Administration of Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations; Definitions That Apply to Department Regulations
Federal RegisterJul 6, 1994
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SUMMARY: The Secretary revises Part 74 (Administration of Grants) and
amends part 77 (Definitions that Apply to Department Regulations) of
the Education Department General Administrative Regulations (EDGAR).
These final regulations implement Office of Management and Budget (OMB)
Circular A-110 establishing uniform administrative requirements for
Federal grants and agreements awarded to institutions of higher
education, hospitals, and other non-profit organizations.
EFFECTIVE DATE: These regulations will be effective October 1, 1994,
and will apply to new and continuation awards made on or after October
1, 1994, with the exception of Secs. 74.12, 74.21, 74.25, 74.34, 74.44,
74.45, 74.46, 74.47, 74.51, 74.52, 74.53, 74.71, 74.72, and 74.75.
These sections will become effective after the information collection
requirements contained in those sections have been submitted by the
Department of Education and approved by the Office of Management and
Budget under the Paperwork Reduction Act of 1980. A document announcing
the effective date of these sections will be published in the Federal
Register.
FOR FURTHER INFORMATION CONTACT: Greg Vick, U.S. Department of
Education, 400 Maryland Avenue, SW., Room 3636, Regional Office
Building 3, Washington, DC 20202. Telephone: (202) 708-8199.
Individuals who use a telecommunications device for the deaf (TDD) may
call the Federal Information Relay Service (FIRS) at 1-800-877-8339
between 8 a.m. and 8 p.m., Eastern time, Monday through Friday.
SUPPLEMENTARY INFORMATION: On August 27, 1992, OMB published a proposed
version of OMB Circular A-110 (57 FR 39018). OMB received over 200
comments from Federal agencies, non-profit organizations, professional
organizations, and others. After considering all comments, OMB
published the circular in final form on November 29, 1993 (58 FR
62992).
The Secretary revises Parts 74 (Administration of Grants) and 77
(Definitions that Apply to Department Regulations) of EDGAR to
incorporate the revised Circular. The Secretary has deviated from the
text of the Circular to make certain technical changes. In addition,
the Secretary has made two substantive changes to the text of the
Circular.
Section 412 of the Department of Education Organization Act
(DEOA)(20 U.S.C. 3472) provides that the Secretary may delegate the
functions of the Department only to officers and employees of the
Department. Section ______ .4 of the Circular, however, has the effect
of delegating one of the Secretary's functions--granting exceptions to
the regulations as promulgated by the Secretary for Department
programs--to employees of the Office of Management and Budget (OMB). In
order to avoid this conflict with the DEOA, the Secretary is deviating
from the text of the Circular to authorize the Secretary to grant
exceptions to the regulations after consultation with appropriate
officials of OMB.
Section 437(a) of the General Education Provisions Act (GEPA) (20
U.S.C. 1232f) requires that records be retained by recipients of grants
for a period of five years. The record retention period specified in
sec. ______.53(b) of the Circular, as established by OMB, however,
requires recipients to retain financial records, supporting documents,
statistical records, and all other records pertinent to the award for a
period of three years. The Secretary has changed this requirement in
Sec. 74.53(b) of the regulations to require recipients to retain
records for five years in accordance with GEPA.
Summary of Major Provisions
The revised Circular A-110 as implemented in 34 CFR Parts 74 and 77
of the Education Department General Administrative Regulations (EDGAR)
(1) harmonize the regulations with numerous and significant changes in
grant administrative practice and legislation since the original
Circular was issued in 1976; (2) bring the requirements for
institutions of higher education, hospitals, and other non-profit
organizations closer to those contained for State, local, and tribal
governments in OMB Circular A-102 (implemented by the Department at 34
CFR Part 80) so that the Department's grant administration is more
uniform across classes of recipients; (3) reduce regulatory burden on
and give greater flexibility to recipients in numerous cases; and (4)
strengthen certain provisions in order to protect the Federal interest.
The Circular, as implemented in these regulations--
Definitions: Expands or clarifies many of the definitions in the
old A-110 Circular (e.g., suspension); Adds new definitions to 34 CFR
Parts 74 and 77 of EDGAR; and amends Part 77 of to reflect the
definitions contained in Part 80.
Program income: Allows costs incident to the generation of program
income to be deducted from gross income to determine program income;
requires excess program income to be deducted from total project costs;
exempts program income earned after the project period; and clarifies
that all program income should be used by recipients before they
request additional cash payments.
