Transcript Administrative Requirements: CFR Title 45, Part 74 & Part

1
SUBPART A: General
Purpose and applicability
2
Sec. 74.1, 92.1, 92.2 & 92.4
Purpose and Applicability
a. This part establishes administrative
requirements for governing institutions of
higher education, hospitals, nonprofit
commercial organizations, state, local and
Indian Tribal governments receiving;
1. (HHS) grants and agreements;
2. Sub-grants or other sub-wards awarded; and
3. Any sub-awards under such grants and
agreements, awarded to carry out the
entitlement programs
3
Purpose and Applicability
b. Nonprofit organizations that implement HHS
programs for the States are also subject to state
requirements.
c. HHS shall not impose additional or inconsistent
requirements.
4
Definitions




74.2 & 92.3
Accrued expenditures mean the charges incurred by
the recipient during a given period;
Advance means a payment made by Treasury check
or other mechanism to a recipient either before outlays
are made or through the use of predetermined
schedules;
Cash contributions means the recipient's cash outlay,
including money contributed to the recipient by third
parties.
Closeout means the process by which the HHS
determines that all administrative actions and required
work have been completed.
5
Definitions




Contract means a procurement contract under an
award or sub-award;
Cost sharing or matching means that portion of
project or program costs not borne by the Feds;
Disallowed costs mean those charges to an award
that the HHS awarding agency determines to be
unallowable;
Equipment means tangible nonexpendable personal
property, having a useful life of more than one year
and an acquisition cost of $5000 or more per unit;
6
Definitions




Funding period means the period of time when
Federal funding is available for obligation by the
recipient;
Obligations means the amounts of orders placed,
contracts and grants awarded, services received and
similar transactions during a given period that requires
payment by the recipient;
Outlays or expenditures mean charges made to the
project or program;
Personal property means property of any kind except
real property;
7
Definitions




Prior approval means written approval by an
authorized HHS 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;
Real property means land, including land
improvements and structures, but excludes movable
machinery and equipment;
Small awards means a grant or cooperative
agreement not exceeding the simplified acquisition
threshold (currently $100,000.00);
8
Definitions




Supplies means all personal property excluding
equipment, intangible property, and debt
instruments;
Third party in-kind contributions means the
value of non-cash contributions provided by nonFederal third parties;
Unobligated balance means the portion of the
funds that has not been obligated by the recipient;
Unrecovered indirect cost means the difference
between the amount awarded and the amount
which could have been awarded under the
recipient's approved negotiated rate;
9
74.3 & 92.5






Effect on Other Issuances.
This part supersedes all administrative
requirements of:
-codified program regulations;
-program manuals;
-handbooks; and
-other non-regulatory materials
which are inconsistent with the requirements of
this part.
10
74.4 & 92.6
Deviations
a.
b.
HHS may apply more restrictive requirements to
a class of awards or recipients when approved by
the Office of Grants and Acquisition Management
(OGAM);
HHS may apply less restrictive requirements
without approval by the OGAM when making
small awards.
Requests for deviations will be considered
favorably whenever the deviation facilitates
comprehensive or integrated service delivery, or
multiple-source consolidate.
11
74.5 & 92.4
Subawards

Administrative requirements shall be applied by
recipients to sub-recipients
12
SUBPART B
Pre-Award Requirements
13
74.10 & 92.10
Purpose
Prescribe Forms, Instructions and Other Preaward Matters to Be Used in Applying for HHS
Awards.
14
Pre-Award Policies
a.
b.
74.11 & 92.11
A grant of cooperative agreement shall be
used only to accomplish a public purpose of
support.
HHS shall notify the public of funding
priorities for discretionary grant programs.
15
Forms for Applying for HHS
Financial Assistance
74.12 & 92.10
a.
b.
c.
d.
HHS awarding agencies shall comply with
the applicable report clearance requirements;
Applicants shall use the SF-424 series;
Applicants shall submit the original and two
copies of any applications;
Doesn’t apply to applications for sub-awards.
16
74.13 & 92.35
Debarment and Suspension

