A-110

CHAPTER II—OFFICE OF MANAGEMENT AND

BUDGET CIRCULARS AND GUIDANCE

Part

Page

200–214
215

216–219
220
221–224
225
226–229
230
231–299

[Reserved]
Uniform administrative requirements for grants
and agreements with institutions of higher edu­
cation, hospitals, and other non-profit organiza­
tions (OMB Circular A–110) ..................................
39
[Reserved]

Cost principles for educational institutions (OMB

Circular A–21) .......................................................
68
[Reserved]
Cost principles for state, local, and Indian tribal
governments (OMB Circular A–87) ........................
115
[Reserved]
Cost principles for non-profit organizations (OMB
Circular A–122) .....................................................
144
[Reserved]

37

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00047

Fmt 8008

Sfmt 8008

Y:\SGML\208005.XXX

208005

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00048

Fmt 8008

Sfmt 8008

Y:\SGML\208005.XXX

208005

215.36 Intangible property.
215.37 Property trust relationship.

PARTS 200–214 [RESERVED]
PART 215—UNIFORM ADMINISTRA­
TIVE REQUIREMENTS FOR GRANTS
AND AGREEMENTS WITH INSTITU­
TIONS OF HIGHER EDUCATION,
HOSPITALS, AND OTHER NONPROFIT ORGANIZATIONS (OMB
CIRCULAR A–110)
Sec.
215.0

PROCUREMENT STANDARDS
215.40 Purpose of procurement standards.
215.41 Recipient responsibilities.
215.42 Codes of conduct.
215.43 Competition.
215.44 Procurement procedures.
215.45 Cost and price analysis.
215.46 Procurement records.
215.47 Contract administration.
215.48 Contract provisions.

About this part.

REPORTS AND RECORDS
215.50 Purpose of reports and records.
215.51 Monitoring and reporting program
performance.
215.52 Financial reporting.
215.53 Retention and access requirements
for records.

Subpart A—General
215.1
215.2
215.3
215.4
215.5

Purpose.
Definitions.
Effect on other issuances.
Deviations.
Subawards.

TERMINATION AND ENFORCEMENT

Subpart B—Pre-Award Requirements

215.60 Purpose of termination and enforce­
ment.
215.61 Termination.
215.62 Enforcement.

215.10 Purpose.
215.11 Pre-award policies.
215.12 Forms for applying for Federal assist­
ance.
215.13 Debarment and suspension.
215.14 Special award conditions.
215.15 Metric system of measurement.
215.16 Resource Conservation and Recovery
Act.
215.17 Certifications and representations.

Subpart D—After-the-Award Requirements
215.70 Purpose.
215.71 Closeout procedures.
215.72 Subsequent adjustments and con­
tinuing responsibilities.
215.73 Collection of amounts due.
APPENDIX A TO PART 215—CONTRACT PROVI­

Subpart C—Post-Award Requirements

SIONS

FINANCIAL AND PROGRAM MANAGEMENT

AUTHORITY: 31 U.S.C. 503; 31 U.S.C. 1111; 41
U.S.C. 405; Reorganization Plan No. 2 of 1970;
E.O. 11541, 35 FR 10737, 3 CFR, 1966–1970, p.
939.

215.20 Purpose of financial and program
management.
215.21 Standards for financial management
systems.
215.22 Payment.
215.23 Cost sharing or matching.
215.24 Program income.
215.25 Revision of budget and program
plans.
215.26 Non-Federal audits.
215.27 Allowable costs.
215.28 Period of availability of funds.
215.29 Conditional exemptions.

SOURCE: 69 FR 26281, May 11, 2004, unless
otherwise noted.

§ 215.0 About this part.
(a) Purpose. This part contains OMB
guidance to Federal agencies on the ad­
ministration of grants to and agree­
ments with institutions of higher edu­
cation, hospitals, and other non-profit
organizations. The guidance sets forth
standards for obtaining consistency
and uniformity in the agencies’ admin­
istration of those grants and agree­
ments.
(b) Applicability. (1) Except as pro­
vided herein, the standards set forth in
this part are applicable to all Federal
agencies. If any statute specifically

PROPERTY STANDARDS
215.30 Purpose of property standards.
215.31 Insurance coverage.
215.32 Real property.
215.33 Federally-owned and exempt prop­
erty.
215.34 Equipment.
215.35 Supplies and other expendable prop­
erty.

39

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00049

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

§ 215.1

2 CFR Ch. II (1–1–06 Edition)

prescribes policies or specific require­
ments that differ from the standards
provided in this part, the provisions of
the statute shall govern.
(2) The provisions of subparts A
through D of this part shall be applied
by Federal agencies to recipients. Re­
cipients shall apply the provisions of
those subparts to subrecipients per­
forming substantive work under grants
and agreements that are passed
through or awarded by the primary re­
cipient, if such subrecipients are orga­
nizations described in paragraph (a) of
this section.
(3) This part does not apply to grants,
contracts, or other agreements be­
tween the Federal Government and
units of State or local governments
covered by OMB Circular A–102,
‘‘Grants and Cooperative Agreements
with State and Local Governments’’ 1
and the Federal agencies’ grants man­
agement common rule (see § 215.5)
which standardize the administrative
requirements Federal agencies impose
on State and local grantees. In addi­
tion, subawards and contracts to State
or local governments are not covered
by this part. However, this part applies
to subawards made by State and local
governments to organizations covered
by this part.
(4) Federal agencies may apply the
provisions of subparts A through D of
this part to commercial organizations,
foreign governments, organizations
under the jurisdiction of foreign gov­
ernments, and international organiza­
tions.
(c) OMB responsibilities. OMB is re­
sponsible for:
(1) Issuing and maintaining the guid­
ance in this part.
(2) Interpreting the policy require­
ments in this part and providing assist­
ance to ensure effective and efficient
implementation.
(3) Reviewing Federal agency regula­
tions implementing the guidance in
this part, as required by Executive
Order 12866.
(4) Granting any deviations to Fed­
eral agencies from the guidance in this
part, as provided in § 215.4. Exceptions
will only be made in particular cases

where adequate justification is pre­
sented.
(5) Conducting broad oversight of
government-wide compliance with the
guidance in this part.
(d) Federal agency responsibilities. The
head of each Federal agency that
awards and administers grants and
agreements subject to the guidance in
this part is responsible for:
(1) Implementing the guidance in
subparts A through D of this part by
adopting the language in those sub­
parts unless different provisions are re­
quired by Federal statute or are ap­
proved by OMB.
(2) Ensuring that the agency’s com­
ponents and subcomponents comply
with the agency’s implementation of
the guidance in subparts A through D
of this part.
(3) Requesting approval from OMB
for deviations from the guidance in
subparts A through D of this part in
situations where the guidance requires
that approval.
(4) Performing other functions speci­
fied in this part.
(e) Relationship to previous issuance.
The guidance in this part previously
was issued as OMB Circular A–110. Sub­
parts A through D of this part contain
the guidance that was in the attach­
ment to the OMB circular. Appendix A
to this part contains the guidance that
was in the appendix to the attachment.
(f) Information Contact. Further infor­
mation concerning this part may be ob­
tained by contacting the Office of Fed­
eral Financial Management, Office of
Management and Budget, Washington,
DC 20503, telephone (202) 395–3993.
(g) Termination Review Date. This part
will have a policy review three years
from the date of issuance.

Subpart A—General
§ 215.1

Purpose.

This part establishes uniform admin­
istrative requirements for Federal
grants and agreements awarded to in­
stitutions of higher education, hos­
pitals, and other non-profit organiza­
tions. Federal awarding agencies shall
not impose additional or inconsistent
requirements, except as provided in
§ 215.4, and § 215.14 or unless specifically

1 See 5 CFR 1310.9 for availability of OMB
circulars.

40

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00050

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

OMB Circulars and Guidance

§ 215.2

required by Federal statute or execu­
tive order. Non-profit organizations
that implement Federal programs for
the States are also subject to State re­
quirements.

money; other assistance in the form of
loans, loan guarantees, interest sub­
sidies, or insurance; direct payments of
any kind to individuals; and, contracts
which are required to be entered into
and administered under procurement
laws and regulations.
(f) Cash contributions means the re­
cipient’s cash outlay, including the
outlay of money contributed to the re­
cipient by third parties.
(g) Closeout means the process by
which a Federal awarding agency de­
termines that all applicable adminis­
trative actions and all required work of
the award have been completed by the
recipient and Federal awarding agency.
(h) Contract means a procurement
contract under an award or subaward,
and a procurement subcontract under a
recipient’s or subrecipient’s contract.
(i) Cost sharing or matching means
that portion of project or program
costs not borne by the Federal Govern­
ment.
(j) Date of completion means the date
on which all work under an award is
completed or the date on the award
document, or any supplement or
amendment thereto, on which Federal
sponsorship ends.
(k) Disallowed costs means those
charges to an award that the Federal
awarding agency determines to be un­
allowable, in accordance with the ap­
plicable Federal cost principles or
other terms and conditions contained
in the award.
(l) Equipment means tangible nonexpendable personal property including
exempt property charged directly to
the award having a useful life of more
than one year and an acquisition cost
of $5,000 or more per unit. However,
consistent with recipient policy, lower
limits may be established.
(m) Excess property means property
under the control of any Federal
awarding agency that, as determined
by the head thereof, is no longer re­
quired for its needs or the discharge of
its responsibilities.
(n) Exempt property means tangible
personal property acquired in whole or
in part with Federal funds, where the
Federal awarding agency has statutory
authority to vest title in the recipient

§ 215.2 Definitions.
(a) Accrued expenditures means the
charges incurred by the recipient dur­
ing a given period requiring the provi­
sion of funds for:
(1) Goods and other tangible property
received;
(2) Services performed by employees,
contractors, subrecipients, and other
payees; and,
(3) Other amounts becoming owed
under programs for which no current
services or performance is required.
(b) Accrued income means the sum of:
(1) Earnings during a given period
from:
(i) Services performed by the recipi­
ent, and
(ii) Goods and other tangible prop­
erty delivered to purchasers, and
(2) Amounts becoming owed to the
recipient for which no current services
or performance is required by the re­
cipient.
(c) Acquisition cost of equipment means
the net invoice price of the equipment,
including the cost of modifications, at­
tachments, accessories, or auxiliary
apparatus necessary to make the prop­
erty usable for the purpose for which it
was acquired. Other charges, such as
the cost of installation, transportation,
taxes, duty or protective in-transit in­
surance, shall be included or excluded
from the unit acquisition cost in ac­
cordance with the recipient’s regular
accounting practices.
(d) Advance means a payment made
by Treasury check or other appropriate
payment mechanism to a recipient
upon its request either before outlays
are made by the recipient or through
the use of predetermined payment
schedules.
(e) Award means financial assistance
that provides support or stimulation to
accomplish a public purpose. Awards
include grants and other agreements in
the form of money or property in lieu
of money, by the Federal Government
to an eligible recipient. The term does
not include: technical assistance,
which provides services instead of