Specifies in Sec. 74.27 that certain OMB circulars and Federal
Register notices apply to grants and subgrants subject to Part 74. The
Secretary adopts the following Circulars and their cost principles as
published in the Federal Register on the dates shown:
A-21--Cost Principles for Educational Institutions--(March
6, 1979 [44 FR 12368]; and August 3, 1982 [47 FR 33658]; and June 9,
1986 [51 FR 20908]; and December 2, 1986 [51 FR 43487]; and October 3,
1991 [56 FR 50224]);
A-87--Cost Principles for State and Local Governments--
(January 28, 1981 [46 FR 9548]); and
A-122--Cost Principles for Nonprofit Organizations--(July
8, 1990 [45 FR 46022]; and March 17, 1980 [46 FR 17185]; and April 27,
1984 [49 FR 18260]; and May 8, 1984 [49 FR 19588]).
These cost principles would apply except to the extent that program
regulations or the regulations in EDGAR require a different outcome.
If OMB publishes at a future date revisions to any of these cost
principles, the Secretary will publish regulatory amendments adopting
the revised circulars.
Record retention: Clarifies the Department's right to have timely
access to recipient personnel and records.
Cost sharing and matching: Allows the fair market value of real
property to be used for cost sharing or matching (with the approval of
the Department); allows a reasonable amount of fringe benefits to be
used for valuing donated services; and adds a section addressing use of
indirect costs as part of cost sharing or matching.
Reports: Provides certain conditions for waiving the requirement
that recipients submit an SF-272 cash transaction report.
Sub-recipients: Describes recipient responsibilities for monitoring
sub-recipients.
Administrative requirements: Revises administrative provisions to
allow the Department to restrict fund transfers greater than 10% among
direct cost categories for projects with a Federal share greater than
$100,000; authorizes the Department to waive certain prior approval and
other administrative and programmatic requirements; authorizes
administrative and programmatic waivers automatically for research
grants unless specifically prohibited; and authorizes the Department to
grant exceptions on a case-by-case basis.
Closeout: Requires recipients to liquidate obligations 90 calendar
days after the funding period or the date the project is completed.
Preaward provisions: Allows the Department to use application forms
other than the SF-424; incorporates requirements of the Federal Grant
and Cooperative Agreement Act concerning the use of grants, cooperative
agreements, or contracts; and addresses the issues of priority setting
and advance public notice.
Property management: Raises the acquisition cost threshold for
defining equipment (formerly nonexpendable personal property) from $300
to $5,000; adds new provisions for intangible property that now
establish title to intangible property and incorporate governmentwide
patent regulations; requires recipients to avoid purchasing unnecessary
or duplicative items of equipment by determining through an appropriate
process that existing equipment is not available; requires recipients
to provide insurance for equipment and real property acquired with
Federal funds; and adds new provisions for federally owned property.
Property trust relationship: Authorizes the Secretary to require
recipients to file liens or other appropriate notices to protect the
federal interest in property acquired or improved with federal funds.
Supplies: Revises standards for supplies (formerly expendable
personal property); raises the threshold to $5,000 for having to
account for unused supplies at the end of a project; and prohibits
recipients from using federally funded supplies to provide services for
a fee lower than that charged by private companies for the same
service.
Procurement standards: Promotes the use of small/minority-owned/
women's business enterprises; requires recipients to establish certain
standards of conduct for its employees engaged in awarding contracts;
increases the small purchase threshold from $10,000 to $25,000;
requires recipients to give preference in contracting to the purchase
of recycled products pursuant to EPA guidelines; and requires that
recipients add clauses to their contracts for Anti-Lobbying and
Debarment and Suspension.
Special award conditions: Provides for written notice to the
applicant or recipient about the reasons for imposing special award
conditions, including an explanation of how recipients may request
reconsideration of these conditions.
In-kind contributions: Redefines third party in-kind contributions
to mean the value of non-cash contributions from third parties, and
provides that all grantee contributions, whether in the form of
property or cash, are considered contributions and are subject to
applicable cost principles.
Metric Usage: Commits the Department to follow the provisions of
E.O. 12770--Metric Usage in Federal Government Programs.
Audit Requirements: Adopts the audit requirements of OMB Circulars
A-128 and A-133. OMB Circular A-128 applies to non-federal audits that
States and local governments are required to obtain. OMB Circular A-133
applies to non-federal audits that institutions of higher education and
other nonprofit organizations are required to obtain. The Secretary
adopts these audit circulars as published in the Federal Register on
the following dates:
A-128--Audits of State and Local Governments--(May 6, 1985
[50 FR 19114]; and December 6, 1985 [50 FR 50027]; and December 23,
1985 [50 FR 52406]; and November 13, 1987 [52 FR 43712]); and
A-133--Audits of Institutions of Higher Education and
Other Nonprofit Organizations--(March 16, 1990 [55 FR 10019]).
