UNSUBSCRIBE Kim Vargas 28 Sep 2005 15:36 EST
Kim Vargas, MBA
Director, Grants Administration
Office of Research
Wake Forest University Health Sciences
Medical Center Boulevard
Winston-Salem, North Carolina 27157
P- (336) 716-0780
F- (336) 716-4480
-----Original Message-----
From: Research Administration List [mailto:xxxxxx@HRINET.ORG] On
Behalf Of RESADM-L automatic digest system
Sent: Wednesday, September 28, 2005 12:00 AM
To: xxxxxx@HRINET.ORG
Subject: RESADM-L Digest - 26 Sep 2005 to 27 Sep 2005 (#2005-202)
There are 3 messages totalling 2092 lines in this issue.
Topics of the day:
1. replacement/upgrade equipment
2. NSF MRI Grants
3. Fwd: Re: FIPSE equipment
----------------------------------------------------------------------
Date: Tue, 27 Sep 2005 09:33:23 -0400
From: Jon Hart <xxxxxx@MAIL.ROCKEFELLER.EDU>
Subject: Re: replacement/upgrade equipment
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In federal grants usually once the grant is over, the equipment becomes
University property. It then becomes part of your inventory and your
policies apply.
Jon Hart, M.P.A., C.I.P.
Senior Director
Office of Sponsored Programs Administration
Human Subjects Protections Program
The Rockefeller University
email: xxxxxx@mail.rockefeller.edu
Tel: (212) 327-8054; fax: (212) 327-8400
_____
From: Research Administration List [mailto:xxxxxx@HRINET.ORG] On
Behalf Of
Pamela Miller
Sent: Monday, September 26, 2005 6:50 PM
To: xxxxxx@HRINET.ORG
Subject: [RESADM-L] replacement/upgrade equipment
Our University has a policy of replacing and upgrading equipment so that
what is being used on campus is up to University-wide standards. We
have a
couple of 100% soft money groups on campus. When these groups purchase
equipment with grant funds and the grant ends, the equipment is moved to
the
University's inventory. The IT people obviously want to see this
equipment
replaced or updated as needed-but who pays? The grant account has been
terminated, and these groups have minimal university resources to fall
back
on.
How do other universities handle this?
Thanks in advance.
Pamela F. Miller, Ph.D.
Director, Office of Sponsored Projects
The University of San Francisco
2130 Fulton Street
San Francisco, CA 94117-1080
TEL 415-422-5368
FAX 415-422-6222
EMAIL xxxxxx@usfca.edu
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<DIV dir=3Dltr align=3Dleft><SPAN class=3D359403213-27092005><FONT =
face=3DArial=20
color=3D#0000ff size=3D2>In federal grants usually once the grant is =
over, the=20
equipment becomes University property. It then becomes part of =
your=20
inventory and your policies apply.</FONT></SPAN></DIV>
<DIV> </DIV>
<DIV align=3Dleft><FONT face=3DArial size=3D2>Jon Hart, M.P.A., =
C.I.P.</FONT></DIV>
<DIV align=3Dleft><FONT face=3DArial size=3D2>Senior =
Director</FONT></DIV>
<DIV align=3Dleft><FONT face=3DArial size=3D2>Office of Sponsored =
Programs=20
Administration</FONT></DIV>
<DIV align=3Dleft><FONT face=3DArial size=3D2>Human Subjects Protections
=
Program</FONT></DIV>
<DIV align=3Dleft><FONT face=3DArial size=3D2>The Rockefeller =
University</FONT></DIV>
<DIV align=3Dleft><FONT face=3DArial size=3D2>email: <A=20
href=3D"mailto:xxxxxx@mail.rockefeller.edu">xxxxxx@mail.rockefeller.edu</A><
/=
FONT></DIV>
<DIV align=3Dleft><FONT face=3DArial size=3D2>Tel: (212) 327-8054;
=
fax: =20
(212) 327-8400</FONT></DIV>
<DIV align=3Dleft> </DIV>
<DIV> </DIV><BR>
<DIV class=3DOutlookMessageHeader lang=3Den-us dir=3Dltr align=3Dleft>
<HR tabIndex=3D-1>
<FONT face=3DTahoma size=3D2><B>From:</B> Research Administration
List=20
[mailto:xxxxxx@HRINET.ORG] <B>On Behalf Of </B>Pamela =
Miller<BR><B>Sent:</B>=20
Monday, September 26, 2005 6:50 PM<BR><B>To:</B>=20
xxxxxx@HRINET.ORG<BR><B>Subject:</B> [RESADM-L] replacement/upgrade=20
equipment<BR></FONT><BR></DIV>
<DIV></DIV>
<DIV class=3DSection1>
<P class=3DMsoNormal><FONT face=3DArial size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">Our University has a =
policy of=20
replacing and upgrading equipment so that what is being used on campus =
is up to=20
University-wide standards. We have a couple of 100% soft money =
groups on=20
campus. When these groups purchase equipment with grant funds and
=
the=20
grant ends, the equipment is moved to the University’s inventory.
=
The IT people=20
obviously want to see this equipment replaced or updated as =
needed—but who=20
pays? The grant account has been terminated, and these groups have
=
minimal=20
university resources to fall back on. =
<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">How do other universities
=
handle=20
this?<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
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<P class=3DMsoNormal><FONT face=3DArial size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">Thanks in=20
advance…<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Arial"><o:p> </o:p></SPAN></FONT></P>
<P><FONT face=3D"Times New Roman" size=3D3><SPAN style=3D"FONT-SIZE: =
12pt">Pamela F.=20
Miller, Ph.D.<BR>Director, Office of Sponsored Projects<BR>The =
<st1:place=20
w:st=3D"on"><st1:PlaceType w:st=3D"on">University</st1:PlaceType> of =
<st1:PlaceName=20
w:st=3D"on">San Francisco</st1:PlaceName></st1:place><BR><st1:Street=20
w:st=3D"on"><st1:address w:st=3D"on">2130 Fulton=20
Street</st1:address></st1:Street><BR><st1:place w:st=3D"on"><st1:City=20
w:st=3D"on">San Francisco</st1:City>, <st1:State =
w:st=3D"on">CA</st1:State>=20
<st1:PostalCode =
w:st=3D"on">94117-1080</st1:PostalCode></st1:place><BR>TEL =20
415-422-5368<BR>FAX 415-422-6222<BR>EMAIL <A=20
href=3D"mailto:xxxxxx@usfca.edu">xxxxxx@usfca.edu</A></SPAN><o:p></o:p
>=
</FONT></P>
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Date: Tue, 27 Sep 2005 10:15:13 -0400
From: "Montoro, Maria" <xxxxxx@ES.MARYWOOD.EDU>
Subject: NSF MRI Grants
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Would anyone being willing to share a successful NSF MRI application
(proprietary info deleted)?
