or contribute to the accuracy of reporting. Federal agencies may accept the required information from grantees in machine usable format or computer printouts instead of prescribed forms. 
I11(6) Federal agencies may waive any report required by this section if not needed. 
I11(7) Federal agencies may extend the due date of any financial report upon receiving a justified request from a grantee. 
I11(b) T3Financial Status ReportG1T1_(1) T3Form.G1T1 Grantees will use Standard Form 269 or 269A, Financial Status Report, to report the status of funds for all nonconstruction grants and for construction grants when required in accordance with paragraph �1A3016.41(e)(2)(iii) of this section. 
I11(2) T3Accounting basis.G1T1 Each grantee will report program outlays and program income on a cash or accrual basis as prescribed by the awarding agency. If the Federal agency requires accrual information and the grantee's accounting records are not normally kept on the accural basis, the grantee shall not be required to convert its accounting system but shall develop such accrual information through and analysis of the documentation on hand. 
I11(3) T3Frequency.G1T1 The Federal agency may prescribe the frequency of the report for each project or program. However, the report will not be required more frequently than quarterly. If the Federal agency does not specify the frequency of the report, it will be submitted annually. A final report will be required upon expiration or termination of grant support. 
I11(4) T3Due date.G1T1 When reports are required on a quarterly or semiannual basis, they will be due 30 days after the reporting period. When required on an annual basis, they will be due 90 days after the grant year. Final reports will �130�be due 90 days after the expiration or termination of grant support. 
I11(c) T3Federal Cash Transactions ReportG1T1_(1) T3Form.G1T1 (i) For grants paid by letter or credit, Treasury check advances or electronic transfer of funds, the grantee will submit the Standard Form 272, Federal Cash Transactions Report, and when necessary, its continuation sheet, Standard Form 272a, unless the terms of the award exempt the grantee from this requirement. 
I11(ii) These reports will be used by the Federal agency to monitor cash advanced to grantees and to obtain disbursement or outlay information for each grant from grantees. The format of the report may be adapted as appropriate when reporting is to be accomplished with the assistance of automatic data processing equipment provided that the information to be submitted is not changed in substance. 
I11(2) T3Forecasts of Federal cash requirements.G1T1 Forecasts of Federal cash requirements may be required in the ``Remarks'' section of the report. 
I11(3) T3Cash in hands of subgrantees.G1T1 When considered necessary and feasible by the Federal agency, grantees may be required to report the amount of cash advances in excess of three days' needs in the hands of their subgrantees or contractors and to provide short narrative explanations of actions taken by the grantee to reduce the excess balances. 
I11(4) T3Frequency and due date.G1T1 Grantees must submit the report no later than 15 working days following the end of each quarter. However, where an advance either by letter of credit or electronic transfer of funds is authorized at an annualized rate of one million dollars or more, the Federal agency may require the report to be submitted within 15 working days following the end of each month. 
I11(d) T3Request for advance or reimbursementG1T1_(1) T3Advance payments.G1T1 Requests for Treasury check advance payments will be submitted on Standard Form 270, Request for Advance or Reimbursement. (This form will not be used for drawdowns under a letter of credit, electronic funds transfer or when Treasury check advance payments are made to the grantee automatically on a predetermined basis.) 
I11(2) T3Reimbursements.G1T1 Requests for reimbursement under nonconstruction grants will also be submitted on Standard Form 270. (For reimbursement requests under construction grants, see paragraph (e)(1) of this section.) 
I11(3) The frequency for submitting payment requests is treated in �1A3016.41(b)(3). 
I11(e) T3Outlay report and request for reimbursement for construction programs.G1T1 (1) Grants that support construction activities paid by reimbursement method.
I11(i) Requests for reimbursement under construction grants will be submitted on Standard Form 271, Outlay Report and Request for Reimbursement for Construction Programs. Federal agencies may, however, prescribe the Request for Advance or Reimbursement form, specified in �1A3016.41(d), instead of this form. 
I11(ii) The frequency for submitting reimbursement requests is treated in �1A3016.41(b)(3). 
I11(2) Grants that support construction activities paid by letter of credit, electronic funds transfer or Treasury check advance. 
I11(i) When a construction grant is paid by letter of credit, electronic funds transfer or Treasury check advances, the grantee will report its outlays to the Federal agency using Standard Form 271, Outlay Report and Request for Reimbursement for Construction Programs. The Federal agency will provide any necessary special instruction. However, frequency and due date shall be governed by �1A3016.41(b) (3) and (4). 
I11(ii) When a construction grant is paid by Treasury check advances based on periodic requests from the grantee, the advances will be requested on the form specified in �1A3016.41(d). 
I11(iii) The Federal agency may substitute the Financial Status Report specified in �1A3016.41(b) for the Outlay Report and Request for Reimbursement for Construction Programs. 
I11(3) T3Accounting basis.G1T1 The accounting basis for the Outlay Report and Request for Reimbursement for Construction Programs shall be governed by �1A3016.41(b)(2). 

�131�I80�1A3016.42 
I89Retention and access requirements for records. 
I11(a) T3Applicability.G1T1 (1) This section applies to all financial and programmatic records, supporting documents, statistical records, and other records of grantees or subgrantees which are: 
I11(i) Required to be maintained by the terms of this part, program regulations or the grant agreement, or 
I11(ii) Otherwise reasonably considered as pertinent to program regulations or the grant agreement. 
I11(2) This section does not apply to records maintained by contractors or subcontractors. For a requirement to place a provision concerning records in certain kinds of contracts, see �1A3016.36(i)(10). 
I11(b) T3Length of retention period.G1T1 (1) Except as otherwise provided, records must be retained for three years from the starting date specified in paragraph (c) of this section. 
I11(2) If any litigation, claim, negotiation, audit or other action involving the records has been started before the expiration of the 3-year period, the records must be retained until completion of the action and resolution of all issues which arise from it, or until the end of the regular 3-year period, whichever is later. 
I11(3) To avoid duplicate recordkeeping, awarding agencies may make special arrangements with grantees and subgrantees to retain any records which are continuously needed for joint use. The awarding agency will request transfer of records to its custody when it determines that the records possess long-term retention value. When the records are transferred to or maintained by the Federal agency, the 3-year retention requirement is not applicable to the grantee or subgrantee. 
I11(c) T3Starting date of retention periodG1T1_(1) T3General.G1T1 When grant support is continued or renewed at annual or other intervals, the retention period for the records of each funding period starts on the day the grantee or subgrantee submits to the awarding agency its single or last expenditure report for that period. However, if grant support is continued or renewed quarterly, the retention period for each year's records starts on the day the grantee submits its expenditure report for the last quarter of the Federal fiscal year. In all other cases, the retention period starts on the day the grantee submits its final expenditure report. If an expenditure report has been waived, the retention period starts on the day the report would have been due. 
I11(2) T3Real property and equipment records.G1T1 The retention period for real property and equipment records starts from the date of the disposition or replacement or transfer at the direction of the awarding agency. 
I11(3) T3Records for income transactions after grant or subgrant support.G1T1 In some cases grantees must report income after the period of grant support. Where there is such a requirement, the retention period for the records pertaining to the earning of the income starts from the end of the grantee's fiscal year in which the income is earned. 
I11(4) T3Indirect cost rate proposals, cost allocations plans, etc.G1T1 This paragraph applies to the following types of documents, and their supporting records: indirect cost rate computations or proposals, cost allocation plans, and any similar accounting computations of the rate at which a particular group of costs is chargeable (such as computer usage chargeback rates or composite fringe benefit rates). 
I11(i) T3If submitted for negotiation.G1T1 If the proposal, plan, or other computation is required to be submitted to the Federal Government (or to the grantee) to form the basis for negotiation of the rate, then the 3-year retention period for its supporting records starts from the date of such submission. 
I11(ii) T3If not submitted for negotiation.G1T1 If the proposal, plan, or other computation is not required to be submitted to the Federal Government (or to the grantee) for negotiation purposes, then the 3-year retention period for the proposal plan, or computation and its supporting records starts from end of the fiscal year (or other accounting period) covered by the proposal, plan, or other computation. 
I11(d) T3Substitution of microfilm.G1T1 Copies made by microfilming, photocopying, or similar methods may be substituted for the original records. 
I11(e) T3Access to records_G1T1(1) T3Records of grantees and subgrantees.G1T1 The awarding agency and the Comptroller General of �132�the United States, or any of their authorized representatives, shall have the right of access to any pertinent books, documents, papers, or other records of grantees and subgrantees which are pertinent to the grant, in order to make audits, examinations, excerpts, and transcripts. 
I11(2) T3Expiration of right of access.G1T1 The rights of access in this section must not be limited to the required retention period but shall last as long as the records are retained. 
I11(f) T3Restrictions on public access.G1T1 The Federal Freedom of Information Act (5 U.S.C. 552) does not apply to records Unless required by Federal, State, or local law, grantees and subgrantees are not required to permit public access to their records. 

I80�1A3016.43 
I89Enforcement. 
I11(a) T3Remedies for noncompliance.G1T1 If a grantee or subgrantee materially fails to comply with any term of an award, whether stated in a Federal statute or regulation, an assurance, in a State plan or application, a notice of award, or elsewhere, the awarding agency may take one or more of the following actions, as appropriate in the circumstances: 
I11(1) Temporarily withhold cash payments pending correction of the deficiency by the grantee or subgrantee or more severe enforcement action by the awarding agency, 
I11(2) Disallow (that is, deny both use of funds and matching credit for) all or part of the cost of the activity or action not in compliance, 
I11(3) Wholly or partly suspend or terminate the current award for the grantee's or subgrantee's program, 
I11(4) Withhold further awards for the program, or 
I11(5) Take other remedies that may be legally available. 
I11(b) T3Hearings, appeals.G1T1 In taking an enforcement action, the awarding agency will provide the grantee or subgrantee an opportunity for such hearing, appeal, or other administrative proceeding to which the grantee or subgrantee is entitled under any statute or regulation applicable to the action involved. 
I11(c) T3Effects of suspension and termination.G1T1 Costs of grantee or subgrantee resulting from obligations incurred by the grantee or subgrantee during a suspension or after termination of an award are not allowable unless the awarding agency expressly authorizes them in the notice of suspension or termination or subsequently. Other grantee or subgrantee costs during suspension or after termination which are necessary and not reasonably avoidable are allowable if: 
I11(1) The costs result from obligations which were properly incurred by the grantee or subgrantee before the effective date of suspension or termination, are not in anticipation of it, and, in the case of a termination, are noncancellable, and, 
I11(2) The costs would be allowable if the award were not suspended or expired normally at the end of the funding period in which the termination takes effect. 
I11(d) T3Relationship to Debarment and Suspension.G1T1 The enforcement remedies identified in this section, including suspension and termination, do not preclude grantee or subgrantee from being subject to ``Debarment and Suspension'' under E.O. 12549 (see �1A3016.35). 

I80�1A3016.44 
I89Termination for convenience. 
I11Except as provided in �1A3016.43 awards may be terminated in whole or in part only as follows: 
I11(a) By the awarding agency with the consent of the grantee or subgrantee in which case the two parties shall agree upon the termination conditions, including the effective date and in the case of partial termination, the portion to be terminated, or 
I11(b) By the grantee or subgrantee upon written notification to the awarding agency, setting forth the reasons for such termination, the effective date, and in the case of partial termination, the portion to be terminated. However, if, in the case of a partial termination, the awarding agency determines that the remaining portion of the award will not accomplish the purposes for which the award was made, the awarding agency may terminate the award in its entirety under either �1A3016.43 or paragraph (a) of this section. 

�133�I56Subpart D_After-the-Grant Requirements 

I80�1A3016.50 
I89Closeout. 
I11(a) T3General.G1T1 The Federal agency will close out the award when it determines that all applicable administrative actions and all required work of the grant has been completed. 
I11(b) T3Reports.G1T1 Within 90 days after the expiration or termination of the grant, the grantee must submit all financial, performance, and other reports required as a condition of the grant. Upon request by the grantee, Federal agencies may extend this timeframe. These may include but are not limited to: 
I11(1) Final performance or progress report. 
I11(2) Financial Status Report (SF 269) or Outlay Report and Request for Reimbursement for Construction Programs (SF�09271) (as applicable.) 
I11(3) Final request for payment (SF�09270) (if applicable). 
I11(4) Invention disclosure (if applicable). 
I11(5) Federally-owned property report:
Q02I10In accordance with �1A3016.32(f), a grantee must submit an inventory of all federally owned property (as distinct from property acquired with grant funds) for which it is accountable and request disposition instructions from the Federal agency of property no longer needed. 
I11(c) T3Cost adjustment.G1T1 The Federal agency will, within 90 days after receipt of reports in paragraph (b) of this section, make upward or downward adjustments to the allowable costs. 
I11(d) T3Cash adjustments.G1T1 (1) The Federal agency will make prompt payment to the grantee for allowable reimbursable costs. 
I11(2) The grantee must immediately refund to the Federal agency any balance of unobligated (unencumbered) cash advanced that is not authorized to be retained for use on other grants. 

I80�1A3016.51 
I89Later disallowances and adjustments. 
I11The closeout of a grant does not affect: 
I11(a) The Federal agency's right to disallow costs and recover funds on the basis of a later audit or other review; 
I11(b) The grantee's obligation to return any funds due as a result of later refunds, corrections, or other transactions; 
I11(c) Records retention as required in �1A3016.42;
I11(d) Property management requirements in �1A3016.31 and 3016.32; and
I11(e) Audit requirements in �1A3016.26.

I80�1A3016.52 
I89Collection of amounts due. 
I11(a) Any funds paid to a grantee in excess of the amount to which the grantee is finally determined to be entitled under the terms of the award constitute a debt to the Federal Government. If not paid within a reasonable period after demand, the Federal agency may reduce the debt by: 
I11(1) Making an adminstrative offset against other requests for reimbursements, 
I11(2) Withholding advance payments otherwise due to the grantee, or 
I11(3) Other action permitted by law. 
I11(b) Except where otherwise provided by statutes or regulations, the Federal agency will charge interest on an overdue debt in accordance with the Federal Claims Collection Standards (4 CFR Ch. II). The date from which interest is computed is not extended by litigation or the filing of any form of appeal. 
S8006I56Subpart E_Entitlement [Reserved] 
S8010
I95Pt. 3017
I52PART 3017_GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT) AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG�09FREE WORKPLACE (GRANTS)


I86Subpart A_General
S8006I18Sec.
S8010I263017.100Purpose.
I263017.105Definitions.
I263017.110Coverage.
I263017.115Policy.

I86Subpart B_Effect of Action
I263017.200Debarment or suspension.
I263017.205Ineligible persons.
I263017.210Voluntary exclusion.
I263017.215Exception provision.
I263017.220Continuation of covered transactions.
�134�I263017.225Failure to adhere to restrictions.

I86Subpart C_Debarment
I263017.300General.
I263017.305Causes for debarment.
I263017.310Procedures.
I263017.311Investigation and referral.
I263017.312Notice of proposed debarment.
I263017.313Opportunity to contest proposed debarment.
I263017.314Debarring official's decision.
I263017.315Settlement and voluntary exclusion.
I263017.320Period of debarment.
I263017.325Scope of debarment.

I86Subpart D_Suspension
I263017.400General.
I263017.405Causes for suspension.
I263017.410Procedures.
I263017.411Notice of suspension.
I263017.412Opportunity to contest suspension.
I263017.413Suspending official's decision.
I263017.415Period of suspension.
I263017.420Scope of suspension.

I86Subpart E_Responsibilities of GSA, Agency and Participants
I263017.500GSA responsibilities.
I263017.505USDA responsibilities.
I263017.510Participants' responsibilities.
I263017.515Appeal of debarment or suspension decisions.

I86Subpart F_Drug-Free Workplace Requirements (Grants) 
I263017.600Purpose. 
I263017.605Definitions. 
I263017.610Coverage. 
I263017.615Grounds for suspension of payments, suspension or termination of grants, or suspension or debarment. 
I263017.620Effect of violation. 
I263017.625Exception provision. 
I263017.630Certification requirements and procedures. 
I263017.635Reporting of and employee sanctions for convictions of criminal drug offenses. 
Q02I26T5T4Appendix A to PartG1T5 3017T4_Certification Regarding Debarment, Suspension, and Other Responsibility Matters_Primary Covered TransactionsG1T5
I26T5T4Appendix B to PartG1T5 3017T4_Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion_Lower Tier Covered TransactionsG1T5
I26T5T4Appendix C to PartG1T5 3017_T4Certification Regarding Drug-Free Workplace RequirementsG1T5 

Q04I21T5Authority:  T15 U.S.C. 301; 41 U.S.C. 701 T3et seq.G1T1; E.O. 12549, 51 FR 6370, 3 CFR, 1986 Comp., p. 189.
Q04I21T5Source:  T154 FR 4731, Jan. 30, 1989, unless otherwise noted.

Q04I21T5Cross Reference:  T1See also Office of Management and Budget notices published at 55 FR 21679, May 25, 1990, and 60 FR 33036, June 26, 1995.


I56Subpart A_General

I80�1A3017.100
I89Purpose.
I11(a) Executive Order (E.O.) 12549 provides that, to the extent permitted by law, Executive departments and agencies shall participate in a governmentwide system for nonprocurement debarment and suspension. A person who is debarred or suspended shall be excluded from Federal financial and nonfinancial assistance and benefits under Federal programs and activities. Debarment or suspension of a participant in a program by one agency shall have governmentwide effect. 
I11(b) These regulations implement section 3 of E.O. 12549 and the guidelines promulgated by the Office of Management and Budget under section 6 of the E.O. by:
I11(1) Prescribing the programs and activities that are covered by the governmentwide system; 
I11(2) Prescribing the governmentwide criteria and governmentwide minimum due process procedures that each agency shall use; 
I11(3) Providing for the listing of debarred and suspended participants, participants declared ineligible (see definition of ``ineligible'' in �1A3017.105), and participants who have voluntarily excluded themselves from participation in covered transactions; 
I11(4) Setting forth the consequences of a debarment, suspension, determination of ineligibility, or voluntary exclusion; and 
I11(5) Offering such other guidance as necessary for the effective implementation and administration of the governmentwide system. 
I11(c) These regulations also implement Executive Order 12689 (3 CFR, 1989 Comp., p. 235) and 31 U.S.C. 6101 note (Public Law 103�09355, sec. 2455, 108 Stat. 3327) by_
I11(1) Providing for the inclusion in the T3List of Parties Excluded from Federal Procurement and Nonprocurement ProgramsG1T1 all persons proposed for debarment, �135�debarred or suspended under the Federal Acquisition Regulation, 48 CFR Part 9, subpart 9.4; persons against which governmentwide exclusions have been entered under this part; and persons determined to be ineligible; and 
I11(2) Setting forth the consequences of a debarment, suspension, determination of ineligibility, or voluntary exclusion. 
I11(d) Although these regulations cover the listing of ineligible participants and the effect of such listing, they do not prescribe policies and procedures governing declarations of ineligibility.
Q04I20[60 FR 33040, 33043, June 26, 1995]



I80�1A3017.105
I89Definitions.

I11The following definitions apply to this part: 
I11T3Adequate evidence.G1T1 Information sufficient to support the reasonable belief that a particular act or omission has occurred.
I11T3Affiliate.G1T1 Persons are affiliates of each other if, directly or indirectly, either one controls or has the power to control the other, T3orG1T1, a third person controls or has the power to control both. Indicia of control include, but are not limited to: interlocking management or ownership, identity of interests among family members, shared facilities and equipment, common use of employees, or a business entity organized following the suspension or debarment of a person which has the same or similar management, ownership, or principal employees as the suspended, debarred, ineligible, or voluntarily excluded person. 
I11T3Agency.G1T1 Any executive department, military department or defense agency or other agency of the executive branch, excluding the independent regulatory agencies.
I11(1) A USDA agency, when used in the context of USDA internal procedures or requirements, is any organizational unit of the U.S. Department of Agriculture with authority delegated in 7 CFR part 2 to carry out primary covered transactions under USDA programs.
I11(2) [Reserved]
I11T3Appeals officer.G1T1 Any administrative law judge of the Office of Administrative Law Judges, Department of Agriculture.
I11T3Civil judgment.G1T1 The disposition of a civil action by any court of competent jurisdiction, whether entered by verdict, decision, settlement, stipulation, or otherwise creating a civil liability for the wrongful acts complained of; or a final determination of liability under the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801�0912). 
I11T3Conviction.G1T1 A judgment or conviction of a criminal offense by any court of competent jurisdiction, whether entered upon a verdict or a plea, including a plea of nolo contendere. 
I11T3Debarment.G1T1 An action taken by a debarring official in accordance with these regulations to exclude a person from participating in covered transactions. A person so excluded is ``debarred.'' 


I11T3Debarring official.G1T1 An official authorized to impose debarment. The debarring official is either: 

I11(1) The agency head, or 

I11(2) An official designated by the agency head. 

I11(i) In USDA, the authority to act as a debarring official is not delegated below the agency head, except that in the case of the Forest Service, the Chief may redelegate the authority to act as a debarring official to the Deputy Chief or an Associate Deputy Chief for the National Forest System.

I11(ii) [Reserved]

I11(3) In USDA, each Under Secretary, Assistant Secretary, or agency head who has been delegated authority in part 2 of this title to carry out a covered transaction is authorized to act as a debarring official in connection with such covered transaction.

I11T3Indictment.G1T1 Indictment for a criminal offense. An information or other filing by competent authority charging a criminal offense shall be given the same effect as an indictment. 
I11T3Ineligible.G1T1 Excluded from participation in Federal nonprocurement programs pursuant to a determination of ineligibility under statutory, executive order, or regulatory authority, other than Executive Order 12549 and its agency implementing regulations; for example, excluded pursuant to the Davis-Bacon Act and its implementing regulations, the equal employment opportunity acts and executive orders, or the environmental protection acts and �136�executive orders. A person is ineligible where the determination of ineligibility affects such person's eligibility to participate in more than one covered transaction. 
I11T3Legal proceedings.G1T1 Any criminal proceeding or any civil judicial proceeding to which the Federal Government or a State or local government or quasi-governmental authority is a party. The term includes appeals from such proceedings. 
I11T3List of Parties Excluded from Federal Procurement and Nonprocurement Programs.G1T1 A list compiled, maintained and distributed by the General Services Administration (GSA) containing the names and other information about persons who have been debarred, suspended, or voluntarily excluded under Executive Orders 12549 and 12689 and these regulations or 48 CFR part 9, subpart 9.4, persons who have been proposed for debarment under 48 CFR part 9, subpart 9.4, and those persons who have been determined to be ineligible. 
I11T3Notice.G1T1 A written communication served in person or sent by certified mail, return receipt requested, or its equivalent, to the last known address of a party, its identified counsel, its agent for service of process, or any partner, officer, director, owner, or joint venturer of the party. Notice, if undeliverable, shall be considered to have been received by the addressee five days after being properly sent to the last address known by the agency. 
I11T3Participant.G1T1 Any person who submits a proposal for, enters into, or reasonably may be expected to enter into a covered transaction. This term also includes any person who acts on behalf of or is authorized to commit a participant in a covered transaction as an agent or representative of another participant. 
I11T3Person.G1T1 Any individual, corporation, partnership, association, unit of government or legal entity, however organized, except: foreign governments or foreign governmental entities, public international organizations, foreign government owned (in whole or in part) or controlled entities, and entities consisting wholly or partially of foreign governments or foreign governmental entities. 
I11T3Preponderance of the evidence.G1T1 Proof by information that, compared with that opposing it, leads to the conclusion that the fact at issue is more probably true than not. 
I11T3Principal.G1T1 Officer, director, owner, partner, key employee, or other person within a participant with primary management or supervisory responsibilities; or a person who has a critical influence on or substantive control over a covered transaction, whether or not employed by the participant. Persons who have a critical influence on or substantive control over a covered transaction are: 
I11(1) Principal investigators. 
I11(2) [Reserved]
I11T3Proposal.G1T1 A solicited or unsolicited bid, application, request, invitation to consider or similar communication by or on behalf of a person seeking to participate or to receive a benefit, directly or indirectly, in or under a covered transaction. 
I11T3Respondent.G1T1 A person against whom a debarment or suspension action has been initiated. 
I11T3State.G1T1 Any of the States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any agency of a State, exclusive of institutions of higher education, hospitals, and units of local government. A State instrumentality will be considered part of the State government if it has a written determination from a State government that such State considers that instrumentality to be an agency of the State government. 

I11T3Suspending official.G1T1 An official authorized to impose suspension. The suspending official is either: 

I11(1) The agency head, or 

I11(2) An official designated by the agency head. 

I11(i) In USDA, the authority to act as a suspending official is not delegated below the agency head, except that in the case of the Forest Service, the Chief may redelegate the authority to act as a suspending official to the Deputy Chief or an Associate Deputy Chief for the National Forest System.

I11(ii) [Reserved]

I11(3) In USDA, each Under Secretary, Assistant Secretary, or agency head �137�who has been delegated authority in part 2 of this title to carry out a covered transaction is authorized to act as a suspending official in connection with such covered transaction.


I11T3Suspension.G1T1 An action taken by a suspending official in accordance with these regulations that immediately excludes a person from participating in covered transactions for a temporary period, pending completion of an investigation and such legal, debarment, or Program Fraud Civil Remedies Act proceedings as may ensue. A person so excluded is ``suspended.'' 
I11T3USDA.G1T1 U.S. Department of Agriculture.
I11T3Voluntary exclusion or voluntarily excluded.G1T1 A status of nonparticipation or limited participation in covered transactions assumed by a person pursuant to the terms of a settlement. 

Q04I20[54 FR 4731, Jan. 30, 1989, as amended at 60 FR 33040, 33043, June 26, 1995; 63 FR 27667, May 20, 1998]



I80�1A3017.110 
I89Coverage.
I11(a) These regulations apply to all persons who have participated, are currently participating or may reasonably be expected to participate in transactions under Federal nonprocurement programs. For purposes of these regulations such transactions will be referred to as ``covered transactions.'' 
I11(1) T3Covered transaction.G1T1 For purposes of these regulations, a covered transaction is a primary covered transaction or a lower tier covered transaction. Covered transactions at any tier need not involve the transfer of Federal funds. 
I11(i) T3Primary covered transaction.G1T1 Except as noted in paragraph (a)(2) of this section, a primary covered transaction is any nonprocurement transaction between an agency and a person, regardless of type, including: Grants, cooperative agreements, scholarships, fellowships, contracts of assistance, loans, loan guarantees, subsidies, insurance, payments for specified use, donation agreements and any other nonprocurement transactions between a Federal agency and a person. Primary covered transactions also include those transactions specially designated by the U.S. Department of Housing and Urban Development in such agency's regulations governing debarment and suspension. 
I11(ii) T3Lower tier covered transaction.G1T1 A lower tier covered transaction is: 
I11(A) Any transaction between a participant and a person other than a procurement contract for goods or services, regardless of type, under a primary covered transaction. 
I11(B) Any procurement contract for goods or services between a participant and a person, regardless of type, expected to equal or exceed the Federal procurement small purchase threshold fixed at 10 U.S.C. 2304(g) and 41 U.S.C. 253(g) (currently $25,000) under a primary covered transaction. 
I11(C) Any procurement contract for goods or services between a participant and a person under a covered transaction, regardless of amount, under which that person will have a critical influence on or substantive control over that covered transaction. Such persons are: 
I11(T31G1T1) Principal investigators. 
I11(T32G1T1) Providers of federally-required audit services. 
I11(2) T3Exceptions.G1T1 The following transactions are not covered: 
I11(i) Statutory entitlements or mandatory awards (but not subtier awards thereunder which are not themselves mandatory), including deposited funds insured by the Federal Government; 
I11(ii) Direct awards to foreign governments or public international organizations, or transactions with foreign governments or foreign governmental entities, public international organizations, foreign government owned (in whole or in part) or controlled entities, entities consisting wholly or partially of foreign governments or foreign governmental entities; 
I11(iii) Benefits to an individual as a personal entitlement without regard to the individual's present responsibility (but benefits received in an individual's business capacity are not excepted); 
I11(iv) Federal employment; 
I11(v) Transactions pursuant to national or agency-recognized emergencies or disasters; 
I11(vi) Incidental benefits derived from ordinary governmental operations; and 
I11(vii) Other transactions where the application of these regulations would be prohibited by law. 
�138�I11(3) T3Department of Agriculture covered transactions.G1T1 (i) With respect to paragraph (a)(1) of this section, for USDA's export and foreign assistance programs, covered transactions will include only primary covered transactions. Any lower tier transactions with respect to UDSA's export and foreign assistance programs will not be considered lower tier covered transactions for the purposes of this part. The export or substitution of Federal timber governed by the Forest Resources Conservation and Shortage Relief Act of 1990, 16 U.S.C. 620 T3et seq.G1T1 (the ``Export Act''), is specifically excluded from the coverage of this rule. The Export Act provides separate statutory authority to debar persons engaged in both primary covered transactions and lower tier transactions.
I11(ii) With respect to paragraph (a)(1)(ii)(B) of this section, for USDA's domestic food assistance programs, only the initial such procurement contract and the first tier subcontract under that procurement contract shall be considered lower tier covered transactions.
I11(iii) With respect to paragraph (a)(2) of this section, the following USDA transactions also are not covered: transactions under programs which provide statutory entitlements and make available loans to individuals and entities in their capacity as producers of agricultural commodities; transactions under conservation programs; transactions under warehouse licensing programs; the receipt of licenses, permits, certificates, and indemnification under regulatory programs conducted in the interest of public health and safety and animal and plant health and safety; the receipt of official grading and inspection services, animal damage control services, public health and safety inspection services, and animal and plant health and safety inspection services; if the person is a State or local government, the provision of official grading and inspection services, animal damage control services, public health and safety inspection services, animal and plant health and safety inspection services; and permits, licenses, exchanges and other acquisitions of real property, rights of way, and easements under natural resource management programs.
I11(b) T3Relationship to other sections.G1T1 This section describes the types of transactions to which a debarment or suspension under the regulations will apply. Subpart B, ``Effect of Action,'' �1A3017.200, ``Debarment or suspension,'' sets forth the consequences of a debarment or suspension. Those consequences would obtain only with respect to participants and principals in the covered transactions and activities described in �1A3017.110(a). Sections 3017.325, ``Scope of debarment,'' and 3017.420, ``Scope of suspension,'' govern the extent to which a specific participant or organizational elements of a participant would be automatically included within a debarment or suspension action, and the conditions under which affiliates or persons associated with a participant may also be brought within the scope of the action. 
I11(c) T3Relationship to Federal procurement activities.G1T1 In accordance with E.O. 12689 and section 2455 of Public Law 103�09355, any debarment, suspension, proposed debarment or other governmentwide exclusion initiated under the Federal Acquisition Regulation (FAR) on or after August 25, 1995 shall be recognized by and effective for Executive Branch agencies and participants as an exclusion under this regulation. Similarly, any debarment, suspension or other governmentwide exclusion initiated under this regulation on or after August 25, 1995 shall be recognized by and effective for those agencies as a debarment or suspension under the FAR.
Q04I20[54 FR 4731, Jan. 30, 1989, as amended at 60 FR 33041, 33043, June 26, 1995; 61 FR 250, Jan. 4, 1996]

I80�1A3017.115 
I89Policy. 
I11(a) In order to protect the public interest, it is the policy of the Federal Government to conduct business only with responsible persons. Debarment and suspension are discretionary actions that, taken in accordance with Executive Order 12549 and these regulations, are appropriate means to implement this policy. 
I11(b) Debarment and suspension are serious actions which shall be used only in the public interest and for the Federal Government's protection and not �139�for purposes of punishment. Agencies may impose debarment or suspension for the causes and in accordance with the procedures set forth in these regulations. 
I11(c) When more than one agency has an interest in the proposed debarment or suspension of a person, consideration shall be given to designating one agency as the lead agency for making the decision. Agencies are encouraged to establish methods and procedures for coordinating their debarment or suspension actions. 
I11(d) In any case in which an administrative exclusion is considered under an authority other than this part, USDA will initiate, where appropriate, a debarment or suspension action under this part for the protection of the entire Federal Government.
Q04I20[54 FR 4731, Jan. 30, 1989, as amended at 61 FR 251, Jan. 4, 1996]

I56Subpart B_Effect of Action

I80�1A3017.200
I89Debarment or suspension.
I11(a) T3Primary covered transactions.G1T1 Except to the extent prohibited by law, persons who are debarred or suspended shall be excluded from primary covered transactions as either participants or principals throughout the Executive Branch of the Federal Government for the period of their debarment, suspension, or the period they are proposed for debarment under 48 CFR part 9, subpart 9.4. Accordingly, no agency shall enter into primary covered transactions with such excluded persons during such period, except as permitted pursuant to �1A3017.215. 
I11(b) T3Lower tier covered transactions.G1T1 Except to the extent prohibited by law, persons who have been proposed for debarment under 48 CFR part 9, subpart 9.4, debarred or suspended shall be excluded from participating as either participants or principals in all lower tier covered transactions (see �1A3017.110(a)(1)(ii)) for the period of their exclusion. 
I11(c) T3Exceptions.G1T1 Debarment or suspension does not affect a person's eligibility for_
I11(1) Statutory entitlements or mandatory awards (but not subtier awards thereunder which are not themselves mandatory), including deposited funds insured by the Federal Government; 
I11(2) Direct awards to foreign governments or public international organizations, or transactions with foreign governments or foreign governmental entities, public international organizations, foreign government owned (in whole or in part) or controlled entities, and entities consisting wholly or partially of foreign governments or foreign governmental entities; 
I11(3) Benefits to an individual as a personal entitlement without regard to the individual's present responsibility (but benefits received in an individual's business capacity are not excepted); 
I11(4) Federal employment; 
I11(5) Transactions pursuant to national or agency-recognized emergencies or disasters; 
I11(6) Incidental benefits derived from ordinary governmental operations; and 
I11(7) Other transactions where the application of these regulations would be prohibited by law. 
I11(d) T3Department of Agriculture excepted transactions.G1T1 With respect to paragraph (c) of this section, the following USDA transactions also are excepted: transactions under programs which provide statutory entitlements and make available loans to individuals and entities in their capacity as producers of agricultural commodities; transations under conservation programs; transactions under warehouse licensing programs; the receipt of licenses, permits, certificates, and indemnification under regulatory programs conducted in the interest of public health and safety and animal and plant health and safety; the receipt of official grading and inspection services, animal damage control services, public health and safety inspection services, and animal and plant health and safety inspection services; if the person is a State or local government, the provision of official grading and inspection services, animal damage control services, public health and safety inspection services, and animal and plant health and safety inspection services; and permits, licenses, exchanges, and other acquisitions of real property, rights of way, and easements �140�under natural resource management programs.
Q04I20[60 FR 33041, 33043, June 26, 1995, as amended at 61 FR 251, Jan. 4, 1996]

I80�1A3017.205
I89Ineligible persons.
I11Persons who are ineligible, as defined in �1A3017.105(i), are excluded in accordance with the applicable statutory, executive order, or regulatory authority.

I80�1A3017.210
I89Voluntary exclusion.
I11Persons who accept voluntary exclusions under �1A3017.315 are excluded in accordance with the terms of their settlements. USDA shall, and participants may, contact the original action agency to ascertain the extent of the exclusion.

I80�1A3017.215
I89Exception provision.
I11USDA may grant an exception permitting a debarred, suspended, or voluntarily excluded person, or a person proposed for debarment under 48 CFR part 9, subpart 9.4, to participate in a particular covered transaction upon a written determination by the agency head or an authorized designee stating the reason(s) for deviating from the Presidential policy established by Executive Order 12549 and �1A3017.200. However, in accordance with the President's stated intention in the Executive Order, exceptions shall be granted only infrequently. Exceptions shall be reported in accordance with �1A3017.505(a). 
Q04I20[60 FR 33041, 33043, June 26, 1995]

I80�1A3017.220
I89Continuation of covered transactions.
I11(a) Notwithstanding the debarment, suspension, proposed debarment under 48 CFR part 9, subpart 9.4, determination of ineligibility, or voluntary exclusion of any person by an agency, agencies and participants may continue covered transactions in existence at the time the person was debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, declared ineligible, or voluntarily excluded. A decision as to the type of termination action, if any, to be taken should be made only after thorough review to ensure the propriety of the proposed action. 
I11(b) Agencies and participants shall not renew or extend covered transactions (other than no-cost time extensions) with any person who is debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, ineligible or voluntary excluded, except as provided in �1A3017.215. 
Q04I20[60 FR 33041, 33043, June 26, 1995]

I80�1A3017.225
I89Failure to adhere to restrictions.
I11(a) Except as permitted under �1A3017.215 or �1A3017.220, a participant shall not knowingly do business under a covered transaction with a person who is_
I11(1) Debarred or suspended; 
I11(2) Proposed for debarment under 48 CFR part 9, subpart 9.4; or 
I11(3) Ineligible for or voluntarily excluded from the covered transaction. 
I11(b) Violation of the restriction under paragraph (a) of this section may result in disallowance of costs, annulment or termination of award, issuance of a stop work order, debarment or suspension, or other remedies as appropriate. 
I11(c) A participant may rely upon the certification of a prospective participant in a lower tier covered transaction that it and its principals are not debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, ineligible, or voluntarily excluded from the covered transaction (See appendix B of these regulations), unless it knows that the certification is erroneous. An agency has the burden of proof that a participant did knowingly do business with a person that filed an erroneous certification. 
Q04I20[60 FR 33041, 33043, June 26, 1995]

I56Subpart C_Debarment

I80�1A3017.300
I89General.
I11The debarring official may debar a person for any of the causes in �1A3017.305, using procedures established in �1A3017.310 through �1A3017.314. The existence of a cause for debarment, however, does not necessarily require that the person be debarred; the seriousness of the person's acts or omissions and �141�any mitigating factors shall be considered in making any debarment decision.

I80�1A3017.305
I89Causes for debarment.
I11Debarment may be imposed in accordance with the provisions of �1A3017.300 through �1A3017.314 for:
I11(a) Conviction of or civil judgment for:
I11(1) Commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public or private agreement or transaction;
I11(2) Violation of Federal or State antitrust statutes, including those proscribing price fixing between competitors, allocation of customers between competitors, and bid rigging;
I11(3) Commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property, making false claims, or obstruction of justice; or
I11(4) Commission of any other offense indicating a lack of business integrity or business honesty that seriously and directly affects the present responsibility of a person.
I11(b) Violation of the terms of a public agreement or transaction so serious as to affect the integrity of an agency program, such as:
I11(1) A willful failure to perform in accordance with the terms of one or more public agreements or transactions;
I11(2) A history of failure to perform or of unsatisfactory performance of one or more public agreements or transactions; or
I11(3) A willful violation of a statutory or regulatory provision or requirement applicable to a public agreement or transaction.
I11(c) Any of the following causes: 
I11(1) A nonprocurement debarment by any Federal agency taken before March 1, 1989, the effective date of these regulations or a procurement debarment by any Federal agency taken pursuant to 48 CFR Subpart 9.4; 
I11(2) Knowingly doing business with a debarred, suspended, ineligible, or voluntarily excluded person, in connection with a covered transaction, except as permitted in �1A3017.215 or �1A3017.220;
I11(3) Failure to pay a single substantial debt, or a number of outstanding debts (including disallowed costs and overpayments, but not including sums owed the Federal Government under the Internal Revenue Code) owed to any Federal agency or instrumentality, provided the debt is uncontested by the debtor or, if contested, provided that the debtor's legal and administrative remedies have been exhausted; 
I11(4) Violation of a material provision of a voluntary exclusion agreement entered into under �1A3017.315 or of any settlement of a debarment or suspension action; or 
I11(5) Violation of any requirement of Subpart F of this part, relating to providing a drug-free workplace, as set forth in �1A3017.615 of this part.
I11(d) Any other cause of so serious or compelling a nature that it affects the present responsibility of a person.
Q04I20[54 FR 4731, Jan. 30, 1989, as amended at 54 FR 4952, Jan. 31, 1989]

I80�1A3017.310
I89Procedures. 
I11USDA shall process debarment actions as informally as practicable, consistent with the principles of fundamental fairness, using the procedures in �1A3017.311 through 3017.314. 

I80�1A3017.311
I89Investigation and referral.
I11Information concerning the existence of a cause for debarment from any source shall be promptly reported, investigated, and referred, when appropriate, to the debarring official for consideration. After consideration, the debarring official may issue a notice of proposed debarment.
I11(a) The decision to utilize agency personnel, the Office of Inspector General (OIG), or other appropriate resources to conduct the investigation and develop the documentation required by paragraph (b) of this section is the responsibility of the agency possessing the information.
I11(b) Basic documentation shall be developed that includes but is not limited to:
I11(1) The name of the specific respondent(s) against whom the action is being proposed or taken;
I11(2) The reason(s) for proposing the debarment;
�142�I11(3) The specific cause(s) for debarment from �1A3017.305;
I11(4) A short narrative stating the facts and/or describing other evidence supporting the reason(s) for the need to debar;
I11(5) The recommended time period for the debarment;
I11(6) The potential effect and/or consequences that the debarment will have on the respondent(s);
I11(7) Copies of any relevant support documentation identified under this section.
I11(c) The debarring official shall be responsible for deciding whether or not to proceed with the action.
I11(d) The Office of the General Counsel (OGC) is responsible for:
I11(1) Reviewing the documentation and notices for legal sufficiency, and
I11(2) Providing any necessary coordination with the Department of Justice (DOJ).
Q04I20[54 FR 4722 and 4731, Jan. 30, 1989, as amended at 54 FR 4732, Jan. 30, 1989]

I80�1A3017.312
I89Notice of proposed debarment.
I11A debarment proceeding shall be initiated by notice to the respondent advising:
I11(a) That debarment is being considered; 
I11(1) Information on the specific debarment action proposed must be given.
I11(b) Of the reasons for the proposed debarment in terms sufficient to put the respondent on notice of the conduct or transaction(s) upon which it is based; 
I11(c) Of the cause(s) relied upon under �1A3017.305 for proposing debarment; 
I11(d) Of the provisions of �1A3017.311 through 3017.314, and any other USDA procedures, if applicable, governing debarment decisionmaking; and 
I11(e) Of the potential effect of a debarment.
Q02I10In USDA, the notice to the respondent shall be signed by the debarring official and transmitted by certified mail, return receipt requested. OGC will be consulted on all proposed debarment actions prior to the notice being sent to the respondent.
Q04I20[54 FR 4722 and 4731, Jan. 30, 1989, as amended at 54 FR 4732, Jan. 30, 1989]

I80�1A3017.313
I89Opportunity to contest proposed debarment.
I11(a) T3Submission in opposition.G1T1 Within 30 days after receipt of the notice of proposed debarment, the respondent may submit, in person, in writing, or through a representative, information and argument in opposition to the proposed debarment. 
I11(b) T3Additional proceedings as to disputed material facts.G1T1 (1) In actions not based upon a conviction or civil judgment, if the debarring official finds that the respondent's submission in opposition raises a genuine dispute over facts material to the proposed debarment, respondent(s) shall be afforded an opportunity to appear with a representative, submit documentary evidence, present witnesses, and confront any witness the agency presents. 
I11(2) A transcribed record of any additional proceedings shall be made available at cost to the respondent, upon request, unless the respondent and the agency, by mutual agreement, waive the requirement for a transcript.

I80�1A3017.314
I89Debarring official's decision.
I11(a) T3No additional proceedings necessary.G1T1 In actions based upon a conviction or civil judgment, or in which there is no genuine dispute over material facts, the debarring official shall make a decision on the basis of all the information in the administrative record, including any submission made by the respondent. The decision shall be made within 45 days after receipt of any information and argument submitted by the respondent, unless the debarring official extends this period for good cause.
I11(1) In USDA debarment actions where respondent(s) fail(s) to timely provide any submission in opposition, the action will be considered decided.
I11(b) T3Additional proceedings necessary.G1T1 (1) In actions in which additional proceedings are necessary to determine disputed material facts, written findings of fact shall be prepared. The debarring official shall base the decision on the facts as found, together with any information and argument submitted by the respondent and any other information in the administrative record. 
�143�I11(2) The debarring official may refer disputed material facts to another official for findings of fact. The debarring official may reject any such findings, in whole or in part, only after specifically determining them to be arbitrary and capricious or clearly erroneous. 
I11(3) The debarring official's decision shall be made after the conclusion of the proceedings with respect to disputed facts. 
I11(c)(1) T3Standard of proof.G1T1 In any debarment action, the cause for debarment must be established by a preponderance of the evidence. Where the proposed debarment is based upon a conviction or civil judgment, the standard shall be deemed to have been met. 
I11(2) T3Burden of proof.G1T1 The burden of proof is on the agency proposing debarment. 
I11(d) T3Notice of debarring official's decision.G1T1 (1) If the debarring official decides to impose debarment, the respondent shall be given prompt notice: 
I11(i) Referring to the notice of proposed debarment; 
I11(ii) Specifying the reasons for debarment; 
I11(iii) Stating the period of debarment, including effective dates; and 
I11(iv) Advising that the debarment is effective for covered transactions throughout the executive branch of the Federal Government unless an agency head or an authorized designee makes the determination referred to in �1A3017.215. 
I11(2) If the debarring official decides not to impose debarment, the respondent shall be given prompt notice of that decision. A decision not to impose debarment shall be without prejudice to a subsequent imposition of debarment by any other agency.
I11(3) In USDA, the notice to the respondent shall be in writing, signed by the debarring official, and transmitted by certified mail, return receipt requested. The OGC will be consulted on all debarment actions prior to the notice being sent to the respondent.
Q04I20[54 FR 4722 and 4731, Jan. 30, 1989, as amended at 54 FR 4732, Jan. 30, 1989]

I80�1A3017.315
I89Settlement and voluntary exclusion. 
I11(a) When in the best interest of the Government, USDA may, at any time, settle a debarment or suspension action. 
I11(b) If a participant and the agency agree to a voluntary exclusion of the participant, such voluntary exclusion shall be entered on the Nonprocurement List (see Subpart E).

I80�1A3017.320 
I89Period of debarment. 
I11(a) Debarment shall be for a period commensurate with the seriousness of the cause(s). If a suspension precedes a debarment, the suspension period shall be considered in determining the debarment period. 
I11(1) Debarment for causes other than those related to a violation of the requirements of Subpart F of this part generally should not exceed three years. Where circumstances warrant, a longer period of debarment may be imposed. 
I11(2) In the case of a debarment for a violation of the requirements of Subpart F of this part (T3seeG1T1 3017.305(c)(5)), the period of debarment shall not exceed five years.
I11(b) The debarring official may extend an existing debarment for an additional period, if that official determines that an extension is necessary to protect the public interest. 
Q02I10However, a debarment may not be extended solely on the basis of the facts and circumstances upon which the initial debarment action was based. If debarment for an additional period is determined to be necessary, the procedures of �1A3017.311 through 3017.314 shall be followed to extend the debarment.
I11(c) The respondent may request the debarring official to reverse the debarment decision or to reduce the period or scope of debarment. Such a request shall be in writing and supported by documentation. The debarring official may grant such a request for reasons including, but not limited to: 
I11(1) Newly discovered material evidence; 
I11(2) Reversal of the conviction or civil judgment upon which the debarment was based; 
I11(3) Bona fide change in ownership or management; 
I11(4) Elimination or other causes for which the debarment was imposed; or 
�144�I11(5) Other reasons the debarring official deems appropriate.
Q04I20[54 FR 4731, Jan. 30, 1989, as amended at 54 FR 4952, Jan. 31, 1989]

I80�1A3017.325
I89Scope of debarment. 
I11(a) T3Scope in general.G1T1 (1) Debarment of a person under these regulations constitutes debarment of all its divisions and other organizational elements from all covered transactions, unless the debarment decision is limited by its terms to one or more specifically identified individuals, divisions or other organizational elements or to specific types of transactions. 
I11(2) The debarment action may include any affiliate of the participant that is specifically named and given notice of the proposed debarment and an opportunity to respond (see �1A3017.311 through 3017.314). 
I11(b) T3Imputing conduct.G1T1 For purposes of determining the scope of debarment, conduct may be imputed as follows: 
I11(1) T3Conduct imputed to participant.G1T1 The fraudulent, criminal or other seriously improper conduct of any officer, director, shareholder, partner, employee, or other individual associated with a participant may be imputed to the participant when the conduct occurred in connection with the individual's performance of duties for or on behalf of the participant, or with the participant's knowledge, approval, or acquiescence. The participant's acceptance of the benefits derived from the conduct shall be evidence of such knowledge, approval, or acquiescence.
I11(2) T3Conduct imputed to individuals associated with participant.G1T1 The fraudulent, criminal, or other seriously improper conduct of a participant may be imputed to any officer, director, shareholder, partner, employee, or other individual associated with the participant who participated in, knew of, or had reason to know of the participant's conduct. 
I11(3) T3Conduct of one participant imputed to other participants in a joint venture.G1T1 The fraudulent, criminal, or other seriously improper conduct of one participant in a joint venture, grant pursuant to a joint application, or similar arrangement or with the knowledge, approval, or acquiescence of these participants. Acceptance of the benefits derived from the conduct shall be evidence of such knowledge, approval, or acquiescence.

I56Subpart D_Suspension

I80�1A3017.400
I89General.
I11(a) The suspending official may suspend a person from any of the causes in �1A3017.405 using procedures established in �1A3017.410 through 3017.413. 
I11(b) Suspension is a serious action to be imposed only when:
I11(1) There exists adequate evidence of one or more of the causes set out in �1A3017.405, and 
I11(2) Immediate action is necessary to protect the public interest. 
I11(c) In assessing the adequacy of the evidence, the agency should consider how much information is available, how credible it is given the circumstances, whether or not important allegations are corroborated, and what inferences can reasonably be drawn as a result. This assessment should include an examination of basic documents such as grants, cooperative agreements, loan authorizations, and contracts. 

I80�1A3017.405
I89Causes for suspension.
I11(a) Suspension may be imposed in accordance�1Awith the provisions of �1A3017.400 through 3017.413 upon adequate evidence: 
I11(1) To suspect the commission of an offense listed in �1A3017.305(a); or 
I11(2) That a cause for debarment under �1A3017.305 may exist. 
I11(b) Indictment shall constitute adequate evidence for purposes of suspension actions. 