41

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00051

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

§ 215.2

2 CFR Ch. II (1–1–06 Edition)

without further obligation to the Fed­
eral Government. An example of ex­
empt property authority is contained
in the Federal Grant and Cooperative
Agreement Act (31 U.S.C. 6306), for
property acquired under an award to
conduct basic or applied research by a
non-profit institution of higher edu­
cation or non-profit organization
whose principal purpose is conducting
scientific research.
(o) Federal awarding agency means
the Federal agency that provides an
award to the recipient.
(p) Federal funds authorized means the
total amount of Federal funds obli­
gated by the Federal Government for
use by the recipient. This amount may
include any authorized carryover of un­
obligated funds from prior funding pe­
riods when permitted by agency regula­
tions or agency implementing instruc­
tions.
(q) Federal share of real property,
equipment, or supplies means that per­
centage of the property’s acquisition
costs and any improvement expendi­
tures paid with Federal funds.
(r) Funding period means the period of
time when Federal funding is available
for obligation by the recipient.
(s) Intangible property and debt instru­
ments means, but is not limited to,
trademarks, copyrights, patents and
patent applications and such property
as loans, notes and other debt instru­
ments, lease agreements, stock and
other instruments of property owner­
ship, whether considered tangible or in­
tangible.
(t) Obligations means the amounts of
orders placed, contracts and grants
awarded, services received and similar
transactions during a given period that
require payment by the recipient dur­
ing the same or a future period.
(u) Outlays or expenditures means
charges made to the project or pro­
gram. They may be reported on a cash
or accrual basis. For reports prepared
on a cash basis, outlays are the sum of
cash disbursements for direct charges
for goods and services, the amount of
indirect expense charged, the value of
third party in-kind contributions ap­
plied and the amount of cash advances
and payments made to subrecipients.
For reports prepared on an accrual
basis, outlays are the sum of cash dis­

bursements for direct charges for goods
and services, the amount of indirect ex­
pense incurred, the value of in-kind
contributions applied, and the net in­
crease (or decrease) in the amounts
owed by the recipient for goods and
other property received, for services
performed by employees, contractors,
subrecipients and other payees and
other amounts becoming owed under
programs for which no current services
or performance are required.
(v) Personal property means property
of any kind except real property. It
may be tangible, having physical exist­
ence, or intangible, having no physical
existence, such as copyrights, patents,
or securities.
(w) Prior approval means written ap­
proval by an authorized official evi­
dencing prior consent.
(x) Program income means gross in­
come earned by the recipient that is di­
rectly generated by a supported activ­
ity or earned as a result of the award
(see exclusions in § 215.24(e) and (h)).
Program income includes, but is not
limited to, income from fees for serv­
ices performed, the use or rental of real
or personal property acquired under
federally-funded projects, the sale of
commodities or items fabricated under
an award, license fees and royalties on
patents and copyrights, and interest on
loans made with award funds. Interest
earned on advances of Federal funds is
not program income. Except as other­
wise provided in Federal awarding
agency regulations or the terms and
conditions of the award, program in­
come does not include the receipt of
principal on loans, rebates, credits, dis­
counts, etc., or interest earned on any
of them.
(y) Project costs means all allowable
costs, as set forth in the applicable
Federal cost principles, incurred by a
recipient and the value of the contribu­
tions made by third parties in accom­
plishing the objectives of the award
during the project period.
(z) Project period means the period es­
tablished in the award document dur­
ing which Federal sponsorship begins
and ends.
(aa) Property means, unless otherwise
stated, real property, equipment, in­
tangible property and debt instru­
ments.

42

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00052

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

OMB Circulars and Guidance

§ 215.2

(bb) Real property means land, includ­
ing land improvements, structures and
appurtenances thereto, but excludes
movable machinery and equipment.
(cc) Recipient means an organization
receiving financial assistance directly
from Federal awarding agencies to
carry out a project or program. The
term includes public and private insti­
tutions of higher education, public and
private hospitals, and other quasi-pub­
lic and private non-profit organizations
such as, but not limited to, community
action agencies, research institutes,
educational associations, and health
centers. The term may include com­
mercial organizations, foreign or inter­
national organizations (such as agen­
cies of the United Nations) which are
recipients, subrecipients, or contrac­
tors or subcontractors of recipients or
subrecipients at the discretion of the
Federal awarding agency. The term
does not include government-owned
contractor-operated facilities or re­
search centers providing continued
support for mission-oriented, largescale programs that are governmentowned or controlled, or are designated
as federally-funded research and devel­
opment centers.
(dd) Research and development means
all research activities, both basic and
applied, and all development activities
that are supported at universities, col­
leges, and other non-profit institu­
tions. ‘‘Research’’ is defined as a sys­
tematic study directed toward fuller
scientific knowledge or understanding
of the subject studied. ‘‘Development’’
is the systematic use of knowledge and
understanding gained from research di­
rected toward the production of useful
materials, devices, systems, or meth­
ods, including design and development
of prototypes and processes. The term
research also includes activities in­
volving the training of individuals in
research techniques where such activi­
ties utilize the same facilities as other
research and development activities
and where such activities are not in­
cluded in the instruction function.
(ee) Small awards means a grant or
cooperative agreement not exceeding
the small purchase threshold fixed at
41 U.S.C. 403(11) (currently $25,000).
(ff) Subaward means an award of fi­
nancial assistance in the form of

money, or property in lieu of money,
made under an award by a recipient to
an eligible subrecipient or by a subrecipient to a lower tier subrecipient.
The term includes financial assistance
when provided by any legal agreement,
even if the agreement is called a con­
tract, but does not include procure­
ment of goods and services nor does it
include any form of assistance which is
excluded from the definition of
‘‘award’’ in § 215.2(e).
(gg) Subrecipient means the legal enti­
ty to which a subaward is made and
which is accountable to the recipient
for the use of the funds provided. The
term may include foreign or inter­
national organizations (such as agen­
cies of the United Nations) at the dis­
cretion of the Federal awarding agen­
cy.
(hh) Supplies means all personal prop­
erty excluding equipment, intangible
property, and debt instruments as de­
fined in this section, and inventions of
a contractor conceived or first actually
reduced to practice in the performance
of work under a funding agreement
(‘‘subject inventions’’), as defined in 37
CFR part 401, ‘‘Rights to Inventions
Made by Nonprofit Organizations and
Small Business Firms Under Govern­
ment Grants, Contracts, and Coopera­
tive Agreements.’’
(ii) Suspension means an action by a
Federal awarding agency that tempo­
rarily withdraws Federal sponsorship
under an award, pending corrective ac­
tion by the recipient or pending a deci­
sion to terminate the award by the
Federal awarding agency. Suspension
of an award is a separate action from
suspension under Federal agency regu­
lations implementing E.O. 12549 (51 FR
6370, 3 CFR, 1986 Comp., p. 189) and E.O.
12689 (54 FR 34131, 3 CFR, 1989 Comp., p.
235), ‘‘Debarment and Suspension.’’
(jj) Termination means the cancella­
tion of Federal sponsorship, in whole or
in part, under an agreement at any
time prior to the date of completion.
(kk) Third party in-kind contributions
means the value of non-cash contribu­
tions provided by non-Federal third
parties. Third party in-kind contribu­
tions may be in the form of real prop­
erty, equipment, supplies and other ex­
pendable property, and the value of
goods and services directly benefiting

43

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00053

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

§ 215.3

2 CFR Ch. II (1–1–06 Edition)

and specifically identifiable to the
project or program.
(ll) Unliquidated obligations, for finan­
cial reports prepared on a cash basis,
means the amount of obligations in­
curred by the recipient that have not
been paid. For reports prepared on an
accrued expenditure basis, they rep­
resent the amount of obligations in­
curred by the recipient for which an
outlay has not been recorded.
(mm) Unobligated balance means the
portion of the funds authorized by the
Federal awarding agency that has not
been obligated by the recipient and is
determined by deducting the cumu­
lative obligations from the cumulative
funds authorized.
(nn) Unrecovered indirect cost means
the difference between the amount
awarded and the amount which could
have been awarded under the recipi­
ent’s approved negotiated indirect cost
rate.
(oo) Working capital advance means a
procedure whereby funds are advanced
to the recipient to cover its estimated
disbursement needs for a given initial
period.

utory. Exceptions on a case-by-case
basis may also be made by Federal
awarding agencies.
§ 215.5 Subawards.
Unless sections of this part specifi­
cally exclude subrecipients from cov­
erage, the provisions of this part shall
be applied to subrecipients performing
work under awards if such subrecipi­
ents are institutions of higher edu­
cation, hospitals or other non-profit or­
ganizations. State and local govern­
ment subrecipients are subject to the
provisions of regulations implementing
the grants management common rule,
‘‘Uniform
Administrative
Require­
ments for Grants and Cooperative
Agreements to State and Local Gov­
ernments,’’ published at 7 CFR parts
3015 and 3016, 10 CFR part 600, 13 CFR
part 143, 15 CFR part 24, 20 CFR part
437, 22 CFR part 135, 24 CFR parts 44, 85,
111, 511, 570, 571, 575, 590, 850, 882, 905,
941, 968, 970, and 990, 28 CFR part 66, 29
CFR parts 97 and 1470, 32 CFR part 278,
34 CFR parts 74 and 80, 36 CFR part
1207, 38 CFR part 43, 40 CFR parts 30, 31,
and 33, 43 CFR part 12, 44 CFR part 13,
45 CFR parts 74, 92, 602, 1157, 1174, 1183,
1234, and 2015, and 49 CFR part 18.

§ 215.3 Effect on other issuances.
For awards subject to this part, all
administrative requirements of codi­
fied program regulations, program
manuals, handbooks and other nonregulatory materials which are incon­
sistent with the requirements of this
part shall be superseded, except to the
extent they are required by statute, or
authorized in accordance with the devi­
ations provision in § 215.4.

[69 FR 26281, May 11, 2004, as amended at 70
FR 51880, Aug. 31, 2005]

Subpart B—Pre-Award

Requirements

§ 215.10 Purpose.
Sections 215.11 through 215.17 pre­
scribe forms and instructions and other
pre-award matters to be used in apply­
ing for Federal awards.