Thanks,
Maria Montoro Edwards
Director, Sponsored Projects
Marywood University
2300 Adams Avenue
Scranton, Pennsylvania 18509
(570) 961-4775
www.marywood.edu
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<DIV><FONT face=3DArial size=3D2><SPAN class=3D859150514-27092005>Would
=
anyone being=20
willing to share a successful NSF MRI application (proprietary info=20
deleted)?</SPAN></FONT></DIV>
<DIV><FONT face=3DArial size=3D2><SPAN=20
class=3D859150514-27092005></SPAN></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2><SPAN=20
class=3D859150514-27092005>Thanks,</SPAN></FONT></DIV>
<DIV><FONT face=3DArial size=3D2><SPAN class=3D859150514-27092005>
<P><I><FONT face=3D"Brush Script MT" size=3D5>Maria Montoro =
Edwards</FONT></I>=20
<BR><FONT face=3DArial size=3D2>Director, Sponsored Projects</FONT> =
<BR><FONT=20
face=3DArial size=3D2>Marywood University</FONT> <BR><FONT face=3DArial
=
size=3D2>2300=20
Adams Avenue</FONT> <BR><FONT face=3DArial size=3D2>Scranton, =
Pennsylvania =20
18509</FONT> <BR><FONT face=3DArial size=3D2>(570) 961-4775</FONT> =
<BR><FONT=20
face=3DArial size=3D2>www.marywood.edu</FONT> =
</P></SPAN></FONT></DIV></BODY></HTML>
<p>
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------------------------------
Date: Tue, 27 Sep 2005 17:07:04 -0700
From: Rachel Cockrell <xxxxxx@USFCA.EDU>
Subject: Fwd: Re: FIPSE equipment
--============_-1084256470==_============
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We have a Department of Education grant for equipment and supply
purchases to upgrade our science labs. This is a 4 part question
e-mail.
1. At what dollar threshold would we have to go out for a formal RFP?
2. How is the threshold calculated? On per unit costs or total award
or some other method?
3. Is the threshold $25,000 as referenced in EDGAR 74,
Administration of Grants & Agreements with Institutions of Higher
Education, Hospitals, & Other Non-profit organizations, under
Subpart C, 74.40-74.48 ?
Specifically under section 74.44, (5) (e) (2) it states:
(e) Recipients shall, on request, make available for the Secretary,
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:
(1) A recipient's procurement procedures or operation fails to
comply with the procurement standards in this part.
(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.
4. Does anyone know the link to 41 U.S.C. 403 (11) to find out if
the small purchase threshold is still fixed at $25,000 or has that
amount changed?
Thank you in advance.
--
Rachel Cockrell
Asst. Controller
email: xxxxxx@usfca.edu
voice: (415) 422-2706
fax: (415) 386-1074
University of San Francisco
Business & Finance
2130 Fulton Street
San Francisco, CA 94117-1080
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<html><head><style type="text/css"><!--
blockquote, dl, ul, ol, li { padding-top: 0 ; padding-bottom: 0 }
--></style><title>Fwd: Re: FIPSE equipment</title></head><body>
<div>We have a Department of Education grant for equipment and supply
purchases to upgrade our science labs. This is a 4 part question
e-mail<i>.</i></div>
<div><br></div>
<div>1. At what dollar threshold would we have to go out for a
formal RFP?</div>
<div>2. How is the threshold calculated? On per unit costs or
total award or some other method?</div>
<div>3. Is the threshold $25,000 as referenced in EDGAR 74,
Administration of Grants & Agreements with Institutions of Higher
Education, Hospitals, & Other Non-profit organizations, under
Subpart C, 74.40-74.48 ?</div>
<div><br></div>
<div>Specifically under section 74.44, (5) (e) (2) it
states:</div>
<div><font face="Verdana" color="#000000">(e) Recipients shall, on
request, make available for the Secretary,</font></div>
<div><font face="Verdana" color="#000000">pre-award review and
procurement documents, such as request for</font></div>
<div><font face="Verdana" color="#000000">proposals or invitations for
bids, independent cost estimates, etc.,</font></div>
<div><font face="Verdana" color="#000000">when any of the following
conditions apply:</font></div>
<div><font face="Verdana" color="#000000"> (1) A
recipient's procurement procedures or operation fails to</font></div>
<div><font face="Verdana" color="#000000">comply with the procurement
standards in this part.</font></div>
<div><font face="Verdana" color="#000000"> (2) The
procurement is expected to exceed the small purchase</font></div>
<div><font face="Verdana" color="#000000">threshold fixed at 41 U.S.C.
403 (11) (currently $25,000) and is to be</font></div>
<div><font face="Verdana" color="#000000">awarded without competition
or only one bid or offer is received in</font></div>
<div><font face="Verdana" color="#000000">response to a
solicitation.</font></div>
<div><font face="Verdana"><br></font></div>
<div>4. Does anyone know the link to<font face="Verdana"
color="#000000"> 41 U.S.C. 403 (11) to find out if the small purchase
threshold is still fixed at $25,000</font> or has that amount
changed?</div>
<div><br></div>
<div>Thank you in advance.</div>
<div><br></div>
<x-sigsep><pre>--
</pre></x-sigsep>
<div>Rachel Cockrell<br>
Asst. Controller<br>
email: xxxxxx@usfca.edu<br>
voice: (415) 422-2706<br>
fax: (415) 386-1074<br>
<br>
University of San Francisco<br>
Business & Finance<br>
2130 Fulton Street<br>
San Francisco, CA 94117-1080</div>
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<h1>EDGAR - Part 74 Subpart C</h1>
<pre>
Subpart C--Post-Award Requirements
Financial and Program Management
Sec. 74.20 Purpose of financial and program management.