I80�1A3017.410
I89Procedures.
I11(a) T3Investigation and referral.G1T1 Information concerning the existence of a cause for suspension from any source shall be promptly reported, investigated, and referred, when appropriate, to the suspending official for consideration. After consideration, the suspending official may issue a notice of suspension. 
I11(1) The decision to utilize agency personnel, OIG or other appropriate resources to conduct the investigation �145�and develop the documentation required by paragraph (a)(2) of this section is the responsibility of the agency possessing the information. 
I11(2) Basic documentation shall be developed that includes but is not limited to: 
I11(i) The name of the specific respondent(s) against whom the suspension is to be taken; 
I11(ii) The reason(s) for proposing the suspension;
I11(iii) The specific cause(s) for suspension from �1A3017.405; 
I11(iv) A short narrative stating the facts and/or describing other evidence supporting the reason(s) for the suspension; 
I11(v) The recommended time period for the suspension; 
I11(vi) The potential effect and/or consequences that the suspension will have on the respondent(s); 
I11(vii) Copies of any relevant support documentation identified under this section.
I11(3) The suspending official shall be responsible for deciding whether or not to proceed with the suspension.
I11(4) OGC is responsible for:
I11(i) Reviewing the documentation and notice for legal sufficiency, and 
I11(ii) Providing any necessary coordination with DOJ.
I11(b) T3Decisionmaking process.G1T1 USDA shall process suspension actions as informally as practicable, consistent with principles of fundamental fairness, using the procedures in �1A3017.411 through �1A3017.413.
Q04I20[54 FR 4722 and 4731, Jan. 30, 1989, as amended at 54 FR 4732, Jan. 30, 1989]

I80�1A3017.411
I89Notice of suspension. 
I11When a respondent is suspended, notice shall immediately be given:
I11(a) That suspension has been imposed; 
I11(b) That the suspension is based on an indictment, conviction, or other adequate evidence that the respondent has committed irregularities seriously reflecting on the propriety of further Federal Government dealings with the respondent;
I11(c) Describing any such irregularities in terms sufficient to put the respondent on notice without disclosing the Federal Government's evidence; 
I11(d) Of the cause(s) relied upon under �1A3017.405 for imposing suspension;
I11(e) That the suspension is for a temporary period pending the completion of an investigation or ensuing legal, debarment, or Program Fraud Civil Remedies Act proceedings; 
I11(f) Of the provisions of �1A3017.411 through �1A3017.413 and any other USDA procedures, if applicable, governing suspension decisionmaking; and 
I11(g) Of the effect of the suspension.
Q02I10In USDA, the notice to the respondent shall be signed by the suspending official and transmitted by certified mail, return receipt requested. OGC will be consulted on all proposed suspension actions prior to the notice being sent to the respondent.
Q04I20[54 FR 4722 and 4731, Jan. 30, 1989, as amended at 54 FR 4732, Jan. 30, 1989]

I80�1A3017.412
I89Opportunity to contest suspension. 
I11(a) T3Submission in opposition.G1T1 Within 30 days after receipt of the notice of suspension, the respondent may submit, in person, in writing, or through a representative, information and argument in opposition to the suspension. 
I11(b) T3Additional proceedings as to disputed material facts.G1T1 (1) If the suspending official finds that the respondent's submission in opposition raises a genuine dispute over facts material to the suspension, respondent(s) shall be afforded an opportunity to appear with a representative, submit documentary evidence, present witnesses, and confront any witness the agency presents, unless: 
I11(i) The action is based on an indictment, conviction or civil judgment, or 
I11(ii) A determination is made, on the basis of Department of Justice advice, that the substantial interests of the Federal Government in pending or contemplated legal proceedings based on the same facts as the suspension would be prejudiced. 
I11(A) In USDA, such determination shall be made by the suspending official, after coordination with OGC.
I11(B) In USDA, the suspending official shall continue the suspension only if he/she determines, after consultation with OGC, that there is enough evidence to proceed without using the �146�facts that DOJ has advised would prejudice the contemplated legal proceedings. If there is not such evidence, the suspension shall be terminated immediately without prejudice.
I11(2) A transcribed record of any additional proceedings shall be prepared and made available at cost to the respondent, upon request, unless the respondent and the agency, by mutual agreement, waive the requirement for a transcript.
Q04I20[54 FR 4722 and 4731, Jan. 30, 1989, as amended at 54 FR 4732, Jan. 30, 1989]

I80�1A3017.413
I89Suspending official's decision.
I11The suspending official may modify or terminate the suspension (for example, see �1A3017.320(c) for reasons for reducing the period or scope of debarment) or may leave it in force. However, a decision to modify or terminate the suspension shall be without prejudice to the subsequent imposition of suspension by any other agency or debarment by any agency. The decision shall be rendered in accordance with the following provisions:
I11(a) T3No additional proceedings necessary.G1T1 In actions: based on an indictment, conviction, or civil judgment; in which there is no genuine dispute over material facts; or in which additional proceedings to determine disputed material facts have been denied on the basis of Department of Justice advice, the suspending official shall make a decision on the basis of all the information in the administrative record, including any submission made by the respondent. The decision shall be made within 45 days after receipt of any information and argument submitted by the respondent, unless the suspending official extends this period for good cause.
I11(1) In USDA, the suspending official shall terminate the suspension immediately when additional proceedings to determine disputed facts have been denied on the basis of DOJ advice. The agency, however, reserves the right to proceed with the suspension when DOJ completes its legal proceedings or is satisfied that the suspension no longer will prejudice DOJ's proceedings.
I11(2) In USDA suspension actions, where the respondent(s) fail(s) to timely provide any submission in opposition, the action will be considered decided.
I11(b) T3Additional proceedings necessary.G1T1 (1) In actions in which additional proceedings are necessary to determine disputed material facts, written findings of fact shall be prepared. The suspending official shall base the decision on the facts as found, together with any information and argument submitted by the respondent and any other information in the administrative record. 
I11(2) The suspending official may refer matters involving disputed material facts to another official for findings of fact. The suspending official may reject any such findings, in whole or in part, only after specificially determining them to be arbitrary or capricious or clearly erroneous. 
I11(c) T3Notice of suspending official's decision.G1T1 Prompt written notice of the suspending official's decision shall be sent to the respondent.
I11(1) In USDA, the notice to the respondent shall be signed by the suspending official and transmitted by certified mail, return receipt requested. OGC will be consulted on all proposed suspension actions prior to the notice being sent to the respondent. The notice shall include the following:
I11(i) Reference to the previously issued notice of suspension;
I11(ii) The reason(s) for the action taken in this notice. 
I11(iii) The effective date(s) of the suspension taken in this notice and, where appropriate, the period of the suspension; 
I11(iv) Advice that the suspension is effective for covered transactions throughout the executive branch of the Federal Government unless an agency head or a designee authorized by an agency head makes a determination referred to in �1A3017.215.

I11(b) [Reserved]


Q04I20[54 FR 4722 and 4731, Jan. 30, 1989, as amended at 54 FR 4732, Jan. 30, 1989]

I80�1A3017.415
I89Period of suspension. 
I11(a) Suspension shall be for a temporary period pending the completion of an investigation or ensuring legal, debarment, or Program Fraud Civil �147�Remedies Act proceedings, unless terminated sooner by the suspending official or as provided in paragraph (b) of this section. 
I11(b) If legal or administrative proceedings are not initiated within 12 months after the date of the suspension notice, the suspension shall be terminated unless an Assistant Attorney General or United States Attorney requests its extension in writing, in which case it may be extended for an additional six months. In no event may a suspension extend beyond 18 months, unless such proceedings have been initiated within that period.
I11(c) The suspending official shall notify the Department of Justice of an impending termination of a suspension, at least 30 days before the 12-month period expires, to give that Department an opportunity to request an extension.
I11(1) The suspending official shall notify OGC which will notify DOJ of the impending termination of a suspension.

I11(2) [Reserved]

Q04I20[54 FR 4722 and 4731, Jan. 30, 1989, as amended at 54 FR 4733, Jan. 30, 1989]

I80�1A3017.420
I89Scope of suspension.
I11The scope of a suspension is the same as the scope of a debarment (see �1A3017.325), except that the procedures of �1A3017.410 through 3017.413 shall be used in imposing a suspension. 

I56Subpart E_Responsibilities of GSA, Agency and Participants

I80�1A3017.500
I89GSA responsibilities.
I11(a) In accordance with the OMB guidelines, GSA shall compile, maintain, and distribute a list of all persons who have been debarred, suspended, or voluntarily excluded by agencies under Executive Order 12549 and these regulations, and those who have been determined to be ineligible.
I11(b) At a minimum, this list shall indicate:
I11(1) The names and addresses of all debarred, suspended, ineligible, and voluntarily excluded persons, in alphabetical order, with cross-references when more than one name is involved in a single action;
I11(2) The type of action;
I11(3) The cause for the action;
I11(4) The scope of the action;
I11(5) Any termination date for each listing; and 
I11(6) The agency and name and telephone number of the agency point of contact for the action.

I80�1A3017.505
I89USDA responsibilities.
I11(a) The agency shall provide GSA with current information concerning debarments, suspensions, determinations of ineligibility, and voluntary exclusions it has taken. Until February 18, 1989, the agency shall also provide GSA and OMB with information concerning all transactions in which USDA has granted exceptions under �1A3017.215 permitting participation by debarred, suspended, or voluntarily excluded persons.
I11(b) Unless an alternative schedule is agreed to by GSA, the agency shall advise GSA of the information set forth in �1A3017.500(b) and of the exceptions granted under �1A3017.215 within five working days after taking such actions.
I11(1) Each communication with GSA regarding additions, deletions, or changes to the Nonprocurement List shall be in writing.

I11(2) [Reserved]

I11(c) The agency shall direct inquiries concerning listed persons to the agency that took the action.
I11(d) Agency officials shall check the Nonprocurement List before entering covered transactions to determine whether a participant in a primary transaction is debarred, suspended, ineligible, or voluntarily excluded (Tel. �1B).
I11(e) Agency officials shall check the Nonprocurement List before approving principals or lower tier participants where agency approval of the principal or lower tier participant is required under the terms of the transaction, to determine whether such principals or participants are debarred, suspended, ineligible, or voluntarily excluded.
I11(f) USDA agencies shall provide the Office of Finance and Management (OFM) with a copy of any information provided to GSA pursuant to this section. 
I11(g) USDA agencies shall notify GSA and OFM, in writing, of debarment or �148�suspension decisions overturned on appeal under �1A3017.515.
Q04I20[54 FR 4722 and 4731, Jan. 30, 1989, as amended at 54 FR 4733, Jan. 30, 1989]

I80�1A3017.510
I89Participants' responsibilities.
I11(a) T3Certification by participants in primary covered transactions.G1T1 Each participant shall submit the certification in Appendix A to this Part for it and its principals at the time the participant submits its proposal in connection with a primary covered transaction, except that States need only complete such certification as to their principals. Participants may decide the method and frequency by which they determine the eligibility of their principals. In addition, each participant may, but is not required to, check the Nonprocurement List for its principals (Tel. �1B). Adverse information on the certification will not necessarily result in denial of participation. However, the certification, and any additional information pertaining to the certification submitted by the participant, shall be considered in the administration of covered transactions.
I11(b) T3Certification by participants in lower tier covered transactions.G1T1 (1) Each participant shall require participants in lower tier covered transactions to include the certification in Appendix B to this part for it and its principals in any proposal submitted in connection with such lower tier covered transactions.
I11(2) A participant may rely upon the certification of a prospective participant in a lower tier covered transaction that it and its principals are not debarred, suspended, ineligible, or voluntarily excluded from the covered transaction by any Federal agency, unless it knows that the certification is erroneous. Participants may decide the method and frequency by which they determine the eligibility of their principals. In addition, a participant may, but is not required to, check the Nonprocurement List for its principals and for participants (Tel. �1B).
I11(c) T3Changed circumstances regarding certification.G1T1 A participant shall provide immediate written notice to USDA if at any time the participant learns that its certification was erroneous when submitted or has become erroneous by reason of changed circumstances. Participants in lower tier covered transactions shall provide the same updated notice to the participant to which it submitted its proposal.

I80�1A3017.515
I89Appeal of debarment or suspension decisions.
I11(a) If a decision to debar or suspend is made by a debarring or suspending official under �1A3017.314 or �1A3017.413, the respondent may appeal the decision to the Office of Administrative Law Judges (OALJ) by filing the appeal, in writing, to the Hearing Clerk, OALJ, United States Department of Agriculture, Washington, DC 20250. The appeal must be filed within 30 days of receiving the decision and it must specify the basis of the appeal. The decision of a debarring or suspending official under �1A3017.314 or �1A3017.413 may be vacated by the assigned appeals officer if the officer determines that the decision is: 
I11(1) Not in accordance with law; 
I11(2) Not based on the applicable standard of evidence; or 
I11(3) Arbitrary and capricious and an abuse of discretion. 
I11(b) The appeals officer will base his/her decision solely upon the administrative record. 
I11(c) Within 90 days of the date the appeal is filed with USDA's OALJ Hearing Clerk, the appeals officer will notify, in writing, the respondent(s) and the debarring or suspending official, who took the action being appealed, of his/her decision in the appeal. The notice must specify the reason(s) for the decision made by the appeals officer.
I11(d) The appeals officer's decision is final and is not appealable within USDA.
Q04I20[54 FR 4733, Jan. 30, 1989]

I56Subpart F_Drug-Free Workplace Requirements (Grants)
Q04I21T5Source:  T155 FR 21688, 21691, May 25, 1990, unless otherwise noted.

I80�1A3017.600
I89Purpose. 
I11(a) The purpose of this subpart is to carry out the Drug-Free Workplace Act of 1988 by requiring that_
�149�I11(1) A grantee, other than an individual, shall certify to the agency that it will provide a drug-free workplace; 
I11(2) A grantee who is an individual shall certify to the agency that, as a condition of the grant, he or she will not engage in the unlawful manufacture, distribution, dispensing, possession or use of a controlled substance in conducting any activity with the grant. 
I11(b) Requirements implementing the Drug-Free Workplace Act of 1988 for contractors with the agency are found at 48 CFR subparts 9.4, 23.5, and 52.2. 

I80�1A3017.605 
I89Definitions. 
I11(a) Except as amended in this section, the definitions of �1A3017.105 apply to this subpart.
I11(b) For purposes of this subpart_
I11(1) T3Controlled substanceG1T1 means a controlled substance in schedules I through V of the Controlled Substances Act (21 U.S.C. 812), and as further defined by regulation at 21 CFR 1308.11 through 1308.15; 
I11(2) T3ConvictionG1T1 means a finding of guilt (including a plea of nolo contendere) or imposition of sentence, or both, by any judicial body charged with the responsibility to determine violations of the Federal or State criminal drug statutes; 
I11(3) T3Criminal drug statuteG1T1 means a Federal or non-Federal criminal statute involving the manufacture, distribution, dispensing, use, or possession of any controlled substance; 
I11(4) T3Drug-free workplaceG1T1 means a site for the performance of work done in connection with a specific grant at which employees of the grantee are prohibited from engaging in the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance; 
I11(5) T3EmployeeG1T1 means the employee of a grantee directly engaged in the performance of work under the grant, including: 
I11(i) All T3direct chargeG1T1 employees; 
I11(ii) All T3indirect chargeG1T1 employees, unless their impact or involvement is insignificant to the performance of the grant; and, 
I11(iii) Temporary personnel and consultants who are directly engaged in the performance of work under the grant and who are on the grantee's payroll. 
Q02I10This definition does not include workers not on the payroll of the grantee (e.g., volunteers, even if used to meet a matching requirement; consultants or independent contractors not on the payroll; or employees of subrecipients or subcontractors in covered workplaces); 
I11(6) T3Federal agencyG1T1 or T3agencyG1T1 means any United States executive department, military department, government corporation, government controlled corporation, any other establishment in the executive branch (including the Executive Office of the President), or any independent regulatory agency; 
I11(7) T3GrantG1T1 means an award of financial assistance, including a cooperative agreement, in the form of money, or property in lieu of money, by a Federal agency directly to a grantee. The term grant includes block grant and entitlement grant programs, whether or not exempted from coverage under the grants management government-wide common rule on uniform administrative requirements for grants and cooperative agreements. The term does not include technical assistance that provides services instead of money, or other assistance in the form of loans, loan guarantees, interest subsidies, insurance, or direct appropriations; or any veterans' benefits to individuals, i.e., any benefit to veterans, their families, or survivors by virtue of the service of a veteran in the Armed Forces of the United States; 
I11(8) T3GranteeG1T1 means a person who applies for or receives a grant directly from a Federal agency (except another Federal agency); 
I11(9) T3IndividualG1T1 means a natural person; 
I11(10) T3StateG1T1 means any of the States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any agency of a State, exclusive of institutions of higher education, hospitals, and units of local government. A State instrumentality will be considered part of the State government if it has a written �150�determination from a State government that such State considers the instrumentality to be an agency of the State government. 

I80�1A3017.610
I89Coverage. 
I11(a) This subpart applies to any grantee of the agency. 
I11(b) This subpart applies to any grant, except where application of this subpart would be inconsistent with the international obligations of the United States or the laws or regulations of a foreign government. A determination of such inconsistency may be made only by the agency head or his/her designee. 
I11(c) The provisions of subparts A, B, C, D and E of this part apply to matters covered by this subpart, except where specifically modified by this subpart. In the event of any conflict between provisions of this subpart and other provisions of this part, the provisions of this subpart are deemed to control with respect to the implementation of drug-free workplace requirements concerning grants. 

I80�1A3017.615
I89Grounds for suspension of payments, suspension or termination of grants, or suspension or debarment.
I11A grantee shall be deemed in violation of the requirements of this subpart if the agency head or his or her official designee determines, in writing, that_ 
I11(a) The grantee has made a false certification under �1A3017.630; 
I11(b) With respect to a grantee other than an individual_ 
I11(1) The grantee has violated the certification by failing to carry out the requirements of paragraphs (A)(a)�09(g) and/or (B) of the certification (Alternate I to Appendix C) or 
I11(2) Such a number of employees of the grantee have been convicted of violations of criminal drug statutes for violations occurring in the workplace as to indicate that the grantee has failed to make a good faith effort to provide a drug-free workplace. 
I11(c) With respect to a grantee who is an individual_
I11(1) The grantee has violated the certification by failing to carry out its requirements (Alternate II to Appendix C); or 
I11(2) The grantee is convicted of a criminal drug offense resulting from a violation occurring during the conduct of any grant activity. 

I80�1A3017.620
I89Effect of violation. 
I11(a) In the event of a violation of this subpart as provided in �1A3017.615, and in accordance with applicable law, the grantee shall be subject to one or more of the following actions: 
I11(1) Suspension of payments under the grant; 
I11(2) Suspension or termination of the grant; and 
I11(3) Suspension or debarment of the grantee under the provisions of this part. 
I11(b) Upon issuance of any final decision under this part requiring debarment of a grantee, the debarred grantee shall be ineligible for award of any grant from any Federal agency for a period specified in the decision, not to exceed five years (T3seeG1T1 �1A3017.320(a)(2) of this part). 

I80�1A3017.625
I89Exception provision. 
I11The agency head may waive with respect to a particular grant, in writing, a suspension of payments under a grant, suspension or termination of a grant, or suspension or debarment of a grantee if the agency head determines that such a waiver would be in the public interest. This exception authority cannot be delegated to any other official. 

I80�1A3017.630
I89Certification requirements and procedures. 
I11(a)(1) As a prior condition of being awarded a grant, each grantee shall make the appropriate certification to the Federal agency providing the grant, as provided in Appendix C to this part. 
I11(2) Grantees are not required to make a certification in order to continue receiving funds under a grant awarded before March 18, 1989, or under a no-cost time extension of such a grant. However, the grantee shall make a one-time drug-free workplace certification for a non-automatic continuation of such a grant made on or after March 18, 1989. 
�151�I11(b) Except as provided in this section, all grantees shall make the required certification for each grant. For mandatory formula grants and entitlements that have no application process, grantees shall submit a one-time certification in order to continue receiving awards. 
I11(c) A grantee that is a State may elect to make one certification in each Federal fiscal year. States that previously submitted an annual certification are not required to make a certification for Fiscal Year 1990 until June 30, 1990. Except as provided in paragraph (d) of this section, this certification shall cover all grants to all State agencies from any Federal agency. The State shall retain the original of this statewide certification in its Governor's office and, prior to grant award, shall ensure that a copy is submitted individually with respect to each grant, unless the Federal agency has designated a central location for submission. 
I11(d)(1) The Governor of a State may exclude certain State agencies from the statewide certification and authorize these agencies to submit their own certifications to Federal agencies. The statewide certification shall name any State agencies so excluded. 
I11(2) A State agency to which the statewide certification does not apply, or a State agency in a State that does not have a statewide certification, may elect to make one certification in each Federal fiscal year. State agencies that previously submitted a State agency certification are not required to make a certification for Fiscal Year 1990 until June 30, 1990. The State agency shall retain the original of this State agency-wide certification in its central office and, prior to grant award, shall ensure that a copy is submitted individually with respect to each grant, unless the Federal agency designates a central location for submission. 
I11(3) When the work of a grant is done by more than one State agency, the certification of the State agency directly receiving the grant shall be deemed to certify compliance for all workplaces, including those located in other State agencies. 
I11(e)(1) For a grant of less than 30 days performance duration, grantees shall have this policy statement and program in place as soon as possible, but in any case by a date prior to the date on which performance is expected to be completed. 
I11(2) For a grant of 30 days or more performance duration, grantees shall have this policy statement and program in place within 30 days after award. 
I11(3) Where extraordinary circumstances warrant for a specific grant, the grant officer may determine a different date on which the policy statement and program shall be in place. 

I80�1A3017.635
I89Reporting of and employee sanctions for convictions of criminal drug offenses. 
I11(a) When a grantee other than an individual is notified that an employee has been convicted for a violation of a criminal drug statute occurring in the workplace, it shall take the following actions: 
I11(1) Within 10 calendar days of receiving notice of the conviction, the grantee shall provide written notice, including the convicted employee's position title, to every grant officer, or other designee on whose grant activity the convicted employee was working, unless a Federal agency has designated a central point for the receipt of such notifications. Notification shall include the identification number(s) for each of the Federal agency's affected grants. 
I11(2) Within 30 calendar days of receiving notice of the conviction, the grantee shall do the following with respect to the employee who was convicted. 
I11(i) Take appropriate personnel action against the employee, up to and including termination, consistent with requirements of the Rehabilitation Act of 1973, as amended; or 
I11(ii) Require the employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State, or local health, law enforcement, or other appropriate agency. 
I11(b) A grantee who is an individual who is convicted for a violation of a criminal drug statute occurring during the conduct of any grant activity shall �152�report the conviction, in writing, within 10 calendar days, to his or her Federal agency grant officer, or other designee, unless the Federal agency has designated a central point for the receipt of such notices. Notification shall include the identification number(s) for each of the Federal agency's affected grants. 
Q04I20(Approved by the Office of Management and Budget under control number 0991�090002)
S8002
I95Pt. 3017, App. A
I85Appendix A to Part T13017_G1T5T4Certification Regarding Debarment, Suspension, and Other Responsibility Matters_Primary Covered TransactionsG1T5
I71Instructions for Certification

I211. By signing and submitting this proposal, the prospective primary participant is providing the certification set out below. 
I212. The inability of a person to provide the certification required below will not necessarily result in denial of participation in this covered transaction. The prospective participant shall submit an explanation of why it cannot provide the certification set out below. The certification or explanation will be considered in connection with the department or agency's determination whether to enter into this transaction. However, failure of the prospective primary participant to furnish a certification or an explanation shall disqualify such person from participation in this transaction. 
I213. The certification in this clause is a material representation of fact upon which reliance was placed when the department or agency determined to enter into this transaction. If it is later determined that the prospective primary participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government, the department or agency may terminate this transaction for cause or default. 
I214. The prospective primary participant shall provide immediate written notice to the department or agency to which this proposal is submitted if at any time the prospective primary participant learns that its certification was erroneous when submitted or has become erroneous by reason of changed circumstances. 
I215. The terms T3covered transaction, debarred, suspended, ineligible, lower tier covered transaction, participant, person, primary covered transaction, principal, proposal, and voluntarily excludedG1T1, as used in this clause, have the meanings set out in the Definitions and Coverage sections of the rules implementing Executive Order 12549. You may contact the department or agency to which this proposal is being submitted for assistance in obtaining a copy of those regulations. 
I216. The prospective primary participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency entering into this transaction. 
I217. The prospective primary participant further agrees by submitting this proposal that it will include the clause titled ``Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-Lower Tier Covered Transaction,'' provided by the department or agency entering into this covered transaction, without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions. 
I218. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded from the covered transaction, unless it knows that the certification is erroneous. A participant may decide the method and frequency by which it determines the eligibility of its principals. Each participant may, but is not required to, check the List of Parties Excluded from Federal Procurement and Nonprocurement Programs. 
I219. Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings. 
I2110. Except for transactions authorized under paragraph 6 of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the Federal Government, the department or agency may terminate this transaction for cause or default. 
�153�I73Certification Regarding Debarment, Suspension, and Other Responsibility Matters_Primary Covered Transactions 
I21(1) The prospective primary participant certifies to the best of its knowledge and belief, that it and its principals: 
I21(a) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded by any Federal department or agency; 
I21(b) Have not within a three-year period preceding this proposal been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; 
I21(c) Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State or local) with commission of any of the offenses enumerated in paragraph (1)(b) of this certification; and 
I21(d) Have not within a three-year period preceding this application/proposal had one or more public transactions (Federal, State or local) terminated for cause or default. 
I21(2) Where the prospective primary participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this proposal.
Q04I20[60 FR 33042, 33043, June 26, 1995]
S8002
I95Pt. 3017, App. B
I85Appendix B to Part T13017_G1T5T4Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion_Lower Tier Covered TransactionsG1T5 
I71Instructions for Certification
I211. By signing and submitting this proposal, the prospective lower tier participant is providing the certification set out below. 
I212. The certification in this clause is a material representation of fact upon which reliance was placed when this transaction was entered into. If it is later determined that the prospective lower tier participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government the department or agency with which this transaction originated may pursue available remedies, including suspension and/or debarment. 
I213. The prospective lower tier participant shall provide immediate written notice to the person to which this proposal is submitted if at any time the prospective lower tier participant learns that its certification was erroneous when submitted or had become erroneous by reason of changed circumstances. 
I214. The terms T3covered transaction, debarred, suspended, ineligible, lower tier covered transaction, participant, person, primary covered transaction, principal, proposal,G1T1 and T3voluntarily excluded,G1T1 as used in this clause, have the meaning set out in the Definitions and Coverage sections of rules implementing Executive Order 12549. You may contact the person to which this proposal is submitted for assistance in obtaining a copy of those regulations. 
I215. The prospective lower tier participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency with which this transaction originated. 
I216. The prospective lower tier participant further agrees by submitting this proposal that it will include this clause titled ``Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-Lower Tier Covered Transaction,'' without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions. 
I217. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded from covered transactions, unless it knows that the certification is erroneous. A participant may decide the method and frequency by which it determines the eligibility of its principals. Each participant may, but is not required to, check the List of Parties Excluded from Federal Procurement and Nonprocurement Programs. 
I218. Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings. 
I219. Except for transactions authorized under paragraph 5 of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, suspended, debarred, ineligible, or voluntarily excluded �154�from participation in this transaction, in addition to other remedies available to the Federal Government, the department or agency with which this transaction originated may pursue available remedies, including suspension and/or debarment. 
I73Certification Regarding Debarment, Suspension, Ineligibility an Voluntary Exclusion_Lower Tier Covered Transactions 
I21(1) The prospective lower tier participant certifies, by submission of this proposal, that neither it nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency. 
I21(2) Where the prospective lower tier participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this proposal.
Q04I20[60 FR 33042, 33043, June 26, 1995]
S8002
I95Pt. 3017, App. C
I85Appendix C to Part T13017_G1T5T4Certification Regarding Drug-Free Workplace RequirementsG1T5 
I73Instructions for Certification
I211. By signing and/or submitting this application or grant agreement, the grantee is providing the certification set out below. 
I212. The certification set out below is a material representation of fact upon which reliance is placed when the agency awards the grant. If it is later determined that the grantee knowingly rendered a false certification, or otherwise violates the requirements of the Drug-Free Workplace Act, the agency, in addition to any other remedies available to the Federal Government, may take action authorized under the Drug-Free Workplace Act. 
I213. For grantees other than individuals, Alternate I applies. 
I214. For grantees who are individuals, Alternate II applies. 
I215. Workplaces under grants, for grantees other than individuals, need not be identified on the certification. If known, they may be identified in the grant application. If the grantee does not identify the workplaces at the time of application, or upon award, if there is no application, the grantee must keep the identity of the workplace(s) on file in its office and make the information available for Federal inspection. Failure to identify all known workplaces constitutes a violation of the grantee's drug-free workplace requirements. 
I216. Workplace identifications must include the actual address of buildings (or parts of buildings) or other sites where work under the grant takes place. Categorical descriptions may be used (e.g., all vehicles of a mass transit authority or State highway department while in operation, State employees in each local unemployment office, performers in concert halls or radio studios). 
I217. If the workplace identified to the agency changes during the performance of the grant, the grantee shall inform the agency of the change(s), if it previously identified the workplaces in question (see paragraph five). 
I218. Definitions of terms in the Nonprocurement Suspension and Debarment common rule and Drug-Free Workplace common rule apply to this certification. Grantees' attention is called, in particular, to the following definitions from these rules: 
I21T3Controlled substanceG1T1 means a controlled substance in Schedules I through V of the Controlled Substances Act (21 U.S.C. 812) and as further defined by regulation (21 CFR 1308.11 through 1308.15); 
I21T3ConvictionG1T1 means a finding of guilt (including a plea of nolo contendere) or imposition of sentence, or both, by any judicial body charged with the responsibility to determine violations of the Federal or State criminal drug statutes; 
I21T3Criminal drug statuteG1T1 means a Federal or non-Federal criminal statute involving the manufacture, distribution, dispensing, use, or possession of any controlled substance; 
I21T3EmployeeG1T1 means the employee of a grantee directly engaged in the performance of work under a grant, including: (i) All T3direct chargeG1T1 employees; (ii) All T3indirect chargeG1T1 employees unless their impact or involvement is insignificant to the performance of the grant; and, (iii) Temporary personnel and consultants who are directly engaged in the performance of work under the grant and who are on the grantee's payroll. This definition does not include workers not on the payroll of the grantee (e.g., volunteers, even if used to meet a matching requirement; consultants or independent contractors not on the grantee's payroll; or employees of subrecipients or subcontractors in covered workplaces). 
I73Certification Regarding Drug-Free Workplace Requirements 
I74T3Alternate I.G1T5 (Grantees Other Than Individuals) 
I21A. The grantee certifies that it will or will continue to provide a drug-free workplace by: 
I21(a) Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance is prohibited in the grantee's workplace and specifying the actions that will be taken against employees for violation of such prohibition; 
I21(b) Establishing an ongoing drug-free awareness program to inform employees about_
I21(1) The dangers of drug abuse in the workplace; 
�155�I21(2) The grantee's policy of maintaining a drug-free workplace; 
I21(3) Any available drug counseling, rehabilitation, and employee assistance programs; and 
I21(4) The penalties that may be imposed upon employees for drug abuse violations occurring in the workplace; 
I21(c) Making it a requirement that each employee to be engaged in the performance of the grant be given a copy of the statement required by paragraph (a); 
I21(d) Notifying the employee in the statement required by paragraph (a) that, as a condition of employment under the grant, the employee will_ 
I21(1) Abide by the terms of the statement; and 
I21(2) Notify the employer in writing of his or her conviction for a violation of a criminal drug statute occurring in the workplace no later than five calendar days after such conviction; 
I21(e) Notifying the agency in writing, within ten calendar days after receiving notice under paragraph (d)(2) from an employee or otherwise receiving actual notice of such conviction. Employers of convicted employees must provide notice, including position title, to every grant officer or other designee on whose grant activity the convicted employee was working, unless the Federal agency has designated a central point for the receipt of such notices. Notice shall include the identification number(s) of each affected grant; 
I21(f) Taking one of the following actions, within 30 calendar days of receiving notice under paragraph (d)(2), with respect to any employee who is so convicted_ 
I21(1) Taking appropriate personnel action against such an employee, up to and including termination, consistent with the requirements of the Rehabilitation Act of 1973, as amended; or 
I21(2) Requiring such employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State, or local health, law enforcement, or other appropriate agency; 
I21(g) Making a good faith effort to continue to maintain a drug-free workplace through implementation of paragraphs (a), (b), (c), (d), (e) and (f). 
I21B. The grantee may insert in the space provided below the site(s) for the performance of work done in connection with the specific grant:
Q02
I25Place of Performance (Street address, city, county, state, zip code)
I77
I77
I77
Q02
S8003I20Check } if there are workplaces on file that are not identified here. 
S8002I74T3Alternate II.G1T5 (Grantees Who Are Individuals) 
I21(a) The grantee certifies that, as a condition of the grant, he or she will not engage in the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance in conducting any activity with the grant; 
I21(b) If convicted of a criminal drug offense resulting from a violation occurring during the conduct of any grant activity, he or she will report the conviction, in writing, within 10 calendar days of the conviction, to every grant officer or other designee, unless the Federal agency designates a central point for the receipt of such notices. When notice is made to such a central point, it shall include the identification number(s) of each affected grant. Q04I20[55 FR 21690, 21691, May 25, 1990]
S8010
I95Pt. 3018
I52PART 3018_NEW RESTRICTIONS ON LOBBYING


I86Subpart A_General
S8006I18Sec.
S8010I263018.100Conditions on use of funds.
I263018.105Definitions.
I263018.110Certification and disclosure.

I86Subpart B_Activities by Own Employees
I263018.200Agency and legislative liaison.
I263018.205Professional and technical services. 
I263018.210Reporting.

I86Subpart C_Activities by Other Than Own Employees
I263018.300Professional and technical services.

I86Subpart D_Penalties and Enforcement
I263018.400Penalties.
I263018.405Penalty procedures.
I263018.410Enforcement.

I86Subpart E_Exemptions
I263018.500Secretary of Defense.

I86Subpart F_Agency Reports
I263018.600Semi-annual compilation.
I263018.605Inspector General report.
Q02I26T5T4Appendix A to PartG1T5 3018_T4Certification Regarding LobbyingG1T5
I26T5T4Appendix B to PartG1T5 3018_T4Disclosure Form to Report LobbyingG1T5

Q04I21T5Authority:  T1Sec. 319, Pub. L. 101�09121 (31 U.S.C. 1352); 5 U.S.C. 301.
Q04I21T5Source:  T155 FR 6737 and 6746, Feb. 26, 1990.

�156�Q04I21T5Cross Reference:  T1See also Office of Management and Budget notice published at 54 FR 52306, December 20, 1989.


I56Subpart A_General 

I80�1A3018.100
I89Conditions on use of funds.
I11(a) No appropriated funds may be expended by the recipient of a Federal contract, grant, loan, or cooperative ageement to pay any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any of the following covered Federal actions: the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement.
I11(b) Each person who requests or receives from an agency a Federal contract, grant, loan, or cooperative agreement shall file with that agency a certification, set forth in Appendix A, that the person has not made, and will not make, any payment prohibited by paragraph (a) of this section.
I11(c) Each person who requests or receives from an agency a Federal contract, grant, loan, or a cooperative agreement shall file with that agency a disclosure form, set forth in Appendix B, if such person has made or has agreed to make any payment using nonappropriated funds (to include profits from any covered Federal action), which would be prohibited under paragraph (a) of this section if paid for with appropriated funds.
I11(d) Each person who requests or receives from an agency a commitment providing for the United States to insure or guarantee a loan shall file with that agency a statement, set forth in Appendix A, whether that person has made or has agreed to make any payment to influence or attempt to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with that loan insurance or guarantee.
I11(e) Each person who requests or receives from an agency a commitment providing for the United States to insure or guarantee a loan shall file with that agency a disclosure form, set forth in Appendix B, if that person has made or has agreed to make any payment to influence or attempt to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with that loan insurance or guarantee.

I80�1A3018.105
I89Definitions.
I11For purposes of this part:
I11(a) T3Agency,G1T1 as defined in 5 U.S.C. 552(f), includes Federal executive departments and agencies as well as independent regulatory commissions and Government corporations, as defined in 31 U.S.C. 9101(1).
I11(b) T3Covered Federal actionG1T1 means any of the following Federal actions:
I11(1) The awarding of any Federal contract;
I11(2) The making of any Federal grant;
I11(3) The making of any Federal loan;
I11(4) The entering into of any cooperative agreement; and,
I11(5) The extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement.
Q02I10Covered Federal action does not include receiving from an agency a commitment providing for the United States to insure or guarantee a loan. Loan guarantees and loan insurance are addressed independently within this part.
I11(c) T3Federal contractG1T1 means an acquisition contract awarded by an agency, including those subject to the Federal Acquisition Regulation (FAR), and any other acquisition contract for real or personal property or services not subject to the FAR.
I11(d) T3Federal cooperative agreementG1T1 means a cooperative agreement entered into by an agency.
I11(e) T3Federal grantG1T1 means an award of financial assistance in the form of money, or property in lieu of money, by the Federal Government or a direct �157�appropriation made by law to any person. The term does not include technical assistance which provides services instead of money, or other assistance in the form of revenue sharing, loans, loan guarantees, loan insurance, interest subsidies, insurance, or direct United States cash assistance to an individual.
I11(f) T3Federal loanG1T1 means a loan made by an agency. The term does not include loan guarantee or loan insurance.
I11(g) T3Indian tribeG1T1 and T3tribal organizationG1T1 have the meaning provided in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450B). Alaskan Natives are included under the definitions of Indian tribes in that Act.
I11(h) T3Influencing or attempting to influenceG1T1 means making, with the intent to influence, any communication to or appearance before an officer or employee or any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any covered Federal action.
I11(i) T3Loan guaranteeG1T1 and T3loan insuranceG1T1 means an agency's guarantee or insurance of a loan made by a person.
I11(j) T3Local governmentG1T1 means a unit of government in a State and, if chartered, established, or otherwise recognized by a State for the performance of a governmental duty, including a local public authority, a special district, an intrastate district, a council of governments, a sponsor group representative organization, and any other instrumentality of a local government.
I11(k) T3Officer or employee of an agencyG1T1 includes the following individuals who are employed by an agency:
I11(1) An individual who is appointed to a position in the Government under title 5, U.S. Code, including a position under a temporary appointment;
I11(2) A member of the uniformed services as defined in section 101(3), title 37, U.S. Code; 
I11(3) A special Government employee as defined in section 202, title 18, U.S. Code; and,
I11(4) An individual who is a member of a Federal advisory committee, as defined by the Federal Advisory Committee Act, title 5, U.S. Code appendix 2.
I11(l) T3PersonG1T1 means an individual, corporation, company, association, authority, firm, partnership, society, State, and local government, regardless of whether such entity is operated for profit or not for profit. This term excludes an Indian tribe, tribal organization, or any other Indian organization with respect to expenditures specifically permitted by other Federal law.
I11(m) T3Reasonable compensationG1T1 means, with respect to a regularly employed officer or employee of any person, compensation that is consistent with the normal compensation for such officer or employee for work that is not furnished to, not funded by, or not furnished in cooperation with the Federal Government. 
I11(n) T3Reasonable paymentG1T1 means, with respect to perfessional and other technical services, a payment in an amount that is consistent with the amount normally paid for such services in the private sector.
I11(o) T3RecipientG1T1 includes all contractors, subcontractors at any tier, and subgrantees at any tier of the recipient of funds received in connection with a Federal contract, grant, loan, or cooperative agreement. The term excludes an Indian tribe, tribal organization, or any other Indian organization with respect to expenditures specifically permitted by other Federal law. 
I11(p) T3Regularly employedG1T1 means, with respect to an officer or employee of a person requesting or receiving a Federal contract, grant, loan, or cooperative agreement or a commitment providing for the United States to insure or guarantee a loan, an officer or employee who is employed by such person for at least 130 working days within one year immediately preceding the date of the submission that initiates agency consideration of such person for receipt of such contract, grant, loan, cooperative agreement, loan insurance commitment, or loan guarantee commitment. An officer or employee who is employed by such person for less than 130 working days within one year immediately preceding the date of the submission that initiates agency consideration of such person shall be considered to be regularly employed as �158�soon as he or she is employed by such person for 130 working days. 
I11(q) T3StateG1T1 means a State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, a territory or possession of the United States, an agency or instrumentality of a State, and a multi-State, regional, or interstate entity having governmental duties and powers. 

I80�1A3018.110
I89Certification and disclosure.
I11(a) Each person shall file a certification, and a disclosure form, if required, with each submission that initiates agency consideration of such person for: 
I11(1) Award of a Federal contract, grant, or cooperative agreement exceeding $100,000; or 
I11(2) An award of a Federal loan or a commitment providing for the United States to insure or guarantee a loan exceeding $150,000. 
I11(b) Each person shall file a certification, and a disclosure form, if required, upon receipt by such person of: 
I11(1) A Federal contract, grant, or cooperative agreement exceeding $100,000; or 
I11(2) A Federal loan or a commitment providing for the United States to insure or guarantee a loan exceeding $150,000,
Q02I10Unless such person previously filed a certification, and a disclosure form, if required, under paragraph (a) of this section. 
I11(c) Each person shall file a disclosure form at the end of each calendar quarter in which there occurs any event that requires disclosure or that materially affects the accuracy of the information contained in any disclosure form previously filed by such person under paragraphs (a) or (b) of this section. An event that materially affects the accuracy of the information reported includes: 
I11(1) A cumulative increase of $25,000 or more in the amount paid or expected to be paid for influencing or attempting to influence a covered Federal action; or 
I11(2) A change in the person(s) or individual(s) influencing or attempting to influence a covered Federal action; or, 
I11(3) A change in the officer(s), employee(s), or Member(s) contacted to influence or attempt to influence a covered Federal action. 
I11(d) Any person who requests or receives from a person referred to in paragraphs (a) or (b) of this section: 
I11(1) A subcontract exceeding $100,000 at any tier under a Federal contract; 
I11(2) A subgrant, contract, or subcontract exceeding $100,000 at any tier under a Federal grant; 
I11(3) A contract or subcontract exceeding $100,000 at any tier under a Federal loan exceeding $150,000; or, 
I11(4) A contract or subcontract exceeding $100,000 at any tier under a Federal cooperative agreement,
Q02I10Shall file a certification, and a disclosure form, if required, to the next tier above.
I11(e) All disclosure forms, but not certifications, shall be forwarded from tier to tier until received by the person referred to in paragraphs (a) or (b) of this section. That person shall forward all disclosure forms to the agency.
I11(f) Any certification or disclosure form filed under paragraph (e) of this section shall be treated as a material representation of fact upon which all receiving tiers shall rely. All liability arising from an erroneous representation shall be borne solely by the tier filing that representation and shall not be shared by any tier to which the erroneous representation is forwarded. Submitting an erroneous certification or disclosure constitutes a failure to file the required certification or disclosure, respectively. If a person fails to file a required certification or disclosure, the United States may pursue all available remedies, including those authorized by section 1352, title 31, U.S. Code.
I11(g) For awards and commitments in process prior to December 23, 1989, but not made before that date, certifications shall be required at award or commitment, covering activities occurring between December 23, 1989, and the date of award or commitment. However, for awards and commitments in process prior to the December 23, 1989 effective date of these provisions, but not made before December 23, 1989, disclosure forms shall not be required at time of award or commitment but shall be filed within 30 days.
�159�I11(h) No reporting is required for an activity paid for with appropriated funds if that activity is allowable under either Subpart B or C.

I56Subpart B_Activities by Own Employees

I80�1A3018.200 
I89Agency and legislative liaison.
I11(a) The prohibition on the use of appropriated funds, in �1A3018.100 (a), does not apply in the case of a payment of reasonable compensation made to an officer or employee of a person requesting or receiving a Federal contract, grant, loan, or cooperative agreement if the payment is for agency and legislative liaison activities not directly related to a covered Federal action.
I11(b) For purposes of paragraph (a) of this section, providing any information specifically requested by an agency or Congress is allowable at any time.
I11(c) For purposes of paragraph (a) of this section, the following agency and legislative liaison activities are allowable at any time only where they are not related to a specific solicitation for any covered Federal action:
I11(1) Discussing with an agency (including individual demonstrations) the qualities and characteristics of the person's products or services, conditions or terms of sale, and service capabilities; and, 
I11(2) Technical discussions and other activities regarding the application or adaptation of the person's products or services for an agency's use.
I11(d) For purposes of paragraph (a) of this section, the following agencies and legislative liaison activities are allowable only where they are prior to formal solicitation of any covered Federal action:
I11(1) Providing any information not specifically requested but necessary for an agency to make an informed decision about initiation of a covered Federal action; 
I11(2) Technical discussions regarding the preparation of an unsolicited proposal prior to its official submission; and, 
I11(3) Capability presentations by persons seeking awards from an agency pursuant to the provisions of the Small Business Act, as amended by Public Law 95�09507 and other subsequent amendments. 
I11(e) Only those activities expressly authorized by this section are allowable under this section.

I80�1A3018.205 
I89Professional and technical services.
I11(a) The prohibition on the use of appropriated funds, in �1A3018.100 (a), does not apply in the case of a payment of reasonable compensation made to an officer or employee of a person requesting or receiving a Federal contract, grant, loan, or cooperative agreement or an extension, continuation, renewal, amendment, or modification of a Federal contract, grant, loan, or cooperative agreement if payment is for professional or technical services rendered directly in the preparation, submission, or negotiation of any bid, proposal, or application for that Federal contract, grant, loan, or cooperative agreement or for meeting requirements imposed by or pursuant to law as a condition for receiving that Federal contract, grant, loan, or cooperative agreement. 
I11(b) For purposes of paragraph (a) of this section, ``professional and technical services'' shall be limited to advice and analysis directly applying any professional or technical discipline. For example, drafting of a legal document accompanying a bid or proposal by a lawyer is allowable. Similarly, technical advice provided by an engineer on the performance or operational capability of a piece of equipment rendered directly in the negotiation of a contract is allowable. However, communications with the intent to influence made by a professional (such as a licensed lawyer) or a technical person (such as a licensed accountant) are not allowable under this section unless they provide advice and analysis directly applying their professional or technical expertise and unless the advice or analysis is rendered directly and solely in the preparation, submission or negotiation of a covered Federal action. Thus, for example, communications with the intent to influence made by a lawyer that do not provide legal advice or analysis directly and solely related to the legal aspects of �160�his or her client's proposal, but generally advocate one proposal over another are not allowable under this section because the lawyer is not providing professional legal services. Similarly, communications with the intent to influence made by an engineer providing an engineering analysis prior to the preparation or submission of a bid or proposal are not allowable under this section since the engineer is providing technical services but not directly in the preparation, submission or negotiation of a covered Federal action.
I11(c) Requirements imposed by or pursuant to law as a condition for receiving a covered Federal award include those required by law or regulation, or reasonably expected to be required by law or regulation, and any other requirements in the actual award documents.
I11(d) Only those services expressly authorized by this section are allowable under this section.

I80�1A3018.210
I89Reporting.
I11No reporting is required with respect to payments of reasonable compensation made to regularly employed officers or employees of a person. 

I56Subpart C_Activities by Other Than Own Employees

I80�1A3018.300
I89Professional and technical services.
I11(a) The prohibition on the use of appropriated funds, in �1A3018.100 (a), does not apply in the case of any reasonable payment to a person, other than an officer or employee of a person requesting or receiving a covered Federal action, if the payment is for professional or technical services rendered directly in the preparation, submission, or negotiation of any bid, proposal, or application for that Federal contract, grant, loan, or cooperative agreement or for meeting requirements imposed by or pursuant to law as a condition for receiving that Federal contract, grant, loan, or cooperative agreement.
I11(b) The reporting requirements in �1A3018.110 (a) and (b) regarding filing a disclosure form by each person, if required, shall not apply with respect to professional or technical services rendered directly in the preparation, submission, or negotiation of any commitment providing for the United States to insure or guarantee a loan.
I11(c) For purposes of paragraph (a) of this section, ``professional and technical services'' shall be limited to advice and analysis directly applying any professional or technical discipline. For example, drafting or a legal document accompanying a bid or proposal by a lawyer is allowable. Similarly, technical advice provided by an engineer on the performance or operational capability of a piece of equipment rendered directly in the negotiation of a contract is allowable. However, communications with the intent to influence made by a professional (such as a licensed lawyer) or a technical person (such as a licensed accountant) are not allowable under this section unless they provide advice and analysis directly applying their professional or technical expertise and unless the advice or analysis is rendered directly and solely in the preparation, submission or negotiation of a covered Federal action. Thus, for example, communications with the intent to influence made by a lawyer that do not provide legal advice or analysis directly and solely related to the legal aspects of his or her client's proposal, but generally advocate one proposal over another are not allowable under this section because the lawyer is not providing professional legal services. Similarly, communications with the intent to influence made by an engineer providing an engineering analysis prior to the preparation or submission of a bid or proposal are not allowable under this section since the engineer is providing technical services but not directly in the preparation, submission or negotiation of a covered Federal action.
I11(d) Requirements imposed by or pursuant to law as a condition for receiving a covered Federal award include those required by law or regulation, or reasonably expected to be required by law or regulation, and any other requirements in the actual award documents.
�161�I11(e) Persons other than officers or employees of a person requesting or receiving a covered Federal action include consultants and trade associations.
I11(f) Only those services expressly authorized by this section are allowable under this section.

I56Subpart D_Penalties and Enforcement

I80�1A3018.400
I89Penalties.
I11(a) Any person who makes an expenditure prohibited herein shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such expenditure.
I11(b) Any person who fails to file or amend the disclosure form (see Appendix B) to be filed or amended if required herein, shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.
I11(c) A filing or amended filing on or after the date on which an administrative action for the imposition of a civil penalty is commenced does not prevent the imposition of such civil penalty for a failure occurring before that date. An administrative action is commenced with respect to a failure when an investigating official determines in writing to commence an investigation of an allegation of such failure.
I11(d) In determining whether to impose a civil penalty, and the amount of any such penalty, by reason of a violation by any person, the agency shall consider the nature, circumstances, extent, and gravity of the violation, the effect on the ability of such person to continue in business, any prior violations by such person, the degree of culpability of such person, the ability of the person to pay the penalty, and such other matters as may be appropriate.
I11(e) First offenders under paragraphs (a) or (b) of this section shall be subject to a civil penalty of $10,000, absent aggravating circumstances. Second and subsequent offenses by persons shall be subject to an appropriate civil penalty between $10,000 and $100,000, as determined by the agency head or his or her designee.
I11(f) An imposition of a civil penalty under this section does not prevent the United States from seeking any other remedy that may apply to the same conduct that is the basis for the imposition of such civil penalty.

I80�1A3018.405 
I89Penalty procedures.
I11Agencies shall impose and collect civil penalties pursuant to the provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C. sections 3803 (except subsection (c)), 3804, 3805, 3806, 3807, 3808, and 3812, insofar as these provisions are not inconsistent with the requirements herein.

I80�1A3018.410 
I89Enforcement.
I11The head of each agency shall take such actions as are necessary to ensure that the provisions herein are vigorously implemented and enforced in that agency.

I56Subpart E_Exemptions

I80�1A3018.500 
I89Secretary of Defense.
I11(a) The Secretary of Defense may exempt, on a case-by-case basis, a covered Federal action from the prohibition whenever the Secretary determines, in writing, that such an exemption is in the national interest. The Secretary shall transmit a copy of each such written exemption to Congress immediately after making such a determination.
I11(b) The Department of Defense may issue supplemental regulations to implement paragraph (a) of this section.

I56Subpart F_Agency Reports

I80�1A3018.600 
I89Semi-annual compilation.
I11(a) The head of each agency shall collect and compile the disclosure reports (see appendix B) and, on May 31 and November 30 of each year, submit to the Secretary of the Senate and the Clerk of the House of Representatives a report containing a compilation of the information contained in the disclosure reports received during the six-month period ending on March 31 or September 30, respectively, of that year.
I11(b) The report, including the compilation, shall be available for public inspection 30 days after receipt of the report by the Secretary and the Clerk.
�162�I11(c) Information that involves intelligence matters shall be reported only to the Select Committee on Intelligence of the Senate, the Permanent Select Committee on Intelligence of the House of Representatives, and the Committees on Appropriations of the Senate and the House of Representatives in accordance with procedures agreed to by such committees. Such information shall not be available for public inspection.
I11(d) Information that is classified under Executive Order 12356 or any successor order shall be reported only to the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives or the Committees on Armed Services of the Senate and the House of Representatives (whichever such committees have jurisdiction of matters involving such information) and to the Committees on Appropriations of the Senate and the House of Representatives in accordance with procedures agreed to by such committees. Such information shall not be available for public inspection.
I11(e) The first semi-annual compilation shall be submitted on May 31, 1990, and shall contain a compilation of the disclosure reports received from December 23, 1989 to March 31, 1990.
I11(f) Major agencies, designated by the Office of Management and Budget (OMB), are required to provide machine-readable compilations to the Secretary of the Senate and the Clerk of the House of Representatives no later than with the compilations due on May 31, 1991. OMB shall provide detailed specifications in a memorandum to these agencies.
I11(g) Non-major agencies are requested to provide machine-readable compilations to the Secretary of the Senate and the Clerk of the House of Representatives.
I11(h) Agencies shall keep the originals of all disclosure reports in the official files of the agency.

I80�1A3018.605 
I89Inspector General report.
I11(a) The Inspector General, or other official as specified in paragraph (b) of this section, of each agency shall prepare and submit to Congress each year, commencing with submission of the President's Budget in 1991, an evaluation of the compliance of that agency with, and the effectiveness of, the requirements herein. The evaluation may include any recommended changes that may be necessary to strengthen or improve the requirements.
I11(b) In the case of an agency that does not have an Inspector General, the agency official comparable to an Inspector General shall prepare and submit the annual report, or, if there is no such comparable official, the head of the agency shall prepare and submit the annual report.
I11(c) The annual report shall be submitted at the same time the agency submits its annual budget justifications to Congress.
I11(d) The annual report shall include the following: All alleged violations relating to the agency's covered Federal actions during the year covered by the report, the actions taken by the head of the agency in the year covered by the report with respect to those alleged violations and alleged violations in previous years, and the amounts of civil penalties imposed by the agency in the year covered by the report.
S8002
I95Pt. 3018, App. A
I85Appendix A to Part T13018_G1T5T4Certification Regarding LobbyingG1T5
I73Certification for Contracts, Grants, Loans, and Cooperative Agreements
I21The undersigned certifies, to the best of his or her knowledge and belief, that:
I21(1) No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement.
I21(2) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete �163�and submit Standard Form�09LLL, ``Disclosure Form to Report Lobbying,'' in accordance with its instructions.
I21(3) The undersigned shall require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly.
I21This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.
I73Statement for Loan Guarantees and Loan Insurance
I21The undersigned states, to the best of his or her knowledge and belief, that:
I21If any funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this commitment providing for the United States to insure or guarantee a loan, the undersigned shall complete and submit Standard Form�09LLL, ``Disclosure Form to Report Lobbying,'' in accordance with its instructions.
I21Submission of this statement is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required statement shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.
A
S8002
�164�I95Pt. 3018, App. B
S8006I24Appendix B to Part 3018_Disclosure Form to Report Lobbying
S8006
gs,ic,w348,d470,r1I95G:\GRAPHICS\EC13SE91.000
S8010
A
S8006
�165�gs,ic,w348,d448,r1I95G:\GRAPHICS\EC13SE91.001
S8010
A
S8006
�166�gs,ic,w348,d470,r1I95G:\GRAPHICS\EC13SE91.002
S8010
A

�167�I95Pt. 3019
I52PART 3019_UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, AND OTHER NON-PROFIT ORGANIZATIONS


I86Subpart A_General
S8006I18Sec.
S8010I263019.1Purpose.
I263019.2Definitions.
I263019.3Effect on other issuances.
I263019.4Deviations.
I263019.5Subawards.

I86Subpart B_Pre-Award Requirements
I263019.10Purpose.
I263019.11Pre-award policies.
I263019.12Forms for applying for Federal assistance.
I263019.13Debarment and suspension.
I263019.14Special award conditions.
I263019.15Metric system of measurement.
I263019.16Resource Conservation and Recovery Act.
I263019.17Certifications and representations.