§ 215.4 Deviations.
The Office of Management and Budg­
et (OMB) may grant exceptions for
classes of grants or recipients subject
to the requirements of this part when
exceptions are not prohibited by stat­
ute. However, in the interest of max­
imum uniformity, exceptions from the
requirements of this part shall be per­
mitted only in unusual circumstances.
Federal awarding agencies may apply
more restrictive requirements to a
class of recipients when approved by
OMB. Federal awarding agencies may
apply less restrictive requirements
when awarding small awards, except
for those requirements which are stat­

§ 215.11 Pre-award policies.
(a) Use of Grants and Cooperative
Agreements, and Contracts. In each in­
stance, the Federal awarding agency
shall decide on the appropriate award
instrument (i.e., grant, cooperative
agreement, or contract). The Federal
Grant and Cooperative Agreement Act
(31 U.S.C. 6301–08) governs the use of
grants, cooperative agreements and
contracts. A grant or cooperative
agreement shall be used only when the
principal purpose of a transaction is to
accomplish a public purpose of support
or stimulation authorized by Federal

44

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00054

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

OMB Circulars and Guidance

§ 215.15

statute. The statutory criterion for
choosing between grants and coopera­
tive agreements is that for the latter,
‘‘substantial involvement is expected
between the executive agency and the
State, local government, or other re­
cipient when carrying out the activity
contemplated in the agreement.’’ Con­
tracts shall be used when the principal
purpose is acquisition of property or
services for the direct benefit or use of
the Federal Government.
(b) Public Notice and Priority Set­
ting. Federal awarding agencies shall
notify the public of its intended fund­
ing priorities for discretionary grant
programs, unless funding priorities are
established by Federal statute.

agency regulations implementing E.O.s
12549 and 12689, ‘‘Debarment and Sus­
pension.’’ Under those regulations, cer­
tain parties who are debarred, sus­
pended or otherwise excluded may not
be participants or principals in Federal
assistance awards and subawards, and
in certain contracts under those
awards and subawards.
[70 FR 51879, Aug. 31, 2005]

§ 215.14 Special award conditions.
If an applicant or recipient: has a his­
tory of poor performance, is not finan­
cially stable, has a management sys­
tem that does not meet the standards
prescribed in this part, has not con­
formed to the terms and conditions of
a previous award, or is not otherwise
responsible, Federal awarding agencies
may impose additional requirements as
needed, provided that such applicant or
recipient is notified in writing as to:
the nature of the additional require­
ments, the reason why the additional
requirements are being imposed, the
nature of the corrective action needed,
the time allowed for completing the
corrective actions, and the method for
requesting reconsideration of the addi­
tional requirements imposed. Any spe­
cial conditions shall be promptly re­
moved once the conditions that
prompted them have been corrected.

§ 215.12 Forms for applying for Fed­
eral assistance.
(a) Federal awarding agencies shall
comply with the applicable report
clearance requirements of 5 CFR part
1320, ‘‘Controlling Paperwork Burdens
on the Public,’’ with regard to all
forms used by the Federal awarding
agency in place of or as a supplement
to the Standard Form 424 (SF–424) se­
ries.
(b) Applicants shall use the SF–424
series or those forms and instructions
prescribed by the Federal awarding
agency.
(c) For Federal programs covered by
E.O. 12372, ‘‘Intergovernmental Review
of Federal Programs,’’ (47 FR 30959, 3
CFR, 1982 Comp., p. 197) the applicant
shall complete the appropriate sections
of the SF–424 (Application for Federal
Assistance) indicating whether the ap­
plication was subject to review by the
State Single Point of Contact (SPOC).
The name and address of the SPOC for
a particular State can be obtained from
the Federal awarding agency or the
Catalog of Federal Domestic Assistance.
The SPOC shall advise the applicant
whether the program for which applica­
tion is made has been selected by that
State for review.
(d) Federal awarding agencies that do
not use the SF–424 form should indi­
cate whether the application is subject
to review by the State under E.O. 12372.

§ 215.15 Metric system of measure­
ment.
The Metric Conversion Act, as
amended by the Omnibus Trade and
Competitiveness Act (15 U.S.C. 205) de­
clares that the metric system is the
preferred measurement system for U.S.
trade and commerce. The Act requires
each Federal agency to establish a date
or dates in consultation with the Sec­
retary of Commerce, when the metric
system of measurement will be used in
the agency’s procurements, grants, and
other business-related activities. Met­
ric implementation may take longer
where the use of the system is initially
impractical or likely to cause signifi­
cant inefficiencies in the accomplish­
ment of federally-funded activities.
Federal awarding agencies shall follow
the provisions of E.O. 12770, ‘‘Metric
Usage in Federal Government Pro­
grams’’ (56 FR 35801, 3 CFR, 1991 Comp.,
p. 343).

§ 215.13 Debarment and suspension.
Federal awarding agencies and re­
cipients shall comply with Federal

45

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00055

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

§ 215.16

2 CFR Ch. II (1–1–06 Edition)
data to performance data and develop
unit cost information whenever prac­
tical.
(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 report­
ing requirements set forth in § 215.52. If
a Federal awarding agency requires re­
porting on an accrual basis from a re­
cipient that maintains its records on
other than an accrual basis, the recipi­
ent 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 per­
taining to Federal awards, authoriza­
tions, obligations, unobligated bal­
ances, assets, outlays, income and in­
terest.
(3) Effective control over and ac­
countability for all funds, property and
other assets. Recipients shall ade­
quately safeguard all such assets and
assure they are used solely for author­
ized purposes.
(4) Comparison of outlays with budg­
et 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 redemp­
tion of checks, warrants or payments
by other means for program purposes
by the recipient. To the extent that the
provisions of the Cash Management Im­
provement 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 deter­
mining the reasonableness, allocability
and allowability of costs in accordance
with the provisions of the applicable

§ 215.16 Resource Conservation and
Recovery Act.
Under the Act, any State agency or
agency of a political subdivision of a
State which is using appropriated Fed­
eral funds must comply with section
6002. Section 6002 requires that pref­
erence be given in procurement pro­
grams to the purchase of specific prod­
ucts containing recycled materials
identified in guidelines developed by
the Environmental Protection Agency
(EPA) (40 CFR parts 247–254). Accord­
ingly, State and local institutions of
higher education, hospitals, and nonprofit organizations that receive direct
Federal awards or other Federal funds
shall give preference in their procure­
ment programs funded with Federal
funds to the purchase of recycled prod­
ucts pursuant to the EPA guidelines.
§ 215.17 Certifications and representa­
tions.
Unless prohibited by statute or codi­
fied regulation, each Federal awarding
agency is authorized and encouraged to
allow recipients to submit certifi­
cations and representations required
by statute, executive order, or regula­
tion on an annual basis, if the recipi­
ents have ongoing and continuing rela­
tionships with the agency. Annual cer­
tifications and representations shall be
signed by responsible officials with the
authority to ensure recipients’ compli­
ance with the pertinent requirements.

Subpart C—Post Award

Requirements

FINANCIAL AND PROGRAM MANAGEMENT
§ 215.20 Purpose of financial and pro­
gram management.
Sections 215.21 through 215.28 pre­
scribe standards for financial manage­
ment systems, methods for making
payments and rules for: satisfying cost
sharing and matching requirements,
accounting for program income, budget
revision approvals, making audits, de­
termining allowability of cost, and es­
tablishing fund availability.
§ 215.21 Standards for financial man­
agement systems.
(a) Federal awarding agencies shall
require recipients to relate financial

46

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00056

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

OMB Circulars and Guidance

§ 215.22

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 discre­
tion, may require adequate bonding
and insurance if the bonding and insur­
ance requirements of the recipient are
not deemed adequate to protect the in­
terest of the Federal Government.
(d) The Federal awarding agency may
require adequate fidelity bond coverage
where the recipient lacks sufficient
coverage to protect the Federal Gov­
ernment’s interest.
(e) Where bonds are required in the
situations described above, the bonds
shall be obtained from companies hold­
ing certificates of authority as accept­
able sureties, as prescribed in 31 CFR
part 223, ‘‘Surety Companies Doing
Business with the United States.’’

the actual disbursements by the recipi­
ent 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 recipi­
ent.
(1) Advance payment mechanisms in­
clude, 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 reim­
bursements at least monthly when
electronic fund transfers are not used.
(d) Requests for Treasury check ad­
vance payment shall be submitted on
SF–270, ‘‘Request for Advance or Reim­
bursement,’’ 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 pre­
determined payment schedule or if pre­
cluded by special Federal awarding
agency instructions for electronic
funds transfer.
(e) Reimbursement is the preferred
method when the requirements in
§ 215.12(b) cannot be met. Federal
awarding agencies may also use this
method on any construction agree­
ment, or if the major portion of the
construction project is accomplished
through private market financing or
Federal loans, and the Federal assist­
ance constitutes a minor portion of the
project.
(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 cri­
teria for advance payments and the
Federal awarding agency has deter­
mined that reimbursement is not fea­
sible because the recipient lacks suffi­
cient working capital, the Federal
awarding agency may provide cash on a
working capital advance basis. Under
this procedure, the Federal awarding

§ 215.22 Payment.
(a) Payment methods shall minimize
the time elapsing between the transfer
of funds from the United States Treas­
ury and the issuance or redemption of
checks, warrants, or payment by other
means by the recipients. Payment
methods of State agencies or instru­
mentalities shall be consistent with
Treasury-State CMIA agreements or
default procedures codified at 31 CFR
part 205.
(b) Recipients are to be paid in ad­
vance, provided they maintain or dem­
onstrate the willingness to maintain:
(1) Written procedures that minimize
the time elapsing between the transfer
of funds and disbursement by the re­
cipient, and
(2) Financial management systems
that meet the standards for fund con­
trol and accountability as established
in § 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 ac­
tual, immediate cash requirements of
the recipient organization in carrying
out the purpose of the approved pro­
gram or project. The timing and
amount of cash advances shall be as
close as is administratively feasible to

47

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00057

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

§ 215.22

2 CFR Ch. II (1–1–06 Edition)

agency shall advance cash to the re­
cipient to cover its estimated disburse­
ment needs for an initial period gen­
erally geared to the awardee’s dis­
bursing cycle. Thereafter, the Federal
awarding agency shall reimburse the
recipient for its actual cash disburse­
ments. 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 ac­
tual cash disbursements.
(g) To the extent available, recipi­
ents shall disburse funds available from
repayments to and interest earned on a
revolving fund, program income, re­
bates, refunds, contract settlements,
audit recoveries and interest earned on
such funds before requesting additional
cash payments.
(h) Unless otherwise required by stat­
ute, Federal awarding agencies shall
not withhold payments for proper
charges made by recipients at any time
during the project period unless para­
graphs (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 Pro­
grams.’’ 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 Gov­
ernment is liquidated.
(i) Standards governing the use of
banks and other institutions as deposi­
tories 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 deposi­
tories for funds provided to a recipient.
However, recipients must be able to ac­
count 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 ad­
vances 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 in­
terest bearing account would not be ex­
pected 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 uni­
versities 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 discre­
tionary 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 re­
questing advances and reimburse­
ments. Federal agencies shall not re­
quire more than an original and two
copies of these forms.
(1) SF–270, Request for Advance or
Reimbursement. Each Federal award­
ing agency shall adopt the SF–270 as a
standard form for all nonconstruction
programs when electronic funds trans­
fer or predetermined advance methods

48

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00058

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

OMB Circulars and Guidance

§ 215.23

are not used. Federal awarding agen­
cies, however, have the option of using
this form for construction programs in
lieu of the SF–271, ‘‘Outlay Report and
Request for Reimbursement for Con­
struction Programs.’’
(2) SF–271, Outlay Report and Re­
quest for Reimbursement for Construc­
tion Programs. Each Federal awarding
agency shall adopt the SF–271 as the
standard form to be used for requesting
reimbursement for construction pro­
grams. However, a Federal awarding
agency may substitute the SF–270
when the Federal awarding agency de­
termines that it provides adequate in­
formation to meet Federal needs.