Sections 74.21 through 74.28 prescribe standards for financial
management systems, methods for making payments and rules for--
(a) Satisfying cost sharing and matching requirements;
(b) Accounting for program income;
(c) Approving budget revisions;
(d) Making audits;
(e) Determining allowability of cost; and
(f) Establishing fund availability.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Sec. 74.21 Standards for financial management systems.
(a) Recipients shall relate financial data to performance data and
develop unit cost information whenever practical.
(b) Recipients' financial management systems shall provide for the
following:
(1) Accurate, current, and complete disclosure of the financial
results of each federally-sponsored project in accordance with the
reporting requirements established in Sec. 74.52. If the Secretary
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 accrual data for its reports on the basis of an analysis of the
documentation on hand.
(2) Records that identify adequately the source and application of
funds for federally-sponsored activities. These records shall contain
information pertaining to awards, authorizations, obligations,
unobligated balances, assets, outlays, income, and interest.
(3) Effective control over and accountability for all funds,
property, and other assets. Recipients shall adequately safeguard all
assets and assure they are used solely for authorized purposes.
(4) Comparison of outlays with budget amounts for each award.
Whenever appropriate, financial information should be related to
performance and unit cost data.
(5) Written procedures to minimize the time elapsing between the
transfer of funds to the recipient from the U.S. Treasury and the
issuance or redemption of checks, warrants or payments by other means
for program purposes by the recipient. To the extent that the provisions
of the Cash Management Improvement Act (CMIA) (Pub. L. 101-453) govern,
payment methods of State agencies, instrumentalities, and fiscal agents
shall be consistent with 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.
(6) Written procedures for determining the reasonableness,
allocability, and allowability of costs in accordance with the
provisions of the applicable Federal cost principles and the terms and
conditions of the award.
(7) Accounting records including cost accounting records that are
supported by source documentation.
(c) Where the Federal Government guarantees or insures the repayment
of money borrowed by the recipient, the Secretary may require adequate
bonding and insurance if the bonding and insurance requirements of the
recipient are not deemed adequate to protect the interest of the Federal
Government.
(d) The Secretary may require adequate fidelity bond coverage where
the recipient lacks sufficient coverage to protect the Federal
Government's interest.
(e) Where bonds are required under paragraphs (a) and (b) 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.
(Approved by the Office of Management and Budget under control number
1880-0513)
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]
Sec. 74.22 Payment.
(a) Payment methods shall minimize the time elapsing between the
transfer of funds from the United States Treasury and the issuance or
redemption of checks, warrants, or payment by other means by the
recipients. Payment methods of State agencies or instrumentalities shall
be consistent with Treasury-State CMIA agreements or default procedures
codified at 31 CFR part 205.
(b)(1) Recipients are paid in advance, provided they maintain or
demonstrate the willingness to maintain--
(i) Written procedures that minimize the time elapsing between the
transfer of funds and disbursement by the recipient; and
(ii) Financial management systems that meet the standards for fund
control and accountability as established in Sec. 74.21.
(2) Cash advances to a recipient organization are 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.
(3) The timing and amount of cash advances are as close as is
administratively feasible to the actual disbursements by the recipient
organization for direct program or project costs and the proportionate
share of any allowable indirect costs.
(c) Whenever possible, advances are consolidated to cover
anticipated cash needs for all awards made by the Secretary.
(1) Advance payment mechanisms include, but are not limited to,
Treasury check, and electronic funds transfer.
(2) Advance payment mechanisms are subject to 31 CFR part 205.
(3) Recipients are authorized to submit requests for advances and
reimbursements at least monthly when electronic fund transfers are not
used.
(d) Requests for Treasury check advance payment shall be submitted
on SF-270--Request for Advance or Reimbursement--or other forms as may
be authorized by OMB. This form is not to be used when Treasury check
advance payments are made to the recipient automatically through the use
of a predetermined payment schedule or if precluded by ED instructions
for electronic funds transfer.
(e) Reimbursement is the preferred method when the requirements in
paragraph (b) of this section cannot be met. The Secretary may also use
this method on any construction agreement, or if the major portion of
the construction project is accomplished through private market
financing or Federal loans, and the Federal assistance constitutes a
minor portion of the project.
(1) When the reimbursement method is used, the Secretary makes
payment within 30 days after receipt of the billing, unless the billing
is improper.
(2) Recipients are authorized to submit request for reimbursement at
least monthly when electronic funds transfers are not used.
(f) If a recipient cannot meet the criteria for advance payments and
the Secretary has determined that reimbursement is not feasible because
the recipient lacks sufficient working capital, the Secretary may
provide cash on a working capital advance basis. Under this procedure,
the Secretary advances cash to the recipient to cover its estimated
disbursement needs for an initial period generally geared to the
awardee's disbursing cycle. Thereafter, the Secretary reimburses the
recipient for its actual cash disbursements. The working capital advance
method of payment is not used for recipients unwilling or unable to
provide timely advances to their subrecipient to meet the subrecipient's
actual cash disbursements.
(g) To the extent available, recipients shall disburse funds
available from repayments to and interest earned on a revolving fund,
program income, rebates, refunds, contract settlements, audit
recoveries, and interest earned on these funds before requesting
additional cash payments.
(h) Unless otherwise required by statute, the Secretary does not
withhold payments for proper charges made by recipients at any time
during the project period unless--
(1) A recipient has failed to comply with the project objectives,
the terms and conditions of the award, or Federal reporting
requirements; or
(2) The recipient or subrecipient is delinquent in a debt to the
United States as defined in OMB Circular A-129--Managing Federal Credit
Programs. Under these conditions, the Secretary may, upon reasonable
notice, inform the recipient that ED does not make payments for
obligations incurred after a specified date until the conditions are
corrected or the indebtedness to the Federal Government is liquidated.
(i) The standards governing the use of banks and other institutions
as depositories of funds advanced under awards are as follows:
(1) Except for situations described in paragraph (i)(2) of this
section, the Secretary does 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.
(2) Advances of Federal funds shall be deposited and maintained in
insured accounts whenever possible.
(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).
