Subpart C_Post Award Requirements
Financial and Program
215.20 Purpose of financial and program
215.21 Standards for
financial management systems.
215.23 Cost sharing or
215.25 Revision of budget
and program plans.
215.28 Period of
availability of funds.
215.30 Purpose of property standards.
215.31 Insurance coverage.
215.32 Real property.
215.33 Federally-owned and exempt
215.35 Supplies and other expendable
215.37 Property trust
215.40 Purpose of procurement standards.
215.41 Recipient responsibilities.
215.42 Codes of conduct.
215.44 Procurement procedures.
215.45 Cost and price analysis.
215.46 Procurement records.
215.47 Contract administration.
215.48 Contract provisions.
Reports and Records
215.50 Purpose of reports and records.
215.51 Monitoring and reporting program
215.53 Retention and access
requirements for records.
Termination and Enforcement
215.60 Purpose of termination and
CFR Part 215 Table of Contents
Sec. 215.20 Purpose of financial and program
Sections 215.21 through 215.28 prescribe
standards for financial management systems, methods for making
payments and rules for: satisfying cost sharing and matching
requirements, accounting for program income, budget revision
approvals, making audits, determining allowability of cost, and
establishing fund availability.
Sec. 215.21 Standards for financial
(a) Federal awarding agencies shall require
recipients to 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 or program in accordance with the reporting requirements set
forth in Sec. 215.52. If a Federal awarding agency requires
reporting on an accrual basis from a recipient that maintains its
records on other than an accrual basis, the recipient shall not be
required to establish an accrual accounting system. These recipients
may develop such accrual data for its reports on the basis of an
analysis of the documentation on hand.
(2) Records that identify adequately the
source and application of funds for federally-sponsored activities.
These records shall contain information pertaining to Federal
awards, authorizations, obligations, unobligated balances, assets,
outlays, income and interest.
(3) Effective control over and
accountability for all funds, property and other assets. Recipients
shall adequately safeguard all such assets and assure they are used
solely for authorized purposes.
(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
Federal awarding agency, at its discretion, may require adequate
bonding and insurance if the bonding and insurance requirements of
the recipient are not deemed adequate to protect the interest of the
(d) The Federal awarding agency may require
adequate fidelity bond coverage where the recipient lacks sufficient
coverage to protect the Federal Government's interest.
(e) Where bonds are required in the
situations described above, 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."
Sec. 215.22 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) Recipients are to be paid in advance,
provided they maintain or demonstrate the willingness to
(1) Written procedures that minimize the
time elapsing between the transfer of funds and disbursement by the
(2) Financial management systems that meet
the standards for fund control and accountability as established in
Sec. 215.21. Cash advances to a recipient organization shall be
limited to the minimum amounts needed and be timed to be in
accordance with the actual, immediate cash requirements of the
recipient organization in carrying out the purpose of the approved
program or project. The timing and amount of cash advances shall be
as close as is administratively feasible to the actual disbursements
by the recipient organization for direct program or project costs
and the proportionate share of any allowable indirect costs.
(c) Whenever possible, advances shall be
consolidated to cover anticipated cash needs for all awards made by
the Federal awarding agency to the recipient.
(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 shall be 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 special Federal awarding agency
instructions for electronic funds transfer.
(e) Reimbursement is the preferred method
when the requirements in Sec. 215.12(b) cannot be met. Federal
awarding agencies may also use this method on any construction
agreement, or if the major portion of the construction project is
accomplished through private market financing or Federal loans, and
the Federal assistance constitutes a minor portion of the
(1) When the reimbursement method is used,
the Federal awarding agency shall make payment within 30 days after
receipt of the billing, unless the billing is improper.
(2) Recipients shall be 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 Federal awarding agency has determined
that reimbursement is not feasible because the recipient lacks
sufficient working capital, the Federal awarding agency may provide
cash on a working capital advance basis. Under this procedure, the
Federal awarding agency shall advance cash to the recipient to cover
its estimated disbursement needs for an initial period generally
geared to the awardee's disbursing cycle. Thereafter, the Federal
awarding agency shall reimburse the recipient for its actual cash
disbursements. The working capital advance method of payment shall
not be used for recipients unwilling or unable to provide timely
advances to their subrecipient to meet the subrecipient's actual
(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 such
funds before requesting additional cash payments.
(h) Unless otherwise required by statute,
Federal awarding agencies shall not withhold payments for proper
charges made by recipients at any time during the project period
unless paragraphs (h)(1) or (2) of this section apply.
(1) A recipient has failed to comply with
the project objectives, the terms and conditions of the award, or
Federal reporting requirements.
(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 such conditions,
the Federal awarding agency may, upon reasonable notice, inform the
recipient that payments shall not be made for obligations incurred
after a specified date until the conditions are corrected or the
indebtedness to the Federal Government is liquidated.
(i) 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, Federal awarding agencies shall
not require separate depository accounts for funds provided to a
recipient or establish any eligibility requirements for depositories
for funds provided to a recipient. However, recipients must be able
to account for the receipt, obligation and expenditure of funds.
(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 paragraphs
(k)(1), (2) or (3) of this section apply.
(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.
(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 at 31 CFR part 205 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 Federal awarding
agency, it waives its right to recover the interest under CMIA.
(m) Except as noted elsewhere in this part,
only the following forms shall be authorized for the recipients in
requesting advances and reimbursements. Federal agencies shall not
require more than an original and two copies of these forms.
(1) SF-270, Request for Advance or
Reimbursement. Each Federal awarding agency shall adopt the SF-270
as a standard form for all nonconstruction programs when electronic
funds transfer or predetermined advance methods are not used.
Federal awarding agencies, however, have the option of using this
form for construction programs in lieu of the SF-271, "Outlay Report
and Request for Reimbursement for Construction Programs."
