44 CFR parts 9, 10, 13, 14
44 CFR parts 9, 10, 13, 14.docx
State Administrative Plan for the Hazard Mitigation Grant Program
44 CFR parts 9, 10, 13, 14
OMB: 1660-0026
PART 9—FLOODPLAIN MANAGEMENT AND PROTECTION OF WETLANDS
Section
Contents
§ 9.1 Purpose
of
part.
§ 9.2 Policy.
§ 9.3 Authority.
§ 9.4 Definitions.
§ 9.5 Scope.
§ 9.6 Decision-making
process.
§ 9.7 Determination
of proposed action's location.
§ 9.8 Public
notice requirements.
§ 9.9 Analysis
and reevaluation of practicable alternatives.
§ 9.10 Identify
impacts of proposed actions.
§ 9.11 Mitigation.
§ 9.12 Final
public notice.
§ 9.13 Particular
types of temporary housing.
§ 9.14 Disposal
of Agency property.
§ 9.15 Planning
programs affecting land use.
§ 9.16 Guidance
for applicants.
§ 9.17 Instructions
to applicants.
§ 9.18 Responsibilities.
Appendix
A to Part 9—Decision-making Process for E.O. 11988
Authority: E.O. 11988 of May 24, 1977. 3 CFR, 1977 Comp., p. 117; E.O. 11990 of May 24 1977, 3 CFR, 1977 Comp. p. 121; Reorganization Plan No. 3 of 1978, 43 FR 41943, 3 CFR, 1978 Comp., p. 329; E.O. 12127 of March 31, 1979, 44 FR 19367, 3 CFR, 1979 Comp., p. 376; E.O. 12148 of July 20, 1979, 44 FR 43239, 3 CFR, 1979 Comp., p. 412, as amended.; E.O. 12127; E.O. 12148; 42 U.S.C. 5201.
Source: 45 FR 59526, Sept. 9, 1980, unless otherwise noted.
§ 9.1 Purpose of part.
This regulation sets forth the policy, procedure and responsibilities to implement and enforce Executive Order 11988, Floodplain Management, and Executive Order 11990, Protection of Wetlands.
§ 9.2 Policy.
(a) FEMA shall take no action unless and until the requirements of this regulation are complied with.
(b) It is the policy of the Agency to provide leadership in floodplain management and the protection of wetlands. Further, the Agency shall integrate the goals of the Orders to the greatest possible degree into its procedures for implementing NEPA. The Agency shall take action to:
(1) Avoid long- and short-term adverse impacts associated with the occupancy and modification of floodplains and the destruction and modification of wetlands;
(2) Avoid direct and indirect support of floodplain development and new construction in wetlands wherever there is a practicable alternative;
(3) Reduce the risk of flood loss;
(4) Promote the use of nonstructural flood protection methods to reduce the risk of flood loss;
(5) Minimize the impact of floods on human health, safety and welfare;
(6) Minimize the destruction, loss or degradation of wetlands;
(7) Restore and preserve the natural and beneficial values served by floodplains;
(8) Preserve and enhance the natural values of wetlands;
(9) Involve the public throughout the floodplain management and wetlands protection decision-making process;
(10) Adhere to the objectives of the Unified National Program for Floodplain Management; and
(11) Improve and coordinate the Agency's plans, programs, functions and resources so that the Nation may attain the widest range of beneficial uses of the environment without degradation or risk to health and safety.
§ 9.3 Authority.
The authority for these regulations is (a) Executive Order 11988, May 24, 1977, which replaced Executive Order 11296, August 10, 1966, (b) Executive Order 11990, May 24, 1977, (c) Reorganization Plan No. 3 of 1978 (43 FR 41943); and (d) Executive Order 12127, April 1, 1979 (44 FR 1936). E.O. 11988 was issued in furtherance of the National Flood Insurance Act of 1968, as amended (Pub. L. 90–488); the Flood Disaster Protection Act of 1973, as amended (Pub. L. 93–234); and the National Environmental Policy Act of 1969 (NEPA) (Pub. L. 91–190). Section 2(d) of Executive Order 11988 requires issuance of new or amended regulations and procedures to satisfy its substantive and procedural provisions. E.O. 11990 was issued in furtherance of NEPA, and at section 6 required issuance of new or amended regulations and procedures to satisfy its substantive and procedural provisions.
[45 FR 59526, Sept. 9, 1980, as amended at 48 FR 44543, Sept. 29, 1983]
§ 9.4 Definitions.
The following definitions shall apply throughout this regulation.
Action means any action or activity including: (a) Acquiring, managing and disposing of Federal lands and facilities; (b) providing federally undertaken, financed or assisted construction and improvements; and (c) conducting Federal activities and programs affecting land use, including, but not limited to, water and related land resources, planning, regulating and licensing activities.
Actions Affecting or Affected by Floodplains or Wetlands means actions which have the potential to result in the long- or short-term impacts associated with (a) the occupancy or modification of floodplains, and the direct or indirect support of floodplain development, or (b) the destruction and modification of wetlands and the direct or indirect support of new construction in wetlands.
Administrator means the Administrator of the Federal Emergency Management Agency.
Agency means the Federal Emergency Management Agency (FEMA).
Agency Assistance means grants for projects or planning activities, loans, and all other forms of financial or technical assistance provided by the Agency.
Base Flood means the flood which has a one percent chance of being equalled or exceeded in any given year (also known as a 100-year flood). This term is used in the National Flood Insurance Program (NFIP) to indicate the minimum level of flooding to be used by a community in its floodplain management regulations.
Base Floodplain means the 100-year floodplain (one percent chance floodplain).
Coastal High Hazard Area means the areas subject to high velocity waters including but not limited to hurricane wave wash or tsunamis. On a Flood Insurance Rate Map (FIRM), this appears as zone V1–30, VE or V.
Critical Action means an action for which even a slight chance of flooding is too great. The minimum floodplain of concern for critical actions is the 500-year floodplain, i.e., critical action floodplain. Critical actions include, but are not limited to, those which create or extend the useful life of structures or facilities:
(a) Such as those which produce, use or store highly volatile, flammable, explosive, toxic or water-reactive materials;
(b) Such as hospitals and nursing homes, and housing for the elderly, which are likely to contain occupants who may not be sufficiently mobile to avoid the loss of life or injury during flood and storm events;
(c) Such as emergency operation centers, or data storage centers which contain records or services that may become lost or inoperative during flood and storm events; and
(d) Such as generating plants, and other principal points of utility lines.
Direct Impacts means changes in floodplain or wetland values and functions and changes in the risk to lives and property caused or induced by an action or related activity. Impacts are caused whenever these natural values and functions are affected as a direct result of an action. An action which would result in the discharge of polluted storm waters into a floodplain or wetland, for example, would directly affect their natural values and functions. Construction-related activities, such as dredging and filling operations within the floodplain or a wetland would be another example of impacts caused by an action.
Emergency Actions means emergency work essential to save lives and protect property and public health and safety performed under sections 305 and 306 of the Disaster Relief Act of 1974 (42 U.S.C. 5145 and 5146). See 44 CFR part 205, subpart E.
Enhance means to increase, heighten, or improve the natural and beneficial values associated with wetlands.
Facility means any man-made or man-placed item other than a structure.
FEMA means the Federal Emergency Management Agency.
FIA means the Federal Insurance Administration.
Five Hundred Year Floodplain (the 500-year floodplain or 0.2 percent change floodplain) means that area, including the base floodplain, which is subject to inundation from a flood having a 0.2 percent chance of being equalled or exceeded in any given year.
Flood or flooding means a general and temporary condition of partial or complete inundation of normally dry land areas from the overflow of inland and/or tidal waters, and/or the unusual and rapid accumulation or runoff of surface waters from any source.
Flood Fringe means that portion of the floodplain outside of the floodway (often referred to as “floodway fringe”).
Flood Hazard Boundary Map (FHBM) means an official map of a community, issued by the Administrator, where the boundaries of the flood, mudslide (i.e., mudflow) and related erosion areas having special hazards have been designated as Zone A, M, or E.
Flood Insurance Rate Map (FIRM) means an official map of a community on which the Administrator has delineated both the special hazard areas and the risk premium zones applicable to the community. FIRMs are also available digitally, and are called Digital Flood Insurance Rate Maps (DFIRM).
Flood Insurance Study (FIS) means an examination, evaluation and determination of flood hazards and, if appropriate, corresponding water surface elevations or an examination, evaluation and determination of mudslide (i.e., mudflow) and/or flood-related erosion hazards.
Floodplain means the lowland and relatively flat areas adjoining inland and coastal waters including, at a minimum, that area subject to a one percent or greater chance of flooding in any given year. Wherever in this regulation the term “floodplain” is used, if a critical action is involved, “floodplain” shall mean the area subject to inundation from a flood having a 0.2 percent chance of occurring in any given year (500-year floodplain). “Floodplain” does not include areas subject only to mudflow until FIA adopts maps identifying “M” Zones.
Floodproofing means the modification of individual structures and facilities, their sites, and their contents to protect against structural failure, to keep water out, or to reduce effects of water entry.
Floodway means that portion of the floodplain which is effective in carrying flow, within which this carrying capacity must be preserved and where the flood hazard is generally highest, i.e., where water depths and velocities are the greatest. It is that area which provides for the discharge of the base flood so the cumulative increase in water surface elevation is no more than one foot.
Functionally Dependent Use means a use which cannot perform its intended purpose unless it is located or carried out in close proximity to water, (e.g., bridges, and piers).
Indirect Impacts means an indirect result of an action whenever the action induces or makes possible related activities which effect the natural values and functions of floodplains or wetlands or the risk to lives and property. Such impacts occur whenever these values and functions are potentially affected, either in the short- or long-term, as a result of undertaking an action.
Minimize means to reduce to the smallest amount or degree possible.
Mitigation means all steps necessary to minimize the potentially adverse effects of the proposed action, and to restore and preserve the natural and beneficial floodplain values and to preserve and enhance natural values of wetlands.
Mitigation Directorate means the Mitigation Directorate of the Federal Emergency Management Agency.
Natural Values of Floodplains and Wetlands means the qualities of or functions served by floodplains and wetlands which include but are not limited to: (a) Water resource values (natural moderation of floods, water quality maintenance, groundwater recharge); (b) living resource values (fish, wildlife, plant resources and habitats); (c) cultural resource values (open space, natural beauty, scientific study, outdoor education, archeological and historic sites, recreation); and (d) cultivated resource values (agriculture, aquaculture, forestry).
New Construction means the construction of a new structure (including the placement of a mobile home) or facility or the replacement of a structure or facility which has been totally destroyed.
New Construction in Wetlands includes draining, dredging, channelizing, filling, diking, impounding, and related activities and any structures or facilities begun or authorized after the effective dates of the Orders, May 24, 1977.
Orders means Executive Orders 11988, Floodplain Management, and 11990, Protection of Wetlands.
Practicable means capable of being done within existing constraints. The test of what is practicable depends upon the situation and includes consideration of all pertinent factors, such as environment, cost and technology.
Preserve means to prevent alterations to natural conditions and to maintain the values and functions which operate the floodplains or wetlands in their natural states.
Regional Administrator means the Regional Administrator of the Federal Emergency Management Agency for the Region in which FEMA is acting, or the Disaster Recovery Manager when one is designated.
Regulatory Floodway means the area regulated by federal, State or local requirements to provide for the discharge of the base flood so the cumulative increase in water surface elevation is no more than a designated amount (not to exceed one foot as set by the National Flood Insurance Program).
Restore means to reestablish a setting or environment in which the natural functions of the floodplain can again operate.
Structures means walled or roofed buildings, including mobile homes and gas or liquid storage tanks.
Substantial Improvement means any repair, reconstruction or other improvement of a structure or facility, which has been damaged in excess of, or the cost of which equals or exceeds, 50% of the market value of the structure or replacement cost of the facility (including all “public facilities” as defined in the Disaster Relief Act of 1974) (a) before the repair or improvement is started, or (b) if the structure or facility has been damaged and is proposed to be restored, before the damage occurred. If a facility is an essential link in a larger system, the percentage of damage will be based on the relative cost of repairing the damaged facility to the replacement cost of the portion of the system which is operationally dependent on the facility. The term “substantial improvement” does not include any alteration of a structure or facility listed on the National Register of Historic Places or a State Inventory of Historic Places.
Support means to encourage, allow, serve or otherwise facilitate floodplain or wetland development. Direct support results from actions within a floodplain or wetland, and indirect support results from actions outside of floodplains or wetlands.
Wetlands means those areas which are inundated or saturated by surface or ground water with a frequency sufficient to support, or that under normal hydrologic conditions does or would support, a prevalence of vegetation or aquatic life typically adapted for life in saturated or seasonally saturated soil conditions. Examples of wetlands include, but are not limited to, swamps, fresh and salt water marshes, estuaries, bogs, beaches, wet meadows, sloughs, potholes, mud flats, river overflows and other similar areas. This definition includes those wetlands areas separated from their natural supply of water as a result of activities such as the construction of structural flood protection methods or solid-fill road beds and activities such as mineral extraction and navigation improvements. This definition is intended to be consistent with the definition utilized by the U.S. Fish and Wildlife Service in the publication entitled Classification of Wetlands and Deep Water Habitats of the United States (Cowardin, et al., 1977).
[45 FR 59526, Sept. 9, 1980, as amended at 47 FR 13149, Mar. 29, 1982; 50 FR 40006, Oct. 1, 1985; 74 FR 15335, Apr. 3, 2009]
§ 9.5 Scope.
(a) Applicability. (1) These regulations apply to all Agency actions which have the potential to affect floodplains or wetlands or their occupants, or which are subject to potential harm by location in floodplains or wetlands.
(2) The basic test of the potential of an action to affect floodplains or wetlands is the action's potential (both by itself and when viewed cumulatively with other proposed actions) to result in the long- or short-term adverse impacts associated with:
(i) The occupancy or modification of floodplains, and the direct and indirect support of floodplain development; or
(ii) The destruction or modification of wetlands and the direct or indirect support of new construction in wetlands.