In some cases, the regulatory language in these sections represent
changes in policy or procedure in the administration of the affected
grants. In others, the language--even if changed from the current 34
CFR Part 74--reaffirms the existing administrative policy or procedures
of the Department.
If OMB publishes at a future date revisions to any of these audit
requirements, the Secretary will publish regulatory amendments adopting
the revised circulars.
Waiver of Proposed Rulemaking
In accordance with section 431(b)(2)(A) of the General Education
Provisions Act (20 U.S.C. 1232(b)(2)(A)) and the Administrative
Procedure Act (5 U.S.C. 553), it is the practice of the Secretary to
offer interested parties the opportunity to comment on proposed
regulations. However, the Secretary waives rulemaking on these
regulations under section 553(b)(B) of the Administrative Procedure Act
(20 U.S.C. 553(b)(B)). This section provides that rulemaking is not
required when the agency for good cause finds that notice and public
procedure are impracticable, unnecessary, or contrary to the public
interest. The Secretary believes further public comment on the
technical changes made to the Circular is unnecessary because the
substance of these provisions has already been subjected to public
comment during OMB's solicitation of public comment. The Secretary also
believes that further public comment on the substantive changes to the
Circular is unnecessary because these changes incorporate statutory
requirements that the Secretary is not authorized to change.
Executive Order 12866
These final regulations have been reviewed in accordance with
Executive Order 12866. Under the terms of the order the Secretary has
assessed the potential costs and benefits of this regulatory action.
The potential costs associated with the final regulations are those
resulting from statutory requirements and those determined by the
Secretary to be necessary for administering the Department's programs
effectively and efficiently. Burdens, specifically associated with
information collection requirements, if any, are identified and
explained elsewhere in this preamble under the heading Paperwork
Reduction Act of 1980.
In assessing the potential costs and benefits--both quantitative
and qualitative--of these regulations, the Secretary has determined
that the benefits of the regulations justify the costs.
Regulatory Flexibility Act Certification
The Secretary certifies that these regulations would not have a
significant economic impact on a substantial number of small entities.
The small entities that would be affected by these regulations are
institutions of higher education, hospitals, and other non-profit
organizations. However, the regulations would not have a significant
economic impact on these small institutions because the regulations
would not impose excessive regulatory burdens or require unnecessary
Federal supervision. The regulations would impose minimal requirements
to ensure the proper expenditure of program funds.
Paperwork Reduction Act
Sections 74.12, 74.21, 74.25, 74.34, 74.44, 74.45, 74.46, 74.47,
74.51, 74.52, 74.53, 74.71, 74.72, and 74.75 contain information
collection requirements. As required by the Paperwork Reduction Act of
1980, the Department of Education will submit a copy of these sections
to the Office of Management and Budget (OMB) for its review. (44 U.S.C.
3504(h))
These regulations affect institutions of higher education,
hospitals, and other non-profit organizations. Annual public reporting
and recordkeeping burden for this collection of information is
estimated to average 1 hour per response for 7300 respondents,
including the time for gathering and maintaining the data needed, and
completing and reviewing the collection of information.
Organizations and individuals desiring to submit comments on the
information collection requirements should direct them to the Office of
Information and Regulatory Affairs, OMB, room 3002, New Executive
Office Building, Washington, DC 20503; Attention: Daniel J. Chenok.
Assessment of Educational Impact
Based on its own review, the Department has determined that the
regulations in this document do not require transmission of information
that is being gathered by or is available from any other agency of
authority of the United States.
List of Subjects
34 CFR Part 74
Administrative practice and procedure, Education Department, Grant
programs--education, Grant Administration, Hospitals, Institutions of
higher education, Non-profit organizations, Reporting and recordkeeping
requirements.
34 CFR Part 77
Definitions, Education Department, Grant programs--education.
Dated: May 27, 1994.
Richard W. Riley,
Secretary of Education.
(Catalog of Federal Domestic Assistance Number does not apply)
The Secretary amends Title 34 of the Code of Federal Regulations by
revising part 74 and amending part 77 to read as follows:
1. Part 74 is revised to read as follows:
PART 74--ADMINISTRATION OF GRANTS AND AGREEMENTS WITH INSTITUTIONS
OF HIGHER EDUCATION, HOSPITALS, AND OTHER NON-PROFIT ORGANIZATIONS
Subpart A--General
Sec.