(2) SF-271, Outlay Report and Request for
Reimbursement for Construction Programs. Each Federal awarding
agency shall adopt the SF-271 as the standard form to be used for
requesting reimbursement for construction programs. However, a
Federal awarding agency may substitute the SF-270 when the Federal
awarding agency determines that it provides adequate information to
meet Federal needs.
Sec. 215.23 Cost sharing or matching.
(a) All contributions, including cash and
third party in-kind, shall be accepted as part of the recipient's
cost sharing or matching when such contributions meet all of the
(1) Are verifiable from the recipient's
(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
(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 Federal awarding agency.
(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 Federal awarding agency.
(c) Values for recipient contributions of
services and property shall be established in accordance with the
applicable cost principles. If a Federal awarding agency authorizes
recipients to donate buildings or land for construction/facilities
acquisition projects or long-term use, the value of the donated
property for cost sharing or matching shall be the lesser of
paragraphs (c)(1) or (2) of this section.
(1) The certified value of the remaining
life of the property recorded in the recipient's accounting records
at the time of donation.
(2) The current fair market value. However,
when there is sufficient justification, the Federal awarding agency
may approve the use of the current fair market value of the donated
property, even if it exceeds the certified value at the time of
donation to the project.
(d) Volunteer services furnished by
professional and technical personnel, consultants, and other skilled
and unskilled labor may be counted as cost sharing or matching if
the service is an integral and necessary part of an approved project
or program. Rates for volunteer services shall be consistent with
those paid for similar work in the recipient's organization. In
those instances in which the required skills are not found in the
recipient organization, rates shall be consistent with those paid
for similar work in the labor market in which the recipient competes
for the kind of services involved. In either case, paid fringe
benefits that are reasonable, allowable, and allocable may be
included in the valuation.
(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
(d) 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.
(e) The method used for determining cost
sharing or matching for donated equipment, buildings and land for
which title passes to the recipient may differ according to the
purpose of the award, if paragraphs (g)(1) or (2) of this section
(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 Federal awarding agency has approved the
(h) The value of donated property shall be
determined in accordance with the usual accounting policies of the
recipient, with the following qualifications.
(1) The value of donated land and buildings
shall not exceed its fair market value at the time of donation to
the recipient as established by an independent appraiser (e.g.,
certified real property appraiser or General Services Administration
representative) and certified by a responsible official of the
(2) The value of donated equipment shall not
exceed the fair market value of equipment of the same age and
condition at the time of donation.
(3) The value of donated space shall not
exceed the fair rental value of comparable space as established by
an independent appraisal of comparable space and facilities in a
privately-owned building in the same locality.
(4)a 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
(i) Volunteer services shall 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 shall
Sec. 215.24 Program income.
(a) Federal awarding agencies shall apply
the standards set forth in this section in requiring recipient
organizations to account for program income related to projects
financed in whole or in part with Federal funds.
(b) Except as provided in paragraph (h) of
this section, program income earned during the project period shall
be retained by the recipient and, in accordance with Federal
awarding agency regulations or the terms and conditions of the
award, shall be used in one or more of the ways listed in the
(1) Added to funds committed to the project
by the Federal awarding agency 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 an agency authorizes the
disposition of program income as described in paragraphs (b)(1) or
(b)(2) of this section, program income in excess of any limits
stipulated shall be used in accordance with paragraph (b)(3) of this
(d) In the event that the Federal awarding
agency does not specify in its regulations or the terms and
conditions of the award how program income is to be used, paragraph
(b)(3) of this section shall apply automatically to all projects or
programs except research. For awards that support research,
paragraph (b)(1) of this section shall apply automatically unless
the awarding agency indicates in the terms and conditions another
alternative on the award or the recipient is subject to special
award conditions, as indicated in Sec. 215.14.
(e) Unless Federal awarding agency
regulations or the terms and conditions of the award provide
otherwise, recipients shall have no obligation to the Federal
Government regarding program income earned after the end of the
(f) If authorized by Federal awarding agency
regulations or the terms and conditions of the award, costs incident
to the generation of program income may be deducted from gross
income to determine program income, provided these costs have not
been charged to the award.\
(g) Proceeds from the sale of property shall
be handled in accordance with the requirements of the Property
Standards (see Sec. 215.30 through Sec. 215.37).
(h) Unless Federal awarding agency
regulations or the terms and condition of the award provide
otherwise, recipients shall have no obligation to the Federal
Government with respect to program income earned from license fees
and royalties for copyrighted material, patents, patent
applications, trademarks, and inventions produced under an award.
However, Patent and Trademark Amendments (35 U.S.C. 18) apply to
inventions made under an experimental, developmental, or research
Sec. 215.25 Revision of budget and program
(a) The budget plan is the financial
expression of the project or program as approved during the award
process. It may include either the Federal and non-Federal share, or
only the Federal share, depending upon Federal awarding agency
requirements. It shall be related to performance for program
evaluation purposes whenever appropriate.
(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
(c) For nonconstruction awards, recipients
shall request prior approvals from Federal awarding agencies for one
or more of the following program or budget related reasons.
(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
(5) The transfer of amounts budgeted for
indirect costs to absorb increases in direct costs, or vice versa,
if approval is required by the Federal awarding agency.
(6) The inclusion, unless waived by the
Federal awarding agency, of costs that require prior approval in
accordance with any of the following, as applicable:
(i) 2 CFR part 220, "Cost Principles for
Educational Institutions (OMB Circular A-21);"
(ii) 2 CFR part 230, "Cost Principles for
Non-Profit Organizations (OMB Circular A-122);"
(iii) 45 CFR part 74, Appendix E, "Principles
for Determining Costs Applicable to Research and Development under
Grants and Contracts with Hospitals;" and
(iv) 48 CFR part 31, "Contract Cost Principles
(7) The transfer of funds allotted for
training allowances (direct payment to trainees) to other categories
(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
(d) No other prior approval requirements for
specific items may be imposed unless a deviation has been approved
(e) Except for requirements listed in
paragraphs (c)(1) and (c)(4) of this section, Federal awarding
agencies are authorized, at their option, to waive cost-related and
administrative prior written approvals required by 2 CFR parts 220
and 230 (OMB Circulars A-21 and A-122). Such waivers may include
authorizing 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 Federal awarding agency. All pre-award costs are incurred at
the recipient's risk (i.e., the Federal awarding agency is under no
obligation to reimburse such costs if for any reason the recipient
does not receive an award or if the award is less than anticipated
and inadequate to cover such costs).