(3) This regulation applies to actions that were, on the effective date of the Orders (May 24, 1977), ongoing, in the planning and/or development stages, or undergoing implementation, and are incomplete as of the effective date of these regulations. The regulation also applies to proposed (new) actions. The Agency shall:
(i) Determine the applicable provisions of the Orders by analyzing whether the action in question has progressed beyond critical stages in the floodplain management and wetlands protection decision-making process, as set out below in §9.6. This determination need only be made at the time that followup actions are being taken to complete or implement the action in question; and
(ii) Apply the provisions of the Orders and of this regulation to all such actions to the fullest extent practicable.
(b) Limited exemption of ongoing actions involving wetlands located outside the floodplains. (1) Executive Order 11990, Protection of Wetlands, contains a limited exemption not found in Executive Order 11988, Floodplain Management. Therefore, this exemption applies only to actions affecting wetlands which are located outside the floodplains, and which have no potential to result in harm to or within floodplains or to support floodplain development.
(2) The following proposed actions that impact wetlands located outside of floodplains are exempt from this regulation:
(i) Agency-assisted or permitted projects which were under construction before May 24, 1977; and
(ii) Projects for which the Agency has proposed a draft of a final environmental impact statement (EIS) which adequately analyzes the action and which was filed before October 1, 1977. Proposed actions that impact wetlands outside of floodplains are not exempt if the EIS:
(A) Only generally covers the proposed action;
(B) Is devoted largely to related activities; or
(C) Treats the project area or program without an adequate and specific analysis of the floodplain and wetland implications of the proposed action.
(c) Decision-making involving certain categories of actions. The provisions set forth in this regulation are not applicable to the actions enumerated below except that the Regional Administrators shall comply with the spirit of the Order to the extent practicable. For any action which is excluded from the actions enumerated below, the full 8-step process applies (see §9.6) (except as indicated at paragraphs (d), (f) and (g) of this section regarding other categories of partial or total exclusions). The provisions of these regulations do not apply to the following (all references are to the Disaster Relief Act of 1974, Pub. L. 93–288, as amended, except as noted):
(1) Assistance provided for emergency work essential to save lives and protect property and public health and safety performed pursuant to sections 305 and 306;
(2) Emergency Support Teams (section 304);
(3) Unemployment Assistance (section 407);
(4) Emergency Communications (section 415);
(5) Emergency Public Transportation (section 416);
(6) Fire Management Assistance (Section 420);
(7) Community Disaster Loans (section 414), except to the extent that the proceeds of the loan will be used for repair of facilities or structures or for construction of additional facilities or structures;
(8) The following Individual and Family Grant Program (section 408) actions:
(i) Housing needs or expenses, except for restoring, repairing or building private bridges, purchase of mobile homes and provision of structures as minimum protective measures;
(ii) Personal property needs or expenses;
(iii) Transportation expenses;
(iv) Medical/dental expenses;
(v) Funeral expenses;
(vi) Limited home repairs;
(vii) Flood insurance premium;
(viii) Cost estimates;
(ix) Food expenses; and
(x) Temporary rental accommodations.
(9) Mortgage and rental assistance under section 404(b);
(10) Use of existing resources in the temporary housing assistance program [section 404(a)], except that Step 1 (§9.7) shall be carried out;
(11) Minimal home repairs [section 404(c)];
(12) Debris removal (section 403), except those grants involving non-emergency disposal of debris within a floodplain or wetland;
(13) Repairs or replacements under section 402, of less than $5,000 to damaged structures or facilities.
(14) Placement of families in existing resources and Temporary Relocation Assistance provided to those families so placed under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, Public Law 96–510.
(d) For each action enumerated below, the Regional Administrator shall apply steps 1, 2, 4, 5 and 8 of the decision-making process (§§9.7, 9.8, 9.10 and 9.11, see §9.6). Steps 3 and 6 (§9.9) shall be carried out except that alternative sites outside the floodplain or wetland need not be considered. After assessing impacts of the proposed action on the floodplain or wetlands and of the site on the proposed action, alternative actions to the proposed action, if any, and the “no action” alternative shall be considered. The Regional Administrator may also require certain other portions of the decision-making process to be carried out for individual actions as is deemed necessary. For any action which is excluded from the actions listed below. (except as indicated in paragraphs (c), (f) and (g) of this section regarding other categories of partial or total exclusion), the full 8-step process applies (see §9.6). The references are to the Disaster Relief Act of 1974, Public Law 93–288, as amended.
(1) Actions performed under the Individual and Family Grant Program (section 408) for restoring or repairing a private bridge, except where two or more individuals or families are authorized to pool their grants for this purpose.
(2) Small project grants (section 419), except to the extent that Federal funding involved is used for construction of new facilities or structures.
(3) Replacement of building contents, materials and equipment. (sections 402 and 419).
(4) Repairs under section 402 to damaged facilities or structures, except any such action for which one or more of the following is applicable:
(i) FEMA estimated cost of repairs is more than 50% of the estimated reconstruction cost of the entire facility or structure, or is more than $100,000, or
(ii) The action is located in a floodway or coastal high hazard area, or
(iii) The facility or structure is one which has previously sustained structural damage from flooding due to a major disaster or emergency or on which a flood insurance claim has been paid, or
(iv) The action is a critical action.
(e) Other categories of actions. Based upon the completion of the 8-step decision-making process (§9.6), the Director may find that a specific category of actions either offers no potential for carrying out the purposes of the Orders and shall be treated as those actions listed in §9.5(c), or has no practicable alternative sites and shall be treated as those actions listed in §9.5(d), or has no practicable alternative actions or sites and shall be treated as those actions listed in §9.5(g). This finding will be made in consultation with the Federal Insurance Administration and the Council on Environmental Quality as provided in section 2(d) of E.O. 11988. Public notice of each of these determinations shall include publication in theFederal Registerand a 30-day comment period.
(f) The National Flood Insurance Program (NFIP). (1) Most of what is done by FIA or the Mitigation Directorate, in administering the National Flood Insurance Program is performed on a program-wide basis. For all regulations, procedures or other issuances making or amending program policy, FIA or the Mitigation Directorate, shall apply the 8-step decision-making process to that program-wide action. The action to which the 8-step process must be applied is the establishment of programmatic standards or criteria, not the application of programmatic standards or criteria to specific situations. Thus, for example, FIA or the Mitigation Directorate, would apply the 8-step process to a programmatic determination of categories of structures to be insured, but not to whether to insure each individual structure. The two prime examples of where FIA or the Mitigation Directorate, does take site specific actions which would require individual application of the 8-step process are property acquisition under section 1362 of the National Flood Insurance Act of 1968, as amended, and the issuance of an exception to a community under 44 CFR 60.6(b). (See also §9.9(e)(6) and §9.11(e).)
(2) The provisions set forth in this regulation are not applicable to the actions enumerated below except that the Federal Insurance Administrator or the Assistant Administrator for Mitigation, as appropriate shall comply with the spirit of the Orders to the extent practicable:
(i) The issuance of individual flood insurance policies and policy interpretations;
(ii) The adjustment of claims made under the Standard Flood Insurance Policy;
(iii) The hiring of independent contractors to assist in the implementation of the National Flood Insurance Program;
(iv) The issuance of individual flood insurance maps, Map Information Facility map determinations, and map amendments; and
(v) The conferring of eligibility for emergency or regular program (NFIP) benefits upon communities.
(g) For the action listed below, the Regional Administrator shall apply steps 1, 4, 5 and 8 of the decision-making process (§§9.7, 9.10 and 9.11). For any action which is excluded from the actions listed below, (except as indicated in paragraphs (c), (d) and (f) of this section regarding other categories of partial or total exclusion), the full 8-step process applies (See §9.6). The Regional Administrator may also require certain other portions of the decision-making process to be carried out for individual actions as is deemed necessary. The references are to the Disaster Relief Act of 1974, Public Law 93–288. The above requirements apply to repairs, under section 402, between $5,000 and $25,000 to damaged structures of facilities except for:
(1) Actions in a floodway or coastal high hazard area; or
(2) New or substantially improved structures or facilities; or
(3) Facilities or structures which have previously sustained structural damage from flooding due to a major disaster or emergency.
[45 FR 59526, Sept. 9, 1980, as amended at 47 FR 13149, Mar. 29, 1982; 49 FR 35583, Sept. 10, 1984; 50 FR 40006, Oct. 1, 1985; 51 FR 39531, Oct. 29, 1986; 66 FR 57347, Nov. 14, 2001]
§ 9.6 Decision-making process.
(a) Purpose. The purpose of this section is to set out the floodplain management and wetlands protection decision-making process to be followed by the Agency in applying the Orders to its actions. While the decision-making process was initially designed to address the floodplain Order's requirements, the process will also satisfy the wetlands Order's provisions due to the close similarity of the two directives. The numbering of Steps 1 through 8 does not firmly require that the steps be followed sequentially. As information is gathered throughout the decision-making process and as additional information is needed, reevaluation of lower numbered steps may be necessary.
(b) Except as otherwise provided in §9.5 (c), (d), (f), and (g) regarding categories of partial or total exclusion when proposing an action, the Agency shall apply the 8-step decision-making process. FEMA shall:
Step 1. Determine whether the proposed action is located in a wetland and/or the 100-year floodplain (500-year floodplain for critical actions); and whether it has the potential to affect or be affected by a floodplain or wetland (see §9.7);
Step 2. Notify the public at the earliest possible time of the intent to carry out an action in a floodplain or wetland, and involve the affected and interested public in the decision-making process (see §9.8);
Step 3. Identify and evaluate practicable alternatives to locating the proposed action in a floodplain or wetland (including alternative sites, actions and the “no action” option) (see §9.9). If a practicable alternative exists outside the floodplain or wetland FEMA must locate the action at the alternative site.
Step 4. Identify the potential direct and indirect impacts associated with the occupancy or modification of floodplains and wetlands and the potential direct and indirect support of floodplain and wetland development that could result from the proposed action (see §9.10);
Step 5. Minimize the potential adverse impacts and support to or within floodplains and wetlands to be identified under Step 4, restore and preserve the natural and beneficial values served by floodplains, and preserve and enhance the natural and beneficial values served by wetlands (see §9.11);
Step 6. Reevaluate the proposed action to determine first, if it is still practicable in light of its exposure to flood hazards, the extent to which it will aggravate the hazards to others, and its potential to disrupt floodplain and wetland values and second, if alternatives preliminarily rejected at Step 3 are practicable in light of the information gained in Steps 4 and 5. FEMA shall not act in a floodplain or wetland unless it is the only practicable location (see §9.9);
Step 7. Prepare and provide the public with a finding and public explanation of any final decision that the floodplain or wetland is the only practicable alternative (see §9.12); and
Step 8. Review the implementation and post-implementation phases of the proposed action to ensure that the requirements stated in §9.11 are fully implemented. Oversight responsibility shall be integrated into existing processes.
[45 FR 59526, Sept. 9, 1980, as amended at 49 FR 35583, Sept. 10, 1984; 50 FR 40006, Oct. 1, 1985]
§ 9.7 Determination of proposed action's location.
(a) The purpose of this section is to establish Agency procedures for determining whether any action as proposed is located in or affects (1) the base floodplain (the Agency shall substitute the 500-year floodplain for the base floodplain where the action being proposed involves a critical action), or (2) a wetland.
(b) Information needed. The Agency shall obtain enough information so that it can fulfill the requirements of the Orders to (1) avoid floodplain and wetland locations unless they are the only practicable alternatives; and (2) minimize harm to and within floodplains and wetlands. In all cases, FEMA shall determine whether the proposed action is located in a floodplain or wetland. In the absence of a finding to the contrary, FEMA may assume that a proposed action involving a facility or structure that has been flooded is in the floodplain. Information about the 100-year and 500-year floods and location of floodways and coastal high hazard areas may also be needed to comply with these regulations, especially §9.11. The following additional flooding characteristics shall be identified by the Regional Administrator as appropriate:
(i) Velocity of floodwater;
(ii) Rate of rise of floodwater;
(iii) Duration of flooding;
(iv) Available warning and evacuation time and routes;
(v) Special problems:
(A) Levees;
(B) Erosion;
(C) Subsidence;
(D) Sink holes;
(E) Ice jams;
(F) Debris load;
(G) Pollutants;
(H) Wave heights;
(I) Groundwater flooding;
(J) Mudflow.
(c) Floodplain determination. (1) In the search for flood hazard information, FEMA shall follow the sequence below:
(i) The Regional Administrator shall consult the FEMA Flood Insurance Rate Map (FIRM) the Flood Boundary Floodway Map (FBFM) and the Flood Insurance Study (FIS).
(ii) If a detailed map (FIRM or FBFM) is not available, the Regional Administrator shall consult an FEMA Flood Hazard Boundary Map (FHBM) . If data on flood elevations, floodways, or coastal high hazard areas are needed, or if the map does not delineate the flood hazard boundaries in the vicinity of the proposed site, the Regional Administrator shall seek the necessary detailed information and assistance from the sources listed below.
Sources of Maps and Technical Information
Department of Agriculture: Soil Conservation Service
Department of the Army: Corps of Engineers
Department of Commerce: National Oceanic and Atmospheric Administration
Federal Insurance Administration
FEMA Regional Offices/Natural and Technological Hazards Division
Department of the Interior:
Geological Survey
Bureau of Land Management
Bureau of Reclamation
Tennessee Valley Authority
Delaware River Basin Commission
Susquehanna River Basin Commission
States
(iii) If the sources listed do not have or know of the information necessary to comply with the Orders' requirements, the Regional Administrator shall seek the services of a Federal or other engineer experienced in this type of work.
(2) If a decision involves an area or location within extensive Federal or state holdings or a headwater area, and an FIS, FIRM, FBFM, or FHBM is not available, the Regional Administrator shall seek information from the land administering agency before information and/or assistance is sought from the sources listed in this section. If none of these sources has information or can provide assistance, the services of an experienced Federal or other engineer shall be sought as described above.
(d) Wetland determination. The following sequence shall be followed by the Agency in making the wetland determination.
(1) The Agency shall consult with the U.S. Fish and Wildlife Service (FWS) for information concerning the location, scale and type of wetlands within the area which could be affected by the proposed action.
(2) If the FWS does not have adequate information upon which to base the determination, the Agency shall consult wetland inventories maintained by the Army Corps of Engineers, the Environmental Protection Agency, various states, communities and others.