I86Subpart C_Post-Award Requirements
I74Financial and Program Management
I263019.20Purpose of financial and program management.
I263019.21Standards for financial management systems.
I263019.22Payment.
I263019.23Cost sharing or matching.
I263019.24Program income.
I263019.25Revision of budget and program plans.
I263019.26Non-Federal audits.
I263019.27Allowable costs.
I263019.28Period of availability of funds.
I74Property Standards
I263019.30Purpose of property standards.
I263019.31Insurance coverage.
I263019.32Real property.
I263019.33Federally-owned and exempt property.
I263019.34Equipment.
I263019.35Supplies and other expendable property.
I263019.36Intangible property.
I263019.37Property trust relationship.
I74Procurement Standards
I263019.40Purpose of procurement standards.
I263019.41Recipient responsibilities.
I263019.42Codes of conduct.
I263019.43Competition.
I263019.44Procurement procedures.
I263019.45Cost and price analysis.
I263019.46Procurement records.
I263019.47Contract administration.
I263019.48Contract provisions.
I74Reports and Records
I263019.50Purpose of reports and records.
I263019.51Monitoring and reporting program performance.
I263019.52Financial reporting.
I263019.53Retention and access requirements for records.
I74Termination and Enforcement
I263019.60Purpose of termination and enforcement.
I263019.61Termination.
I263019.62Enforcement.

I86Subpart D_After-the-Award Requirements
I263019.70Purpose.
I263019.71Closeout procedures.
I263019.72Subsequent adjustments and continuing responsibilities.
I263019.73Collection of amounts due.
Q02I26T5T4Appendix A to PartG1T5 3019_T4Contract ProvisionsG1T5

Q04I21T5Authority:  T15 U.S.C. 301.
Q04I21T5Source:  T160 FR 44124, Aug. 24, 1995, unless otherwise noted.

I56Subpart A_General

I80�1A3019.1
I89Purpose.
I11This part establishes uniform administrative requirements for Federal grants and agreements awarded to institutions of higher education, hospitals, and other non-profit organizations. Federal awarding agencies shall not impose additional or inconsistent requirements, except as provided in �1A3019.4, and 3019.14 or unless specifically required by Federal statute or executive order. Non-profit organizations that implement Federal programs for the States are also subject to State requirements.

I80�1A3019.2
I89Definitions.
I11(a) T3Accrued expendituresG1T1 means the charges incurred by the recipient during a given period requiring the provision of funds for:
I11(1) Goods and other tangible property received;
I11(2) Services performed by employees, contractors, subrecipients, and other payees; and

I11(3) Other amounts becoming owed under programs for which no current services or performance is required.
�168�I11(b) T3Accrued incomeG1T1 means the sum of:
I11(1) Earnings during a given period from:
I11(i) Services performed by the recipient, and 
I11(ii) Goods and other tangible property delivered to purchasers, and
I11(2) Amounts becoming owed to the recipient for which no current services or performance is required by the recipient.
I11(c) T3Acquisition cost of equipmentG1T1 means the net invoice price of the equipment, including the cost of modifications, attachments, accessories, or auxiliary apparatus necessary to make the property usable for the purpose for which it was acquired. Other charges, such as the cost of installation, transportation, taxes, duty or protective in-transit insurance, shall be included or excluded from the unit acquisition cost in accordance with the recipient's regular accounting practices.
I11(d) T3AdvanceG1T1 means a payment made by Treasury check or other appropriate payment mechanism to a recipient upon its request either before outlays are made by the recipient or through the use of predetermined payment schedules.
I11(e) T3AwardG1T1 means financial assistance that provides support or stimulation to accomplish a public purpose. Awards include grants and other agreements in the form of money or property in lieu of money, by the Federal Government to an eligible recipient. The term does not include: technical assistance, which provides services instead of money; other assistance in the form of loans, loan guarantees, interest subsidies, or insurance; direct payments of any kind to individuals; contracts which are required to be entered into and administered under procurement laws and regulations; and those agreements that are entered into under the authorities provided by sections 1472(b), 1473A, and 1473C of the National Research Extension, and Teaching Policy Act of 1977 (as amended by the Food Security Act (7 U.S.C. 3318, 3319a and 3319c.) and subsequent authorizations. The term also does not include entitlement grants and subgrants under the National School Lunch Act:
I11(1) School Lunch (section 4 of the Act), 
I11(2) Commodity Assistance (section 6 of the Act),
I11(3) Special Meal Assistance (section 11 of the Act),
I11(4) Summer Food Service for Children (section 13 of the Act), and,
I11(5) Child and Adult Care Food Program (section 17 of the Act), and entitlements grants and subgrants under the following programs of the Child Nutrition Act of 1966:
I11(i) Special Milk (section 3 of the Act), and,
I11(ii) School Breakfast (section 4 of the Act).
I11(f) T3Cash contributionsG1T1 means the recipient's cash outlay, including the outlay of money contributed to the recipient by third parties.
I11(g) T3CloseoutG1T1 means the process by which a Federal awarding agency determines that all applicable administrative actions and all required work of the award have been completed by the recipient and Federal awarding agency.
I11(h) T3ContractG1T1 means a procurement contract under an award or subaward, and a procurement subcontract under a recipient's or subrecipient's contract.
I11(i) T3Cost sharing or matchingG1T1 means that portion of project or program costs not borne by the Federal Government.
I11(j) T3Date of completionG1T1 means the date on which all work under an award is completed or the date on the award document, or any supplement or amendment thereto, on which Federal sponsorship ends.
I11(k) T3Disallowed costsG1T1 means those charges to an award that the Federal awarding agency determines to be unallowable, in accordance with the applicable Federal cost principles or other terms and conditions contained in the award.
I11(l) T3EquipmentG1T1 means tangible nonexpendable personal property including exempt property charged directly to the award having a useful life of more than one year and an acquisition cost of $5000 or more per unit. However, consistent with recipient policy, lower limits may be established.
I11(m) T3Excess propertyG1T1 means property under the control of any Federal awarding agency that, as determined �169�by the head thereof, is no longer required for its needs or the discharge of its responsibilities.
I11(n) T3Exempt propertyG1T1 means tangible personal property acquired in whole or in part with Federal funds, where the Federal awarding agency has statutory authority to vest title in the recipient without further obligation to the Federal Government. An example of exempt property authority is contained in the Federal Grant and Cooperative Agreement Act (31 U.S.C. 6306), for property acquired under an award to conduct basic or applied research by a non-profit institution of higher education or non-profit organization whose principal purpose is conducting scientific research.
I11(o) T3Federal awarding agencyG1T1 means the U.S. Department of Agriculture (USDA) or any subagency of the U.S. Department of Agriculture that provides an award to the recipient.
I11(p) T3Federal funds authorizedG1T1 means the total amount of Federal funds obligated by the Federal Government for use by the recipient. This amount may include any authorized carryover of unobligated funds from prior funding periods when permitted by agency regulations or agency implementing instructions.
I11(q) T3Federal shareG1T1 of real property, equipment, or supplies means that percentage of the property's acquisition costs and any improvement expenditures paid with Federal funds.
I11(r) T3Funding periodG1T1 means the period of time when Federal funding is available for obligation by the recipient.
I11(s) T3Intangible property and debt instrumentsG1T1 means, but is not limited to, trademarks, copyrights, patents and patent applications and such property as loans, notes and other debt instruments, lease agreements, stock and other instruments of property ownership, whether considered tangible or intangible.
I11(t) T3ObligationsG1T1 means the amounts of orders placed, contracts and grants awarded, services received and similar transactions during a given period that require payment by the recipient during the same or a future period.
I11(u) T3Outlays or expendituresG1T1 means charges made to the project or program. They may be reported on a cash or accrual basis. For reports prepared on a cash basis, outlays are the sum of cash disbursements for direct charges for goods and services, the amount of indirect expense charged, the value of third party in-kind contributions applied and the amount of cash advances and payments made to subrecipients. For reports prepared on an accrual basis, outlays are the sum of cash disbursements for direct charges for goods and services, the amount of indirect expense incurred, the value of in-kind contributions applied, and the net increase (or decrease) in the amounts owed by the recipient for goods and other property received, for services performed by employees, contractors, subrecipients and other payees and other amounts becoming owed under programs for which no current services or performance are required.
I11(v) T3Personal propertyG1T1 means property of any kind except real property. It may be tangible, having physical existence, or intangible, having no physical existence, such as copyrights, patents, or securities.
I11(w) T3Prior approvalG1T1 means written approval by an authorized official evidencing prior consent.
I11(x) T3Program incomeG1T1 means gross income earned by the recipient that is directly generated by a supported activity or earned as a result of the award (see exclusions in �1A3019.24 (e) and (h)). Program income includes, but is not limited to, income from fees for services performed, the use or rental of real or personal property acquired under federally-funded projects, the sale of commodities or items fabricated under an award, license fees and royalties on patents and copyrights, and interest on loans made with award funds. Interest earned on advances of Federal funds is not program income. Except as otherwise provided in Federal awarding agency regulations or the terms and conditions of the award, program income does not include the receipt of principal on loans, rebates, credits, discounts, etc., or interest earned on any of them.
I11(y) T3Project costsG1T1 means all allowable costs, as set forth in the applicable Federal cost principles, incurred by a �170�recipient and the value of the contributions made by third parties in accomplishing the objectives of the award during the project period.
I11(z) T3Project periodG1T1 means the period established in the award document during which Federal sponsorship begins and ends.
I11(aa) T3PropertyG1T1 means, unless otherwise stated, real property, equipment, intangible property and debt instruments.
I11(bb) T3Real propertyG1T1 means land, including land improvements, structures and appurtenances thereto, but excludes movable machinery and equipment.
I11(cc) T3RecipientG1T1 means an organization receiving financial assistance directly from Federal awarding agencies to carry out a project or program. The term includes public and private institutions of higher education, public and private hospitals, and other quasi-public and private non-profit organizations such as, but not limited to, community action agencies, research institutes, educational associations, and health centers. The term may include commercial organizations, foreign or international organizations (such as agencies of the United Nations) which are recipients, subrecipients, or contractors or subcontractors of recipients or subrecipients at the discretion of the Federal awarding agency. The term does not include government-owned contractor-operated facilities or research centers providing continued support for mission-oriented, large-scale programs that are government-owned or controlled, or are designated as federally-funded research and development centers.
I11(dd) T3Research and developmentG1T1 means all research activities, both basic and applied, and all development activities that are supported at universities, colleges, and other non-profit institutions. ``Research'' is defined as a systematic study directed toward fuller scientific knowledge or understanding of the subject studied. ``Development'' is the systematic use of knowledge and 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.
I11(ee) T3Small awardsG1T1 means a grant or cooperative agreement not exceeding the small purchase threshold fixed at 41 U.S.C. 403(11) (currently $25,000).
I11(ff) T3SubawardG1T1 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.
I11(gg) T3SubrecipientG1T1 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.
I11(hh) T3SuppliesG1T1 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.''
I11(ii) T3SuspensionG1T1 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.''
�171�I11(jj) T3TerminationG1T1 means the cancellation of Federal sponsorship, in whole or in part, under an agreement at any time prior to the date of completion.
I11(kk) T3Third party in-kind contributionsG1T1 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.
I11(ll) T3Unliquidated obligationsG1T1, 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.
I11(mm) T3Unobligated balanceG1T1 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.
I11(nn) T3Unrecovered indirect costG1T1 means the difference between the amount awarded and the amount which could have been awarded under the recipient's approved negotiated indirect cost rate.
I11(oo) T3Working capital advanceG1T1 means a procedure where by funds are advanced to the recipient to cover its estimated disbursement needs for a given initial period.

I80�1A3019.3
I89Effect on other issuances.
I11For awards subject to this part, all administrative requirements of codified program regulations, program manuals, handbooks and other nonregulatory materials which are inconsistent with the requirements of this part shall be superseded, except to the extent they are required by statute, or authorized in accordance with the deviations provision in �1A3019.4.

I80�1A3019.4
I89Deviations.
I11The 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. Federal awarding agencies may apply less restrictive requirements when awarding small awards, except for those requirements which are statutory. Exceptions on a case-by-case basis may also be made by Federal awarding agencies.

I80�1A3019.5
I89Subawards.
I11Unless 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 regulations implementing the grants management common rule, ``Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Government,'' codified at 7 CFR part 3016.

I56Subpart B_Pre-Award Requirements

I80�1A3019.10
I89Purpose.
I11Sections 3019.11 through 3019.17 prescribe forms and instructions and other pre-award matters to be used in applying for Federal awards. 

I80�1A3019.11
I89Pre-award policies.
I11(a) T3Use of grants and cooperative agreements, and contracts.G1T1 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�0908) 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 �172�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.
I11(b) T3Public notice and priority setting.G1T1 Federal awarding agencies shall notify the public of its intended funding priorities for discretionary grant programs, unless funding priorities are established by Federal statute.

I80�1A3019.12
I89Forms for applying for Federal assistance.
I11(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�09424) series.
I11(b) Applicants shall use the SF�09424 series or those forms and instructions prescribed by the Federal awarding agency.
I11(c) For Federal programs covered by E.O. 12372, ``Intergovernmental Review of Federal Programs,'' the applicant shall complete the appropriate sections of the SF�09424 (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. The U.S. Department of Agriculture procedures implementing E.O. 12372 are found at CFR part 3015.
I11(d) Federal awarding agencies that do not use the SF�09424 form should indicate whether the application is subject to review by the State under E.O. 12372.

I80�1A3019.13
I89Debarment and suspension.
I11Federal awarding agencies and recipients shall comply with the nonprocurement debarment and suspension common rule implementing E.O.s 12549 and 12669, ``Debarment and Suspension,'' codified at 7 CFR 3017. This common 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.

I80�1A3019.14
I89Special award conditions.
I11If an applicant or recipient.
I11(a) Has a history of poor performance,
I11(b) Is not financially stable,
I11(c) Has a management system that does not meet the standards prescribed in this part,
I11(d) Has not conformed to the terms and conditions of a previous award, or
I11(e) Is not otherwise responsible,
Q02I10Federal awarding agencies may impose additional requirements as needed, provided that such applicant or recipient is notified in writing as to: the nature of the additional requirements, the reason why the additional requirements are being imposed, the nature of the corrective action needed, the time allowed for completing the corrective actions, and the method for requesting reconsideration of the additional requirements imposed. Any special conditions shall be promptly removed once the conditions that prompted them have been corrected.

I80�1A3019.15
I89Metric system of measurement.
I11The 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 �173�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.''

I80�1A3019.16
I89Resource Conservation and Recovery Act.
I11Under the Resource Conservation and Recovery Act (RCRA) (Pub. L. 94�09580 codified at 42 U.S.C. 6962), 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�09254). Accordingly, State and local institutions of higher education, hospitals, and non-profit 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.

I80�1A3019.17
I89Certifications and representations.
I11Unless 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 requirements.

I56Subpart C_Post-Award Requirements
I84Financial and Program Management

I80�1A3019.20 
I89Purpose of financial and program management.
I11Sections 3019.21 through 3019.28 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.

I80�1A3019.21 
I89Standards for financial management systems.
I11(a) Federal awarding agencies shall require recipients to relate financial data to performance data and develop unit cost information whenever practical.
I11(b) Recipients' financial management systems shall provide for the following.
I11(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 �1A3019.52. 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.
I11(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.
I11(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.
I11(4) Comparison of outlays with budget amounts for each award. Whenever appropriate, financial information should be related to performance and unit cost data.
I11(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�09453) govern, payment methods of State �174�agencies, instrumentalities, and fiscal agents shall be consistent with CMIA 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.''
I11(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.
I11(7) Accounting records including cost accounting records that are supported by source documentation.
I11(c) Where the Federal Government guarantees or insures the repayment of money borrowed by the recipient, the Federal USDA 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.
I11(d) The Federal awarding agency may require adequate fidelity bond coverage where the recipient lacks sufficient coverage to protect the Federal Government's interest.
I11(e) Where bonds are required in the situations described in paragraphs (c) and (d) of this section, 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.''

I80�1A3019.22 
I89Payment.
I11(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.
I11(b) Recipients are to be paid in advance, provided they maintain or demonstrate the willingness to maintain: written procedures that minimize the time elapsing between the transfer of funds and disbursement by the recipient, and financial management systems that meet the standards for fund control and accountability as established in �1A3019.21. 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.
I11(c) Whenever possible, advances shall be consolidated to cover anticipated cash needs for all awards made by the Federal awarding agency to the recipient.
I11(1) Advance payment mechanisms include, but are not limited to, Treasury check and electronic funds transfer.
I11(2) Advance payment mechanisms are subject to 31 CFR part 205.
I11(3) Recipients shall be authorized to submit requests for advances and reimbursements at least monthly when electronic fund transfers are not used.
I11(d) Requests for Treasury check advance payment shall be submitted on SF�09270, ``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.
I11(e) Reimbursement is the preferred method when the requirements in paragraph (b) of this section 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.
I11(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.
�175�I11(2) Recipients shall be authorized to submit request for reimbursement at least monthly when electronic funds transfers are not used.
I11(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.
I11(g) To the extent available, recipients shall disburse funds from repayments to and interest earned on a revolving fund, program income, rebates, refunds, contract settlements, audit recoveries and interest earned on such funds before requesting additional cash payments.
I11(h) Unless otherwise required by statute, Federal awarding agencies shall not withhold payments for proper charges made by recipients at any time during the project period unless paragraphs (h)(1) and (h)(2) of this section apply.
I11(1) A recipient has failed to comply with the project objectives, the terms and conditions of the award, or Federal reporting requirements.
I11(2) The recipient or subrecipient is delinquent in a debt to the Untied States as defined in OMB Circular A�09129, ``Managing Federal Credit Programs.''
I11(3) 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.
I11(i) Standards governing the use of banks and other institutions as depositories of funds advanced under awards are as follows.
I11(1) Except for situations described in paragraph (i)(2) of this section, Federal awarding agencies 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.
I11(2) Advances of Federal funds shall be deposited and maintained in insured accounts whenever possible.
I11(j) Consistent with the national goal of expanding the opportunities for women-owned and minority-owned business enterprises, recipients shall be encouraged to use women-owned and minority-owned banks (a bank which is owned at least 50 percent by women or minority group members).
I11(k) Recipients shall maintain advances of Federal funds in interest bearing accounts, unless paragraphs (k)(1), (k)(2) or (k)(3) of this section apply.
I11(1) The recipient receives less than $120,000 in Federal awards per year.
I11(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.
I11(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.
I11(l) 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 Department of Health and Human Services, Payment 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. In keeping with the Electronic Funds Transfer rules, (31 CFR Part 206), interest should be remitted 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. �176�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.
I11(m) Except as noted elsewhere in this part, 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.
I11(1) SF�09270, Request for Advance or Reimbursement. Each Federal awarding agency shall adopt the SF�09270 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�09271, ``Outlay Report and Request for Reimbursement for Construction Programs.''
I11(2) SF�09271, Outlay Report and Request for Reimbursement for Construction Programs. Each Federal awarding agency shall adopt the SF�09271 as the standard form to be used for requesting reimbursement for construction programs. However, a Federal awarding agency may substitute the SF�09270 when the Federal awarding agency determines that it provides adequate information to meet Federal needs.

I80�1A3019.23 
I89Cost sharing or matching.
I11(a) All contributions, including cash and third party in-kind, shall be accepted as part of the recipient's cost sharing or matching when such contributions meet all of the following criteria.
I11(1) Are verifiable from the recipient's records.
I11(2) Are not included as contributions for any other federally-assisted project or program.
I11(3) Are necessary and reasonable for proper and efficient accomplishment of project or program objectives.
I11(4) Are allowable under the applicable costs principles.
I11(5) Are not paid by the Federal Government under another award, except where authorized by Federal statute to be used for cost sharing or matching.
I11(6) Are provided for in the approved budget when required by the Federal awarding agency.
I11(7) Conform to other provisions of this part, as applicable.
I11(b) Unrecovered indirect costs may be included as part of cost sharing or matching only with the prior approval of the Federal awarding agency.
I11(c) Values for recipient contributions of services and property shall be established in accordance with the applicable cost principles. If a Federal awarding agency authorizes recipients to donate buildings or land for construction/facilities acquisition projects or long-term use, the value of the donated property for cost sharing or matching shall be the lesser of paragraphs (c)(1) or (c)(2) of this section.
I11(1) The certified value of the remaining life of the property recorded in the recipient's accounting records at the time of donation.
I11(2) The current fair market value. However, when there is sufficient justification, the Federal awarding agency may approve the use of the current fair market value of the donated property, even if it exceeds the certified value at the time of donation to the project.
I11(d) Volunteer services furnished by professional and technical personnel, consultants, and other skilled and unskilled labor may be counted as cost sharing or matching if the service is an integral and necessary part of an approved project or program. Rates for volunteer services shall be consistent with those paid for similar work in the recipient's organization. In those instances in which the required skills are not found in the recipient organization, rates shall be consistent with those paid for similar work in the labor market in which the recipient competes for the kind of services involved. In either case, paid fringe benefits that are reasonable, allowable, and allocable may be included in the valuation.
I11(e) When an employer other than the recipient furnishes the services of an employee, these services shall be valued at the employee's regular rate of pay (plus an amount of fringe benefits �177�that are reasonable, allowable, and allocable, but exclusive of overhead costs), provided these services are in the same skill for which the employee is normally paid.
I11(f) Donated supplies may include such items as expendable equipment, 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.
I11(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 paragraphs (g)(1) or (g)(2) of this section apply.
I11(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.
I11(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 the Federal awarding agency has approved the charges.
I11(h) The value of donated property shall be determined in accordance with the usual accounting policies of the recipient, with the following qualifications.
I11(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.
I11(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.
I11(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.
I11(4) The value of loaned equipment shall not exceed its fair rental value.
I11(5) The following requirements pertain to the recipient's supporting records for in-kind contributions from third parties.
I11(i) Volunteer services shall be documented and, to the extent feasible, supported by the same methods used by the recipient for its own employees.
I11(ii) The basis for determining the valuation of personal service, material, equipment, buildings and land shall be documented.

I80�1A3019.24 
I89Program income.
I11(a) Federal awarding agencies shall apply the standards set forth in this section in requiring recipient organizations to account for program income related to projects financed in whole or in part with Federal funds.
I11(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 Federal awarding agency regulations or the terms and conditions of the award, shall be used in one or more of the ways listed in the following.
I11(1) Added to funds committed to the project by the Federal awarding agency and recipient and used to further eligible project or program objectives.
I11(2) Used to finance the non-Federal share of the project or program.
I11(3) Deducted from the total project or program allowable cost in determining the net allowable costs on which the Federal share of costs is based.
I11(c) When an agency authorizes the disposition of program income as described in paragraphs (b)(1) or (b)(2) of this section, program income in excess of any limits stipulated shall be used in accordance with paragraph (b)(3) of this section.
I11(d) In the event that the Federal awarding agency does not specify in its regulations or the terms and conditions of the award how program income is to be used, paragraph (b)(3) of this section shall apply automatically to all projects or programs except research. For awards that support research, paragraph (b)(1) of this section �178�shall apply automatically unless the awarding agency indicates in the terms and conditions another alternative on the award or the recipient is subject to special award conditions, as indicated in �1A3019.14.
I11(e) Unless Federal awarding agency regulations or the terms and conditions of the award provide otherwise, recipients shall have no obligation to the Federal Government regarding program income earned after the end of the project period.
I11(f) If authorized by Federal awarding agency regulations or the terms and conditions of the award, costs incident to the generation of program income may be deducted from gross income to determine program income, provided these costs have not been charged to the award.
I11(g) Proceeds from the sale of property shall be handled in accordance with the requirements of the Property Standards (See �1A3019.30 through 3019.37).
I11(h) Unless Federal awarding agency regulations or the terms and condition of the award provide otherwise, recipients shall have no obligation to the Federal Government with respect to program income earned from license fees and royalties for copyrighted material, patents, patent applications, trademarks, and inventions produced under an award. However, Patent and Trademark Amendments (35 U.S.C. 18) apply to inventions made under an experimental, developmental, or research award.

I80�1A3019.25
I89Revision of budget and program plans.
I11(a) The budget plan is the financial expression of the project or program as approved during the award process. It may include either the Federal and non-Federal share, or only the Federal share, depending upon Federal awarding agency requirements. It shall be related to performance for program evaluation purposes whenever appropriate.
I11(b) Recipients are required to report deviations from budget and program plans, and request prior approvals for budget and program plan revisions, in accordance with this section.
I11(c) For nonconstruction awards, recipients shall request prior approvals from Federal awarding agencies for one or more of the following program or budget related reasons.
I11(1) Change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval).
I11(2) Change in a key person specified in the application or award document.
I11(3) The absence for more than three months, or a 25 percent reduction in time devoted to the project, by the approved project director or principal investigator.
I11(4) The need for additional Federal funding.
I11(5) The transfer of amounts budgeted for indirect costs to absorb increases in direct costs, or vice versa, if approval is required by the Federal awarding agency.
I11(6) The inclusion, unless waived by the Federal awarding agency, of costs that require prior approval in accordance with OMB Circular A�0921, ``Cost Principles for Institutions of Higher Education,'' OMB Circular A�09122, ``Cost Principles for Non-Profit Organizations,'' or 45 CFR part 74 Appendix E, ``Principles for Determining Costs Applicable to Research and Development under Grants and Contracts with Hospitals,'' or 48 CFR part 31, ``Contract Cost Principles and Procedures,'' as applicable.
I11(7) The transfer of funds allotted for training allowances (direct payment to trainees) to other categories of expense.
I11(8) Unless described in the application and funded in the approved awards, the subaward, transfer or contracting out of any work under an award. This provision does not apply to the purchase of supplies, material, equipment or general support services.
I11(d) No other prior approval requirements for specific items may be imposed unless a deviation has been approved by OMB.
I11(e) Except for requirements listed in paragraphs (c)(1) and (c)(4) of this section, Federal awarding agencies are authorized, at their option, to waive cost-related and administrative prior written approvals required by this part and OMB Circulars A�0921 and A�09122. Such waivers may include authorizing recipients to do any one or more of the following.
�179�I11(1) Incur pre-award costs 90 calendar days prior to award or more than 90 calendar days with the prior approval of the Federal awarding agency. All pre-award costs are incurred at the recipient's risk (i.e., the Federal awarding agency is under no obligation to reimburse such costs if for any reason the recipient does not receive an award or if the award is less than anticipated and inadequate to cover such costs).
I11(2) Initiate a one-time extension of the expiration date of the award of up to 12 months unless one or more of the following conditions apply. For one-time extensions, the recipient must notify the Federal awarding agency in writing with the supporting reasons and revised expiration date at least 10 days before the expiration date specified in the award. This one-time extension may not be exercised merely for the purpose of using unobligated balances.
I11(i) The terms and conditions of award prohibit the extension.
I11(ii) The extension requires additional Federal funds.
I11(iii) The extension involves any change in the approved objectives or scope of the project.
I11(3) Carry forward unobligated balances to subsequent funding periods.
I11(4) For awards that support research, unless the Federal awarding agency provides otherwise in the award or in the agency's regulations, the prior approval requirements described in this paragraph (e) are automatically waived (i.e., recipients need not obtain such prior approvals) unless one of the conditions included in paragraph (e)(2) of this section applies.
I11(f) The Federal awarding agency may, at its option, restrict the transfer of funds among direct cost categories or programs, functions and activities for awards in which the Federal share of the project exceeds $100,000 and the cumulative amount of such transfers exceeds or is expected to exceed 10 percent of the total budget as last approved by the Federal awarding agency. No Federal awarding agency shall permit a transfer that would cause any Federal appropriation or part thereof to be used for purposes other than those consistent with the original intent of the appropriation.
I11(g) All other changes to nonconstruction budgets, except for the changes described in paragraph (j) of this section, do not require prior approval.
I11(h) For construction awards, recipients shall request prior written approval promptly from Federal awarding agencies for budget revisions whenever paragraphs (h)(1), (h)(2) or (h)(3) of this section apply.
I11(1) The revision results from changes in the scope or the objective of the project or program.
I11(2) The need arises for additional Federal funds to complete the project.
I11(3) A revision is desired which involves specific costs for which prior written approval requirements may be imposed consistent with applicable OMB cost principles listed in �1A3019.27.
I11(i) No other prior approval requirements for specific items may be imposed unless a deviation has been approved by OMB.
I11(j) When a Federal awarding agency makes an award that provides support for both construction and nonconstruction work, the Federal awarding agency may require the recipient to request prior approval from the Federal awarding agency before making any fund or budget transfers between the two types of work supported.
I11(k) For both construction and nonconstruction awards, Federal awarding agencies shall require recipients to notify the Federal awarding agency in writing promptly whenever the amount of Federal authorized funds is expected to exceed the needs of the recipient for the project period by more than $5000 or five percent of the Federal award, whichever is greater. This notification shall not be required if an application for additional funding is submitted for a continuation award.
I11(l) When requesting approval for budget revisions, recipients shall use the budget forms that were used in the application unless the Federal awarding agency indicates a letter of request suffices.
I11(m) Within 30 calendar days from the date of receipt of the request for budget revisions, Federal awarding agencies shall review the request and notify the recipient whether the budget revisions have been approved. If the revision is still under consideration at the end of �180�30 calendar days, the Federal awarding agency shall inform the recipient in writing of the date when the recipient may expect the decision.



I80�1A3019.26
I89Non-Federal audits.


I11(a) Recipients and subrecipients that are institutions of higher education or other non-profit organizations (including hospitals) shall be subject to the audit requirements contained in the Single Audit Act Amendments of 1996 (31 U.S.C. 7501�097507) and revised OMB Circular A�09133, ``Audits of States, Local Governments, and Non-Profit Organizations.''

I11(b) State and local governments shall be subject to the audit requirements contained in the Single Audit Act Amendments of 1996 (31 U.S.C. 7501�097507) and revised OMB Circular A�09133, ``Audits of States, Local Governments, and Non-Profit Organizations.''

I11(c) For-profit hospitals not covered by the audit provisions of revised OMB Circular A�09133 shall be subject to the audit requirements of the Federal awarding agencies.


I11(d) Commercial organizations shall be subject to the audit requirements of the Federal awarding agency or the prime recipient as incorporated into the award document.


I11(e) In USDA, revised OMB Circular A�09133 is implemented in 7 CFR part 3052, ``Audits of States, Local Governments, and Non-Profit Organizations.''

Q04I20[60 FR 44124, Aug. 24, 1995, as amended at 62 FR 45939, Aug. 29, 1997]



I80�1A3019.27
I89Allowable costs.
I11For each kind of recipient, there is a set of Federal principles for determining allowable costs. Allowability of costs shall be determined in accordance with the cost principles applicable to the entity incurring the costs. Thus, allowability of costs incurred by State, local or federally-recognized Indian tribal governments is determined in accordance with the provisions of OMB Circular A�0987, ``Cost Principles for State and Local Governments.'' The allowability of costs incurred by non-profit organizations is determined in accordance with the provisions of OMB Circular A�09122, ``Cost Principles for Non-Profit Organizations.'' The allowability of costs incurred by institutions of higher education is determined in accordance with the provisions of OMB Circular A�0921, ``Cost Principles for Educational Institutions.'' The allowability of costs incurred by hospitals is determined in accordance with the provisions of Appendix E of 45 CFR part 74, ``Principles for Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals.'' The allowability of costs incurred by commercial organizations and those non-profit organizations listed in Attachment C to Circular A�09122 is determined in accordance with the provisions of the Federal Acquisition Regulation (FAR) at 48 CFR part 31.

I80�1A3019.28
I89Period of availability of funds.
I11Where a funding period is specified, a recipient may charge to the grant only allowable costs resulting from obligations incurred during the funding period and any pre-award costs authorized by the Federal awarding agency.
I84Property Standards

I80�1A3019.30
I89Purpose of property standards.
I11Sections 3019.31 through 3019.37 set forth uniform standards governing management and disposition of property furnished by the Federal Government whose cost was charged to a project supported by a Federal award. Federal awarding agencies shall require recipients to observe these standards under awards and shall not impose additional requirements, unless specifically required by Federal statute. The recipient may use its own property management standards and procedures provided it observes the provisions of �1A3019.31 through 3019.37.

I80�1A3019.31
I89Insurance coverage.
I11Recipients shall, at a minimum, provide the equivalent insurance coverage for real property and equipment acquired with Federal funds as provided to property owned by the recipient. Federally-owned property need not be insured unless required by the terms and conditions of the award.

�181�I80�1A3019.32
I89Real property.
I11Each Federal awarding agency shall prescribe requirements for recipients concerning the use and disposition of real property acquired in whole or in part under awards. Unless otherwise provided by statute, such requirements, at a minimum, shall contain the following.
I11(a) Title to real property shall vest in the recipient subject to the condition that the recipient shall use the real property for the authorized purpose of the project as long as it is needed and shall not encumber the property without approval of the Federal awarding agency.
I11(b) The recipient shall obtain written approval by the Federal awarding agency for the use of real property in other federally-sponsored projects when the recipient determines that the property is no longer needed for the purpose of the original project. Use in other projects shall be limited to those under federally-sponsored projects (i.e., awards) or programs that have purposes consistent with those authorized for support by the Federal awarding agency.
I11(c) When the real property is no longer needed as provided in paragraphs (a) and (b), the recipient shall request disposition instructions from the Federal awarding agency or its successor Federal awarding agency. The Federal awarding agency shall observe one or more of the following disposition instructions.
I11(1) The recipient may be permitted to retain title without further obligation to the Federal Government after it compensates the Federal Government for that percentage of the current fair market value of the property attributable to the Federal participation in the project.
I11(2) The recipient may be directed to sell the property under guidelines provided by the Federal awarding agency and pay the Federal Government for that percentage of the current fair market value of the property attributable to the Federal participation in the project (after deducting actual and reasonable selling and fix-up expenses, if any, from the sales proceeds). When the recipient is authorized or required to sell the property, proper sales procedures shall be established that provide for competition to the extent practicable and result in the highest possible return.
I11(3) The recipient may be directed to transfer title to the property to the Federal Government or to an eligible third party provided that, in such cases, the recipient shall be entitled to compensation for its attributable percentage of the current fair market value of the property.

I80�1A3019.33 
I89Federally-owned and exempt property.
I11(a) T3Federally-owned property.G1T1 (1) Title to federally-owned property remains vested in the Federal Government. Recipients shall submit annually an inventory listing of federally-owned property in their custody to the Federal awarding agency. Upon completion of the award or when the property is no longer needed, the recipient shall report the property to the Federal awarding agency for further Federal agency utilization.
I11(2) If the Federal awarding agency has no further need for the property, it shall be declared excess and reported to the General Services Administration, unless the Federal awarding agency has statutory authority to dispose of the property by alternative methods (e.g., the authority provided by the Federal Technology Transfer Act (15 U.S.C. 3710(I)) to donate research equipment to educational and non-profit organizations in accordance with E.O. 12821, ``Improving Mathematics and Science Education in Support of the National Education Goals''). Appropriate instructions shall be issued to the recipient by the Federal awarding agency.
I11(b) T3Exempt property.G1T1 When statutory authority exists, the Federal awarding agency has the option to vest title to property acquired with Federal funds in the recipient without further obligation to the Federal Government and under conditions the Federal awarding agency considers appropriate. Such property is ``exempt property.'' Should a Federal awarding agency not establish conditions, title to exempt property upon acquisition shall vest in the recipient without further obligation to the Federal Government.

�182�I80�1A3019.34 
I89Equipment.
I11(a) Title to equipment acquired by a recipient with Federal funds shall vest in the recipient, subject to conditions of this section.
I11(b) The recipient shall not use equipment acquired with Federal funds to provide services to non-Federal outside organizations for a fee that is less than private companies charge for equivalent services, unless specifically authorized by Federal statute, for as long as the Federal Government retains an interest in the equipment.
I11(c) The recipient shall use the equipment in the project or program for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds and shall not encumber the property without approval of the Federal awarding agency. When no longer needed for the original project or program, the recipient shall use the equipment in connection with its other federally-sponsored activities, in the following order of priority:
I11(1) Activities sponsored by the Federal awarding agency which funded the original project, then
I11(2) Activities sponsored by other Federal awarding agencies.
I11(d) During the time that equipment is used on the project or program for which it was acquired, the recipient shall make it available for use on other projects or programs if such other use will not interfere with the work on the project or program for which the equipment was originally acquired. First preference for such other use shall be given to other projects or programs sponsored by the Federal awarding agency that financed the equipment; second preference shall be given to projects or programs sponsored by other Federal awarding agencies. If the equipment is owned by the Federal Government, use on other activities not sponsored by the Federal Government shall be permissible if authorized by the Federal awarding agency. User charges shall be treated as program income.
I11(e) When acquiring replacement equipment, the recipient may use the equipment to be replaced as trade-in or sell the equipment and use the proceeds to offset the costs of the replacement equipment subject to the approval of the Federal awarding agency.
I11(f) The recipient's property management standards for equipment acquired with Federal funds and federally-owned equipment shall include all of the following.
I11(1) Equipment records shall be maintained accurately and shall include the following information.
I11(i) A description of the equipment.
I11(ii) Manufacturer's serial number, model number, Federal stock number, national stock number, or other identification number.
I11(iii) Source of the equipment, including the award number.
I11(iv) Whether title vests in the recipient or the Federal Government.
I11(v) Acquisition date (or date received, if the equipment was furnished by the Federal Government) and cost.
I11(vi) Information from which one can calculate the percentage of Federal participation in the cost of the equipment (not applicable to equipment furnished by the Federal Government).
I11(vii) Location and condition of the equipment and the date the information was reported.
I11(viii) Unit acquisition cost.
I11(ix) Ultimate disposition data, including date of disposal and sales price or the method used to determine current fair market value where a recipient compensates the Federal awarding agency for its share.
I11(2) Equipment owned by the Federal Government shall be identified to indicate Federal ownership.
I11(3) A physical inventory of equipment shall be taken and the results reconciled with the equipment records at least once every two years. Any differences between quantities determined by the physical inspection and those shown in the accounting records shall be investigated to determine the causes of the difference. The recipient shall, in connection with the inventory, verify the existence, current utilization, and continued need for the equipment.
I11(4) A control system shall be in effect to ensure adequate safeguards to prevent loss, damage, or theft of the equipment. Any loss, damage, or theft of equipment shall be investigated and fully documented; if the equipment was �183�owned by the Federal Government, the recipient shall promptly notify the Federal awarding agency.
I11(5) Adequate maintenance procedures shall be implemented to keep the equipment in good condition.
I11(6) Where the recipient is authorized or required to sell the equipment, proper sales procedures shall be established which provide for competition to the extent practicable and result in the highest possible return.
I11(g) When the recipient no longer needs the equipment, the equipment may be used for other activities in accordance with the following standards. For equipment with a current per unit fair market value of $5000 or more, the recipient may retain the equipment for other uses provided that compensation is made to the original Federal awarding agency or its successor. The amount of compensation shall be computed by applying the percentage of Federal participation in the cost of the original project or program to the current fair market value of the equipment. If the recipient has no need for the equipment, the recipient shall request disposition instructions from the Federal awarding agency. The Federal awarding agency shall determine whether the equipment can be used to meet the agency's requirements. If no requirement exists within that agency, the availability of the equipment shall be reported to the General Services Administration by the Federal awarding agency to determine whether a requirement for the equipment exists in other Federal agencies. The Federal awarding agency shall issue instructions to the recipient no later than 120 calendar days after the recipient's request and the following procedures shall govern.
I11(1) If so instructed or if disposition instructions are not issued within 120 calendar days after the recipient's request, the recipient shall sell the equipment and reimburse the Federal awarding agency an amount computed by applying to the sales proceeds the percentage of Federal participation in the cost of the original project or program. However, the recipient shall be permitted to deduct and retain from the Federal share $500 or ten percent of the proceeds, whichever is less, for the recipient's selling and handling expenses.
I11(2) If the recipient is instructed to ship the equipment elsewhere, the recipient shall be reimbursed by the Federal Government by an amount which is computed by applying the percentage of the recipient's participation in the cost of the original project or program to the current fair market value of the equipment, plus any reasonable shipping or interim storage costs incurred.
I11(3) If the recipient is instructed to otherwise dispose of the equipment, the recipient shall be reimbursed by the Federal awarding agency for such costs incurred in its disposition. 
I11(4) The Federal awarding agency may reserve the right to transfer the title to the Federal Government or to a third party named by the Federal Government when such third party is otherwise eligible under existing statutes. Such transfer shall be subject to the following standards.
I11(i) The equipment shall be appropriately identified in the award or otherwise made known to the recipient in writing.
I11(ii) The Federal awarding agency shall issue disposition instructions within 120 calendar days after receipt of a final inventory. The final inventory shall list all equipment acquired with grant funds and federally-owned equipment. If the Federal awarding agency fails to issue disposition instructions within the 120 calendar day period, the recipient shall apply the standards of this section, as appropriate.
I11(iii) When the Federal awarding agency exercises its right to take title, the equipment shall be subject to the provisions for federally-owned equipment.

I80�1A3019.35 
I89Supplies and other expendable property.
I11(a) Title to supplies and other expendable property shall vest in the recipient upon acquisition. If there is a residual inventory of unused supplies exceeding $5000 in total aggregate value upon termination or completion of the project or program and the supplies are not needed for any other federally-sponsored project or program, �184�the recipient shall retain the supplies for use on non-Federal sponsored activities or sell them, but shall, in either case, compensate the Federal Government for its share. The amount of compensation shall be computed in the same manner as for equipment. 
I11(b) The recipient shall not use supplies acquired with Federal funds to provide services to non-Federal outside organizations for a fee that is less than private companies charge for equivalent services, unless specifically authorized by Federal statute as long as the Federal Government retains an interest in the supplies.

I80�1A3019.36 
I89Intangible property.
I11(a) The recipient may copyright any work that is subject to copyright and was developed, or for which ownership was purchased, under an award. The Federal awarding agency(ies) reserve a royalty-free, nonexclusive and irrevocable right to reproduce, publish, or otherwise use the work for Federal purposes, and to authorize others to do so.
I11(b) Recipients are subject to applicable regulations governing patents and inventions, including government-wide regulations issued by the Department of Commerce at 37 CFR part 401, ``Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements.''
I11(c) Unless waived by the Federal awarding agency, the Federal Government has the right to:
I11(1) Obtain, reproduce, publish or otherwise use the date first produced under an award, and 
I11(2) Authorize others to receive, reproduce, publish, or otherwise use such data for Federal purposes.
I11(d) Title to intangible property and debt instruments acquired under an award or subaward vests upon acquisition in the recipient. The recipient shall use that property for the originally-authorized purpose, and the recipient shall not encumber the property without approval of the Federal awarding agency. When no longer needed for the originally authorized purpose, disposition of the intangible property shall occur in accordance with the provisions of �1A3019.34(g).

I80�1A3019.37 
I89Property trust relationship.
I11Real property, equipment, intangible property and debt instruments that are acquired or improved with Federal funds shall be held in trust by the recipient as trustee for the beneficiaries of the project or program under which the property was acquired or improved. Agencies may require recipients to record liens or other appropriate notices of record to indicate that personal or real property has been acquired or improved with Federal funds and that use and disposition conditions apply to the property.
I84Procurement Standards

I80�1A3019.40 
I89Purpose of procurement standards.
I11Sections 3019.41 through 3019.48 set forth standards for use by recipients in establishing procedures for the procurement of supplies and other expendable property, equipment, real property and other services with Federal funds. These standards are furnished to ensure that such materials and services are obtained in an effective manner and in compliance with the provisions of applicable Federal statutes and executive orders. No additional procurement standards or requirements shall be imposed by the Federal awarding agencies upon recipients, unless specifically required by Federal statute or executive order or approved by OMB.

I80�1A3019.41 
I89Recipient responsibilities.
I11The standards contained in this section do not relieve the recipient of the contractual responsibilities arising under its contract(s). The recipient is the responsible authority, without recourse to the Federal awarding agency, regarding the settlement and satisfaction of all contractual and administrative issues arising out of procurements entered into in support of an award or other agreement. This includes disputes, claims, protests of award, source evaluation or other matters of a contractual nature. Matters concerning violation of statute are to be referred to such Federal, State or local authority as may have proper jurisdiction. 

�185�I80�1A3019.42 
I89Codes of conduct.
I11The recipient shall maintain written standards of conduct governing the performance of its employees engaged in the award and administration of contracts. No employee, officer, or agent shall participate in the selection, award, or administration of a contract supported by Federal funds if a real or apparent conflict of interest would be involved. Such a conflict would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in the firm selected for an award. The officers, employees, and agents of the recipient shall neither solicit nor accept gratuities, favors, or anything of monetary value from contractors, or parties to subagreements. However, recipients may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nominal value. The standards of conduct shall provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the recipient.

I80�1A3019.43 
I89Competition.
I11All procurement transactions shall be conducted in a manner to provide, to the maximum extent practical, open and free competition. The recipient shall be alert to organizational conflicts of interests as well as noncompetitive practices among contractors that may restrict or eliminate competition or otherwise restrain trade. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, invitations for bids and/or requests for proposals shall be excluded from competing for such procurements. Awards shall be made to the bidder or offeror whose bid or offer is responsive to the solicitation and is most advantageous to the recipient, price, quality and other factors considered. Solicitations shall clearly set forth all requirements that the bidder or offeror shall fulfill in order for the bid or offer to be evaluated by the recipient. Any and all bids or offers may be rejected when it is in the recipient's interest to do so.

I80�1A3019.44 
I89Procurement procedures.
I11(a) All recipients shall establish written procurement procedures. These procedures shall provide for, at a minimum, that paragraphs (a)(1), (a)(2), and (a)(3) of this section apply.
I11(1) Recipients avoid purchasing unnecessary items.
I11(2) Where appropriate, an analysis is made of lease and purchase alternatives to determine which would be the most economical and practical procurement for the Federal Government.
I11(3) Solicitations for goods and services provide for all of the following:
I11(i) A clear and accurate description of the technical requirements for the material, product or service to be procured. In competitive procurements, such a description shall not contain features which unduly restrict competition.
I11(ii) Requirements which the bidder/offeror must fulfill and all other factors to be used in evaluating bids or proposals.
I11(iii) A description, whenever practicable, of technical requirements in terms of functions to be performed or performance required, including the range of acceptable characteristics or minimum acceptable standards.
I11(iv) The specific features of ``brand name or equal'' descriptions that bidders are required to meet when such items are included in the solicitation.
I11(v) The acceptance, to the extent practicable and economically feasible, of products and services dimensioned in the metric system of measurement.
I11(vi) Preference, to the extent practicable and economically feasible, for products and services that conserve natural resources and protect the environment and are energy efficient.
I11(b) Positive efforts shall be made by recipients to utilize small businesses, minority-owned firms, and women's business enterprises, whenever possible. Recipients of Federal awards shall take all of the following steps to further this goal.
�186�I11(1) Ensure that small businesses, minority-owned firms, and women's business enterprises are used to the fullest extent practicable.
I11(2) Make information on forthcoming opportunities available and arrange time frames for purchases and contracts to encourage and facilitate participation by small businesses, minority-owned firms, and women's business enterprises.
I11(3) Consider in the contract process whether firms competing for larger contracts intend to subcontract with small businesses, minority-owned firms, and women's business enterprises.
I11(4) Encourage contracting with consortiums of small businesses, minority-owned firms and women's business enterprises when a contract is too large for one of these firms to handle individually.
I11(5) Use the services and assistance, as appropriate, of such organizations as the Small Business Administration and the Department of Commerce's Minority Business Development Agency in the solicitation and utilization of small businesses, minority-owned firms and women's business enterprises.
I11(c) The type of procuring instruments used (e.g., fixed price contracts, cost reimbursable contracts, purchase orders, and incentive contracts) shall be determined by the recipient but shall be appropriate for the particular procurement and for promoting the best interest of the program or project involved. The ``cost-plus-a-percentage-of-cost'' or ``percentage of construction cost'' methods of contracting shall not be used.
I11(d) Contracts shall be made only with responsible contractors who possess the potential ability to perform successfully under the term and conditions of the proposed procurement. Consideration shall be given to such matters as contractor integrity, record of past performance, financial and technical resources or accessibility to other necessary resources. In certain circumstances, contracts with certain parties are restricted by agencies' implementation of E.O.s 12549 and 12689, ``Debarment and Suspension.''
I11(e) Recipients shall, on request, make available for the Federal awarding agency, pre-award review and procurement documents, such as request for proposals or invitations for bids, independent cost estimates, etc., when any of the following conditions apply.
I11(1) A recipient's procurement procedures or operation fails to comply with the procurement standards in the Federal awarding agency's implementation of this part.
I11(2) The procurement is expected to exceed the small purchase threshold fixed at 41 U.S.C. 403(11) (currently $25,000) and is to be awarded without competition or only one bid or offer is received in response to a solicitation.
I11(3) The procurement, which is expected to exceed the small purchase threshold, specifies a ``brand name'' product.
I11(4) The proposed award over the small purchase threshold is to be awarded to other than the apparent low bidder under a sealed bid procurement.
I11(5) A proposed contract modification changes the scope of a contract or increases the contract amount by more than the amount of the small purchase threshold.

I80�1A3019.45
I89Cost and price analysis.
I11Some form of cost or price analysis shall be made and documented in the procurement files in connection with every procurement action. Price analysis may be accomplished in various ways, including the comparison of price quotations submitted, market prices and similar indicia, together with discounts. Cost analysis is the review and evaluation of each element of cost to determine reasonableness, allocability and allowability.

I80�1A3019.46
I89Procurement records.
I11Procurement records and files for purchases in excess of the small purchase threshold shall include the following at a minimum:
I11(a) Basis for contractor selection,
I11(b) Justification for lack of competition bids or offers are not obtained, and
I11(c) Basis for award cost or price.

I80�1A3019.47
I89Contract administration.
I11A system for contract administration shall be maintained to ensure contractor conformance with the terms, �187�conditions and specifications of the contract and to ensure adequate and timely follow up of all purchases. Recipients shall evaluate contractor performance and document, as appropriate, whether contractors have met the terms, conditions and specifications of the contract.

I80�1A3019.48
I89Contract provisions.
I11The recipient shall include, in addition to provisions to define a sound and complete agreement, the following provisions in all contracts. The following provisions shall also be applied to subcontracts.
I11(a) Contracts in excess of the small purchase threshold shall contain contractual provisions or conditions that allow for administrative, contractual, or legal remedies in instances in which a contractor violates or breaches the contract terms, and provide for such remedial actions as may be appropriate.
I11(b) All contracts in excess of the small purchase threshold shall contain suitable provisions for termination by the recipient, including the manner by which termination shall be effected and the basis for settlement. In addition, such contracts shall describe conditions under which the contract may be terminated for default as well as conditions where the contract may be terminated because of circumstances beyond the control of the contractor.
I11(c) Except as otherwise required by statute, an award that requires the contracting (or subcontracting) for construction or facility improvements shall provide for the recipient to follow its own requirements relating to bid guarantees, performance bonds, and payment bonds unless the construction contract or subcontract exceeds $100,00. For those contracts or subcontracts exceeding $100,000, the Federal awarding agency may accept the bonding policy and requirements of the recipient, provided the Federal awarding agency has made a determination that the Federal Government's interest is adequately protected. If such a determination has not been made, the minimum requirements shall be as follows.
I11(1) A bid guarantee from each bidder equivalent to five percent of the bid price. The ``bid guarantee'' shall consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder shall, upon acceptance of his bid, execute such contractual documents as may be required within the time specified.
I11(2) A performance bond on the part of the contractor for 100 percent of the contract price. A ``performance bond'' is one executed in connection with a contract to secure fulfillment of all the contractor's obligations under such contract.
I11(3) A payment bond on the part of the contractor for 100 percent of the contract price. A ``payment bond'' is one executed in connection with a contract to assure payment as required by statute of all persons supplying labor and material in the execution of the work provided for in the contract.
I11(4) Where bonds are required in the situations described herein, the bonds shall be obtained from companies holding certificates of authority as acceptable sureties pursuant to 31 CFR part 223, ``Surety Companies Doing Business with the United States.''
I11(d) All negotiated contracts (except those for less than the small purchase threshold) awarded by recipients shall include a provision to the effect that the recipient, the Federal awarding agency, the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to any books, documents, papers and records of the contractor which are directly pertinent to a specific program for the purpose of making audits, examinations, excerpts and transcriptions.
I11(e) All contracts, including small purchases, awarded by recipients and their contractors shall contain the procurement provisions of Appendix A to this part, as applicable.
I84Reports and Records 

I80�1A3019.50 
I89Purpose of reports and records. 
I11Sections 3019.51 through 3019.53 set forth the procedures for monitoring and reporting on the recipient's financial and program performance and the necessary standard reporting forms. �188�They also set forth record retention requirements.

I80�1A3019.51 
I89Monitoring and reporting program performance.
I11(a) Recipients are responsible for managing and monitoring each project, program, subaward, function or activity supported by the award. Recipients shall monitor subawards to ensure subrecipients have met the audit requirements as delineated in Section 3019.26.
I11(b) The Federal awarding agency shall prescribe the frequency with which the performance reports shall be submitted. Except as provided in paragraph (f) of this section, performance reports shall not be required more frequently than quarterly or, less frequently than annually. Annual reports shall be due 90 calendar days after the grant year; quarterly or semi-annual reports shall be due 30 days after the reporting period. The Federal awarding agency may require annual reports before the anniversary dates of multiple years awards in lieu of these requirements. The final performance reports are due 90 calendar days after the expiration or termination of the award.
I11(c) If inappropriate, a final technical or performance report shall not be required after completion of the project.
I11(d) When required, performance reports shall generally contain, for each award, brief information on each of the following.
I11(1) A comparison of actual accomplishments with the goals and objectives established for the period, the findings of the investigator, or both. Whenever appropriate and the output of programs or projects can be readily quantified, such quantitative data should be related to cost data for computation of unit costs. 
I11(2) Reasons why established goals were not met, if appropriate.
I11(3) Other pertinent information including, when appropriate, analysis and explanation of cost overruns or high unit costs.
I11(e) Recipients shall not be required to submit more than the original and two copies of performance reports.
I11(f) Recipients shall immediately notify the Federal awarding agency of developments that have a significant impact on the award-supported activities. Also, notification shall be given in the case of problems, delays, or adverse conditions which materially impair the ability to meet the objectives of the award. This notification shall include a statement of the action taken or contemplated, and any assistance needed to resolve the situation.
I11(g) Federal awarding agencies may make site visits, as needed.
I11(h) Federal awarding agencies shall comply with clearance requirements of 5 CFR part 1320 when requesting performance data from recipients.