(2) Initiate a one-time extension of the
expiration date of the award of up to 12 months unless one or more
of the following conditions apply. For one-time extensions, the
recipient must notify the Federal awarding agency in writing with
the supporting reasons and revised expiration date at least 10 days
before the expiration date specified in the award. This one-time
extension may not be exercised merely for the purpose of using
(i) The terms and conditions of award
prohibit the extension.
(ii) The extension
requires additional Federal funds.
The extension involves any change in the approved objectives or
scope of the project.
(3) Carry forward unobligated balances to
subsequent funding periods.
(4) For awards that support research, unless
the Federal awarding agency provides otherwise in the award or in
the agency's regulations, the prior approval requirements described
in this paragraph (e) are automatically waived (i.e., recipients
need not obtain such prior approvals) unless one of the conditions
included in paragraph (e)(2) applies.
(f) The Federal awarding agency may, at its
option, restrict the transfer of funds among direct cost categories
or programs, functions and activities for awards in which the
Federal share of the project exceeds $100,000 and the cumulative
amount of such transfers exceeds or is expected to exceed 10 percent
of the total budget as last approved by the Federal awarding agency.
No Federal awarding agency shall permit a transfer that would cause
any Federal appropriation or part thereof to be used for purposes
other than those consistent with the original intent of the
(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 Federal awarding
agencies for budget revisions whenever paragraphs (h)(1), (2) or (3)
of this section apply.
(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.
(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
(i) No other prior approval requirements for
specific items may be imposed unless a deviation has been approved
(j) When a Federal awarding agency makes an
award that provides support for both construction and
nonconstruction work, the Federal awarding agency may require the
recipient to request prior approval from the Federal awarding agency
before making any fund or budget transfers between the two types of
(k) For both construction and
nonconstruction awards, Federal awarding agencies shall require
recipients to notify the Federal awarding agency in writing promptly
whenever the amount of Federal authorized funds is expected to
exceed the needs of the recipient for the project period by more
than $5000 or five percent of the Federal award, whichever is
greater. This notification shall not be required if an application
for additional funding is submitted for a continuation award.
(l) When requesting approval for budget
revisions, recipients shall use the budget forms that were used in
the application unless the Federal awarding agency indicates a
letter of request suffices.
(m) Within 30 calendar days from the date of
receipt of the request for budget revisions, Federal awarding
agencies shall review the request and notify the recipient whether
the budget revisions have been approved. If the revision is still
under consideration at the end of 30 calendar days, the Federal
awarding agency shall inform the recipient in writing of the date
when the recipient may expect the decision.
Sec. 215.26 Non-Federal audits.
(a) Recipients and subrecipients that are
institutions of higher education or other non-profit organizations
(including hospitals) shall be subject to the audit requirements
contained in the Single Audit Act Amendments of 1996 (31 U.S.C.
7501-7507) and revised OMB Circular A-133, "Audits of States, Local
Governments, and Non-Profit Organizations."
(b) State and local governments shall be
subject to the audit requirements contained in the Single Audit Act
Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular
A-133, "Audits of States, Local Governments, and Non-Profit
(c) For-profit hospitals not covered by the
audit provisions of revised OMB Circular A-133 shall be subject to
the audit requirements of the Federal awarding agencies.
(d) Commercial organizations shall be
subject to the audit requirements of the Federal awarding agency or
the prime recipient as incorporated into the award document.
Sec. 215.27 Allowable costs.
For each kind of recipient, there is a set
of Federal principles for determining allowable costs. Allowability
of costs shall be determined in accordance with the cost principles
applicable to the entity incurring the costs. Thus, allowability of
costs incurred by State, local or federally-recognized Indian tribal
governments is determined in accordance with the provisions of 2 CFR
part 225, "Cost Principles for State, Local, and Indian Tribal
Governments (OMB Circular A-87." The allowability of costs incurred
by non-profit organizations is determined in accordance with the
provisions of 2 CFR part 230, "Cost Principles for Non-Profit
Organizations (OMB Circular A-122)." The allowability of costs
incurred by institutions of higher education is determined in
accordance with the provisions of 2 CFR part 220, "Cost Principles
for Educational Institutions (OMB Circular A-21)." The allowability
of costs incurred by hospitals is determined in accordance with the
provisions of Appendix E of 45 CFR part 74, "Principles for
Determining Costs Applicable to Research and Development Under
Grants and Contracts with Hospitals." The allowability of costs
incurred by commercial organizations and those non-profit
organizations listed in Attachment C to Circular A-122 is determined
in accordance with the provisions of the Federal Acquisition
Regulation (FAR) at 48 CFR part 31.
Sec. 215.28 Period of availability of
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 Federal awarding agency.
Sec. 215.29 Conditional exemptions.