(3) If state or other sources do not have adequate information upon which to base the determination, the Agency shall carry out an on-site analysis performed by a representative of the FWS or other qualified individual for wetlands characteristics based on the performance definition of what constitutes a wetland.
(4) If an action is in a wetland but not in a floodplain, and the action is new construction, the provisions of this regulation shall apply. Even if the action is not in a wetland, the Regional Administrator shall determine if the action has the potential to result in indirect impacts on wetlands. If so, all adverse impacts shall be minimized. For actions which are in a wetland and the floodplain, completion of the decision-making process is required. (See §9.6.) In such a case the wetland will be considered as one of the natural and beneficial values of floodplain.
[45 FR 59526, Sept. 9, 1980, as amended at 47 FR 13149, Mar. 29, 1982; 49 FR 33879, Aug. 27, 1984; 50 FR 40006, Oct. 1, 1985; 51 FR 34605, Sept. 30, 1986]
§ 9.8 Public notice requirements.
(a) Purpose. The purpose of this section is to establish the initial notice procedures to be followed when proposing any action in or affecting floodplains or wetlands.
(b) General. The Agency shall provide adequate information to enable the public to have impact on the decision outcome for all actions having potential to affect, adversely, or be affected by floodplains or wetlands that it proposes. To achieve this objective, the Agency shall:
(1) Provide the public with adequate information and opportunity for review and comment at the earliest possible time and throughout the decision-making process; and upon completion of this process, provide the public with an accounting of its final decisions (see §9.12); and
(2) Rely on its environmental assessment processes, to the extent possible, as vehicles for public notice, involvement and explanation.
(c) Early public notice. The Agency shall provide opportunity for public involvement in the decision-making process through the provision of public notice upon determining that the proposed action can be expected to affect or be affected by floodplains or wetlands. Whenever possible, notice shall precede major project site identification and analysis in order to preclude the foreclosure of options consistent with the Orders.
(1) For an action for which an environmental impact statement is being prepared, the Notice of Intent to File an EIS is adequate to constitute the early public notice, if it includes the information required under paragraph (c)(5) of this section.
(2) For each action having national significance for which notice is being provided, the Agency shall use theFederal Registeras the minimum means for notice, and shall provide notice by mail to national organizations reasonably expected to be interested in the action. The additional notices listed in paragraph (c)(4) of this section shall be used in accordance with the determination made under paragraph (c)(3) of this section.
(3) The Agency shall base its determination of appropriate notices, adequate comment periods, and whether to issue cumulative notices (paragraphs (c)(4), (6) and (7) of this section) on factors which include, but are not limited to:
(i) Scale of the action;
(ii) Potential for controversy;
(iii) Degree of public need;
(iv) Number of affected agencies and individuals; and
(v) Its anticipated potential impact.
(4) For each action having primarily local importance for which notice is being provided, notice shall be made in accordance with the criteria under paragraph (c)(3) of this section, and shall entail as appropriate:
(i) [Reserved]
(ii) Notice to Indian tribes when effects may occur on reservations.
(iii) Information required in the affected State's public notice procedures for comparable actions.
(iv) Publication in local newspapers (in papers of general circulation rather than legal papers).
(v) Notice through other local media.
(vi) Notice to potentially interested community organizations.
(vii) Publication in newsletters that may be expected to reach potentially interested persons.
(viii) Direct mailing to owners and occupants of nearby or affected property.
(ix) Posting of notice on and off site in the area where the action is to be located.
(x) Holding a public hearing.
(5) The notice shall include:
(i) A description of the action, its purpose and a statement of the intent to carry out an action affecting or affected by a floodplain or wetland;
(ii) Based on the factors in paragraph (c)(3) of this section, a map of the area or other indentification of the floodplain and/or wetland areas which is of adequate scale and detail so that the location is discernible; instead of publication of such map, FEMA may state that such map is available for public inspection, including the location at which such map may be inspected and a telephone number to call for information;
(iii) Based on the factors in paragraph (c)(3) of this section, a description of the type, extent and degree of hazard involved and the floodplain or wetland values present; and
(iv) Identification of the responsible official or organization for implementing the proposed action, and from whom further information can be obtained.
(6) The Agency shall provide for an adequate comment period.
(7) In a post-disaster situation in particular, the requirement for early public notice may be met in a cumulative manner based on the factors set out in paragraph (c)(3) of this section. Several actions may be addressed in one notice or series of notices. For some actions involving limited public interest a single notice in a local newspaper or letter to interested parties may suffice.
(d) Continuing public notice. The Agency shall keep the public informed of the progress of the decision-making process through additional public notices at key points in the process. The preliminary information provided under paragraph (c)(5) of this section shall be augmented by the findings of the adverse effects of the proposed actions and steps necessary to mitigate them. This responsibility shall be performed for actions requiring the preparation of an EIS, and all other actions having the potential for major adverse impacts, or the potential for harm to the health and safety of the general public.
[45 FR 59526, Sept. 9, 1980, as amended at 48 FR 29318, June 24, 1983]
§ 9.9 Analysis and reevaluation of practicable alternatives.
(a) Purpose. (1) The purpose of this section is to expand upon the directives set out in §9.6, of this part, in order to clarify and emphasize the Orders' key requirements to avoid floodplains and wetlands unless there is no practicable alternative.
(2) Step 3 is a preliminary determination as to whether the floodplain is the only practicable location for the action. It is a preliminary determination because it comes early in the decision-making process when the Agency has a limited amount of information. If it is clear that there is a practicable alternative, or the floodplain or wetland is itself not a practicable location, FEMA shall then act on that basis. Provided that the location outside the floodplain or wetland does not indirectly impact floodplains or wetlands or support development therein (see §9.10), the remaining analysis set out by this regulation is not required. If such location does indirectly impact floodplains or wetlands or support development therein, the remaining analysis set out by this regulation is required. If the preliminary determination is to act in the floodplain, FEMA shall gather the additional information required under Steps 4 and 5 and then reevaluate all the data to determine if the floodplain or wetland is the only practicable alternative.
(b) Analysis of practicable alternatives. The Agency shall identify and evaluate practicable alternatives to carrying out a proposed action in floodplains or wetlands, including:
(1) Alternative sites outside the floodplain or wetland;
(2) Alternative actions which serve essentially the same purpose as the proposed action, but which have less potential to affect or be affected by the floodplain or wetlands; and
(3) No action. The floodplain and wetland site itself must be a practicable location in light of the factors set out in this section.
(c) The Agency shall analyze the following factors in determining the practicability of the alternatives set out in paragraph (b) of this section:
(1) Natural environment (topography, habitat, hazards, etc.);
(2) Social concerns (aesthetics, historical and cultural values, land patterns, etc.);
(3) Economic aspects (costs of space, construction, services, and relocation); and
(4) Legal constraints (deeds, leases, etc.).
(d) Action following the analysis of practicable alternatives. (1) The Agency shall not locate the proposed action in the floodplain or in a wetland if a practicable alternative exists outside the floodplain or wetland.
(2) For critical actions, the Agency shall not locate the proposed action in the 500-year floodplain if a practicable alternative exists outside the 500-year floodplain.
(3) Even if no practicable alternative exists outside the floodplain or wetland, in order to carry out the action the floodplain or wetland must itself be a practicable location in light of the review required in this section.
(e) Reevaluation of alternatives. Upon determination of the impact of the proposed action to or within the floodplain or wetland and of what measures are necessary to comply with the requirement to minimize harm to and within floodplains and wetlands (§9.11), FEMA shall:
(1) Determine whether:
(i) The action is still practicable at a floodplain or wetland site in light of the exposure to flood risk and the ensuing disruption of natural values;
(ii) The floodplain or wetland site is the only practicable alternative;
(iii) There is a potential for limiting the action to increase the practicability of previously rejected non-floodplain or wetland sites and alternative actions; and
(iv) Minimization of harm to or within the floodplain can be achieved using all practicable means.
(2) Take no action in a floodplain unless the importance of the floodplain site clearly outweighs the requirement of E.O. 11988 to:
(i) Avoid direct or indirect support of floodplain development;
(ii) Reduce the risk of flood loss;
(iii) Minimize the impact of floods on human safety, health and welfare; and
(iv) Restore and preserve floodplain values.
(3) Take no action in a wetland unless the importance of the wetland site clearly outweighs the requirements of E.O. 11990 to:
(i) Avoid the destruction or modification of the wetlands;
(ii) Avoid direct or indirect support of new construction in wetlands;
(iii) Minimize the destruction, loss or degradation of wetlands; and
(iv) Preserve and enhance the natural and beneficial values of wetlands.
(4) In carrying out this balancing process, give the factors in paragraphs (e)(2) and (3) of this section, the great weight intended by the Orders.
(5) Choose the “no action” alternative where there are no practicable alternative actions or sites and where the floodplain or wetland is not itself a practicable alternative. In making the assessment of whether a floodplain or wetland location is itself a practicable alternative, the practicability of the floodplain or wetland location shall be balanced against the practicability of not carrying out the action at all. That is, even if there is no practicable alternative outside of the floodplain or wetland, the floodplain or wetland itself must be a practicable location in order for the action to be carried out there. To be a practicable location, the importance of carrying out the action must clearly outweigh the requirements of the Orders listed in paragraphs (e)(2) and (e)(3) of this section. Unless the importance of carrying out the action clearly outweighs those requirements, the “no action” alternative shall be selected.
(6) In any case in which the Regional Director has selected the “no action” option, FIA may not provide a new or renewed contract of flood insurance for that structure.
Effective Date Note: At 45 FR 79070, Nov. 28, 1980, §9.9(e)(6) was temporarily suspended until further notice.
§ 9.10 Identify impacts of proposed actions.
(a) Purpose. The purpose of this section is to ensure that the effects of proposed Agency actions are identified.
(b) The Agency shall identify the potential direct and indirect adverse impacts associated with the occupancy and modification of floodplains and wetlands and the potential direct and indirect support of floodplain and wetland development that could result from the proposed action. Such identification of impacts shall be to the extent necessary to comply with the requirements of the Orders to avoid floodplain and wetland locations unless they are the only practicable alternatives and to minimize harm to and within floodplains and wetlands.
(c) This identification shall consider whether the proposed action will result in an increase in the useful life of any structure or facility in question, maintain the investment at risk and exposure of lives to the flood hazard or forego an opportunity to restore the natural and beneficial values served by floodplains or wetlands. Regional Offices of the U.S. Fish and Wildlife Service may be contacted to aid in the identification and evaluation of potential impacts of the proposed action on natural and beneficial floodplain and wetland values.
(d) In the review of a proposed or alternative action, the Regional Administrator shall specifically consider and evaluate: impacts associated with modification of wetlands and floodplains regardless of its location; additional impacts which may occur when certain types of actions may support subsequent action which have additional impacts of their own; adverse impacts of the proposed actions on lives and property and on natural and beneficial floodplain and wetland values; and the three categories of factors listed below:
(1) Flood hazard-related factors. These include for example, the factors listed in §9.7(b)(2);
(2) Natural values-related factors. These include, for example, the following: Water resource values (natural moderation of floods, water quality maintenance, and ground water recharge); living resource values (fish and wildlife and biological productivity); cultural resource values (archeological and historic sites, and open space recreation and green belts); and agricultural, aquacultural and forestry resource values.
(3) Factors relevant to a proposed action's effects on the survival and quality of wetlands. These include, for example, the following: Public health, safety, and welfare, including water supply, quality, recharge and discharge; pollution; flood and storm hazards; and sediment and erosion; maintenance of natural systems, including conservation and long term productivity of existing flora and fauna, species and habitat diversity and stability, hydrologic utility, fish, wildlife, timber, and food and fiber resources; and other uses of wetlands in the public interest, including recreational, scientific, and cultural uses.
§ 9.11 Mitigation.
(a) Purpose. The purpose of this section is to expand upon the directives set out in §9.6 of this part, and to set out the mitigative actions required if the preliminary determination is made to carry out an action that affects or is in a floodplain or wetland.
(b) General provisions. (1) The Agency shall design or modify its actions so as to minimize harm to or within the floodplain;
(2) The Agency shall minimize the destruction, loss or degradation of wetlands;
(3) The Agency shall restore and preserve natural and beneficial floodplain values; and
(4) The Agency shall preserve and enhance natural and beneficial wetland values.
(c) Minimization provisions. The Agency shall minimize:
(1) Potential harm to lives and the investment at risk from the base flood, or, in the case of critical actions, from the 500-year flood;
(2) Potential adverse impacts the action may have on others; and
(3) Potential adverse impact the action may have on floodplain and wetland values.
(d) Minimization Standards. In its implementation of the Disaster Relief Act of 1974, the Agency shall apply at a minimum, the following standards to its actions to comply with the requirements of paragraphs (b) and (c), of this section, (except as provided in §9.5 (c), (d), and (g) regarding categories of partial or total exclusion). Any Agency action to which the following specific requirements do not apply, shall nevertheless be subject to the full 8-step process (§9.6) including the general requirement to minimize harm to and within floodplains:
(1) There shall be no new construction or substantial improvement in a floodway, and no new construction in a coastal high hazard area, except for:
(i) A functionally dependent use; or
(ii) A structure or facility which facilitates an open space use.
(2) For a structure which is a functionally dependent use, or which facilitates an open space use, the following applies. There shall be no construction of a new or substantially improved structure in a coastal high hazard area unless it is elevated on adequately anchored pilings or columns, and securely anchored to such piles or columns so that the lowest portion of the structural members of the lowest floor (excluding the pilings or columns) is elevated to or above the base flood level (the 500-year flood level for critical actions) (including wave height). The structure shall be anchored so as to withstand velocity waters and hurricane wave wash. The Regional Administrator shall be responsible for determining the base flood level, including the wave height, in all cases. Where there is a FIRM in effect, it shall be the basis of the Regional Administrator's determination. If the FIRM does not reflect wave heights, or if there is no FIRM in effect, the Regional Administrator is responsible for delineating the base flood level, including wave heights.
(3) Elevation of structures. (i) There shall be no new construction or substantial improvement of structures unless the lowest floor of the structures (including basement) is at or above the level of the base flood.
(ii) There shall be no new construction or substantial improvement of structures involving a critical action unless the lowest floor of the structure (including the basement) is at or above the level of the 500-year flood.