This common rule restricts sub-awards and
contracts with parties that are debarred,
suspended or excluded from or ineligible for
participation in Federal assistance programs or
activities.
17
74.14 & 92.12
Special Award Conditions
a.
HHS may impose additional requirements
as needed, if an applicant or recipient:
☺
Has a history of poor performance;
Is not financially stable;
Has a management system that does not meet
the standards prescribed in this part;
Has not conformed to the terms and conditions of
a previous award; or
Is not otherwise responsible.
☺
☺
☺
☺
18
Special Award Conditions
b.
Special conditions or restrictions may
include (In part 92):
1. Payment on a reimbursement basis;
2. Withholding authority to proceed to the next
phase until receipt of evidence of acceptable
performance;
3. Requiring additional, more detailed financial
reports;
4. Additional project monitoring;
5. Requiring the grantee or sub-grantee to obtain
technical or management assistance; or
6. Establishing additional prior approvals.
19
Special Award Conditions
c.
When additional requirements are imposed,
HHS must notify the recipient in writing as to
the following:
1. The nature of the additional requirements;
2. The reason the additional requirements are
being imposed;
3. The nature of the corrective actions needed;
4. The time allowed for completing the corrective
actions;
5. The method for requesting reconsideration of
the additional requirements imposed.
20
74.15
Metric system of measurement

(*)Declares that the metric system is the
preferred measurement system for U.S.
trade and commerce.

(*) not included in Part 92
21
74.16
Resource Conservation and
Recovery Act

(*)“preference to purchase of products
containing recycled materials”

(*) not included in Part 92
22
Certifications and
Representations

74.17 & 92.10(b)
Submit annually and signed by a
responsible official.
23
SUBPART C
Post-Award
Requirements
Financial and Program Management
24
Purpose of Financial and
Program Management 74.20 & 92.20 (a)
This sections prescribe standards for:
1.
Financial management systems,
2.
Methods for making payments,
3.
Rules for satisfying cost sharing and
matching requirements,
4.
Accounting for program income,
5.
Budget revision approvals,
6.
Making audits,
7.
Determining allowability of cost, and
8.
Establishing fund availability.
25
Standards for financial
management systems
74.21 & 92.20(b)
1. Accurate, current and complete disclosure of
the financial results of each program in
accordance with the reporting requirements;
2. Records that identify the source and application
of funds;
3. Effective control over and accountability for all
funds, property, and other assets;
26
Standards for financial
management systems
4. Comparison of outlays with budget amounts
for each award;
5. Written procedures to minimize the time
elapsing between the transfer of funds and the
issuance of checks, or payments by other
means;
6. Written procedures for determining the
reasonableness, allocability and allowability of
costs in accordance with the applicable cost
principles; and
27
Standards for financial
management systems

7. Accounting records, that are supported by source
documentation.
28
Payment
74.22 & 92.21
1. Recipients will be paid in advance,
if they maintain:
-Written procedures that minimize the time
between transfers and disbursement; and
-Their financial management systems
meets the standards for accountability.
29
Payment


2. Cash advances to a recipient organization
shall be limited to the minimum amounts needed
and be timed to be in accordance with the
actual, immediate cash requirements of the
recipient.
The timing and amount of cash advances shall
be as close as is administratively feasible to the
actual disbursements by the recipient
organization for direct program or project costs
and any allowable indirect costs.
30
Payment
1. Advance payment mechanisms include
electronic funds transfer, with Treasury
checks available on an exception basis
2. Reimbursement method will be used
when the requirements for advancing can’t
be met.
3. Working capital advances method of
payment will be used, if recipients cannot
meet the criteria for advances and
reimbursement; and
4. Use Federal funds last.
31
Payment
HHS will withhold payments for charges made
by recipients if;
-A recipient has failed to comply with the project
objectives; and
-The recipient or sub-recipient is delinquent in a debt
to the United States.
32
Payment
Standards governing the use of banks and
other institutions as depositories of funds are
as follows:



-HHS will not require separate depository accounts;
and
-Advances shall be deposited and maintained in
insured accounts whenever possible.
Recipients are encouraged to use womenowned and minority-owned banks.
33
Advances shall be maintained in an
interest bearing accounts, unless one of
the following conditions apply:
1.
2.
3.
The recipient receives less than $120,000
funding;
The interest bearing account would not earn
interest in excess of $250/$100 per year;
The depository requires a high minimum
balance so high that it would not be feasible
within the expected Federal and non-Federal
cash resources.
34
Payment
Part 74 grantees may retained up to $250 per
year in interest for administrative expense.
Part 92 grantees may retained up to $100 per year
in interest for administrative expense
35
Cost sharing or matching





74.23 & 92.24
All cost sharing or matching contributions,
including cash and third party in-kind, shall
meet all of the following criteria:
Are verifiable from the recipient's records;
Are not included as contributions for any other
federally-assisted project or program;
Are necessary and reasonable for proper and
efficient accomplishment of project or program
objectives;
Are allowable under the applicable cost
principles;
36
Cost sharing or matching



74.23 & 92.24
Are not paid by the Federal Government
under another award, except where
authorized by Federal statute to be used for
cost sharing or matching;
Are provided for in the approved budget;
and
Conform to other provisions of this part, as
applicable.
37
Cost sharing or matching



74.23 & 92.24
Un-recovered indirect costs may be included as
part of cost sharing or matching.
Values for recipient contributions of services and
property shall be established in accordance with
the applicable cost principles.
If the HHS awarding agency authorizes recipients
to donate buildings or land for
construction/facilities acquisition projects or longterm use, the value of the donated property for
cost sharing or matching shall be the lesser of:
38
Cost sharing or matching


74.23 & 92.24
The certified value of the remaining life of the
property recorded in the recipient's
accounting records at the time of donation; or
The current fair market value. HHS awarding
agency may approve the use of the current
fair market value of the donated property.
39
Cost sharing or matching


74.23 & 92.24
Volunteer services furnished by professional and
technical personnel, consultants, and other skilled
and unskilled labor may be counted as cost
sharing or matching if the service is an integral
and necessary part of an approved project or
program.
Rates for volunteer services shall be consistent
with those paid for similar work in the recipient's
organization.
40
Cost sharing or matching


74.23 & 92.24
In those instances in which the required skills
are not found in the recipient's organization,
rates shall be consistent with those paid for
similar work in the labor market
Fringe benefits consistent with those paid that
are reasonable, allowable, and allocable may be
included in the valuation.
41
Cost sharing or matching


74.23 & 92.24
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), provided these services
are in the same skill for which the employee is
normally paid.
Donated supplies may include such items as
expendable property, office supplies, laboratory
supplies or workshop and classroom supplies. Value
assessed to donated supplies shall be reasonable
and shall not exceed the fair market value of the
property at the time of the donation.
42
Cost sharing or matching




74.23 & 92.24
Donated equipment, buildings and land for which title
passes to the recipient may differ according to the purpose
of the award:
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.
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.
The full value of equipment or other capital assets and fair
rental charges for land may be allowed, with approval.
43
Cost sharing or matching



74.23 & 92.24
The value of donated property shall be determined
in accordance with the usual accounting policies of
the recipient, with the following qualifications.
The value of donated land and buildings shall not
exceed its fair market value at the time of donation
to the recipient as established by an independent
appraiser (e.g., certified real property appraiser or
General Services Administration representative)
and certified by a responsible official of the
recipient.
The value of donated equipment shall not exceed
the fair market value of equipment of the same age
and condition at the time of donation.
44
Cost sharing or matching


74.23 & 92.24
The value of donated space shall not exceed
the fair rental value of comparable space as
established by an independent appraisal of
comparable space and facilities in a privatelyowned building in the same locality.
The value of loaned equipment shall not
exceed its fair rental value.
45
Cost sharing or matching