74.1 Purpose.
74.2 Definitions.
74.3 Effect on other issuances.
74.4 Deviations.
74.5 Subawards.
Subpart B--Pre-Award Requirements
74.10 Purpose.
74.11 Pre-award policies.
74.12 Forms for applying for Federal assistance.
74.13 Debarment and suspension.
74.14 Special award conditions.
74.15 Metric system of measurement.
74.16 Resource Conservation and Recovery Act.
74.17 Certifications and representations.
Subpart C--Post-Award Requirements
Financial and Program Management
74.20 Purpose of financial and program management.
74.21 Standards for financial management systems.
74.22 Payment.
74.23 Cost sharing or matching.
74.24 Program income.
74.25 Revision of budget and program plans.
74.26 Non-Federal audits.
74.27 Allowable costs.
74.28 Period of availability of funds.
Property Standards
74.30 Purpose of property standards.
74.31 Insurance coverage.
74.32 Real property.
74.33 Federally-owned and exempt property.
74.34 Equipment.
74.35 Supplies and other expendable property.
74.36 Intangible property.
74.37 Property trust relationship.
Procurement Standards
74.40 Purpose of procurement standards.
74.41 Recipient responsibilities.
74.42 Codes of conduct.
74.43 Competition.
74.44 Procurement procedures.
74.45 Cost and price analysis.
74.46 Procurement records.
74.47 Contract administration.
74.48 Contract provisions.
Reports and Records
74.50 Purpose of reports and records.
74.51 Monitoring and reporting program performance.
74.52 Financial reporting.
74.53 Retention and access requirements for records.
Termination and Enforcement
74.60 Purpose of termination and enforcement.
74.61 Termination.
74.62 Enforcement.
Subpart D--After-The-Award Requirements
74.70 Purpose.
74.71 Closeout procedures.
74.72 Subsequent adjustments and continuing responsibilities.
74.73 Collection of amounts due.
Appendix A--Contract Provisions
Authority: 20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110,
unless otherwise noted.
Subpart A--General
Sec. 74.1 Purpose.
(a) This part establishes uniform administrative requirements for
Federal grants and agreements awarded to institutions of higher
education, hospitals, and other non-profit organizations.
(b) The Secretary does not impose additional or inconsistent
requirements, except as provided in Secs. 74.4 and 74.14 or unless
specifically required by Federal statute or executive order.
(c) This part applies to all recipients other than State and local
governments and Indian tribal organizations. Uniform requirements for
State and local governments and tribal organizations are in 34 CFR Part
80--Uniform Administrative Requirements for Grants and Cooperative
Agreements to State and Local Governments.
(d) Non-profit organizations that implement Federal programs for
the States are also subject to State requirements. (20 U.S.C. 1221e-
3(a)(1) and 3474; OMB Circular A-110)
Sec. 74.2 Definitions.
The following definitions apply to this part:
Accrued expenditures means the charges incurred by the recipient
during a given period requiring the provision of funds for--
(1) Goods and other tangible property received;
(2) Services performed by employees, contractors, subrecipients,
and other payees; and
(3) Other amounts becoming owed under programs for which no current
services or performance is required.
Accrued income means the sum of--
(1) Earnings during a given period from--
(i) Services performed by the recipient; and
(ii) Goods and other tangible property delivered to purchasers; and
(2) Amounts becoming owed to the recipient for which no current
services or performance is required by the recipient.
Acquisition cost of equipment 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.
Advance 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.
Award 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--
(1) Technical assistance, which provides services instead of money;
(2) Other assistance in the form of loans, loan guarantees,
interest subsidies, or insurance;
(3) Direct payments of any kind to individuals; and
(4) Contracts which are required to be entered into and
administered under procurement laws and regulations.
Cash contributions means the recipient's cash outlay, including the
outlay of money contributed to the recipient by third parties.
Closeout means the process by which the Secretary determines that
all applicable administrative actions and all required work of the
award have been completed by the recipient and Department of Education
(ED).
Contract means a procurement contract under an award or subaward,
and a procurement subcontract under a recipient's or subrecipient's
contract.
Cost sharing or matching means that portion of project or program
costs not borne by the Federal Government.
Date of completion 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.
Disallowed costs means those charges to an award that the Secretary
determines to be unallowable, in accordance with the applicable Federal
cost principles or other terms and conditions contained in the award.
Equipment 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 $5,000 or more per unit.
However, consistent with recipient policy, lower limits may be
established.
Excess property means property under the control of ED that is no
longer required for its needs or the discharge of its responsibilities.
Exempt property means tangible personal property acquired in whole
or in part with Federal funds, where the Secretary 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.
Federal awarding agency means the Federal agency that provides an
award to the recipient.
Federal funds authorized 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 ED regulations or ED
implementing instructions.
Federal share of real property, equipment, or supplies means that
percentage of the property's acquisition costs and any improvement
expenditures paid with Federal funds.