(k) Recipients shall maintain advances of Federal funds in interest
bearing accounts, unless--
(1) The recipient receives less than $120,000 in Federal awards per
year;
(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; or
(3) The depository would require an average or minimum balance so
high that it would not be feasible within the expected Federal and non-
=46ederal cash resources.
(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, Rockville, MD 20852. Interest
amounts up to $250 per year may be retained by the recipient for
administrative expense. 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 Secretary, it waives its right to
recover the interest under CMIA.
(m) Except as noted elsewhere in this part, only the following forms
are authorized for the recipients in requesting advances and
reimbursements. The Secretary does not require more than an original and
two copies of the following:
(1) SF-270--Request for Advance or Reimbursement. The Secretary
adopts the SF-270 as a standard form for all nonconstruction programs
when electronic funds transfer or predetermined advance methods are not
used. The Secretary may, however, use this form for construction
programs in lieu of the SF-271--Outlay Report and Request for
Reimbursement for Construction Programs.
(2) SF-271--Outlay Report and Request for Reimbursement for
Construction Programs. The Secretary adopts the SF-271 as the standard
form to be used for requesting reimbursement for construction programs.
However, the Secretary may substitute the SF-270 when the Secretary
determines that it provides adequate information to meet Federal needs.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Sec. 74.23 Cost sharing or matching.
(a) All contributions, including cash and third party in-kind, are
accepted as part of the recipient's cost sharing or matching when
contributions meet the following criteria:
(1) Are verifiable from the recipient's records.
(2) Are not included as contributions for any other federally-
assisted project or program.
(3) Are necessary and reasonable for proper and efficient
accomplishment of project or program objectives.
(4) Are allowable under the applicable cost principles.
(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.
(6) Are provided for in the approved budget when required by the
Secretary.
(7) Conform to other provisions of this part, as applicable.
(b) Unrecovered indirect costs may be included as part of cost
sharing or matching only with the prior approval of the Secretary.
(c) Values for recipient contributions of services and property
shall be established in accordance with the applicable cost principles.
If the Secretary 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--
(1) The certified value of the remaining life of the property
recorded in the recipient's accounting records at the time of donation;
or
(2) The current fair market value. However, if there is sufficient
justification, the Secretary 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.
(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 must 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 must 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.
(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 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.
(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.
(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.
(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.
(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 Secretary has
approved the charges.
(h) The value of donated property must be determined in accordance
with the usual accounting policies of the recipient, with the following
qualifications:
(1) The value of donated land and buildings may 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.
(2) The value of donated equipment may not exceed the fair market
value of equipment of the same age and condition at the time of
donation.
(3) The value of donated space may 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.
(4) The value of loaned equipment shall not exceed its fair rental
value.
(5) The following requirements pertain to the recipient's supporting
records for in-kind contributions from third parties:
(i) Volunteer services must be documented and, to the extent
feasible, supported by the same methods used by the recipient for its
own employees.
(ii) The basis for determining the valuation for personal service,
material, equipment, buildings, and land must be documented.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Sec. 74.24 Program income.
(a) The Secretary applies the standards contained in this section in
requiring recipient organizations to account for program income related
to projects financed in whole or in part with Federal funds.
(b) Except as provided in paragraph (h) of this section, program
income earned during the project period must be retained by the
recipient and, in accordance with ED regulations or the terms and
conditions of the award, must be used in one or more of the following
ways:
(1) Added to funds committed to the project by the Secretary and
recipient and used to further eligible project or program objectives.
(2) Used to finance the non-Federal share of the project or program.
(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.
(c) When the Secretary 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.
(d) In the event that the Secretary does not specify in program
regulations or the terms and conditions of the award how program income
is to be used, paragraph (b)(3) of this section applies automatically to
all projects or programs except research. For awards that support
research, paragraph (b)(1) of this section applies automatically unless
the Secretary indicates in the terms and conditions another alternative
on the award or the recipient is subject to special award conditions, as
indicated in Sec. 74.14.
(e) Unless ED regulations or the terms and conditions of the award
provide otherwise, recipients have no obligation to the Federal
Government regarding program income earned after the end of the project
period.
(f) If authorized by ED 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.
(g) Proceeds from the sale of property shall be handled in
accordance with the requirements of the Property Standards (See
Secs. 74.30 through 74.37).
(h) Unless ED regulations or the terms and condition of the award
provide otherwise, recipients 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.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Sec. 74.25 Revision of budget and program plans.
(a) The budget plan is the financial expression of the project or
program as approved during the award process. It may include either the
=46ederal and non-Federal share, or only the Federal share, depending
upon
ED requirements. It shall be related to performance for program
evaluation purposes whenever appropriate.
(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.
(c) For nonconstruction awards, recipients shall request prior
approvals from ED for one or more of the following program or budget
related reasons:
(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).
(2) Change in a key person specified in the application or award
document.
(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.
(4) The need for additional Federal funding.
(5) The transfer of amounts budgeted for indirect costs to absorb
increases in direct costs, or vice versa, if approval is required by the
Secretary.
(6) The inclusion, unless waived by the Secretary, of costs that
require prior approval in accordance with OMB Circular A-21--Cost
Principles for Institutions of Higher Education, OMB Circular A-122--
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.
(7) The transfer of funds allotted for training allowances (direct
payment to trainees) to other categories of expense.
(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.
(d) No other prior approval requirements for specific items are
imposed unless a deviation has been approved by OMB.
(e) Except for requirements listed in paragraphs (c)(1) and (c)(4)
of this section, the Secretary may waive cost-related and administrative
prior written approvals required by this part and OMB Circulars A-21 and
A-122. These waivers may authorize recipients to do any one or more of
the following:
(1) Incur pre-award costs 90 calendar days prior to award or more
than 90 calendar days with the prior approval of the Secretary. All pre-
award costs are incurred at the recipient's risk (i.e., the Secretary is
under no obligation to reimburse these costs if for any reason the
recipient does not receive an award or if the award is less than
anticipated and inadequate to cover these costs).
(2)(i) 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:
(A) The terms and conditions of award prohibit the extension.
(B) The extension requires additional Federal funds.
(C) The extension involves any change in the approved objectives or
scope of the project.
(ii) For one-time extensions, the recipient shall notify the
Secretary 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.
(3) Carry forward unobligated balances to subsequent funding
periods.