(1) The certified value of the remain­
ing 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 jus­
tification, the Federal awarding agen­
cy may approve the use of the current
fair market value of the donated prop­
erty, 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 un­
skilled labor may be counted as cost
sharing or matching if the service is an
integral and necessary part of an ap­
proved project or program. Rates for
volunteer services shall be consistent
with those paid for similar work in the
recipient’s organization. In those in­
stances 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 mar­
ket in which the recipient competes for
the kind of services involved. In either
case, paid fringe benefits that are rea­
sonable, 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 val­
ued at the employee’s regular rate of
pay (plus an amount of fringe benefits
that are reasonable, allowable, and al­
locable, but exclusive of overhead
costs), provided these services are in
the same skill for which the employee
is normally paid.
(f) Donated supplies may include
such items as expendable equipment,
office supplies, laboratory supplies or
workshop and classroom supplies.
Value assessed to donated supplies in­
cluded in the cost sharing or matching
share shall be reasonable and shall not
exceed the fair market value of the
property at the time of the donation.
(g) The method used for determining
cost sharing or matching for donated
equipment, buildings and land for
which title passes to the recipient may
differ according to the purpose of the
award, if paragraphs (g)(1) or (2) of this
section apply.
(1) If the purpose of the award is to
assist the recipient in the acquisition

§ 215.23 Cost sharing or matching.
(a) All contributions, including cash
and third party in-kind, shall be ac­
cepted as part of the recipient’s cost
sharing or matching when such con­
tributions meet all of the following cri­
teria.
(1) Are verifiable from the recipient’s
records.
(2) Are not included as contributions
for any other federally-assisted project
or program.
(3) Are necessary and reasonable for
proper and efficient accomplishment of
project or program objectives.
(4) Are allowable under the applica­
ble cost principles.
(5) Are not paid by the Federal Gov­
ernment 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 estab­
lished in accordance with the applica­
ble cost principles. If a Federal award­
ing agency authorizes recipients to do­
nate 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 paragraphs (c)(1)
or (2) of this section.

49

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00059

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

§ 215.24

2 CFR Ch. II (1–1–06 Edition)

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, nor­
mally only depreciation or use charges
for equipment and buildings may be
made. However, the full value of equip­
ment or other capital assets and fair
rental charges for land may be allowed,
provided that the Federal awarding
agency has approved the charges.
(h) The value of donated property
shall be determined in accordance with
the usual accounting policies of the re­
cipient, with the following qualifica­
tions.
(1) The value of donated land and
buildings shall not exceed its fair mar­
ket value at the time of donation to
the recipient as established by an inde­
pendent appraiser (e.g., certified real
property appraiser or General Services
Administration representative) and
certified by a responsible official of the
recipient.
(2) The value of donated equipment
shall not exceed the fair market value
of equipment of the same age and con­
dition at the time of donation.
(3) The value of donated space shall
not exceed the fair rental value of com­
parable space as established by an inde­
pendent appraisal of comparable space
and facilities in a privately-owned
building in the same locality.
(4) The value of loaned equipment
shall not exceed its fair rental value.
(5) The following requirements per­
tain to the recipient’s supporting
records for in-kind contributions from
third parties.
(i) Volunteer services shall be docu­
mented and, to the extent feasible, sup­
ported by the same methods used by
the recipient for its own employees.
(ii) The basis for determining the
valuation for personal service, mate­
rial, equipment, buildings and land
shall be documented.

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 ac­
cordance with Federal awarding agency
regulations or the terms and condi­
tions of the award, shall be used in one
or more of the ways listed in the fol­
lowing.
(1) Added to funds committed to the
project by the Federal awarding agency
and recipient and used to further eligi­
ble 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 de­
scribed in paragraphs (b)(1) or (b)(2) of
this section, program income in excess
of any limits stipulated shall be used in
accordance with paragraph (b)(3) of
this section.
(d) In the event that the Federal
awarding agency does not specify in its
regulations or the terms and condi­
tions 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 re­
search. For awards that support re­
search, 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 § 215.14.
(e) Unless Federal awarding agency
regulations or the terms and condi­
tions of the award provide otherwise,
recipients shall have no obligation to
the Federal Government regarding pro­
gram income earned after the end of
the project period.
(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.

§ 215.24 Program income.
(a) Federal awarding agencies shall
apply the standards set forth in this
section in requiring recipient organiza­
tions to account for program income

50

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00060

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

OMB Circulars and Guidance

§ 215.25

(g) Proceeds from the sale of property
shall be handled in accordance with the
requirements of the Property Stand­
ards (see § 215.30 through § 215.37).
(h) Unless Federal awarding agency
regulations or the terms and condition
of the award provide otherwise, recipi­
ents shall have no obligation to the
Federal Government with respect to
program income earned from license
fees and royalties for copyrighted ma­
terial, 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 ex­
perimental, developmental, or research
award.

(6) The inclusion, unless waived by
the Federal awarding agency, of costs
that require prior approval in accord­
ance with any of the following, as ap­
plicable:
(i) 2 CFR part 220, ‘‘Cost Principles
for Educational Institutions (OMB Cir­
cular A–21);’’
(ii) 2 CFR part 230, ‘‘Cost Principles
for Non-Profit Organizations (OMB Cir­
cular A–122);’’
(iii) 45 CFR part 74, Appendix E,
‘‘Principles for Determining Costs Ap­
plicable to Research and Development
under Grants and Contracts with Hos­
pitals;’’ and
(iv) 48 CFR part 31, ‘‘Contract Cost
Principles and Procedures.’’
(7) The transfer of funds allotted for
training allowances (direct payment to
trainees) to other categories of ex­
pense.
(8) Unless described in the applica­
tion and funded in the approved
awards, the subaward, transfer or con­
tracting out of any work under an
award. This provision does not apply to
the purchase of supplies, material,
equipment or general support services.
(d) No other prior approval require­
ments for specific items may be im­
posed unless a deviation has been ap­
proved by OMB.
(e) Except for requirements listed in
paragraphs (c)(1) and (c)(4) of this sec­
tion, Federal awarding agencies are au­
thorized, at their option, to waive costrelated and administrative prior writ­
ten approvals required by 2 CFR parts
220 and 230 (OMB Circulars A–21 and A–
122). Such waivers may include author­
izing 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 re­
cipient’s risk (i.e., the Federal award­
ing agency is under no obligation to re­
imburse 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-

§ 215.25 Revision of budget and pro­
gram plans.
(a) The budget plan is the financial
expression of the project or program as
approved during the award process. It
may include either the Federal and
non-Federal share, or only the Federal
share, depending upon Federal award­
ing agency requirements. It shall be re­
lated to performance for program eval­
uation purposes whenever appropriate.
(b) Recipients are required to report
deviations from budget and program
plans, and request prior approvals for
budget and program plan revisions, in
accordance with this section.
(c) For nonconstruction awards, re­
cipients 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 objec­
tive 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 ap­
proved project director or principal in­
vestigator.
(4) The need for additional Federal
funding.
(5) The transfer of amounts budgeted
for indirect costs to absorb increases in
direct costs, or vice versa, if approval
is required by the Federal awarding
agency.

51

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00061

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

§ 215.26

2 CFR Ch. II (1–1–06 Edition)

time extensions, the recipient must no­
tify the Federal awarding agency in
writing with the supporting reasons
and revised expiration date at least 10
days before the expiration date speci­
fied in the award. This one-time exten­
sion may not be exercised merely for
the purpose of using unobligated bal­
ances.
(i) The terms and conditions of award
prohibit the extension.
(ii) The extension requires additional
Federal funds.
(iii) The extension involves any
change in the approved objectives or
scope of the project.
(3) Carry forward unobligated bal­
ances 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 ap­
proval requirements described in this
paragraph (e) are automatically waived
(i.e., recipients need not obtain such
prior approvals) unless one of the con­
ditions included in paragraph (e)(2) ap­
plies.
(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 per­
cent of the total budget as last ap­
proved by the Federal awarding agen­
cy. 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 in­
tent of the appropriation.
(g) All other changes to nonconstruc­
tion budgets, except for the changes de­
scribed in paragraph (j) of this section,
do not require prior approval.
(h) For construction awards, recipi­
ents shall request prior written ap­
proval promptly from Federal awarding
agencies for budget revisions whenever
paragraphs (h)(1), (2) or (3) of this sec­
tion 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 in­
volves specific costs for which prior
written approval requirements may be
imposed consistent with applicable
OMB cost principles listed in § 215.27.
(i) No other prior approval require­
ments for specific items may be im­
posed unless a deviation has been ap­
proved by OMB.
(j) When a Federal awarding agency
makes an award that provides support
for both construction and nonconstruc­
tion work, the Federal awarding agen­
cy may require the recipient to request
prior approval from the Federal award­
ing agency before making any fund or
budget transfers between the two types
of work supported.
(k) For both construction and nonconstruction awards, Federal awarding
agencies shall require recipients to no­
tify 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 award­
ing agency indicates a letter of request
suffices.
(m) Within 30 calendar days from the
date of receipt of the request for budg­
et 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.
[69 FR 26281, May 11, 2004, as amended at 70
FR 51880, Aug. 31, 2005]

§ 215.26 Non-Federal audits.
(a) Recipients and subrecipients that
are institutions of higher education or
other non-profit organizations (includ­
ing 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

52

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00062

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

OMB Circulars and Guidance

§ 215.29

Circular A–133, ‘‘Audits of States,
Local Governments, and Non-Profit Or­
ganizations.’’
(b) State and local governments shall
be subject to the audit requirements
contained in the Single Audit Act
Amendments of 1996 (31 U.S.C. 7501–
7507) and revised OMB Circular A–133,
‘‘Audits of States, Local Governments,
and Non-Profit Organizations.’’
(c) For-profit hospitals not covered
by the audit provisions of revised OMB
Circular A–133 shall be subject to the
audit requirements of the Federal
awarding agencies.
(d) Commercial organizations shall
be subject to the audit requirements of
the Federal awarding agency or the
prime recipient as incorporated into
the award document.

visions of the Federal Acquisition Reg­
ulation (FAR) at 48 CFR part 31.
[70 FR 51880, Aug. 31, 2005]

§ 215.28

Period of availability of funds.