(iii) If the subject structure is nonresidential, FEMA may, instead of elevating the structure to the 100-year or 500-year level, as appropriate, approve the design of the structure and its attendant utility and sanitary facilities so that below the flood level the structure is water tight with walls substantially impermeable to the passage of water and with structural components having the capability of resisting hydrostatic and hydrodynamic loads and effects of buoyancy.
(iv) The provisions of paragraphs (d)(3)(i), (ii), and (iii) of this section do not apply to the extent that the Federal Insurance Administration has granted an exception under 44 CFR §60.6(b) (formerly 24 CFR 1910.6(b)), or the community has granted a variance which the Regional Administrator determines is consistent with 44 CFR 60.6(a) (formerly 24 CFR 1910.6(a)). In a community which does not have a FIRM in effect, FEMA may approve a variance from the standards of paragraphs (d)(3)(i), (ii), and (iii) of this section, after compliance with the standards of 44 CFR 60.6(a).
(4) There shall be no encroachments, including fill, new construction, substantial improvements of structures or facilities, or other development within a designated regulatory floodway that would result in any increase in flood levels within the community during the occurrence of the base flood discharge. Until a regulatory floodway is designated, no new construction, substantial improvements, or other development (including fill) shall be permitted within the base floodplain unless it is demonstrated that the cumulative effect of the proposed development, when combined with all other existing and anticipated development, will not increase the water surface elevation of the base flood more than one foot at any point within the community.
(5) Even if an action is a functionally dependent use or facilitates open space uses (under paragraph (d) (1) or (2) of this section) and does not increase flood heights (under paragraph (d)(4) of this section), such action may only be taken in a floodway or coastal high hazard area if:
(i) Such site is the only practicable alternative; and
(ii) Harm to and within the floodplain is minimized.
(6) In addition to standards (d)(1) through (d)(5) of this section, no action may be taken if it is inconsistent with the criteria of the National Flood Insurance Program (44 CFR part 59 et seq. ) or any more restrictive Federal, State or local floodplain management standards.
(7) New construction and substantial improvement of structures shall be elevated on open works (walls, columns, piers, piles, etc.) rather than on fill, in all cases in coastal high hazard areas and elsewhere, where practicable.
(8) To minimize the effect of floods on human health, safety and welfare, the Agency shall:
(i) Where appropriate, integrate all of its proposed actions in floodplains into existing flood warning and preparedness plans and ensure that available flood warning time is reflected;
(ii) Facilitate adequate access and egress to and from the site of the proposed action; and
(iii) Give special consideration to the unique hazard potential in flash flood, rapid-rise or tsunami areas.
(9) In the replacement of building contents, materials and equipment, the Regional Administrator shall require as appropriate, disaster proofing of the building and/or elimination of such future losses by relocation of those building contents, materials and equipment outside or above the base floodplain or the 500-year floodplain for critical actions.
(e) In the implementation of the National Flood Insurance Program. (1) The Federal Insurance Administration shall make identification of all coastal high hazard areas a priority;
(2) Beginning October 1, 1981, the Federal Insurance Administration of FEMA may only provide flood insurance for new construction or substantial improvements in a coastal high hazard area if:
(i) Wave heights have been designated for the site of the structure either by the Administrator of FEMA based upon data generated by FEMA or by another source, satisfactory to the Administrator; and
(ii) The structure is rated by FEMA-FIA based on a system which reflects the capacity to withstand the effects of the 100-year frequency flood including, but not limited to, the following factors:
(A) Wave heights;
(B) The ability of the structure to withstand the force of waves.
(3)(i) FEMA shall accept and take fully into account information submitted by a property owner indicating that the rate for a particular structure is too high based on the ability of the structure to withstand the force of waves. In order to obtain a rate adjustment, a property owner must submit to FEMA specific information regarding the structure and its immediate environment. Such information must be certified by a registered professional architect or engineer who has demonstrable experience and competence in the fields of foundation, soils, and structural engineering. Such information should include:
(A) Elevation of the structure (bottom of lowest floor beam) in relation to the Base Flood Elevation including wave height;
(B) Distance of the structure from the shoreline;
(C) Dune protection and other environmental factors;
(D) Description of the building support system; and
(E) Other relevant building details.
Adequate completion of the “V-Zone Risk Factor Rating Form” is sufficient for FEMA to determine whether a rate adjustment is appropriate. The form is available from and applications for rate adjustments should be submitted to:
National Flood Insurance Program
Attention: V-Zone Underwriting Specialist
9901–A George Palmer Highway
Lanham, MD 20706
Pending a determination on a rate adjustment, insurance will be issued at the class rate. If the rate adjustment is granted, a refund of the appropriate portion of the premium will be made. Unless a property owner is seeking an adjustment of the rate prescribed by FEMA-FIA, this information need not be submitted.
(ii) FIA shall notify communities with coastal high hazard areas and federally related lenders in such communities, of the provisions of this paragraph. Notice to the lenders may be accomplished by the Federal instrumentalities to which the lenders are related.
(4) In any case in which the Regional Director has been, pursuant to §9.11(d)(1), precluded from providing assistance for a new or substantially improved structure in a floodway, FIA may not provide a new or renewed policy of flood insurance for that structure.
(f) Restore and preserve. (1) For any action taken by the Agency which affects the floodplain or wetland and which has resulted in, or will result in, harm to the floodplain or wetland, the Agency shall act to restore and preserve the natural and beneficial values served by floodplains and wetlands.
(2) Where floodplain or wetland values have been degraded by the proposed action, the Agency shall identify, evaluate and implement measures to restore the values.
(3) If an action will result in harm to or within the floodplain or wetland, the Agency shall design or modify the action to preserve as much of the natural and beneficial floodplain and wetland values as is possible.
[45 FR 59526, Sept. 9, 1980, as amended at 46 FR 51752, Oct. 22, 1981; 48 FR 44543, Sept. 29, 1983; 49 FR 33879, Aug. 27, 1984; 49 FR 35584, Sept. 10, 1984; 50 FR 40006, Oct. 1, 1985]
Effective Date Note: At 45 FR 79070, Nov. 28, 1980, §9.11(e)(4) was temporarily suspended until further notice.
§ 9.12 Final public notice.
If the Agency decides to take an action in or affecting a floodplain or wetland, it shall provide the public with a statement of its final decision and shall explain the relevant factors considered by the Agency in making this determination.
(a) In addition, those sent notices under §9.8 shall also be provided the final notice.
(b) For actions for which an environmental impact statement is being prepared, the FEIS is adequate to constitute final notice in all cases except where:
(1) Significant modifications are made in the FEIS after its initial publication;
(2) Significant modifications are made in the development plan for the proposed action; or
(3) Significant new information becomes available in the interim between issuance of the FEIS and implementation of the proposed action.
If any of these situations develop, the Agency shall prepare a separate final notice that contains the contents of paragraph (e) of this section and shall make it available to those who received the FEIS. A minimum of 15 days shall, without good cause shown, be allowed for comment on the final notice.
(c) For actions for which an environmental assessment was prepared, the Notice of No Significant Impact is adequate to constitute final public notice, if it includes the information required under paragraph (e) of this section.
(d) For all other actions, the finding shall be made in a document separate from those described in paragraphs (a), (b), and (c) of this section. Based on an assessment of the following factors, the requirement for final notice may be met in a cumulative manner:
(1) Scale of the action;
(2) Potential for controversy;
(3) Degree of public need;
(4) Number of affected agencies and individuals;
(5) Its anticipated potential impact; and
(6) Similarity of the actions, i.e., to the extent that they are susceptible of common descriptions and assessments.
When a damaged structure or facility is already being repaired by the State or local government at the time of the Damage Survey Report, the requirements of Steps 2 and 7 (§§9.8 and 9.12) may be met by a single notice. Such notice shall contain all the information required by both sections.
(e) The final notice shall include the following:
(1) A statement of why the proposed action must be located in an area affecting or affected by a floodplain or a wetland;
(2) A description of all significant facts considered in making this determination;
(3) A list of the alternatives considered;
(4) A statement indicating whether the action conforms to applicable state and local floodplain protection standards;
(5) A statement indicating how the action affects or is affected by the floodplain and/or wetland, and how mitigation is to be achieved;
(6) Identification of the responsible official or organization for implementation and monitoring of the proposed action, and from whom further information can be obtained; and
(7) A map of the area or a statement that such map is available for public inspection, including the location at which such map may be inspected and a telephone number to call for information.
(f) After providing the final notice, the Agency shall, without good cause shown, wait at least 15 days before carrying out the action.
[45 FR 59526, Sept. 9, 1980, as amended at 48 FR 29318, June 24, 1983]
§ 9.13 Particular types of temporary housing.
(a) The purpose of this section is to set forth the procedures whereby the Agency will provide certain specified types of temporary housing.
(b) Prior to providing the types of temporary housing enumerated in paragraph (c) of this section, the Agency shall comply with the provisions of this section. For all temporary housing not enumerated below, the full 8-step process (see §9.6) applies.
(c) The following temporary housing actions are subject to the provisions of this section and not the full 8-step process:
(1) [Reserved]
(2) Placing a mobile home or readily fabricated dwelling on a private or commercial site, but not a group site.
(d) The actions set out in paragraph (c) of this section are subject to the following decision-making process:
(1) The temporary housing action shall be evaluated in accordance with the provisions of §9.7 to determine if it is in or affects a floodplain or wetland.
(2) No mobile home or readily fabricated dwelling may be placed on a private or commercial site in a floodway or coastal high hazard area.
(3) An individual or family shall not be housed in a floodplain or wetland unless the Regional Administrator has complied with the provisions of §9.9 to determine that such site is the only practicable alternative. The following factors shall be substituted for the factors in §9.9 (c) and (e) (2) through (4):
(i) Speedy provision of temporary housing;
(ii) Potential flood risk to the temporary housing occupant;
(iii) Cost effectiveness;
(iv) Social and neighborhood patterns;
(v) Timely availability of other housing resources; and
(vi) Potential harm to the floodplain or wetland.
(4) An individual or family shall not be housed in a floodplain or wetland (except in existing resources) unless the Regional Administrator has complied with the provisions of §9.11 to minimize harm to and within floodplains and wetlands. The following provisions shall be substituted for the provisions of §9.11(d) for mobile homes:
(i) No mobile home or readily fabricated dwelling may be placed on a private or commercial site unless it is elevated to the fullest extent practicable up to the base flood level and adequately anchored.
(ii) No mobile home or readily fabricated dwelling may be placed if such placement is inconsistent with the criteria of the National Flood Insurance Program (44 CFR part 59 et seq.) or any more restrictive Federal, State or local floodplain management standard. Such standards may require elevation to the base flood level in the absence of a variance.
(iii) Mobile homes shall be elevated on open works (walls, columns, piers, piles, etc.) rather than on fill where practicable.
(iv) To minimize the effect of floods on human health, safety and welfare, the Agency shall:
(A) Where appropriate, integrate all of its proposed actions in placing mobile homes for temporary housing in floodplains into existing flood warning and preparedness plans and ensure that available flood warning time is reflected;
(B) Provide adequate access and egress to and from the proposed site of the mobile home; and
(C) Give special consideration to the unique hazard potential in flash flood and rapid-rise areas.
(5) FEMA shall comply with Step 2 Early Public Notice (§9.8(c)) and Step 7 Final Public Notice (§9.12). In providing these notices, the emergency nature of temporary housing shall be taken into account.
(e) FEMA shall not sell or otherwise dispose of mobile homes or other readily fabricated dwellings which would be located in floodways or coastal high hazard areas. FEMA shall not sell or otherwise dispose of mobile homes or other readily fabricated dwellings which would be located in floodplains or wetlands unless there is full compliance with the 8-step process. Given the vulnerability of mobile homes to flooding, a rejection of a non-floodplain location alternative and of the no-action alternative shall be based on (1) a compelling need of the family or individual to buy a mobile home for permanent housing, and (2) a compelling requirement to locate the unit in a floodplain. Further, FEMA shall not sell or otherwise dispose of mobile homes or other readily fabricated dwellings in a floodplain unless they are elevated at least to the level of the 100-year flood. The Regional Administrator shall notify the Assistant Administrator for Mitigation of each instance where a floodplain location has been found to be the only practicable alternative for a mobile home sale.
[45 FR 59526, Sept. 9, 1980, as amended at 47 FR 13149, Mar. 29, 1982; 49 FR 35584, Sept. 10, 1984; 50 FR 40006, Oct. 1, 1985]
§ 9.14 Disposal of Agency property.
(a) The purpose of this section is to set forth the procedures whereby the Agency shall dispose of property.
(b) Prior to its disposal by sale, lease or other means of disposal, property proposed to be disposed of by the Agency shall be reviewed according to the decision-making process set out in §9.6 of this part, as follows:
(1) The property shall be evaluated in accordance with the provisions of §9.7 to determine if it affects or is affected by a floodplain or wetland;
(2) The public shall be notified of the proposal and involved in the decision-making process in accordance with the provisions of §9.8;
(3) Practicable alternatives to disposal shall be evaluated in accordance with the provisions of §9.9. For disposals, this evaluation shall focus on alternative actions (conveyance for an alternative use that is more consistent with the floodplain management and wetland protection policies set out in §9.2 than the one proposed, e.g., open space use for park or recreational purposes rather than high intensity uses), and on the “no action” option (retain the property);
(4) Identify the potential impacts and support associated with the disposal of the property in accordance with §9.10;
(5) Identify the steps necessary to minimize, restore, preserve and enhance in accordance with §9.11. For disposals, this analysis shall address all four of these components of mitigation where unimproved property is involved, but shall focus on minimization through floodproofing and restoration of natural values where improved property is involved;
(6) Reevaluate the proposal to dispose of the property in light of its exposure to the flood hazard and its natural values-related impacts, in accordance with §9.9. This analysis shall focus on whether it is practicable in light of the findings from §§9.10 and 9.11 to dispose of the property, or whether it must be retained. If it is determined that it is practicable to dispose of the property, this analysis shall identify the practicable alternative that best achieves all of the components of the Orders' mitigation responsibility;
(7) To the extent that it would decrease the flood hazard to lives and property, the Agency shall, wherever practicable, dispose of the properties according to the following priorities:
(i) Properties located outside the floodplain;
(ii) Properties located in the flood fringe; and
(iii) Properties located in a floodway, regulatory floodway or coastal high hazard area.