(4) For awards that support research, unless the Secretary provides
otherwise in the award or in ED's regulations, the prior approval
requirements described in paragraph (e) of this section are
automatically waived (i.e., recipients need not obtain prior approvals)
unless one of the conditions included in paragraph (e)(2)(i) of this
section applies.
(f) The Secretary may 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 the transfers exceeds or is expected to exceed 10
percent of the total budget as last approved by the Secretary. The
Secretary does not 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.
(g) All other changes to nonconstruction budgets, except for the
changes described in paragraph (j) of this section, do not require prior
approval.
(h) For construction awards, recipients shall request prior written
approval promptly from the Secretary for budget revisions whenever--
(1) The revision results from changes in the scope or the objective
of the project or program;
(2) The need arises for additional Federal funds to complete the
project; or
(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 Sec. 74.27.
(i) No other prior approval requirements for specific items may be
imposed unless a deviation has been approved by OMB.
(j) When the Secretary makes an award that provides support for both
construction and nonconstruction work, the Secretary may require the
recipient to request prior approval from the Secretary before making any
fund or budget transfers between the two types of work supported.
(k) For both construction and nonconstruction awards, recipients
shall notify the Secretary in writing promptly whenever the amount of
=46ederal authorized funds is expected to exceed the needs of the
recipient for the project period by more than $5,000 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.
(l) When requesting approval for budget revisions, recipients shall
use the budget forms that were used in the application unless the
Secretary indicates a letter of request suffices.
(m) Within 30 calendar days from the date of receipt of the request
for budget revisions, the Secretary 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 30 calendar days,
the Secretary informs the recipient in writing of the date when the
recipient may expect the decision.
(Approved by the Office of Management and Budget under control number
1880-0513)
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]
Sec. 74.26 Non-Federal audits.
(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. 7501-7507) and revised OMB Circular A-133,
``Audits of States, Local Governments, and Non-Profit Organizations.''
(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. 7501-7507) and revised OMB Circular A-133, ``Audits of States,
Local Governments, and Non-Profit Organizations.''
(c) For-profit hospitals not covered by the audit provisions of
revised OMB Circular A-133 shall be subject to the audit requirements of
the Federal awarding agencies.
(d) Commercial organizations are subject to the audit requirements
established by the Secretary or the prime recipient as incorporated into
the award document.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
[59 FR 34724, July 6, 1994, as amended at 62 FR 45939, 45943, Aug. 29,
1997]
Sec. 74.27 Allowable costs.
(a) For each kind of recipient, there is a set of cost principles
for determining allowable costs. Allowability of costs are determined in
accordance with the cost principles applicable to the entity incurring
the costs, as specified in the following chart.
Note: OMB circulars are available from the Office of Management and
Budget, Publication Office, Room 2200, New Executive Office Building,
Washington, DC 20503 (202) 395-7332.)
------------------------------------------------------------------------
For the cost of a-- Use the principles in--
------------------------------------------------------------------------
Private nonprofit organization OMB Circular A-122.
other than (1) An institution of
higher education; (2) a hospital;
or (3) an organization named in
OMB Circular A-122 as not subject
to that circular.
Educational institution........... OMB Circular A-21.
Hospital.......................... Appendix E to 45 CFR part 74.
Commercial for-profit organization 48 CFR part 31 Contract Cost
other than a hospital and an Principles and Procedures or
educational institution. uniform cost accounting standards
that comply with cost principles
acceptable to ED.
------------------------------------------------------------------------
(b) The cost principles applicable to a State, a local government,
or Federally recognized Indian tribal government are specified at 34 CFR
Sec. 80.22.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Sec. 74.28 Period of availability of funds.
Where 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 Secretary.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Property Standards
Sec. 74.30 Purpose of property standards.
Sections 74.31 through 74.37 establish uniform standards governing
management and disposition of property furnished by ED whose cost was
charged to a project supported by a Federal award. Recipients shall
observe these standards under awards. The Secretary does 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 Secs. 74.31 through
74.37.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Sec. 74.31 Insurance coverage.
Recipients 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.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Sec. 74.32 Real property.
The Secretary prescribes requirements for recipients concerning the
use and disposition of real property acquired in whole or in part under
awards. Unless otherwise provided by statute, the minimum requirements
provide the following:
(a) Title to real property must 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 Secretary.
(b) The recipient shall obtain written approval by the Secretary 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) that have
purposes consistent with those authorized for support by the Secretary.
(c) When the real property is no longer needed as provided in
paragraphs (a) and (b) of this section, the recipient shall request
disposition instructions from ED or its successor Federal awarding
agency. The Secretary observes one or more of the following disposition
instructions:
(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.
(2) The recipient may be directed to sell the property under
guidelines provided by the Secretary 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 must be established that
provide for competition to the extent practicable and result in the
highest possible return.
(3) The recipient may be directed to transfer title to the property
to the Federal Government or to an eligible third party. The recipient
is entitled to compensation for its attributable percentage of the
current fair market value of the property.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Sec. 74.33 Federally-owned and exempt property.
(a) Federally-owned property. (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 Secretary. Upon completion of the award or when the
property is no longer needed, the recipient shall report the property to
the Secretary for further ED utilization.
(2) If ED has no further need for the property, it shall be declared
excess and reported to the General Services Administration, unless the
Secretary 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 Secretary.
(b) Exempt property. When statutory authority exists, the Secretary
may vest title to property acquired with Federal funds in the recipient
without further obligation to the Federal Government and under
conditions the Secretary considers appropriate. This property is
``exempt property.'' Should the Secretary not establish conditions,
title to exempt property upon acquisition vests in the recipient without
further obligation to the Federal Government.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Sec. 74.34 Equipment.
(a) Title to equipment acquired by a recipient with Federal funds
shall vest in the recipient, subject to conditions of this section.
(b) The recipient may 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.
(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 may not
encumber the property without approval of the Secretary. 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:
(1) Activities sponsored by the Federal awarding agency which funded
the original project; and then
(2) Activities sponsored by other Federal awarding agencies.
(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 other use will not interfere with the
work on the project or program for which the equipment was originally
acquired. First preference for 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.
(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 Secretary.
(f) The recipient's property management standards for equipment
acquired with Federal funds and federally-owned equipment shall include
all of the following:
(1) Equipment records shall be maintained accurately and shall
include the following information:
(i) A description of the equipment.