Where a funding period is specified, a
recipient may charge to the grant only
allowable costs resulting from obliga­
tions incurred during the funding pe­
riod and any pre-award costs author­
ized by the Federal awarding agency.
§ 215.29

Conditional exemptions.

(a) OMB authorizes conditional ex­
emption from OMB administrative re­
quirements and cost principles circu­
lars for certain Federal programs with
statutorily-authorized
consolidated
planning and consolidated administra­
tive 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 consider­
ation of whether to grant such an ex­
emption.
(b) To promote efficiency in State
and local program administration,
when Federal non-entitlement pro­
grams with common purposes have spe­
cific statutorily-authorized consoli­
dated planning and consolidated ad­
ministrative 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 pro­
visions 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 Or­
ganizations (OMB Circular A–122)’’

§ 215.27 Allowable costs.
For each kind of recipient, there is a
set of Federal principles for deter­
mining allowable costs. Allowability of
costs shall be determined in accord­
ance 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 Govern­
ments (OMB Circular A–87.’’ The allowability of costs incurred by non-profit
organizations is determined in accord­
ance with the provisions of 2 CFR part
230, ‘‘Cost Principles for Non-Profit Or­
ganizations (OMB Circular A–122).’’ The
allowability of costs incurred by insti­
tutions of higher education is deter­
mined in accordance with the provi­
sions of 2 CFR part 220, ‘‘Cost Prin­
ciples for Educational Institutions
(OMB Circular A–21).’’ The allowability
of costs incurred by hospitals is deter­
mined in accordance with the provi­
sions of Appendix E of 45 CFR part 74,
‘‘Principles for Determining Costs Ap­
plicable to Research and Development
Under Grants and Contracts with Hos­
pitals.’’ The allowability of costs in­
curred by commercial organizations
and those non-profit organizations list­
ed in Attachment C to Circular A–122 is
determined in accordance with the pro­

53

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00063

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

§ 215.30

2 CFR Ch. II (1–1–06 Edition)

other than the allocability of costs pro­
visions 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 Require­
ments for Grants and Agreements with
Institutions of Higher Education, Hos­
pitals, and Other Non-Profit Organiza­
tions,’’); and
(5) The agencies’ grants management
common rule (see § 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 ex­
pending and accounting for all funds,
which are consistent with the provi­
sions of 2 CFR part 225, ‘‘Cost Prin­
ciples for State, Local, and Indian
Tribal Governments (OMB Circular A–
87)’’ and extend such policies to all subrecipients. These fiscal and administra­
tive requirements must be sufficiently
specific to ensure that: funds are used
in compliance with all applicable Fed­
eral statutory and regulatory provi­
sions, costs are reasonable and nec­
essary 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.

§ 215.31

§ 215.32

PROPERTY STANDARDS
of

property

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 require­
ments, 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 with­
out approval of the Federal awarding
agency.
(b) The recipient shall obtain written
approval by the Federal awarding agen­
cy 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 pur­
poses consistent with those authorized
for support by the Federal awarding
agency.
(c) When the real property is no
longer needed as provided in para­
graphs (a) and (b) of this section, the
recipient shall request disposition in­
structions from the Federal awarding
agency or its successor Federal award­
ing agency. The Federal awarding
agency shall observe one or more of the
following disposition instructions.
(1) The recipient may be permitted to
retain title without further obligation
to the Federal Government after it
compensates the Federal Government
for that percentage of the current fair
market value of the property attrib­
utable to the Federal participation in
the project.

[69 FR 26281, May 11, 2004, as amended at 70
FR 51881, Aug. 31, 2005]

§ 215.30 Purpose
ards.

Insurance coverage.

Recipients shall, at a minimum, pro­
vide the equivalent insurance coverage
for real property and equipment ac­
quired 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.

stand­

Sections 215.31 through 215.37 set
forth uniform standards governing
management and disposition of prop­
erty furnished by the Federal Govern­
ment whose cost was charged to a
project supported by a Federal award.
Federal awarding agencies shall re­
quire recipients to observe these stand­
ards under awards and shall not impose
additional requirements, unless specifi­
cally required by Federal statute. The
recipient may use its own property
management standards and procedures
provided it observes the provisions of
§ 215.31 through § 215.37.

54

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00064

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

OMB Circulars and Guidance

§ 215.34
(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 obliga­
tion to the Federal Government and
under conditions the Federal awarding
agency considers appropriate. Such
property is ‘‘exempt property.’’ Should
a Federal awarding agency not estab­
lish conditions, title to exempt prop­
erty upon acquisition shall vest in the
recipient without further obligation to
the Federal Government.

(2) The recipient may be directed to
sell the property under guidelines pro­
vided by the Federal awarding agency
and pay the Federal Government for
that percentage of the current fair
market value of the property attrib­
utable 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 proce­
dures shall be established that provide
for competition to the extent prac­
ticable and result in the highest pos­
sible return.
(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 per­
centage of the current fair market
value of the property.

§ 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 equip­
ment acquired with Federal funds to
provide services to non-Federal outside
organizations for a fee that is less than
private companies charge for equiva­
lent services, unless specifically au­
thorized by Federal statute, for as long
as the Federal Government retains an
interest in the equipment.
(c) The recipient shall use the equip­
ment in the project or program for
which it was acquired as long as need­
ed, whether or not the project or pro­
gram continues to be supported by Fed­
eral funds and shall not encumber the
property without approval of the Fed­
eral awarding agency. When no longer
needed for the original project or pro­
gram, the recipient shall use the equip­
ment in connection with its other fed­
erally-sponsored activities, in the fol­
lowing order of priority:
(1) Activities sponsored by the Fed­
eral awarding agency which funded the
original project, then
(2) Activities sponsored by other Fed­
eral awarding agencies.
(d) During the time that equipment
is used on the project or program for
which it was acquired, the recipient
shall make it available for use on other
projects or programs if such other use
will not interfere with the work on the
project or program for which the equip­
ment 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;

§ 215.33 Federally-owned and exempt
property.
(a) Federally-owned property. (1) Title
to federally-owned property remains
vested in the Federal Government. Re­
cipients shall submit annually an in­
ventory listing of federally-owned
property in their custody to the Fed­
eral awarding agency. Upon completion
of the award or when the property is no
longer needed, the recipient shall re­
port the property to the Federal award­
ing 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-prof­
it 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)). Ap­
propriate instructions shall be issued
to the recipient by the Federal award­
ing agency.

55

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00065

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

§ 215.34

2 CFR Ch. II (1–1–06 Edition)

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 Govern­
ment shall be permissible if authorized
by the Federal awarding agency. User
charges shall be treated as program in­
come.
(e) When acquiring replacement
equipment, the recipient may use the
equipment to be replaced as trade-in or
sell the equipment and use the pro­
ceeds to offset the costs of the replace­
ment equipment subject to the ap­
proval of the Federal awarding agency.
(f) The recipient’s property manage­
ment standards for equipment acquired
with Federal funds and federally-owned
equipment shall include all of the fol­
lowing:
(1) Equipment records shall be main­
tained 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 identi­
fication number.
(iii) Source of the equipment, includ­
ing the award number.
(iv) Whether title vests in the recipi­
ent or the Federal Government.
(v) Acquisition date (or date re­
ceived, 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 equip­
ment (not applicable to equipment fur­
nished by the Federal Government).
(vii) Location and condition of the
equipment and the date the informa­
tion was reported.
(viii) Unit acquisition cost.
(ix) Ultimate disposition data, in­
cluding date of disposal and sales price
or the method used to determine cur­
rent fair market value where a recipi­
ent compensates the Federal awarding
agency for its share.
(2) Equipment owned by the Federal
Government shall be identified to indi­
cate Federal ownership.
(3) A physical inventory of equipment
shall be taken and the results rec­
onciled with the equipment records at
least once every two years. Any dif­

ferences between quantities deter­
mined 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 inven­
tory, verify the existence, current uti­
lization, and continued need for the
equipment.
(4) A control system shall be in effect
to insure adequate safeguards to pre­
vent 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 awarding agency.
(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, prop­
er 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 ac­
cordance 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 award­
ing agency or its successor. The
amount of compensation shall be com­
puted by applying the percentage of
Federal participation in the cost of the
original project or program to the cur­
rent fair market value of the equip­
ment. If the recipient has no need for
the equipment, the recipient shall re­
quest 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 Ad­
ministration by the Federal awarding
agency to determine whether a require­
ment for the equipment exists in other
Federal agencies. The Federal award­
ing agency shall issue instructions to
the recipient no later than 120 calendar

56

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00066

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

OMB Circulars and Guidance

§ 215.36

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 re­
quest, 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 pro­
gram. However, the recipient shall be
permitted to deduct and retain from
the Federal share $500 or ten percent of
the proceeds, whichever is less, for the
recipient’s selling and handling ex­
penses.
(2) If the recipient is instructed to
ship the equipment elsewhere, the re­
cipient shall be reimbursed by the Fed­
eral Government by an amount which
is computed by applying the percent­
age of the recipient’s participation in
the cost of the original project or pro­
gram to the current fair market value
of the equipment, plus any reasonable
shipping or interim storage costs in­
curred.
(3) If the recipient is instructed to
otherwise dispose of the equipment, the
recipient shall be reimbursed by the
Federal awarding agency for such costs
incurred in its disposition.
(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 Gov­
ernment when such third party is oth­
erwise eligible under existing statutes.
Such transfer shall be subject to the
following standards.
(i) The equipment shall be appro­
priately identified in the award or oth­
erwise made known to the recipient in
writing.
(ii) The Federal awarding agency
shall issue disposition instructions
within 120 calendar days after receipt
of a final inventory. The final inven­
tory shall list all equipment acquired
with grant funds and federally-owned
equipment. If the Federal awarding
agency fails to issue disposition in­
structions within the 120 calendar day
period, the recipient shall apply the
standards of this section, as appro­
priate.
(iii) When the Federal awarding
agency exercises its right to take title,

the equipment shall be subject to the
provisions for federally-owned equip­
ment.
§ 215.35 Supplies and other expend­
able property.
(a) Title to supplies and other ex­
pendable property shall vest in the re­
cipient 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 sup­
plies are not needed for any other fed­
erally-sponsored project or program,
the recipient shall retain the supplies
for use on non-Federal sponsored ac­
tivities or sell them, but shall, in ei­
ther case, compensate the Federal Gov­
ernment for its share. The amount of
compensation shall be computed in the
same manner as for equipment.
(b) The recipient shall not use sup­
plies acquired with Federal funds to
provide services to non-Federal outside
organizations for a fee that is less than
private companies charge for equiva­
lent services, unless specifically au­
thorized by Federal statute as long as
the Federal Government retains an in­
terest in the supplies.
§ 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 irrev­
ocable right to reproduce, publish, or
otherwise use the work for Federal pur­
poses, and to authorize others to do so.
(b) Recipients are subject to applica­
ble 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 Non­
profit Organizations and Small Busi­
ness Firms Under Government Grants,
Contracts and Cooperative Agree­
ments.’’
(c) The Federal Government has the
right to:
(1) Obtain, reproduce, publish or oth­
erwise use the data first produced
under an award.