(8) The Agency shall prepare and provide the public with a finding and public explanation in accordance with §9.12.
(9) The Agency shall ensure that the applicable mitigation requirements are fully implemented in accordance with §9.11.
(c) At the time of disposal, for all disposed property, the Agency shall reference in the conveyance uses that are restricted under existing Federal, State and local floodplain management and wetland protection standards relating to flood hazards and floodplain and wetland values.
§ 9.15 Planning programs affecting land use.
The Agency shall take floodplain management into account when formulating or evaluating any water and land use plans. No plan may be approved unless it:
(a) Reflects consideration of flood hazards and floodplain management and wetlands protection; and
(b) Prescribes planning procedures to implement the policies and requirements of the Orders and this regulation.
§ 9.16 Guidance for applicants.
(a) The Agency shall encourage and provide adequate guidance to applicants for agency assistance to evaluate the effects of their plans and proposals in or affecting floodplains and wetlands.
(b) This shall be accomplished primarily through amendment of all Agency instructions to applicants, e.g., program handbooks, contracts, application and agreement forms, etc., and also through contact made by agency staff during the normal course of their activities, to fully inform prospective applicants of:
(1) The Agency's policy on floodplain management and wetlands protection as set out in §9.2;
(2) The decision-making process to be used by the Agency in making the determination of whether to provide the required assistance as set out in §9.6;
(3) The nature of the Orders' practicability analysis as set out in §9.9;
(4) The nature of the Orders' mitigation responsibilities as set out in §9.11;
(5) The nature of the Orders' public notice and involvement process as set out in §§9.8 and 9.12; and
(6) The supplemental requirements applicable to applications for the lease or other disposal of Agency owned properties set out in §9.14.
(c) Guidance to applicants shall be provided where possible, prior to the time of application in order to minimize potential delays in process application due to failure of applicants to recognize and reflect the provisions of the Orders and this regulation.
§ 9.17 Instructions to applicants.
(a) Purpose. In accordance with Executive Orders 11988 and 11990, the Federal executive agencies must respond to a number of floodplain management and wetland protection responsibilities before carrying out any of their activities, including the provision of Federal financial and technical assistance. The purpose of this section is to put applicants for Agency assistance on notice concerning both the criteria that it is required to follow under the Orders, and applicants' responsibilities under this regulation.
(b) Responsibilities of Applicants. Based upon the guidance provided by the Agency under §9.16, that guidance included in the U.S. Water Resources Council's Guidance for Implementing E.O. 11988, and based upon the provisions of the Orders and this regulation, applicants for Agency assistance shall recognize and reflect in their application:
(1) The Agency's policy on floodplain management and wetlands protection as set out in §9.2;
(2) The decision-making process to be used by the Agency in making the determination of whether to provide the requested assistance as set out in §9.6;
(3) The nature of the Orders' practicability analysis as set out in §9.9;
(4) The nature of the Orders' mitigation responsibilities as set out in §9.11;
(5) The nature of the Orders' public and involvement process as set out in §§9.8 and 9.12; and
(6) The supplemental requirements for application for the lease or other disposal of Agency-owned properties, as set out in §9.13.
(c) Provision of supporting information. Applicants for Agency assistance may be called upon to provide supporting information relative to the various responsibilities set out in paragraph (b) of this section as a prerequisite to the approval of their applications.
(d) Approval of applications. Applications for Agency assistance shall be reviewed for the recognition and reflection of the provisions of this regulation in addition to the Agency's existing approval criteria.
§ 9.18 Responsibilities.
(a) Regional Administrators' responsibilities. Regional Administrators shall, for all actions falling within their respective jurisdictions:
(1) Implement the requirements of the Orders and this regulation. Anywhere in §§9.2, 9.6 through 9.13, and 9.15 where a direction is given to the Agency, it is the responsibility of the Regional Administrator.
(2) Consult with the Chief Counsel regarding any question of interpretation concerning this regulation or the Orders.
(b) The Heads of the Offices, Directorates and Administrations of FEMA shall:
(1) Implement the requirements of the Orders and this regulation. When a decision of a Regional Administrator relating to disaster assistance is appealed, the Assistant Administrator for Mitigation may make determinations under these regulations on behalf of the Agency.
(2) Prepare and submit to the Office of Chief Counsel reports to the Office of Management and Budget in accordance with section 2(b) of E.O. 11988 and section 3 of E.O. 11990. If a proposed action is to be located in a floodplain or wetland, any requests to the Office of Management and Budget for new authorizations or appropriations shall be accompanied by a report indicating whether the proposed action is in accord with the Orders and these regulations.
[45 FR 59526, Sept. 9, 1980, as amended at 49 FR 33879, Aug. 27, 1984; 74 FR 15336, Apr. 3, 2009]
Appendix A to Part 9—Decision-making Process for E.O. 11988
Title 44: Emergency Management and Assistance
PART 10—ENVIRONMENTAL CONSIDERATIONS
Section Contents
§ 10.1 Background
and purpose.
§ 10.2 Applicability
and scope.
§ 10.3 Definitions.
§ 10.4 Policy.
Subpart B—Agency Implementing Procedures
§ 10.5 Responsibilities.
§ 10.6 Making
or amending policy.
§ 10.7 Planning.
§ 10.8 Determination
of requirement for environmental review.
§ 10.9 Preparation
of environmental assessments.
§ 10.10 Preparation
of environmental impact statements.
§ 10.11 Environmental
information.
§ 10.12 Pre-implementation
actions.
§ 10.13 Emergencies.
§ 10.14 Flood
plains and wetlands.
Authority: 42 U.S.C. 4321 et seq. ; E.O. 11514 of March 7, 1970, 35 FR 4247, as amended by E. O. 11991 of March 24, 1977, 3 CFR, 1977 Comp., p. 123; Reorganization Plan No. 3 of 1978, 43 FR 41943, 3 CFR, 1978 Comp., p. 329; E.O. 12127 of March 31, 1979, 44 FR 19367, 3 CFR, 1979 Comp., p. 376; E.O. 12148 of July 20, 1979, 44 FR 43239, 3 CFR, 1979 Comp., p. 412, as amended.
Source: 45 FR 41142, June 18, 1980, unless otherwise noted.
Subpart A—General
§ 10.1 Background and purpose.
(a) This part implements the Council on Environmental Quality (CEQ) regulations (National Environmental Policy Act Regulations, 43 FR 55978 (1978)) and provides policy and procedures to enable Federal Emergency Management Agency (FEMA) officials to be informed of and take into account environmental considerations when authorizing or approving major FEMA actions that significantly affect the environment in the United States. The Council on Environmental Quality Regulations implement the procedural provisions, section 102(2), of the National Environmental Policy Act of 1969, as amended (hereinafter NEPA) (Pub. L. 91–190, 42 U.S.C. 4321 et seq. ), and Executive Order 11991, 42 FR 26967 (1977).
(b) Section 1507.3, Council on Environmental Quality Regulations (National Environmental Policy Act Regulations, 43 FR 55978 (1978)) directs that Federal agencies shall adopt procedures to supplement the CEQ regulations. This regulation provides detailed FEMA implementing procedures to supplement the CEQ regulations.
(c) The provisions of this part must be read together with those of the CEQ regulations and NEPA as a whole when applying the NEPA process.
§ 10.2 Applicability and scope.
The provisions of this part apply to the Federal Emergency Management Agency, (hereinafter referred to as FEMA) including any office or administration of FEMA, and the FEMA regional offices.
§ 10.3 Definitions.
(a) Regional Administrator means the Regional Administrator of the Federal Emergency Management Agency for the region in which FEMA is acting.
(b) The other terms used in this part are defined in the CEQ regulations (40 CFR part 1508).
(c) Environmental Officer means the Director, Office of Environmental Planning and Historic Preservation, Mitigation Directorate, or his or her designee.
[45 FR 41142, June 18, 1980, as amended at 47 FR 13149, Mar. 29, 1982; 50 FR 40006, Oct. 1, 1985; 74 FR 15336, Apr. 3, 2009]
§ 10.4 Policy.
(a) FEMA shall act with care to assure that, in carrying out its responsibilities, including disaster planning, response and recovery and hazard mitigation and flood insurance, it does so in a manner consistent with national environmental policies. Care shall be taken to assure, consistent with other considerations of national policy, that all practical means and measures are used to protect, restore, and enhance the quality of the environment, to avoid or minimize adverse environmental consequences, and to attain the objectives of:
(1) Achieving use of the environment without degradation, or undesirable and unintended consequences;
(2) Preserving historic, cultural and natural aspects of national heritage and maintaining, wherever possible, an environment that supports diversity and variety of individual choice;
(3) Achieving a balance between resource use and development within the sustained carrying capacity of the ecosystem involved; and
(4) Enhancing the quality of renewable resources and working toward the maximum attainable recycling of depletable resources.
(b) FEMA shall:
(1) Assess environmental consequences of FEMA actions in accordance with §§10.9 and 10.10 of this part and parts 1500 through 1508 of the CEQ regulations;
(2) Use a systematic, interdisciplinary approach that will ensure the integrated use of the natural and social sciences, and environmental considerations, in planning and decisionmaking where there is a potential for significant environmental impact;
(3) Ensure that presently unmeasured environmental amenities are considered in the decisionmaking process;
(4) Consider reasonable alternatives to recommended courses of action in any proposal that involves conflicts concerning alternative uses of resources; and
(5) Make available to States, counties, municipalities, institutions and individuals advice and information useful in restoring, maintaining, and enhancing the quality of the environment.
Subpart B—Agency Implementing Procedures
§ 10.5 Responsibilities.
(a) The Regional Administrators shall, for each action not categorically excluded from this regulation and falling within their respective jurisdictions:
(1) Prepare an environmental assessment and submit such assessment to the Environmental Officer and the Office of Chief Counsel (OCC);
(2) Prepare a finding of no significant impact, or prepare an environmental impact statement;
(3) Coordinate and provide information regarding environmental review with applicants for FEMA assistance;
(4) Prepare and maintain an administrative record for each proposal that is determined to be categorically excluded from this regulation;
(5) Involve environmental agencies, applicants, and the public to the extent practicable in preparing environmental assessments;
(6) Prepare, as required, a supplement to either the draft or final environmental impact statement;
(7) Circulate draft and final environmental impact statements;
(8) Ensure that decisions are made in accordance with the policies and procedures of NEPA and this part, and prepare a concise public record of such decisions;
(9) Consider mitigating measures to avoid or minimize environmental harm, and, in particular, harm to and within floodplains and wetlands; and
(10) Review and comment upon, as appropriate, environmental assessments and impact statements of other Federal agencies and of State and local entities within their respective regions.
(b) The Environmental Officer shall:
(1) Determine, on the basis of the environmental assessment whether an environmental impact statement is required, or whether a finding of no significant impact shall be prepared;
(2) Review all proposed changes or additions to the list of categorical exclusions;
(3) Review all findings of no significant impact;
(4) Review all proposed draft and final environmental statements;
(5) Publish the required notices in theFederal Register;
(6) Provide assistance in the preparation of environmental assessments and impact statements and assign lead agency responsibility when more than one FEMA office or administration is involved;
(7) Direct the preparation of environmental documents for specific actions when required;
(8) Comply with the requirements of this part when the Administrator of FEMA promulgates regulations, procedures or other issuances making or amending Agency policy;
(9) Provide, when appropriate, consolidated FEMA comments on draft and final impact statements prepared for the issuance of regulations and procedures of other agencies;
(10) Review FEMA issuances that have environmental implications;
(11) Maintain liaison with the Council on Environmental Quality, the Environmental Protection Agency, the Office of Management and Budget, other Federal agencies, and State and local groups, with respect to environmental analysis for FEMA actions affecting the environment.
(c) The Heads of the Offices, Directorates, and Administrations of FEMA shall:
(1) Assess environmental consequences of proposed and on-going programs within their respective organizational units;
(2) Prepare and process environmental assessments and environmental impact statements for all regulations, procedures and other issuances making or amending program policy related to actions which do not qualify for categorical exclusions;
(3) Integrate environmental considerations into their decisionmaking processes;
(4) Ensure that regulations, procedures and other issuances making or amending program policy are reviewed for consistency with the requirements of this part;
(5) Designate a single point of contact for matters pertaining to this part;
(6) Provide applicants for FEMA assistance with technical assistance regarding FEMA's environmental review process.
(d) The Office of Chief Counsel of FEMA shall:
(1) Provide advice and assistance concerning the requirements of this part;
(2) Review all proposed changes or additions to the list of categorical exclusions;
(3) Review all findings of no significant impact; and
(4) Review all proposed draft and final environmental impact statements.
[45 FR 41142, June 18, 1980, as amended at 47 FR 13149, Mar. 29, 1982]
§ 10.6 Making or amending policy.
For all regulations, procedures, or other issuances making or amending policy, the head of the FEMA office or administration establishing such policy shall be responsible for application of this part to that action. This does not apply to actions categorically excluded. For all policy-making actions not categorically excluded, the head of the office or administration shall comply with the requirements of this part. Thus, for such actions, the office or administration head shall assume the responsibilities that a Regional Administrator assumes for a FEMA action in his/her respective region. For such policy-making actions taken by the Administrator of FEMA, the Environmental Officer shall assume the responsibilities that a Regional Administrator assumes for a FEMA action in his/her respective region.
[45 FR 41142, June 18, 1980, as amended at 47 FR 13149, Mar. 29, 1982]
§ 10.7 Planning.
(a) Early planning. The Regional Administrator shall integrate the NEPA process with other planning at the earliest possible time to ensure that planning decisions reflect environmental values, to avoid delays later in the process, and to head off potential conflicts.
(b) Lead agency. To determine the lead agency for policy-making in which more than one FEMA office or administration is involved or any action in which another Federal agency is involved, FEMA offices and administrations shall apply criteria defined in §1501.5 of the CEQ regulation. If there is disagreement, the FEMA offices and/or administrations shall forward a request for lead agency determination to the Environmental Officer;
(1) The Environmental Officer will determine lead agency responsibility among FEMA offices and administration.
(2) In those cases involving a FEMA office or administration and another Federal agency, the Environmental Officer will attempt to resolve the differences. If unsuccessful, the Environmental Officer will file the request with the Council on Environmental Quality for determination.