(ii) Manufacturer's serial number, model number, Federal stock
number, national stock number, or other identification number.
(iii) Source of the equipment, including the award number.
(iv) Whether title vests in the recipient or the Federal Government.
(v) Acquisition date (or date received, if the equipment was
furnished by the Federal Government) and cost.
(vi) Information from which one can calculate the percentage of
=46ederal participation in the cost of the equipment (not applicable to
equipment furnished by the Federal Government).
(vii) Location and condition of the equipment and the date the
information was reported.
(viii) Unit acquisition cost.
(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 ED for its share.
(2) Equipment owned by the Federal Government must be identified to
indicate Federal ownership.
(3) A physical inventory of equipment must 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 must 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.
(4) A control system must be in effect to insure 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 owned by the Federal Government, the recipient shall
promptly notify the Secretary.
(5) Adequate maintenance procedures must be implemented to keep the
equipment in good condition.
(6) Where the recipient is authorized or required to sell the
equipment, proper sales procedures must be established which provide for
competition to the extent practicable and result in the highest possible
return.
(g) When the recipient no longer needs the equipment, the equipment
may be used for other activities in accordance with the following
standards:
(1) 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 ED 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.
(2) If the recipient has no need for the equipment, the recipient
shall request disposition instructions from the Secretary. The Secretary
shall determine whether the equipment can be used to meet ED
requirements. If no requirement exists within ED, the availability of
the equipment shall be reported to the General Services Administration
by the Secretary to determine whether a requirement for the equipment
exists in other Federal agencies. The Secretary issues instructions to
the recipient no later than 120 calendar days after the recipient's
request and the following procedures govern:
(i) 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 ED 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.
(ii) If the recipient is instructed to ship the equipment elsewhere,
the recipient is reimbursed by ED 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.
(iii) If the recipient is instructed to otherwise dispose of the
equipment, the recipient is reimbursed by ED for costs incurred in its
disposition.
(iv) The Secretary may reserve the right to transfer the title to
the Federal Government or to a third party named by the Federal
Government when the third party is otherwise eligible under existing
statutes. This transfer shall be subject to the following standards:
(A) The equipment must be appropriately identified in the award or
otherwise made known to the recipient in writing.
(B) The Secretary issues disposition instructions within 120
calendar days after receipt of a final inventory. The final inventory
must list all equipment acquired with grant funds and federally-owned
equipment. If the Secretary does not issue disposition instructions
within the 120 calendar day period, the recipient shall apply the
standards of this section, as appropriate.
(C) When the Secretary exercises the right to take title, the
equipment is subject to the provisions for federally-owned equipment.
(Approved by the Office of Management and Budget under control number
1880-0513)
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]
Sec. 74.35 Supplies and other expendable property.
(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 $5,000 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, the
recipient shall retain the supplies for use on non-Federal sponsored
activities or sell them, but shall, in either case, compensate the
=46ederal Government for its share. The amount of compensation shall be
computed in the same manner as for equipment.
(b) The recipient may 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.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Sec. 74.36 Intangible property.
(a) The recipient may copyright any work that is subject to
copyright and was developed, or for which ownership was purchased, under
an award. ED and any other Federal awarding agency 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.
(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.
(c) The Federal Government has the right to:
(1) Obtain, reproduce, publish or otherwise use the data first
produced under an award; and
(2) Authorize others to receive, reproduce, publish, or otherwise
use such data for Federal purposes.
(d)(1) In addition, in response to a Freedom of Information Act
(FOIA) request for research data relating to published research findings
produced under an award that were used by the Federal Government in
developing an agency action that has the force and effect of law, ED
shall request, and the recipient shall provide, within a reasonable
time, the research data so that they can be made available to the public
through the procedures established under the FOIA. If ED obtains the
research data solely in response to a FOIA request, the agency may
charge the requester a reasonable fee equaling the full incremental cost
of obtaining the research data. This fee should reflect costs incurred
by the agency, the recipient, and applicable subrecipients. This fee is
in addition to any fees the agency may assess under the FOIA (5 U.S.C.
552(a)(4)(A)).
(2) The following definitions apply for purposes of this paragraph
(d):
(i) Research data is defined as the recorded factual material
commonly accepted in the scientific community as necessary to validate
research findings, but not any of the following: preliminary analyses,
drafts of scientific papers, plans for future research, peer reviews, or
communications with colleagues. This ``recorded'' material excludes
physical objects (e.g., laboratory samples). Research data also do not
include:
(A) Trade secrets, commercial information, materials necessary to be
held confidential by a researcher until they are published, or similar
information which is protected under law; and
(B) Personnel and medical information and similar information the
disclosure of which would constitute a clearly unwarranted invasion of
personal privacy, such as information that could be used to identify a
particular person in a research study.
(ii) Published is defined as either when:
(A) Research findings are published in a peer-reviewed scientific or
technical journal; or
(B) A Federal agency publicly and officially cites the research
findings in support of an agency action that has the force and effect of
law.
(iii) Used by the Federal Government in developing an agency action
that has the force and effect of law is defined as when an agency
publicly and officially cites the research findings in support of an
agency action that has the force and effect of law.
(e) 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 Secretary. When no longer needed for the originally authorized
purpose, disposition of the intangible property shall occur in
accordance with the provisions of Sec. 74.34(g).
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
[59 FR 34724, July 6, 1994, as amended at 65 FR 14407, 14416, Mar. 16,
2000]
Sec. 74.37 Property trust relationship.
Real property, equipment, intangible property, and debt instruments
that are acquired or improved with Federal funds must 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. The Secretary
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.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Procurement Standards
Sec. 74.40 Purpose of procurement standards.
Sections 74.41 through 74.48 contain standards for use by recipients
in establishing procedures for the procurement of supplies and other
expendable property, equipment, real property, and other services with
=46ederal funds. These standards are designed to ensure that these
materials and services are obtained in an effective manner and in
compliance with the provisions of applicable Federal statutes and
executive orders. The Secretary does not impose additional procurement
standards or requirements upon recipients, unless specifically required
by Federal statute or executive order or as authorized in Sec. 74.4 or
Sec. 74.14.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Sec. 74.41 Recipient responsibilities.