74.23 & 92.24
The following requirements pertain to the recipient's
supporting records for in-kind contributions from
third parties.
Volunteer services shall be documented and, to the
extent feasible, supported by the same methods
used by the recipient for its own employees,
including time records.
The basis for determining the valuation for personal
service, material, equipment, buildings and land
shall be documented.
46
74.24 & 92.25
Program Income
1. Program income shall be retained by the recipient
in accordance with the the award,
It shall be used in one or more of the following
ways:
A.
Added to funds committed - required approval
B.
Finance the non-Federal share – requires
approval; and
C.
Deducted from project costs – automatic
2. No obligation to the Feds for program income
earned after end of the project period;
3. Costs incident to generation of program income
can be deducted unless costs charged to award. 47
Program Income
4. Proceeds from the sale of property shall be
handled according to the Property Standards.
5. Unless the terms and conditions for the award
provide otherwise, recipients shall have
no obligation to HHS with respect to program
income earned from license fees, copyrighted
material, patents, patent applications,
trademarks, and inventions.
48
74.25 & 92.30
Revision of Budget and
Program Plans
Prior approval required for:
1. Change in scope or objective
2. Change key person specified in
application or award (project director)
3. Three-month absence or 25% reduction
in time of approved project director
4. Additional Federal funding
5. Items in cost principles requiring prior
approval
49
Revision of Budget and
Program Plans
6. Transfer of funds allotted for training
allowances;
7. Subcontracting out of any work under
an award (does not apply to supplies,
equipment, general support, etc.)
8. Transfers that are expected to exceed
25percent of the budget, if HHS share
exceeds $250,000.00.
50
Revision of Budget and
Program Plans
9. Incur pre-award costs up to 90 calendar
days prior to award, requires prior
approval.
10. Initiate a one-time extension of the
expiration date of the award of up to 12
months; and
11. Carry forward unobligated balances to
subsequent funding periods
12. Notify Federal Government when funds
expected to exceed needs by $5,000 or 5%
of Federal award.
51
Revision of Budget and
Program Plans




Federal agency respond in 30 days or
notify when to expect decision
When requesting approval for budget
changes, recipients shall make their
requests in writing.
All approvals granted shall not be valid
unless they are in writing; and
No other prior approval may be imposed
unless a deviation has been approved.
52
Non-Federal Audits


74.26 & 92.26
Single Audit Act of 1996
A-133 - States, Local Governments, NPOs
and For-profits
53
74.27 & 92.22
Allowable Costs




A-87 - State and Local Governments
A-122 - NPOs
A-21 - Colleges and Universities
48 CFR part 31- For Profits
54
74.28 & 92.23
Period of Availability of Funds


A recipient may charge only allowable
costs resulting from obligations incurred
during the funding period; and
Any pre-award costs authorized by the
HHS awarding agency
55
Property Standards
56
Insurance coverage


74.31, 92.20(b)(3)
& 92.32(d)
(*)Recipients shall, provide the equivalent
insurance coverage for real property and
equipment acquired with HHS funds as
provided to property owned by the
recipient.
(*) not included in Part 92
58
Equipment
74.34 & 92.32
Title vests in recipient:

The recipient shall not use equipment acquired
with HHS funds to provide services to nonFederal organizations for a fee that is less than
private companies charge for equivalent services.

Use in project as long as needed

Use in other Federal projects with approval

Available on other projects if not interfere; user
charges as program income
61
Equipment
Trade in or sell and apply to replacement
equipment with prior approval
Property management standards:

Equipment records
1. Description
2. Serial, model, etc. number
3. Source, including award number
4. Title vesting
5. Acquisition date

62
Equipment
6. Federal percentage
7. Location and condition
8. Unit acquisition cost
9. Ultimate disposition data
 Physical inventory reconciled with equipment
records once every two years.
 Control system to prevent loss, damage or theft
 Adequate maintenance procedures
 Proper sales procedures
63
Equipment
Disposition - FMV over $5,000 recipients must:
 Compensate Feds and use in other projects
 Sell with approval from feds, feds issue
instructions within (120 days) including:
 Reimburse Feds
 Keep $500 or 10% which ever is less
64
74.35 7 92.33
Supplies and other
expendable property


Title vests in recipient
Residual inventory at termination of
$5,000 or more - reimburse Feds
65
Procurement Standards
66
Purpose of procurement
standards.