(c) Technical assistance to applicants. (1) Section 1501.2(d) of the CEQ regulations requires agencies to provide for early involvement in actions which, while planned by private applicants or other non-Federal entities, require some form of Federal approval. To implement the requirements of §1501.2(d),
(i) The heads of the FEMA offices and administration shall prepare where practicable, generic guidelines describing the scope and level of environmental information required from applicants as a basis for evaluating their proposed actions, and make these guidelines available upon request.
(ii) The Regional Administrator shall provide such guidance on a project-by-project basis to applicants seeking assistance from FEMA.
(iii) Upon receipt of an application for agency approval, or notification that an application will be filed, the Regional Administrator shall consult as required with other appropriate parties to initiate and coordinate the necessary environmental analyses.
(2) To facilitate compliance with the requirements of paragraph (a) of this section, applicants and other non-Federal entities are expected to:
(i) Contact the Regional Administrator as early as possible in the planning process for guidance on the scope and level of environmental information required to be submitted in support of their application;
(ii) Conduct any studies which are deemed necessary and appropriate by FEMA to determine the impact of the proposed action on the human environment;
(iii) Consult with appropriate Federal, regional, State, and local agencies and other potentially interested parties during preliminary planning stages to ensure that all environmental factors are identified;
(iv) Submit applications for all Federal, regional, State, and local approvals as early as possible in the planning process;
(v) Notify the Regional Administrator as early as possible of all other Federal, regional, State, local, and Indian tribe actions required for project completion so that FEMA may coordinate all Federal environmental reviews; and
(vi) Notify the Regional Administrator of all known parties potentially affected by or interested in the proposed action.
[45 FR 41142, June 18, 1980, as amended at 47 FR 13149, Mar. 29, 1982]
§ 10.8 Determination of requirement for environmental review.
The first step in applying the NEPA process is to determine whether to prepare an environmental assessment or an environmental impact statement. Early determination will help ensure that necessary environmental documentation is prepared and integrated into the decision-making process. Environmental impact statements will be prepared for all major Agency actions (see 40 CFR 1508.18) significantly (see 40 CFR 1508.27) affecting the quality of the human environment.
(a) In determining whether to prepare an environmental impact statement (EIS) the Regional Administrator will first determine whether the proposal is one which:
(1) Normally requires an environmental impact statement; or
(2) Normally does not require either an environmental impact statement or an environmental assessment (categorical exclusion).
(b) Actions that normally require an EIS. (1) In some cases, it will be readily apparent that a proposed action will have significant impact on the environment. In that event, the Regional Administrator will, pursuant to §10.9(g) of this part, submit the notice of preparation of an environmental impact statement to the Environmental Officer.
(2) To assist in determining those actions that normally do require an environmental impact statement, the following criteria apply:
(i) If an action will result in an extensive change in land use or the commitment of a large amount of land;
(ii) If an action will result in a land use change which is incompatible with the existing or planned land use of the surrounding area;
(iii) If many people will be affected;
(iv) If the environmental impact of the project is likely to be controversial;
(v) If an action will affect, in large measure, wildlife populations and their habitats, important natural resources, floodplains, wetlands, estuaries, beaches, dunes, unstable soils, steep slopes, aquifer recharge areas, or delicate or rare ecosystems, including endangered species;
(vi) If an action will result in a major adverse impact upon air or water quality;
(vii) If an action will adversely affect a property listed on the National Register of Historic Places or eligible for listing on the Register if, after consultation with the Advisory Council on Historic Preservation an environmental assessment is not deemed sufficient;
(viii) If an action is one of several actions underway or planned for an area and the cumulative impact of these projects is considered significant in terms of the above criteria;
(ix) If an action holds potential for threat or hazard to the public; or
(x) If an action is similar to previous actions determined to require an environmental impact statement.
(3) In any case involving an action that normally does require an environmental impact statement, the Regional Administrator may prepare an environmental assessment to determine if an environmental impact statement is required.
(c) Statutory exclusions. The following actions are statutorily excluded from NEPA and the preparation of environmental impact statements and environmental assessments by section 316 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), as amended, 42 U.S.C. 5159;
(1) Action taken or assistance provided under sections 402, 403, 407, or 502 of the Stafford Act; and
(2) Action taken or assistance provided under section 406 of the Stafford Act that has the effect of restoring facilities substantially as they existed before a major disaster or emergency.
(d) Categorical Exclusions (CATEXs). CEQ regulations at 40 CFR 1508.4 provide for the categorical exclusion of actions that do not individually or cumulatively have a significant impact on the human environment and for which, therefore, neither an environmental assessment nor an environmental impact statement is required. Full implementation of this concept will help FEMA avoid unnecessary or duplicate effort and concentrate resources on significant environmental issues.
(1) Criteria. The criteria used for determination of those categories of actions that normally do not require either an environmental impact statement or an environmental assessment include:
(i) Minimal or no effect on environmental quality;
(ii) No significant change to existing environmental conditions; and
(iii) No significant cumulative environmental impact.
(2) List of exclusion categories. FEMA has determined that the following categories of actions have no significant effect on the human environment and are, therefore, categorically excluded from the preparation of environmental impact statements and environmental assessments except where extraordinary circumstances as defined in paragraph (d)(5) of this section exist. If the action is of an emergency nature as described in §316 of the Stafford Act (42 U.S.C. 5159), it is statutorily excluded and is noted with [SE].
(i) Administrative actions such as personnel actions, travel, procurement of supplies, etc., in support of normal day-to-day activities and disaster related activities;
(ii) Preparation, revision, and adoption of regulations, directives, manuals, and other guidance documents related to actions that qualify for categorical exclusions;
(iii) Studies that involve no commitment of resources other than manpower and associated funding;
(iv) Inspection and monitoring activities, granting of variances, and actions to enforce Federal, state, or local codes, standards or regulations;
(v) Training activities and both training and operational exercises utilizing existing facilities in accordance with established procedures and land use designations;
(vi) Procurement of goods and services for support of day-to-day and emergency operational activities, and the temporary storage of goods other than hazardous materials, so long as storage occurs on previously disturbed land or in existing facilities;
(vii) The acquisition of properties and the associated demolition/removal [see paragraph (d)(2)(xii) of this section] or relocation of structures [see paragraph (d)(2)(xiii) of this section] under any applicable authority when the acquisition is from a willing seller, the buyer coordinated acquisition planning with affected authorities, and the acquired property will be dedicated in perpetuity to uses that are compatible with open space, recreational, or wetland practices.
(viii) Acquisition or lease of existing facilities where planned uses conform to past use or local land use requirements;
(ix) Acquisition, installation, or operation of utility and communication systems that use existing distribution systems or facilities, or currently used infrastructure rights-of-way;
(x) Routine maintenance, repair, and grounds-keeping activities at FEMA facilities;
(xi) Planting of indigenous vegetation;
(xii) Demolition of structures and other improvements or disposal of uncontaminated structures and other improvements to permitted off-site locations, or both;
(xiii) Physical relocation of individual structures where FEMA has no involvement in the relocation site selection or development;
(xiv) Granting of community-wide exceptions for floodproofed residential basements meeting the requirements of 44 CFR 60.6(c) under the National Flood Insurance Program;
(xv) Repair, reconstruction, restoration, elevation, retrofitting, upgrading to current codes and standards, or replacement of any facility in a manner that substantially conforms to the preexisting design, function, and location; [SE, in part]
(xvi) Improvements to existing facilities and the construction of small scale hazard mitigation measures in existing developed areas with substantially completed infrastructure, when the immediate project area has already been disturbed, and when those actions do not alter basic functions, do not exceed capacity of other system components, or modify intended land use; provided the operation of the completed project will not, of itself, have an adverse effect on the quality of the human environment;
(xvii) Actions conducted within enclosed facilities where all airborne emissions, waterborne effluent, external radiation levels, outdoor noise, and solid and bulk waste disposal practices comply with existing Federal, state, and local laws and regulations;
(xviii) The following planning and administrative activities in support of emergency and disaster response and recovery:
(A) Activation of the Emergency Support Team and convening of the Catastrophic Disaster Response Group at FEMA headquarters;
(B) Activation of the Regional Operations Center and deployment of the Emergency Response Team, in whole or in part;
(C) Deployment of Urban Search and Rescue teams;
(D) Situation Assessment including ground and aerial reconnaissance;
(E) Information and data gathering and reporting efforts in support of emergency and disaster response and recovery and hazard mitigation; and
(xix) The following emergency and disaster response, recovery and hazard mitigation activities under the Stafford Act:
(A) General Federal Assistance (§402); [SE]
(B) Essential Assistance (§403); [SE]
(C) Debris Removal (§407) [SE]
(D) Temporary Housing (§408), except locating multiple mobile homes or other readily fabricated dwellings on sites, other than private residences, not previously used for such purposes;
(E) Unemployment Assistance (§410);
(F) Individual and Family Grant Programs (§411), except for grants that will be used for restoring, repairing or building private bridges, or purchasing mobile homes or other readily fabricated dwellings;
(G) Food Coupons and Distribution (§412);
(H) Food Commodities (§413);
(I) Legal Services (§415);
(J) Crisis Counseling Assistance and Training (§416);
(K) Community Disaster Loans (§417);
(L) Emergency Communications (§418);
(M) Emergency Public Transportation (§419);
(N) Fire Management Assistance Grants; and
(O) Federal Emergency Assistance (§502) [SE].
(3) Extraordinary circumstances. If extraordinary circumstances exist within an area affected by an action, such that an action that is categorically excluded from NEPA compliance may have a significant adverse environmental impact, an environmental assessment shall be prepared. Extraordinary circumstances that may have a significant environmental impact include:
(i) Greater scope or size than normally experienced for a particular category of action;
(ii) Actions with a high level of public controversy;
(iii) Potential for degradation, even though slight, of already existing poor environmental conditions;
(iv) Employment of unproven technology with potential adverse effects or actions involving unique or unknown environmental risks;
(v) Presence of endangered or threatened species or their critical habitat, or archaeological, cultural, historical or other protected resources;
(vi) Presence of hazardous or toxic substances at levels which exceed Federal, state or local regulations or standards requiring action or attention;
(vii) Actions with the potential to affect special status areas adversely or other critical resources such as wetlands, coastal zones, wildlife refuge and wilderness areas, wild and scenic rivers, sole or principal drinking water aquifers;
(viii) Potential for adverse effects on health or safety; and
(ix) Potential to violate a Federal, State, local or tribal law or requirement imposed for the protection of the environment.
(x) Potential for significant cumulative impact when the proposed action is combined with other past, present and reasonably foreseeable future actions, even though the impacts of the proposed action may not be significant by themselves.
(4) Documentation. The Regional Administrator will prepare and maintain an administrative record of each proposal that is determined to be categorically excluded from the preparation of an environmental impact statement or an environmental assessment.
(5) Revocation. The Regional Administrator shall revoke a determination of categorical exclusion and shall require a full environmental review if, subsequent to the granting an exclusion, the Regional Administrator determines that due to changes in the proposed action or in light of new findings, the action no longer meets the requirements for a categorical exclusion.
(6) Changes to the list of exclusion categories. (i) The FEMA list of exclusion categories will be continually reviewed and refined as additional categories are identified and experience is gained in the categorical exclusion process. An office, directorate, or administration of FEMA may, at any time, recommend additions or changes to the FEMA list of exclusion categories.
(ii) Offices, directorates, and administrations of FEMA are encouraged to develop additional categories of exclusions necessary to meet their unique operational and mission requirements.
(iii) If an office, directorate, or administration of FEMA proposes to change or add to the list of exclusion categories, it shall first:
(A) Obtain the approval of the Environmental Officer and the Office of the Chief Counsel; and
(B) Publish notice of such proposed change or addition in theFederal Registerat least 60 days before the effective date of such change or addition.
(e) Actions that normally require an environmental assessment. When a proposal is not one that normally requires an environmental impact statement and does not qualify as a categorical exclusion, the Regional Administrator shall prepare an environmental assessment.
(f) Documentation. The Regional Administrator will prepare and maintain an administrative record of each proposal that is determined to be categorically excluded from the preparation of an environmental impact statement or an environmental assessment.
(g) Actions that normally require an environmental assessment. When a proposal is not one that normally requires an environmental impact statement and does not qualify as a categorical exclusion, the Regional Administrator shall prepare an environmental assessment.
[45 FR 41142, June 18, 1980, as amended at 46 FR 2049, Jan. 8, 1981; 46 FR 54346, Nov. 3, 1981; 47 FR 13149, Mar. 29, 1982; 52 FR 5285, Feb. 20, 1987; 59 FR 954, Jan. 7, 1994; 61 FR 4230, Feb. 5, 1996; 61 FR 10688, Mar. 15, 1996; 66 FR 57347, Nov. 14, 2001]
§ 10.9 Preparation of environmental assessments.
(a) When to prepare. The Regional Administrator shall begin preparation of an environmental assessment as early as possible after the determination that an assessment is required. The Regional Administrator may prepare an environmental assessment at any time to assist planning and decision-making.
(b) Content and format. The environmental assessment is a concise public document to determine whether to prepare an environmental impact statement, aiding in compliance with NEPA when no EIS is necessary, and facilitating preparation of a statement when one is necessary. Preparation of an environmental assessment generally will not require extensive research or lengthy documentation. The environmental assessment shall contain brief discussion of the following:
(1) Purpose and need for the proposed action.
(2) Description of the proposed action.
(3) Alternatives considered.
(4) Environmental impact of the proposed action and alternatives.
(5) Listing of agencies and persons consulted.
(6) Conclusion of whether to prepare an environmental impact statement.
(c) Public participation. The Regional Administrator shall involve environmental agencies, applicants, and the public, to the extent practicable, in preparing environmental assessments. In determining “to the extent practicable,” the Regional Administrator shall consider:
(1) Magnitude of the proposal;
(2) Likelihood of public interest;
(3) Need to act quickly;
(4) Likelihood of meaningful public comment;
(5) National security classification issues;
(6) Need for permits; and
(7) Statutory authority of environmental agency regarding the proposal.
(d) When to prepare an EIS. The Regional Administrator shall prepare an environmental impact statement for all major Agency actions significantly affecting the quality of the human environment. The test of what is a “significant” enough impact to require an EIS is found in the CEQ regulations at 40 CFR 1508.27.