57

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00067

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

§ 215.37

2 CFR Ch. II (1–1–06 Edition)

(2) Authorize others to receive, repro­
duce, publish, or otherwise use such
data for Federal purposes.
(d) (1) In addition, in response to a
Freedom of Information Act (FOIA) re­
quest for research data relating to pub­
lished 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 pro­
vide, within a reasonable time, the re­
search data so that they can be made
available to the public through the pro­
cedures 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 re­
flect costs incurred by the agency, the
recipient, and the applicable subrecipi­
ents. This fee is in addition to any fees
the agency may assess under the FOIA
(5 U.S.C. 552(a)(4)(A)).
(2) The following definitions apply
for purposes of paragraph (d) of this
section:
(i) Research data is defined as the re­
corded factual material commonly ac­
cepted in the scientific community as
necessary to validate research findings,
but not any of the following: Prelimi­
nary analyses, drafts of scientific pa­
pers, plans for future research, peer re­
views, or communications with col­
leagues. This ‘‘recorded’’ material ex­
cludes physical objects (e.g., laboratory
samples). Research data also do not in­
clude:
(A) Trade secrets, commercial infor­
mation, materials necessary to be held
confidential by a researcher until they
are published, or similar information
which is protected under law; and
(B) Personnel and medical informa­
tion and similar information the dis­
closure of which would constitute a
clearly unwarranted invasion of per­
sonal privacy, such as information that
could be used to identify a particular
person in a research study.
(ii) Published is defined as either
when:
(A) Research findings are published
in a peer-reviewed scientific or tech­
nical journal; or

(B) A Federal agency publicly and of­
ficially 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 de­
fined 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 acquisi­
tion in the recipient. The recipient
shall use that property for the origi­
nally-authorized purpose, and the re­
cipient shall not encumber the prop­
erty without approval of the Federal
awarding agency. When no longer need­
ed for the originally authorized pur­
pose, disposition of the intangible prop­
erty shall occur in accordance with the
provisions of § 215.34(g).
[69 FR 26281, May 11, 2004, as amended at 70
FR 51881, Aug. 31, 2005]

§ 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 re­
cipient 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 no­
tices of record to indicate that per­
sonal or real property has been ac­
quired or improved with Federal funds
and that use and disposition conditions
apply to the property.
PROCUREMENT STANDARDS
§ 215.40 Purpose
standards.

of

procurement

Sections 215.41 through 215.48 set
forth standards for use by recipients in
establishing procedures for the pro­
curement of supplies and other expend­
able property, equipment, real property
and other services with Federal funds.
These standards are furnished to en­
sure that such materials and services
are obtained in an effective manner
and in compliance with the provisions

58

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00068

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

OMB Circulars and Guidance

§ 215.44

of applicable Federal statutes and ex­
ecutive orders. No additional procure­
ment standards or requirements shall
be imposed by the Federal awarding
agencies upon recipients, unless spe­
cifically required by Federal statute or
executive order or approved by OMB.

§ 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 con­
flicts of interest as well as noncompeti­
tive practices among contractors that
may restrict or eliminate competition
or otherwise restrain trade. In order to
ensure objective contractor perform­
ance 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 consid­
ered. 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 re­
cipient. Any and all bids or offers may
be rejected when it is in the recipient’s
interest to do so.

§ 215.41 Recipient responsibilities.
The standards contained in this sec­
tion do not relieve the recipient of the
contractual responsibilities arising
under its contract(s). The recipient is
the responsible authority, without re­
course to the Federal awarding agency,
regarding the settlement and satisfac­
tion of all contractual and administra­
tive issues arising out of procurements
entered into in support of an award or
other agreement. This includes dis­
putes, claims, protests of award, source
evaluation or other matters of a con­
tractual nature. Matters concerning
violation of statute are to be referred
to such Federal, State or local author­
ity as may have proper jurisdiction.
§ 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 orga­
nization 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 ac­
cept gratuities, favors, or anything of
monetary value from contractors, or
parties to subagreements. However, re­
cipients may set standards for situa­
tions in which the financial interest is
not substantial or the gift is an unso­
licited item of nominal value. The
standards of conduct shall provide for
disciplinary actions to be applied for
violations of such standards by offi­
cers, employees, or agents of the re­
cipient.

§ 215.44 Procurement procedures.
(a) All recipients shall establish writ­
ten procurement procedures. These
procedures shall provide for, at a min­
imum, that paragraphs (a)(1), (2) and
(3) of this section apply.
(1) Recipients avoid purchasing un­
necessary items.
(2) Where appropriate, an analysis is
made of lease and purchase alter­
natives to determine which would be
the most economical and practical pro­
curement for the Federal Government.
(3) Solicitations for goods and serv­
ices provide for all of the following.
(i) A clear and accurate description
of the technical requirements for the
material, product or service to be pro­
cured. In competitive procurements,
such a description shall not contain
features which unduly restrict com­
petition.
(ii) Requirements which the bidder/
offeror must fulfill and all other fac­
tors to be used in evaluating bids or
proposals.
(iii) A description, whenever prac­
ticable, of technical requirements in
terms of functions to be performed or

59

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00069

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

§ 215.45

2 CFR Ch. II (1–1–06 Edition)

performance required, including the
range of acceptable characteristics or
minimum acceptable standards.
(iv) The specific features of ‘‘brand
name or equal’’ descriptions that bid­
ders 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 prac­
ticable and economically feasible, for
products and services that conserve
natural resources and protect the envi­
ronment and are energy efficient.
(b) Positive efforts shall be made by
recipients to utilize small businesses,
minority-owned firms, and women’s
business enterprises, whenever pos­
sible. Recipients of Federal awards
shall take all of the following steps to
further this goal.
(1) Ensure that small businesses, mi­
nority-owned firms, and women’s busi­
ness enterprises are used to the fullest
extent practicable.
(2) Make information on forthcoming
opportunities available and arrange
time frames for purchases and con­
tracts to encourage and facilitate par­
ticipation by small businesses, minor­
ity-owned firms, and women’s business
enterprises.
(3) Consider in the contract process
whether firms competing for larger
contracts intend to subcontract with
small
businesses,
minority-owned
firms, and women’s business enter­
prises.
(4) Encourage contracting with con­
sortiums of small businesses, minorityowned firms and women’s business en­
terprises when a contract is too large
for one of these firms to handle individ­
ually.
(5) Use the services and assistance, as
appropriate, of such organizations as
the Small Business Administration and
the Department of Commerce’s Minor­
ity Business Development Agency in
the solicitation and utilization of
small businesses, minority-owned firms
and women’s business enterprises.
(c) The type of procuring instruments
used (e.g., fixed price contracts, cost re­
imbursable contracts, purchase orders,
and incentive contracts) shall be deter­
mined by the recipient but shall be ap­

propriate for the particular procure­
ment and for promoting the best inter­
est 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 suc­
cessfully under the terms and condi­
tions 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’ im­
plementation 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 procure­
ment documents, such as request for
proposals or invitations for bids, inde­
pendent cost estimates, etc., when any
of the following conditions apply.
(1) A recipient’s procurement proce­
dures or operation fails to comply with
the procurement standards in the Fed­
eral 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 ex­
pected to exceed the small purchase
threshold, specifies a ‘‘brand name’’
product.
(4) The proposed award over the
small purchase threshold is to be
awarded to other than the apparent
low bidder under a sealed bid procure­
ment.
(5) A proposed contract modification
changes the scope of a contract or in­
creases the contract amount by more
than the amount of the small purchase
threshold.
§ 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

60

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00070

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

OMB Circulars and Guidance

§ 215.48

every procurement action. Price anal­
ysis 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 re­
view and evaluation of each element of
cost to determine reasonableness,
allocability and allowability.

conditions where the contract may be
terminated because of circumstances
beyond the control of the contractor.
(c) Except as otherwise required by
statute, an award that requires the
contracting (or subcontracting) for
construction or facility improvements
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 sub­
contracts exceeding $100,000, the Fed­
eral awarding agency may accept the
bonding policy and requirements of the
recipient, provided the Federal award­
ing agency has made a determination
that the Federal Government’s interest
is adequately protected. If such a de­
termination has not been made, the
minimum requirements shall be as fol­
lows.
(1) A bid guarantee from each bidder
equivalent to five percent of the bid
price. The ‘‘bid guarantee’’ shall con­
sist of a firm commitment such as a
bid bond, certified check, or other ne­
gotiable instrument accompanying a
bid as assurance that the bidder shall,
upon acceptance of his bid, execute
such contractual documents as may be
required within the time specified.
(2) A performance bond on the part of
the contractor for 100 percent of the
contract price. A ‘‘performance bond’’
is one executed in connection with a
contract to secure fulfillment of all the
contractor’s obligations under such
contract.
(3) A payment bond on the part of the
contractor for 100 percent of the con­
tract price. A ‘‘payment bond’’ is one
executed in connection with a contract
to assure payment as required by stat­
ute 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 hold­
ing certificates of authority as accept­
able 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

§ 215.46 Procurement records.
Procurement records and files for
purchases in excess of the small pur­
chase threshold shall include the fol­
lowing at a minimum:
(a) Basis for contractor selection;
(b) Justification for lack of competi­
tion when competitive bids or offers
are not obtained; and
(c) Basis for award cost or price.
§ 215.47 Contract administration.
A system for contract administration
shall be maintained to ensure con­
tractor conformance with the terms,
conditions and specifications of the
contract and to ensure adequate and
timely follow up of all purchases. Re­
cipients shall evaluate contractor per­
formance and document, as appro­
priate, whether contractors have met
the terms, conditions and specifica­
tions of the contract.
§ 215.48 Contract provisions.
The recipient shall include, in addi­
tion to provisions to define a sound and
complete agreement, the following pro­
visions in all contracts. The following
provisions shall also be applied to sub­
contracts.
(a) Contracts in excess of the small
purchase threshold shall contain con­
tractual 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 appro­
priate.
(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 addi­
tion, such contracts shall describe con­
ditions under which the contract may
be terminated for default as well as

61

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00071

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

§ 215.50

2 CFR Ch. II (1–1–06 Edition)

the recipient, the Federal awarding
agency, the Comptroller General of the
United States, or any of their duly au­
thorized representatives, shall have ac­
cess to any books, documents, papers
and records of the contractor which are
directly pertinent to a specific pro­
gram for the purpose of making audits,
examinations,
excerpts
and
tran­
scriptions.
(e) All contracts, including small
purchases, awarded by recipients and
their contractors shall contain the pro­
curement provisions of appendix A to
this part, as applicable.