Funding period means the period of time when Federal funding is
available for obligation by the recipient.
Intangible property and debt instruments 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.
Obligations 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.
Outlays or expenditures 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.
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 copyrights, patents, or securities.
Prior approval means written approval by an authorized official
evidencing prior consent.
Program income 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 Sec. 74.24(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 ED 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.
Project costs means all allowable costs, as established in the
applicable Federal cost principles, incurred by a recipient and the
value of the contributions made by third parties in accomplishing the
objectives of the award during the project period.
Project period means the period established in the award document
during which Federal sponsorship begins and ends.
Property means, unless otherwise stated, real property, equipment,
intangible property and debt instruments.
Real property means land, including land improvements, structures
and appurtenances thereto, but excludes movable machinery and
equipment.
Recipient means an organization receiving financial assistance
directly from ED 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 Secretary. 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.
Research and development 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 these activities
utilize the same facilities as other pesearch and development
activities and where these activities are not included in the
instruction function.
Small awards means a grant or cooperative agreement not exceeding
the small purchase threshold fixed at 41 U.S.C. 403(11) (currently
$25,000).
Subaward means an award of financial assistance in the form of
money, or property in lieu of money, made under an award by a recipient
to an eligible subrecipient or by a subrecipient to a lower tier
subrecipient. The term includes financial assistance when provided by
any legal agreement, even if the agreement is called a contract, but
does not include procurement of goods and services nor does it include
any form of assistance which is excluded from the definition of
``award'' as defined in this section.
Subrecipient means the legal entity to which a subaward is made and
which is accountable to the recipient for the use of the funds
provided. The term may include foreign or international organizations
(such as agencies of the United Nations) at the discretion of the
Secretary.
Supplies means all personal property excluding equipment,
intangible property, and debt instruments as defined in this section,
and inventions of a contractor conceived or first actually reduced to
practice in the performance of work under a funding agreement
(``subject inventions''), as defined in 37 CFR Part 401--Rights to
Inventions Made by Nonprofit Organizations and Small Business Firms
Under Government Grants, Contracts, and Cooperative Agreements.
Suspension means an action by the Secretary that temporarily
withdraws Federal sponsorship under an award, pending corrective action
by the recipient or pending a decision to terminate the award by the
Secretary. Suspension of an award is a separate action from suspension
under 34 CFR Part 85 (Governmentwide Debarment and Suspension
(Nonprocurement) and Governmentwide Requirements for Drug-Free
Workplace (Grants).
Termination means the cancellation of Federal sponsorship, in whole
or in part, under an agreement at any time prior to the date of
completion.
Third party in-kind contributions means the value of non-cash
contributions provided by non-Federal third parties. Third party in-
kind contributions may be in the form of real property, equipment,
supplies and other expendable property, and the value of goods and
services directly benefiting and specifically identifiable to the
project or program.
Unliquidated obligations, for financial reports prepared on a cash
basis, means the amount of obligations incurred by the recipient that
have not been paid. For reports prepared on an accrued expenditure
basis, they represent the amount of obligations incurred by the
recipient for which an outlay has not been recorded.
Unobligated balance means the portion of the funds authorized by
the Secretary that has not been obligated by the recipient and is
determined by deducting the cumulative obligations from the cumulative
funds authorized.
Unrecovered indirect cost means the difference between the amount
awarded and the amount which could have been awarded under the
recipient's approved negotiated indirect cost rate.
Working capital advance means a procedure whereby funds are
advanced to the recipient to cover its estimated disbursement needs for
a given initial period.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
Sec. 74.3 Effect on other issuances.
For 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 are superseded, except to the extent they are required by
statute, or authorized in accordance with the deviations provision in
Sec. 74.4.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
Sec. 74.4 Deviations.
The Secretary, after consultation with the Office of Management and
Budget (OMB), may grant exceptions for classes of grants or recipients
subject to the requirements of this part when exceptions are not
prohibited by statute. However, in the interest of maximum uniformity,
exceptions from the requirements of this part are permitted only in
unusual circumstances. The Secretary may apply more restrictive
requirements to a class of recipients when approved by OMB. The
Secretary 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 the Secretary.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
Sec. 74.5 Subawards.
Unless sections of this part specifically exclude subrecipients
from coverage, the provisions of this part shall be applied to
subrecipients performing work under awards if the subrecipients are
institutions of higher education, hospitals, or other non-profit
organizations. State and local government subrecipients are subject to
the provisions of 34 CFR Part 80--Uniform Administrative Requirements
for Grants and Cooperative Agreements to State and Local Governments.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
Subpart B--Pre-Award Requirements
Sec. 74.10 Purpose.