The 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
Secretary, 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
=46ederal, State or local authority that may have proper jurisdiction.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Sec. 74.42 Codes of conduct.
The 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. 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 these standards by officers, employees, or
agents of the recipient.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Sec. 74.43 Competition.
All 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 interest 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 or requests for
proposals shall be excluded from competing for procurements. Awards must
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 establish 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.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Sec. 74.44 Procurement procedures.
(a) All recipients shall establish written procurement procedures.
These procedures must provide for, at a minimum, that--
(1) Recipients avoid purchasing unnecessary items;
(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; or
(3) Solicitations for goods and services provide for all of the
following:
(i) A clear and accurate description of the technical requirements
for the material, product, or service to be procured. In competitive
procurements, a description shall not contain features which unduly
restrict competition.
(ii) Requirements which the bidder/offeror must fulfill and all
other factors to be used in evaluating bids or proposals.
(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.
(iv) The specific features of brand name or equal descriptions that
bidders are required to meet when these items are included in the
solicitation.
(v) The acceptance, to the extent practicable and economically
feasible, of products and services dimensioned in the metric system of
measurement.
(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.
(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:
(1) Ensure that small businesses, minority-owned firms, and women's
business enterprises are used to the fullest extent practicable.
(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.
(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.
(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.
(5) Use the services and assistance, as appropriate, of
organizations such 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.
(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 must 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 must not
be used.
(d) Contracts are made only with responsible contractors who possess
the potential ability to perform successfully under the terms and
conditions of the proposed procurement. Consideration is given to
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 E.O. 12549 (implemented by the Secretary in 34 CFR Part 85) and E.O.
12689--Debarment and Suspension.
(e) Recipients shall, on request, make available for the Secretary,
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:
(1) A recipient's procurement procedures or operation fails to
comply with the procurement standards in this part.
(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.
(3) The procurement, which is expected to exceed the small purchase
threshold, specifies a ``brand name'' product.
(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.
(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.
(Approved by the Office of Management and Budget under control number
1880-0513)
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]
Sec. 74.45 Cost and price analysis.
Some form of cost or price analysis must 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
allowabi=
lity.
(Approved by the Office of Management and Budget under control number
1880-0513)
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]
Sec. 74.46 Procurement records.
Procurement records and files for purchases in excess of the small
purchase threshold must include the following at a minimum--
(a) Basis for contractor selection;
(b) Justification for lack of competition when competitive bids or
offers are not obtained;
(c) Basis for award cost or price.
(Approved by the Office of Management and Budget under control number
1880-0513)
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]
Sec. 74.47 Contract administration.
A system for contract administration must be maintained to ensure
contractor conformance with the terms, 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.
(Approved by the Office of Management and Budget under control number
1880-0513)
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]
Sec. 74.48 Contract provisions.
The recipient shall include, in addition to provisions to define a
sound and complete agreement, the following provisions in all contracts.
The following provisions must also be applied to subcontracts:
(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
remedial actions as may be appropriate.
(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, contracts must 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.
(c) Except as otherwise required by statute, an award that requires
the contracting (or subcontracting) for construction or facility
improvements must 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 $100,000.
=46or those contracts or subcontracts exceeding $100,000, the Secretary
may accept the bonding policy and requirements of the recipient,
provided the Secretary has made a determination that the Federal
Government's interest is adequately protected. If a determination has
not been made, the minimum requirements are as follows:
(1) A bid guarantee from each bidder equivalent to five percent of
the bid price. The ``bid guarantee'' must 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 contractual documents as may be required within the
time specified.
(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 a contract.
(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.
(4) Where bonds are required, the bonds must 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.
(d) All negotiated contracts (except those for less than the small
purchase threshold) awarded by recipients must include a provision to
the effect that the recipient, ED, the Comptroller General of the United
States, or any of their duly authorized representatives, must 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.
(e) All contracts, including small purchases, awarded by recipients
and their contractors must contain the procurement provisions of
appendix A to this part, as applicable.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Reports and Records
Sec. 74.50 Purpose of reports and records.
Sections 74.51 through 74.53 establish the procedures for monitoring
and reporting on the recipient's financial and program performance and
the necessary standard reporting forms. They also establish record
retention requirements.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Sec. 74.51 Monitoring and reporting program performance.
(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 in Sec. 74.26.
(b) The Secretary prescribes the frequency with which the
performance reports shall be submitted. Except as provided in
Sec. 74.51(f), performance reports are not required more frequently than
quarterly or, less frequently than annually. Annual reports are due 90
calendar days after the grant year; quarterly or semi-annual reports are
due 30 days after the reporting period. The Secretary may require annual
reports before the anniversary dates of multiple year awards in lieu of
these requirements. The final performance reports are due 90 calendar
days after the expiration or termination of the award.
(c) If inappropriate, a final technical or performance report is not
required after completion of the project.
(d) When required, performance reports must generally contain, for
each award, brief information on each of the following:
(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, this quantitative data should be related to cost
data for computation of unit costs.
(2) Reasons why established goals were not met, if appropriate.
(3) Other pertinent information including, when appropriate,
analysis, and explanation of cost overruns or high unit costs.
(e) Recipients are not required to submit more than the original and
two copies of performance reports.
(f) Recipients shall immediately notify the Secretary of
developments that have a significant impact on the award-supported
activities. Also, notification must 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 must include a
statement of the action taken or contemplated, and any assistance needed
to resolve the situation.
(g) The Secretary may make site visits, as needed.
(h) The Secretary complies with the clearance requirements of 5 CFR
part 1320 when requesting performance data from recipients.
(Approved by the Office of Management and Budget under control number
1880-0513)
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]
Sec. 74.52 Financial reporting.
(a) The following forms or other forms as may be approved by OMB are
authorized for obtaining financial information from recipients.
(1) SF-269 or SF-269A--Financial Status Report. (i) Recipients are
required to use the SF-269 or SF-269A to report the status of funds for
all nonconstruction projects or programs. The Secretary may not require
the SF-269 or SF-269A when, the Secretary determines that SF-270--
Request for Advance or Reimbursement, or SF-272--Report of Federal Cash
Transactions--provides adequate information to meet the Department's
needs, except that a final SF-269 or SF-269A is required at the
completion of the project when the SF-270 is used only for advances.