(a) OMB authorizes conditional exemption
from OMB administrative requirements and cost principles circulars
for certain Federal programs with statutorily-authorized
consolidated planning and consolidated administrative funding, that
are identified by a Federal agency and approved by the head of the
Executive department or establishment. A Federal agency shall
consult with OMB during its consideration of whether to grant such
(b) To promote efficiency in State and local
program administration, when Federal non-entitlement programs with
common purposes have specific statutorily-authorized consolidated
planning and consolidated administrative funding and where most of
the State agency's resources come from non-Federal sources, Federal
agencies may exempt these covered State-administered,
non-entitlement grant programs from certain OMB grants management
requirements. The exemptions would be from:
(1) The requirements in 2 CFR part 225,
"Cost Principles for State, Local, and Indian Tribal Governments
(OMB Circular A-87)" other than the allocability of costs provisions
that are contained in subsection C.3 of Appendix A to that part;
(2) The requirements in 2 CFR part 220,
"Cost Principles for Educational Institutions (OMB Circular A-21)"
other than the allocability of costs provisions that are contained
in paragraph C.4 in section C of the Appendix to that part;
(3) The requirements in 2 CFR part 230,
"Cost Principles for Non-Profit Organizations (OMB Circular
A-122)"other than the allocability of costs provisions that are in
paragraph A.4 in section A of Appendix A to that part;
(4) The administrative requirements
provisions of part 215 (OMB Circular A-110, "Uniform Administrative
Requirements for Grants and Agreements with Institutions of Higher
Education, Hospitals, and Other Non-Profit Organizations,"); and
(5) The agencies' grants management common
rule (see Sec. 215.5).
(c) When a Federal agency provides this
flexibility, as a prerequisite to a State's exercising this option,
a State must adopt its own written fiscal and administrative
requirements for expending and accounting for all funds, which are
consistent with the provisions of 2 CFR part 225, "Cost Principles
for State, Local, and Indian Tribal Governments (OMB Circular A-87)"
and extend such policies to all subrecipients. These fiscal and
administrative requirements must be sufficiently specific to ensure
that: funds are used in compliance with all applicable Federal
statutory and regulatory provisions, costs are reasonable and
necessary for operating these programs, and funds are not be used
for general expenses required to carry out other responsibilities of
a State or its subrecipients.
Sec. 215.30 Purpose of property
Sections 215.31 through 215.37 set forth
uniform standards governing management and disposition of property
furnished by the Federal Government whose cost was charged to a
project supported by a Federal award. Federal awarding agencies
shall require recipients to observe these standards under awards and
shall not impose additional requirements, unless specifically
required by Federal statute. The recipient may use its own property
management standards and procedures provided it observes the
provisions of Sec. 215.31 through Sec. 215.37.
Sec. 215.31 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.
Sec. 215.32 Real property.
Each Federal awarding agency shall prescribe
requirements for recipients concerning the use and disposition of
real property acquired in whole or in part under awards. Unless
otherwise provided by statute, such requirements, at a minimum,
shall contain the following.
(a) Title to real property shall vest in the
recipient subject to the condition that the recipient shall use the
real property for the authorized purpose of the project as long as
it is needed and shall not encumber the property without approval of
the Federal awarding agency.
(b) The recipient shall obtain written
approval by the Federal awarding agency for the use of real property
in other federally-sponsored projects when the recipient determines
that the property is no longer needed for the purpose of the
original project. Use in other projects shall be limited to those
under federally-sponsored projects (i.e., awards) or programs that
have purposes consistent with those authorized for support by the
Federal awarding agency.
(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 the Federal
awarding agency or its successor Federal awarding agency. The
Federal awarding agency shall observe one or more of the following
(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 Federal awarding
agency and pay the Federal Government for that percentage of the
current fair market value of the property attributable to the
Federal participation in the project (after deducting actual and
reasonable selling and fix-up expenses, if any, from the sales
proceeds). When the recipient is authorized or required to sell the
property, proper sales procedures shall be established that provide
for competition to the extent practicable and result in the highest
(3) The recipient may be directed to
transfer title to the property to the Federal Government or to an
eligible third party provided that, in such cases, the recipient
shall be entitled to compensation for its attributable percentage of
the current fair market value of the property.
Sec. 215.33 Federally-owned and exempt
(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 Federal awarding
agency. Upon completion of the award or when the property is no
longer needed, the recipient shall report the property to the
Federal awarding agency for further Federal agency utilization.
(2) If the Federal awarding agency has no
further need for the property, it shall be declared excess and
reported to the General Services Administration, unless the Federal
awarding agency has statutory authority to dispose of the property
by alternative methods (e.g., the authority provided by the Federal
Technology Transfer Act (15 U.S.C. 3710 (I)) to donate research
equipment to educational and non-profit organizations in accordance
with E.O. 12821, "Improving Mathematics and Science Education in
Support of the National Education Goals" (57 FR 54285, 3 CFR, 1992
Comp., p. 323)). Appropriate instructions shall be issued to the
recipient by the Federal awarding agency.
(b) Exempt property. When statutory
authority exists, the Federal awarding agency has the option to vest
title to property acquired with Federal funds in the recipient
without further obligation to the Federal Government and under
conditions the Federal awarding agency considers appropriate. Such
property is "exempt property." Should a Federal awarding agency not
establish conditions, title to exempt property upon acquisition
shall vest in the recipient without further obligation to the
Sec. 215.34 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 shall not use equipment
acquired with Federal funds to provide services to non-Federal
outside organizations for a fee that is less than private companies
charge for equivalent services, unless specifically authorized by
Federal statute, for as long as the Federal Government retains an
interest in the equipment.
(c) The recipient shall use the equipment in
the project or program for which it was acquired as long as needed,
whether or not the project or program continues to be supported by
Federal funds and shall not encumber the property without approval
of the Federal awarding agency. When no longer needed for the
original project or program, the recipient shall use the equipment
in connection with its other federally-sponsored activities, in the
following order of priority:
(1) Activities sponsored by the Federal
awarding agency which funded the original project, then
(2) Activities sponsored by other Federal
(d) During the time that equipment is used
on the project or program for which it was acquired, the recipient
shall make it available for use on other projects or programs if
such other use will not interfere with the work on the project or
program for which the equipment was originally acquired. First
preference for such other use shall be given to other projects or
programs sponsored by the Federal awarding agency that financed the
equipment;second preference shall be given to projects or programs
sponsored by other Federal awarding agencies. If the equipment is
owned by the Federal Government, use on other activities not
sponsored by the Federal Government shall be permissible if
authorized by the Federal awarding agency. User charges shall be
treated as program income.