Sections 74.11 through 74.17 prescribes forms and instructions and
other pre-award matters to be used in applying for awards.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
Sec. 74.11 Pre-award policies.
(a) Use of Grants and Cooperative Agreements, and Contracts. In
each instance, the Secretary decides on the appropriate award
instrument (i.e., grant, cooperative agreement, or contract). The
Federal Grant and Cooperative Agreement Act (31 U.S.C. 6301-08) governs
the use of grants, cooperative agreements, and contracts. A grant or
cooperative agreement shall be used only when the principal purpose of
a transaction is to accomplish a public purpose of support or
stimulation authorized by Federal statute. The statutory criterion for
choosing between grants and cooperative agreements is that for the
latter, substantial involvement is expected between ED and the
recipient when carrying out the activity contemplated in the agreement.
Contracts shall be used when the principal purpose is acquisition of
property or services for the direct benefit or use of the Federal
Government.
(b) Public Notice and Priority Setting. The Secretary notifies the
public of intended funding priorities for discretionary grant programs,
unless funding priorities are established by Federal statute.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
Sec. 74.12 Forms for applying for Federal assistance.
(a) The Secretary complies with the applicable report clearance
requirements of 5 CFR Part 1320--Controlling Paperwork Burdens on the
Public--with regard to all forms used by ED in place of or as a
supplement to the Standard Form 424 (SF-424) series.
(b) Applicants shall use the SF-424 series or those forms and
instructions prescribed by the Secretary.
(c) For Federal programs covered by E.O. 12372--Intergovernmental
Review of Federal Programs (implemented by the Secretary in 34 CFR Part
79--Intergovernmental Review of Department of Education Programs and
Activities)--the applicant shall complete the appropriate sections of
the SF-424 (Application for Federal Assistance) indicating whether the
application was subject to review by the State Single Point of Contact
(SPOC). The name and address of the SPOC for a particular State can be
obtained from the Secretary or the Catalog of Federal Domestic
Assistance (available from the Superintendent of Documents, Government
Printing Office). The SPOC shall advise the applicant whether the
program for which application is made has been selected by that State
for review.
(d) If ED does not use the SF-424 form, the Secretary may indicate
whether the application is subject to review by the State under E.O.
12372.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
Sec. 74.13 Debarment and suspension.
The Secretary and recipients shall comply with the nonprocurement
debarment and suspension common rule (implemented by the Secretary in
34 CFR Part 85). 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.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
Sec. 74.14 Special award conditions.
(a) The Secretary may impose special award conditions, if an
applicant or recipient--
(1) Has a history of poor performance;
(2) Is not financially stable;
(3) Has a management system that does not meet the standards
prescribed in this part;
(4) Has not conformed to the terms and conditions of a previous
award; or
(5) Is not otherwise responsible.
(b) If special award conditions are established under paragraph (a)
of this section, the Secretary notifies the applicant or recipient of--
(1) The nature of the additional requirements;
(2) The reason why the additional requirements are being imposed;
(3) The nature of the corrective action needed;
(4) The time allowed for completing the corrective actions; and
(5) The method for requesting reconsideration of the additional
requirements imposed.
(c) Any special conditions are promptly removed once the conditions
that prompted them have been corrected.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
Sec. 74.15 Metric system of measurement.
The Metric Conversion Act, as amended by the Omnibus Trade and
Competitiveness Act (15 U.S.C. 205) declares that the metric system is
the preferred measurement system for U.S. trade and commerce. The Act
requires each Federal agency to establish a date or dates in
consultation with the Secretary of Commerce, when the metric system of
measurement will be used in the agency's procurements, grants, and
other business-related activities. Metric implementation may take
longer where the use of the system is initially impractical or likely
to cause significant inefficiencies in the accomplishment of federally-
funded activities. The Secretary follows the provisions of E.O. 12770--
Metric Usage in Federal Government Programs.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
Sec. 74.16 Resource Conservation and Recovery Act.
Under the Resource Conservation and Recovery Act (RCRA) (Pub. L.
94-580 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 of the RCRA. Section 6002 requires
that preference be given in procurement programs to the purchase of
specific products containing recycled materials identified in
guidelines developed by the Environmental Protection Agency (EPA) (40
CFR Parts 247-254). Accordingly, recipients 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.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
Sec. 74.17 Certifications and representations.
Unless prohibited by statute or codified regulation, the Secretary
allows 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 ED. Annual
certifications and representations shall be signed by responsible
officials with the authority to ensure recipients' compliance with the
pertinent requirements.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
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.
(20 U.S.C. 1221e-3(a)(1) and 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.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
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-
Federal 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.
(20 U.S.C. 1221e-3(a)(1) and 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.