74.40 & 92.36
This section set forth standards for
establishing procedures for the procurement
of supplies and other expendable property,
equipment, real property and other services
with Federal funds.
These standards are established to ensure
materials and services are obtained in an
effective manner and in compliance with
applicable Federal statutes and executive
orders.
67
Recipient responsibilities
74.41 & 92.36


The standards do not relieve the recipients of
the contractual responsibilities arising under its
contract's.
The recipient is the responsible without
recourse to HHS, regarding the settlement and
satisfaction of all contractual and administrative
issues arising out of procurements, including
disputes, claims, protests, source evaluation or
other matters of a contractual nature.
68
Codes of conduct


74.42 & 92.36
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.
69
Codes of conduct

74.42 & 92.36
Such a conflict would arise when the
employee, officer, or agent, or 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.
70
Codes of conduct



The officers, employees, and agents of the
recipient shall neither solicit nor accept
gratuities, favors, or anything of monetary
value from contractors, or parties to subagreements.
However, recipients may set standards for
situations in which the financial interest is not
substantial or the gift is an unsolicited item of
nominal value.
The standards of conduct shall provide for
disciplinary actions to be applied for
violations of such standards by officers,
employers, or agents of the recipients.
71
Competition
74.43 & 92.36


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.
72
Competition
74.43 & 92.36

In order to ensure objective contractor
performance and eliminate unfair
competitive advantage, contractors that
develop or draft grant applications, or
contract specifications, requirements,
statements of work, invitations for bids
and/or requests for proposals shall be
excluded from competing for such
procurements.
73
Competition



Awards shall be made to the bidder or offeror
whose responds to the solicitation and is most
advantageous to the recipient, price, quality and
other factors considered.
Solicitations shall clearly set forth all requirements
that the bidder or offeror shall fulfill in order for the
bid or offer to be evaluated.
Any and all bids or offers may be rejected when it
is in the recipient's interest to do so.
74
Procurement procedures
74.44 & 92.36




All recipients shall establish written procurement
procedures.
The procedures shall provide for:
Recipients avoid purchasing unnecessary items;
Where appropriate, an analysis is made of lease
and purchase alternatives to determine which
would be the most economical and practical
procurement;
75
Procurement procedures




Solicitations for goods and services provide for the
following:
A clear and accurate description of the technical
requirements for the material, product or service to
be procured.
The description shall not contain features which
restrict competition.
Requirements the bidder/offeror must fulfill and all
other factors to be used in evaluating bids or
proposals.
76
Procurement procedures




A description, whenever practicable, of technical
requirements, including the range of acceptable
characteristics or minimum acceptable standards.
The specific features of "brand name or equal"
descriptions that bidders are required to meet.
The acceptance, to the extent practicable and
economically feasible, of products and services
dimensioned in the metric system of measurement.
Preference, to the extent practicable and economically
feasible, for products and services that conserve
natural resources and protect the environment and are
energy efficient.
77
Procurement procedures



Positive efforts to utilize small businesses, minorityowned firms, and women's business enterprises,
whenever possible. Recipients shall take all of the
following steps.
Ensure that small businesses, minority-owned firms,
and women's business enterprises are used to the
fullest extent practicable.
Make information 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.
78
Procurement procedures


Consider in the contract process whether
firms competing for larger contracts intend
to subcontract.
Encourage contracting with consortiums of
small businesses, minority-owned firms and
women's business enterprises.
79
Procurement procedures

Use the services and assistance, 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.
80
Procurement procedures






The type of procuring instruments used (e.g.,
fixed price contracts,
cost reimbursable contracts,
purchase orders, and
incentive contracts shall be appropriate for the
particular procurement and for promoting the
best interest of the program or project involved.
The "cost-plus-a-percentage-of-cost" or
"percentage of construction cost" methods of
contracting shall not be used.
81
Procurement procedures