(e) When acquiring replacement equipment,
the recipient may use the equipment to be replaced as trade-in or
sell the equipment and use the proceeds to offset the costs of the
replacement equipment subject to the approval of the Federal
(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
(iii) Source of the equipment, including the
(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
(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 the Federal
awarding agency for its share.
(2) Equipment owned by the Federal
Government shall be identified to indicate Federal ownership.
(3) A physical inventory of equipment shall
be taken and the results reconciled with the equipment records at
least once every two years. Any differences between quantities
determined by the physical inspection and those shown in the
accounting records shall be investigated to determine the causes of
the difference. The recipient shall, in connection with the
inventory, verify the existence, current utilization, and continued
need for the equipment.
(4) A control system shall 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 Federal
(5) Adequate maintenance procedures shall be
implemented to keep the equipment in good condition.
(6) Where the recipient is authorized or
required to sell the equipment, proper sales procedures shall be
established which provide for competition to the extent practicable
and result in the highest possible return.
(g) When the recipient no longer needs the
equipment, the equipment may be used for other activities in
accordance with the following standards. For equipment with a
current per unit fair market value of $5000 or more, the recipient
may retain the equipment for other uses provided that compensation
is made to the original Federal awarding agency or its successor.
The amount of compensation shall be computed by applying the
percentage of Federal participation in the cost of the original
project or program to the current fair market value of the
equipment. If the recipient has no need for the equipment, the
recipient shall request disposition instructions from the Federal
awarding agency. The Federal awarding agency shall determine whether
the equipment can be used to meet the agency's requirements. If no
requirement exists within that agency, the availability of the
equipment shall be reported to the General Services Administration
by the Federal awarding agency to determine whether a requirement
for the equipment exists in other Federal agencies. The Federal
awarding agency shall issue instructions to the recipient no later
than 120 calendar days after the recipient's request and the
following procedures shall govern.
(1) If so instructed or if disposition
instructions are not issued within 120 calendar days after the
recipient's request, the recipient shall sell the equipment and
reimburse the Federal awarding agency an amount computed by applying
to the sales proceeds the percentage of Federal participation in the
cost of the original project or program.
However, the recipient shall be permitted to
deduct and retain from the Federal share $500 or ten percent of the
proceeds, whichever is less, for the recipient's selling and
(2) If the recipient is instructed to ship
the equipment elsewhere, the recipient shall be reimbursed by the
Federal Government by an amount which is computed by applying the
percentage of the recipient's participation in the cost of the
original project or program to the current fair market value of the
equipment, plus any reasonable shipping or interim storage costs
(3) If the recipient is instructed to
otherwise dispose of the equipment, the recipient shall be
reimbursed by the Federal awarding agency for such costs incurred in
(4) The Federal awarding agency may reserve
the right to transfer the title to the Federal Government or to a
third party named by the Federal Government when such third party is
otherwise eligible under existing statutes. Such transfer shall be
subject to the following standards.
(i) The equipment shall be appropriately
identified in the award or otherwise made known to the recipient in
(ii) The Federal awarding agency shall issue
disposition instructions within 120 calendar days after receipt of a
final inventory. The final inventory shall list all equipment
acquired with grant funds and federally-owned equipment. If the
Federal awarding agency fails to issue disposition instructions
within the 120 calendar day period, the recipient shall apply the
standards of this section, as appropriate.
(iii) When the Federal awarding agency
exercises its right to take title, the equipment shall be subject to
the provisions for federally-owned equipment.
Sec. 215.35 Supplies and other expendable
(a) Title to supplies and other expendable
property shall vest in the recipient upon acquisition. If there is a
residual inventory of unused supplies exceeding $5000 in total
aggregate value upon termination or completion of the project or
program and the supplies are not needed for any other
federally-sponsored project or program, 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 shall not use supplies
acquired with Federal funds to provide services to non-Federal
outside organizations for a fee that is less than private companies
charge for equivalent services, unless specifically authorized by
Federal statute as long as the Federal Government retains an
interest in the supplies.
Sec. 215.36 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. The Federal awarding
agency(ies) reserve a royalty-free, nonexclusive and irrevocable
right to reproduce, publish, or otherwise use the work for Federal
purposes, and to authorize others to do so.
(b) Recipients are subject to applicable
regulations governing patents and inventions, including
government-wide regulations issued by the Department of Commerce at
37 CFR part 401, "Rights to Inventions Made by Nonprofit
Organizations and Small Business Firms Under Government Grants,
Contracts and Cooperative Agreements."
(c) The Federal Government has the right
(1) Obtain, reproduce, publish or otherwise
use the data first produced under an award.
(3) Authorize others to receive, reproduce,
publish, or otherwise use such data for Federal purposes.
(d) (1) In addition, in response to a
Freedom of Information Act (FOIA) request for research data relating
to published research findings produced under an award that was used
by the Federal Government in developing an agency action that has
the force and effect of law, the Federal awarding agency shall
request, and the recipient shall provide, within a reasonable time,
the research data so that they can be made available to the public
through the procedures established under the FOIA. If the Federal
awarding agency obtains the research data solely in response to a
FOIA request, the agency may charge the requester a reasonable fee
equaling the full incremental cost of obtaining the research data.
This fee should reflect costs incurred by the agency, the recipient,
and the applicable subrecipients. This fee is in addition to any
fees the agency may assess under the FOIA (5 U.S.C.