(20 U.S.C. 1221e-3(a)(1) and 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.
(20 U.S.C. 1221e-3(a)(1) and 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
Federal 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
Federal 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.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
Sec. 74.26 Non-Federal audits.
(a) Recipients and subrecipients that are institutions of higher
education or other non-profit organizations are subject to the audit
requirements contained in OMB Circular A-133--Audits of Institutions of
Higher Education and Other Non-Profit Institutions.
(b) State and local governments are subject to the audit
requirements contained in the Single Audit Act (31 U.S.C. 7501-7) and
the ED regulations implementing OMB Circular A-128--Audits of State and
Local Governments.
(c) Hospitals not covered by the audit provisions of OMB Circular
A-133 are subject to the audit requirements established by the
Secretary.
(d) Commercial organizations are subject to the audit requirements
established by the Secretary or the prime recipient as incorporated
into the award document.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
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 48 CFR Part 31 Contract Cost Principles
organization other than a and Procedures or uniform cost
hospital and an educational accounting standards that comply with
institution. 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(a)(1) and 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.
(20 U.S.C. 1221e-3(a)(1) and 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.
(20 U.S.C. 1221e-3(a)(1) and 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.
(20 U.S.C. 1221e-3(a)(1) and 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.
(20 U.S.C. 1221e-3(a)(1) and 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.
(20 U.S.C. 1221e-3(a)(1) and 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
Federal 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.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
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 Federal 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.
(20 U.S.C. 1221e-3(a)(1) and 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) Unless waived by the Secretary, 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 these data for Federal purposes.
(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 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).
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
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.
(20 U.S.C. 1221e-3(a)(1) and 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 Federal 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 Secs. 74.4 or 74.14.
(20 U.S.C. 1221e-3(a)(1) and 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 Federal, State or local authority that
may have proper jurisdiction.
(20 U.S.C. 1221e-3(a)(1) and 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.
(20 U.S.C. 1221e-3(a)(1) and 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.
(20 U.S.C. 1221e-3(a)(1) and 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.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
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 allowability.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
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.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
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.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
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.
For 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.
(20 U.S.C. 1221e-3(a)(1) and 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.
(20 U.S.C. 1221e-3(a)(1) and 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.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
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.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
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 five 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 5-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 5 years after final disposition.
(3) When records are transferred to or maintained by the Secretary,
the 5-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 5-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 5-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.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
Termination and Enforcement
Sec. 74.60 Purpose of termination and enforcement.
Sections 74.61 and 74.62 establish uniform suspension, termination,
and enforcement procedures.
(20 U.S.C. 1221e-3(a)(1) and 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 paragraphs (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.
(20 U.S.C. 1221e-3(a)(1) and 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
Federal 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).
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
Subpart D--After-the-Award Requirements
Sec. 74.70 Purpose.
Sections 74.71 through 74.73 contain closeout procedures and other
procedures for subsequent disallowances and adjustments.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
Sec. 74.71 Closeout procedures.
(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
Secretary may approve extensions when requested by the recipient.
(b) Unless the Secretary 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 ED
implementing instructions.
(c) The Secretary makes prompt payments to a recipient for
allowable reimbursable costs under the award being closed out.
(d) The recipient shall promptly refund any balances of unobligated
cash that the Secretary has advanced or paid and that is not authorized
to be retained by the recipient for use in other projects. OMB Circular
A-129 governs unreturned amounts that become delinquent debts.
(e) When authorized by the terms and conditions of the award, the
Secretary makes a settlement for any upward or downward adjustments to
the Federal share of costs after closeout reports are received.
(f) The recipient shall account for any real and personal property
acquired with Federal funds or received from the Federal Government in
accordance with Secs. 74.31 through 74.37.
(g) In the event a final audit has not been performed prior to the
closeout of an award, the Secretary shall retain the right to recover
an appropriate amount after fully considering the recommendations on
disallowed costs resulting from the final audit.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
Sec. 74.72 Subsequent adjustments and continuing responsibilities.
(a) The closeout of an award does not affect any of the following:
(1) The right of the Secretary to disallow costs and recover funds
on the basis of a later audit or other review.
(2) The obligation of the recipient to return any funds due as a
result of later refunds, corrections, or other transactions.
(3) Audit requirements in Sec. 74.26.
(4) Property management requirements in Secs. 74.31 through 74.37.
(5) Records retention as required in Sec. 74.53.
(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 Secretary and the recipient, provided the responsibilities of the
recipient referred to in Sec. 74.73(a), including those for property
management as applicable, are considered and provisions made for
continuing responsibilities of the recipient, as appropriate.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
Sec. 74.73 Collection of amounts due.