(d) When required, performance re­
ports shall generally contain, for each
award, brief information on each of the
following.
(1) A comparison of actual accom­
plishments with the goals and objec­
tives 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 com­
putation of unit costs.
(2) Reasons why established goals
were not met, if appropriate.
(3) Other pertinent information in­
cluding, when appropriate, analysis
and explanation of cost overruns or
high unit costs.
(e) Recipients shall not be required to
submit more than the original and two
copies of performance reports.
(f) Recipients shall immediately no­
tify the Federal awarding agency of de­
velopments that have a significant im­
pact 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 con­
templated, and any assistance needed
to resolve the situation.
(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 per­
formance data from recipients.

REPORTS AND RECORDS
§ 215.50 Purpose
records.

of

reports

and

Sections 215.51 through 215.53 set
forth the procedures for monitoring
and reporting on the recipient’s finan­
cial and program performance and the
necessary standard reporting forms.
They also set forth record retention re­
quirements.
§ 215.51 Monitoring and reporting pro­
gram performance.
(a) Recipients are responsible for
managing and monitoring each project,
program, subaward, function or activ­
ity supported by the award. Recipients
shall monitor subawards to ensure subrecipients have met the audit require­
ments as delineated in § 215.26.
(b) The Federal awarding agency
shall prescribe the frequency with
which the performance reports shall be
submitted. Except as provided in
§ 215.51(f), performance reports shall
not be required more frequently than
quarterly or, less frequently than an­
nually. 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 pe­
riod. The Federal awarding agency may
require annual reports before the anni­
versary dates of multiple year awards
in lieu of these requirements. The final
performance reports are due 90 cal­
endar days after the expiration or ter­
mination of the award.
(c) If inappropriate, a final technical
or performance report shall not be re­
quired after completion of the project.

§ 215.52 Financial reporting.
(a) The following forms or such other
forms as may be approved by OMB are
authorized for obtaining financial in­
formation from recipients.
(1) SF–269 or SF–269A, Financial Sta­
tus Report.
(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 agen­
cy 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 deter­
mined to provide adequate information

62

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00072

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

OMB Circulars and Guidance

§ 215.52

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 ac­
crual information and the recipient’s
accounting records are not normally
kept on the accrual basis, the recipient
shall not be required to convert its ac­
counting 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 re­
port shall not be required more fre­
quently than quarterly or less fre­
quently than annually. A final report
shall be required at the completion of
the agreement.
(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 re­
porting period for quarterly and semiannual reports, and 90 calendar days
for annual and final reports. Exten­
sions of reporting due dates may be ap­
proved by the Federal awarding agency
upon request of the recipient.
(2) SF–272, Report of Federal Cash
Transactions.
(i) When funds are advanced to re­
cipients the Federal awarding agency
shall require each recipient to submit
the SF–272 and, when necessary, its
continuation sheet, SF–272a. The Fed­
eral awarding agency shall use this re­
port to monitor cash advanced to re­
cipients and to obtain disbursement in­
formation for each agreement with the
recipients.
(ii) Federal awarding agencies may
require forecasts of Federal cash re­
quirements in the ‘‘Remarks’’ section
of the report.
(iii) When practical and deemed nec­
essary, 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 re­
quire a monthly report from those re­
cipients 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 fol­
lowing reasons:
(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 agen­
cy’s opinion, the recipient’s accounting
controls are adequate to minimize ex­
cessive Federal advances; or,
(C) When the electronic payment
mechanisms provide adequate data.
(b) When the Federal awarding agen­
cy needs additional information or
more frequent reports, the following
shall be observed.
(1) When additional information is
needed to comply with legislative re­
quirements, Federal awarding agencies
shall issue instructions to require re­
cipients to submit such information
under the ‘‘Remarks’’ section of the re­
ports.
(2) When a Federal awarding agency
determines that a recipient’s account­
ing system does not meet the standards
in § 215.21, additional pertinent infor­
mation 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 in­
formation, shall comply with report
clearance requirements of 5 CFR part
1320.
(3) Federal awarding agencies are en­
couraged 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 for­
mat or computer printouts or elec­
tronic outputs in lieu of prescribed for­
mats.

63

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00073

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

§ 215.53

2 CFR Ch. II (1–1–06 Edition)

(5) Federal awarding agencies may
provide computer or electronic outputs
to recipients when such expedites or
contributes to the accuracy of report­
ing.

(e) The Federal awarding agency, the
Inspector General, Comptroller Gen­
eral of the United States, or any of
their duly authorized representatives,
have the right of timely and unre­
stricted access to any books, docu­
ments, papers, or other records of re­
cipients that are pertinent to the
awards, in order to make audits, ex­
aminations, excerpts, transcripts and
copies of such documents. This right
also includes timely and reasonable ac­
cess to a recipient’s personnel for the
purpose of interview and discussion re­
lated to such documents. The rights of
access in this paragraph are not lim­
ited to the required retention period,
but shall last as long as records are re­
tained.
(f) Unless required by statute, no
Federal awarding agency shall place
restrictions on recipients that limit
public access to the records of recipi­
ents that are pertinent to an award, ex­
cept 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 Informa­
tion Act (5 U.S.C. 552) if the records
had belonged to the Federal awarding
agency.
(g) Indirect cost rate proposals, cost al­
locations 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 alloca­
tion 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 sup­
porting records starts on the date of
such submission.
(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

§ 215.53 Retention and access require­
ments for records.
(a) This section sets forth require­
ments 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 doc­
uments, 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 submis­
sion of the quarterly or annual finan­
cial report, as authorized by the Fed­
eral awarding agency. The only excep­
tions are the following.
(1) If any litigation, claim, or audit is
started before the expiration of the 3year period, the records shall be re­
tained until all litigation, claims or
audit findings involving the records
have been resolved and final action
taken.
(2) Records for real property and
equipment acquired with Federal funds
shall be retained for 3 years after final
disposition.
(3) When records are transferred to or
maintained by the Federal awarding
agency, the 3-year retention require­
ment is not applicable to the recipient.
(4) Indirect cost rate proposals, cost
allocations plans, etc. as specified in
§ 215.53(g).
(c) Copies of original records may be
substituted for the original records if
authorized by the Federal awarding
agency.
(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 re­
cipients to retain any records that are
continuously needed for joint use.

64

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00074

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

OMB Circulars and Guidance

§ 215.62

other computation for negotiation pur­
poses, then the 3-year retention period
for the proposal, plan, or other com­
putation and its supporting records
starts at the end of the fiscal year (or
other accounting period) covered by
the proposal, plan, or other computa­
tion.

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 § 215.14, take one or more of the fol­
lowing actions, as appropriate in the
circumstances.
(1) Temporarily withhold cash pay­
ments pending correction of the defi­
ciency 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 ter­
minate the current award.
(4) Withhold further awards for the
project or program.
(5) Take other remedies that may be
legally available.
(b) Hearings and appeals. In taking an
enforcement action, the 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 termi­
nation. Costs of a recipient resulting
from obligations incurred by the re­
cipient during a suspension or after
termination of an award are not allow­
able unless the awarding agency ex­
pressly authorizes them in the notice
of suspension or termination or subse­
quently. 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 re­
cipient before the effective date of sus­
pension or termination, are not in an­
ticipation of it, and in the case of a ter­
mination, are noncancellable.
(2) The costs would be allowable if
the award were not suspended or ex­
pired normally at the end of the fund­
ing period in which the termination
takes effect.
(d) Relationship to debarment and sus­
pension. The enforcement remedies
identified in this section, including

TERMINATION AND ENFORCEMENT
§ 215.60 Purpose of termination and
enforcement.
Sections 215.61 and 215.62 set forth
uniform suspension, termination and
enforcement procedures.
§ 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 com­
ply 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, in­
cluding 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 termi­
nation, the portion to be terminated.
However, if the Federal awarding agen­
cy determines in the case of partial
termination that the reduced or modi­
fied portion of the grant will not ac­
complish the purposes for which the
grant was made, it may terminate the
grant in its entirety under either para­
graphs (a)(1) or (2) of this section.
(b) If costs are allowed under an
award, the responsibilities of the re­
cipient referred to in § 215.71(a), includ­
ing those for property management as
applicable, shall be considered in the
termination of the award, and provi­
sion shall be made for continuing re­
sponsibilities of the recipient after ter­
mination, as appropriate.
§ 215.62 Enforcement.
(a) Remedies for noncompliance. If a re­
cipient materially fails to comply with

65

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00075

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

§ 215.70

2 CFR Ch. II (1–1–06 Edition)

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 regula­
tions (see § 215.13).

an award, the Federal awarding agency
shall retain the right to recover an ap­
propriate amount after fully consid­
ering the recommendations on dis­
allowed costs resulting from the final
audit.

Subpart D—After-the-Award

Requirements

§ 215.72 Subsequent adjustments and
continuing responsibilities.
(a) The closeout of an award does not
affect any of the following:
(1) The right of the Federal awarding
agency to disallow costs and recover
funds on the basis of a later audit or
other review.
(2) The obligation of the recipient to
return any funds due as a result of
later refunds, corrections, or other
transactions.
(3) Audit requirements in § 215.26.
(4) Property management require­
ments in § 215.31 through § 215.37.
(5) Records retention as required in
§ 215.53.
(b) After closeout of an award, a rela­
tionship created under an award may
be modified or ended in whole or in
part with the consent of the Federal
awarding agency and the recipient,
provided the responsibilities of the re­
cipient referred to in paragraph (a) of
this section, including those for prop­
erty management as applicable, are
considered and provisions made for
continuing responsibilities of the re­
cipient, as appropriate.