I80�1A3019.52
I89Financial reporting. 
I11(a) The following forms or such other forms as may be approved by OMB are authorized for obtaining financial information from recipients.
I11(1) SF�09269 or SF�09269A, Financial Status Report.
I11(i) Each Federal awarding agency shall require recipients to use the SF�09269 or SF�09269A to report the status of funds for all nonconstruction projects or programs. A Federal awarding agency may, however, have the option of not requiring the SF�09269 or SF�09269A when the SF�09270, Request for Advance or Reimbursement, or SF�09272, Report of Federal Cash Transactions, is determined to provided adequate information to meet its needs, except that a final SF�09269 or SF�09269A shall be required at the completion of the project when the SF�09270 is used only for advances.
I11(ii) The Federal awarding agency shall prescribe whether the report shall be on a cash or accrual basis. If the Federal awarding agency requires accrual information and the recipient's accounting records are not normally kept on the accrual basis, the recipient shall not be required to convert its accounting system, but shall develop such accrual information through best estimates based on an analysis of the documentation on hand.
I11(iii) The Federal awarding agency shall determine the frequency of the Financial Status Report for each project or program, considering the size and complexity of the particular project or program. However, the report shall not be required more frequently than quarterly or less frequently than annually. A final report �189�shall be required at the completion of the agreement.
I11(iv) The Federal awarding agency shall require recipients to submit the SF�09269 or SF�09269A (an original and no more than two copies no later than 30 days after the end of each specified reporting period for quarterly and semi- 
Q02I10annual reports, and 90 calendar days for annual and final reports. Extensions of reporting due dates may be approved by the Federal awarding agency upon request of the recipient.
I11(2) SF�09272, Report of Federal Cash Transactions.
I11(i) When funds are advanced to recipients the Federal awarding agency shall require each recipient to submit the SF�09272 and, when necessary, its continuation sheet, SF�09272a. The Federal awarding agency shall use this report to monitor cash advanced to recipients and to obtain disbursement information for each agreement with the recipients.
I11(ii) Federal awarding agencies may require forecasts of Federal cash requirements in the ``Remarks'' section of the report.
I11(iii) When practical and deemed necessary, Federal awarding agencies may require recipients to report in the ``Remarks'' section the amount of cash advances received in excess of three days. Recipients shall provide short narrative explanations of actions taken to reduce the excess balances.
I11(iv) Recipients shall be required to submit not more than the original and two copies of the SF�09272 15 calendar days following the end of each quarter. The Federal awarding agencies may require a monthly report from those recipients receiving advances totaling $1 million or more per year.
I11(v) Federal awarding agencies may waive the requirement for submission of the SF�09272 for any one of the following reasons:
I11(A) When monthly advances do not exceed $25,000 per recipient, provided that such advances are monitored through other forms contained in this section;
I11(B) If, in the Federal awarding agency's opinion, the recipient's accounting controls are adequate to minimize excessive Federal advances; or
I11(C) When the electronic payment mechanisms provide adequate data.
I11(b) When the Federal awarding agency needs additional information or more frequent reports, the following shall be observed.
I11(1) When additional information is needed to comply with legislative requirements, Federal awarding agencies shall issue instructions to require recipients to submit such information under the ``Remarks'' section of the reports.
I11(2) When a Federal awarding agency determines that a recipient's accounting system does not meet the standards in �1A3019.21, additional pertinent information to further monitor awards may be obtained upon written notice to the recipient until such time as the system is brought up to standard. The Federal awarding agency, in obtaining this information, shall comply with report clearance requirements of 5 CFR part 1320.
I11(3) Federal awarding agencies are encouraged to shade out any line item on any report if not necessary.
I11(4) Federal awarding agencies may accept the identical information from the recipients in machine readable format or computer printouts or electronic outputs in lieu of prescribed formats.
I11(5) Federal awarding agencies may provide computer or electronic outputs to recipients when such expedites or contributes to the accuracy of reporting.

I80�1A3019.53 
I89Retention and access requirements for records.
I11(a) This section sets forth requirements for record retention and access to records for awards to recipients. Federal awarding agencies shall not impose any other record retention or access requirements upon recipients. 
I11(b) Financial records, supporting documents, statistical records, and all other records pertinent to an award shall be retained for a period of three years from the date of submission of the final expenditure report or, for awards that are renewed quarterly or �190�annually, from the date of the submission of the quarterly or annual financial report, as authorized by the Federal awarding agency. The only exceptions are the following.
I11(1) If any litigation, claim, or audit is started before the expiration of the 3-year period, the records shall be retained until all litigation, claims or audit findings involving the records have been resolved and final action taken.
I11(2) Records for real property and equipment acquired with Federal funds shall be retained for 3 years after final disposition.
I11(3) When records are transferred to or maintained by the Federal awarding agency, the 3-year retention requirement is not applicable to the recipient.
I11(4) Indirect cost rate proposals, cost allocations plans, etc. as specified in paragraph (g) of this section.
I11(c) Copies of original records may be substituted for the original records if authorized by the Federal awarding agency.
I11(d) The Federal awarding agency shall request transfer of certain records to its custody from recipients when it determines that the records possess long term retention value. However, in order to avoid duplicate recordkeeping, a Federal awarding agency may make arrangements for recipients to retain any records that are continuously needed for joint use.
I11(e) The Federal awarding agency, the Inspector General, Comptroller General of the United States, or any of their duly authorized representatives, have the right of timely and unrestricted access to any books, documents, papers, or other records of recipients that are pertinent to the awards, in order to make audits, examinations, excerpts, transcripts and copies of such documents. This right also includes timely and reasonable access to a recipient's personnel for the purpose of interview and discussion related to such documents. The rights of access in this paragraph are not limited to the required retention period, but shall last as long as records are retained.
I11(f) Unless required by statute, no Federal awarding agency shall place restrictions on receipts that limit public access to the records of recipients that are pertinent to an award, except when the Federal awarding agency can demonstrate that such records shall be kept confidential and would have been exempted from disclosure pursuant to the Freedom of Information Act (5 U.S.C. 552) if the records had belonged to the Federal awarding agency.
I11(g) Indirect cost rate proposals, cost allocations plans, etc. Paragraphs (g)(1) and (g)(2) of this section apply to the following types of documents, and their supporting records: indirect cost rate computations or proposals, cost allocation plans, and any similar accounting computations of the rate at which a particular group of costs is chargeable (such as computer usage chargeback rates or composite fringe benefit rates).
I11(1) If submitted for negotiation. If the recipient submits to the Federal awarding agency or the subrecipient submits to the recipient the proposal, plan, or other computation to form the basis for negotiation of the rate, then the 3-year retention period for its supporting records starts on the date of such submission.
I11(2) If not submitted for negotiation. If the recipient is not required to submit to the Federal awarding agency or the subrecipient is not required to submit to the recipient the proposal, plan, or other computation for negotiation purposes, then the 3-year retention period for the proposal, plan, or other computation and its supporting records starts at the end of the fiscal year (or other accounting period) covered by the proposal, plan, or other computation.
I84Termination and Enforcement

I80�1A3019.60 
I89Purpose of termination and enforcement.
I11Sections 3019.61 and 3019.62 set forth uniform suspension, termination and enforcement procedures.

I80�1A3019.61 
I89Termination.
I11(a) Awards may be terminated in whole or in part only if paragraphs (a)(1), (a)(2) or (a)(3) of this section apply.
�191�I11(1) By the Federal awarding agency, if a recipient materially fails to comply with the terms and conditions of an award.
I11(2) By the Federal awarding agency with the consent of the recipient, in which case the two parties shall agree upon the termination conditions, including the effective date and, in the case of partial termination, the portion to be terminated.
I11(3) By the recipient upon sending to the Federal awarding agency written notification setting forth the reasons for such termination, the effective date, and, in the case of partial termination, the portion to be terminated. However, if the Federal awarding agency determines in the case of partial termination that the reduced or modified portion of the grant will not accomplish the purposes for which the grant was made, it may terminate the grant in its entirety under either paragraphs (a)(1) or (2) of this section.
I11(b) If costs are allowed under an award, the responsibilities of the recipient referred to in �1A3019.71(a), including those for property management as applicable, shall be considered in the termination of the award, and provision shall be made for continuing responsibilities of the recipient after termination, as appropriate.

I80�1A3019.62 
I89Enforcement.
I11(a) T3Remedies for noncompliance.G1T1 If a recipient materially fails to comply with the terms and conditions of an award, whether stated in a Federal statute, regulation, assurance, application, or notice of award, the Federal awarding agency may, in addition to imposing any of the special conditions outlined in �1A3019.14, take one or more of the following actions, as appropriate in the circumstances.
I11(1) Temporarily withhold cash payments pending correction of the deficiency by the recipient or more severe enforcement action by the Federal awarding agency.
I11(2) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance.
I11(3) Wholly or partly suspend or terminate the current award.
I11(4) Withhold further awards for the project or program.
I11(5) Take other remedies that may be legally available.
I11(b) T3Hearings and appeals.G1T1 In taking an enforcement action, the awarding agency shall provide the recipient an opportunity for hearing, appeal, or other administrative proceeding to which the recipient is entitled under any statute or regulation applicable to the action involved.
I11(c) T3Effects of suspension and termination.G1T1 Costs of a recipient resulting from obligations incurred by the recipient during a suspension or after termination of an award are not allowable unless the awarding agency expressly authorizes them in the notice of suspension of termination or subsequently. Other recipient costs during suspension or after termination which are necessary and not reasonably avoidable are allowable if paragraphs (c)(1) and (c)(2) of this section apply.
I11(1) The costs result from obligations which were properly incurred by the recipient before the effective date of suspension or termination, are not in anticipation of it, and in the case of a termination, are noncancellable.
I11(2) The costs would be allowable if the award were not suspended or expired normally at the end of the funding period in which the termination takes effect.
I11(d) T3Relationship to debarment and suspension.G1T1 The enforcement remedies identified in this section, including suspension and termination, do not preclude a recipient from being subject to debarment and suspension under E.O.s 12549 and 12689 and the Federal awarding agency implementing regulations (see �1A3019.13).

I56Subpart D_After-the-Award Requirements

I80�1A3019.70 
I89Purpose.
I11Sections 3019.71 through 3019.73 contain closeout procedures and other procedures for subsequent disallowances and adjustments.

�192�I80�1A3019.71 
I89Closeout procedures.
I11(a) Recipients shall submit, within 90 calendar days after the date of completion of the award, all financial, performance, and other reports as required by the terms and conditions of the award. The Federal awarding agency may approve extensions when requested by the recipient.
I11(b) Unless the Federal awarding agency authorizes an extension, a recipient shall liquidate all obligations incurred under the award not later than 90 calendar days after the funding period or the date of completion as specified in the terms and conditions of the award or in agency implementing instructions.
I11(c) The Federal awarding agency shall make prompt payments to a recipient for allowable reimbursable costs under the award being closed out.
I11(d) The recipient shall promptly refund any balances of unobligated cash that the Federal awarding agency has advanced or paid and that is not authorized to be retained by the recipient for use in other projects. OMB Circular A�09129 governs unreturned amounts that become delinquent debts.
I11(e) When authorized by the terms and conditions of the award, the Federal awarding agency shall make a settlement for any upward or downward adjustments to the Federal share of costs after closeout reports are received.
I11(f) The recipient shall account for any real and personal property acquired with Federal funds or received from the Federal Government in accordance with �1A3019.31 through 3019.37.
I11(g) In the event a final audit has not been performed prior to the closeout of an award, the Federal awarding agency shall retain the right to recover an appropriate amount after fully considering the recommendations on disallowed costs resulting from the final audit.

I80�1A3019.72 
I89Subsequent adjustments and continuing responsibilities.
I11(a) The closeout of an award does not affect any of the following.
I11(1) The right of the Federal awarding agency to disallow costs and recover funds on the basis of a later audit or other review.
I11(2) The obligation of the recipient to return any funds due as a result of later refunds, corrections, or other transactions.
I11(3) Audit requirements in �1A3019.26.
I11(4) Property management requirements in �1A3019.31 through 3019.37.
I11(5) Records retention as required in �1A3019.53.
I11(b) After closeout of an award, a relationship created under an award may be modified or ended in whole or in part with the consent of the Federal awarding agency and the recipient, provided the responsibilities of the recipient referred to in �1A3019.73(a), including those for property management as applicable, are considered and provisions made for continuing responsibilities of the recipient, as appropriate.

I80�1A3019.73 
I89Collection of amounts due.
I11(a) Any funds paid to a recipient in excess of the amount to which the recipient is finally determined to be entitled under the terms and conditions of the award constitute a debt to the Federal Government. If not paid within a reasonable period after the demand for payment, the Federal awarding agency may reduce the debt by:
I11(1) Making an administrative offset against other requests for reimbursements.
I11(2) Withholding advance payments otherwise due to the recipient.
I11(3) Taking other action permitted by statute.
I11(b) Except as otherwise provided by law, the Federal awarding agency shall charge interest on an overdue debt in accordance with 4 CFR Chapter II, ``Federal Claims Collection Standards.''
S8002
I95Pt. 3019, App. A
I85Appendix A to Part T13019_G1T5T4Contract ProvisionsG1T5
I21All contracts, awarded by a recipient including small purchases, shall contain the following provisions as applicable:
I211. T3Equal Employment OpportunityG1T1_All contracts shall contain a provision requiring compliance with E.O. 11246, ``Equal Employment Opportunity,'' as amended by E.O. 11375, ``Amending Executive Order 11246 Relating to Equal Employment Opportunity,'' and as supplemented by regulations at 41 CFR part 60, ``Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor.''
�193�I212. T3Copeland ``Anti-Kickback'' Act (18 U.S.C. 874 and 40 U.S.C. 276c)G1T1_All contracts and subgrants in excess of $2000 for construction or repair awarded by recipients and subrecipients shall include a provision for compliance with the Copeland ``Anti-Kickback'' Act (18 U.S.C. 874), as supplemented by Department of Labor regulations (29 CFR part 3, ``Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States''). The Act provides that each contractor or subrecipient shall be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he is otherwise entitled. The recipient shall report all suspected or reported violations to the Federal awarding agency.
I213. T3Davis-Bacon Act, as amended (40 U.S.C. 276a to a�097)G1T1_When required by Federal program legislation, all construction contracts awarded by the recipients and subrecipients of more than $2000 shall include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 276a to a�097) and as supplemented by Department of Labor regulations (29 CFR part 5, ``Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction''). Under this Act, contractors shall be required to pay wages to laborers and mechanics at a rate not less than the minimum wages specified in a wage determination made by the Secretary of Labor. In addition, contractors shall be required to pay wages not less than once a week. The recipient shall place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation and the award of a contract shall be conditioned upon the acceptance of the wage determination. The recipient shall report all suspected or reported violations to the Federal awarding agency.
I214. T3Contract Work Hours and Safety Standards Act (40 U.S.C. 327�09333)G1T1_Where applicable, all contracts awarded by recipients in excess of $2000 for construction contracts and in excess of $2500 for other contracts that involve the employment of mechanics or laborers shall include a provision for compliance with Sections 102 and 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327�09333), as supplemented by Department of Labor regulations (29 CFR part 5). Under Section 102 of the Act, each contractor shall be required to compute the wages of every mechanic and laborer on the basis of a standard work week of 40 hours. Work in excess of the standard work week is permissible provided that the worker is compensated at a rate of not less than 1\1/2\ times the basic rate of pay for all hours worked in excess of 40 hours in the work week. Section 107 of the Act is applicable to construction work and provides that no laborer or mechanic shall be required to work in surroundings or under working conditions which are unsanitary, hazardous or dangerous. These requirements do not apply to the purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence.
I215. T3Rights to Inventions Made Under a Contract or AgreementG1T1_Contracts or agreements for the performance of experimental, developmental, or research work shall provide for the rights of the Federal Government and the recipient in any resulting invention in accordance with 37 CFR part 401, ``Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements,'' and any implementing regulations issued by the awarding agency.
I216. T3Clean Air Act (42 U.S.C. 7401 et. seq.) and the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.G1T1), as amended_Contracts and subgrants of amounts in excess of $100,000 shall contain a provision that requires the recipient to agree to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. 7401 T3et seq.G1T1) and the Federal Water Pollution Control Act as amended (33 U.S.C. 1251 T3et seq.G1T1). Violations shall be reported to the Federal awarding agency and the Regional Office of the Environmental Protection Agency (EPA).
I217. T3Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)G1T1_Contractors who apply or bid for an award of $100,000 or more shall file the required certification. Each tier certifies to the tier above that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant or any other award covered by 31 U.S.C. 1352. Each tier shall also disclose any lobbying with non-Federal funds that takes place in connection with obtaining any Federal award. Such disclosures are forwarded from tier to tier up to the recipient.
I218. T3Debarment and Suspension (E.O.s 12549 and 12689)G1T1_All parties doing business with the Department of Agriculture should consult the Department's regulations for debarment and suspension found at 7 CFR 3017. No contract shall be made to parties listed on the General Services Administration's List of Parties Excluded from Federal Procurement or Nonprocurement Programs in accordance with E.O.s 12549 and 12689, ``Debarment and Suspension.'' This list contains the names of parties debarred, suspended, or otherwise excluded by agencies, and contractors declared ineligible under statutory or regulatory authority other than E.O. 12549. Contractors with awards that exceed the small �194�purchase threshold shall provide the required certification regarding its exclusion status and that of its principal employees.

S8010
I95Pt. 3052
I52PART 3052_AUDITS OF STATES, LOCAL GOVERNMENTS, AND NON-PROFIT ORGANIZATIONS 


I86Subpart A_General 
S8006I18Sec. 
S8010I263052.100Purpose. 
I263052.105Definitions. 

I86Subpart B_Audits 

I263052.200Audit requirements. 
I263052.205Basis for determining Federal awards expended. 
I263052.210Subrecipient and vendor determinations. 
I263052.215Relation to other audit requirements. 
I263052.220Frequency of audits. 
I263052.225Sanctions. 
I263052.230Audit costs. 
I263052.235Program-specific audits. 

I86Subpart C_Auditees 

I263052.300Auditee responsibilities. 
I263052.305Auditor selection. 
I263052.310Financial statements. 
I263052.315Audit findings follow-up. 
I263052.320Report submission. 

I86Subpart D_Federal Agencies and Pass-Through Entities

I263052.400Responsibilities.
I263052.405Management decision.

I86Subpart E_Auditors 

I263052.500Scope of audit.
I263052.505Audit reporting.
I263052.510Audit findings.
I263052.515Audit working papers.
I263052.520Major program determination.
I263052.525Criteria for Federal program risk.
I263052.530Criteria for a low-risk auditee. 


Q04I21T5Authority:  T15 U.S.C. 301

Q04I21T5Source: T162 FR 45949, Aug. 29, 1997, unless otherwise noted.



I56Subpart A_General


I80�1A3052.100
I89Purpose.
I11This part sets forth standards for obtaining consistency and uniformity among Federal agencies for the audit of non-Federal entities expending Federal awards.


I80�1A3052.105
I89Definitions.
I11T3Audit findingG1T1 means deficiencies which the auditor is required by �1A3052.510(a) to report in the schedule of findings and questioned costs.
I11T3AuditeeG1T1 means any non-Federal entity that expends Federal awards which must be audited under this part.
I11T3AuditorG1T1 means an auditor, that is a public accountant or a Federal, State or local government audit organization, which meets the general standards specified in generally accepted government auditing standards (GAGAS). The term auditor does not include internal auditors of non-profit organizations.
I11T3CFDA numberG1T1 means the number assigned to a Federal program in the Catalog of Federal Domestic Assistance (CFDA).
I11T3Cluster of programsG1T1 means a grouping of closely related programs that share common compliance requirements. The types of clusters of programs are research and development (R&D), student financial aid (SFA), and other clusters. ``Other clusters'' are as defined by the Office of Management and Budget (OMB) in the compliance supplement or as designated by a State for Federal awards the State provides to its subrecipients that meet the definition of a cluster of programs. When designating an ``other cluster,'' a State shall identify the Federal awards included in the cluster and advise the subrecipients of compliance requirements applicable to the cluster, consistent with �1A3052.400(d)(1) and �1A3052.400(d)(2), respectively. A cluster of programs shall be considered as one program for determining major programs, as described in �1A3052.520, and, with the exception of R&D as described in �1A3052.200(c), whether a program-specific audit may be elected.
I11T3Cognizant agency for auditG1T1 means the Federal agency designated to carry out the responsibilities described in �1A3052.400(a).
I11T3Compliance supplementG1T1 refers to the Circular A�09133 Compliance Supplement, included as Appendix B to Circular A�09133, or such documents as OMB or its designee may issue to replace it. This document is available from the �195�Government Printing Office, Superintendent of Documents, Washington, DC 20402�099325.
I11T3Corrective actionG1T1 means action taken by the auditee that:
I11(1) Corrects identified deficiencies;
I11(2) Produces recommended improvements; or
I11(3) Demonstrates that audit findings are either invalid or do not warrant auditee action.
I11T3Federal agencyG1T1 has the same meaning as the term agency in Section 551(1) of title 5, United States Code.
I11T3Federal awardG1T1 means Federal financial assistance and Federal cost-reimbursement contracts that non-Federal entities receive directly from Federal awarding agencies or indirectly from pass-through entities. It does not include procurement contracts, under grants or contracts, used to buy goods or services from vendors. Any audits of such vendors shall be covered by the terms and conditions of the contract. Contracts to operate Federal Government owned, contractor operated facilities (GOCOs) are excluded from the requirements of this part.
I11T3Federal awarding agencyG1T1 means the Federal agency that provides an award directly to the recipient.
I11T3Federal financial assistanceG1T1 means assistance that non-Federal entities receive or administer in the form of grants, loans, loan guarantees, property (including donated surplus property), cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations, and other assistance, but does not include amounts received as reimbursement for services rendered to individuals as described in �1A3052.205(h) and �1A3052.205(i).
I11T3Federal programG1T1 means:

I11(1) All Federal awards to a non-Federal entity assigned a single number in the CFDA.
I11(2) When no CFDA number is assigned, all Federal awards from the same agency made for the same purpose should be combined and considered one program.
I11(3) Notwithstanding paragraphs (1) and (2) of this definition, a cluster of programs. The types of clusters of programs are:
I11(i) Research and development (R&D);
I11(ii) Student financial aid (SFA); and
I11(iii) ``Other clusters,'' as described in the definition of cluster of programs in this section.
I11T3GAGASG1T1 means generally accepted government auditing standards issued by the Comptroller General of the United States, which are applicable to financial audits.
I11T3Generally accepted accounting principlesG1T1 has the meaning specified in generally accepted auditing standards issued by the American Institute of Certified Public Accountants (AICPA).
I11T3Indian tribeG1T1 means any Indian tribe, band, nation, or other organized group or community, including any Alaskan Native village or regional or village corporation (as defined in, or established under, the Alaskan Native Claims Settlement Act) that is recognized by the United States as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.
I11T3Internal controlG1T1 means a process, effected by an entity's management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories:
I11(1) Effectiveness and efficiency of operations;
I11(2) Reliability of financial reporting; and
I11(3) Compliance with applicable laws and regulations.
I11T3Internal control pertaining to the compliance requirements for Federal programsG1T1 (Internal control over Federal programs) means a process_effected by an entity's management and other personnel_designed to provide reasonable assurance regarding the achievement of the following objectives for Federal programs:
I11(1) Transactions are properly recorded and accounted for to:
I11(i) Permit the preparation of reliable financial statements and Federal reports;
I11(ii) Maintain accountability over assets; and
I11(iii) Demonstrate compliance with laws, regulations, and other compliance requirements;
I11(2) Transactions are executed in compliance with:
I11(i) Laws, regulations, and the provisions of contracts or grant agreements �196�that could have a direct and material effect on a Federal program; and
I11(ii) Any other laws and regulations that are identified in the compliance supplement; and
I11(3) Funds, property, and other assets are safeguarded against loss from unauthorized use or disposition.
I11T3LoanG1T1 means a Federal loan or loan guarantee received or administered by a non-Federal entity.
I11T3Local governmentG1T1 means any unit of local government within a State, including a county, borough, municipality, city, town, township, parish, local public authority, special district, school district, intrastate district, council of governments, and any other instrumentality of local government.
I11T3Major programG1T1 means a Federal program determined by the auditor to be a major program in accordance with �1A3052.520 or a program identified as a major program by a Federal agency or pass-through entity in accordance with �1A3052.215(c).
I11T3Management decisionG1T1 means the evaluation by the Federal awarding agency or pass-through entity of the audit findings and corrective action plan and the issuance of a written decision as to what corrective action is necessary.
I11T3Non-Federal entityG1T1 means a State, local government, or non-profit organization.
I11T3Non-profit organizationG1T1 means:
I11(1) any corporation, trust, association, cooperative, or other organization that:
I11(i) Is operated primarily for scientific, educational, service, charitable, or similar purposes in the public interest;
I11(ii) Is not organized primarily for profit; and
I11(iii) Uses its net proceeds to maintain, improve, or expand its operations; and  
I11(2) The term non-profit organization includes non-profit institutions of higher education and hospitals.  
I11T3OMBG1T1 means the Executive Office of the President, Office of Management and Budget.  
I11T3Oversight agency for auditG1T1 means the Federal awarding agency that provides the predominant amount of direct funding to a recipient not assigned a cognizant agency for audit. When there is no direct funding, the Federal agency with the predominant indirect funding shall assume the oversight responsibilities. The duties of the oversight agency for audit are described in �1A3052.400(b).  
I11T3Pass-through entityG1T1 means a non-Federal entity that provides a Federal award to a subrecipient to carry out a Federal program.  
I11T3Program-specific auditG1T1 means an audit of one Federal program as provided for in �1A3052.200(c) and �1A3052.235.  
I11T3Questioned costG1T1 means a cost that is questioned by the auditor because of an audit finding:  
I11(1) Which resulted from a violation or possible violation of a provision of a law, regulation, contract, grant, cooperative agreement, or other agreement or document governing the use of Federal funds, including funds used to match Federal funds;  
I11(2) Where the costs, at the time of the audit, are not supported by adequate documentation; or  
I11(3) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances.  
I11T3RecipientG1T1 means a non-Federal entity that expends Federal awards received directly from a Federal awarding agency to carry out a Federal program.  
I11T3Research and developmentG1T1 (R&D) means all research activities, both basic and applied, and all development activities that are performed by a non-Federal entity. Research is defined as a systematic study directed toward fuller scientific knowledge or understanding of the subject studied. 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. Development is the systematic use of knowledge and understanding gained from research directed toward the production of useful materials, devices, systems, or methods, including design and development of prototypes and processes.  
I11T3Single auditG1T1 means an audit which includes both the entity's financial statements and the Federal awards as described in �1A3052.500.  
�197�I11T3StateG1T1 means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and the Trust Territory of the Pacific Islands, any instrumentality thereof, any multi-State, regional, or interstate entity which has governmental functions, and any Indian tribe as defined in this section.  
I11T3Student Financial Aid (SFA)G1T1 includes those programs of general student assistance, such as those authorized by Title IV of the Higher Education Act of 1965, as amended, (20 U.S.C. 1070 et seq.) which is administered by the U.S. Department of Education, and similar programs provided by other Federal agencies. It does not include programs which provide fellowships or similar Federal awards to students on a competitive basis, or for specified studies or research.  
I11T3SubrecipientG1T1 means a non-Federal entity that expends Federal awards received from a pass-through entity to carry out a Federal program, but does not include an individual that is a beneficiary of such a program. A subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agency. Guidance on distinguishing between a subrecipient and a vendor is provided in �1A3052.210.  
I11T3Types of compliance requirementsG1T1 refers to the types of compliance requirements listed in the compliance supplement. Examples include: activities allowed or unallowed; allowable costs/cost principles; cash management; eligibility; matching, level of effort, earmarking; and, reporting.  
I11T3VendorG1T1 means a dealer, distributor, merchant, or other seller providing goods or services that are required for the conduct of a Federal program. These goods or services may be for an organization's own use or for the use of beneficiaries of the Federal program. Additional guidance on distinguishing between a subrecipient and a vendor is provided in �1A3052.210.  
I56Subpart B_Audits  


I80�1A3052.200 
I89Audit requirements.  
I11(a) T3Audit required.G1T1 Non-Federal entities that expend $300,000 or more in a year in Federal awards shall have a single or program-specific audit conducted for that year in accordance with the provisions of this part. Guidance on determining Federal awards expended is provided in �1A3052.205. 
I11(b) T3Single audit.G1T1 Non-Federal entities that expend $300,000 or more in a year in Federal awards shall have a single audit conducted in accordance with �1A3052.500 except when they elect to have a program-specific audit conducted in accordance with paragraph (c) of this section.  
I11(c) T3Program-specific audit election.G1T1 When an auditee expends Federal awards under only one Federal program (excluding R&D) and the Federal program's laws, regulations, or grant agreements do not require a financial statement audit of the auditee, the auditee may elect to have a program-specific audit conducted in accordance with �1A3052.235. A program-specific audit may not be elected for R&D unless all of the Federal awards expended were received from the same Federal agency, or the same Federal agency and the same pass-through entity, and that Federal agency, or pass-through entity in the case of a subrecipient, approves in advance a program-specific audit.  
I11(d) T3Exemption when Federal awards expended are less than $300,000.G1T1 Non-Federal entities that expend less than $300,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in �1A3052.215(a), but records must be available for review or audit by appropriate officials of the Federal agency, pass-through entity, and General Accounting Office (GAO).  
I11(e) T3Federally Funded Research and Development Centers (FFRDC).G1T1 Management of an auditee that owns or operates a FFRDC may elect to treat the FFRDC as a separate entity for purposes of this part.  


�198�I80�1A3052.205 
I89Basis for determining Federal awards expended.  
I11(a) T3Determining Federal awards expended.G1T1 The determination of when an award is expended should be based on when the activity related to the award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with laws, regulations, and the provisions of contracts or grant agreements, such as: expenditure/expense transactions associated with grants, cost-reimbursement contracts, cooperative agreements, and direct appropriations; the disbursement of funds passed through to subrecipients; the use of loan proceeds under loan and loan guarantee programs; the receipt of property; the receipt of surplus property; the receipt or use of program income; the distribution or consumption of food commodities; the disbursement of amounts entitling the non-Federal entity to an interest subsidy; and, the period when insurance is in force.  
I11(b) T3Loan and loan guarantees (loans).G1T1 Since the Federal Government is at risk for loans until the debt is repaid, the following guidelines shall be used to calculate the value of Federal awards expended under loan programs, except as noted in paragraphs (c) and (d) of this section:  
I11(1) Value of new loans made or received during the fiscal year; plus  
I11(2) Balance of loans from previous years for which the Federal Government imposes continuing compliance requirements; plus  
I11(3) Any interest subsidy, cash, or administrative cost allowance received.  
I11(c) T3Loan and loan guarantees (loans) at institutions of higher education.G1T1 When loans are made to students of an institution of higher education but the institution does not make the loans, then only the value of loans made during the year shall be considered Federal awards expended in that year. The balance of loans for previous years is not included as Federal awards expended because the lender accounts for the prior balances.  
I11(d) T3Prior loan and loan guarantees (loans).G1T1 Loans, the proceeds of which were received and expended in prior-years, are not considered Federal awards expended under this part when the laws, regulations, and the provisions of contracts or grant agreements pertaining to such loans impose no continuing compliance requirements other than to repay the loans.  
I11(e) T3Endowment funds.G1T1 The cumulative balance of Federal awards for endowment funds which are federally restricted are considered awards expended in each year in which the funds are still restricted. 

I11(f) T3Free rent.G1T1 Free rent received by itself is not considered a Federal award expended under this part. However, free rent received as part of an award to carry out a Federal program shall be included in determining Federal awards expended and subject to audit under this part. 
I11(g) T3Valuing non-cash assistance.G1T1 Federal non-cash assistance, such as free rent, food stamps, food commodities, donated property, or donated surplus property, shall be valued at fair market value at the time of receipt or the assessed value provided by the Federal agency. 
I11(h) T3Medicare.G1T1 Medicare payments to a non-Federal entity for providing patient care services to Medicare eligible individuals are not considered Federal awards expended under this part. 
I11(i) T3Medicaid.G1T1 Medicaid payments to a subrecipient for providing patient care services to Medicaid eligible individuals are not considered Federal awards expended under this part unless a State requires the funds to be treated as Federal awards expended because reimbursement is on a cost-reimbursement basis. 
I11(j) T3Certain loans provided by the National Credit Union Administration.G1T1 For purposes of this part, loans made from the National Credit Union Share Insurance Fund and the Central Liquidity Facility that are funded by contributions from insured institutions are not considered Federal awards expended. 


I80�1A3052.210 
I89Subrecipient and vendor determinations. 
I11(a) T3General.G1T1 An auditee may be a recipient, a subrecipient, and a vendor. Federal awards expended as a recipient or a subrecipient would be subject to audit under this part. The payments received for goods or services provided as a vendor would not be considered �199�Federal awards. The guidance in paragraphs (b) and (c) of this section should be considered in determining whether payments constitute a Federal award or a payment for goods and services. 
I11(b) T3Federal award.G1T1 Characteristics indicative of a Federal award received by a subrecipient are when the organization: 
I11(1) Determines who is eligible to receive what Federal financial assistance; 
I11(2) Has its performance measured against whether the objectives of the Federal program are met; 
I11(3) Has responsibility for programmatic decision making; 
I11(4) Has responsibility for adherence to applicable Federal program compliance requirements; and 
I11(5) Uses the Federal funds to carry out a program of the organization as compared to providing goods or services for a program of the pass-through entity. 
I11(c) T3Payment for goods and services.G1T1 Characteristics indicative of a payment for goods and services received by a vendor are when the organization: 
I11(1) Provides the goods and services within normal business operations; 
I11(2) Provides similar goods or services to many different purchasers; 
I11(3) Operates in a competitive environment; 
I11(4) Provides goods or services that are ancillary to the operation of the Federal program; and 
I11(5) Is not subject to compliance requirements of the Federal program. 
I11(d) T3Use of judgment in making determination.G1T1 There may be unusual circumstances or exceptions to the listed characteristics. In making the determination of whether a subrecipient or vendor relationship exists, the substance of the relationship is more important than the form of the agreement. It is not expected that all of the characteristics will be present and judgment should be used in determining whether an entity is a subrecipient or vendor. 
I11(e) T3For-profit subrecipient.G1T1 Since this part does not apply to for-profit subrecipients, the pass-through entity is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients. The contract with the for-profit subrecipient should describe applicable compliance requirements and the for-profit subrecipient's compliance responsibility. Methods to ensure compliance for Federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the contract, and post-award audits. 
I11(f) T3Compliance responsibility for vendors.G1T1 In most cases, the auditee's compliance responsibility for vendors is only to ensure that the procurement, receipt, and payment for goods and services comply with laws, regulations, and the provisions of contracts or grant agreements. Program compliance requirements normally do not pass through to vendors. However, the auditee is responsible for ensuring compliance for vendor transactions which are structured such that the vendor is responsible for program compliance or the vendor's records must be reviewed to determine program compliance. Also, when these vendor transactions relate to a major program, the scope of the audit shall include determining whether these transactions are in compliance with laws, regulations, and the provisions of contracts or grant agreements. 



I80�1A3052.215 
I89Relation to other audit requirements. 
I11(a) T3Audit under this part in lieu of other audits.G1T1 An audit made in accordance with this part shall be in lieu of any financial audit required under individual Federal awards. To the extent this audit meets a Federal agency's needs, it shall rely upon and use such audits. The provisions of this part neither limit the authority of Federal agencies, including their Inspectors General, or GAO to conduct or arrange for additional audits (e.g., financial audits, performance audits, evaluations, inspections, or reviews) nor authorize any auditee to constrain Federal agencies from carrying out additional audits. Any additional audits shall be planned and performed in such a way as to build upon work performed by other auditors. 
I11(b) T3Federal agency to pay for additional audits.G1T1 A Federal agency that conducts or contracts for additional audits shall, consistent with other applicable laws �200�and regulations, arrange for funding the full cost of such additional audits. 
I11(c) T3Request for a program to be audited as a major program.G1T1 A Federal agency may request an auditee to have a particular Federal program audited as a major program in lieu of the Federal agency conducting or arranging for the additional audits. To allow for planning, such requests should be made at least 180 days prior to the end of the fiscal year to be audited. The auditee, after consultation with its auditor, should promptly respond to such request by informing the Federal agency whether the program would otherwise be audited as a major program using the risk-based audit approach described in �1A3052.520 and, if not, the estimated incremental cost. The Federal agency shall then promptly confirm to the auditee whether it wants the program audited as a major program. If the program is to be audited as a major program based upon this Federal agency request, and the Federal agency agrees to pay the full incremental costs, then the auditee shall have the program audited as a major program. A pass-through entity may use the provisions of this paragraph for a subrecipient. 


I80�1A3052.220 
I89Frequency of audits. 
I11Except for the provisions for biennial audits provided in paragraphs (a) and (b) of this section, audits required by this part shall be performed annually. Any biennial audit shall cover both years within the biennial period. 
I11(a) A State or local government that is required by constitution or statute, in effect on January 1, 1987, to undergo its audits less frequently than annually, is permitted to undergo its audits pursuant to this part biennially. This requirement must still be in effect for the biennial period under audit. 
I11(b) Any non-profit organization that had biennial audits for all biennial periods ending between July 1, 1992, and January 1, 1995, is permitted to undergo its audits pursuant to this part biennially. 


I80�1A3052.225 
I89Sanctions.  
I11No audit costs may be charged to Federal awards when audits required by this part have not been made or have been made but not in accordance with this part. In cases of continued inability or unwillingness to have an audit conducted in accordance with this part, Federal agencies and pass-through entities shall take appropriate action using sanctions such as:  
I11(a) Withholding a percentage of Federal awards until the audit is completed satisfactorily;  
I11(b) Withholding or disallowing overhead costs;  
I11(c) Suspending Federal awards until the audit is conducted; or  
I11(d) Terminating the Federal award.  


I80�1A3052.230 
I89Audit costs.  
I11(a) T3Allowable costs.G1T1 Unless prohibited by law, the cost of audits made in accordance with the provisions of this part are allowable charges to Federal awards. The charges may be considered a direct cost or an allocated indirect cost, as determined in accordance with the provisions of applicable OMB cost principles circulars, the Federal Acquisition Regulation (FAR) (48 CFR parts 30 and 31), or other applicable cost principles or regulations.  
I11(b) T3Unallowable costs.G1T1 A non-Federal entity shall not charge the following to a Federal award:  
I11(1) The cost of any audit under the Single Audit Act Amendments of 1996 (31 U.S.C. 7501 T3et seq.G1T1) not conducted in accordance with this part.  
I11(2) The cost of auditing a non-Federal entity which has Federal awards expended of less than $300,000 per year and is thereby exempted under �1A3052.200(d) from having an audit conducted under this part. However, this does not prohibit a pass-through entity from charging Federal awards for the cost of limited scope audits to monitor its subrecipients in accordance with �1A3052.400(d)(3), provided the subrecipient does not have a single audit. For purposes of this part, limited scope audits only include agreed-upon procedures engagements conducted in accordance with either the AICPA's generally accepted auditing standards or attestation standards, that are paid for and arranged by a pass-through entity and address only one or more of the following types of compliance requirements: activities allowed or unallowed; �201�allowable costs/cost principles; eligibility; matching, level of effort, earmarking; and, reporting.  


I80�1A3052.235 
I89Program-specific audits.  
I11(a) T3Program-specific audit guide available.G1T1 In many cases, a program-specific audit guide will be available to provide specific guidance to the auditor with respect to internal control, compliance requirements, suggested audit procedures, and audit reporting requirements. The auditor should contact the Office of Inspector General of the Federal agency to determine whether such a guide is available. When a current program-specific audit guide is available, the auditor shall follow GAGAS and the guide when performing a program-specific audit.  
I11(b) T3Program-specific audit guide not available.G1T1 (1) When a program-specific audit guide is not available, the auditee and auditor shall have basically the same responsibilities for the Federal program as they would have for an audit of a major program in a single audit.  
I11(2) The auditee shall prepare the financial statement(s) for the Federal program that includes, at a minimum, a schedule of expenditures of Federal awards for the program and notes that describe the significant accounting policies used in preparing the schedule, a summary schedule of prior audit findings consistent with the requirements of �1A3052.315(b), and a corrective action plan consistent with the requirements of �1A3052.315(c). 
I11(3) The auditor shall:  
I11(i) Perform an audit of the financial statement(s) for the Federal program in accordance with GAGAS; 
I11(ii) Obtain an understanding of internal control and perform tests of internal control over the Federal program consistent with the requirements of �1A3052.500(c) for a major program;  
I11(iii) Perform procedures to determine whether the auditee has complied with laws, regulations, and the provisions of contracts or grant agreements that could have a direct and material effect on the Federal program consistent with the requirements of �1A3052.500(d) for a major program; and  
I11(iv) Follow up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee, and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding in accordance with the requirements of �1A3052.500(e).  
I11(4) The auditor's report(s) may be in the form of either combined or separate reports and may be organized differently from the manner presented in this section. The auditor's report(s) shall state that the audit was conducted in accordance with this part and include the following:  
I11(i) An opinion (or disclaimer of opinion) as to whether the financial statement(s) of the Federal program is presented fairly in all material respects in conformity with the stated accounting policies;  
I11(ii) A report on internal control related to the Federal program, which shall describe the scope of testing of internal control and the results of the tests;  
I11(iii) A report on compliance which includes an opinion (or disclaimer of opinion) as to whether the auditee complied with laws, regulations, and the provisions of contracts or grant agreements which could have a direct and material effect on the Federal program; and  
I11(iv) A schedule of findings and questioned costs for the Federal program that includes a summary of the auditor's results relative to the Federal program in a format consistent with �1A3052.505(d)(1) and findings and questioned costs consistent with the requirements of �1A3052.505(d)(3).  
I11(c) T3Report submission for program-specific audits.G1T1 (1) The audit shall be completed and the reporting required by paragraph (c)(2) or (c)(3) of this section submitted within the earlier of 30 days after receipt of the auditor's report(s), or nine months after the end of the audit period, unless a longer period is agreed to in advance by the Federal agency that provided the funding or a different period is specified in a program-specific audit guide. (However, for fiscal years beginning on or before June 30, 1988, the audit shall be completed and the required reporting shall �202�be submitted within the earlier of 30 days after receipt of the auditor's report(s), or 13 months after the end of the audit period, unless a different period is specified in a program-specific audit guide.) Unless restricted by law or regulation, the auditee shall make report copies available for public inspection.  
I11(2) When a program-specific audit guide is available, the auditee shall submit to the Federal clearinghouse designated by OMB the data collection form prepared in accordance with �1A3052.320(b), as applicable to a program-specific audit, and the reporting required by the program-specific audit guide to be retained as an archival copy. Also, the auditee shall submit to the Federal awarding agency or pass-through entity the reporting required by the program-specific audit guide.  
I11(3) When a program-specific audit guide is not available, the reporting package for a program-specific audit shall consist of the financial statement(s) of the Federal program, a summary schedule of prior audit findings, and a corrective action plan as described in paragraph (b)(2) of this section, and the auditor's report(s) described in paragraph (b)(4) of this section. The data collection form prepared in accordance with �1A3052.320(b), as applicable to a program-specific audit, and one copy of this reporting package shall be submitted to the Federal clearinghouse designated by OMB to be retained as an archival copy. Also, when the schedule of findings and questioned costs disclosed audit findings or the summary schedule of prior audit findings reported the status of any audit findings, the auditee shall submit one copy of the reporting package to the Federal clearinghouse on behalf of the Federal awarding agency, or directly to the pass-through entity in the case of a subrecipient. Instead of submitting the reporting package to the pass-through entity, when a subrecipient is not required to submit a reporting package to the pass-through entity, the subrecipient shall provide written notification to the pass-through entity, consistent with the requirements of �1A3052.320(e)(2). A subrecipient may submit a copy of the reporting package to the pass-through entity to comply with this notification requirement.  
I11(d) T3Other sections of this part may apply.G1T1 Program-specific audits are subject to �1A3052.100 through �1A3052.215(b), �1A3052.220 through �1A3052.230, �1A3052.300 through �1A3052.305, �1A3052.315, �1A3052.320(f) through �1A3052.320(j), �1A3052.400 through �1A3052.405, �1A3052.510 through �1A3052.515, and other referenced provisions of this part unless contrary to the provisions of this section, a program-specific audit guide, or program laws and regulations. 
I56Subpart C_Auditees  


I80�1A3052.300
I89Auditee responsibilities.  
I11The auditee shall:  
I11(a) Identify, in its accounts, all Federal awards received and expended and the Federal programs under which they were received. Federal program and award identification shall include, as applicable, the CFDA title and number, award number and year, name of the Federal agency, and name of the pass-through entity.  
I11(b) Maintain internal control over Federal programs that provides reasonable assurance that the auditee is managing Federal awards in compliance with laws, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its Federal programs.  
I11(c) Comply with laws, regulations, and the provisions of contracts or grant agreements related to each of its Federal programs.  
I11(d) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with �1A3052.310.  
I11(e) Ensure that the audits required by this part are properly performed and submitted when due. When extensions to the report submission due date required by �1A3052.320(a) are granted by the cognizant or oversight agency for audit, promptly notify the Federal clearinghouse designated by OMB and each pass-through entity providing Federal awards of the extension.  
I11(f) Follow up and take corrective action on audit findings, including preparation of a summary schedule of prior audit findings and a corrective action �203�plan in accordance with �1A3052.315(b) and �1A3052.315(c), respectively.  


I80�1A3052.305
I89Auditor selection.  
I11(a) T3Auditor procurement.G1T1 In procuring audit services, auditees shall follow the procurement standards prescribed by the Grants Management Common Rule (hereinafter referred to as the ``A�09102 Common Rule'') 7 CFR Part 3016, Circular A�09110, ``Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations,'' or the FAR (48 CFR part 42), as applicable (OMB Circulars are available from the Office of Administration, Publications Office, Room 2200, New Executive Office Building, Washington, DC 20503). Whenever possible, auditees shall make positive efforts to utilize small businesses, minority-owned firms, and women's business enterprises, in procuring audit services as stated in the A�09102 Common Rule, OMB Circular A�09110, or the FAR (48 CFR part 42), as applicable. In requesting proposals for audit services, the objectives and scope of the audit should be made clear. Factors to be considered in evaluating each proposal for audit services include the responsiveness to the request for proposal, relevant experience, availability of staff with professional qualifications and technical abilities, the results of external quality control reviews, and price.  
I11(b) T3Restriction on auditor preparing indirect cost proposals.G1T1 An auditor who prepares the indirect cost proposal or cost allocation plan may not also be selected to perform the audit required by this part when the indirect costs recovered by the auditee during the prior year exceeded $1 million. This restriction applies to the base year used in the preparation of the indirect cost proposal or cost allocation plan and any subsequent years in which the resulting indirect cost agreement or cost allocation plan is used to recover costs. To minimize any disruption in existing contracts for audit services, this paragraph applies to audits of fiscal years beginning after June 30, 1998.  
I11(c) T3Use of Federal auditors.G1T1 Federal auditors may perform all or part of the work required under this part if they comply fully with the requirements of this part.  


I80�1A3052.310
I89Financial statements.  
I11(a) T3Financial statements.G1T1 The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The financial statements shall be for the same organizational unit and fiscal year that is chosen to meet the requirements of this part. However, organization-wide financial statements may also include departments, agencies, and other organizational units that have separate audits in accordance with �1A3052.500(a) and prepare separate financial statements.  
I11(b) T3Schedule of expenditures of Federal awards.G1T1 The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple award years, the auditee may list the amount of Federal awards expended for each award year separately. At a minimum, the schedule shall:  
I11(1) List individual Federal programs by Federal agency. For Federal programs included in a cluster of programs, list individual Federal programs within a cluster of programs. For R&D, total Federal awards expended shall be shown either by individual award or by Federal agency and major subdivision within the Federal agency. For example, the National Institutes of Health is a major subdivision in the Department of Health and Human Services. 
I11(2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity shall be included.  
I11(3) Provide total Federal awards expended for each individual Federal program and the CFDA number or other identifying number when the CFDA information is not available.  
�204�I11(4) Include notes that describe the significant accounting policies used in preparing the schedule.  
I11(5) To the extent practical, pass-through entities should identify in the schedule the total amount provided to subrecipients from each Federal program.  
I11(6) Include, in either the schedule or a note to the schedule, the value of the Federal awards expended in the form of non-cash assistance, the amount of insurance in effect during the year, and loans or loan guarantees outstanding at year end. While not required, it is preferable to present this information in the schedule.  


I80�1A3052.315
I89Audit findings follow-up.  
I11(a) T3General.G1T1 The auditee is responsible for follow-up and corrective action on all audit findings. As part of this responsibility, the auditee shall prepare a summary schedule of prior audit findings. The auditee shall also prepare a corrective action plan for current year audit findings. The summary schedule of prior audit findings and the corrective action plan shall include the reference numbers the auditor assigns to audit findings under �1A3052.510(c). Since the summary schedule may include audit findings from multiple years, it shall include the fiscal year in which the finding initially occurred.  
I11(b) T3Summary schedule of prior audit findings.G1T1 The summary schedule of prior audit findings shall report the status of all audit findings included in the prior audit's schedule of findings and questioned costs relative to Federal awards. The summary schedule shall also include audit findings reported in the prior audit's summary schedule of prior audit findings except audit findings listed as corrected in accordance with paragraph (b)(1) of this section, or no longer valid or not warranting further action in accordance with paragraph (b)(4) of this section.  
I11(1) When audit findings were fully corrected, the summary schedule need only list the audit findings and state that corrective action was taken.  
I11(2) When audit findings were not corrected or were only partially corrected, the summary schedule shall describe the planned corrective action as well as any partial corrective action taken.  
I11(3) When corrective action taken is significantly different from corrective action previously reported in a corrective action plan or in the Federal agency's or pass-through entity's management decision, the summary schedule shall provide an explanation.  
I11(4) When the auditee believes the audit findings are no longer valid or do not warrant further action, the reasons for this position shall be described in the summary schedule. A valid reason for considering an audit finding as not warranting further action is that all of the following have occurred:  
I11(i) Two years have passed since the audit report in which the finding occurred was submitted to the Federal clearinghouse;  
I11(ii) The Federal agency or pass-through entity is not currently following up with the auditee on the audit finding; and  
I11(iii) A management decision was not issued.  
I11(c) T3Corrective action plan.G1T1 At the completion of the audit, the auditee shall prepare a corrective action plan to address each audit finding included in the current year auditor's reports. The corrective action plan shall provide the name(s) of the contact person(s) responsible for corrective action, the corrective action planned, and the anticipated completion date. If the auditee does not agree with the audit findings or believes corrective action is not required, then the corrective action plan shall include an explanation and specific reasons. 