(2) The following definitions apply for
purposes of paragraph (d) of this section:
(i) Research data is defined as the recorded
factual material commonly accepted in the scientific community as
necessary to validate research findings, but not any of the
following: Preliminary analyses, drafts of scientific papers, plans
for future research, peer reviews, or communications with
colleagues. This "recorded" material excludes physical objects
(e.g., laboratory samples). Research data also do not include:
(A) Trade secrets, commercial information,
materials necessary to be held confidential by a researcher until
they are published, or similar information which is protected under
(B) Personnel and medical information and
similar information the disclosure of which would constitute a
clearly unwarranted invasion of personal privacy, such as
information that could be used to identify a particular person in a
(ii) Published is defined as either
(A) Research findings are published in a
peer-reviewed scientific or technical journal; or
(B) A Federal agency publicly and officially
cites the research findings in support of an agency action that has
the force and effect of law.
(iii) Used by the Federal Government in
developing an agency action that has the force and effect of law is
defined as when an agency publicly and officially cites the research
findings in support of an agency action that has the force and
effect of law.
(e) Title to intangible property and debt
instruments acquired under an award or subaward vests upon
acquisition in the recipient. The recipient shall use that property
for the originally-authorized purpose, and the recipient shall not
encumber the property without approval of the Federal awarding
agency. When no longer needed for the originally authorized purpose,
disposition of the intangible property shall occur in accordance
with the provisions of Sec. 215.34(g).
Sec. 215.37 Property trust relationship.
Real property, equipment, intangible
property and debt instruments that are acquired or improved with
Federal funds shall be held in trust by the recipient as trustee for
the beneficiaries of the project or program under which the property
was acquired or improved. Agencies may require recipients to record
liens or other appropriate notices of record to indicate that
personal or real property has been acquired or improved with Federal
funds and that use and disposition conditions apply to the
Sec. 215.40 Purpose of procurement
Sections 215.41 through 215.48 set forth
standards for use by recipients in establishing procedures for the
procurement of supplies and other expendable property, equipment,
real property and other services with Federal funds. These standards
are furnished to ensure that such materials and services are
obtained in an effective manner and in compliance with the
provisions of applicable Federal statutes and executive orders. No
additional procurement standards or requirements shall be imposed by
the Federal awarding agencies upon recipients, unless specifically
required by Federal statute or executive order or approved by
Sec. 215.41 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 Federal awarding agency,
regarding the settlement and satisfaction of all contractual and
administrative issues arising out of procurements entered into in
support of an award or other agreement. This includes disputes,
claims, protests of award, source evaluation or other matters of a
contractual nature. Matters concerning violation of statute are to
be referred to such Federal, State or local authority as may have
Sec. 215.42 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. Such a conflict
would arise when the employee, officer, or agent, any member of his
or her immediate family, his or her partner, or an organization
which employs or is about to employ any of the parties indicated
herein, has a financial or other interest in the firm selected for
an award. The officers, employees, and agents of the recipient shall
neither solicit nor accept gratuities, favors, or anything of
monetary value from contractors, or parties to subagreements.
However, recipients may set standards for situations in which the
financial interest is not substantial or the gift is an unsolicited
item of nominal value. The standards of conduct shall provide for
disciplinary actions to be applied for violations of such standards
by officers, employees, or agents of the recipient.
Sec. 215.43 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 and/or
requests for proposals shall be excluded from competing for such
procurements. Awards shall be made to the bidder or offeror whose
bid or offer is responsive to the solicitation and is most
advantageous to the recipient, price, quality and other factors
considered. Solicitations shall clearly set forth all requirements
that the bidder or offeror shall fulfill in order for the bid or
offer to be evaluated by the recipient. Any and all bids or offers
may be rejected when it is in the recipient's interest to do so.
Sec. 215.44 Procurement procedures.
(a) All recipients shall establish written
procurement procedures. These procedures shall provide for, at a
minimum, that paragraphs (a)(1), (2) and (3) of this section
(1) Recipients avoid purchasing unnecessary
(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
(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, such 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
(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 such
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
(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
(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
(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
(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
(5) Use the services and assistance, as
appropriate, of such organizations as the Small Business
Administration and the Department of Commerce's Minority Business
Development Agency in the solicitation and utilization of small
businesses, minority-owned firms and women's business
(c) The type of procuring instruments used
(e.g., fixed price contracts, cost reimbursable contracts, purchase
orders, and incentive contracts) shall be determined by the
recipient but shall be appropriate for the particular procurement
and for promoting the best interest of the program or project
involved. The "cost-plus-a-percentage-of-cost" or "percentage of
construction cost" methods of contracting shall not be used.
(d) Contracts shall be made only with
responsible contractors who possess the potential ability to perform
successfully under the terms and conditions of the proposed
procurement. Consideration shall be given to such matters as
contractor integrity, record of past performance, financial and
technical resources or accessibility to other necessary resources.
In certain circumstances, contracts with certain parties are
restricted by agencies' implementation of E.O.s 12549 and 12689,
"Debarment and Suspension."
(e) Recipients shall, on request, make
available for the Federal awarding agency, pre-award review and
procurement documents, such as request for proposals or invitations
for bids, independent cost estimates, etc., when any of the
following conditions apply.
(1) A recipient's procurement procedures or
operation fails to comply with the procurement standards in the
Federal awarding agency's implementation of this part.
(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"
(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.
Sec. 215.45 Cost and price analysis.
Some form of cost or price analysis shall be
made and documented in the procurement files in connection with
every procurement action. Price analysis may be accomplished in
various ways, including the comparison of price quotations
submitted, market prices and similar indicia, together with
discounts. Cost analysis is the review and evaluation of each
element of cost to determine reasonableness, allocability and
Sec. 215.46 Procurement records.
Procurement records and files for purchases
in excess of the small purchase threshold shall 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; and
(c) Basis for award cost or price.
Sec. 215.47 Contract administration.
A system for contract administration shall
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
Sec. 215.48 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 shall 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 such remedial actions as may be
(b) All contracts in excess of the small
purchase threshold shall contain suitable provisions for termination
by the recipient, including the manner by which termination shall be
effected and the basis for settlement. In addition, such contracts
shall describe conditions under which the contract may be terminated
for default as well as conditions where the contract may be
terminated because of circumstances beyond the control of the
(c) Except as otherwise required by statute,
an award that requires the contracting (or subcontracting) for
construction or facility improvements shall provide for the
recipient to follow its own requirements relating to bid guarantees,
performance bonds, and payment bonds unless the construction
contract or subcontract exceeds $100,000.