(ii) The Secretary prescribes whether the report is on a cash or
accrual basis. If the Secretary requires accrual information and the
recipient's accounting records are not normally kept on the accrual
basis, the recipient is not required to convert its accounting system,
but shall develop accrual information through best estimates based on an
analysis of the documentation on hand.
(iii) The Secretary determines 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 is not
required more frequently than quarterly or less frequently than
annually. A final report is required at the completion of the agreement.
(iv) The Secretary requires recipients to submit the SF-269 or SF-
269A (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-
annual reports, and 90 calendar days for annual and final reports.
Extensions of reporting due dates may be approved by the Secretary upon
request of the recipient.
(2) SF-272--Report of Federal Cash Transactions. (i) When funds are
advanced to recipients the Secretary requires each recipient to submit
the SF-272 and, when necessary, its continuation sheet, SF-272a. The
Secretary uses this report to monitor cash advanced to recipients and to
obtain disbursement information for each agreement with the recipients.
(ii) The Secretary may require forecasts of Federal cash
requirements in the ``Remarks'' section of the report.
(iii) When practical and deemed necessary, the Secretary 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.
(iv) Recipients shall be required to submit not more than the
original and two copies of the SF-272 15 calendar days following the end
of each quarter. The Secretary may require a monthly report from those
recipients receiving advances totaling $1 million or more per year.
(v) The Secretary may waive the requirement for submission of the
SF-272 for any one of the following reasons:
(A) When monthly advances do not exceed $25,000 per recipient,
provided that advances are monitored through other forms contained in
this section;
(B) If, in the Secretary's opinion, the recipient's accounting
controls are adequate to minimize excessive Federal advances; or
(C) When the electronic payment mechanisms provide adequate data.
(b) When the Secretary needs additional information or more frequent
reports, the following shall be observed:
(1) When additional information is needed to comply with legislative
requirements, the Secretary shall issue instructions to require
recipients to submit information under the ``Remarks'' section of the
reports.
(2) When the Secretary determines that a recipient's accounting
system does not meet the standards in Sec. 74.21, additional pertinent
information to further monitor awards may be obtained upon written
notice to the recipient until the system is brought up to standard. The
Secretary, in obtaining this information, complies with the report
clearance requirements of 5 CFR part 1320.
(3) The Secretary may shade out any line item on any report if not
necessary.
(4) The Secretary may accept the identical information from the
recipients in machine readable format or computer printouts or
electronic outputs in lieu of prescribed formats.
(5) The Secretary may provide computer or electronic outputs to
recipients when these outputs expedite or contribute to the accuracy of
reporting.
(Approved by the Office of Management and Budget under control number
1880-0513)
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]
Sec. 74.53 Retention and access requirements for records.
(a) This section establishes requirements for record retention and
access to records for awards to recipients. The Secretary does not
impose any other record retention or access requirements upon
recipients.
(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
annually, from the date of the submission of the quarterly or annual
financial report, as authorized by the Secretary. The only exceptions
are the following:
(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.
(2) Records for real property and equipment acquired with Federal
funds shall be retained for 3 years after final disposition.
(3) When records are transferred to or maintained by the Secretary,
the 3-year retention requirement is not applicable to the recipient.
(4) Indirect cost rate proposals, cost allocations plans, etc. as
specified in Sec. 74.53(g).
(c) Copies of original records may be substituted for the original
records if authorized by the Secretary.
(d) The Secretary requests 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, the Secretary may make arrangements for recipients to
retain any records that are continuously needed for joint use.
(e) The Secretary, 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
documents. This right also includes timely and reasonable access to a
recipient's personnel for the purpose of interview and discussion
related to these 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.
(f) Unless required by statute, the Secretary does not place
restrictions on recipients that limit public access to the records of
recipients that are pertinent to an award, except when the Secretary can
demonstrate that the records must 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 ED.
(g) The starting date for retention of the following types of
documents (including supporting records) is specified in paragraphs
(g)(1) and (2) of this section: 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).
(1) If submitted for negotiation. If the recipient submits to the
Secretary 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 submission.
(2) If not submitted for negotiation. If the recipient is not
required to submit
to the Secretary 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.
(Approved by the Office of Management and Budget under control number
1880-0513)
(Authority: 20 U.S.C. 1221e-3 and 3474; OMB Circular A-110)
[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995; 60
=46R 46493, Sept. 6, 1995]
Termination and Enforcement
Sec. 74.60 Purpose of termination and enforcement.
Sections 74.61 and 74.62 establish uniform suspension, termination,
and enforcement procedures.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Sec. 74.61 Termination.
(a) Awards may be terminated in whole or in part only--
(1) By the Secretary, if a recipient materially fails to comply with
the terms and conditions of an award;
(2) By the Secretary 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.
(3) By the recipient, upon sending to the Secretary written
notification containing the reasons for the termination, the effective
date, and, in the case of partial termination, the portion to be
terminated. However, if the Secretary 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 paragraph (a)(1) or (2) of this
section.
(b) If costs are allowed under an award, the responsibilities of the
recipient referred to in Sec. 74.71(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.
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
Sec. 74.62 Enforcement.
(a) Remedies for noncompliance. If a recipient materially fails to
comply with the terms and conditions of an award, whether stated in a
=46ederal statute, regulation, assurance, application, or notice of
award,
the Secretary may, in addition to imposing any of the special conditions
outlined in Sec. 74.14, take one or more of the following actions, as
appropriate in the circumstances:
(1) Temporarily withhold cash payments pending correction of the
deficiency by the recipient or more severe enforcement action by the
Secretary.
(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.
(3) Wholly or partly suspend or terminate the current award.
(4) Withhold further awards for the project or program.
(5) Take other remedies that may be legally available.
(b) Hearings and appeals. In taking an enforcement action, the
Secretary provides 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.
(c) Effects of suspension and termination. 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 Secretary
expressly authorizes them in the notice of suspension or termination or
subsequently. Other recipient costs during suspension or after
termination which are necessary and not reasonably avoidable are
allowable if--
(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; and
(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.
(d) Relationship to debarment and suspension. The enforcement
remedies identified in this section, including suspension and
termination, do not preclude ED from initiating a debarment or
suspension action against a recipient under 34 CFR part 85 (see
Sec. 74.13).
(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)
</pre>
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