§ 215.70 Purpose.
Sections 215.71 through 215.73 contain
closeout procedures and other proce­
dures for subsequent disallowances and
adjustments.
§ 215.71 Closeout procedures.
(a) Recipients shall submit, within 90
calendar days after the date of comple­
tion of the award, all financial, per­
formance, and other reports as required
by the terms and conditions of the
award. The Federal awarding agency
may approve extensions when re­
quested by the recipient.
(b) Unless the Federal awarding agen­
cy authorizes an extension, a recipient
shall liquidate all obligations incurred
under the award not later than 90 cal­
endar days after the funding period or
the date of completion as specified in
the terms and conditions of the award
or in agency implementing instruc­
tions.
(c) The Federal awarding agency
shall make prompt payments to a re­
cipient for allowable reimbursable
costs under the award being closed out.
(d) The recipient shall promptly re­
fund any balances of unobligated cash
that the Federal awarding agency has
advanced or paid and that is not au­
thorized to be retained by the recipient
for use in other projects. OMB Circular
A–129 governs unreturned amounts that
become delinquent debts.
(e) When authorized by the terms and
conditions of the award, the Federal
awarding agency shall make a settle­
ment for any upward or downward ad­
justments to the Federal share of costs
after closeout reports are received.
(f) The recipient shall account for
any real and personal property ac­
quired with Federal funds or received
from the Federal Government in ac­
cordance with § 215.31 through § 215.37.
(g) In the event a final audit has not
been performed prior to the closeout of

[69 FR 26281, May 11, 2004, as amended at 70
FR 51881, Aug. 31, 2005]

§ 215.73 Collection of amounts due.
(a) Any funds paid to a recipient in
excess of the amount to which the re­
cipient is finally determined to be enti­
tled under the terms and conditions of
the award constitute a debt to the Fed­
eral Government. If not paid within a
reasonable period after the demand for
payment, the Federal awarding agency
may reduce the debt by paragraphs
(a)(1), (2) or (3) of this section.
(1) Making an administrative offset
against other requests for reimburse­
ments.
(2) Withholding advance payments
otherwise due to the recipient.
(3) Taking other action permitted by
statute.
(b) Except as otherwise provided by
law, the Federal awarding agency shall

66

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00076

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005

OMB Circulars and Guidance

Pt. 215, App. A
port all suspected or reported violations to
the Federal awarding agency.
4. Contract Work Hours and Safety Standards
Act (40 U.S.C. 327–333)—Where applicable, all
contracts awarded by recipients in excess of
$2000 for construction contracts and in ex­
cess of $2500 for other contracts that involve
the employment of mechanics or laborers
shall include a provision for compliance with
sections 102 and 107 of the Contract Work
Hours and Safety Standards Act (40 U.S.C.
327–333), as supplemented by Department of
Labor regulations (29 CFR part 5). Under sec­
tion 102 of the Act, each contractor shall be
required to compute the wages of every me­
chanic and laborer on the basis of a standard
work week of 40 hours. Work in excess of the
standard work week is permissible provided
that the worker is compensated at a rate of
not less than 11⁄2 times the basic rate of pay
for all hours worked in excess of 40 hours in
the work week. Section 107 of the Act is ap­
plicable to construction work and provides
that no laborer or mechanic shall be required
to work in surroundings or under working
conditions which are unsanitary, hazardous
or dangerous. These requirements do not
apply to the purchases of supplies or mate­
rials or articles ordinarily available on the
open market, or contracts for transportation
or transmission of intelligence.
5. Rights to Inventions Made Under a Con­
tract or Agreement—Contracts or agreements
for the performance of experimental, devel­
opmental, or research work shall provide for
the rights of the Federal Government and
the recipient in any resulting invention in
accordance with 37 CFR part 401, ‘‘Rights to
Inventions Made by Nonprofit Organizations
and Small Business Firms Under Govern­
ment Grants, Contracts and Cooperative
Agreements,’’ and any implementing regula­
tions issued by the awarding agency.
6. Clean Air Act (42 U.S.C. 7401 et seq.) and
the Federal Water Pollution Control Act (33
U.S.C. 1251 et seq.), as amended—Contracts
and subgrants of amounts in excess of
$100,000 shall contain a provision that re­
quires the recipient to agree to comply with
all applicable standards, orders or regula­
tions issued pursuant to the Clean Air Act
(42 U.S.C. 7401 et seq.) and the Federal Water
Pollution Control Act as amended (33 U.S.C.
1251 et seq.). Violations shall be reported to
the Federal awarding agency and the Re­
gional Office of the Environmental Protec­
tion Agency (EPA).
7. Byrd Anti-Lobbying Amendment (31 U.S.C.
1352)—Contractors who apply or bid for an
award of $100,000 or more shall file the re­
quired certification. Each tier certifies to
the tier above that it will not and has not
used Federal appropriated funds to pay any
person or organization for influencing or at­
tempting to influence an officer or employee
of any agency, a member of Congress, officer
or employee of Congress, or an employee of a

charge interest on an overdue debt in
accordance with 4 CFR Chapter II,
‘‘Federal Claims Collection Stand­
ards.’’
APPENDIX A TO PART 215—CONTRACT
PROVISIONS
All contracts, awarded by a recipient in­
cluding small purchases, shall contain the
following provisions as applicable:
1. Equal Employment Opportunity—All con­
tracts shall contain a provision requiring
compliance with E.O. 11246, ‘‘Equal Employ­
ment Opportunity’’ (30 FR 12319, 12935, 3
CFR, 1964–1965 Comp., p. 339), as amended by
E.O. 11375, ‘‘Amending Executive Order 11246
Relating to Equal Employment Oppor­
tunity,’’ and as supplemented by regulations
at 41 CFR part 60, ‘‘Office of Federal Con­
tract Compliance Programs, Equal Employ­
ment Opportunity, Department of Labor.’’
2. Copeland ‘‘Anti-Kickback’’ Act (18 U.S.C.
874 and 40 U.S.C. 276c)—All contracts and subgrants in excess of $2000 for construction or
repair awarded by recipients and subrecipi­
ents shall include a provision for compliance
with the Copeland ‘‘Anti-Kickback’’ Act (18
U.S.C. 874), as supplemented by Department
of Labor regulations (29 CFR part 3, ‘‘Con­
tractors and Subcontractors on Public Build­
ing or Public Work Financed in Whole or in
Part by Loans or Grants from the United
States’’). The Act provides that each con­
tractor or subrecipient shall be prohibited
from inducing, by any means, any person
employed in the construction, completion, or
repair of public work, to give up any part of
the compensation to which he is otherwise
entitled. The recipient shall report all sus­
pected or reported violations to the Federal
awarding agency.
3. Davis-Bacon Act, as amended (40 U.S.C.
276a to a–7)—When required by Federal pro­
gram legislation, all construction contracts
awarded by the recipients and subrecipients
of more than $2000 shall include a provision
for compliance with the Davis-Bacon Act (40
U.S.C. 276a to a–7) and as supplemented by
Department of Labor regulations (29 CFR
part 5, ‘‘Labor Standards Provisions Applica­
ble to Contracts Governing Federally Fi­
nanced and Assisted Construction’’). Under
this Act, contractors shall be required to pay
wages to laborers and mechanics at a rate
not less than the minimum wages specified
in a wage determination made by the Sec­
retary of Labor. In addition, contractors
shall be required to pay wages not less than
once a week. The recipient shall place a copy
of the current prevailing wage determination
issued by the Department of Labor in each
solicitation and the award of a contract shall
be conditioned upon the acceptance of the
wage determination. The recipient shall re-

67

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00077

Fmt 8010

Sfmt 8002

Y:\SGML\208005.XXX

208005

Pt. 220

2 CFR Ch. II (1–1–06 Edition)

member of Congress in connection with ob­
taining any Federal contract, grant or any
other award covered by 31 U.S.C. 1352. Each
tier shall also disclose any lobbying with
non-Federal funds that takes place in con­
nection with obtaining any Federal award.
Such disclosures are forwarded from tier to
tier up to the recipient.
8. Debarment and Suspension (E.O.s 12549
and 12689)—A contract award with an
amount expected to equal or exceed $25,000
and certain other contract awards (see 2 CFR
180.220) shall not be made to parties listed on
the government-wide Excluded Parties List
System, in accordance with the OMB guide­
lines at 2 CFR part 180 that implement E.O.s
12549 (3 CFR, 1986 Comp., p. 189) and 12689 (3
CFR, 1989 Comp., p. 235), ‘‘Debarment and
Suspension.’’ The Excluded Parties List Sys­
tem contains the names of parties debarred,
suspended, or otherwise excluded by agen­
cies, as well as parties declared ineligible
under statutory or regulatory authority
other than E.O. 12549.

§ 220.10

Scope.

The principles in this part deal with
the subject of cost determination, and
make no attempt to identify the cir­
cumstances or dictate the extent of
agency and institutional participation
in the financing of a particular project.
Provision for profit or other increment
above cost is outside the scope of this
part.
§ 220.15

Policy.

The principles in this part are de­
signed to provide that the Federal Gov­
ernment bear its fair share of total
costs, determined in accordance with
generally accepted accounting prin­
ciples, except where restricted or pro­
hibited by law. Agencies are not ex­
pected to place additional restrictions
on individual items of cost. The suc­
cessful application of cost accounting
principles requires development of mu­
tual understanding between represent­
atives of educational institutions and
of the Federal Government as to their
scope, implementation, and interpreta­
tion.

[69 FR 26281, May 11, 2004, as amended at 70
FR 51879, Aug. 31, 2005]

PARTS 216–219 [RESERVED]
PART 220—COST PRINCIPLES FOR
EDUCATIONAL
INSTITUTIONS
(OMB CIRCULAR A–21)

§ 220.20

Applicability.

(a) All Federal agencies that sponsor
research and development, training,
and other work at educational institu­
tions shall apply the provisions of Ap­
pendix A to this part in determining
the costs incurred for such work. The
principles shall also be used as a guide
in the pricing of fixed price or lump
sum agreements.
(b) Each federal agency that awards
defense-related contracts to a Feder­
ally Funded Research and Development
Center (FFRDC) associated with an
educational institution shall require
the FFRDC to comply with the Cost
Accounting Standards and with the
rules and regulations issued by the
Cost Accounting Standards Board and
set forth in 47 CFR part 99.

Sec.
220.5 Purpose.
220.10 Scope.
220.15 Policy.
220.20 Applicability.
220.25 OMB responsibilities.
220.30 Federal agency responsibilities.
220.35 Effective date of changes.
220.40 Relationship to previous issuance.
220.45 Information contact.
APPENDIX A TO PART 220—PRINCIPLES FOR DE­
TERMINING COSTS APPLICABLE TO GRANTS,
CONTRACTS, AND OTHER AGREEMENTS WITH
EDUCATIONAL INSTITUTIONS
AUTHORITY: 31 U.S.C. 503; 31 U.S.C. 1111; 41
U.S.C. 405; Reorganization Plan No. 2 of 1970;
E.O. 11541, 35 FR 10737, 3 CFR, 1966–1970, p.
939.

§ 220.25

SOURCE: 70 FR 51881, Aug. 31, 2005, unless
otherwise noted.

OMB responsibilities.

OMB is responsible for:
(a) Issuing and maintaining the guid­
ance in this part.
(b) Interpreting the policy require­
ments in this part and providing assist­
ance to ensure effective and efficient
implementation.

§ 220.5 Purpose.
This part establishes principles for
determining costs applicable to grants,
contracts, and other agreements with
educational institutions.

68

VerDate Aug<31>2005

13:55 Jan 19, 2006

Jkt 208005

PO 00000

Frm 00078

Fmt 8010

Sfmt 8010

Y:\SGML\208005.XXX

208005