For those contracts or subcontracts
exceeding $100,000, the Federal awarding agency may accept the
bonding policy and requirements of the recipient, provided the
Federal awarding agency has made a determination that the Federal
Government's interest is adequately protected. If such a
determination has not been made, the minimum requirements shall be
(1) A bid guarantee from each bidder
equivalent to five percent of the bid price. The "bid guarantee"
shall consist of a firm commitment such as a bid bond, certified
check, or other negotiable instrument accompanying a bid as
assurance that the bidder shall, upon acceptance of his bid, execute
such contractual documents as may be required within the time
(2) A performance bond on the part of the
contractor for 100 percent of the contract price. A "performance
bond" is one executed in connection with a contract to secure
fulfillment of all the contractor's obligations under such
(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 in the
situations described herein, the bonds shall be obtained from
companies holding certificates of authority as acceptable sureties
pursuant to 31 CFR part 223, "Surety Companies Doing Business with
the United States."
(d) All negotiated contracts (except those
for less than the small purchase threshold) awarded by recipients
shall include a provision to the effect that the recipient, the
Federal awarding agency, the Comptroller General of the United
States, or any of their duly authorized representatives, shall have
access to any books, documents, papers and records of the contractor
which are directly pertinent to a specific program for the purpose
of making audits, examinations, excerpts and transcriptions.
(e) All contracts, including small
purchases, awarded by recipients and their contractors shall contain
the procurement provisions of appendix A to this part, as
Reports and Records
Sec. 215.50 Purpose of reports and
Sections 215.51 through 215.53 set forth the
procedures for monitoring and reporting on the recipient's financial
and program performance and the necessary standard reporting forms.
They also set forth record retention requirements.
Sec. 215.51 Monitoring and reporting program
(a) Recipients are responsible for managing
and monitoring each project, program, subaward, function or activity
supported by the award. Recipients shall monitor subawards to ensure
subrecipients have met the audit requirements as delineated in Sec.
(b) The Federal awarding agency shall
prescribe the frequency with which the performance reports shall be
submitted. Except as provided in Sec. 215.51(f), performance reports
shall not be required more frequently than quarterly or, less
frequently than annually. Annual reports shall be due 90 calendar
days after the grant year; quarterly or semi-annual reports shall be
due 30 days after the reporting period. The Federal awarding agency
may require annual reports before the anniversary dates of multiple
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 shall not be required after completion of the
(d) When required, performance reports shall
generally contain, for each award, brief information on each of the
(1) A comparison of actual accomplishments
with the goals and objectives established for the period, the
findings of the investigator, or both. Whenever appropriate and the
output of programs or projects can be readily quantified, such
quantitative data should be related to cost data for computation of
(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
(e) Recipients shall not be required to
submit more than the original and two copies of performance
(f) Recipients shall immediately notify the
Federal awarding agency of developments that have a significant
impact on the award-supported activities. Also, notification shall
be given in the case of problems, delays, or adverse conditions
which materially impair the ability to meet the objectives of the
award. This notification shall include a statement of the action
taken or contemplated, and any assistance needed to resolve the
(g) Federal awarding agencies may make site
visits, as needed.
(h) Federal awarding agencies shall comply
with clearance requirements of 5 CFR part 1320 when requesting
performance data from recipients.
Sec. 215.52 Financial reporting.
(a) The following forms or such other forms
as may be approved by OMB are authorized for obtaining financial
information from recipients.
(1) SF-269 or SF-269A, Financial Status
(i) Each Federal awarding agency shall
require recipients to use the SF-269 or SF-269A to report the status
of funds for all nonconstruction projects or programs. A Federal
awarding agency may, however, have the option of not requiring the
SF-269 or SF-269A when the SF-270, Request for Advance or
Reimbursement, or SF-272, Report of Federal Cash Transactions, is
determined to provide adequate information to meet its needs, except
that a final SF-269 or SF-269A shall be required at the completion
of the project when the SF-270 is used only for advances.
(ii) The Federal awarding agency shall
prescribe whether the report shall be on a cash or accrual basis. If
the Federal awarding agency requires accrual information and the
recipient's accounting records are not normally kept on the accrual
basis, the recipient shall not be required to convert its accounting
system, but shall develop such accrual information through best
estimates based on an analysis of the documentation on hand.
(iii) The Federal awarding agency shall
determine the frequency of the Financial Status Report for each
project or program, considering the size and complexity of the
particular project or program. However, the report shall not be
required more frequently than quarterly or less frequently than
annually. A final report shall be required at the completion of the
(iv) The Federal awarding agency shall
require 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 Federal awarding agency
upon request of the recipient.
(2) SF-272, Report of Federal Cash
(i) When funds are advanced to recipients
the Federal awarding agency shall require each recipient to submit
the SF-272 and, when necessary, its continuation sheet, SF-272a. The
Federal awarding agency shall use this report to monitor cash
advanced to recipients and to obtain disbursement information for
each agreement with the recipients.
(ii) Federal awarding agencies may require
forecasts of Federal cash requirements in the "Remarks" section of
(iii) When practical and deemed necessary,
Federal awarding agencies may require recipients to report in the
"Remarks" section the amount of cash advances received in excess of
three days. Recipients shall provide short narrative explanations of
actions taken to reduce the excess balances.
(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 Federal awarding
agencies may require a monthly report from those recipients
receiving advances totaling $1 million or more per year.
(v) Federal awarding agencies may waive the
requirement for submission of the SF-272 for any one of the
(A) When monthly advances do not exceed
$25,000 per recipient, provided that such advances are monitored
through other forms contained in this section;
(B) If, in the Federal awarding agency'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 Federal awarding agency needs
additional information or more frequent reports, the following shall
(1) When additional information is needed to
comply with legislative requirements, Federal awarding agencies
shall issue instructions to require recipients to submit such
information under the "Remarks" section of the reports.