(e) Finding of No Significant Impact. If the Regional Administrator determines on the basis of the environmental assessment not to prepare an environmental impact statement, the Regional Administrator shall prepare a finding of no significant impact in accordance with 40 CFR 1501.4(e) of the CEQ regulations. The assessment and the finding shall be submitted to the Environmental Officer and the Office of Chief Counsel (OCC) for approval. If Environmental Officer and OGC approval is obtained, the Regional Administrator shall then make the finding of no significant impact available to the public as specified in §1506.6 of the CEQ regulations. A finding of no significant impact is not required when the decision not to prepare an environmental impact statement is based on a categorical exclusion.
(f) Environmental Officer or OCC Disallowance. If the Environmental Officer or OCC disagrees with the finding of no significant impact, the Regional Administrator shall prepare an environmental impact statement. Prior to preparation of an EIS, the Regional Administrator shall forward a notice of intent to prepare the EIS to the Environmental Officer who shall publish such notice in theFederal Register.
(g) EIS determination of Regional Administrator. The Regional Director may decide on his/her own to prepare an environmental impact statement. In such case, the Regional Administrator shall forward a notice of intent to prepare the EIS to the Environmental Officer who shall publish such notice in theFederal Register.The notice of intent shall be published before initiation of the scoping process.
[45 FR 41142, June 18, 1980, as amended at 47 FR 13149, Mar. 29, 1982]
§ 10.10 Preparation of environmental impact statements.
(a) Scoping. After determination that an environmental impact statement will be prepared and publication of the notice of intent, the Regional Administrator will initiate the scoping process in accordance with §1501.7 of the CEQ regulations.
(b) Preparation. Based on the scoping process, the Regional Administrator will begin preparation of the environmental impact statement. Detailed procedures for preparation of the environmental impact statement are provided in part 1502 of the CEQ regulations.
(c) Supplemental Environmental Impact Statements. The Regional Administrator may at any time supplement a draft or final environmental impact statement. The Regional Administrator shall prepare a supplement to either the draft or final environmental impact statement when required under the criteria set forth in §1502.9(2). The Regional Administrator will prepare, circulate, and file a supplement to a statement in the same fashion (exclusive of scoping) as a draft or final statement and will introduce the supplement into their formal administrative record.
(d) Circulation of Environmental Impact Statements. The Regional Administrator shall circulate draft and final environmental impact statements as prescribed in §1502.19 of CEQ regulations. Prior to signing off on a draft or final impact statement, the Regional Administrator shall obtain the approval of the Environmental Officer and OCC.
[45 FR 41142, June 18, 1980, as amended at 47 FR 13149, Mar. 29, 1982]
§ 10.11 Environmental information.
Interested persons may contact the Environmental Officer or the Regional Administrator for information regarding FEMA's compliance with NEPA.
[45 FR 41142, June 18, 1980, as amended at 47 FR 13149, Mar. 29, 1982]
§ 10.12 Pre-implementation actions.
(a) Decision-making. The Regional Administrator shall ensure that decisions are made in accordance with the policies and procedures of the Act and that the NEPA process is integrated into the decision-making process. Because of the diversity of FEMA, it is not feasible to describe in this part the decision-making process for each of the various FEMA programs. Proposals and actions may be initiated at any level. Similarly, review and approval authority may be exercised at various levels depending on the nature of the action, available funding, and statutory authority. FEMA offices and administrations shall provide further guidance, commensurate with their programs and organization, for integration of environmental considerations into the decision-making process. The Regional Administrator shall:
(1) Consider all relevant environmental documents in evaluating proposals for Agency action;
(2) Make all relevant environmental documents, comments, and responses part of the record in formal rulemaking or adjudicatory proceedings;
(3) Ensure that all relevant environmental documents, comments and responses accompany the proposal through existing Agency review processes;
(4) Consider only those alternatives encompassed by the range of alternatives discussed in the relevant environmental documents when evaluating proposals for Agency action;
(5) Where an EIS has been prepared, consider the specific alternatives analyzed in the EIS when evaluating the proposal which is the subject of the EIS.
(b) Record of decision. In those cases requiring environmental impact statements, the Regional Administrator at the time of his/her decision, or if appropriate, his/her recommendation to Congress, shall prepare a concise public record of that decision. The record of decision is not intended to be an extensive, detailed document for the purpose of justifying the decision. Rather it is a concise document that sets forth the decision and describes the alternatives and relevant factors considered as specified in 40 CFR 1505.2. The record of decision will normally be less than three pages in length.
(c) Mitigation. Throughout the NEPA process, the Regional Administrator shall consider mitigating measures to avoid or minimize environmental harm and, in particular, harm to or within flood plains and wetlands. Mitigation measures or programs will be identified in the environmental impact statement and made available to decision-makers. Mitigation and other conditions established in the environmental impact statement or during its review and committed as part of the decision shall be implemented by the Regional Administrator.
(d) Monitoring. If a Regional Administrator determines that monitoring is applicable for established mitigation, a monitoring program will be adopted to assure the mitigation measures are accomplished. The Regional Administrator shall provide monitoring information, upon request, as specified in 40 CFR 1505.3. This does not, however, include standing or blanket requests for periodic reporting.
§ 10.13 Emergencies.
In the event of an emergency, the Regional Administrator may be required to take immediate action with significant environmental impact. The Regional Administrator shall notify the Environmental Officer of the emergency action at the earliest possible time so that the Environmental Officer may consult with the Council on Environmental Quality. In no event shall any Regional Administrator delay an emergency action necessary to the preservation of human life for the purpose of complying with the provision of this directive or the CEQ regulations.
[45 FR 41142, June 18, 1980, as amended at 47 FR 13149, Mar. 29, 1982]
§ 10.14 Flood plains and wetlands.
For any action taken by FEMA in a flood plain or wetland, the provisions of this part are supplemental to, and not instead of, the provisions of the FEMA regulation implementing Executive Order 11988, Flood Plain Management, and Executive Order 11990, Protection of Wetlands (44 CFR part 9).
PART 13— UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND COOPERATIVE AGREEMENTS
TO STATE AND LOCAL GOVERNMENTS
Subpart A— General Section
13.1 Purpose and scope of this part.
13.2 Scope of subpart.
13.3 Definitions.
13.4 Applicability.
13.5 Effect on other issuances.
13.6 Additions and exceptions.
Subpart B— Pre- Award Requirements
13.10 Forms for applying for grants.
13.11 State plans.
13.12 Special grant or subgrant conditions for ‘‘ high- risk’ grantees.
Subpart C— Post- Award Requirements
FINANCIAL ADMINISTRATION
13.20 Standards for financial management systems.
13.21 Payment.
13.22 Allowable costs.
13.23 Period of availability of funds.
13.24 Matching or cost sharing.
13.25 Program income.
13.26 Non-Federal audit.
CHANGES, PROPERTY, AND SUBAWARDS
13.30 Changes.
13.31 Real property.
13.32 Equipment.
13.33 Supplies.
13.34 Copyrights.
13.35 Subawards to debarred and suspended parties.
13.36 Procurement.
13.37 Subgrants.
REPORTS, RECORDS RETENTION, AND ENFORCEMENT
13.40 Monitoring and reporting program performance.
13.41 Financial reporting.
13.42 Retention and access requirements for records.
13.43 Enforcement.
13.44 Termination for convenience.
Subpart D— After- the- Grant Requirements
13.50 Closeout.
13.51 Later disallowances and adjustments.
13.52 Collection of amounts due.
Subpart E— Entitlement [Reserved]
AUTHORITY: Reorganization Plan No. 3 of 1978; 43 FR 41943,3 CFR, 1978 Comp, p. 329; E. O. 12148, 44 FR 43239,3
CFR, 1979 Comp, p. 412.
SOURCE: 53 FR 8078, 8087, Mar. 11, 1988, unless otherwise noted.
EDITORIAL NOTE: For additional information, see related documents published at 49
FR 24958, June 18, 1984; 52 FR 20178, May 29, 1987; and 53 FR 8028, Mar. 11, 1988.
Subpart A— General
§ 13.1 Purpose and scope of this part.
This part establishes uniform administrative rules for Federal grants and cooperative agreements and subawards to State,
local and Indian tribal governments.
§ 13.2 Scope of subpart.
This subpart contains general rules pertaining to this part and procedures for control of exceptions from this part.
§ 13.3 Definitions.
As used in this part:
Accrued expenditures mean the charges incurred by the grantee during a given period requiring the provision of funds
for: (1) Goods and other tangible property received; (2) Services performed by employees, contractors, subgrantees,
subcontractors, and other payees; and (3) Other amounts becoming owed under programs for which no current services
or performance is required, such as annuities, insurance claims, and other benefit payments.
Accrued income means the sum of: (1) Earnings during a given period from services performed by the grantee and goods
and other tangible property delivered to purchasers, and (2) amounts becoming owed to the grantee for which no current
services or performance is required by the grantee.
Acquisition cost of an item of purchased equipment means the net invoice unit price of the property including the cost of
modifications, attachments, accessories, or auxiliary apparatus necessary to make the property usable for the purpose for
which it was acquired. Other charges such as the cost of installation, transportation, taxes, duty or protective in- transit
insurance, shall be included or excluded from the unit acquisition cost in accordance with the grantee’s regular accounting
practices.
Administrative requirements mean those matters common to grants in general, such as financial management, kinds and
frequency of reports, and retention of records. These are distinguished from ‘‘ programmatic’ requirements, which
concern matters that can be treated only on a program- by- program or grant- by- grant basis, such as kinds of activities
that can be supported by grants under a particular program.
Awarding agency means (1) with respect to a grant, the Federal agency, and (2) with respect to a subgrant, the party
that awarded the subgrant.
Cash contributions means the grantee’s cash outlay, including the outlay of money contributed to the grantee or
subgrantee by other public agencies and institutions, and private organizations and individuals. When authorized by
Federal legislation, Federal funds received from other assistance agreements may be considered as grantee or subgrantee
cash contributions.
Contract means (except as used in the definitions for grant and subgrant in this section and except where qualified by
Federal) a procurement contract under a grant or subgrant, and means a procurement subcontract under a contract.
Cost sharing or matching means the value of the third party in- kind contributions and the portion of the costs of a
federally assisted project or program not borne by the Federal Government.
Cost- type contract means a contract or subcontract under a grant in which the contractor or subcontractor is paid on the
basis of the costs it incurs, with or without a fee.
Equipment means tangible, nonexpendable, personal property having a useful life of more than one year and an
acquisition cost of $5,000 or more per unit. A grantee may use its own definition of equipment provided that such
definition would at least include all equipment defined above.
Expenditure report means: (1) For nonconstruction grants, the SF– 269 ‘‘ Financial Status Report’ (or other equivalent
report; (2) for construction grants, the SF– 271 ‘‘ Outlay Report and Request for Reimbursement’ (or other equivalent
report.
Federally recognized Indian tribal government means the governing body or a governmental agency of any Indian tribe,
band, nation, or other organized group or community (including any Native village as defined in section 3 of the Alaska
Native Claims Settlement Act, 85 Stat 688) certified by the Secretary of the Interior as eligible for the special programs
and services provided by him through the Bureau of Indian Affairs.
Government means a State or local government or a federally recognized Indian tribal government.
Grant means an award of financial assistance, including cooperative agreements, in the form of money, or property in lieu
of money, by the Federal Government to an eligible grantee. The term does not include technical assistance which
provides services instead of money, or other assistance in the form of revenue sharing, loans, loan guarantees, interest
subsidies, insurance, or direct appropriations. Also, the term does not include assistance, such as a fellowship or other
lump sum award, which the grantee is not required to account for.
Grantee means the government to which a grant is awarded and which is accountable for the use of the funds provided.
The grantee is the entire legal entity even if only a particular component of the entity is designated in the grant award
document.
Local government means a county, municipality, city, town, township, local public authority (including any public and
Indian housing agency under the United States Housing Act of 1937) school district, special district, intrastate district,
council of governments (whether or not incorporated as a nonprofit corporation under state law), any other regional or
interstate government entity, or any agency or instrumentality of a local government.
Obligations means the amounts of orders placed, contracts and subgrants awarded, goods and services received, and
similar transactions during a given period that will require payment by the grantee during the same ora future period.
OMB means the United States Office of Management and Budget.
Outlays (expenditures) mean charges made to the project or program. They may be reported on a cash or accrual basis.
For reports prepared on a cash basis, outlays are the sum of actual cash disbursement for direct charges for goods and
services, the amount of indirect expense incurred, the value of in- kind contributions applied, and the amount of cash
advances and payments made to contractors and subgrantees. For reports prepared on an accrued expenditure basis,
outlays are the sum of actual cash disbursements, the amount of indirect expense incurred, the value of in kind
contributions applied, and the new increase (or decrease) in the amounts owed by the grantee for goods and other
property received, for services performed by employees, contractors, subgrantees, subcontractors, and other payees, and
other amounts becoming owed under programs for which no current services or performance are required, such as
annuities, insurance claims, and other benefit payments.
Percentage of completion method refers to a system under which payments are made for construction work according to
the percentage of completion of the work, rather than to the grantee’s cost incurred.
Prior approval means documentation evidencing consent prior to incurring specific cost.
Real property means land, including land improvements, structures and appurtenances thereto, excluding movable
machinery and equipment.
Share, when referring to the awarding agency’s portion of real property, equipment or supplies, means the same
percentage as the awarding agency’s portion of the acquiring party’s total costs under the grant to which the acquisition
costs under the grant to which the acquisition cost of the property was charged. Only costs are to be counted— not the
value of third- party in- kind contributions.
State means any of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico,
any territory or possession of the United States, or any agency or instrumentality of a State exclusive of local
governments. The term does not include any public and Indian housing agency under United States Housing Act of 1937.
Subgrant means an award of financial assistance in the form of money, or property in lieu of money, made under a grant
by a grantee to an eligible subgrantee. The term includes financial assistance when provided by contractual legal
agreement, but does not include procurement purchases, nor does it include any form of assistance which is excluded
from the definition of grant in this part.
Subgrantee means the government or other legal entity to which a subgrant is awarded and which is accountable to the
grantee for the use of the funds provided.
Supplies means all tangible personal property other than equipment as defined in this part.