Contracts shall be made only with contractors
who possess the potential ability to perform
successfully.
Consideration shall be given to such matters as
contractor integrity, record of past performance,
financial and technical resources or accessibility
to other necessary resources.
In certain circumstances, contracts with certain
parties are restricted by agencies' (Debarment
and Suspension.“)
82
Procurement procedures


Recipients shall, make available to HHS preaward review and procurement documents,
such as requests for proposals or invitations for
bids, independent cost estimates, etc., when
any of the following conditions apply.
A recipient's procurement procedures or
operation fails to comply with the procurement
standards.
83
Procurement procedures




The procurement is expected to exceed the
simplified acquisition threshold (currently $100,000)
and is to be awarded without competition or only one
bid or offer is received in response to a solicitation.
The procurement, which is expected to exceed the
small purchase threshold, specifies a "brand name"
product.
The proposed award over the simplified acquisition
threshold is to be awarded to other than the
apparent low bidder under a sealed bid procurement.
A proposed contract modification changes the scope
of a contract or increases the contract amount by
more than the amount of the simplified acquisition
threshold
84
Cost and Price Analysis
74.45 & 92.36
Some form for every procurement - made
and document:
 Price analysis - comparison of prices; ie
quotations, market prices and similar
indicia, together with discounts ; and
 Cost analysis - review and evaluation of
elements of cost for reasonableness,
allocability and allowability.
85
Procurement Records
74.46 & 92.36
Excess of small purchase ($100,000)
threshold



Basis for selection
Justification if lack of competition; and
Basis for award cost or price
86
Contract Administration
74.47 & 92.36
System shall be maintained to
include:



Contractor conformance
Adequate and timely follow-up; and
Evaluate contractor performance
87
Contract Provisions
74.48 & 92.36
Provisions to define a sound and
complete agreement;
Excess of small purchase threshold:



Remedies in instances in which a
contractor violates or breaches the
contract terms
Termination of contract; and
Recipient to follow its own requirements
relating to bid guarantees
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HHS shall have access to records
construction or facility improvements
contracts exceeding simplified
acquisition threshold shall at a
minimum contain:
1. A bid guarantee of five percent of the bid price;
2. A performance bond of 100 percent of the
contract price;
3. A payment bond of 100 percent of the contract
price;
4. Bonds from companies holding certificates of
authority;
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5. Feds shall have access to any books,
documents, papers and records of the
contractor; and
6. All contracts, including small purchases shall
contain the procurement provisions of
appendix A.
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Reports and Records
91
74.50 & 92.40
Purpose of Reports and
Records.
Set forth the procedures for monitoring and
reporting financial and program performance
and the necessary standard reporting forms.
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74.51& 92.40
Monitoring and Reporting
Program Performance
1. Recipients are responsible for managing and
monitoring each project, program, subaward,
function or activity supported by the award;
2. Recipients shall monitor subawards to ensure
that subrecipients have met the audit
requirements;
3. HHS will prescribe the frequency with which
the performance reports shall be submitted; and
4. Feds may make site visits as needed.
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Financial Reporting


74.52 & 92.41
Financial Status (SF-269), HHS
awarding agency will determine the
frequency; and
Report of Federal Cash Transactions
(SF- 272) HHS awarding agency will
determine the frequency
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74.53 & 92.42





Retention and Access
Requirements
for
Records
Three years from final expenditure report (or
annual report for renewal awards);
Litigation, claim or audit - retain until resolved
after three years;
Real property and equipment - three years after
final disposition;
When records are maintained or transferred to
the feds the 3 year retention requirement isn’t
applicable;
Copies may be substituted for the original
records if authorized by the HHS awarding
agency.
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Retention and Access
Requirements for Records



Access to records and personnel for
interview and discussion as long as records
retained;
Feds not restrict public access, unless
required by statute; and
Indirect cost rate proposals, cost allocation
plans, etc. - three years from date of
submission or three years from end of
period if not submitted
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