(2) When a Federal awarding agency
determines that a recipient's accounting system does not meet the
standards in Sec. 215.21, additional pertinent information to
further monitor awards may be obtained upon written notice to the
recipient until such time as the system is brought up to standard.
The Federal awarding agency, in obtaining this information, shall
comply with report clearance requirements of 5 CFR part 1320.
(3) Federal awarding agencies are encouraged
to shade out any line item on any report if not necessary.
(4) Federal awarding agencies may accept the
identical information from the recipients in machine readable format
or computer printouts or electronic outputs in lieu of prescribed
(5) Federal awarding agencies may provide
computer or electronic outputs to recipients when such expedites or
contributes to the accuracy of reporting.
Sec. 215.53 Retention and access
requirements for records.
(a) This section sets forth requirements for
record retention and access to records for awards to recipients.
Federal awarding agencies shall not impose any other record
retention or access requirements upon recipients.
(b) Financial records, supporting documents,
statistical records, and all other records pertinent to an award
shall be retained for a period of three years from the date of
submission of the final expenditure report or, for awards that are
renewed quarterly or annually, from the date of the submission of
the quarterly or annual financial report, as authorized by the
Federal awarding agency. The only exceptions are the following.
(1) If any litigation, claim, or audit is
started before the expiration of the 3-year period, the records
shall be retained until all litigation, claims or audit findings
involving the records have been resolved and final action taken.
(2) Records for real property and equipment
acquired with Federal funds shall be retained for 3 years after
(3) When records are transferred to or
maintained by the Federal awarding agency, the 3-year retention
requirement is not applicable to the recipient.
(4) Indirect cost rate proposals, cost
allocations plans, etc. as specified in Sec. 215.53(g).
(c) Copies of original records may be
substituted for the original records if authorized by the Federal
(d) The Federal awarding agency shall
request transfer of certain records to its custody from recipients
when it determines that the records possess long term retention
value. However, in order to avoid duplicate recordkeeping, a Federal
awarding agency may make arrangements for recipients to retain any
records that are continuously needed for joint use.
(e) The Federal awarding agency, the
Inspector General, Comptroller General of the United States, or any
of their duly authorized representatives, have the right of timely
and unrestricted access to any books, documents, papers, or other
records of recipients that are pertinent to the awards, in order to
make audits, examinations, excerpts, transcripts and copies of such
documents. This right also includes timely and reasonable access to
a recipient's personnel for the purpose of interview and discussion
related to such documents. The rights of access in this paragraph
are not limited to the required retention period, but shall last as
long as records are retained.
(f) Unless required by statute, no Federal
awarding agency shall place restrictions on recipients that limit
public access to the records of recipients that are pertinent to an
award, except when the Federal awarding agency can demonstrate that
such records shall be kept confidential and would have been exempted
from disclosure pursuant to the Freedom of Information Act (5 U.S.C.
552) if the records had belonged to the Federal awarding agency.
(g) Indirect cost rate proposals, cost
allocations plans, etc. Paragraphs (g)(1) and (g)(2) of this section
apply to the following types of documents, and their supporting
records: indirect cost rate computations or proposals, cost
allocation plans, and any similar accounting computations of the
rate at which a particular group of costs is chargeable (such as
computer usage chargeback rates or composite fringe benefit rates).
(1) If submitted for negotiation. If the
recipient submits to the Federal awarding agency or the subrecipient
submits to the recipient the proposal, plan, or other computation to
form the basis for negotiation of the rate, then the 3-year
retention period for its supporting records starts on the date of
(2) If not submitted for negotiation. If the
recipient is not required to submit to the Federal awarding agency
or the subrecipient is not required to submit to the recipient the
proposal, plan, or other computation for negotiation purposes, then
the 3-year retention period for the proposal, plan, or other
computation and its supporting records starts at the end of the
fiscal year (or other accounting period) covered by the proposal,
plan, or other computation.
Sec. 215.60 Purpose of termination and
Sections 215.61 and 215.62 set forth uniform
suspension, termination and enforcement procedures.
Sec. 215.61 Termination.
(a) Awards may be terminated in whole or in
part only if paragraphs (a)(1), (2) or (3) of this section apply.
(1) By the Federal awarding agency, if a
recipient materially fails to comply with the terms and conditions
of an award.
(2) By the Federal awarding agency with the
consent of the recipient, in which case the two parties shall agree
upon the termination conditions, including the effective date and,
in the case of partial termination, the portion to be terminated.
(3) By the recipient upon sending to the
Federal awarding agency written notification setting forth the
reasons for such termination, the effective date, and, in the case
of partial termination, the portion to be terminated. However, if
the Federal awarding agency determines in the case of partial
termination that the reduced or modified portion of the grant will
not accomplish the purposes for which the grant was made, it may
terminate the grant in its entirety under either paragraphs (a)(1)
or (2) of this section.
(b) If costs are allowed under an award, the
responsibilities of the recipient referred to in Sec. 215.71(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.
Sec. 215.62 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 Federal awarding
agency may, in addition to imposing any of the special conditions
outlined in Sec. 215.14, 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 Federal awarding agency.
(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
(5) Take other remedies that may be legally
(b) Hearings and appeals. In taking an
enforcement action, the awarding agency shall provide the recipient
an opportunity for hearing, appeal, or other administrative
proceeding to which the recipient is entitled under any statute or
regulation applicable to the action involved.
(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 awarding agency 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 paragraphs
(c)(1) and (2) of this section apply.
(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.
(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,
suspension and termination, do not preclude
a recipient from being subject to debarment and suspension under
E.O.s 12549 and 12689 and the Federal awarding agency implementing
regulations (see Sec. 215.13).