I80�1A3052.320 
I89Report submission. 
I11(a) T3General.G1T1 The audit shall be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section shall be submitted within the earlier of 30 days after receipt of the auditor's report(s), or nine months after the end of the audit period, unless a longer period is agreed to in advance by the cognizant or oversight agency for audit. (However, for fiscal years beginning on or before June 30, 1998, the audit shall be completed and the data collection form and reporting package shall be submitted within the earlier of 30 days after receipt of the auditor's report(s), �205�or 13 months after the end of the audit period.) Unless restricted by law or regulation, the auditee shall make copies available for public inspection. 
I11(b) T3Data collection.G1T1 (1) The auditee shall submit a data collection form which states whether the audit was completed in accordance with this part and provides information about the auditee, its Federal programs, and the results of the audit. The form shall be approved by OMB, available from the Federal clearinghouse designated by OMB, and include data elements similar to those presented in this paragraph. A senior level representative of the auditee (e.g., State controller, director of finance, chief executive officer, or chief financial officer) shall sign a statement to be included as part of the form certifying that: the auditee complied with the requirements of this part, the form was prepared in accordance with this part (and the instructions accompanying the form), and the information included in the form, in its entirety, are accurate and complete. 
I11(2) The data collection form shall include the following data elements: 
I11(i) The type of report the auditor issued on the financial statements of the auditee (i.e., unqualified opinion, qualified opinion, adverse opinion, or disclaimer of opinion). 
I11(ii) Where applicable, a statement that reportable conditions in internal control were disclosed by the audit of the financial statements and whether any such conditions were material weaknesses. 
I11(iii) A statement as to whether the audit disclosed any noncompliance which is material to the financial statements of the auditee. 
I11(iv) Where applicable, a statement that reportable conditions in internal control over major programs were disclosed by the audit and whether any such conditions were material weaknesses. 
I11(v) The type of report the auditor issued on compliance for major programs (i.e., unqualified opinion, qualified opinion, adverse opinion, or disclaimer of opinion). 
I11(vi) A list of the Federal awarding agencies which will receive a copy of the reporting package pursuant to �1A3052.320(d)(2) of OMB Circular A�09133. 
I11(vii) A yes or no statement as to whether the auditee qualified as a low-risk auditee under �1A3052.530 of OMB Circular A�09133. 
I11(viii) The dollar threshold used to distinguish between Type A and Type B programs as defined in �1A3052.520(b) of OMB Circular A�09133. 
I11(ix) The Catalog of Federal Domestic Assistance (CFDA) number for each Federal program, as applicable. 
I11(x) The name of each Federal program and identification of each major program. Individual programs within a cluster of programs should be listed in the same level of detail as they are listed in the schedule of expenditures of Federal awards. 
I11(xi) The amount of expenditures in the schedule of expenditures of Federal awards associated with each Federal program. 
I11(xii) For each Federal program, a yes or no statement as to whether there are audit findings in each of the following types of compliance requirements and the total amount of any questioned costs: 

I11(A) Activities allowed or unallowed. 
I11(B) Allowable costs/cost principles. 
I11(C) Cash management. 
I11(D) Davis-Bacon Act. 
I11(E) Eligibility. 
I11(F) Equipment and real property management. 
I11(G) Matching, level of effort, earmarking. 
I11(H) Period of availability of Federal funds. 
I11(I) Procurement and suspension and debarment. 
I11(J) Program income. 
I11(K) Real property acquisition and relocation assistance. 
I11(L) Reporting. 
I11(M) Subrecipient monitoring. 
I11(N) Special tests and provisions. 
I11(xiii) Auditee Name, Employer Identification Number(s), Name and Title of Certifying Official, Telephone Number, Signature, and Date. 
I11(xiv) Auditor Name, Name and Title of Contact Person, Auditor Address, Auditor Telephone Number, Signature, and Date. 
I11(xv) Whether the auditee has either a cognizant or oversight agency for audit. 
�206�I11(xvi) The name of the cognizant or oversight agency for audit determined in accordance with �1A3052.400(a) and �1A3052.400(b), respectively. 
I11(3) Using the information included in the reporting package described in paragraph (c) of this section, the auditor shall complete the applicable sections of the form. The auditor shall sign a statement to be included as part of the data collection form that indicates, at a minimum, the source of the information included in the form, the auditor's responsibility for the information, that the form is not a substitute for the reporting package described in paragraph (c) of this section, and that the content of the form is limited to the data elements prescribed by OMB. 
I11(c) T3Reporting package.G1T1 The reporting package shall include the: 
I11(1) Financial statements and schedule of expenditures of Federal awards discussed in �1A3052.310(a) and �1A3052.310(b), respectively; 
I11(2) Summary schedule of prior audit findings discussed in �1A3052.315(b); 
I11(3) Auditor's report(s) discussed in �1A3052.505; and 
I11(4) Corrective action plan discussed in �1A3052.315(c). 
I11(d) T3Submission to clearinghouse.G1T1 All auditees shall submit to the Federal clearinghouse designated by OMB the data collection form described in paragraph (b) of this section and one copy of the reporting package described in paragraph (c) of this section for: 
I11(1) The Federal clearinghouse to retain as an archival copy; and 
I11(2) Each Federal awarding agency when the schedule of findings and questioned costs disclosed audit findings relating to Federal awards that the Federal awarding agency provided directly or the summary schedule of prior audit findings reported the status of any audit findings relating to Federal awards that the Federal awarding agency provided directly. 
I11(e) T3Additional submission by subrecipients.G1T1 (1) In addition to the requirements discussed in paragraph (d) of this section, auditees that are also subrecipients shall submit to each pass-through entity one copy of the reporting package described in paragraph (c) of this section for each pass-through entity when the schedule of findings and questioned costs disclosed audit findings relating to Federal awards that the pass-through entity provided or the summary schedule of prior audit findings reported the status of any audit findings relating to Federal awards that the pass-through entity provided. 

I11(2) Instead of submitting the reporting package to a pass-through entity, when a subrecipient is not required to submit a reporting package to a pass-through entity pursuant to paragraph (e)(1) of this section, the subrecipient shall provide written notification to the pass-through entity that: an audit of the subrecipient was conducted in accordance with this part (including the period covered by the audit and the name, amount, and CFDA number of the Federal award(s) provided by the pass-through entity); the schedule of findings and questioned costs disclosed no audit findings relating to the Federal award(s) that the pass-through entity provided; and, the summary schedule of prior audit findings did not report on the status of any audit findings relating to the Federal award(s) that the pass-through entity provided. A subrecipient may submit a copy of the reporting package described in paragraph (c) of this section to a pass-through entity to comply with this notification requirement.  
I11(f) T3Requests for report copies.G1T1 In response to requests by a Federal agency or pass-through entity, auditees shall submit the appropriate copies of the reporting package described in paragraph (c) of this section and, if requested, a copy of any management letters issued by the auditor.  
I11(g) T3Report retention requirements.G1T1 Auditees shall keep one copy of the data collection form described in paragraph (b) of this section and one copy of the reporting package described in paragraph (c) of this section on file for three years from the date of submission to the Federal clearinghouse designated by OMB. Pass-through entities shall keep subrecipients' submissions on file for three years from date of receipt.  
I11(h) T3Clearinghouse responsibilities.G1T1 The Federal clearinghouse designated by OMB shall distribute the reporting �207�packages received in accordance with paragraph (d)(2) of this section and �1A3052.235(c)(3) to applicable Federal awarding agencies, maintain a data base of completed audits, provide appropriate information to Federal agencies, and follow up with known auditees which have not submitted the required data collection forms and reporting packages.  
I11(i) T3Clearinghouse address.G1T1 The address of the Federal clearinghouse currently designated by OMB is Federal Audit Clearinghouse, Bureau of the Census, 1201 E. 10th Street, Jeffersonville, IN 47132.  
I11(j) T3Electronic filing.G1T1 Nothing in this part shall preclude electronic submissions to the Federal clearinghouse in such manner as may be approved by OMB. With OMB approval, the Federal clearinghouse may pilot test methods of electronic submissions.  
I56Subpart D_Federal Agencies and Pass-Through Entities  


I80�1A3052.400 
I89Responsibilities.  
I11(a) T3Cognizant agency for audit responsibilities.G1T1 Recipients expending more than $25 million a year in Federal awards shall have a cognizant agency for audit. The designated cognizant agency for audit shall be the Federal awarding agency that provides the predominant amount of direct funding to a recipient unless OMB makes a specific cognizant agency for audit assignment. To provide for continuity of cognizance, the determination of the predominant amount of direct funding shall be based upon direct Federal awards expended in the recipient's fiscal years ending in 1995, 2000, 2005, and every fifth year thereafter. For example, audit cognizance for periods ending in 1997 through 2000 will be determined based on Federal awards expended in 1995. (However, for States and local governments that expend more than $25 million a year in Federal awards and have previously assigned cognizant agencies for audit, the requirements of this paragraph are not effective until fiscal years beginning after June 30, 2000.) Notwithstanding the manner in which audit cognizance is determined, a Federal awarding agency with cognizance for an auditee may reassign cognizance to another Federal awarding agency which provides substantial direct funding and agrees to be the cognizant agency for audit. Within 30 days after any reassignment, both the old and the new cognizant agency for audit shall notify the auditee, and, if known, the auditor of the reassignment. The cognizant agency for audit shall:  
I11(1) Provide technical audit advice and liaison to auditees and auditors.  
I11(2) Consider auditee requests for extensions to the report submission due date required by �1A3052.320(a). The cognizant agency for audit may grant extensions for good cause.  
I11(3) Obtain or conduct quality control reviews of selected audits made by non-Federal auditors, and provide the results, when appropriate, to other interested organizations.  
I11(4) Promptly inform other affected Federal agencies and appropriate Federal law enforcement officials of any direct reporting by the auditee or its auditor of irregularities or illegal acts, as required by GAGAS or laws and regulations. 
I11(5) Advise the auditor and, where appropriate, the auditee of any deficiencies found in the audits when the deficiencies require corrective action by the auditor. When advised of deficiencies, the auditee shall work with the auditor to take corrective action. If corrective action is not taken, the cognizant agency for audit shall notify the auditor, the auditee, and applicable Federal awarding agencies and pass-through entities of the facts and make recommendations for follow-up action. Major inadequacies or repetitive substandard performance by auditors shall be referred to appropriate State licensing agencies and professional bodies for disciplinary action.  
I11(6) Coordinate, to the extent practical, audits or reviews made by or for Federal agencies that are in addition to the audits made pursuant to this part, so that the additional audits or reviews build upon audits performed in accordance with this part.  
I11(7) Coordinate a management decision for audit findings that affect the Federal programs of more than one agency.  
I11(8) Coordinate the audit work and reporting responsibilities among auditors �208�to achieve the most cost-effective audit.  
I11(9) For biennial audits permitted under �1A3052.220, consider auditee requests to qualify as a low-risk auditee under �1A3052.530(a).  
I11(b) T3Oversight agency for audit responsibilities.G1T1 An auditee which does not have a designated cognizant agency for audit will be under the general oversight of the Federal agency determined in accordance with �1A3052.105. The oversight agency for audit:  
I11(1) Shall provide technical advice to auditees and auditors as requested.  
I11(2) May assume all or some of the responsibilities normally performed by a cognizant agency for audit.  
I11(c) T3Federal awarding agency responsibilities.G1T1 The Federal awarding agency shall perform the following for the Federal awards it makes:  
I11(1) Identify Federal awards made by informing each recipient of the CFDA title and number, award name and number, award year, and if the award is for R&D. When some of this information is not available, the Federal agency shall provide information necessary to clearly describe the Federal award.  
I11(2) Advise recipients of requirements imposed on them by Federal laws, regulations, and the provisions of contracts or grant agreements.  
I11(3) Ensure that audits are completed and reports are received in a timely manner and in accordance with the requirements of this part.  
I11(4) Provide technical advice and counsel to auditees and auditors as requested.  
I11(5) Issue a management decision on audit findings within six months after receipt of the audit report and ensure that the recipient takes appropriate and timely corrective action.  
I11(6) Assign a person responsible for providing annual updates of the compliance supplement to OMB.  
I11(d) T3Pass-through entity responsibilities.G1T1 A pass-through entity shall perform the following for the Federal awards it makes:  
I11(1) Identify Federal awards made by informing each subrecipient of CFDA title and number, award name and number, award year, if the award is R&D, and name of Federal agency. When some of this information is not available, the pass-through entity shall provide the best information available to describe the Federal award.  
I11(2) Advise subrecipients of requirements imposed on them by Federal laws, regulations, and the provisions of contracts or grant agreements as well as any supplemental requirements imposed by the pass-through entity.  
I11(3) Monitor the activities of subrecipients as necessary to ensure that Federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved.  
I11(4) Ensure that subrecipients expending $300,000 or more in Federal awards during the subrecipient's fiscal year have met the audit requirements of this part for that fiscal year.  
I11(5) Issue a management decision on audit findings within six months after receipt of the subrecipient's audit report and ensure that the subrecipient takes appropriate and timely corrective action.  
I11(6) Consider whether subrecipient audits necessitate adjustment of the pass-through entity's own records.  
I11(7) Require each subrecipient to permit the pass-through entity and auditors to have access to the records and financial statements as necessary for the pass-through entity to comply with this part.  


I80�1A3052.405 
I89Management decision. 
I11(a) T3General.G1T1 The management decision shall clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action. If the auditee has not completed corrective action, a timetable for follow-up should be given. Prior to issuing the management decision, the Federal agency or pass-through entity may request additional information or documentation from the auditee, including a request for auditor assurance related to the documentation, as a way of mitigating disallowed costs. The management decision should describe any appeal process available to the auditee.  
I11(b) T3Federal agency.G1T1 As provided in �1A3052.400(a)(7), the cognizant agency for �209�audit shall be responsible for coordinating a management decision for audit findings that affect the programs of more than one Federal agency. As provided in �1A3052.400(c)(5), a Federal awarding agency is responsible for issuing a management decision for findings that relate to Federal awards it makes to recipients. Alternate arrangements may be made on a case-by-case basis by agreement among the Federal agencies concerned.  
I11(c) T3Pass-through entity.G1T1 As provided in �1A3052.400(d)(5), the pass-through entity shall be responsible for making the management decision for audit findings that relate to Federal awards it makes to subrecipients.  
I11(d) T3Time requirements.G1T1 The entity responsible for making the management decision shall do so within six months of receipt of the audit report. Corrective action should be initiated within six months after receipt of the audit report and proceed as rapidly as possible.  
I11(e) T3Reference numbers.G1T1 Management decisions shall include the reference numbers the auditor assigned to each audit finding in accordance with �1A3052.510(c).  
I56Subpart E_Auditors  


I80�1A3052.500 
I89Scope of audit.  
I11(a) T3General.G1T1 The audit shall be conducted in accordance with GAGAS. The audit shall cover the entire operations of the auditee; or, at the option of the auditee, such audit shall include a series of audits that cover departments, agencies, and other organizational units which expended or otherwise administered Federal awards during such fiscal year, provided that each such audit shall encompass the financial statements and schedule of expenditures of Federal awards for each such department, agency, and other organizational unit, which shall be considered to be a non-Federal entity. The financial statements and schedule of expenditures of Federal awards shall be for the same fiscal year.  
I11(b) T3Financial statements.G1T1 The auditor shall determine whether the financial statements of the auditee are presented fairly in all material respects in conformity with generally accepted accounting principles. The auditor shall also determine whether the schedule of expenditures of Federal awards is presented fairly in all material respects in relation to the auditee's financial statements taken as a whole.  
I11(c) T3Internal control.G1T1 (1) In addition to the requirements of GAGAS, the auditor shall perform procedures to obtain an understanding of internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk for major programs.  
I11(2) Except as provided in paragraph (c)(3) of this section, the auditor shall:  
I11(i) Plan the testing of internal control over major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program; and  
I11(ii) Perform testing of internal control as planned in paragraph (c)(2)(i) of this section.  
I11(3) When internal control over some or all of the compliance requirements for a major program are likely to be ineffective in preventing or detecting noncompliance, the planning and performing of testing described in paragraph (c)(2) of this section are not required for those compliance requirements. However, the auditor shall report a reportable condition (including whether any such condition is a material weakness) in accordance with �1A3052.510, assess the related control risk at the maximum, and consider whether additional compliance tests are required because of ineffective internal control.  
I11(d) T3Compliance.G1T1 (1) In addition to the requirements of GAGAS, the auditor shall determine whether the auditee has complied with laws, regulations, and the provisions of contracts or grant agreements that may have a direct and material effect on each of its major programs. 
I11(2) The principal compliance requirements applicable to most Federal programs and the compliance requirements of the largest Federal programs are included in the compliance supplement.  
I11(3) For the compliance requirements related to Federal programs contained in the compliance supplement, an audit �210�of these compliance requirements will meet the requirements of this part. Where there have been changes to the compliance requirements and the changes are not reflected in the compliance supplement, the auditor shall determine the current compliance requirements and modify the audit procedures accordingly. For those Federal programs not covered in the compliance supplement, the auditor should use the types of compliance requirements contained in the compliance supplement as guidance for identifying the types of compliance requirements to test, and determine the requirements governing the Federal program by reviewing the provisions of contracts and grant agreements and the laws and regulations referred to in such contracts and grant agreements.  
I11(4) The compliance testing shall include tests of transactions and such other auditing procedures necessary to provide the auditor sufficient evidence to support an opinion on compliance.  
I11(e) T3Audit follow-up.G1T1 The auditor shall follow-up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee in accordance with �1A3052.315(b), and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding. The auditor shall perform audit follow-up procedures regardless of whether a prior audit finding relates to a major program in the current year.  
I11(f) T3Data collection form.G1T1 As required in �1A3052.320(b)(3), the auditor shall complete and sign specified sections of the data collection form.  


I80�1A3052.505 
I89Audit reporting.  
I11The auditor's report(s) may be in the form of either combined or separate reports and may be organized differently from the manner presented in this section. The auditor's report(s) shall state that the audit was conducted in accordance with this part and include the following:  
I11(a) An opinion (or disclaimer of opinion) as to whether the financial statements are presented fairly in all material respects in conformity with generally accepted accounting principles and an opinion (or disclaimer of opinion) as to whether the schedule of expenditures of Federal awards is presented fairly in all material respects in relation to the financial statements taken as a whole.  
I11(b) A report on internal control related to the financial statements and major programs. This report shall describe the scope of testing of internal control and the results of the tests, and, where applicable, refer to the separate schedule of findings and questioned costs described in paragraph (d) of this section.  
I11(c) A report on compliance with laws, regulations, and the provisions of contracts or grant agreements, noncompliance with which could have a material effect on the financial statements. This report shall also include an opinion (or disclaimer of opinion) as to whether the auditee complied with laws, regulations, and the provisions of contracts or grant agreements which could have a direct and material effect on each major program, and, where applicable, refer to the separate schedule of findings and questioned costs described in paragraph (d) of this section. 

I11(d) A schedule of findings and questioned costs which shall include the following three components:  
I11(1) A summary of the auditor's results which shall include:  
I11(i) The type of report the auditor issued on the financial statements of the auditee (i.e., unqualified opinion, qualified opinion, adverse opinion, or disclaimer of opinion);  
I11(ii) Where applicable, a statement that reportable conditions in internal control were disclosed by the audit of the financial statements and whether any such conditions were material weaknesses;  
I11(iii) A statement as to whether the audit disclosed any noncompliance which is material to the financial statements of the auditee;  
I11(iv) Where applicable, a statement that reportable conditions in internal control over major programs were disclosed by the audit and whether any such conditions were material weaknesses;  
�211�I11(v) The type of report the auditor issued on compliance for major programs (i.e., unqualified opinion, qualified opinion, adverse opinion, or disclaimer of opinion);  
I11(vi) A statement as to whether the audit disclosed any audit findings which the auditor is required to report under �1A3052.510(a);  
I11(vii) An identification of major programs; 
I11(viii) The dollar threshold used to distinguish between Type A and Type B programs, as described in �1A3052.520(b); and  
I11(ix) A statement as to whether the auditee qualified as a low-risk auditee under �1A3052.530.  
I11(2) Findings relating to the financial statements which are required to be reported in accordance with GAGAS.  
I11(3) Findings and questioned costs for Federal awards which shall include audit findings as defined in �1A3052.510(a).  
I11(i) Audit findings (e.g., internal control findings, compliance findings, questioned costs, or fraud) which relate to the same issue should be presented as a single audit finding. Where practical, audit findings should be organized by Federal agency or pass-through entity.  
I11(ii) Audit findings which relate to both the financial statements and Federal awards, as reported under paragraphs (d)(2) and (d)(3) of this section, respectively, should be reported in both sections of the schedule. However, the reporting in one section of the schedule may be in summary form with a reference to a detailed reporting in the other section of the schedule.  


I80�1A3052.510 
I89Audit findings.  
I11(a) T3Audit findings reported.G1T1 The auditor shall report the following as audit findings in a schedule of findings and questioned costs:  
I11(1) Reportable conditions in internal control over major programs. The auditor's determination of whether a deficiency in internal control is a reportable condition for the purpose of reporting an audit finding is in relation to a type of compliance requirement for a major program or an audit objective identified in the compliance supplement. The auditor shall identify reportable conditions which are individually or cumulatively material weaknesses.  
I11(2) Material noncompliance with the provisions of laws, regulations, contracts, or grant agreements related to a major program. The auditor's determination of whether a noncompliance with the provisions of laws, regulations, contracts, or grant agreements is material for the purpose of reporting an audit finding is in relation to a type of compliance requirement for a major program or an audit objective identified in the compliance supplement.  
I11(3) Known questioned costs which are greater than $10,000 for a type of compliance requirement for a major program. Known questioned costs are those specifically identified by the auditor. In evaluating the effect of questioned costs on the opinion on compliance, the auditor considers the best estimate of total costs questioned (likely questioned costs), not just the questioned costs specifically identified (known questioned costs). The auditor shall also report known questioned costs when likely questioned costs are greater than $10,000 for a type of compliance requirement for a major program. In reporting questioned costs, the auditor shall include information to provide proper perspective for judging the prevalence and consequences of the questioned costs.  
I11(4) Known questioned costs which are greater than $10,000 for a Federal program which is not audited as a major program. Except for audit follow-up, the auditor is not required under this part to perform audit procedures for such a Federal program; therefore, the auditor will normally not find questioned costs for a program which is not audited as a major program. However, if the auditor does become aware of questioned costs for a Federal program which is not audited as a major program (e.g., as part of audit follow-up or other audit procedures) and the known questioned costs are greater than $10,000, then the auditor shall report this as an audit finding. 
I11(5) The circumstances concerning why the auditor's report on compliance for major programs is other than an unqualified opinion, unless such circumstances are otherwise reported as �212�audit findings in the schedule of findings and questioned costs for Federal awards.  
I11(6) Known fraud affecting a Federal award, unless such fraud is otherwise reported as an audit finding in the schedule of findings and questioned costs for Federal awards. This paragraph does not require the auditor to make an additional reporting when the auditor confirms that the fraud was reported outside of the auditor's reports under the direct reporting requirements of GAGAS.  
I11(7) Instances where the results of audit follow-up procedures disclosed that the summary schedule of prior audit findings prepared by the auditee in accordance with �1A3052.315(b) materially misrepresents the status of any prior audit finding.  
I11(b) T3Audit finding detail.G1T1 Audit findings shall be presented in sufficient detail for the auditee to prepare a corrective action plan and take corrective action and for Federal agencies and pass-through entities to arrive at a management decision. The following specific information shall be included, as applicable, in audit findings:  
I11(1) Federal program and specific Federal award identification including the CFDA title and number, Federal award number and year, name of Federal agency, and name of the applicable pass-through entity. When information, such as the CFDA title and number or Federal award number, is not available, the auditor shall provide the best information available to describe the Federal award.  
I11(2) The criteria or specific requirement upon which the audit finding is based, including statutory, regulatory, or other citation.  
I11(3) The condition found, including facts that support the deficiency identified in the audit finding.  
I11(4) Identification of questioned costs and how they were computed.  
I11(5) Information to provide proper perspective for judging the prevalence and consequences of the audit findings, such as whether the audit findings represent an isolated instance or a systemic problem. Where appropriate, instances identified shall be related to the universe and the number of cases examined and be quantified in terms of dollar value.  
I11(6) The possible asserted effect to provide sufficient information to the auditee and Federal agency, or pass-through entity in the case of a subrecipient, to permit them to determine the cause and effect to facilitate prompt and proper corrective action.  
I11(7) Recommendations to prevent future occurrences of the deficiency identified in the audit finding.  
I11(8) Views of responsible officials of the auditee when there is disagreement with the audit findings, to the extent practical.  
I11(c) T3Reference numbers.G1T1 Each audit finding in the schedule of findings and questioned costs shall include a reference number to allow for easy referencing of the audit findings during follow-up.  


I80�1A3052.515 
I89Audit working papers.  
I11(a) T3Retention of working papers.G1T1 The auditor shall retain working papers and reports for a minimum of three years after the date of issuance of the auditor's report(s) to the auditee, unless the auditor is notified in writing by the cognizant agency for audit, oversight agency for audit, or pass-through entity to extend the retention period. When the auditor is aware that the Federal awarding agency, pass-through entity, or auditee is contesting an audit finding, the auditor shall contact the parties contesting the audit finding for guidance prior to destruction of the working papers and reports.  
I11(b) T3Access to working papers.G1T1 Audit working papers shall be made available upon request to the cognizant or oversight agency for audit or its designee, a Federal agency providing direct or indirect funding, or GAO at the completion of the audit, as part of a quality review, to resolve audit findings, or to carry out oversight responsibilities consistent with the purposes of this part. Access to working papers includes the right of Federal agencies to obtain copies of working papers, as is reasonable and necessary.  


�213�I80�1A3052.520 
I89Major program determination.  
I11(a) T3General.G1T1 The auditor shall use a risk-based approach to determine which Federal programs are major programs. This risk-based approach shall include consideration of: Current and prior audit experience, oversight by Federal agencies and pass-through entities, and the inherent risk of the Federal program. The process in paragraphs (b) through (I) of this section shall be followed. 

I11(b) T3Step 1.G1T1 (1) The auditor shall identify the larger Federal programs, which shall be labeled Type A programs. Type A programs are defined as Federal programs with Federal awards expended during the audit period exceeding the larger of: 
I11(i) $300,000 or three percent (.03) of total Federal awards expended in the case of an auditee for which total Federal awards expended equal or exceed $300,000 but are less than or equal to $100 million.  
I11(ii) $3 million or three-tenths of one percent (.003) of total Federal awards expended in the case of an auditee for which total Federal awards expended exceed $100 million but are less than or equal to $10 billion.  
I11(iii) $30 million or 15 hundredths of one percent (.0015) of total Federal awards expended in the case of an auditee for which total Federal awards expended exceed $10 billion.  
I11(2) Federal programs not labeled Type A under paragraph (b)(1) of this section shall be labeled Type B programs.  
I11(3) The inclusion of large loan and loan guarantees (loans) should not result in the exclusion of other programs as Type A programs. When a Federal program providing loans significantly affects the number or size of Type A programs, the auditor shall consider this Federal program as a Type A program and exclude its values in determining other Type A programs. 
I11(4) For biennial audits permitted under �1A3052.220, the determination of Type A and Type B programs shall be based upon the Federal awards expended during the two-year period.  
I11(c) T3Step 2.G1T1 (1) The auditor shall identify Type A programs which are low-risk. For a Type A program to be considered low-risk, it shall have been audited as a major program in at least one of the two most recent audit periods (in the most recent audit period in the case of a biennial audit), and, in the most recent audit period, it shall have had no audit findings under �1A3052.510(a). However, the auditor may use judgment and consider that audit findings from questioned costs under �1A3052.510(a)(3) and �1A3052.510(a)(4), fraud under �1A3052.510(a)(6), and audit follow-up for the summary schedule of prior audit findings under �1A3052.510(a)(7) do not preclude the Type A program from being low-risk. The auditor shall consider: the criteria in �1A3052.525(c), �1A3052.525(d)(1), �1A3052.525(d)(2), and �1A3052.525(d)(3); the results of audit follow-up; whether any changes in personnel or systems affecting a Type A program have significantly increased risk; and apply professional judgment in determining whether a Type A program is low-risk.  
I11(2) Notwithstanding paragraph (c)(1) of this section, OMB may approve a Federal awarding agency's request that a Type A program at certain recipients may not be considered low-risk. For example, it may be necessary for a large Type A program to be audited as major each year at particular recipients to allow the Federal agency to comply with the Government Management Reform Act of 1994 (31 U.S.C. 3515). The Federal agency shall notify the recipient and, if known, the auditor at least 180 days prior to the end of the fiscal year to be audited of OMB's approval.  
I11(d) T3Step 3.G1T1 (1) The auditor shall identify Type B programs which are high-risk using professional judgment and the criteria in �1A3052.525. However, should the auditor select Option 2 under Step 4 (paragraph (e)(2)(i)(B) of this section), the auditor is not required to identify more high-risk Type B programs than the number of low-risk Type A programs. Except for known reportable conditions in internal control or compliance problems as discussed in �1A3052.525(b)(1), �1A3052.525(b)(2), and �1A3052.525(c)(1), a single criteria in �1A3052.525 would seldom cause a Type B program to be considered high-risk.  
I11(2) The auditor is not expected to perform risk assessments on relatively �214�small Federal programs. Therefore, the auditor is only required to perform risk assessments on Type B programs that exceed the larger of:  
I11(i) $100,000 or three-tenths of one percent (.003) of total Federal awards expended when the auditee has less than or equal to $100 million in total Federal awards expended.  
I11(ii) $300,000 or three-hundredths of one percent (.0003) of total Federal awards expended when the auditee has more than $100 million in total Federal awards expended. 
I11(e) T3Step 4.G1T1 At a minimum, the auditor shall audit all of the following as major programs: 
I11(1) All Type A programs, except the auditor may exclude any Type A programs identified as low-risk under Step 2 (paragraph (c)(1) of this section). 
I11(2)(i) High-risk Type B programs as identified under either of the following two options:  
I11(A) T3Option 1.G1T1 At least one half of the Type B programs identified as high-risk under Step 3 (paragraph (d) of this section), except this paragraph (e)(2)(i)(A) does not require the auditor to audit more high-risk Type B programs than the number of low-risk Type A programs identified as low-risk under Step 2.  
I11(B) T3Option 2.G1T1 One high-risk Type B program for each Type A program identified as low-risk under Step 2.  
I11(ii) When identifying which high-risk Type B programs to audit as major under either Option 1 or 2 in paragraph (e)(2)(i) (A) or (B), the auditor is encouraged to use an approach which provides an opportunity for different high-risk Type B programs to be audited as major over a period of time.  
I11(3) Such additional programs as may be necessary to comply with the percentage of coverage rule discussed in paragraph (f) of this section. This paragraph (e)(3) may require the auditor to audit more programs as major than the number of Type A programs.  
I11(f) T3Percentage of coverage rule.G1T1 The auditor shall audit as major programs Federal programs with Federal awards expended that, in the aggregate, encompass at least 50 percent of total Federal awards expended. If the auditee meets the criteria in �1A3052.530 for a low-risk auditee, the auditor need only audit as major programs Federal programs with Federal awards expended that, in the aggregate, encompass at least 25 percent of total Federal awards expended.  
I11(g) T3Documentation of risk.G1T1 The auditor shall document in the working papers the risk analysis process used in determining major programs.  
I11(h) T3Auditor's judgment.G1T1 When the major program determination was performed and documented in accordance with this part, the auditor's judgment in applying the risk-based approach to determine major programs shall be presumed correct. Challenges by Federal agencies and pass-through entities shall only be for clearly improper use of the guidance in this part. However, Federal agencies and pass-through entities may provide auditors guidance about the risk of a particular Federal program and the auditor shall consider this guidance in determining major programs in audits not yet completed.  
I11(i) T3Deviation from use of risk criteria.G1T1 For first-year audits, the auditor may elect to determine major programs as all Type A programs plus any Type B programs as necessary to meet the percentage of coverage rule discussed in paragraph (f) of this section. Under this option, the auditor would not be required to perform the procedures discussed in paragraphs (c), (d), and (e) of this section.  
I11(1) A first-year audit is the first year the entity is audited under this part or the first year of a change of auditors.  
I11(2) To ensure that a frequent change of auditors would not preclude audit of high-risk Type B programs, this election for first-year audits may not be used by an auditee more than once in every three years.  


I80�1A3052.525 
I89Criteria for Federal program risk.  
I11(a) T3General.G1T1 The auditor's determination should be based on an overall evaluation of the risk of noncompliance occurring which could be material to the Federal program. The auditor shall use auditor judgment and consider criteria, such as described in paragraphs (b), (c), and (d) of this section, to identify risk in Federal programs. Also, as part of the risk analysis, the auditor may wish to discuss a particular Federal program �215�with auditee management and the Federal agency or pass-through entity.  
I11(b) T3Current and prior audit experience.G1T1 (1) Weaknesses in internal control over Federal programs would indicate higher risk. Consideration should be given to the control environment over Federal programs and such factors as the expectation of management's adherence to applicable laws and regulations and the provisions of contracts and grant agreements and the competence and experience of personnel who administer the Federal programs. 
I11(i) A Federal program administered under multiple internal control structures may have higher risk. When assessing risk in a large single audit, the auditor shall consider whether weaknesses are isolated in a single operating unit (e.g., one college campus) or pervasive throughout the entity.  
I11(ii) When significant parts of a Federal program are passed through to subrecipients, a weak system for monitoring subrecipients would indicate higher risk.  
I11(iii) The extent to which computer processing is used to administer Federal programs, as well as the complexity of that processing, should be considered by the auditor in assessing risk. New and recently modified computer systems may also indicate risk.  
I11(2) Prior audit findings would indicate higher risk, particularly when the situations identified in the audit findings could have a significant impact on a Federal program or have not been corrected.  
I11(3) Federal programs not recently audited as major programs may be of higher risk than Federal programs recently audited as major programs without audit findings.  
I11(c) T3Oversight exercised by Federal agencies and pass-through entities.G1T1 (1) Oversight exercised by Federal agencies or pass-through entities could indicate risk. For example, recent monitoring or other reviews performed by an oversight entity which disclosed no significant problems would indicate lower risk. However, monitoring which disclosed significant problems would indicate higher risk.  
I11(2) Federal agencies, with the concurrence of OMB, may identify Federal programs which are higher risk. OMB plans to provide this identification in the compliance supplement.  
I11(d) T3Inherent risk of the Federal program.G1T1 (1) The nature of a Federal program may indicate risk. Consideration should be given to the complexity of the program and the extent to which the Federal program contracts for goods and services. For example, Federal programs that disburse funds through third party contracts or have eligibility criteria may be of higher risk. Federal programs primarily involving staff payroll costs may have a high-risk for time and effort reporting, but otherwise be at low-risk.  
I11(2) The phase of a Federal program in its life cycle at the Federal agency may indicate risk. For example, a new Federal program with new or interim regulations may have higher risk than an established program with time-tested regulations. Also, significant changes in Federal programs, laws, regulations, or the provisions of contracts or grant agreements may increase risk.  
I11(3) The phase of a Federal program in its life cycle at the auditee may indicate risk. For example, during the first and last years that an auditee participates in a Federal program, the risk may be higher due to start-up or closeout of program activities and staff.  
I11(4) Type B programs with larger Federal awards expended would be of higher risk than programs with substantially smaller Federal awards expended.  


I80�1A3052.530 
I89Criteria for a low-risk auditee.  
I11An auditee which meets all of the following conditions for each of the preceding two years (or, in the case of biennial audits, preceding two audit periods) shall qualify as a low-risk auditee and be eligible for reduced audit coverage in accordance with �1A3052.520:  
I11(a) Single audits were performed on an annual basis in accordance with the provisions of this part. A non-Federal entity that has biennial audits does not qualify as a low-risk auditee, unless agreed to in advance by the cognizant or oversight agency for audit.  
I11(b) The auditor's opinions on the financial statements and the schedule of expenditures of Federal awards were unqualified. However, the cognizant or �216�oversight agency for audit may judge that an opinion qualification does not affect the management of Federal awards and provide a waiver.  
I11(c) There were no deficiencies in internal control which were identified as material weaknesses under the requirements of GAGAS. However, the cognizant or oversight agency for audit may judge that any identified material weaknesses do not affect the management of Federal awards and provide a waiver.  
I11(d) None of the Federal programs had audit findings from any of the following in either of the preceding two years (or, in the case of biennial audits, preceding two audit periods) in which they were classified as Type A programs:  
I11(1) Internal control deficiencies which were identified as material weaknesses;  
I11(2) Noncompliance with the provisions of laws, regulations, contracts, or grant agreements which have a material effect on the Type A program; or  
I11(3) Known or likely questioned costs that exceed five percent of the total Federal awards expended for a Type A program during the year.




F8008I327 CFR Ch. XXXI (1�091�0900 Edition)
I33Office of Environmental Quality, USDA


�217�I04CHAPTER XXXI_OFFICE OF ENVIRONMENTAL QUALITY, DEPARTMENT OF AGRICULTURE
I03
I87Part
I88Page
I483100
I49Cultural and environmental quality
I59219



F80103I327 CFR Ch. XXXI (1�091�0900 Edition)
I33Office of Environmental Quality, USDA

�219�I95Pt. 3100
I52PART 3100_CULTURAL AND ENVIRONMENTAL QUALITY
S8006I86Subparts A�09B [Reserved]
S8010
I86Subpart C_Enhancement, Protection, and Management of the Cultural Environment
S8006I18Sec. 
S8010I263100.40Purpose. 
I263100.41Authorities. 
I263100.42Definitions. 
I263100.43Policy. 
I263100.44Implementation. 
I263100.45Direction to agencies. 
I263100.46Responsibilities of the Department of Agriculture. 
S8006I56Subparts A�09B [Reserved]
S8010
I56Subpart C_Enhancement, Protection, and Management of the Cultural Environment
Q04I21T5Authority:  T1Sec. 106, National Historic Preservation Act, as amended (16 U.S.C. 470f); National Environmental Policy Act, as amended (42 U.S.C. 4321 T3et seq.G1T1); E.O. 11593, 36 FR 8921, May 13, 1971.
Q04I21T5Source:  T144 FR 66181, Nov. 19, 1979, unless otherwise noted. 

I80�1A3100.40
I89Purpose.
I11(a) This subpart establishes USDA policy regarding the enhancement, protection, and management of the cultural environment.
I11(b) This subpart establishes procedures for implementing Executive Order 11593, and regulations promulgated by the Advisory Council on Historic Preservation (ACHP) ``Protection of Historical and Cultural Properties'' in 36 CFR part 800 as required by �1A800.10 of those regulations.
I11(c) Direction is provided to the agencies of USDA for protection of the cultural environment.

I80�1A3100.41
I89Authorities.
I11These regulations are based upon and implement the following laws, regulations, and Presidential directives:
I11(a) T3Antiquities Act of 1906G1T1 (Pub. L. 59�09209; 34 Stat. 225; 16 U.S.C. 431 T3et seq.G1T1) which provides for the protection of historic or prehistoric remains or any object of antiquity on Federal lands; establishes criminal sanctions for unauthorized destruction or appropriation of antiquities; and authorizes scientific investigation of antiquities on Federal lands, subject to permit and regulations. Paleontological resources also are considered to fall within the authority of this Act.
I11(b) T3Historic Sites Act of 1935G1T1 (Pub. L. 74�09292; 49 Stat. 666; 16 U.S.C. 461 T3et seq.G1T1) which authorizes the establishment of National Historic Sites and otherwise authorizes the preservation of properties of national historical or archeological significance; authorizes the designation of National Historic Landmarks; establishes criminal sanctions for violation of regulations pursuant to the Act; authorizes interagency, intergovernmental, and interdisciplinary efforts for the preservation of cultural resources; and other provisions.
I11(c) T3Reservoir Salvage Act of 1960G1T1 (Pub. L. 86�09521; 74 Stat. 220; 16 U.S.C. 469�09469c.) which provides for the recovery and preservation of historical and archeological data, including relics and specimens, that might be lost or destroyed as a result of the construction of dams, reservoirs, and attendant facilities and activities.
I11(d) T3The National Historic Preservation Act of 1966G1T1 as amended (16 U.S.C. 470), which establishes positive national policy for the preservation of the cultural environment, and sets forth a mandate for protection in section 106. The purpose of section 106 is to protect properties on or eligible for the National Register of Historic Places through review and comment by the ACHP of Federal undertakings that affect such properties. Properties are listed on the National Register or declared eligible for listing by the Secretary of the Interior. As developed through the ACHP's regulations, section 106 establishes a public interest process in which the Federal agency proposing an undertaking, the State Historic Preservation Officer, the ACHP, interested organizations and individuals participate. The process is designed to insure that properties, impacts on them, and effects to them are identified, and that alternatives to avoid or mitigate an adverse effect on property eligible for the National Register are adequately considered in the planning process.
I11(e) T3The National Environmental Policy Act of 1969G1T1 (NEPA) (Pub. L. 91�09190; 83 �220�Stat. 852; 42 U.S.C. 4321 T3et seq.G1T1) which declares that it is the policy of the Federal Government to preserve important historic, cultural, and natural aspects of our national heritage. Compliance with NEPA requires consideration of all environmental concerns during project planning and execution.
I11(f) T3Executive Order 11593, ``Protection and Enhancement of the Cultural Environment'',G1T1 which gives the Federal Government the responsibility for stewardship of our nation's heritage resources and charges Federal agencies with the task of inventorying historic and prehistoric sites on their lands. E.O. 11593 also charges agencies with the task of identifying and nominating all historic properties under their jurisdiction, and exercising caution to insure that they are not transferred, sold, demolished, or substantially altered.
I11(g) T3Historical and Archeological Data Preservation Act of 1974.G1T1 (Pub. L. 93�09291; 88 Stat. 174.) which amends the Reservoir Salvage Act of 1960 to extend its provisions beyond the construction of dams to any alteration of the terrain caused as a result of any Federal construction project or federally licensed activity or program. In addition, the Act provides a mechanism for funding the protection of historical and archeological data.
I11(h) T3Presidential memorandum of July 12, 1978, ``Environmental Quality and Water Resource Management''G1T1 which directs the ACHP to publish final regulations, implementing section 106 of the National Historic Preservation Act (NHPA), and further directs each agency with water and related land resources responsibilities to publish procedures implementing those regulations.
I11(i) T336 CFR part 800,G1T1 ``Protection of Historic and Cultural Properties'' which establishes procedures for the implementation of section 106 of the NHPA, and directs publication of agency implementing procedures.
I11(j) T3Land use policy of the USDA (Secretary's Memorandum No. 1827 Revised, with Supplement)G1T1 which establishes a commitment by the Department to the preservation of farms, rural communities, and rural landscapes.
I11(k) T3Public Buildings Cooperative Use Act of 1976 (40 U.S.C. 611) and Executive Order 12072 (Federal Space Management).G1T1 The Act encourages adaptive use of historic buildings as administrative facilities for Federal agencies and activities; the Executive Order directs Federal agencies to locate administrative and other facilities in central business districts.
I11(l) T3American Indian Religious Freedom Act of 1978 (42 U.S.C. 1996)G1T1 which declares it to be the policy of the United States to protect and preserve for American Indians their inherent right of freedom to believe, express, and exercise the traditional religions of the American Indian, Eskimo, Aleut, and Native Hawaiians.

I80�1A3100.42
I89Definitions.
I11All definitions are those which appear in 36 CFR part 800. In addition, the following apply in this rule:
I11T3Cultural resources (heritage resources)G1T1 are the remains or records of districts, sites, structures, buildings, networks, neighborhoods, objects, and events from the past. They may be historic, prehistoric, archeological, or architectural in nature. Cultural resources are an irreplaceable and nonrenewable aspect of our national heritage.
I11T3Cultural environmentG1T1 is that portion of the environment which includes reminders of the rich historic and prehistoric past of our nation.

I80�1A3100.43
I89Policy.
I11(a) The nonrenewable cultural environment of our country constitutes a valuable and treasured portion of the national heritage of the American people. The Department of Agriculture is committed to the management_identification, protection, preservation, interpretation, evaluation and nomination_of our prehistoric and historic cultural resources for the benefit of all people of this and future generations.
I11(b) The Department supports the cultural resource goals expressed in Federal legislation. Executive orders, and regulations.
I11(c) The Department supports the preservation and protection of farms, rural landscapes, and rural communities.
I11(d) The Department is committed to consideration of the needs of American �221�Indians, Eskimo, Aleut, and Native Hawaiians in the practice of their traditional religions. 
I11(e) The Department will aggressively implement these policies to meet goals for the positive management of the cultural environment.

I80�1A3100.44
I89Implementation.
I11(a) It is the intent of the Department to carry out its program of management of the cultural environment in the most effective and efficient manner possible. Implementation must consider natural resource utilization, must exemplify good government, and must constitute a noninflationary approach which makes the best use of tax dollars.
I11(b) The commitment to cultural resource protection is vital. That commitment will be balanced with the multiple departmental goals of food and fiber production, environmental protection, natural resource and energy conservation, and rural development. It is essential that all of these be managed to reduce conflicts between programs. Positive management of the cultural environment can contribute to achieving better land use, protection of rural communities and farm lands, conservation of energy, and more efficient use of resources.
I11(c) In reaching decisions, the long-term needs of society and the irreversible nature of an action must be considered. The Department must act to preserve future options; loss of important cultural resources must be avoided except in the face of overriding national interest where there are no reasonable alternatives.
I11(d) To assure the protection of Native American religious practices, traditional religious leaders and other native leaders (or their representatives) should be consulted about potential conflict areas in the management of the cultural environment and the means to reduce or eliminate such conflicts.

I80�1A3100.45
I89Direction to agencies.
I11(a) Each agency of the Department shall consult with OEQ to determine whether its programs and activities may affect the cultural environment. Then, if needed, the agency, in consultation with the OEQ, shall develop its own specific procedures for implementing section 106 of the National Historic Preservation Act, Executive Order 11593, the regulations of the ACHP (36 CFR part 800), the American Indian Religious Freedom Act of 1978 and other relevant legislation and regulations in accordance with the agency's programs, mission and authorities. Such implementing procedures shall be published as proposed and final procedures in the T4Federal Register,G1T1 and must be consistent with the requirements of 36 CFR part 800 and this subpart. Where applicable, each agency's procedures must contain mechanisms to insure:
I11(1) Compliance with section 106 of NHPA and mitigation of adverse effects to cultural properties on or eligible for the National Register of Historic Places;
I11(2) Clear definition of the kind and variety of sites and properties which should be managed;
I11(3) Development of a long-term program of management of the cultural environment on lands administered by USDA as well as direction for project-specific protection;
I11(4) Identification of all properties listed on or eligible for listing in the National Register that may be affected directly or indirectly by a proposed activity;
I11(5) Location, identification and nomination to the Register of all sites, buildings, objects, districts, neighborhoods, and networks under its management which appear to qualify (in compliance with E.O. 11593);
I11(6) The exercise of caution to assure that properties managed by USDA which may qualify for nomination are not transferred, sold, demolished, or substantially altered;
I11(7) Early consultation with, and involvement of, the State Historic Preservation Officer(s), the ACHP, Native American traditional religious leaders and appropriate tribal leaders, and others with appropriate interests or expertise;
I11(8) Early notification to insure substantive and meaningful involvement by the public in the agency's decisionmaking process as it relates to the cultural environment;
�222�I11(9) Identification and consideration of alternatives to a proposed undertaking that would mitigate or minimize adverse effects to a property identified under paragraph (a)(4) of this section;
I11(10) Funding of mitigation measures where required to minimize the potential for adverse effects on the cultural environment. Funds for mitigation shall be available and shall be spent when needed during the life of the project to mitigate the expected loss; and
I11(11) Development of plans to provide for the management, protection, maintenance and/or restoration of Register sites under its management.
I11(b) Each agency of the Department which conducts programs or activities that may have an effect on the cultural environment shall recruit, place, develop, or otherwise have available, professional expertise in anthropology, archeology, history, historic preservation, historic architecture, and/or cultural resource management (depending upon specific need). Such arrangements may include internal hiring, Intergovernmental Personnel Act assignments, memoranda of agreement with other agencies or Departments, or other mechanisms which insure a professionally directed program. Agencies should use Department of the Interior professional standards (36 CFR 61.5) as guidelines to insure Departmentwide competence and consistency.
I11(c) Compliance with cultural resource legislation is the responsibility of each individual agency. Consideration of cultural resource values must begin during the earliest planning stages of any undertaking. 
I11(d) Agency heads shall insure that cultural resource management activities meet professional standards as promulgated by the Department of the Interior (e.g., 36 CFR parts 60, 63, 66, 1208). 
I11(e) Cultural resource review requirements and compliance with section 106 of NHPA and Executive Order 11593 shall be integrated and run concurrently, rather than consecutively, with the other environmental considerations under NEPA regulations. As such, direct and indirect impacts on cultural resources must be addressed in the environmental assessment for every agency undertaking. In meeting these requirements, agencies shall be guided by regulations implementing the procedural provisions of NEPA (40 CFR parts 1500�091508) and Department of Agriculture regulations (7 CFR part 3100, subpart B). 
I11(f) Each agency shall work closely with the appropriate State Historic Preservation Officer(s) in their preparation of State plans, determination of inventory needs, and collection of data relevant to general plans or specific undertakings in carrying out mutual cultural resource responsibilities. 
I11(g) Each agency shall, to the maximum extent possible, use existing historic structures for administrative purposes in compliance with Public Buildings Cooperative Use Act of 1976 and Executive Order 12072, ``Federal Space Management''. 
I11(h) Each agency should consult with Native American traditional religious leaders or their representatives and other native leaders in the development and implementation of cultural resource programs which may affect their religious customs and practices. 

I80�1A3100.46 
I89Responsibilities of the Department of Agriculture. 
I11(a) Within the Department, the responsibility for the protection of the cultural environment is assigned to the Office of Environmental Quality (OEQ). The Office is responsible for reviewing the development and implementation of agency procedures and insuring Departmental commitment to cultural resource goals. 
I11(b) The Director of the OEQ is the Secretary's Designee to the ACHP. 
I11(c) In order to carry out cultural resource responsibilities, there will be professional expertise within the OEQ to advise agencies, aid the Department in meeting its cultural resource management goals, and to insure that all Departmental and agency undertakings comply with applicable cultural resource protection legislation and regulations. 
I11(d) The OEQ will be involved in individual compliance cases only where resolution cannot be reached at the agency level. Prior to the decision to refer a matter to the full Council of the �223�ACHP, the OEQ will review the case and make recommendations to the Secretary regarding the position of the Department. The agency also will consult with the OEQ before reaching a final decision in response to the Council's comments. Copies of correspondence relevant to compliance with Section 106 shall be made available to OEQ.






F8008I327 CFR Ch. XXXII (1�091�0900 Edition)
I33Office of Procurement and Property Management, USDA


�225�I04CHAPTER XXXII_OFFICE OF PROCUREMENT AND PROPERTY MANAGEMENT, DEPARTMENT OF AGRICULTURE 
I03
I87Part
I88Page


I483200
I49Department of Agriculture guidelines for the acquisition and transfer of excess personal property
I59227

Q02
I483201�093299
I46[Reserved]





F80103I327 CFR Ch. XXXII (1�091�0900 Edition)
I33Office of Procurement and Property Management, USDA

�227�I95Pt. 3200
I52PART 3200_DEPARTMENT OF AGRICULTURE GUIDELINES FOR THE ACQUISITION AND TRANSFER OF EXCESS PERSONAL PROPERTY
S8006I18Sec.
S8010I263200.1Purpose.
I263200.2Eligibility.
I263200.3Definitions.
I263200.4Procedures.
I263200.5Dollar limitation.
I263200.6Restrictions.
I263200.7Title.
I263200.8Costs.
I263200.9Accountability and record keeping.
I263200.10Disposal.
I263200.11Liabilities and losses.


Q04I21T5Authority: T15 U.S.C. 301; 7 U.S.C. 2206a.

Q04I21T5Source: T163 FR 57234, Oct. 27, 1998, unless otherwise noted.




I80�1A3200.1
I89Purpose.
I11This Part sets forth the procedures to be utilized by Department of Agriculture (USDA) in the acquisition and transfer of excess property to the 1890 Land Grant Institutions (including Tuskegee University), 1994 Land Grant Institutions, and the Hispanic-Serving Institutions in support of research, educational, technical, and scientific activities or for related programs as authorized by 7 U.S.C. 2206a. Title to the personal property shall pass to the institution.


I80�1A3200.2
I89Eligibility.
I11Institutions that are eligible to receive Federal excess personal property pursuant to the provisions of this part are the 1890 Land Grant Institutions (including Tuskegee University), 1994 Land Grant Institutions, and the Hispanic-Serving Institutions conducting research, educational, technical, and scientific activities or related programs.


I80�1A3200.3
I89Definitions.
I11(a) T31890 Land grant institutionsG1T1_any college or university eligible to receive funds under the Act of August 30, 1890 (7 U.S.C. 321 et.seq.), including Tuskegee University.
I11(b) T31994 Land grant institutionsG1T1_any of the tribal colleges or universities as defined in section 532 of the Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note).
I11(c) T3Hispanic-serving institutionsG1T1_institutions of higher education as defined in section 316(b) of the Higher Education Act of 1965 (20 U.S.C. 1059c (b)).
I11(d) T3Property management officerG1T1_is an authorized USDA or institution official responsible for property management.
I11(e) T3ScreenerG1T1_is an individual designated by an eligible institution and authorized by the General Services Administration (GSA) to visit property sites for the purpose of inspecting personal property intended for use by the institution.
I11(f) T3Excess personal propertyG1T1_is any personal property under the control of a Federal agency that is no longer needed.
I11(g) T3CannibalizationG1T1_is the dismantling of equipment for parts to repair or enhance other equipment.


I80�1A3200.4
I89Procedures.
I11(a) To receive information concerning the availability of Federal excess personal property, an eligible institution's property management officer may contact their regional GSA, Area Utilization Officer. All property management officers of eligible institutions will be placed on the USDA mailing list for information on the availability of property. USDA excess property will first be screened by USDA agencies through the Departmental Excess Personal Property Coordinator (DEPPC) using the PMIS/PROP system.
I11(b) Excess property selected by screeners of eligible institutions should be inspected whenever possible, or the holding agency should be contacted to verify the condition of the items, because interpretation of condition codes varies among Federal agencies.
I11(c) If the condition of the item is acceptable, the institution should ``freeze'' (reserve) items by calling the appropriate GSA office or USDA Departmental Excess Personal Property Coordinator (DEPPC). Since GSA may have several ``freezes'' on a piece of equipment, it is critical that the paperwork be submitted as soon as possible. Further, while transfers of excess personal property normally will be approved by GSA on a first-come-first-serve basis, consideration will be given �228�to such factors as national defense requirements, emergency needs, preclusion of new procurement, energy conservation, equitable distribution, and retention of title in the Government.
I11(d) Eligible institutions may submit property requests by mail or fax on a Standard Form 122, ``Transfer Order Excess Personal Property,'' with a written justification statement (submitted by the recipient) explaining how the property will be used for research, educational, technical, or scientific activity or for related programs.
I11(e) The SF�09122 should be signed by the eligible institution's property management officer or authorized designee.
I11(1) The following information should also be provided:
I11(i) Date prepared.
I11(ii) GSA/DEPPC address.
I11(iii) Ordering Agency and address.
I11(iv) Holding Agency and address.
I11(v) Name and address of Institution.
I11(vi) Location of property.
I11(vii) Shipping instruction (including institution contact person and phone number).
I11(viii) Complete description of property including original acquisition cost, serial number, condition code, and quantity.