(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
Secretary may reduce the debt by--
(1) Making an administrative offset against other requests for
reimbursements;
(2) Withholding advance payments otherwise due to the recipient; or
(3) Taking other action permitted by statute.
(b) Except as otherwise provided by law, the Secretary charges
interest on an overdue debt in accordance with 4 CFR Chapter II--
Federal Claims Collection Standards.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
Appendix A to Part 74--Contract Provisions
All contracts, awarded by a recipient including small purchases,
shall contain the following provisions as applicable:
1. Equal Employment Opportunity--All contracts must 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.
2. Copeland ``Anti-Kickback'' Act (18 U.S.C. 874 and 40 U.S.C.
276c)--All contracts and subgrants in excess of $2,000 for
construction or repair awarded by recipients and subrecipients must
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.
3. Davis-Bacon Act, as amended (40 U.S.C. 276a to a-7)--When
required by Federal program legislation, all construction contracts
awarded by the recipients and subrecipients of more than $2,000
shall include a provision for compliance with the Davis-Bacon Act
(40 U.S.C. 276a to a-7) 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.
4. Contract Work Hours and Safety Standards Act (40 U.S.C. 327-
333)--Where applicable, all contracts awarded by recipients in
excess of $2,000 for construction contracts and in excess of $2500
for other contracts that involve the employment of mechanics or
laborers must include a provision for compliance with Sections 102
and 107 of the Contract Work Hours and Safety Standards Act (40
U.S.C. 327-333), 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.
5. Rights to Inventions Made Under a Contract or Agreement--
Contracts or agreements for the performance of experimental,
developmental, or research work must 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.
6. Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water
Pollution Control Act (33 U.S.C. 1251 et seq.), 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 et seq.) and the
Federal Water Pollution Control Act as amended (33 U.S.C. 1251 et
seq.). Violations shall be reported to ED and the Regional Office of
the Environmental Protection Agency (EPA).
7. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)--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. The disclosures are forwarded from tier
to tier up to the recipient.
8. Debarment and Suspension (E.O. 12549 and E.O. 12689)--No
contract may 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 12549 and E.O.
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 purchase threshold
must provide the required certification regarding its exclusion
status and that of its principal employees.
(20 U.S.C. 1221e-3(a)(1) and 3474; OMB Circular A-110)
PART 77--DEFINITIONS THAT APPLY TO DEPARTMENT REGULATIONS
2. The authority citation for Part 77 continues to read as follows:
(Authority: 20 U.S.C. 1221e-3(a)(1), 2831(a), 2974(b), and 3474)
3. In Sec. 77.1, paragraph (b) is revised, and paragraph (c) is
amended by adding the definitions of Budget and Grantee, and removing
the definitions of Award and Project period as follows:
Sec. 77.1 Definitions that apply to all Department programs.
* * * * *
(b) Unless a statute or regulation provides otherwise, the
following definitions in part 74 or 80 of this title apply to the
regulations in Title 34 of the Code of Federal Regulations. The section
of part 74 or 80 that contains the definition is given in parentheses.
Award (Sec. 74.2)
Contract (includes definition of ``Subcontract'') (Sec. 74.2)
(Sec. 80.3)
Equipment (Sec. 74.2) (Sec. 80.3)
Grant (Sec. 80.3)
Personal property (Sec. 74.2)
Project period (Sec. 74.2)
Real property (Sec. 74.2) (Sec. 80.3)
Recipient (Sec. 74.2)
Supplies (Sec. 74.2) (Sec. 80.3)
(c) * * *
Budget means that recipient's financial plan for carrying out the
project or program.
* * * * *
Grantee means the legal entity other than a Government subject to
34 CFR Part 80 to which a grant is awarded and which is accountable to
the Federal Government 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 award document. For example, a grant award
document may name as the grantee one school or campus of a university.
In this case, the granting agency usually intends, or actually intends,
that the named component assume primary or sole responsibility for
administering the grant-assisted project or program. Nevertheless, the
naming of a component of a legal entity as the grantee in a grant award
document shall not be construed as relieving the whole legal entity
from accountability to the Federal Government for the use of the funds
provided. (This definition is not intended to affect the eligibility
provision of grant programs in which eligibility is limited to
organizations which may be only components of a legal entity.) The term
``grantee'' does not include any secondary recipients such as
subgrantees, contractors, etc., who may receive funds from a grantee
pursuant to a grant. The definition of ``grantee'' for State, local,
and tribal governments is contained in 34 CFR 80.3.
* * * * *
[FR Doc. 94-16159 Filed 7-5-94; 8:45 am]
BILLING CODE 4000-01-P
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.