I11(2) This statement needs to be added following the property description but does not serve as a justification statement:

Q04



I21The property requested hereon is certified to be used in support of research, educational, technical, and scientific activities or for related programs. This transfer is requested pursuant to the provisions of section 923 of Pub. L. 104�09127 (7 U.S.C. 2206a).

Q04

I11(f) The SF�09122 should be forwarded to USDA for approval and signature by an authorized USDA official. As confirmation of approval, the eligible institution's property management officer will receive a stamped copy of the SF�09122. If the request is disapproved, it will be returned to the property management officer of the eligible institution with an appropriate explanation. All USDA approved SF�09122's will be forwarded to DEPPC or the appropriate GSA office for final approval.
I11(g) Once the excess personal property is physically received, the institution is required to immediately return a copy of the SF�09122 to USDA indicating receipt of requested items. Cancellations should also be reported to USDA.

Q04

I21T5Note: T1USDA shall send an informational copy of all SF�09122's transactions to GSA.


I80�1A3200.5
I89Dollar limitation.
I11There is no dollar limitation on excess personal property obtained under these procedures.


I80�1A3200.6
I89Restrictions.
I11(a) The authorized USDA official will approve the transfer of excess personal property in the following groups for the 1890 Land Grant Institutions (including Tuskegee University), 1994 Land Grant Institutions and the Hispanic-Serving Institutions in support of research, educational, technical, and scientific activities or for related programs:

c2,L2,i1,xs48,r25  I95T4Eligible Federal Supply Code Groups
h1FSC group h1Name
j
I0112 DFire Control Equipment.
I0119DShips, Small Crafts, Pontoons, and Floating Docks.
I0122DRailway Equipment.
I0123DVehicles, Motor Vehicles, Trailers and Cycles.
I0124DTractors.
I0126DTires and Tubes.
I0128DEngines, Turbines and Components.
I0129DEngine Accessories.
I0130DMechanical Power Transmission Equipment.
I0131DBearings.
I0132DWoodworking Machinery and Equipment.
I0134DMetal Working Machinery.
I0135DService and Trade Equipment.
I0136DSpecial Industry Machinery.
I0137DAgricultural Machinery and Equipment.
I0138DConstruction, Mining, Excavating, and Highway Maintenance Equipment.
I0139DMaterial Handling Equipment.
I0140DRope, Cable, Chain, and Fittings.
I0141DRefrigeration, Air Conditioning and Air Circulating Equipment.
I0142DFire Fighting, Rescue, and Safety Equipment.
I0143DPumps, Compressors.
I0144DFurnace, Steam Plant, and Drying.
I0145DPlumbing, Heating, and Sanitation Equipment; and Nuclear Reactors.
I0146DWater Purification and Sewage Treatment Equipment.
I0147DPipe, Tubing, Hose, and Fittings.
I0149DMaintenance and Repair Shop Equipment.
I0151DHand Tools.
I0152DMeasuring Tools.
I0153DHardware and Abrasives.
I0154DPrefabricated Structures and Scaffolding.
I0155DLumber, Millwork, Plywood, and Veneer.
I0156DConstruction and Building Materials.
�229�I0158DCommunication, Detection, and Coherent Radiation Equipment.
I0159DElectrical and Electronic Equipment Components.
I0160DFiber Optics Materials, Components, Assemblies, and Accessories.
I0161DElectric Wire, and Power and Distribution Equipment.
I0162DLighting Fixtures and Lamps.
I0163DAlarm, Signal, and Security Detection Systems.
I0165DMedical, Dental, and Veterinary Equipment and Supplies.
I0166DInstruments and Laboratory Equipment.
I0167DPhotographic Equipment.
I0169DTraining Aids and Devices.
I0170DGeneral Purposes Automatic Data Processing Equipment (Including Firmware) Software, and Support Equipment.
I0171DFurniture.
I0172DHousehold and Commercial Furnishings and Appliances.
I0173DFood Preparation and Serving Equipment.
I0174DOffice Machines, Text Processing Systems and Visible Record Equipment.
I0175DOffice Supplies and Devices.
I0176DBooks, Maps, and Other Publications.
I0177DMusical Instruments, Phonographs, and Home-type Radios.
I0178DRecreational and Athletic Equipment.
I0179DCleaning Equipment and Supplies.
I0180DBrushes, Paints, Sealers, and Adhesives.
I0181DContainers, Packaging and Packing Supplies.
I0183DTextiles, Leather, Furs, Apparel and Shoe Findings, Tents, and Flags.
I0184DClothing, Individual Equipment and Insignia.
I0185DToiletries.
I0187DAgricultural Supplies.
I0188DLive Animals.
I0191DFuels, Lubricants, Oils and Waxes.
I0193DNonmetallic Fabricated Materials.
I0194DNonmetallic Crude Materials.
I0195DMetal Bars, Sheets, and Shapes.
I0196DOres, Minerals and their Primary Products.
I0199DMiscellaneous.

e


Q04
I21T5Note to paragraph T1(a): Requests for items in Federal Supply Code Groups other than those listed in this paragraph shall be referred to the Director of OPPM for consideration and approval.

I11(b) Excess personal property may be transferred for the purpose of cannibalization, provided the eligible institution submits a supporting statement which clearly indicates that cannibalizing the requested property for secondary use has greater benefit than utilization of the item in its existing form.
I11(c) Use of the procedures in this part for the purpose of stockpiling of excess personal property for future cannibalization is prohibited. Transfer requests for the purpose of cannibalization will be considered, but are normally subordinate to requests for complete items.


I80�1A3200.7
I89Title.
I11Title to excess personal property obtained under Part 3200 will automatically pass to the 1890 Land Grant Institutions (including Tuskegee University), 1994 Land Grant Institutions, and the Hispanic-Serving Institutions once USDA receives the SF�09122 indicating that the institution has received the property. Note: When competing Federal claims are made for particular items of excess personal property held by agencies other than USDA, with or without payment of reimbursement, GSA will give preference to the Federal agency that will retain title in the Government.


I80�1A3200.8
I89Costs.
I11Excess personal property obtained under this part is provided free of charge. However, the institution must pay all costs associated with packaging and transportation. The institution should specify the method of shipment on the SF�09122.


I80�1A3200.9
I89Accountability and record keeping.
I11USDA requires that Federal excess personal property received by an eligible institution pursuant to this part shall be placed into use for a research, educational, technical, or scientific activity, or for a related purpose, within 1 year of receipt of the property, and used for such purpose for at least 1 year thereafter. The institution's property management officer must establish and maintain accountable records identifying the property's location, description, utilization and value. To ensure that the excess personal property is being used for its intended purpose under this part, compliance reviews will be conducted by an authorized representative of USDA. The review will include site visit inspections of the property and the accountability and record keeping systems.


�230�I80�1A3200.10
I89Disposal.
I11When the property is no longer needed by the institution, it may be used in support of other Federal projects or sold, and the proceeds used for research, educational, technical, and scientific activities, or for related programs of the recipient institution.


I80�1A3200.11
I89Liabilities and losses.
I11USDA assumes no liability with respect to accidents, bodily injury, illness, or any other damages or loss related to excess personal property transferred under this part.
S8006I53PARTS 3201�093299[RESERVED]
S8010
F8008I327 CFR Ch. XXXIII (1�091�0900 Edition)
I33Office of Transportation, USDA


�231�I04CHAPTER XXXIII_OFFICE OF TRANSPORTATION, DEPARTMENT OF AGRICULTURE 
I03
I87Part
I88Page
I483300
I49Agreement on the international carriage of perishable foodstuffs and on the special equipment to be used for such carriage (ATP); inspection, testing, and certification of special equipment
I59233
Q02
I483305
I46[Reserved]


F80103I327 CFR Ch. XXXIII (1�091�0900 Edition)
I33Office of Transportation, USDA
�233�I95Pt. 3300
I52PART 3300_AGREEMENT ON THE INTERNATIONAL CARRIAGE OF PERISHABLE FOODSTUFFS AND ON THE SPECIAL EQUIPMENT TO BE USED FOR SUCH CARRIAGE (ATP); INSPECTION, TESTING, AND CERTIFICATION OF SPECIAL EQUIPMENT 


I86Subpart A_Introduction
S8006I18Sec. 
S8010I263300.1Scope of authority and purpose.
I263300.4Definitions. 

I86Subpart B_Procedures for Testing of Equipment 
I263300.7General. 
I263300.10Measurement of the K-coefficient of an insulated body. 
I263300.13Determination of the efficiency of the thermal appliances as installed in the insulated body. 

I86Subpart C_Approval of Testing Stations 
I263300.16General. 
I263300.19Application for approval. 
I263300.22Response to application for approval. 
I263300.25Application for renewal of approval. 
I263300.28Response to application for renewal of approval. 
I263300.31Termination of approval. 

I86Subpart D_Procedures for Separate Testing of Mechanical Refrigerating Appliances 
I263300.34General. 
I263300.37Testing of a mechanical refrigerating appliance. 

I86Subpart E_Approval of Testing Laboratories 
I263300.40General. 
I263300.43Application for approval. 
I263300.46Response to application for approval. 
I263300.49Application for renewal of approval. 
I263300.52Response to application for renewal of approval. 
I263300.55Termination of approval. 

I86Subpart F_Certification of New Equipment 
I263300.58General. 
I263300.61Testing and verification requirements. 
I263300.64Application for certificate for new equipment produced or assembled in the United States or in a foreign country which is not a contracting party to the ATP. 
I263300.67Application for certificate for new equipment produced or assembled in a foreign country which is a contracting party to the ATP. 
I263300.70Issuance of certificate. 
I263300.73Period of validity of certificates. 

I86Subpart G_Certification of Equipment in Service 
I263300.76General. 
I263300.79Application for certificate. 
I263300.82Issuance of certificate. 
I263300.85Period of validity of certificates. 

I86Subpart H_Other Provisions 
I263300.88Fees for U.S. ATP certificates. 
I263300.91List of approved testing stations, approved testing laboratories, and fees for certificates. 
I263300.94Appeals.

Q04I21T5Authority:  T1Sec. 4, Pub. L. 97�09325, International Carriage of Perishable Foodstuffs Act (7 U.S.C. 4403). 
Q04I21T5Source:  T151 FR 33879, Sept. 24, 1986, unless otherwise noted.

I56Subpart A_Introduction 

I80�1A3300.1
I89Scope of authority and purpose. 
I11The International Carriage of Perishable Foodstuffs Act assigns to the Secretary of Agriculture the responsibility for implementation of the Agreement on the International Carriage of Perishable Foodstuffs and on the Special Equipment to be Used for Such Carriage (ATP). The purpose of this rule is to establish procedures for the inspection, testing, and certification of insulated, refrigerated, mechanically refrigerated, and heated transport equipment in accordance with the Act and the standards specified in the Agreement. In the process, the intent is to utilize existing industry organizations and facilities for testing and inspection of equipment. The Secretary is the sole authority to issue certificates of compliance. 

I80�1A3300.4
I89Definitions. 
I11T3AdministratorG1T1 means the Administrator, Office of Transportation, U.S. Department of Agriculture, whose address is: 1405 Auditors Building, 201 14th Street, SW., Washington, DC 20250. 
�234�I11T3ATPG1T1 means the Agreement on the International Carriage of Perishable Foodstuffs and on the Special Equipment to be Used for Such Carriage (ATP), and the annexes and appendices thereto, done at Geneva, September 1, 1970, under the auspices of the Economic Commission for Europe, and any subsequent amendments thereto.\1\N 

I28N\1\�1AA copy of the agreement can be obtained by request to the ATP Manager, Office of Transportation, U.S. Department of Agriculture, 1405 Auditors Building, 201 14th Street, SW., Washington, DC 20250. 

I11T3ATP managerG1T1 means the person designated by the Administrator to manage the program established by this rule, whose address is: ATP Manager, Office of Transportation, U.S Department of Agriculture, 1405 Auditors Building, 201 14th Street, SW., Washington, DC 20250. 
I11T3Contracting partyG1T1 means a country which is signatory to the ATP. 
I11T3Domestic ownerG1T1 means an organization incorporated or chartered under the laws of, and with principal office in, the United States, and to which one of the following applies: 
I11(a) The organization owns and operates the equipment directly. 
I11(b) The organization owns and operates the equipment through a wholly owned subsidiary in a foreign country. 
I11(c) The organization is a lessee or bailee of the equipment, and a written lease or bailment provides that the organization is responsible for any inspection, testing, and certification of the equipment with respect to the ATP rule. 
I11T3EquipmentG1T1 means the special transport equipment that meets the definitions and standards set forth in ATP, Annex 1, including, but not limited to, railcars, trucks, trailers, semitrailers, and intermodal freight containers that have an insulated body only, or an insulated body equipped with a refrigerating, mechanically refrigerating, or heating appliance. 
I11T3Equipment manufacturerG1T1 means an organization which producers or assembles the complete unit of equipment, that is, the insulated body with the thermal appliance installed. 
I11T3Foreign ownerG1T1 means an organization registered under the laws of, or with principal office in, a country outside the United States, and which owns or operates the equipment. 
I11T3Foreign-ATP certificateG1T1 means a certificate issued by a foreign country which is a contracting party to the ATP, attesting that the equipment listed in the certificate complies with pertinent standards in the ATP. 
I11T3Identical mechanical refrigerating applianceG1T1 means an appliance which is of the same model number and design as the reference mechanical refrigerating appliance. 
I11T3Insulated bodyG1T1 means the six-sided structural component of equipment, consisting of insulated doors, sidewalls, roof, floor, and endwall, inside which perishable foodstuffs are carried. 
I11T3International carriageG1T1 means transportation of perishable foodstuffs if such foodstuffs are loaded in equipment or the equipment containing them is loaded onto a rail or road vehicle, in the territory of any country and such foodstuffs are, or the equipment containing them is, unloaded in the territory of another country that is a contracting party, where such transportation is by: 
I11(a) Rail, 
I11(b) Road, 
I11(c) Any combination of rail and road, or 
I11(d) Any sea crossing of less than one hundred and fifty kilometers, if preceded or followed by one or more land journeys as referred to in clauses (a), (b), and (c) of this definition, and the perishable foodstuffs are shipped in the same equipment used for such land journeys without transloading of such foodstuffs. 
Q02I10In the case of any transportation that involves one or more sea crossings other than as specified in clause (d) of this definition, each land journey shall be considered separately. 
I11T3New equipmentG1T1 means equipment produced or assembled on or after the effective date of this rule. 
I11T3Perishable foodstuffsG1T1 means the quick deep-frozen and frozen food products listed in Annex 2, and the chilled food products listed in Annex 3 to the ATP. 
I11T3Reference equipmentG1T1 means a unit of equipment which has passed a test in an approved testing station, and can thereby serve as a basis for certification of related serially-produced equipment. 
�235�I11T3Reference insulated bodyG1T1 means an insulated body which has passed a test in an approved testing station for measurement of the K-coefficient of the body, and can thereby serve as the basis for approval of serially-produced bodies in the case in which the body and the mechanical refrigerating appliance of the equipment are tested separately. 
I11T3Reference mechanical refrigerating applianceG1T1 means an appliance which has passed a test in an approved testing laboratory, and can thereby serve as the basis for approval of identical mechanical refrigerating appliances in the case in which the appliance and the insulated body of the equipment are tested separately. 
I11T3Serially-produced bodiesG1T1 means insulated bodies which meet the definition in ATP, Annex 1 Appendix 1, paragraph 2(c)(i). 
I11T3Serially-produced equipmentG1T1 means equipment of a specific type (container, semi-trailer, trailer, truck, or container), which meets the definition in ATP, Annex 1, Appendix 1, paragraphs 2(c), (i), (ii), (iii), and (iv). 
I11T3Thermal applianceG1T1 means the refrigerating, mechanical refrigerating, or heating appliance which is installed in the insulated body of the equipment. 
I11T3United StatesG1T1 means the fifty States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands of the United States, the Commonwealth of the Northern Mariana Islands, and any other territory or possession of the United States. 
I11T3U.S. ATP certificateG1T1 means a certificate issued by the U.S. Department of Agriculture, attesting that the equipment listed in the certificate complies with pertinent standards in the ATP.
I11T3U.S. ATP testing laboratoryG1T1 means a facility in the United States which has been approved by the Administrator to conduct tests of mechanical refrigerating appliances. 
I11T3U.S. ATP testing stationG1T1 means a facility in the United States which has been approved by the Administrator to conduct tests of equipment. 

I56Subpart B_Procedures for Testing of Equipment 

I80�1A3300.7 
I89General. 
I11Testing of equipment according to the ATP is basically done in two phases: 
I11(a) Measurement of the insulating capacity, that is, the K-coefficient, of the insulated body. 
I11(b) Determination of the efficiency of the thermal appliance as installed in the insulated body. In the case of mechanically refrigerated equipment, the mechanical refrigerating appliance may be tested separate from the body. 

I80�1A3300.10 
I89Measurement of the K-coefficient of an insulated body. 
I11The K-coefficient shall be measured according to the procedures in ATP, Annex 1, Appendix 2, paragraphs 1�0928, and the following shall apply:
I11(a) The internal heating method shall be used. 
I11(b) In ATP, Annex 1, Appendix 2, paragraph 8, last line, ``about +20 G6T1�G1T1C for the mean temperature of the walls of the body shall be interpreted to mean between +19 G6T1�G1T1C (+66 G6T1�G1T1F) and 21 G6T1�G1T1C (+70 G6T1�G1T1F).
I11(c) A report of each test shall be completed on a form corresponding to the pertinent test report model prescribed in ATP, Annex 1, Appendix 2. Report forms may be obtained by a request to the ATP manager. 

I80�1A3300.13 
I89Determination of the efficiency of the thermal appliances as installed in the insulated body. 
I11In determining the efficiency of a thermal appliance with respect to maintaining a prescribed temperature inside the body, the procedures in ATP, Annex 1, Appendix 2, paragraphs 31�0940 and 43�0947 shall be used. A report of each test shall be completed on a form corresponding to the pertinent test report model prescribed in ATP, Annex 1, Appendix 2. Report forms may be obtained by a request to the ATP manager.

�236�I56Subpart C_Approval of Testing Stations 

I80�1A3300.16 
I89General. 
I11Any public or private organization incorporated or chartered under the laws of, and with principal office in, the United States may apply to have one or more of its facilities in the United States designated as a U.S. ATP testing station. 

I80�1A3300.19 
I89Application for approval. 
I11An application by an officer of the organization shall be submitted to the Administrator for each facility for which approval is sought. Copies of the Form, Application for Approval as a U.S. ATP Testing Station, may be obtained by a request to the ATP manager. The following information must be supplied in the application: 
I11(a) A statement that the organization is incorporated or chartered under the laws of, and that it has its principal office in, the United States, including the name, address, and telephone number of the principal office. 
I11(b) The address and telephone number of the testing station, and name and title of person in charge of the station. 
I11(c) A summary of experience at the facility which would indicate the capability to conduct tests of equipment according to Supart B of this rule. 
I11(d) A general description of the station, including drawings on letter size (8 \1/2\ �0A 11 inches) paper to show the floor plan and cross-sections of the test chamber, basic dimensions, location of heat exchangers and instruments, and any other pertinent information. 
I11(e) An indication of which of the following types of equipment, as defined in ATP, Annex 1, that the station is capable of testing: intermodal freight containers, semi-trailers, trailers, railcars, and trucks. 
I11(f) A statement that the ATP manager or other representative of the Administrator may, before a decision is made concerning the application, observe a test at the station of a Class ``C'' mechanically refrigerated container or semi-trailer, with Class ``C'' being defined as in ATP, Annex 1, paragraph 3.
I11(g) A statement that the station will be open to public use, that is, to manufacturers and owners of equipment which may apply to have equipment tested. 
I11(h) A statement that the fees to be charged by the organization for testing will be reasonable with respect to costs involved, and that such fees will be payable directly to the organization by those who seek testing of their equipment. 
I11(i) A statement that the station will maintain records of basic data developed in each test conducted under this rule, such records to be available for review by the ATP manager or other representative of the Administrator upon request. The record for each test shall be maintained for a period of three years.
I11(j) A statement that the organization will advise the ATP manager as soon as practicable of its intent to conduct a test under this rule and that it will, as soon as possible, advise when a firm test date has been set so that the ATP manager or other representative of the Administrator may observe the test. 
I11(k) A statement that the organization will send to the ATP manager a copy of each test report for equipment tested at the station according to this rule, within 30 days after completion of the test. 
I11(l) A statement that, should any significant change occur in the facility with respect to structure or test equipment as a result of redesign or other cause during the period of approval, the organization will so advise the ATP manager within 30 days after such change. 
I11(m) Any other pertinent information. 

I80�1A3300.22 
I89Response to application for approval.
I11The Administrator will, within 30 days of receipt of the application and any relevant information required, advise the applicant whether or not the facility is approved as a testing station. Approval is for a 5-year period. 

I80�1A3300.25 
I89Application for renewal of approval. 
I11If an organization wishes to have an approval renewed at the end of a 5-year �237�period, it shall submit a request for renewal to the Administrator 90 days before expiration of the existing approval. The request for renewal shall contain the same type of information as required in the original application, that is, the information called for in �1A3300.19 of subpart C. 

I80�1A3300.28 
I89Response to application for renewal of approval. 
I11The Administrator will, within 30 days of receipt of application and any relevant information required, advise the applicant whether or not approval is renewed. A renewal is good for 5 years. 

I80�1A3300.31 
I89Termination of approval. 
I11An approved testing station may at any time withdraw as an approved testing station by written notice to the Administrator. Similarly, the Administrator may suspend or terminate for cause the approved status of a testing station by written notice to the organization, setting forth the reasons for such action. Examples of causes for suspension or termination of approval of a testing station would be a change in equipment or operations at the station which would render the station incapable of performing tests according to the standards in the ATP, or noncompliance of the station with pertinent portions of this rule. 

I56Subpart D_Procedures for Separate Testing of Mechanical Refrigerating Appliances 

I80�1A3300.34 
I89General. 
I11ATP, Annex 1, Appendix 2, paragraph 41, provides that approval of mechanically refrigerated equipment may be done on the basis of separate testing of the mechanical refrigerating appliance. 

I80�1A3300.37 
I89Testing of a mechanical refrigerating appliance.
I11For separate testing of a mechanical refrigerating appliance, the following shall pertain: 
I11(a) The calibrated-box method shall be used, as set forth in ARI Standard 1110, Standard for Mechanical Refrigeration Units, of the Air-Conditioning and Refrigeration Institute. 
I11(b) The appliance shall be rated according to the class, or classes, of service for which the appliance is intended, with classes being defined as in ATP, Annex 1, paragraph 3. 
I11(c) A report of each test shall be completed on a form corresponding to the pertinent test report model prescribed in ATP, Annex 1, Appendix 2. Report forms may be obtained by a request to the ATP manager. 

I56Subpart E_Approval of Testing Laboratories

I80�1A3300.40 
I89General. 
I11Any public or private organization incorporated or chartered under the laws of, and with principal office in, the United States may apply to have one or more of its facilities in the United States designated as a U.S. ATP testing laboratory.

I80�1A3300.43 
I89Application for approval. 
I11An application by an officer of the organization shall be submitted to the Administrator for each facility for which approval is sought. Copies of the Form, Application for Approval as a U.S. ATP Testing Laboratory, may be obtained by a request to the ATP manager. The following information must be supplied in the application:
I11(a) A statement that the organization is incorporated or chartered under the laws of, and that it has its principal office in, the United States, including the address and telephone number of the principal office.
I11(b) The address and telephone number of the testing laboratory, and name and title of person in charge of the laboratory.
I11(c) A summary of the experience at the facility which would indicate a capability to conduct tests of mechanical refrigerating appliances according to subpart D of this rule.
I11(d) A general description of the laboratory, including drawings on letter size (8\1/2\ �0A 11 inches) paper to show the floor plan and cross-section of the test chamber, basic dimensions, location of heat exchangers and instruments, and any other pertinent information.
I11(e) A statement that the ATP manager or other representative of the Administrator may, before a decision is �238�made concerning the application, observe a test at the laboratory of a mechanical refrigerating appliance for a Class ``C'' mechanically refrigerated container or trailer, with Class ``C'' as defined in ATP, Annex 1, paragraph 3.
I11(f) A statement that the laboratory will maintain records of basic data developed in each test conducted under this rule, such records to be available for review by the ATP manager or other representative of the Administrator, upon request. The record for each test shall be maintained for a period of three years.
I11(g) A statement that the organization will advise the ATP manager as soon as practicable of its intent to conduct a test under this rule and that it will, as soon as possible, advise when a firm test has been set so that the ATP manager or other representative of the Administrator may observe the test.
I11(h) A statement that the organization will send to the ATP manager a copy of each test report for an appliance tested at the laboratory according to this rule, within 30 days after completion of the test.
I11(i) A statement that, should any significant change occur in the facility with respect to structure or test equipment as a result of redesign or other cause during the period of approval, the organization will so advise the ATP manager within 30 days after such change.
I11(j) Any other pertinent information.

I80�1A3300.46 
I89Response to application for approval.
I11The Administrator will, within 30 days of receipt of an application and any relevant information required, advise the applicant whether or not the facility is approved as a testing laboratory. Approval is for a 5-year period from date of approval.

I80�1A3300.49 
I89Application for renewal of approval.
I11If an organization wishes to have an approval renewed at the end of a 5-year period, it shall submit a request for renewal to the Administrator 90 days before expiration of the existing approval. The request for renewal shall contain the same type of information as required in the original application, that is, the information called for in �1A3300.43 of subpart E.

I80�1A3300.52 
I89Response to application for renewal of approval.
I11The Administrator will, within 30 days of receipt of application and any relevant information required, advise the applicant whether or not approval is renewed. A renewal extends the period of approval for 5 years.

I80�1A3300.55 
I89Termination of approval. 
I11An approved testing laboratory may at any time withdraw as an approved testing laboratory by written notice to the Administrator. Similarly, the Administrator may suspend or terminate for cause the approved status of a testing laboratory by written notice to the organization, setting forth the reasons for such action. Examples of causes for suspension or termination of approval would be a change in equipment or operations at the laboratory which would render it incapable of performing tests according to the standards in the ATP, or noncompliance of the laboratory with pertinent portions of this rule. 

I56Subpart F_Certification of New Equipment 

I80�1A3300.58 
I89General. 
I11The following shall apply for certification of new equipment: 
I11(a) Domestic owners are eligible to receive U.S. ATP certificates for equipment produced or assembled in the United States or in a foreign country. 
I11(b) Foreign owners are eligible to receive U.S. ATP certificates only for equipment produced or assembled in the United States. 
I11(c) For equipment manufactured (i.e., produced or assembled) in the United States: 
I11(1) When the complete unit of equipment is tested, the test shall be performed in a U.S. ATP testing station.
I11(2) When the mechanical refrigerating appliance and the insulated body are tested separately, such tests shall be performed in approved testing facilities in the United States or in test facilities located in, and approved by, a foreign country which is a Contracting Party. 
�239�I11(d) For equipment manufactured in a foreign country which is a Contracting Party, a domestic owner may receive a U.S. ATP certiticate in exchange for the Foreign-ATP certificate issued by the country of manufacture.
I11(e) For equipment manufactured in a foreign country which is not a Contracting Party, tests shall be performed in approved testing facilities in the United States or in facilities located in and approved by a foreign country which is a Contracting Party.
I11(f) In accordance with ATP, Annex 1, Appendix 1, paragraphs 2(a) and (d), the validity of a test report for a reference equipment shall expire at the end of a period of 3 years or at the end of the manufacture of 1,000 units of serially-produced equipment, whichever occurs first.
I11(g) The validity of a test report for a reference mechanical refrigerating appliance shall expire at the end of a period of three years, or at the end of the manufacture of 1,000 identical mechanical refrigerating appliances, whichever occurs first.
I11(h) The validity of a test report for a reference insulated body shall expire at the end of a period of three years, or at the end of the manufacture of 1,000 serially-produced bodies, whichever occurs first.
I11(i) Serially-produced equipment shall be produced or assembled by the same manufacturer and at the same manufacturing plant as the reference equipment.
I11(j) Identical mechanical refrigerating appliances shall be manufactured by the same manufacturer and at the same manufacturing plant as the reference mechanical refrigerating appliance.
I11(k) Serially-produced bodies shall be manufactured by the same manufacturer and at the same manufacturing plant as the reference insulated body.
I11(l) Equipment manufacturers shall notify the ATP manager 30 days before start of manufacture so that the ATP manager or other representative of the Administrator may observe the manufacturing operation. 
I11(m) Owners who receive a U.S. ATP certificate have the responsibility to manitain the equipment in good repair and operating condition with the understanding that the certificate is valid only so long as:
I11(1) The insulated body and the thermal appliance are maintained in good condition; 
I11(2) No material alteration is made to the thermal appliance which decreases its refrigerating capacity, and; 
I11(3) If the thermal appliance is replaced, it is replaced by an appliance of equal or greater refrigerating capacity. 

I80�1A3300.61
I89Testing and verification requirements. 
I11In accordance with ATP, Annex 1, Appendix 1, paragraphs 1, 1(a), 2(a), 2(b), 2(c) and 3, and Appendix 2, paragraph 41, certification of new equipment is based upon the following: 
I11(a) For a unit of equipment, a test of the equipment in an approved testing station. 
I11(b) For serially-produced equipment: 
I11(1) A test of one unit of equipment in an approved testing station, such unit to serve as the reference equipment. 
I11(2) Verification that production of other units of equipment is in conformity with the reference equipment. 
I11(c) For mechanically refrigerated equipment, certification may be based upon a separate test of the mechanical refrigerating appliance and a separate test of the insulated body. 

I80�1A3300.64
I89Application for certificate for new equipment produced or assembled in the United States or in a foreign country which is not a contracting party to the ATP. 
I11Application for certification shall be submitted to the ATP manager by an officer in the organization of the owner of the equipment. In the case of equipment manufactured in the United States, application may be made by an officer in the organization of the equipment manufacturer, acting on behalf of the owner. Copies of the Form, Application for U.S. ATP Certificate for New Equipment Produced or Assembled in the United States or in a Foreign Country Which is not a Contracting Party to the ATP, may be obtained by a request to the ATP manager. The following information must be supplied in the application: 
I11(a) A statement whether the owner is a domestic owner or a foreign owner, with the name, address and telephone �240�number of its principal office, and the name and title of person to contact. 
I11(b) If the operator of the equipment is different from the owner, the name and address of the operator. 
I11(c) Type of equipment (intermodal freight container, semi-trailer, trailer, railcar, or truck). 
I11(d) Total number of units of equipment. 
I11(e) Definition and distinguishing mark of the equipment for which certification is sought, referring to ATP, Annex 1, paragraph 3 and Appendix 4. 
I11(f) Name, address, and telephone number of the principal office of the equipment manufacturer, and name and title of the person to contact. 
I11(g) Name and address of the plant at which the equipment was manufactured. 
I11(h) In the case of a unit of equipment (i.e., the insulated body with its mechanical refrigerating appliance installed) that has been tested to serve as the reference equipment for serially-produced equipment: 
I11(1) The original or certified true copy of the test report for the reference equipment. 
I11(2) For the serially-produced equipment: 
I11(i) The manufacturer's make and model number for the equipment, including a brief description of the equipment and enclosure of any brochure on the equipment which might be available. 
I11(ii) The basis upon which the equipment meets the definition of serially-produced equipment, with respect to the reference equipment. 
I11(iii) A statement that the equipment was manufactured at the same plant at which the reference equipment was manufactured. 
I11(iv) A statement that production of the equipment was in conformity with the reference equipment.
I11(i) In the case where the mechanical refrigerating appliance and the insulated body have been tested separately:
I11(1) For the reference mechanical refrigerating appliance:
I11(i) The original or certified true copy of the test report.
I11(ii) From the test report, the effective refrigerating capacity, W, in watts, of the appliance at an outside temperature of +30 G6T1�G1T1C and the inside temperature (T3seeG1T1 ATP, Annex 1, paragraph 3 and Appendix 4) for the class of equipment for which certification is sought. ``W'' must be equal to, or greater than, the increased heat transfer rate, HG5T2iG1T1, for the reference insulated body. See paragraph (3)(iii) below.
I11(2) For the identical mechanical refrigerating appliances:
I11(i) Name and address of the plant at which the identical appliances and reference appliance were manufactured.
I11(ii) The manufacturer's make, model number, and a brief description of the appliances with enclosure of any brochure on the appliances which might be available.
I11(iii) A statement that the appliances meet the definition of identical mechanical refrigerating appliances.
I11(3) For the reference insulated body:
I11(i) The original or certified true copy of the test report.
I11(ii) The total heat transfer rate of the body, HG5T2tG1T1=S�0AK�0AG6T1DG1T1 T, in watts, where: ``S'' is the mean surface area of the body, from the test report; ``K'' is the heat transfer coefficient of the body, from the test report; and, ``G6T1DG1T1 T'' is the difference in degrees Kelvin between an outside temperature of +30 G6T1�G1T1C and the inside temperature for the class of equipment for which certification is sought.
I11(iii) The increased beat transfer rate, HG5T2iG1T1, obtained by multiplying the total heat transfer rate HG5T2tG1T1, by the factor of 1.75.
I11(4) For the serially-produced insulated bodies:
I11(i) Name and address of the plant at which the serially-produced bodies and reference body were manufactured.
I11(ii) The manufacturer's make, model number, and a brief description of the bodies, with any brochure on the bodies which might be available.
I11(iii) The basis upon which the bodies meet the definition of serially-produced bodies, with respect to the reference insulated body.
I11(iv) A statement that production of the bodies was in conformity with the reference insulated body.
I11(j) Information on the equipment after manufacture:
�241�I11(1) A statement that each mechanical refrigerating appliance, after it was installed in the body, was operated and thoroughly checked and that each appliance functioned properly.
I11(2) A statement that each body and each appliance has affixed to it a manufacturer's plate or other means of identification which shows the items of information required by ATP, Annex 1, paragraph 6.
I11(3) A statement that each unit of equipment, before it is put into service, will have affixed to it a certification plate and distinguishing mark as specified in ATP, Annex 1, Appendix 1, paragraphs 4 and 5, and Appendixes 3 and 4.
I11(4) A list showing, for each unit of equipment, the serial number of the body and the corresponding owner's equipment identification number.

I80�1A3300.67 
I89Application for certificate for new equipment produced or assembled in a foreign country which is a contracting party to the ATP. 
I11An application for certification of equipment shall be submitted to the ATP manager by an officer in the organization of the owner of the equipment. Copies of the Form, Application for U.S. ATP Certificate for New Equipment Produced or Assembled in a Foreign Country Which is a Contracting Party, may be obtained by a request to the ATP manager. The following information must be submitted in the application: 
I11(a) A statement that the owner is a domestic owner, with the name, address and telephone number of its principal office, and the name and title of the person to contact. 
I11(b) If the operator of the equipment is different from the owner, the name and address of the operator. 
I11(c) The type of equipment (intermodal freight container, trailer, semi-trailer, railcar, or truck.) 
I11(d) Total number of units of equipment. 
I11(e) Definition of the equipment for which certification is sought, referring to ATP, Annex 1, paragraph 3, and Appendix 4. 
I11(f) Name, address, and telephone number of the manufacturer of the equipment, and the name and title of the person to contact. 
I11(g) The manufacturer's make and model number for the equipment, including a brief description of the equipment and any brochure on the equipment which might be available. 
I11(h) The original or certified true copy of the test report for the reference equipment. 
I11(i) The original or certified true copy of the Foreign-ATP certificate issued for the equipment. 
I11(j) A statement that each unit of equipment, before it is put into service, will have affixed to it a certification plate and distinguishing mark as specified in ATP, Annex 1, Appendix 1, paragraphs 4 and 5, and Appendixes 3 and 4. 
I11(k) A list showing, for each unit of equipment, the serial number of the body and the corresponding owner's equipment identification number. 

I80�1A3300.70 
I89Issuance of certificate. 
I11The ATP manager will evaluate the documents received and, for equipment deemed qualified, will issue a U.S. ATP certificate to the applicant within 30 days of the receipt of an application and any relevant information required. The certificate will be in the format prescribed in ATP, Annex 1, Appendix 3. For equipment deemed not qualified, the applicant will be advised of the reasons for non-qualification within 30 days of the receipt of an application and any relevant information required. 

I80�1A3300.73 
I89Period of validity of certificates. 
I11In accordance with ATP, Annex 1, Appendix 1, paragraphs 1(a) and 1(b), certificates issued for new equipment are valid for a period of 6 years from date of issue. 

I56Subpart G_Certification of Equipment in Service 

I80�1A3300.76 
I89General. 
I11Only domestic owners are eligible to receive U.S. ATP certificates for equipment in service, with certification based upon the following: 
I11(a) For equipment which has not previously been certified: 
I11(1) For each unit of equipment, a test in a U.S. ATP testing station or in a testing station located in and approved by a country which is a Contracting �242�Party, to measure the K-coefficient of the insulated body and the efficiency of the thermal appliance in accordance with �1A3300.10 and �1A3300.13 of this rule. 
I11(2) If the equipment consists of serially-produced equipment manufactured by a particular equipment manufacturer, and belonging to one owner, certification may be based upon the following: 
I11(i) A test of 1 percent of the units of equipment as prescribed in preceding paragraph (a)(1) of this section, the units tested to serve as reference equipment.
I11(ii) An inspection of each unit of equipment, using the procedures set forth in ATP, Annex 1, Appendix 2, paragraphs 29 and 49. The inspections shall be performed by one of the following, at the choice of the owner: 
I11(A) Persons in the owner's organization whom the owner deems qualified to perform inspections, or; 
I11(B) By an independent inspection agency which the owner deems competent to perform inspections. Fees charged by such inspection agency shall be payable directly to the agency by the owner. 
I11(iii) A report of each inspection shall be completed on a form corresponding to the pertinent test report model in ATP, Annex 1, Appendix 2. Report forms may be obtained by a request to the ATP manager. 
I11(b) For renewal of a U.S. ATP certificate which is nearing its expiration date, any of the following three procedures: 
I11(1) For each unit of equipment, a test as prescribed in preceding paragraph (a)(1) of this section, or; 
I11(2) If the equipment is serially-produced by a particular manufacturer and belongs to one owner, test and inspection of the equipment according to the procedures prescribed in preceding paragraphs (a)(2)(i), (ii), and (iii) of this section, or; 
I11(3) An inspection of each unit of equipment as prescribed in paragraphs (a)(2)(ii) and (iii) of this section. 
I11(c) For equipment which is currently certified according to a U.S. ATP certificate, and which has been transferred from one domestic owner to another, the new owner may obtain a U.S. ATP certificate by submitting the original or certified true copy of the certificate issued to the previous owner, and by performing an inspection and submitting an inspection report for each unit of equipment. 
I11(d) For equipment which is currently certified according to a Foreign-ATP certificate, and which has been transferred from a foreign owner to a domestic owner, the domestic owner may obtain a U.S. ATP certificate by submitting the original or certified true copy of the test report for the reference equipment and the original or certified true copy of the foreign certificate, and by performing an inspection and submitting an inspection report for each unit of equipment. 
I11(e) Owners who receive a U.S. ATP certificate have the responsibility to maintain equipment in good repair and operating condition with the understanding that the certificate is valid only so long as: 
I11(1) The insulated body and the thermal appliance are maintained in good condition; 
I11(2) No material alteration is made to the thermal appliance which decreases its refrigeration capacity, and; 
I11(3) If the thermal appliance is replaced, it is replaced by an appliance of equal or greater refrigerating capacity. 

I80�1A3300.79 
I89Application for certificate. 
I11An application shall be submitted to the ATP manager by an officer in the organization of the owner of the equipment. Copies of the Form, Application for U.S. ATP Certificate for Equipment in Service, may be obtained by a request to the ATP manager. The following information is requested in the application: 
I11(a) A statement that the owner is a domestic owner, with the name, address, and telephone number of its principal office, and name and title of person to contact. 
I11(b) If the operator of the equipment is different from the owner, the name and address of the operator. 
I11(c) The type of equipment (intermodal freight container, trailer, semi-trailer, railcar, or truck). 
I11(d) The total number of units of equipment. 
�243�I11(e) The definition of the equipment for which certification is sought, referring to ATP, Annex 1, paragraph 3 and Appendix 4. 
I11(f) For equipment which has not been previously certified, one of the following:
I11(1) For each unit of equipment, the original or certified true copy of the test report, or; 
I11(2) If the equipment is serially-produced by one manufacturer: 
I11(i) Name of manufacturer. 
I11(ii) The original or certified true copy of the test report(s) of 1 percent of the equipment which was tested to serve as reference equipment. 
I11(iii) A report of inspection for each unit of equipment. 
I11(g) For renewal of a U.S. ATP Certificate which is nearing its expiration date: 
I11(1) The original or certified true copy of that certificate, and; 
I11(2) One of the following, (i) (ii), or (iii): 
I11(i) For each unit of equipment, the original or certified true copy of the test report. 
I11(ii) If the equipment is serially-produced by one manufacturer: 
I11(A) Name of manufacturer. 
I11(B) The original or certified true copy of the test report(s) of 1 percent of the equipment which was tested to serve as reference equipment. 
I11(C) A report of inspection from each unit of equipment. 
I11(iii) A report of inspection for each unit of equipment. 
I11(h) For equipment which is currently certified according to a U.S. ATP certificate, and which has been transferred from one domestic owner to another: 
I11(1) The original or certified true copy of that certificate. 
I11(2) A report of inspection for each unit of equipment. 
I11(i) For equipment which is currently certified according to a Foreign-ATP certificate, and which has been transferred from a foreign owner to a domestic owner: 
I11(1) The original or certified true copy of the test report for the reference equipment. 
I11(2) The original or certified true copy of the Foreign-ATP certificate. 
I11(3) A report of inspection for each unit of equipment. 
I11(j) A statement that each unit of equipment has, or will have, affixed to it a certification plate and distinguishing mark as prescribed in ATP, Annex 1, Appendix 1, paragraphs 4 and 5, and Appendices 3 and 4. 
I11(k) A list showing, for each unit of equipment, the serial number of the body and the corresponding owner's equipment identification number. 

I80�1A3300.82
I89Issuance of certificate. 
I11The ATP manager will evaluate documents received and, for equipment deemed qualified, will issue a U.S. ATP certificate to the applicant within 30 days of receipt of the application and any relevant information required. The certificate will be in the format prescribed in ATP, Annex 1, Appendix 3. For equipment deemed not qualified, the applicant will be advised of reasons for non-qualification within 30 days of receipt of an application and any relevant information required. 

I80�1A3300.85
I89Period of validity of certificates. 
I11In accordance with ATP, Annex 1, Appendix 1, paragraphs 1(b), and Appendix 2, paragraphs 29(c) and 49(b) and (d), considered in combination, certificates will be valid for periods as follows: 
I11(a) For equipment which passes a test, 6 years. 
I11(b) For serially-produced equipment of which 1 percent have passed a test, and all units have been inspected and passed such inspection, 6 years. 
I11(c) For renewal of a U.S. ATP certificate which is nearing its expiration date, where the equipment has passed an inspection but has not been tested, 3 years. 
I11(d) For equipment currently certified according to a U.S. ATP certificate, where the equipment has been transferred from one domestic owner to another and the equipment has passed an inspection, 3 years or the date of expiration of the current U.S. ATP certificate, whichever gives the later expiration date on the new U.S. ATP certificate. 
�244�I11(e) For equipment currently certified according to a Foreign-ATP certificate, where the equipment has been transferred from a foreign owner to a domestic owner and the equipment has passed an inspection, 3 years or the date of expiration of the foreign certificate, whichever gives the later expiration date on the newly issued U.S. ATP certificate. 

I56Subpart H_Other Provisions 

I80�1A3300.88 
I89Fees for U.S. ATP certificates. 
I11The fee schedule for issuance of U.S. ATP certificates by the U.S. Department of Agriculture will be calculated according to the criteria in Circular A�0925�1A\2\N, issued by the Office of Management and Budget. Fees may be revised as required on an annual basis. 

I28N\2\�1AA copy of Circular A�0925 can be obtained by a request to the Office of Management and Budget (OMB), 17th Street and Pennsylvania Avenue, NW., Washington, DC 20503. 


I80�1A3300.91
I89List of approved testing stations, approved testing laboratories, and fees for certificates. 
I11A current list of U.S. ATP testing stations, U.S. ATP testing laboratories, and fees for issuance of U.S. ATP certificates may be obtained by request to the ATP manager. 

I80�1A3300.94 
I89Appeals. 
I11Any organization aggrieved by an action in connection with this rule may obtain a review of such action by submitting pertinent information by letter to the Administrator. The decision of the Administrator is the final agency action. 
S8006I53PART 3305[RESERVED]
S8010
F8008I327 CFR Ch. XXXIV (1�091�0900 Edition)
I33Coop. State Research, Education, and Extension Ser., USDA


�245�I04CHAPTER XXXIV_COOPERATIVE STATE RESEARCH, EDUCATION, AND EXTENSION SERVICE, DEPARTMENT OF AGRICULTURE
I03
Q06Q04I21T5Editorial Note: T1Nomenclature changes to chapter XXXIV appear at 59 FR 68073, Dec. 30, 1994.
I87Part
I88Page

I483400
I49Special Research Grants Program 
I59247
I483401
I49Rangeland Research Grants Program
I59257
I483402
I49Food and Agricultural Sciences National Needs Graduate Fellowship Grants Program
I59267
I483403
I49Small Business Innovation Research Grants Program
I59277
I483404
I49Public information
I59287
I483405
I49Higher Education Challenge Grants Program  
I59287

I483406
I491890 Institution Capacity Building Grants Program  
I59304


I483407
I49Implementation of National Environmental Policy Act
I59334
I483411
I49National Research Initiative Competitive Grants Program
I59338
I483415
I49Biotechnology Risk Assessment Research Grants Program
I59351


F80103I327 CFR Ch. XXXIV (1�091�0900 Edition)
I33Coop. State Research, Education, and Extension Ser., USDA
�247�I95Pt. 3400

I52PART 3400_SPECIAL RESEARCH GRANTS PROGRAM


I86Subpart A_General
S8006I18Sec.
S8010I263400.1Applicability of regulations.
I263400.2Definitions.
I263400.3Eligibility requirements.
I263400.4How to apply for a grant.
I263400.5Evaluation and disposition of applications.
I263400.6Grant awards.
I263400.7Use of funds; changes.
I263400.8Other Federal statutes and regulations that apply.
I263400.9Other conditions.


I86Subpart B_Scientific Peer Review of Research Grant Applications
I263400.10Establishment and operation of peer review groups.
I263400.11Composition of peer review groups.
I263400.12Conflicts of interest.
I263400.13Availability of information.
I263400.14Proposal review.
I263400.15Review criteria.



I86Subpart C_Peer and Merit Review Arranged by Grantees

I263400.20Grantee review prior to award.
I263400.21Scientific peer review for research activities.
I263400.22Merit review for education and extension activities.


I86Subpart D_Annual Reports

I263400.23Annual reports.



Q04I21T5Authority: T17 U.S.C. 450i(c).

Q04I21T5Source: T156 FR 58147, Nov 15, 1991, unless otherwise noted.



I56Subpart A_General



I80�1A3400.1
I89Applicability of regulations.

I11(a) The regulations of this part apply to special research grants awarded under the authority of subsection (c) of the Competitive, Special, and Facilities Research Grant Act, as amended (7 U.S.C. 450i (c)), to facilitate or expand promising breakthroughs in areas of the food and agricultural sciences of importance to the United States. Subparts A and B, excepting this section, apply only to special research grants awarded under subsection (c)(1)(A). Subpart C, Peer and Merit Review Arranged by Grantees, and Subpart D, Annual Reports, apply to all grants awarded under subsection (c).
I11(b) Each year the Administrator of CSREES shall determine and announce through publication of a Notice in such publications as the T4Federal RegisterG1T1, professional trade journals, agency or program handbooks, the Catalog of Federal Domestic Assistance, or any other appropriate means, research program areas for which proposals will be solicited competitively, to the extent that funds are available.
I11(c) The regulations of this part do not apply to research, extension or education grants awarded by the Department of Agriculture under any other authority.

Q04I20[64 FR 34103, June 24, 1999]




I80�1A3400.2
I89Definitions.
I11As used in this part:
I11(a) T3AdministratorG1T1 means the Administrator of the Cooperative State Research, Education, and Extension Service (CSREES) and any other officer or employee of the Department of Agriculture to whom the authority involved may be delegated.
I11(b) T3DepartmentG1T1 means the Department of Agriculture.
I11(c) T3Principal investigatorG1T1 means a single individual designated by the grantee in the grant application and approved by the Administrator who is responsible for the scientific and technical direction of the project.
I11(d) T3GranteeG1T1 means the entity designated in the grant award document as the responsible legal entity to whom a grant is awarded under this part.
I11(e) T3Research project grantG1T1 means the award by the Administrator of funds to a grantee to assist in meeting the costs of conducting, for the benefit of the public, an identified project which is intended and designed to establish, discover, elucidate, or confirm information or the underlying mechanisms relating to a research program area identified in the annual solicitation of applications.
I11(f) T3ProjectG1T1 means the particular activity within the scope of one or more of the research program areas identified in the annual solicitation of applications, which is supported by a grant award under this part.
�248�I11(g) T3Project periodG1T1 means the total length of time that is approved by the Administrator for conducting the research project as outlined in an approved grant application.
I11(h) T3Budget periodG1T1 means the interval of time (usually 12 months) into which the project period is divided for budgetary and reporting purposes.
I11(i) T3Awarding officialG1T1 means the Administrator and any other officer or employee of the Department to whom the authority to issue or modify research project grant instruments has been delegated.
I11(j) T3Peer review groupG1T1 means an assembled group of experts or consultants qualified by training and experience in particular scientific or technical fields to give expert advice, in accordance with the provisions of this part, on the scientific and technical merit of grant applications in those fields.
I11(k) T3Ad hoc reviewersG1T1 means experts or consultants qualified by training and experience in particular scientific or technical fields to render special expert advice, whose written evaluations of grant applications are designed to complement the expertise of the peer review group, in accordance with the provisions of this part, on the scientific or technical merit of grant applications in those fields.
I11(l) T3ResearchG1T1 means any systematic study directed toward new or fuller knowledge and understanding of the subject studied.
I11(m) T3MethodologyG1T1 means the project approach to be followed and the resources needed to carry out the project.

I80�1A3400.3
I89Eligibility requirements.
I11(a) Except where otherwise prohibited by law, any State agricultural experiment station, all colleges and universities, other research institutions and organizations, Federal agencies, private organizations or corporations, and individuals, shall be eligible to apply for and to receive a special research project grant under this part, provided that the applicant qualifies as a responsible grantee under the criteria set forth in paragraph (b) of this section.
I11(b) To qualify as responsible, an applicant must meet the following standards as they relate to a particular project:
I11(1) Have adequate financial resources for performance, the necessary experience, organizational and technical qualifications, and facilities, or a firm commitment, arrangement, or ability to obtain such (including proposed subagreements);
I11(2) Be able to comply with the proposed or required completion schedule for the project;
I11(3) Have a satisfactory record of integrity, judgment, and performance, including, in particular, any prior performance under grants and contracts from the Federal Government;
I11(4) Have an adequate financial management system and audit procedure which provides efficient and effective accountability and control of all property, funds, and other assets; and
I11(5) Be otherwise qualified and eligible to receive a research project grant under applicable laws and regulations.
I11(c) Any applicant who is determined to be not responsible will be notified in writing of such findings and the basis therefor.

I80�1A3400.4
I89How to apply for a grant.
I11(a) A request for proposals will be prepared and announced through publications such as the T4Federal RegisterG1T1, professional trade journals, agency or program handbooks, the Catalog of Federal Domestic Assistance, or any other appropriate means of solicitation, as early as practicable each fiscal year. It will contain information sufficient to enable all eligible applicants to prepare special research grant proposals and will be as complete as possible with respect to:

I11(1) Descriptions of specific research program areas which the Department proposes to support during the fiscal year involved, including anticipated funds to be awarded;
I11(2) Deadline dates for having proposal packages postmarked;
I11(3) Name and address where proposals should be mailed;
I11(4) Number of copies to be submitted;
I11(5) Forms required to be used when submitting proposals; and
I11(6) Special requirements.
I11(b) T3Grant Application Kit.G1T1 A Grant Application Kit will be made available to �249�any potential grant applicant who requests a copy. This kit contains required forms, certifications, and instructions applicable to the submission of grant proposals.
I11(c) T3Format for research grant proposals.G1T1 Unless otherwise stated in the specific program solicitation, the following applies:
I11(1) T3Grant Application.G1T1 All research grant proposals submitted by eligible applicants should contain a Grant Application form, which must be signed by the proposing principal investigator(s) and endorsed by the cognizant authorized organizational representative who possesses the necessary authority to commit the applicant's time and other relevant resources.
I11(2) T3Title of Project.G1T1 The title of the project must be brief (80-character maximum), yet represent the major thrust of the research. This title will be used to provide information to the Congress and other interested parties who may be unfamiliar with scientific terms; therefore, highly technical words or phraseology should be avoided where possible. In addition, phrases such as ``investigation of'' or ``research on'' should not be used.
I11(3) T3Objectives.G1T1 Clear, concise, complete, enumerated, and logically arranged statement(s) of the specific aims of the research must be included in all proposals.
I11(4) T3Procedures.G1T1 The procedures or methodology to be applied to the proposed research plan should be explicitly stated. This section should include but not necessarily be limited to:
I11(i) A description of the proposed investigations and/or experiments in the sequence in which it is planned to carry them out;
I11(ii) Techniques to be employed, including their feasibility;
I11(iii) Kinds of results expected;
I11(iv) Means by which data will be analyzed or interpreted;
I11(v) Pitfalls which might be encountered; and
I11(vi) Limitations to proposed procedures.
I11(5) T3Justification.G1T1 This section should describe:
I11(i) The importance of the problem to the needs of the Department and to the Nation, including estimates of the magnitude of the problem.
I11(ii) The importance of starting the work during the current fiscal year, and
I11(iii) Reasons for having the work performed by the proposing organization.
I11(6) T3Literature review.G1T1 A summary of pertinent publications with emphasis on their relationship to the research should be provided and should include all important and recent publications. The citations should be accurate, complete, written in acceptable journal format, and be appended to the proposal.
I11(7) T3Current research.G1T1 The relevancy of the proposed research to ongoing and, as yet, unpublished research of both the applicant and any other institutions should be described.
I11(8) T3Facilities and equipment.G1T1 All facilities, including laboratories, which are available for use or assignment to the proposed research project during the requested period of support, should be reported and described. Any materials, procedures, situations, or activities, whether or not directly related to a particular phase of the proposed research, and which may be hazardous to personnel, must be fully explained, along with an outline of precautions to be exercised. All items of major instrumentation available for use or assignment to the proposed research project during the requested period of support should be itemized. In addition, items of nonexpendable equipment needed to conduct and bring the proposed project to a successful conclusion should be listed.
I11(9) T3Collaborative arrangements.G1T1 If the proposed project requires collaboration with other research scientists, corporations, organizations, agencies, or entities, such collaboration must be fully explained and justified. Evidence should be provided to assure peer reviewers that the collaborators involved agree with the arrangements. It should be specifically indicated whether or not such collaborative arrangements have the potential for any conflict(s) of interest. Proposals which indicate collaborative involvement must state which proposer is to receive any resulting grant award, since only one eligible applicant, as provided in �1A3400.3 of this �250�part, may be the recipient of a research project grant under one proposal.
I11(10) T3Research timetable.G1T1 The applicant should outline all important research phases as a function of time, year by year.
I11(11) T3Personnel support.G1T1 All personnel who will be involved in the research effort must be clearly identified. For each scientist involved, the following should be included:
I11(i) An estimate of the time commitments necessary;
I11(ii) Vitae of the principal investigator(s), senior associate(s), and other professional personnel to assist reviewers in evaluating the competence and experience of the project staff. This section should include curricula vitae of T3allG1T1 key persons who will work on the proposed research project, whether or not Federal funds are sought for their support. The vitae are to be no more than two pages each in length, excluding publications listings; and
I11(iii) A chronological listing of the most representative publications during the past five years shall be provided for each professional project member for whom a curriculum vitae appears under this section. Authors should be listed in the same order as they appear on each paper cited, along with the title and complete reference as these usually appear in journals.
I11(12) T3Budget.G1T1 A detailed budget is required for each year of requested support. In addition, a summary budget is required detailing requested support for the overall project period. A copy of the form which must be used for this purpose, along with instructions for completion, is included in the Grant Application Kit identified under �1A3400.4(b) of this part and may be reproduced as needed by applicants. Funds may be requested under any of the categories listed, provided that the item or service for which support is requested is allowable under applicable Federal cost principles and can be identified as necessary for successful conduct of the proposed research project. No funds will be awarded for the renovation or refurbishment of research spaces; purchases or installation of fixed equipment in such spaces; or for the planning, repair, rehabilitation, acquisition, or construction of a building or facility. All research project grants awarded under this part shall be issued without regard to matching funds or cost sharing.
I11(13) T3Research involving special considerations.G1T1 A number of situations encountered in the conduct of research require special information and supporting documentation before funding can be approved for the project. If such situations are anticipated, the proposal must so indicate. It is expected that a significant number of special research grant proposals will involve the following:
I11(i) T3Recombinant DNA molecules.G1T1 All key personnel identified in a proposal and all endorsing officials of a proposed performing entity are required to comply with the guidelines established by the National Institutes of Health entitled, ``Guidelines for Research Involving Recombinant DNA Molecules,'' as revised. The Grant Application Kit, identified above in �1A3400.4(b), contains forms which are suitable for such certification of compliance.
I11(ii) T3Human subjects at risk.G1T1 Responsibility for safeguarding the rights and welfare of human subjects used in any research project supported with grant funds provided by the Department rests with the performing entity. Regulations have been issued by the Department under 7 CFR Part 1c, Protection of Human Subjects. In the event that a project involving human subjects at risk is recommended for award, the applicant will be required to submit a statement certifying that the research plan has been reviewed and approved by the Institutional Review Board at the proposing organization or institution. The Grant Application Kit, identified above in �1A3400.4(b), contains forms which are suitable for such certification. 
I11(iii) T3Laboratory animal care.G1T1 The responsibility for the humane care and treatment of any laboratory animal, which has the same meaning as ``animal'' in section 2(g) of the Animal Welfare Act of 1966, as amended (7 U.S.C. 2132(g)), used in any research project supported with Special Research Grants Program funds rests with the performing organization. In this regard, all key personnel identified in a proposal and all endorsing officials of �251�the proposed performing entity are required to comply with applicable provisions of the Animal Welfare Act of 1966, as amended (7 U.S.C. 2131 T3et. seq.G1T1) and the regulation promulgated thereunder by the Secretary of Agriculture in 9 CFR parts 1, 2, 3, and 4. In the event that a project involving the use of a laboratory animal is recommended for award, the applicant will be required to submit a statement certifying such compliance. The Grant Application Kit, identified above in �1A3400.4(b), contains forms which are suitable of such certification.
I11(14) T3Current and pending support.G1T1 All proposals must list any other current public or private research support, in addition to the proposed project, to which key personnel listed in the proposal under consideration have committed portions of their time, whether or not salary support for the person(s) involved is included in the budgets of the various projects. This section must also contain analogous information for all projects underway and for pending research proposals which are currently being considered by, or which will be submitted in the near future to, other possible sponsors, including other Departmental programs or agencies. Concurrent submission of identical or similar projects to other possible sponsors will not prejudice its review or evaluation by the Administrator or experts or consultants engaged by the Administrator for this purpose. The Grant Application Kit, identified above in �1A3400.4(b), contains a form which is suitable for listing current and pending support.
I11(15) T3Additions to project description.G1T1 Each project description is expected by the Administrator, members of peer review groups, and the relevant program staff to be complete in itself. However, in those instances in which the inclusion of additional information is necessary, the number of copies submitted should match the number of copies of the application requested in the annual solicitation of proposals as indicated in �1A3400.4(a)(4). Each set of such materials must be identified with the title of the research project as it appears in the Grant Application and the name(s) of the principal investigator(s). Examples of additional materials may include photographs which do not reproduce well, reprints, and other pertinent materials which are deemed to be unsuitable for inclusion in the proposal.
I11(16) T3Organizational management information.G1T1 Specific management information relating to an applicant shall be submitted on a one-time basis prior to the award of a research project grant identified under this part if such information has not been provided previously under this or another program for which the sponsoring agency is responsible. Copies of forms recommended for use in fulfilling the requirements contained in this section will be provided by the agency specified in this part once a research project grant has been recommended for funding. 

I80�1A3400.5
I89Evaluation and disposition of applications.
I11(a) T3Evaluation.G1T1 All proposals received from eligible applicants in accordance with eligible research problem or program areas and deadlines established in the applicable request for proposals shall be evaluated by the Administrator through such officers, employees, and others as the Administrator determines are uniquely qualified in the areas of research represented by particular projects. To assist in equitably and objectively evaluating proposals and to obtain the best possible balance of viewpoints, the Administrator shall solicit the advice of peer scientists, T3ad hocG1T1 reviewers, or others who are recognized specialists in the research program areas covered by the applications received and whose general roles are defined in �1A3400.2(j) and 3400.2(k). Specific evaluations will be based upon the criteria established in subpart B �1A3400.15, unless CSREES determines that different criteria are necessary for the proper evaluation of proposals in one or more specific program areas, and announces such criteria and their relative importance in the annual program solicitation. The overriding purpose of such evaluations is to provide information upon which the Administrator can make informed judgments in selecting proposals for ultimate support. Incomplete, unclear, or poorly organized applications will work to the detriment of applicants during �252�the peer evaluation process. To ensure a comprehensive evaluation, all applications should be written with the care and thoroughness accorded papers for publication.
I11(b) T3Disposition.G1T1 On the basis of the Administrator's evaluation of an application in accordance with paragraph (a) of this section, the Administrator will 
I11(1) Approve support using currently available funds, 
I11(2) Defer support due to lack of funds or a need for further evaluations, or 
I11(3) Disapprove support for the proposed project in whole or in part.
Q02I10With respect to approved projects, the Administrator will determine the project period (subject to extension as provided in �1A3400.7(c)) during which the project may be supported. Any deferral or disapproval of an application will not preclude its reconsideration or a reapplication during subsequent fiscal years.

I80�1A3400.6
I89Grant awards.
I11(a) T3General.G1T1 Within the limit of funds available for such purpose, the awarding official shall make research project grants to those responsible, eligible applicants whose proposals are judged most meritorious in the announced program areas under the evaluation criteria and procedures set forth in this part. The date specified by the Administrator as the beginning of the project period shall be no later than September 30 of the Federal fiscal year in which the project is approved for support and funds are appropriated for such purpose, unless otherwise permitted by law. All funds granted under this part shall be expended solely for the purpose for which the funds are granted in accordance with the approved application and budget, the regulations of this part, the terms and conditions of the award, the applicable Federal cost principles, and the Department's ``Uniform Federal Assistance Regulations'' (part 3015 of this title).
I11(b) T3Grant award document and notice of grant award_G1T1(1) T3Grant award document.G1T1 The grant award document shall include at a minimum the following: 
I11(i) Legal name and address of performing organization or institution to whom the Administrator has awarded a special research project grant under the terms of this part;
I11(ii) Title of project;
I11(iii) Name(s) and address(es) of principal investigator(s) chosen to direct and control approved activities;
I11(iv) Identifying grant number assigned by the Department; 
I11(v) Project period, which specifies how long the Department intends to support the effort without requiring recompetition for funds;
I11(vi) Total amount of Departmental financial assistance approved by the Administrator during the project period;
I11(vii) Legal authority(ies) under which the research project grant is awarded to accomplish the purpose of the law;
I11(viii) Approved budget plan for categorizing allocable project funds to accomplish the stated purpose of the research project grant award; and
I11(ix) Other information or provisions deemed necessary by the Department to carry out its granting activities or to accomplish the purpose of a particular research project grant.
I11(2) T3Notice of grant award.G1T1 The notice of grant award, in the form of a letter, will be prepared and will provide pertinent instructions or information to the grantee that is not included in the grant award document.
I11(c) T3Categories of grant instruments.G1T1 The major categories of grant instruments shall be as follows:
I11(1) T3Standard grant.G1T1 This is a grant instrument by which the Department agrees to support a specified level of research effort for a predetermined project period without the announced intention of providing additional support at a future date. This type of research project grant is approved on the basis of peer review and recommendation and is funded for the entire project period at the time of award.
I11(2) T3Renewal grant.G1T1 This is a document by which the Department agrees to provide additional funding under a standard grant as specified in paragraph (c)(1) of this section for a project period beyond that approved in an original or amended award, provided that the cumulative period does not exceed the statutory limitation. When a renewal application is submitted, it should include a summary of progress �253�to date under the previous grant instrument. Such a renewal shall be based upon new application, T3de novoG1T1 peer review and staff evaluation, new recommendation and approval, and a new award instrument.
I11(3) T3Continuation grant.G1T1 This is a grant instrument by which the Department agrees to support a specified level of effort for a predetermined period of time with a statement of intention to provide additional support at a future date, provided that performance has been satisfactory, appropriations are available for this purpose, and continued support would be in the best interests of the Federal Government and the public. It involves a long-term research project that is considered by peer reviewers and Departmental officers to have an unusually high degree of scientific merit, the results of which are expected to have a significant impact on the food and agricultural sciences, and it supports the efforts of experienced scientists with records of outstanding research accomplishments. This kind of document will normally be awarded for an initial one-year period and any subsequent continuation research project grants will also be awarded in one-year increments. The award of a continuation research project grant to fund an initial or succeeding budget period does not constitute an obligation to fund any subsequent budget period. A grantee must submit a separate application for continued support for each subsequent fiscal year. Requests for such continued support must be submitted in duplicate at least three months prior to the expiration date of the budget period currently being funded. Such requests must include: an interim progress report detailing all work performed to date; a Grant Application; a proposed budget for the ensuing period, including an estimate of funds anticipated to remain unobligated at the end of the current budget period; and current information regarding other extramural support for senior personnel. Decisions regarding continued support and the actual funding levels of such support in future years will usually be made administratively after consideration of such factors as the grantee's progress and management practices and within the context of available funds. Since initial peer reviews were based upon the full term and scope of the original special research grant application, additional evaluations of this type generally are not required prior to successive years' support. However, in unusual cases (e.g., when the nature of the project or key personnel change or when the amount of future support requested substantially exceeds the grant application originally reviewed and approved), additional reviews may be required prior to approving continued funding.
I11(4) T3Supplemental grant.G1T1 This is an instrument by which the Department agrees to provide small amounts of additional funding under a standard, renewal, or continuation grant as specified in paragraphs (c)(1), (c)(2), and (c)(3) of this section and may involve a short-term (usually six months or less) extension of the project period beyond that approved in an original or amended award, but in no case may the cumulative period of the project, including short term extensions, exceed the statutory time limitation. A supplement is awarded only if required to assure adequate completion of the original scope of work and if there is sufficient justification of need to warrant such action. A request of this nature normally does not require additional peer review.
I11(d) T3Obligation of the Federal Government.G1T1 Neither the approval of any application nor the award of any research project grant shall commit or obligate the United States in any way to make any renewal, supplemental, continuation, or other award with respect to any approved application or portion of an approved application. 



I80�1A3400.7 
I89Use of funds; changes.

I11(a) T3Delegation of fiscal responsibility.G1T1 The grantee may not delegate or transfer in whole or in part, to another person, institution, or organization the responsibility for use or expenditure of grant funds.
I11(b) T3Change in project plans.G1T1 (1) The permissible changes by the grantee, principal investigator(s), or other key project personnel in the approved research project grant shall be limited to changes in methodology, techniques, or �254�other aspects of the project to expedite achievement of the projects' approved goals. If the grantee or the principal investigator(s) is uncertain as to whether a change complies with this provision, the question must be referred to the Administrator for a final determination.
I11(2) Changes in approved goals, or objectives, shall be requested by the grantee and approved in writing by the Department prior to effecting such changes. In no event shall requests for such changes be approved which are outside the scope of the original approved project.
I11(3) Changes in approved project leadership or the replacement or reassignment of other key project personnel shall be requested by the grantee and approved in writing by the Department prior to effecting such changes.
I11(4) Transfers of actual performance of the substantive programmatic work in whole or in part and provisions for payment of funds, whether or not Federal funds are involved, shall be requested by the grantee and approved in writing by the Department prior to effecting such changes, except as may be allowed in the terms and conditions of the grant award.


I11(c) T3Changes in project period.G1T1 The project period determined pursuant to �1A3400.5(b) may be extended by the Administrator without additional financial support for such additional period(s) as the Administrator determines may be necessary to complete or fulfill the purposes of an approved project. Any extension, when combined with the originally approved or amended project period shall not exceed three (3) years (the limitation established by statute) and shall be further conditioned upon prior request by the grantee and approval in writing by the Department, unless prescribed otherwise in the terms and conditions of a grant award.


I11(d) T3Changes in approved budget.G1T1 The terms and conditions of a grant will prescribe circumstances under which written Departmental approval will be requested and obtained prior to instituting changes in an approved budget.

Q04I20[56 FR 58147, Nov 15, 1991, as amended at 64 FR 34103, June 24, 1999]





I80�1A3400.8 
I89Other Federal statutes and regulations that apply.
I11Several other Federal statutes and/or regulations apply to grant proposals considered for review or to research project grants awarded under this part. These include but are not limited to:

Q04
I217 CFR Part 1c_USDA implementation of the Federal Policy for the Protection of Human Subjects.
I217 CFR 1.1_USDA implementation of Freedom of Information Act.
I217 CFR Part 3_USDA implementation of OMB Circular A�09129 regarding debt collection.
I217. CFR Part 15, Subpart A_USDA implementation of Title VI of the Civil Rights Act of 1964.
I217 CFR Part 3015_USDA Uniform Federal Assistance Regulations, implementing OMB directives (i.e., Circular Nos. A�09110, A�0921, and A�09122) and incorporating provisions of 31 U.S.C. 6301�096308 (formerly, the Federal Grant and Cooperative Agreement Act of 1977, Pub. L. 95�09224), as well as general policy requirements applicable to recipients of Departmental financial assistance.
I217 CFR Part 3016_USDA Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments, implementing OMB directives (i.e., Circular Nos. A�09102 and A�0987).
I217 CFR Part 3017, as amended_USDA implementation of Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants).
I217 CFR Part 3018_USDA implementation of New Restrictions on Lobbying. Imposes new prohibitions and requirements for disclosure and certification related to lobbying on recipients of Federal contracts, grants, cooperative agreements, and loans.
I217 CFR Part 3407_CSREES procedures to implement the National Environmental Policy Act.
I2129 U.S.C. 794, section 504_Rehabilitation Act of 1973, and 7 CFR part 15B (USDA implementation of statute), prohibiting discrimination based upon physical or mental handicap in Federally assisted programs.
I2135 U.S.C. 200 T3et seq.G1T1_Bayh-Dole Act, controlling allocation of rights to inventions made by employees of small business firms and domestic nonprofit organizations, including universities, in Federally assisted programs (implementing regulations are contained in 37 CFR part 401).

I80�1A3400.9 
I89Other conditions.
I11The Administrator may, with respect to any research project grant or to any class of awards, impose additional conditions prior to or at the time of any �255�award when, in the Administrator's judgment, such conditions are necessary to assure or protect advancement of the approved project, the interests of the public, or the conservation of grant funds.

I56Subpart B_Scientific Peer Review of Research Grant Applications

I80�1A3400.10 
I89Establishment and operation of peer review groups.
I11Subject to �1A3400.5, the Administrator will adopt procedures for the conduct of peer reviews and the formulation of recommendations under �1A3400.14.

I80�1A3400.11 
I89Composition of peer review groups.
I11(a) Peer review group members will be selected based upon their training and experience in relevant scientific or technical fields, taking into account the following factors:
I11(1) The level of formal scientific or technical education by the individual;
I11(2) The extent to which the individual has engaged in relevant research, the capacities in which the individual has done so (e.g., principal investigator, assistant), and the quality of such research;
I11(3) Professional recognition as reflected by awards and other honors received from scientific and professional organizations outside of the Department;
I11(4) The need of the group to include within its membership experts from various areas of specialization within relevant scientific or technical fields;
I11(5) The need of the group to include within its membership experts from a variety of organizational types (e.g., universities, industry, private consultant(s)) and geographic locations; and
I11(6) The need of the group to maintain a balanced membership, e.g., minority and female representation and an equitable age distribution.

I11(b) [Reserved]



I80�1A3400.12 
I89Conflicts of interest.
I11Members of peer review groups covered by this part are subject to relevant provisions contained in Title 18 of the United States Code relating to criminal activity, Department regulations governing employee responsibilities and conduct (part O of this title), and Executive Order 11222, as amended.

I80�1A3400.13 
I89Availability of information.
I11Information regarding the peer review process will be made available to the extent permitted under the Freedom of Information Act (5 U.S.C. 552), the Privacy Act (5 U.S.C. 552a), and implementing Departmental regulations (part 1 of this title).

I80�1A3400.14 
I89Proposal review.
I11(a) All research grant applications will be acknowledged. Prior to technical examination, a preliminary review will be made for responsiveness to the request for proposals (e.g., relationship of application to research program area). Proposals which do not fall within the guidelines as stated in the annual request for proposals will be eliminated from competition and will be returned to the applicant. Proposals whose budgets exceed the maximum allowable amount for a particular program area as announced in the request for proposals may be considered as lying outside the guidelines.
I11(b) All applications will be carefully reviewed by the Administrator, qualified officers or employees of the Department, the respective peer review group, and T3ad hocG1T1 reviewers, as required. Written comments will be solicited from T3ad hocG1T1 reviewers when required, and individual written comments and in-depth discussions will be provided by peer review group members prior to recommending applications for funding. Applications will be ranked and support levels recommended within the limitation of total available funding for each research program area as announced in the applicable request for proposals.
I11(c) No awarding official will make a research project grant based upon an application covered by this part unless the application has been reviewed by a peer review group and/or T3ad hocG1T1 reviewers in accordance with the provisions of this part and said reviewers have made recommendations concerning the scientific merit of such application.
I11(d) Except to the extent otherwise provided by law, such recommendations are advisory only and are not �256�binding on program officers or on the awarding official.

I80�1A3400.15
I89Review criteria.
I11(a) Subject to the varying conditions and needs of States, Federal funded agricultural research supported under these provisions shall be designed to, among other things, accomplish one or more of the following purposes:
I11(1) Continue to satisfy human food and fiber needs;
I11(2) Enhance the long-term viability and competitiveness of the food production and agricultural system of the United States within the global economy;
I11(3) Expand economic opportunities in rural America and enhance the quality of life for farmers, rural citizens, and society as a whole;
I11(4) Improve the productivity of the American agricultural system and develop new agricultural crops and new uses for agricultural commodities;
I11(5) Develop information and systems to enhance the environment and the natural resource base upon which a sustainable agricultural economy depends; or
I11(6) Enhance human health.
Q02I10In carrying out its review under �1A3400.14, the peer review group will use the following form upon which the evaluation criteria to be used are enumerated, unless pursuant to �1A3400.5(a), different evaluation criteria are specified in the annual solicitation of proposals for a particular program.

I71Peer Panel Scoring Form
I77Proposal Identification No. 
Q02
I77Institution and Project Title
I71I. Basic Requirement:
I21Proposal falls within guidelines? G7T2XXXXXG1T1 Yes G7T2XXXXXG1T1 No. If no, explain why proposal does not meet guidelines under comment section of this form.
I71II. Selection Criteria:
c5,L2,tp0,i1,s25,5,6,6,5 I95   h1 h1Score 1�0910 h1Weight factor h1Score X weight factor h1Comments
j
I011. Overall scientific and technical quality of proposalDD10DD
I012. Scientific and technical quality of the approachDD10DD
I013. Relevance and importance of proposed research to solution of specific areas of inquiryDD6DD
I014. Feasibility of attaining objectives; adequacy of professional training and experience, facilities and equipmentDD5DD
e


I77Score
Q02
I77Summary Comments
Q04
I11(b) Proposals satisfactorily meeting the guidelines will be evaluated and scored by the peer review panel for each criterion utilizing a scale of 1 through 10. A score of one (1) will be considered low and a score of ten (10) will be considered high for each selection criterion. A weighted factor is used for each criterion. 



I56Subpart C_Peer and Merit Review Arranged by Grantees

Q04I21T5Source: T164 FR 34104, June 24, 1999, unless otherwise noted.



I80�1A3400.20
I89Grantee review prior to award.

I11(a) T3Review requirement.G1T1 Prior to the award of a standard or continuation grant by CSREES, any proposed project shall have undergone a review arranged by the grantee as specified in this subpart. For research projects, such review must be a scientific peer review conducted in accordance with �1A3400.21. For education and extension projects, such review must be a merit review conducted in accordance with �1A3400.22.

I11(b) T3Credible and independent.G1T1 Review arranged by the grantee must provide for a credible and independent assessment of the proposed project. A credible review is one that provides an appraisal of technical quality and relevance sufficient for an organizational representative to make an informed judgment as to whether the proposal is appropriate for submission for Federal support. To provide for an independent review, such review may include USDA employees, but should not be conducted solely by USDA employees.
�257�I11(c) T3Notice of completion and retention of records.G1T1 A notice of completion of review shall be conveyed in writing to CSREES either as part of the submitted proposal or prior to the issuance of an award, at the option of CSREES. The written notice constitutes certification by the applicant that a review in compliance with these regulations has occurred. Applicants are not required to submit results of the review to CSREES; however, proper documentation of the review process and results should be retained by the applicant.
I11(d) T3Renewal and supplemental grants.G1T1 Review by the grantee is not automatically required for renewal or supplemental grants as defined in �1A3400.6. A subsequent grant award will require a new review if, according to CSREES, either the funded project has changed significantly, other scientific discoveries have affected the project, or the need for the project has changed. Note that a new review is necessary when applying for another standard or continuation grant after expiration of the grant term.



I80�1A3400.21
I89Scientific peer review for research activities.

I11Scientific peer review is an evaluation of a proposed project for technical quality and relevance to regional or national goals performed by experts with the scientific knowledge and technical skills to conduct the proposed research work. Peer reviewers may be selected from an applicant organization or from outside the organization, but shall not include principals, collaborators or others involved in the preparation of the application under review.


I80�1A3400.22
I89Merit review for education and extension activities.
I11Merit review is an evaluation of a proposed project or elements of a proposed program whereby the technical quality and relevance to regional or national goals are assessed. The merit review shall be performed by peers and other individuals with expertise appropriate to evaluate the proposed project. Merit reviewers may not include principals, collaborators or others involved in the preparation of the application under review.





I56Subpart D_Annual Reports


I80�1A3400.23
I89Annual reports.

I11(a) T3Reporting requirement.G1T1 The recipient shall submit an annual report describing the results of the research, extension, or education activity and the merit of the results.
I11(b) T3Report type and content.G1T1 Unless otherwise stipulated, grant recipients will have met the reporting requirement under this subpart by complying with the reporting requirements as set forth in the terms and conditions of the grant at the time of award. 

Q04I20[64 FR 34104, June 24, 1999]





I95Pt. 3401
I52PART 3401_RANGELAND RESEARCH GRANTS PROGRAM


I86Subpart A_General
S8006I18Sec.
S8010I263401.1Applicability of regulations of this part.
I263401.2Definitions.
I263401.3Eligibility requirements.
I263401.4Matching funds requirement.
I263401.5Indirect costs and tuition remission costs.
I263401.6How to apply for a grant.
I263401.7Evaluation and disposition of applications.
I263401.8Grant awards.
I263401.9Use of funds; changes.
I263401.10Other Federal statutes and regulations that apply.
I263401.11Other conditions.

I86Subpart B_Scientific Peer Review of Research Applications for Funding
I263401.12Establishment and operation of peer review groups.
I263401.13Composition of peer review groups.
I263401.14Conflicts of interest.
I263401.15Availability of information.
I263401.16Proposal review.
I263401.17Review criteria.

Q04I21T5Authority:  T1Section 1470 of the National Agricultural Research, Extension and Teaching Policy Act of 1977 (7 U.S.C. 3316).
Q04I21T5Source:  T161 FR 27753, May 31, 1996, unless otherwise noted.

I56Subpart A_General

I80�1A3401.1
I89Applicability of regulations of this part.
I11(a) The regulations of this part apply to rangeland research grants awarded �258�under the authority of section 1480 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977, as amended (7 U.S.C. 3333) to land-grant colleges and universities, State agricultural experiment stations, and colleges, universities, and Federal laboratories having a demonstrable capacity in rangeland research, as determined by the Secretary, to carry out rangeland research. The Administrator of the Cooperative State Research, Education, and Extension Service (CSREES) shall determine and announce, through publication each year of a Notice in the T4Federal RegisterG1T1, professional trade journals, agency or program handbooks, the catalog of Federal Domestic Assistance or any other appropriate means, research program areas for which proposals will be solicited, to the extent that funds are available.
I11(b) The regulations of this part do not apply to research grants awarded by the Department of Agriculture under any other authority.

I80�1A3401.2
I89Definitions.
I11As used in this part:
I11(a) T3AdministratorG1T1 means the Administrator of CSREES and any other officer or employee of the Department of Agriculture to whom the authority involved may be delegated.
I11(b) T3DepartmentG1T1 means the Department of Agriculture.
I11(c) T3Principal investigatorG1T1 means a single individual designated by the grantee in the application for funding and approved by the Administrator who is responsible for the scientific and technical direction of the project.
I11(d) T3GranteeG1T1 means the entity designated in the grant award document as the responsible legal entity to whom a grant is awarded under this part.
I11(e) T3Research project grantG1T1 means the award by the Administrator of funds to a grantee to assist in meeting the costs of conducting, for the benefit of the public, an identified project which is intended and designed to establish, discover, elucidate, or confirm information or the underlying mechanisms relating to a research program area identified in the annual solicitation of applications.
I11(f) T3ProjectG1T1 means the particular activity within the scope of one or more of the research program areas identified in the annual solicitation of applications, which is supported by a grant award under this part.
I11(g) T3Project periodG1T1 means the total length of time that is approved by the Administrator for conducting the research project as outlined in an approved application for funding.
I11(h) T3Budget periodG1T1 means the interval of time (usually 12 months) into which the project period is divided for budgetary and reporting purposes.
I11(i) T3Awarding officialG1T1 means the Administrator and any other officer or employee of the Department to whom the authority to issue or modify research project grant instruments has been delegated.
I11(j) T3Peer review groupG1T1 means an assembled group of experts or consultants qualified by training or experience in particular scientific or technical fields to give expert advice, in accordance with the provisions of this part, on the scientific and technical merit of applications for funding in those fields.
I11(k) T3Ad hoc reviewersG1T1 means experts or consultants qualified by training or experience in particular scientific or technical fields to render special expert advice, whose written evaluations of applications for funding are designed to complement the expertise of the peer review group, in accordance with the provisions of this part, on the scientific or technical merit of applications for Funding in those fields.
I11(l) T3ResearchG1T1 means any systematic study directed toward new or fuller knowledge and understanding of the subject studied.
I11(m) T3MethodologyG1T1 means the project approach to be followed and the resources needed to carry out the project.

I80�1A3401.3
I89Eligibility requirements.
I11(a) Except where otherwise prohibited by law, any land-grant college and university, State agricultural experiment station, and college, university, and Federal laboratory having a demonstrable capacity in rangeland research, as determined by the Secretary, shall be eligible to apply for and to receive a project grant under �259�this part, provided that the applicant qualifies as a responsible grantee under the criteria set forth in paragraph (b) of this section.
I11(b) To qualify as responsible, an applicant must meet the following standards as they relate to a particular project:
I11(1) Have adequate financial resources for performance, the necessary experience, organizational and technical qualifications, and facilities, or a firm commitment, arrangement, or ability to obtain such (including proposed subagreements);
I11(2) Be able to comply with the proposed or required completion schedule for the project;
I11(3) Have a satisfactory record of integrity, judgment, and performance, including, in particular, any prior performance under grants and contracts from the Federal government;
I11(4) Have an adequate financial management system and audit procedure which provides efficient and effective accountability and control of all property, funds, and other assets; and
I11(5) Be otherwise qualified and eligible to receive a research project grant under applicable laws and regulations.
I11(c) Any applicant who is determined to be not responsible will be notified in writing of such findings and the basis therefor.

I80�1A3401.4 
I89Matching funds requirement.
I11In accordance with section 1480 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977, as amended (7 U.S.C. 3333), except in the case of Federal laboratories, each grant recipient must match the Federal funds expended on a research project based on a formula of 50 percent Federal and 50 percent non-Federal funding.

I80�1A3401.5 
I89Indirect costs and tuition remission costs.
I11Pursuant to section 1473 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977, as amended (7 U.S.C. 3319), funds made available under this program to recipients other than Federal laboratories shall not be subject to reduction for indirect costs or tuition remission costs. Since indirect costs and tuition remission costs, except in the case of Federal laboratories, are not allowable costs for purposes of this program, such costs may not be used to satisfy the matching requirement set forth in �1A3401.4.

I80�1A3401.6 
I89How to apply for a grant.
I11(a) T3General.G1T1 After consultation with the Rangeland Research Advisory Board, established pursuant to section 1482 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977, as amended (7 U.S.C. 3335), a request for proposals will be prepared and announced through publications such as the T4Federal Register,G1T1 professional trade journals, agency or program handbooks, the Catalog of Federal Domestic Assistance, or any other appropriate means of solicitation, as early as practicable each fiscal year. It will contain information sufficient to enable all eligible applicants to prepare rangeland research grant proposals and will be as complete as possible with respect to:
I11(1) Descriptions of specific research program areas which the Department proposes to support during the fiscal year involved, including anticipated funds to be awarded;
I11(2) Deadline dates for having proposal packages postmarked;
I11(3) Name and address where proposals should be mailed;
I11(4) Number of copies to be submitted;
I11(5) Forms required to be used when submitting proposals; and
I11(6) Special requirements.
I11(b) T3Application kitG1T1. An Application Kit will be made available to any potential grant applicant who requests a copy. This kit contains required forms, certifications, and instructions applicable to the submission of grant proposals.
I11(c) T3Format for research grant proposalsG1T1. Unless otherwise stated in the specific program solicitation, the following format applies:
I11(1) T3Application for fundingG1T1. All research grant proposals submitted by eligible applicants should contain an Application for Funding form, which must �260�be signed by the proposing principal investigator(s) and endorsed by the cognizant authorized organizational representative who possesses the necessary authority to commit the applicant's time and other relevant resources.
I11(2) T3Title of projectG1T1. The title of the project must be brief (80-character maximum), yet represent the major thrust of the research. This title will be used to provide information to the Congress and other interested parties who may be unfamiliar with scientific terms; therefore, highly technical words or phraseology should be avoided where possible. In addition, phrases such as ``investigation of'' or ``research on'' should not be used.
I11(3) T3ObjectivesG1T1. Clear, concise, complete, enumerated, and logically arranged statement(s) of the specific aims of the research must be included in all proposals.
I11(4) T3ProceduresG1T1. The procedures of methodology to be applied to the proposed research plan should be stated explicitly. This section should include but not necessarily be limited to:
I11(i) A description of the proposed investigations and/or experiments in the sequence in which it is planned to carry them out;
I11(ii) Techniques to be employed, including their feasibility;
I11(iii) Kinds of results expected;
I11(iv) Means by which data will be analyzed or interpreted;
I11(v) Pitfalls which might be encountered; and
I11(vi) Limitations to proposed procedures.
I11(5) T3JustificationG1T1. This section of the grant proposal should describe:
I11(i) The importance of the problem to the needs of the Department and to the Nation, including estimates of the magnitude of the problem;
I11(ii) The importance of starting the work during the current fiscal year; and
I11(iii) Reasons for having the work performed by the proposing organization.
I11(6) T3Literature reviewG1T1. A summary of pertinent publications with emphasis on their relationship to the research should be provided and should include all important and recent publications. The citations should be accurate, complete, written in acceptable journal format, and be appended to the proposal.
I11(7) T3Current researchG1T1. The relevancy of the proposed research to ongoing and, as yet, unpublished research of both the applicant and any other institutions should be described.
I11(8) T3Facilities and equipment.G1T1 All facilities, including laboratories, that are available for use or assignment to the proposed research project during the requested period of support, should be reported and described. Any materials, procedures, situations, or activities, whether or nor directly related to a particular phase of the proposed research, and which may be hazardous to personnel, must be explained fully, along with an outline of precautions to be exercised. All items of major instrumentation available for use or assignment to the proposed research project during the requested period of support should be itemized. In addition, items of nonexpendable equipment needed to conduct and bring the proposed project to a successful conclusion should be listed.
I11(9) T3Collaborative arrangements.G1T1 If the proposed project requires collaboration with other research scientists, corporations, organizations, agencies, or entities, such collaboration must be explained fully and justified. Evidence should be provided to assure peer reviewers that the collaborators involved agree with the arrangements. It should be specifically indicated whether or not such collaborative arrangements have the potential for any conflict(s) of interest. Proposals which indicate collaborative involvements must state which applicant is to receive any resulting grant award, since only one eligible applicant, as provided in �1A3401.3 may be the recipient of a research project grant under one proposal.
I11(10) T3Research timetable.G1T1 The applicant should outline all important research phases as a function of time, year by year.
I11(11) T3Personnel support.G1T1 All personnel who will be involved in the research effort must be identified clearly. For each scientist involved, the following should be included:
I11(i) An estimate of the time commitments necessary;
�261�I11(ii) Vitae of the principal investigator(s), senior associate(s), and other professional personnel to assist reviewers in evaluating the competence and experience of the project staff. This section should include curricula vitae of T3allG1T1 key persons who will work on the proposed research project, whether or not Federal funds are sought for their support. The vitae are to be no more than two pages each in length, excluding publication listings; and
I11(iii) A chronological listing of the most representative publications during the past five years shall be provided for each professional project member of whom a curriculum vitae appears under this section. Authors should be listed in the same order as they appear on each paper cited, along with the title and complete reference as these usually appear in journals.
I11(12) T3Budget.G1T1 A detailed budget is required for each year of requested support. In addition, a summary budget is required detailing requested support for the overall project period. A copy of the form which must be used for this purpose, along with instructions for completion, is included in the Application Kit identified under �1A3401.6(b) and may be reproduced as needed by applicants. Funds may be requested under any of the categories listed, provided that the item or service for which support is requested is allowable under applicable Federal cost principles and can be identified as necessary for successful conduct of the proposed research project. As stated in �1A3401.4 each grant recipient must match the Federal funds expended on a research project based on a formula of 50 percent Federal and 50 percent non-Federal funding. As stated in �1A3401.5, indirect costs and tuition remission costs are not allowable costs for purposes of this program and , thus, may not be used to satisfy the matching requirement set forth in �1A3401.4.
I11(13) T3Research involving special considerations.G1T1 A number of situations encountered in the conduct of research require special information and supporting documentation before funding can be approved for the project. If such situations are anticipated, the proposal must so indicate. It is expected that a significant number of rangeland grant proposals will involve the following:
I11(i) T3Recombinant DNA molecules.G1T1 All key personnel identified in a proposal and all endorsing officials of a proposed performing entity are required to comply with the guidelines establishing by the National Institutes of Health entitled, ``Guidelines for Research Involving Recombinant DNA Molecules,'' as revised. The Application Kit, identified above in �1A3401.6(b), contains a form which is suitable for such certification of compliance. In the event a project involving recombinant DNA and RNA molecules results in a grant award, the Institutional Biosafety Committee must approve the research before CSREES funds will be released.
I11(ii) T3Human subjects at risk.G1T1 Responsibility for safeguarding the rights and welfare of human subjects used in any research project supported with grant funds provided by the Department rests with the performing entity. Regulations have been issued by the Department under 7 CFR part 1c, Protection of Human Subjects. In the event that a project involving human subjects at risk is recommended for award, the applicant will be required to submit a statement certifying that the research plan has been reviewed and approved by the Institutional Review Board at the proposing organization or institution. The Application Kit, identified above in �1A3401.6(b), contains a form which is suitable for such certification. In the event a project involving human subjects results in a grant award, funds will be released only after the Institutional Committee has approved the project.
I11(iii) T3Laboratory animal care.G1T1 The responsibility for the humane care and treatment of any laboratory animal, which has the same meaning as ``animal'' in section 2(g) of the Animal Welfare Act of 1966, as amended (7 U.S.C. 2132(g)), used in any research project supported with Rangeland Research Grant Program funds rests with the performing organization. In this regard, all key personnel identified in a proposal and all endorsing officials of the proposed performing entity are required to comply with the applicable provisions of the Animal Welfare Act of 1966, as amended (7 U.S.C. 2131 T3et seq.G1T1) �262�and the regulations promulgated thereunder by the Secretary of Agriculture in 9 CFR parts 1, 2, 3, and 4. In the event that a project involving the use of a laboratory animal is recommended for award, the applicant will be required to submit a statement certifying such compliance. The Application Kit, identified above in �1A3401.6(b), contains a form which is suitable for such certification. In the event a project involving the use of living vertebrate animals results in a grant award, funds will be released only after the Institutional Animal Care and Use Committee has approved the project.
I11(14) T3Current and pending support.G1T1 All proposals must list any other current public or private research support, in addition to the proposed project, to which key personnel listed in the proposal under consideration have committed portions of their time, whether or not salary support for the person(s) involved is included in the budgets of the various projects. This section must also contain analogous information for all projects underway and for pending research proposals which are currently being considered by, or which will be submitted in the near future to, other possible sponsors, including other Departmental programs or agencies. Concurrent submission of identical or similar projects to other possible sponsors will not prejudice its review or evaluation by the Administrator or experts or consultants engaged by the Administrator for this purpose. The Application Kit, identified above in �1A3401.6(b), contains a form which is suitable for listing current and pending support.
I11(15) T3Additions to project description.G1T1 Each project description is expected by the Administrator, members of peer review groups, and the relevant program staff to be complete in itself. However, in those instances in which the inclusion of additional information is necessary, the number of copies submitted should match the number of copies of the application requested in the annual solicitation of proposals as indicated in �1A3401.6(a)(4). Each set of such materials must be identified with the title of the research project as it appears in the Application for Funding and the name(s) of the principal investigator(s). Examples of additional materials may include photographs which do not reproduce well, reprints, and other pertinent materials which are deemed to be unsuitable for inclusion in the proposal.
I11(16) T3National Environmental Policy Act.G1T1 As outlined in CSREES's implementing regulations of the National Environmental Policy Act of 1969 (NEPA) at 7 CFR part 3407, environmental data or documentation for the proposed project is to be provided to CSREES in order to assist CSREES in carrying out its responsibilities under NEPA. These responsibilities include determining whether the project requires an Environmental Assessment or an Environmental Impact Statement or whether it can be excluded from this requirement on the basis of several categorical exclusions listed in 7 CFR part 3407. In this regard, the applicant should review the categories defined for exclusion to ascertain whether the proposed project may fall within one or more of the exclusions, and should indicate if it does so on the National Environmental Policy Act Exclusions Form (Form CSREES_1234) provided in the Application Kit. Even though the applicant considers that a proposed project may fall within a categorical exclusion, CSREES may determine that an Environmental Assessment or an Environmental Impact Statement is necessary for a proposed project should substantial controversy on environmental grounds exist or if other extraordinary conditions or circumstances are present that may cause such activity to have a significant environmental effect.
I11(17) T3Organizational management information.G1T1 Specific management information relating to an applicant shall be submitted on an T3one-time basis prior to the award of a research project grantG1T1 identified under this part if such information has not been provided previously under this or another program for which the sponsoring agency is responsible. Copies of forms recommended for use in fulfilling the requirements contained in this section will be provided by the agency specified in this part once a research project grant has been recommended for funding.

�263�I80�1A3401.7
I89Evaluation and disposition of applications.
I11(a) T3Evaluation.G1T1 All proposals received from eligible applicants in accordance with eligible research problem or program areas and deadlines established in the applicable request for proposals shall be evaluated by the Administrator through such officers, employees, and others as the Administrator determines are particularly qualified in the areas of research represented by particular projects. To assist in equitably and objectively evaluating proposals and to obtain the best possible balance of viewpoints, the Administrator may solicit the advice of peer scientists, T3ad hocG1T1 reviewers, or others who are recognized specialists in the research program areas covered by the applications received. Specific evaluations will be based upon the criteria established in subpart B of this part, �1A3401.17, unless CSREES determines that different criteria are necessary for the proper evaluation of proposals in one or more specific program areas, and announces such criteria and their relative importance in the annual program solicitation. The overriding purpose of such evaluations is to provide information upon which the Administrator can make informed judgments in selecting proposals for ultimate support. Incomplete, unclear, or poorly organized applications will work to the detriment of applicants during the peer evaluation process. To ensure a comprehensive evaluation, all applications should be written with the care and thoroughness accorded papers for publication.
I11(b) T3Disposition.G1T1 On the basis of the Administrator's evaluation of an application in accordance with paragraph (a) of this section, the Administrator will approve using currently available funds, defer support due to lack of funds or a need for further evaluations, or disapprove support for the proposed project in whole or in part. With respect to approved projects, the Administrator will determine the project period (subject to extension as provided in �1A3401.9(c)) during which the project may be supported. Any deferral or disapproval of an application will not preclude its reconsideration or a reapplication during subsequent fiscal years.

I80�1A3401.8
I89Grant awards.
I11(a) T3General.G1T1 Within the limit of funds available for such purpose, the awarding official shall make research project grants to those responsible, eligible applicants whose proposals are judged most meritorious in the announced program areas under the evaluation criteria and procedures set forth in this part. The date specified by the Administrator as the beginning of the project period shall be no later than September 30 of the Federal fiscal year in which the project is approved for support and funds are appropriated for such purpose, unless otherwise permitted by law. All funds granted under this part shall be expended solely for the purpose for which the funds are granted in accordance with the approved application and budget, the regulations of this part, the terms and conditions of the award, the applicable Federal cost principles, and the Department's ``Uniform Federal Assistance Regulations'' (parts 3015 and 3019 of this title).
I11(b) T3Grant award document and notice of grant awardG1T1_(1) T3Grant award documents.G1T1 The grant award document shall include at a minimum the following:
I11(i) Legal name and address of performing organization or institution to whom the Administrator has awarded a rangeland research project grant under the terms of this part;
I11(ii) Title of project;
I11(iii) Name(s) and address(es) of principal investigator(s) chosen to direct and control approved activities; 
I11(iv) Identifying grant number assigned by the Department;
I11(v) Project period, which specifies how long the Department intends to support the effort without requiring recompetition for funds;
I11(vi) Total amount of Departmental financial assistance approved by the Administrator during the project period;
I11(vii) Legal authority(ies) under which the research project grant is awarded to accomplish the purpose of the law; 
I11(viii) Approved budget plan for categorizing allocable project funds to accomplish the stated purpose of the research project grant award; and
�264�I11(ix) Other information or provisions deemed necessary by the Department to carry out its granting activities or to accomplish the purpose of a particular research project grant.
I11(2) T3Notice of grant award.G1T1 The notice of grant award, in the form of a letter, will be prepared and will provide pertinent instructions or information to the grantee that is not included in the grant award document.
I11(c) T3Categories of grant instruments.G1T1 The major categories of grant instruments by which the Department may provide support are as follows:
I11(1) T3Standard grant.G1T1 This is a grant instrument by which the Department agrees to support a specified level of research effort for a predetermined project period without the announced intention of providing additional support at a future date. This type of research project grant is approved on the basis of peer review and recommendation and is funded for the entire project period at the time of award.
I11(2) T3Renewal grant.G1T1 This is a document by which the Department agrees to provide additional funding under a standard grant as specified in paragraph (c)(1) of this section for a project period beyond that approved in an original or amended award, provided that the cumulative period does not exceed the statutory limitation. When a renewal application is submitted, it should include a summary of progress to date under the previous grant instrument. Such a renewal shall be based upon new application, T3de novoG1T1 peer review and staff evaluation, new recommendation and approval, and a new award instrument.
I11(3) T3Continuation grant.G1T1 This is a grant instrument by which the Department agrees to support a specified level of effort for a predetermined period of time with a statement of intention to provide additional support at a future date, provided that performance has been satisfactory, appropriations are available for this purpose, and continued support would be in the best interests of the Federal government and the public. It involves a long-term research project that is considered by peer reviewers and Departmental officers to have an unusually high degree of scientific merit, the results of which are expected to have a significant impact on the productivity of the Nation's rangelands, and it supports the efforts of experienced scientists with records of outstanding research accomplishments. This kind of document normally will be awarded for an initial one-year period and any subsequent continuation research project grants also will be awarded in one-year increments, but in no case may the cumulative period of the project exceed the statutory limit. The award of a continuation research project grant to fund an initial or succeeding budget period does not constitute an obligation to fund any subsequent budget period. A grantee must submit a separate application for continued support for each subsequent fiscal year. Requests for such continued support must be submitted in duplicate at least three months prior to the expiration date of the budget period currently being funded. Such requests must include: an interim progress report detailing all work performed to date; an Application for Funding; a proposed budget for the enuring period, including an estimate of funds anticipated to remain unobligated at the end of the current budget period; and current information regarding other extramural support for senior personnel. Decisions regarding continued support and the actual funding levels of such support in future years usually will be made administratively after consideration of such factors as the grantee's progress and management practices and within the context of available funds. Since initial peer reviews were based upon the full term and scope of the original rangeland research application for funding, additional evaluations of this type generally are not required prior to successive years' support. However, in unusual cases (e.g., when the nature of the project or key personnel change or when the amount of future support requested substantially exceeds the application for funding originally reviewed and approved), additional reviews may be required prior to approval of continued funding.
I11(4) T3Supplemental grant.G1T1 This is an instrument by which the Department �265�agrees to provide small amounts of additional funding under a standard, renewal, or continuation grant as specified in paragraphs (c)(1), (c)(2), and (c)(3) of this section and may involve a short-term (usually six months or less) extension of the project period beyond that approved in an original or amended award, but in no case may the cumulative period of the project, including short term extensions, exceed the statutory time limitation. A supplement is awarded only if required to assure adequate completion of the original scope of work and if there is sufficient justification of need to warrant such action. A request of this nature normally does not require additional peer review.
I11(d) T3Obligation of the Federal government.G1T1 Neither the approval of any application nor the award of any research project grant shall commit or obligate the United States in any way to make any renewal, supplemental, continuation, or other award with respect to any approved application or portion of an approved application.

I80�1A3401.9
I89Use of funds; changes.
I11(a) T3Delegation of fiscal responsibility.G1T1 The grantee may not delegate or transfer in whole or in part, to another person, institution, or organization the responsibility for use or expenditure of grant funds.
I11(b) T3Change in project plans.G1T1 (1) The permissible changes by the grantee, principal investigator(s), or other key project personnel in the approved research project grant shall be limited to changes in methodology, techniques, or other aspects of the project to expedite achievement of the projects' approved goals. If the grantee or the principal investigator(s) is uncertain as to whether a change complies with this provision, the question shall be referred to the Administrator for a final determination.
I11(2) Changes in approved goals, or objectives, shall be requested by the grantee and approved in writing by the Department prior to effecting such changes. In no event shall requests for such changes be approved which are outside the scope of the original approved project.
I11(3) Changes in approved project leadership or the replacement or reassignment of other key project personnel shall be requested by the grantee and approved in writing by the Department prior to effecting such changes.
I11(4) Transfers of actual performance of the substantive programmatic work in whole or in part and provisions for payment of funds, whether or not Federal funds are involved, shall be requested by the grantee and approved in writing by the Department prior to effecting such changes, except as may be allowed in the terms and conditions of a grant award.
I11(c) T3Changes in project period.G1T1 The project period determined pursuant to �1A3401.7(b) may be extended by the Administrator without additional financial support, for such additional period(s) as the Administrator determines may be necessary to complete, or fulfill the purposes of, an approved project. Any extension, when combined with the originally approved or amended project period, shall be conditioned upon prior request by the grantee and approval in writing by the Department, unless prescribed otherwise in the terms and conditions of a grant award.
I11(d) T3Changes in approved budget.G1T1 The terms and conditions of a grant will prescribe circumstances under which written Departmental approval will be requested and obtained prior to instituting changes in an approved budget.

I80�1A3401.10
I89Other Federal statutes and regulations that apply.
I11Several other Federal statutes and/or regulations apply to grant proposals considered for review or to research project grants awarded under this part. These include but are not limited to:

Q04
I217 CFR Part 1c_USDA implementation of the Federal Policy for the Protection of Human Subjects;
I217 CFR Part 1.1_USDA implementation of Freedom of Information Act:
I217 CFR Part 3_USDA implementation of OMB Circular A�09129 regarding debt collection;
I217 CFR Part 15, Subpart A_USDA implementation of Title VI of the Civil Rights Act of 1964;
I217 CFR Part 3015_USDA Uniform Federal Assistance Regulations, implementing OMB directives (i.e., Circular Nos. A�09110, A�0921, and A�09122) and incorporating provisions of 31 �266�U.S.C. 6301�096308 (formerly, the Federal Grant and Cooperative Agreement Act of 1977), as well as general policy requirements applicable to recipients of Departmental financial assistance;
I217 CFR Part 3017, as amended_USDA implementation of Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants); 
I217 CFR Part 3018_USDA implementation of New Restrictions on Lobbying. Imposes new prohibitions and requirements for disclosure and certification related to lobbying on recipients of Federal contracts, grants, cooperative agreements, and loans;
I217 CFR Part 3019_USDA Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-profit Organizations;
I217 CFR Part 3051_Audits of Institutions of Higher Education and Other Nonprofit Institutions;
I217 CFR Part 3407_CSREES procedures to implement the National Environmental Policy Act;
I2129 U.S.C. 794 (section 504, Rehabilitation Act of 1973) and 7 CFR Part 15B (USDA implementation of statute)_prohibiting discrimination based upon physical or mental handicap in Federally assisted programs; and
I2135 U.S.C. 200 T3et seq.G1T1_Bayh-Dole Act, controlling allocation of rights to inventions made by employees of small business firms and domestic nonprofit organizations, including universities, in Federally assisted programs (implementing regulations are contained in 37 CFR part 401).

I80�1A3401.11
I89Other conditions.
I11The Administrator may, with respect to any research project grant or to any class of awards, impose additional conditions prior to or at the time of any award when, in the Administrator's judgment, such conditions are necessary to assure or protect advancement of the approved project, the interests of the public, or the conservation of grant funds.

I56Subpart B_Scientific Peer Review of Research Applications for Funding

I80�1A3401.12
I89Establishment and operation of peer review groups.
I11Subject to �1A3401.7, the Administrator will adopt procedures for the conduct of peer reviews and the formulation of recommendations under �1A3401.16.

I80�1A3401.13
I89Composition of peer review groups.
I11Peer review group members will be selected based upon their training or experience in relevant scientific or technical fields, taking into account the following factors:
I11(a) The level of formal scientific or technical education by the individual;
I11(b) The extent to which the individual has engaged in relevant research, the capacities in which the individual has done so (e.g., principal investigator, assistant), and the quality of such research;
I11(c) Professional recognition as reflected by awards and other honors received from scientific and professional organizations outside of the Department;
I11(d) The need of the group to include within its membership experts from various areas of specialization within relevant scientific or technical fields;
I11(e) The need of the group to include within its membership experts from a variety of organizational types (e.g., universities, industry, private consultant(s)) and geographic locations; and 
I11(f) The need of the group to maintain a balanced membership, e.g., minority and female representation and an equitable age distribution.

I80�1A3401.14
I89Conflicts of interest.
I11Members of peer review groups covered by this part are subject to relevant provisions contained in Title 18 of the United States Code relating to criminal activity, Department regulations governing employee responsibilities and conduct (part 0 of this title), and Executive Order 11222 (3 CFR, 1964�091965 Comp., p. 306), as amended.

I80�1A3401.15
I89Availability of information.
I11Information regarding the peer review process will be made available to the extent permitted under the Freedom of Information Act (5 U.S.C. 552), the Privacy Act (5 U.S.C. 552a.), and implementing Departmental regulations (part 1 of this title).

I80�1A3401.16
I89Proposal review.
I11(a) All research Applications for Funding will be acknowledged. Prior to technical examination, a preliminary review will be made for responsiveness �267�to the request for proposals (e.g., relationship of application to research program area). Proposals that do not fall within the guidelines as stated in the annual request for proposals will be eliminated from competition and will be returned to the applicant. Proposals whose budgets exceed the maximum allowable amount for a particular program area as announced in the request for proposals may be considered as lying outside the guidelines.
I11(b) All applications will be reviewed carefully by the Administrator, qualified officers or employees of the Department, the respective merit review panel, and ad hoc reviewers, as required. Written comments will be solicited from ad hoc reviewers, when required, and individual written comments and in-depth discussions will be provided by peer review group members prior to recommending applications for funding. Applications will be ranked and support levels recommended within the limitation of total available funding for each research program area as announced in the applicable request for proposals.
I11(c) Except to the extent otherwise provided by law, such recommendations are advisory only and are not binding on program officers or on the awarding official.

I80�1A3401.17 
I89Review criteria.
I11(a) Federally funded research supported under these provisions shall be designed to, among other things, accomplish one or more of the following purposes:
I11(1) Improve management of rangelands as an integrated system and/or watershed;
I11(2) Remedy unstable or unsatisfactory rangeland conditions;
I11(3) Increase revegetation and/or rehabilitation of rangelands;
I11(4) Examine the health of rangelands; and
I11(5) Define economic parameters associated with rangelands.
I11(b) In carrying out its review under �1A3401.16, the peer review panel will use the following form upon which the evaluation criteria to be used are enumerated, unless, pursuant to �1A3401.7(a), different evaluation criteria are specified in the annual solicitation of proposals for a particular program:




I71Peer Panel Scoring Form

I77Proposal Identification No.

Q02

I77Institution and Project Title

I71I. Basic Requirement:

I21Proposal falls within guidelines? G7T2XXXXXG1T1 Yes G7T2XXXXXG1T1 No. If no, explain why proposal does not meet guidelines under comment section of this form.


I71II. Selection Criteria:

c5,L2,tp0,i1,s25,5,6,6,5 I95   h1  h1Score 1�0910  h1Weight factor  h1Score X weight factor  h1Comments   
j
I011. Overall scientific and technical quality of proposalDD10DD

I012. Scientific and technical quality of the approachDD10DD

I013. Relevance and importance of proposed research to solution of specific areas of inquiryDD6DD

I014. Feasibility of attaining objectives; adequacy of professional training and experience, facilities and equipmentDD5DD 

e


I77Score
Q02

I77Summary Comments
Q04



I11(c) Proposals satisfactorily meeting the guidelines will be evaluated and scored by the peer review panel for each criterion utilizing a scale of 1 through 10. A score of one (1) will be considered low and a score of ten (10) will be considered high for each selection criterion. A weighted factor is used for each criterion. 

I95Pt. 3402
I52PART 3402_FOOD AND AGRICULTURAL SCIENCES NATIONAL NEEDS GRADUATE FELLOWSHIP GRANTS PROGRAM


I86Subpart A_General Introduction
S8006I18Sec.
S8010I263402.1Applicability of regulations.
I263402.2Definitions.
I263402.3Institutional eligibility.

I86Subpart B_Program Description
I263402.4Food and agricultural sciences areas targeted for national needs graduate fellowship grants support.
�268�I263402.5Overview of National Needs Graduate Fellowship Grants Program.
I263402.6Fellowship appointments.
I263402.7Fellowship activities.
I263402.8Financial provisions.

I86Subpart C_Preparation of a Proposal
I263402.9Application package.
I263402.10Proposal cover page.
I263402.11National need summary.
I263402.12National need narrative.
I263402.13Budget.
I263402.14Faculty vitae.
I263402.15Appendix.

I86Subpart D_Submission of a Proposal
I263402.16Intent to submit a proposal.
I263402.17Where to submit a proposal.

I86Subpart E_Proposal Review and Evaluation
I263402.18Proposal review.
I263402.19Evaluation criteria.

I86Subpart F_Supplementary Information
I263402.20Terms and conditions of grant awards.
I263402.21Grant awards.
I263402.22Other Federal statutes and regulations that apply.
I263402.23Confidential aspects of proposals and awards.
I263402.24Access to peer review information.
I263402.25Documentation of progress on funded projects.
I263402.26Evaluation of program.

Q04I21T5Authority:  T17 U.S.C. 3316.
Q04I21T5Source:  T159 FR 68073, Dec. 30, 1994, unless otherwise noted.

I56Subpart A_General Introduction

I80�1A3402.1 
I89Applicability of regulations.
I11(a) The regulations of this part apply to competitive grants awarded under the provisions of section 1417(b)(6) of the National Agricultural Research, Extension and Teaching Policy Act of 1977, as amended, 7 U.S.C. 3152(b)(6). This statute designates the U.S. Department of Agriculture (USDA) as the lead Federal agency for agricultural research, extension, and teaching in the food and agricultural sciences. It authorizes the Secretary of Agriculture, who has delegated the authority to the Cooperative State Research, Education, and Extension Service (CSREES), to make competitive grants to land-grant colleges and universities, colleges and universities having significant minority enrollments and a demonstrable capacity to carry out the teaching of food and agricultural sciences, and to other colleges and universities having a demonstrable capacity to carry out the teaching of food and agricultural sciences, to administer and conduct graduate fellowship programs to help meet the Nation's needs for development of scientific and professional expertise in the food and agricultural sciences. The fellowships are intended to encourage outstanding students to pursue and complete graduate degrees in the areas of food and agricultural sciences designated by CSREES through the Office of Higher Education Programs (HEP) as national needs.
I11(b) The regulations of this part do not apply to grants awarded by the Department of Agriculture under any other authority.

I80�1A3402.2 
I89Definitions.
I11As used in this part:
I11T3Citizen or national of the United StatesG1T1 means
I11(1) A citizen or native resident of a State; or,
I11(2) A person defined in the Immigration and Nationality Act, 8 U.S.C. 1101(a)(22), who, though not a citizen of the United States, owes permanent allegiance to the United States.
I11T3College and universityG1T1 means an educational institution in any State which
I11(1) Admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate,
I11(2) Is legally authorized within such State to provide a program of education beyond secondary education,
I11(3) Provides an educational program for which a bachelor's degree or any other higher degree is awarded,
I11(4) Is a public or other nonprofit institution, and
I11(5) Is accredited by a nationally recognized accrediting agency or association.
I11T3Food and agricultural sciencesG1T1 means basic, applied, and developmental research, extension, and teaching activities in the food, agricultural, renewable natural resources, forestry, and �269�physical and social sciences in the broadest sense of these terms including but not limited to research, extension and teaching activities concerned with the production, processing, marketing, distribution, conservation, consumption, research, and development of food and agriculturally related products and services, inclusive of programs in agriculture, natural resources, aquaculture, forestry, veterinary medicine, home economics, rural development, and closely allied fields.
I11T3Graduate degreeG1T1 means a Master's or doctoral degree.
I11T3StateG1T1 means any one of the fifty States, the Commonwealth of Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Marianas, the Trust Territory of the Pacific Islands, the Virgin Islands of the United States, and the District of Columbia.
I11T3Teaching activitiesG1T1 means formal classroom instruction, laboratory instruction, and practicum experience specific to the food and agricultural sciences and matters relating thereto conducted by colleges and universities offering baccalaureate or higher degrees.

I80�1A3402.3 
I89Institutional eligibility.
I11Proposals may be submitted by land-grant colleges and universities, by colleges and universities having significant minority enrollments and a demonstrable capacity to carry out the teaching of food and agricultural sciences, and by other colleges and universities having a demonstrable capacity to carry out the teaching of food and agricultural sciences. All applicants should be institutions that confer a graduate degree in at least one area of the food and agricultural sciences targeted for national needs fellowships, that have a significant ongoing commitment to the food and agricultural sciences generally, and that have a significant ongoing commitment to the specific subject area for which a grant application is made. It is the objective to award grants to colleges and universities which have notable teaching and research competencies in the food and agricultural sciences. The grants are specifically intended to support fellowship programs that encourage outstanding students to pursue and complete a graduate degree at such institutions in an area of the food and agricultural sciences for which there is a national need for the development of scientific and professional expertise. Therefore, institutions which currently have excellent programs of graduate study and research in the food and agricultural sciences dealing with targeted national needs are particularly encouraged to apply.

I56Subpart B_Program Description

I80�1A3402.4 
I89Food and agricultural sciences areas targeted for national needs graduate fellowship grants support.
I11Areas of the food and agricultural sciences appropriate for fellowship grant applications are those in which developing shortages of expertise have been determined and targeted by HEP for national needs fellowship grant support. When funds are available and HEP determines that a new competition is warranted, the specific areas and funds per area will be identified in a T4Federal RegisterG1T1 notice announcing the program and soliciting program applications.

I80�1A3402.5 
I89Overview of National Needs Graduate Fellowship Grants Program.
I11(a) The program will provide funds for a limited number of grants to support fixed graduate student stipends and fixed cost-of-education institutional allowances. These grants will be awarded competitively to eligible institutions. In order to encourage the development of special activities that are expected to contribute to Fellows' advanced degree objectives, the program will also provide competitive, special international study or thesis/dissertation research travel allowances for a limited number of USDA Graduate Fellows.
I11(b) Based on the amount of funds appropriated in any fiscal year, HEP will determine:
I11(1) Whether new competitions for graduate fellowships and/or special international study or thesis/dissertation research travel allowances will be held during that fiscal year;
�270�I11(2) The graduate degree level(s) to be supported_Master's and/or doctoral;
I11(3) The proportion of appropriations to be targeted for the fellowship stipends for each respective graduate degree level supported;
I11(4) The proportion of appropriations to be targeted for the cost-of-education institutional allowances for each respective graduate degree level supported;
I11(5) The proportion of appropriations to be targeted for the special international study or thesis/dissertation research travel allowances for each respective graduate degree level supported;
I11(6) The allowable stipend amount for each respective graduate degree level supported, the cost-of-education institutional allowance for each respective graduate degree level supported, and the maximum funds available for each special international study or thesis/dissertation research travel allowance for each respective graduate degree level supported; and
I11(7) The maximum total funds that may be awarded to an institution under the program in a given fiscal year.
I11(c) HEP will also determine:
I11(1) The maximum number of national needs areas for which funding may be requested in a single proposal;
I11(2) The degree levels for which funding may be requested in a single proposal;
I11(3) The minimum and maximum number of fellowships for which an institution may apply in a single proposal; and
I11(4) The limits on the total number of proposals that can be submitted by an institution, college, school, or other administrative unit. 
I11(d) All of these determinations will be published as a part of the program announcement in the T4Federal RegisterG1T1.
I11(e) For each USDA Graduate Fellow who desires to be considered for a special international study or thesis/dissertation research travel allowance, the project director must apply to HEP for a supplemental grant in accordance with instructions published in the program announcement in the T4Federal RegisterG1T1. Each application must include an ``Application for Funding'' (Form CSRS�09661) and a ``Budget'' (Form CSRS�0955).
I11(1) To provide HEP with sufficient information upon which to evaluate the merits of the requests for a special international study or thesis/dissertation research travel allowance, each application for a supplemental grant must contain a narrative which provides the following:
I11(i) The specific destination(s) and duration of the travel;
I11(ii) The specific study or thesis/dissertation research activities in which the Fellow will be engaged;
I11(iii) How the international experience will contribute to the Fellow's program of study;
I11(iv) A budget narrative specifying and justifying the dollar amount requested for the travel;
I11(v) Summary credentials of the faculty or other professionals with whom the Fellow will be working during the international experience (summary credentials must not exceed three pages per person; ``Summary Vita_Teaching Proposal'' (Form CSRS�09708) may be used for this purpose);
I11(vi) A letter from the dean of the Fellow's college or equivalent administrative unit supporting the Fellow's travel request and certifying that the travel experience will not jeopardize the Fellow's satisfactory programs toward degree completion; and
I11(vii) A letter from the fellowship grant project director certifying the Fellow's eligibility, the accuracy of the Fellow's travel request, and the relevance of the travel to the Fellow's advanced degree objectives.
I11(2) The narrative portion of the application must not exceed 10 pages, excluding the summary vita/vitae.
I11(f) All complete requests will be evaluated by professional staff from USDA or other Federal agencies, as appropriate. Evaluation criteria will be published in the program announcement in the T4Federal RegisterG1T1. Awards will be made to the extent possible based on availability of funds.
I11(g) Any current fellow with sufficient time to complete the international experience before the termination date of �271�the grant under which he/she is supported is eligible for a special international study or thesis/dissertation research travel allowance. Before the international study or thesis/dissertation research travel may commence, a Fellow must have completed one academic year of full-time study, as defined by the institution, under the fellowship appointment and arrangements must have been formalized for the Fellow to study and/or conduct research in the foreign location(s).

I80�1A3402.6
I89Fellowship appointments.
I11(a)(1) Fellows must be identified and fellowships must be awarded within 15 months of the effective date of a grant. Institutions failing to meet this deadline will be required to refund monies associated with any unawarded fellowship(s). Fellowship appointments may be held only by persons who enroll and pursue full-time study in a graduate degree program in the national need area and at the degree level supported by the grant.
I11(2) In addition, fellows:
I11(i) must be newly recruited;
I11(ii) must not have been enrolled previously in the academic program at the same degree level; 
I11(iii) must be citizens of nationals of the United States as determined in accordance with Federal law; and
I11(iv) must have strong interest, as judged by the institution, in pursuing a degree in a targeted national need area and in preparing for a career as a food or agricultural scientist or professional.
I11(3) It will be the responsibility of the grantee institution to award fellowships to students of superior academic ability.
I11(4) A doctoral Fellow who maintains satisfactory progress in his or her course of study is eligible for support for a maximum of 36 months within a 45-month period. Master's level Fellows, maintaining satisfactory progress, are eligible for support for a maximum of 24 months during a 33-month period. However, it is the intent of this program that Fellows pursue full-time uninterrupted study or thesis/dissertation research, including time spent pursuing USDA-funded special international study or thesis/dissertation research activities. For Fellows requiring additional time to complete a degree, it is expected that the institution will endeavor to continue supporting individuals originally appointed to fellowships through such other institutional means as teaching assistantships and research assistantships. For Fellows who complete the program of study early (less than 24 hours for Master's degree or 36 months for doctoral degree), the institution must refund any unexpended monies to the granting agency.
I11(b) Within the framework of the regulations in this part, all decisions with respect to the appointment of Fellows will be made by the institution. However, institutions are urged to take maximum advantage of opportunities for awarding fellowships to members of underrepresented groups at the graduate level in the food and agricultural sciences, particularly minorities and women. Throughout a Fellow's tenure, the institution should satisfy itself that the Fellow is making satisfactory academic progress, and carrying out, or planning to carry out, national needs related research. If an institution finds it necessary to terminate support of a Fellow for insufficient academic progress or by decision on the part of the Fellow, the Fellow becomes ineligible for future assistance under the program. If a Fellow finds it necessary to interrupt his or her program of study because of health, personal reasons, outside employment, or acceptance of an assistantship, the institution must reserve the funds for the purpose of allowing the Fellow to resume funded study any time within a 9-month period. However, a Fellow who finds it necessary to interrupt his or her program of study more than one time cannot exceed a total of 9 months' cumulative leave status without forfeiting eligibility. For fellowships terminated because of insufficient academic progress, a decision on the part of the Fellow, or reserved due to an interrupted program of study but not resumed within the required time period, unexpended monies must be refunded. Institutions may not use unexpended monies associated with a terminated fellowship to recruit and support a ``replacement'' Fellow.
�272�I11(c) Only Fellows enrolled in Master's programs of study may be supported under a Master's fellowship grant. Only Fellows enrolled in doctoral programs of study may be supported under a doctoral fellowship grant.

I80�1A3402.7 
I89Fellowship activities.
I11A Fellow must be enrolled as a full-time graduate student, as defined by the institution, at all times during the tenure of the fellowship in the national need area and at the degree level supported by the grant. This includes the time used for special international study or thesis/dissertation research if the international travel is funded through a special international study or thesis/dissertation research travel allowance under this grant program. However, the normal requirement of formal registration during part of this tenure may be waived if permitted by the policy of the fellowship institution, provided that the fellow is making satisfactory progress toward degree completion and remains engaged in appropriate full-time fellowship activities such as thesis/dissertation research. Fellows in academic institutions are not entitled to vacations as such. They are entitled to the short normal student holidays observed by the institution. The time between academic semesters or quarters is to be utilized as an active part of the grant period. During the period of support, a Fellow may not accept employment by the institution or any other agency. However, a grant supporting research costs of the Fellow is acceptable, exclusive of salary or wages and fringe benefits for the Fellow.

I80�1A3402.8 
I89Financial provisions.
I11The basis fellowship stipend, cost-of-education institutional allowance, and special international study or thesis/dissertation research travel allowance that may be paid from grant funds will be determined by HEP contingent upon appropriations. The amount of the stipend, cost-of-education institution allowance, and special international study or thesis/dissertation research travel allowance will be cited in the program announcement in the T4Federal RegisterG1T1. An institution may elect to apply the cost-of-education institutional allowance to a Fellow's tuition and fees; however, such is not required. The allowance also may be used by an institution to defray other program expenses (e.g., recruitment, travel, publications, or salaries of project personnel). Tuition and fees are the responsibility of the Fellow unless an institution elects to use its cost-of-education institutional allowance for this purpose or elects to pay such costs out of other non-USDA monies. No dependency allowances are provided for Fellows. Stipend payments and special international study or thesis/dissertation research travel allowances will be made to Fellows by the institution, according to standard institutional procedures for fellowships and assistantships.

I56Subpart C_Preparation of a Proposal

I80�1A3402.9 
I89Application package.
I11An application package will be made available to any potential grant applicant upon request. This package will include all necessary forms and instructions to apply for a grant under this program. The package also includes the regulatory provisions applicable to the program.

I80�1A3402.10 
I89Proposal cover page.
I11The Proposal Cover Page, Form CSRS 701, must be completed in its entirety including all authorizing signatures. One copy of each grant application must contain the original pen-and-ink signature of:
I11(a) The Project Director(s); 
I11(b) The Authorized Certifying Representative for the college or equivalent administrative unit; and 
I11(c) The Authorized Certifying Representative for the institution.

I80�1A3402.11 
I89National need summary.
I11Using the National Need Summary, Form CSRS�09702, applicants must summarize the proposed graduate program of study and the academic and research strengths of the institution in the national need area for which funding is requested. To the extent possible, applicants should emphasize the uniqueness of the proposed graduate program �273�of study. The summary should not include any reference to the specific number of fellowships requested. The information on the summary page will be used in assigning the most appropriate panelists to review a proposal. If a proposal is supported, this page may be used in program publications.

I80�1A3402.12 
I89National need narrative.
I11A narrative for the national need area should be written in five sections limited to no more than 20 pages, and preceded by a table of contents. The table of contents is not considered part of the 20-page limitation. The narrative should be typed on one side of the page only, using a font no smaller than 12 point, and double-spaced. The five sections to be included in the narrative are as follows:
Q04
I21Sec. 1. In this section, applicants should establish clearly that the proposed program of study and research will result in the development of outstanding expertise in the national need area for which funding is requested and will do so in a reasonable period of time. Applicants should present a detailed description of the proposed graduate program of study and research. This section of the narrative should contain, but need not be limited to, the following components:
I21(a) The plan should specifically address the course work which Fellows will be required to take rather than the overall spectrum of departmental offerings. Identify courses, summarize content, and discuss sequencing. Explain how course work will relate to Fellows' research.
I21(b) Identify and describe areas of research that Fellows will be encouraged to engage in via a thesis or dissertation.
I21(c) Discuss graduate program examination requirements, such as a proficiency or qualifying examination, a comprehensive examination, and an oral examination.
I21(d) Include a projected timetable for completing the proposed graduate program of study and research.
I21(e) If admission to a proposed doctoral program does not require a Master's degree, discuss how institutional procedures allow for the bypass of a Master's degree.
I21Sec. 2. In this section, applicants should highlight thoroughly any special features of the graduate program such as the extent to which it will involve an inter-disciplinary, multi-disciplinary, or cross-disciplinary approach resulting in the development of expertise transcending a single discipline. Applicants should also discuss any other special features such as development of an unusual collateral specialization in a related discipline, experiential learning opportunities such as practicums or internships, unique mentoring programs, seminars, or a multi-university collaborative approach.
I21Sec. 3. In this section, applicants should substantiate clearly the institution's position that it presently provides a major, productive, and recognized program of graduate study and research at the level(s) of study in the area of national need in which selected Fellows would be engaged. Applicants should include evidence of the quality of existing academic attributes and resources of the institution such as teaching and research faculty, instructional and research instrumentation and facilities, library resources, computing resources, and other such indicators of academic quality. Also, applicants should discuss the extent to which graduate students have access to such institutional resources.
I21Sec. 4. In this section, applicants should document thoroughly the institution's plans and procedures for managing fellowship appointments. Applicants should explain in-depth the plan for recruiting academically outstanding Fellows and procedures for selecting Fellows of superior quality who appear to be highly motivated to prepare for and pursue a career as a food or agricultural scientist or professional. In addition, applicants should cite specific plans for advising and guiding Fellows through a program of study, as well as any special programs or activities that will be offered to enrich the Fellows' graduate study. Particular attention should be given to the plans and procedures for recruiting and retaining members of underrepresented groups.
I21Sec. 5. In this section, applicants should include important supplementary summary data for the institution relevant to the national need area for which funding is requested. Examples of appropriate data are indices of student quality, enrollments and degrees awarded for recent years, placement of graduates, facilities, faculty research support, and publications of previous graduate students. To the extent possible, applicants should present the supplementary summary data in tabular form.

I80�1A3402.13 
I89Budget.
I11Applicants must prepare the Proposal Budget, Form CSRS�09703, identifying all costs associated with the proposal. Instructions for completing the ``Proposal Budget'' are provided on the form. Pagination for the budget page should be continuous following the national need narrative and so indicated in the table of contents.

�274�I80�1A3402.14 
I89Faculty vitae.
I11This section should include a Summary Vita, Form CSRS�09708, for each faculty member contributing significantly to institutional competence at the level of graduate study for the national area addressed in the proposal. Applicants should arrange the faculty vitae with the project director(s) first, followed by the remaining faculty, in alphabetical order. Pagination for the faculty vitae should be continuous following the budget page and so indicated in the table of contents.

I80�1A3402.15 
I89Appendix.
I11Any additional supporting information deemed essential for clarifying and/or strengthening the proposal should be included in an Appendix and referenced in the national need narrative. To the extent possible, applicants should present supporting information included in the Appendix in tabular form. Pagination for the Appendix should be continuous following the faculty vitae and so indicated in the table of contents.

I56Subpart D_Submission of a Proposal

I80�1A3402.16 
I89Intent to submit a proposal.
I11To assist HEP in preparing for review of fellowship proposals, institutions planning to submit proposals for fellowships may be requested to complete and return an Intent to Submit a Proposal form (Form CSRS�09706). When required, applicants should complete and return one form for each proposal they anticipate submitting. Sending this form does not commit an institution to any course of action. The program announcement published in the T4Federal RegisterG1T1 will delineate if, when, and where the Intent to Submit a Proposal Forms should be sent.

I80�1A3402.17 
I89Where to submit a proposal.
I11The program announcement published in the T4Federal RegisterG1T1 will delineate the date for submission of proposals and the number of proposal copies required to apply for a grant. In addition, the program announcement will provide the address to which the proposal, its accompanying duplicate copies, and the institution's latest graduate catalog should be mailed.

I56Subpart E_Proposal Review and Evaluation

I80�1A3402.18 
I89Proposal review.
I11The proposal evaluation process includes both USDA internal staff review and merit evaluation by panels of scientists, educators, industrialists, and Government officials who are highly qualified to render expert advice in the targeted areas. The goal of the process of selection and structuring of evaluation panels is to provide optimum expertise and objective judgment in the evaluation of proposals specific to a particular area of national need.

I80�1A3402.19 
I89Evaluation criteria.
I11Proposals addressing a particular national need area at a particular degree level will be evaluated in competition with other proposals addressing the same national need area at the same degree level. Both USDA internal staff and the panelists will evaluate proposals primarily on the basis of the following criteria:
c2,L2,tp0,i1,s200,xs48 I95   h1Evaluation criterion  h1Weight 
j
I01a. The degree to which the proposal establishes clearly that the proposed program of graduate study will result in the development of outstanding scientific/professional expertise related to the national need area and will do so in a reasonable period of time D30 points.
I01b. The degree to which the proposal highlights thoroughly any special features such as an inter-disciplinary, multi-disciplinary, or cross-disciplinary approach, an unusual collateral specialization in a related discipline, experiential learning opportunities, unique mentoring programs, seminars, or a multi-university collaborative approach D10 points.
I01c. The degree to which the proposal substantiates clearly that the institution's faculty, facilities and equipment, instructional support resources, and other academic attributes are excellent for providing outstanding graduate study and research at the forefront of science and technology related to the chosen area of national need D20 points.
I01d. The degree to which the institution's plans and procedures for recruiting and selecting academically outstanding Fellows and for advising and guiding Fellows through a program of study reflect excellence as documented in the proposal D20 points.
�275�I01e. The degree to which supplementary summary data substantiate program quality in the targeted national need area D10 points.
I01f. The quality of the proposal as reflected by its substantive content, organization, clarity, and accuracy D10 points.
e


I11Additional or amended evaluation criteria and new point weightings may be cited in the program announcement published in the T4Federal RegisterG1T1.

I56Subpart F_Supplementary Information

I80�1A3402.20 
I89Terms and conditions of grant awards.
I11Within the limit of funds available for such purpose, the awarding official shall make project grants to those responsible, eligible applicants whose proposals are judged most meritorious in the announced program areas under the evaluation criteria and procedures set forth in this part. The beginning of the project period shall be no later than September 30 of the Federal fiscal year in which the project is approved for support. All funds granted under this part shall be expended solely for the purpose for which the funds are granted in accordance with the approved application and budget, the regulations of this part, the terms and conditions of the award, the applicable Federal cost principles, and the Department's Uniform Federal Assistance Regulations (7 CFR Part 3015).

I80�1A3402.21 
I89Grant awards.
I11(a) The grant award document shall include, at a minimum, the following:
I11(1) Legal name and address of performing organization.
I11(2) Title of project.
I11(3) Name(s) and address(es) of Project Director(s).
I11(4) Identifying grant number assigned by the Department.
I11(5) Project period, which specifies how long the Department intends to support the effort without requiring reapplication for funds.
I11(6) Total amount of Federal financial assistance approved during the project period.
I11(7) Legal authority under which the grant is awarded.
I11(8) Approved budget plan for categorizing allocable project funds to accomplish the stated purpose of the grant award.
I11(9) Other information or provisions deemed necessary by the Department to carry out its granting activities or to accomplish the purpose of this particular project grant.
I11(b) The notice of grant award, in the form of a letter, will provide pertinent instructions and information to the grantee that are not included in the grant award document described above.
I11(c) The major types of grant instruments shall be as follows:
I11(1) New grant. This is a grant instrument by which HEP agrees to support a specified number of graduate Fellows at a specific institution via funds for fixed graduate student stipends and fixed cost-of-education institutional allowances. This type of grant is approved on the basis of peer review recommendation.
I11(2) Supplemental grant. This is an instrument by which HEP agrees to provide additional funding under a new grant as specified in paragraph (c)(1) of this section to provide special international study or thesis/dissertation research travel allowances for graduate Fellows. This type of grant will not require additional peer review.

I80�1A3402.22
I89Other Federal statutes and regulations that apply.
I11Several other Federal regulations or statutes apply to project grants awarded under this part. These include but are not limited to: 

Q04
I217 CFR Part 1.1_USDA implementation of the Freedom of Information Act.
I217 CFR Part 3_USDA implementation of OMB Circular No. A�09129 regarding debt collection.
I217 CFR Part 15, Subpart A_USDA implementation of Title IV of the Civil Rights Act of 1964.
I217 CFR Part 3015_USDA Uniform Federal Assistance Regulations, as amended, implementing OMB directives (i.e., Circular Nos. �276�A�09110 and A�0921), as well as general policy requirements applicable to recipients of Departmental financial assistance.
I217 CFR Part 3017, as amended_USDA implementation of Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants), as amended.
I217 CFR Part 3018_USDA implementation of New Restrictions on Lobbying. Imposes new prohibitions and requirements for disclosure and certification related to lobbying on recipients of Federal contracts, grants, cooperative agreements, and loans.
I217 CFR Part 3051_USDA implementation of OMB Circular No. A�09133 regarding audits of institutions of higher education and other nonprofit institutions.
I217 CFR Part 3407_CSREES implementation of the National Environmental Policy Act.
I2129 U.S.C. 794, Section 504_Rehabilitation Act of 1973, and 7 CFR Part 15b (USDA implementation of statute), prohibiting discrimination based upon physical or mental handicap in Federally assisted programs.
I2135 U.S.C. 200 T3et seq.G1T1_Bayh-Dole Act, controlling allocation of rights to inventions made by employees of small business firms and domestic nonprofit organizations, including universities, in Federally assisted programs (implementing regulations are contained in 37 CFR Part 401).


I80�1A3402.23
I89Confidential aspects of proposals and awards.
I11When a proposal results in a grant, it becomes a part of the record of the Agency's transactions, available to the public upon specific request. Information that the Agency and the grantee mutually agree to be of a privileged nature will be held in confidence to the extent permitted by law. Therefore, any information that the applicant wishes to have considered as privileged should be clearly marked as such and sent in a separate statement, two copies of which should accompany the proposal. The original copy of a proposal that does not result in a grant will be retained by the Agency for a period of one year. Other copies will be destroyed. Such a proposal will be released only with the consent of the applicant or to the extent required by law. A proposal may be withdrawn at any time prior to the final action thereon.

I80�1A3402.24 
I89Access to peer review information.
I11After final decisions have been announced, HEP will, upon request, inform the project director of the reasons for its decision on a proposal. Verbatim copies of summary reviews, not including the identity of the reviewers, will be made available to respective project directors upon specific request.

I80�1A3402.25 
I89Documentation of progress on funded projects.
I11(a) A Fellowship Appointment Documentation form (Form CSRS�09707) is included in the application package. Upon request by HEP, project directors awarded grants under the program will be required to complete and submit this form. Follow-up progress reports will focus on assessing continuing progress of Fellows through their graduate programs of study (including activities supported by any special international study or thesis/dissertation research allowance) and on institution adherence to program guidelines.
I11(b) A Graduate Fellow Exit Report (Form CSRS�09709) is included in the application package. This form should be completed and submitted to HEP by the project director for each Fellow supported by a grant as soon as a Fellow either: graduates; is officially terminated from the fellowship or the academic program due to unsatisfactory academic progress; or voluntarily withdraws from the fellowship or the academic program. If a Fellow has not completed all degree requirements at the end of the five-year grant duration, HEP may request a preliminary exit report. In such a case, a final exit report will be required at a later date. When a final exit report for each Fellow supported by a grant has been accepted by USDA, the grantee institution will have satisfied the requirement of a final performance report for the grant. Additional follow-up reports to track the Fellows' career patterns may be requested.
I11(c) A Final Report must be completed and returned within 90 days after the expiration date of the project. The Final Report must be submitted to the program contact person and must contain proper data and information as specified in the ``Special Terms and Conditions'' of the award. Generally, the Final Report should include a summary of: recruitment strategies that were effective; successful mentoring �277�procedures or activities; enrichment activities the fellows were afforded; barriers faced in recruiting and graduating fellows; and the impact of the fellowship grant on the overall quality of the educational programs of the institution.

I80�1A3402.26 
I89Evaluation of program.
I11Grantees should be aware that HEP may, as a part of its own program evaluation activities, carry out in-depth evaluations of assisted activities through independent third parties. Thus, grantees should be prepared to cooperate with evaluators retained by HEP to analyze both the institutional context and the impact of any supported project.



I95Pt. 3403
I52PART 3403_SMALL BUSINESS INNOVATION RESEARCH GRANTS PROGRAM



I86Subpart A_General Information
S8006I18Sec.
S8010I263403.1Applicability of regulations.
I263403.2Definitions.
I263403.3Eligibility requirements.

I86Subpart B_Program Description
I263403.4Three-phase program.

I86Subpart C_Preparation and Submission of Proposals
I263403.5Requests for proposals
I263403.6General content of proposals.
I263403.7Proposal format for phase I applications.
I263403.8Proposal format for phase II applications.
I263403.9Submission of proposals.

I86Subpart D_Proposal Review and Evaluation
I263403.10Proposal review
I263403.11Availability of information.

I86Subpart E_Supplementary Information
I263403.12Terms and conditions of grant awards
I263403.13Notice of grant awards.
I263403.14Use of funds; changes.
I263403.15Other Federal statutes and regulations that apply.
I263403.16Other conditions.


Q04I21T5Authority:  T115 U.S.C. 638.

Q04I21T5Source: T162 FR 26168, May 12, 1997, unless otherwise noted.




I56Subpart A_General Information


I80�1A3403.1
I89Applicability of regulations.
I11(a) The regulations of this part apply to small business innovation research grants awarded under the general authority of section 630 of the Act making appropriations for Agriculture, Rural Development, and Related Agencies' programs for fiscal year ending September 30, 1987, and for other purposes, as made applicable by section 101(a) of Public Law 99�09591, 100 Stat. 3341, and the provisions of the Small Business Innovation Development Act of 1982, as amended (15 U.S.C. 638). The Small Business Innovation Development Act of 1982, as amended, mandates that each Federal agency with an annual extramural budget for research or research and development in excess of $100 million participate in a Small Business Innovation Research (SBIR) program by reserving a statutory percentage of its annual extramural budget for award to small business concerns for research or research and development in order to stimulate technological innovation, use small business to meet Federal research and development needs, increase private sector commercialization of innovations derived from Federal research and development, and foster and encourage the participation of socially and economically disadvantaged small business concerns and women-owned small business concerns in technological innovation. The U.S. Department of Agriculture (USDA) will participate in this program through the issuance of competitive research grants which will be administered by the Office of Competitive Research Grants and Awards Management, Cooperative State Research, Education, and Extension Service (CSREES).
I11(b) The regulations of this part do not apply to research grants awarded by the Department of Agriculture under any other authority.


I80�1A3403.2
I89Definitions.

I11As used in this part:
I11T3Ad hoc reviewersG1T1 means experts or consultants, qualified by training and �278�experience in particular scientific or technical fields to render expert advice on the scientific or technical merit of grant applications in those fields, who review on an individual basis one or several of the eligible proposals submitted to this program in their area of expertise and who submit to the Department written evaluations of such proposals.
I11T3Awarding officialG1T1 means any officer or employee of the Department who has the authority to issue or modify research project grant instruments on behalf of the Department.
I11T3Budget periodG1T1 means the interval of time into which the project period is divided for budgetary and reporting purposes.
I11T3CommercializationG1T1 means the process of developing markets and producing and delivering products or services for sale (whether by the originating party or by others); as used here, commercialization includes both government and commercial markets.
I11T3DepartmentG1T1 means the Department of Agriculture.
I11T3Funding agreementG1T1 is any contract, grant, or cooperative agreement entered into between any Federal agency and any small business concern for the performance of experimental, developmental, or research work funded in whole or in part by the Federal Government.
I11T3GranteeG1T1 means the small business concern designated in the grant award document as the responsible legal entity to whom a grant is awarded under this part.
I11T3Peer review groupG1T1 means experts or consultants, qualified by training and experience in particular scientific or technical fields to give expert advice on the scientific and technical merit of grant applications in those fields, who assemble as a group to discuss and evaluate all of the eligible proposals submitted to this program in their area of expertise.
I11T3Principal investigatorG1T1 means a single individual designated by the grantee in the grant application and approved by the Department who is responsible for the scientific or technical direction of the project. Therefore, the individual should have a scientific and technical background.
I11T3Program solicitationG1T1 is a formal request for proposals whereby an agency notifies the small business community of its research or research and development needs and interests in selected areas and invites proposals from small business concerns in response to those needs.
I11T3ProjectG1T1 means the particular activity within the scope of one of the research topic areas identified in the annual solicitation of applications, which is supported by a grant award under this part.
I11T3Project periodG1T1 means the total length of time that is approved by the Department for conducting the research project as outlined in an approved grant application.
I11T3Research or research and development (R&D)G1T1 means any activity which is:
I11(1) A systematic, intensive study directed toward greater knowledge or understanding of the subject studied;
I11(2) A systematic study directed specifically toward applying new knowledge to meet a recognized need; or
I11(3) A systematic application of knowledge toward the production of useful materials, devices, and systems or methods, including design, development, and improvement of prototypes and new processes to meet specific requirements.
I11T3Research project grantG1T1 means the award by the Department of funds to a grantee to assist in meeting the costs of conducting for the benefit of the public an identified project which is intended and designed to establish, discover, elucidate, or confirm information or the underlying mechanisms relating to a research topic area identified in the annual solicitation of applications.
I11T3Small business concernG1T1 means a concern which at the time of award of phase I and phase II funding agreements meets the following criteria:
I11(1) Is organized for profit, independently owned or operated, is not dominant in the field in which it is proposing, has its principal place of business located in the United States, has a number of employees not exceeding 500 (full-time, part-time, temporary, or other) in all affiliated concerns owned or controlled by a single parent concern, and meets the other regulatory �279�requirements outlined in 13 CFR Part 121. Business concerns, other than licensed investment companies, or State development companies qualifying under the Small Business Investment Act of 1958, 15 U.S.C. 661, T3et seq.G1T1, are affiliates of one another when directly or indirectly one concern controls or has the power to control the other or third parties (or party) control or have the power to control both. Control can be exercised through common ownership, common management, and contractual relationships. The term ``affiliates'' is defined in greater detail in 13 CFR 121.401(a) through (m). The term ``number of employees'' is defined in 13 CFR 121.407. Business concerns include, but are not limited to, any individual, partnership, corporation, joint venture, association, or cooperative.
I11(2) Is at least 51 percent owned, or in the case of a publicly owned business at least 51 percent of its voting stock is owned, by United States citizens or lawfully admitted permanent resident aliens.
I11T3Socially and economically disadvantaged individualG1T1 is a member of any of the following groups: Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian Americans, other groups designated from time to time by the Small Business Administration (SBA) to be socially disadvantaged, or any other individual found to be socially and economically disadvantaged by the SBA pursuant to section 8(a) of the Small Business Act, 15 U.S.C. 637(a).
I11T3Socially and economically disadvantaged small business concernG1T1 is one that is:
I11(1) At least 51 percent owned by
I11(i) An Indian tribe or a native Hawaiian organization, or
I11(ii) One or more socially and economically disadvantaged individuals; and
I11(2) Whose management and daily business operations are controlled by one or more socially and economically disadvantaged individuals.
I11T3SubcontractG1T1 is any agreement, other than one involving an employer-employee relationship, entered into by a Federal Government funding agreement awardee requesting supplies or services required solely for the performance of the funding agreement.
I11T3United StatesG1T1 means the fifty States, the territories and possessions of the United States, the Commonwealth of Puerto Rico, the Trust Territory of the Pacific Islands, and the District of Columbia.
I11T3Women-owned small business concernG1T1 means a small business concern that is at least 51 percent owned by a woman or women who also control and operate it. ``Control'' as used in this context means exercising the power to make policy decisions. ``Operate'' as used in this context means being actively involved in the day-to-day management of the concern.



I80�1A3403.3
I89Eligibility requirements.
I11(a) T3Eligibility of organization.G1T1 (1) Each organization submitting a proposal must qualify as a small business concern for research purposes, as defined in �1A3403.2. Joint ventures and limited partnerships are eligible to apply for and to receive research grants under this program, provided that the entity created qualifies as a small business concern in accordance with section 2(3) of the Small Business Act (15 U.S.C. 632) and as defined in �1A3403.2. For both phase I and phase II the research must be performed in the United States.
I11(2) A minimum of two-thirds of the research or analytical work, as determined by budget expenditures, must be performed by the proposing organization under phase I grants. For phase II awards, a minimum of one-half of the research or analytical effort must be conducted by the proposing organization. The space used by the SBIR awardee to conduct the research must be space over which it has exclusive control for the period of the grant.
I11(b) T3Eligibility of principal investigator.G1T1 (1) It is strongly suggested that the individual responsible for the scientific or technical direction of the project be designated as the principal investigator. In addition, the primary employment of the principal investigator must be with the proposing small business concern at the time of award and during the conduct of the proposed research. Primary employment means that more than one-half of the principal investigator's time is spent in the �280�employ of the small business concern. Primary employment with the small business applicant precludes full-time employment with another organization.
I11(2) If the proposed principal investigator is employed by another organization (e.g., university or another company) at the time of submission of the application, documentation must be submitted with the proposal from the principal investigator's current employer verifying that, in the event of an SBIR award, he/she will become a less-than half-time employee of such organization and will remain so for the duration of the SBIR project.
I56Subpart B_Program Description


I80�1A3403.4
I89Three-phase program.
I11The Small Business Innovation Research Grants Program will be carried out in three separate phases described in this section. The first two phases are designed to assist USDA in meeting its research and development objectives and will be supported with SBIR funds. The purpose of the third phase is to pursue the commercial applications or objectives of the research carried out in phases I and II through the use of private or Federal non-SBIR funds.

I11(a) Phase I is the initial stage in which the scientific and technical merit and feasibility of an idea related to one of the research areas described in the program solicitation is evaluated, normally for a period not to exceed 6 months. In special cases, however, where a proposed research project requires more than 6 months to complete, a longer grant period may be considered. A proposer of a phase I project with an anticipated duration beyond 6 months should specify the length and duration in the proposal at the time of its submission to USDA in order for it to be considered at the time of award. (See �1A3403.14(c) for changes in project period subsequent to award).
I11(b) Phase II is the principal research or research and development effort in which the results from Phase I are expanded upon and further pursued, normally for a period not to exceed 24 months. Only those small businesses previously receiving phase I awards are eligible to submit phase II proposals. For each phase I project funded the awardee may apply for a phase II award only once. Phase I awardees who for valid reasons cannot apply for phase II support in the next fiscal year funding cycle may apply for support not later than the second fiscal year funding cycle.
I11(c) Phase III is to stimulate technological innovation and the national return on investment from research through the pursuit of commercial objectives resulting from the work supported by SBIR funding carried out in phases I and II. This portion of the project is performed by the small business concern and privately funded or Federally funded by a non-SBIR source through the use of a follow-on funding commitment. A follow-on funding commitment is an agreement between the small business concern and a provider of follow-on capital for a specified amount of funds to be made available to the small business concern for further development of their effort upon achieving certain mutually agreed upon technical objectives during phase II.
I56Subpart C_Preparation and Submission of Proposals


I80�1A3403.5
I89Requests for proposals.
I11(a) T3Phase I.G1T1 A program solicitation requesting phase I proposals will be prepared each fiscal year in which funds are made available for this purpose. The solicitation will contain information sufficient to enable eligible applicants to prepare grant proposals and will include descriptions of specific research topic areas which the Department will support during the fiscal year involved, forms to be completed and submitted with proposals, and special requirements. A notice will be published in the T4Federal RegisterG1T1 informing the public of the availability of the program solicitation.
I11(b) T3Phase II.G1T1 For each fiscal year in which funds are made available for this purpose, the Department will send a letter requesting phase II proposals from the phase I grantees eligible to apply for phase II funding in that fiscal year. The letter will be accompanied by �281�the solicitation which contains information sufficient to enable eligible applicants to prepare grant proposals and includes forms to be submitted with proposals as well as special requirements.


I80�1A3403.6
I89General content of proposals.
I11(a) The proposed research must be responsive to one of the USDA program interests stated in the research topic descriptions of the program solicitation.
I11(b) Proposals must cover only scientific/technological research activities. A small business concern must not propose product development, technical assistance, demonstration projects, classified research, or patent applications. Many of the research projects supported by the SBIR program lead to the development of new products based upon the research results obtained during the project. However, projects that seek funding solely for product development where no research is involved, i.e. the funds are needed to permit the development of a project based on previously completed research, will not be accepted. Literature surveys should be conducted prior to preparing proposals for submission and must not be proposed as a part of the SBIR phase I or phase II effort. Proposals principally for the development of proven concepts toward commercialization or for market research should not be submitted since such efforts are considered the responsibility of the private sector and therefore are not supported by USDA.
I11(c) A proposal must be limited to only one topic. The same proposal may not be submitted under more than one topic. However, an organization may submit separate proposals on the same topic. Where similar research is discussed under more than one topic, the proposer should choose that topic whose description appears most relevant to the proposer's research concept. Duplicate proposals will be returned to the applicant without review.
I11(d) The limitation on the length of phase I and phase II proposals, text instructions, and the formatting instructions will be identified in the annual solicitation.


I80�1A3403.7
I89Proposal format for phase I applications.
I11(a) The following items relate to phase I applications. Further instructions or descriptions for these items as well as any additional items to be included will be provided in the annual solicitation, as necessary.
I11(1) T3Proposal cover sheet.G1T1 Photocopy and complete Form CSREES�09667 in the program solicitation. The original of the proposal cover sheet must at a minimum contain the pen-and-ink signatures of the proposed principal investigator(s) and the authorized organizational official.
I11(2) T3Project summary.G1T1 Photocopy and complete Form CSREES�09668 in the program solicitation. The technical abstract should include a brief description of the problem or opportunity, project objectives, and a description of the effort. Anticipated results and potential commercial applications of the proposed research also should be summarized in the space provided. Keywords, to be provided in the last block on the page, should characterize the most important aspects of the project. The project summary of successful proposals may be published by USDA and, therefore, should not contain proprietary information.
I11(3) T3Technical content.G1T1 The main body of the proposal should include:
I11(i) Identification and significance of the problem or opportunity.
I11(ii) Background and rationale.
I11(iii) Relationship with future research or research and development.
I11(iv) Phase I technical objectives.
I11(v) Phase I work plan.
I11(vi) Related research or research and development.
I11(4) T3Key personnel and bibliography.G1T1 Identify key personnel involved in the effort, including information on their directly related education and experience.
I11(5) T3Facilities and equipment.G1T1 Describe the types, location, and availability of instrumentation and physical facilities necessary to carry out the work proposed. Items of equipment to be purchased must be fully justified under this section.
I11(6) T3Consultants.G1T1 Involvement of university or other consultants in the planning and research stages of the �282�project is permitted and may be particularly helpful to small firms which have not previously received Federal research awards. If such involvement is intended, it should be described in detail.
I11(7) T3Potential post application.G1T1 Briefly describe:
I11(i) Whether and by what means the proposed research appears to have potential commercial application;
I11(ii) Whether and by what means the proposed research appears to have potential use by the Federal Government; and
I11(iii) Whether and by what means the proposed research will satisfy the public interest.
I11(8) T3Current and pending support.G1T1 If a proposal, substantially the same as the one being submitted, has been previously funded or is currently funded, pending, or about to be submitted to another Federal agency or to USDA in a separate action, the proposer must provide the following information:
I11(i) Name and address of the agency(s) to which a proposal was submitted, or will be submitted, or from which an award is expected or has been received.
I11(ii) Date of actual or anticipated proposal submission or date of award, as appropriate.
I11(iii) Title of proposal or award, identifying number assigned by the agency involved, and the date of program solicitation under which the proposal was submitted or the award was received.
I11(iv) Applicable research topic area for each proposal submitted or award received.
I11(v) Title of research project.
I11(vi) Name and title of principal investigator for each proposal submitted or award received. USDA will not make awards that duplicate research funded (or to be funded) by other Federal agencies.
I11(9) T3Cost breakdown on proposal budget.G1T1 Photocopy and complete the budget form in the program solicitation only for the phase under which you are currently applying. (An applicant for phase I funding should not submit both phase I and II budgets.)
I11(10) T3Research involving special considerations.G1T1 If the proposed research will involve recombinant DNA molecules, human subjects at risk, or laboratory animal care, the proposal must so indicate and include an assurance statement (Form CSREES�09662) as the last page of the proposal. The original of the assurance statement must at a minimum contain the pen-and-ink signature of the authorized organizational official. In order to complete the assurance statement, the proposer may be required to have the research plan reviewed and approved by an appropriate ``Institutional Review Board'' (IRB) prior to commencing actual substantive work. If an IRB review is required, USDA will not release funds for an award until proper documentation of the IRB approval is submitted to and accepted by USDA. It is suggested that proposers contact local universities, colleges, or nonprofit research organizations which have established such reviewing mechanisms to have this service performed.
I11(11) T3Proprietary information.G1T1 (i) If a proposal contains proprietary information that constitutes a trade secret, proprietary commercial or financial information, confidential personal information, or data affecting the national security, it will be treated in confidence to the extent permitted by law, provided the information is clearly marked by the proposer with the term ``confidential proprietary information'' and provided the following legend appears in the designated area at the bottom of the proposal cover sheet (Form CSREES�09667):

Q04


I21T3The following pages (specify) contain proprietary information which (name of proposing organization) requests not be released to persons outside the Government, except for purposes of evaluation.G1T1

Q04
I11(ii) USDA by law is required to make the final decision as to whether the information is required to be kept in confidence. Information contained in unsuccessful proposals will remain the property of the proposer. However, USDA will retain for one year one file copy of all proposals received; extra copies will be destroyed. Public release of information for any proposal submitted will be subject to existing statutory and regulatory requirements. Any proposal which is funded will be considered an integral part of the award and normally will be made available to the public upon request except �283�for designated proprietary information that is determined by USDA to be proprietary information.
I11(iii) The inclusion of proprietary information is discouraged unless it is necessary for the proper evaluation of the proposal. If proprietary information is to be included, it should be limited, set apart from other text on a separate page, and keyed to the text by numbers. It should be confined to a few critical technical items which, if disclosed, could jeopardize the obtaining of foreign or domestic patents. Trade secrets, salaries, or other information which could jeopardize commercial competitiveness should be similarly keyed and presented on a separate page. Proposals or reports which attempt to restrict dissemination of large amounts of information may be found unacceptable by USDA. Any other legend than that listed in paragraph (a)(11)(i) of this section may be unacceptable to USDA and may constitute grounds for return of the proposal without further consideration. Without assuming any liability for inadvertent disclosure, USDA will limit dissemination of such information to its employees and, where necessary for the evaluation of the proposal, to outside reviewers on a confidential basis.
I11(12) T3Rights in data developed under SBIR funding agreement.G1T1 The SBIR legislation provides for ``retention of rights in data generated in the performance of the contract by the small business concern.''
I11(i) The legislative history clarifies that the intent of the statute is to provide authority for the participating agency to protect technical data generated under the funding agreement, and to refrain from disclosing such data to competitors of the small business concern or from using the information to produce future technical procurement specifications that could harm the small business concern that discovered and developed the innovation until the small business concern has a reasonable chance to seek patent protection, if appropriate.
I11(ii) Therefore, except for program evaluation, participating agencies shall protect such technical data for a period of not less than T34 yearsG1T1 from the completion of the project from which the data were generated unless the agencies obtain permission to disclose such data from the contractor or grantee. The government shall retain a royalty-free license for government use of any technical data delivered under an SBIR funding agreement whether patented or not.
I11(13) T3Organizational management information.G1T1 Before the award of an SBIR funding agreement, USDA requires the submission of certain organizational management, personnel and financial information to assure the responsibility of the proposer. This information is not required unless a project is recommended for funding, and then it is submitted on a one-time basis only. However, new information should be submitted if a small business concern has undergone significant changes in organization, personnel, finance, or policies including those relating to civil rights.
I11(b) [Reserved]


I80�1A3403.8
I89Proposal format for phase II applications.
I11(a) The following items relate to phase II applications. Further instructions or descriptions for these items as well as any additional items to be included will be identified in the annual solicitation, as necessary.
I11(1) T3Proposal cover sheet.G1