Suspension means depending on the context, either (1) temporary withdrawal of the authority to obligate grant funds
pending corrective action by the grantee or subgrantee ora decision to terminate the grant, or (2) an action taken by a
suspending official in accordance with agency regulations implementing E. O. 12549 to immediately exclude a person
from participating in grant transactions for a period, pending completion of an investigation and such legal or debarment
proceedings as may ensue.
Termination means permanent withdrawal of the authority to obligate previously awarded grant funds before that
authority would otherwise expire. It also means the voluntary relinquishment of that authority by the grantee or
subgrantee. ‘‘ Termination’ does not include: (1) Withdrawal of funds awarded on the basis of the grantee’s
underestimate of the unobligated balance in a prior period; (2) Withdrawal of the unobligated balance as of the expiration
of a grant; (3) Refusal to extend a grant or award additional funds, to make a competing or noncompeting continuation,
renewal, extension, or supplemental award; or (4) voiding of a grant upon determination that the award was obtained
fraudulently, or was otherwise illegal or invalid from inception.
Terms of a grant or subgrant mean all requirements of the grant or subgrant, whether in statute, regulations, or the
award document.
Third party in- kind contributions mean property or services which benefit a federally assisted project or program and
which are contributed by non- Federal third parties without charge to the grantee, or a cost- type contractor under the
grant agreement.
Unliquidated obligations for reports prepared on a cash basis mean the amount of obligations incurred by the grantee
that has not been paid. For reports prepared on an accrued expenditure basis, they represent the amount of obligations
incurred by the grantee for which an outlay has not been recorded.
Unobligated balance means the portion of the funds authorized by the Federal agency that has not been obligated by the
grantee and is determined by deducting the cumulative obligations from the cumulative funds authorized.
§ 13.4 Applicability.
(a) General. Subparts A through D of this part apply to all grants and subgrants to governments, except where
inconsistent with Federal statutes or with regulations authorized in accordance with the exception provision of section
13.6, or:
(1) Grants and subgrants to State and local institutions of higher education or State and local hospitals.
(2) The block grants authorized by the Omnibus Budget Reconciliation Act of 1981 (Community Services; Preventive
Health and Health Services; Alcohol, Drug Abuse, and Mental Health Services; Maternal and Child Health Services;
Social Services; Low- Income Home Energy Assistance; States’ Program of Community Development Block Grants for
Small Cities; and Elementary and Secondary Education other than programs administered by the Secretary of
Education under title V, subtitle D, Chapter 2, Section 583— the Secretary’s discretionary grant program) and titles I–
III of the Job Training Partnership Act of 1982 and under the Public Health Services Act (section 1921), Alcohol and
Drug Abuse Treatment and Rehabilitation Block Grant and Part C of title V, Mental Health Service for the Homeless
Block Grant.
(3) Entitlement grants to carry out the following programs of the Social Security Act:
(i) Aid to Needy Families with Dependent Children (Title IV–A of the Act, not including the Work Incentive
Program (WIN) authorized by section 402(a) 19(G); HHS grants for WIN are subject to this part);
(ii) Child Support Enforcement and Establishment of Paternity (Title IV–D of the Act;
(iii) Foster Care and Adoption Assistance (Title IV–E of the Act;
(iv) Aid to the Aged, Blind, and Disabled (Titles I, X, XIV, and XVI– AABD of the Act; and
(v) Medical Assistance (Medicaid) (Title XIX of the Act) not including the State Medicaid Fraud Control program
authorized by section 1903(a)(6)(B).
(4) Entitlement grants under the following programs of The National School Lunch Act:
(i) School Lunch (section 4 of the Act),
(ii) Commodity Assistance (section 6 of the Act),
(iii) Special Meal Assistance (section 11 of the Act,
(iv) Summer Food Service for Children (section 13 of the Act), and
(v) Child Care Food Program (section 17 of the Act).
(5) Entitlement grants under the following programs of The Child Nutrition Act of 1966:
(i) Special Milk (section 3 of the Act), and
(ii) School Breakfast (section 4 of the Act).
(6) Entitlement grants for State Administrative expenses under The Food Stamp Act of 1977 (section 16 of the Act).
(7) A grant for an experimental, pilot, or demonstration project that is also supported by a grant listed in paragraph
(a)(3) of this section;
(8) Grant funds awarded under subsection 412 (e) of the Immigration and Nationality Act (8 U. S. C. 1522(e) and
subsection 501( a) of the Refugee Education Assistance Act of 1980) (Pub. L. 96– 422, 94 Stat. 1809, for cash
assistance, medical assistance, and supplemental security income benefits to refugees and entrants and the
administrative costs of providing the assistance and benefits;
(9) Grants to local education agencies under 20 U. S. C. 236 through 241–1(a), and 242 through 244 (portions of the
Impact Aid program, except for 20 U. S. C. 238( d( 2( c) and 240(f) (Entitlement Increase for Handicapped Children;
and
(10) Payments under the Veterans Administration’s State Home Per Diem Program (38 U. S. C. 641(a)).
(b) Entitlement programs. Entitlement programs enumerated above in § 13.4(a)(3) through (8) are subject to subpart E.
§ 13.5 Effect on other issuances.
All other grants administration provisions of codified program regulations, program manuals, handbooks and other
nonregulatory materials which are inconsistent with this part are superseded, except to the extent they are required by
statute, or authorized in accordance with the exception provision in § 13.6.
§ 13.6 Additions and exceptions.
(a) For classes of grants and grantees subject to this part, Federal agencies may not impose additional administrative
requirements except in codified regulations published in the FEDERAL REGISTER.
(b) Exceptions for classes of grants or grantees may be authorized only by OMB.
(c) Exceptions on a case- by- case basis and for subgrantees may be authorized by the affected Federal agencies.
Subpart B— Pre- Award Requirements
§ 13.10 Forms for applying for grants.
(a) Scope.
(1) This section prescribes forms and instructions to be used by governmental organizations (except hospitals and
institutions of higher education operated by a government) in applying for grants. This section is not applicable,
however, to formula grant programs which do not require applicants to apply for funds on a project basis.
(2) This section applies only to applications to Federal agencies for grants, and is not required to be applied by
grantees in dealing with applicants for subgrants. However, grantees are encouraged to avoid more detailed or
burdensome application requirements for subgrants.
(b) Authorized forms and instructions for governmental organizations.
(1) In applying for grants, applicants shall only use standard application forms or those prescribed by the granting
agency with the approval of OMB under the Paperwork Reduction Act of 1980.
(2) Applicants are not required to submit more than the original and two copies of pre-applications or applications.
(3) Applicants must follow all applicable instructions that bear OMB clearance numbers. Federal agencies may specify
and describe the programs, functions, or activities that will be used to plan, budget, and evaluate the work under a
grant. Other supplementary instructions may be issued only with the approval of OMB to the extent required under
the Paperwork Reduction Act of 1980. For any standard form, except the SF– 424 facesheet, Federal agencies may
shade out or instruct the applicant to disregard any line item that is not needed.
(4) When a grantee applies for additional funding (such as a continuation or supplemental award) or amends a
previously submitted application, only the affected pages need be submitted. Previously submitted pages with
information that is still current need not be resubmitted.
§ 13.11 State plans.
(a) Scope. The statutes for some programs require States to submit plans before receiving grants. Under regulations
implementing Executive Order 12372, ‘‘ Intergovernmental Review of Federal Programs,’’ States are allowed to simplify,
consolidate and substitute plans. This section contains additional provisions for plans that are subject to regulations
implementing the Executive Order.
(b) Requirements. A State need meet only Federal administrative or programmatic requirements for a plan that are in
statutes or codified regulations.
(c) Assurances. In each plan the State will include an assurance that the State shall comply with all applicable Federal
statutes and regulations in effect with respect to the periods for which it receives grant funding. For this assurance and
other assurances required in the plan, the State may:
(1) Cite by number the statutory or regulatory provisions requiring the assurances and affirm that it gives the
assurances required by those provisions,
(2) Repeat the assurance language in the statutes or regulations, or
(3) Develop its own language to the extent permitted by law.
(c) Amendments. A State will amend a plan whenever necessary to reflect:
(1) New or revised Federal statutes or regulations or
(2) a material change in any State law, organization, policy, or State agency operation. The State will obtain approval
for the amendment and its effective date but need submit for approval only the amended portions of the plan.
§ 13.12 Special grant or subgrant conditions for‘‘ high- risk’ grantees.
(a) A grantee or subgrantee may be considered ‘‘ high risk’ if an awarding agency determines that a grantee or
subgrantee:
(1) Has a history of unsatisfactory performance, or
(2) Is not financially stable, or
(3) Has a management system which does not meet the management standards set forth in this part, or
(4) Has not conformed to terms and conditions of previous awards, or
(5) Is otherwise not responsible; and if the awarding agency determines that an award will be made, special
conditions and/or restrictions shall correspond to the high-risk condition and shall be included in the award.
(b) Special conditions or restrictions may include:
(1) Payment on a reimbursement basis;
(2) Withholding authority to proceed to the next phase until receipt of evidence of acceptable performance within a
given funding period;
(3) Requiring additional, more detailed financial reports;
(4) Additional project monitoring;
(5) Requiring the grantee or subgrantee to obtain technical or management assistance; or
(6) Establishing additional prior approvals.
(c) If an awarding agency decides to impose such conditions, the awarding official will notify the grantee or subgrantee
as early as possible, in writing, of:
(1) The nature of the special conditions/restrictions;
(2) The reason(s) for imposing them;
(3) The corrective actions which must be taken before they will be removed and the time allowed for completing the
corrective actions and
(4) The method of requesting reconsideration of the conditions/restrictions imposed.
Subpart C— Post- Award Requirements
FINANCIAL ADMINISTRATION
§ 13.20 Standards for financial management systems.
(a) A State must expand and account for grant funds in accordance with State laws and procedures for expending and
accounting for its own funds. Fiscal control and accounting procedures of the State, as well as its subgrantees and costtype
contractors, must be sufficient to—
(1) Permit preparation of reports required by this part and the statutes authorizing the grant, and
(2) Permit the tracing of funds to a level of expenditures adequate to establish that such funds have not been used in
violation of the restrictions and prohibitions of applicable statutes.
(b) The financial management systems of other grantees and subgrantees must meet the following standards:
(1) Financial reporting. Accurate, current, and complete disclosure of the financial results of financially assisted
activities must be made in accordance with the financial reporting requirements of the grant or subgrant.
(2) Accounting records. Grantees and subgrantees must maintain records which adequately identify the source and
application of funds provided for financially-assisted activities. These records must contain information pertaining
to grant or subgrant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays or
expenditures, and income.
(3) Internal control. Effective control and accountability must be maintained for all grant and subgrant cash, real and
personal property, and other assets. Grantees and subgrantees must adequately safeguard all such property and
must assure that it is used solely for authorized purposes.
(4) Budget control. Actual expenditures or outlays must be compared with budgeted amounts for each grant or
subgrant. Financial information must be related to performance or productivity data, including the development of
unit cost information whenever appropriate or specifically required in the grant or subgrant agreement. If unit cost
data are required, estimates based on available documentation will be accepted whenever possible.
(5) Allowable cost. Applicable OMB cost principles, agency program regulations, and the terms of grant and subgrant
agreements will be followed in determining the reasonableness, allowability, and allocability of costs.
(6) Source documentation. Accounting records must be supported by such source documentation as cancelled checks,
paid bills, payrolls, time and attendance records, contract and subgrant award documents, etc.
(7) Cash management. Procedures for minimizing the time elapsing between the transfer of funds from the U. S.
Treasury and disbursement by grantees and subgrantees must be followed whenever advance payment procedures
are used. Grantees must establish reasonable procedures to ensure the receipt of reports on subgrantees’ cash
balances and cash disbursements in sufficient time to enable them to prepare complete and accurate cash transaction
reports to the awarding agency. When advances are made by letter of-credit or electronic transfer of funds methods,
the grantee must make drawdowns as close as possible to the time of making disbursements. Grantees must monitor
cash drawdowns by their subgrantees to assure that they conform substantially to the same standards of timing and
amount as apply to advances to the grantees.
(d) An awarding agency may review the adequacy of the financial management system of any applicant for financial
assistance as part of a preaward review or at any time subsequent to award.
§ 13.21 Payment.
(a) Scope. This section prescribes the basic standard and the methods under which a Federal agency will make payments
to grantees, and grantees will make payments to subgrantees and contractors.
(b) Basic standard. Methods and procedures for payment shall minimize the time elapsing between the transfer of funds
and disbursement by the grantee or subgrantee, in accordance with Treasury regulations at 31 CFR part 205.
(c) Advances. Grantees and subgrantees shall be paid in advance, provided they maintain or demonstrate the willingness
and ability to maintain procedures to minimize the time elapsing between the transfer of the funds and their
disbursement by the grantee or subgrantee.
(d) Reimbursement. Reimbursement shall be the preferred method when the requirements in paragraph (c) of this
section are not met. Grantees and subgrantees may also be paid by reimbursement for any construction grant.
Except as otherwise specified in regulation, Federal agencies shall not use the percentage of completion method to pay
construction grants. The grantee or subgrantee may use that method to pay its construction contractor, and if it does, the
awarding agency’s payments to the grantee or subgrantee will be based on the grantee’s or subgrantee’s actual rate of
disbursement.
(e) Working capital advances. If a grantee cannot meet the criteria for advance payments described in paragraph (c) of
this section, and the Federal agency has determined that reimbursement is not feasible because the grantee lacks
sufficient working capital, the awarding agency may provide cash or a working capital advance basis. Under this
procedure the awarding agency shall advance cash to the grantee to cover its estimated disbursement needs for an initial
period generally geared to the grantee’s disbursing cycle. Thereafter, the awarding agency shall reimburse the grantee
for its actual cash disbursements. The working capital advance method of payment shall not be used by grantees or
subgrantees if the reason for using such method is the unwillingness or inability of the grantee to provide timely advances
to the subgrantee to meet the subgrantee’s actual cash disbursements.
(e) Effect of program income, refunds, and audit recoveries on payment.
(1) Grantees and subgrantees shall disburse repayments to and interest earned on a revolving fund before requesting
additional cash payments for the same activity.
(2) Except as provided in paragraph (f)(1) of this section, grantees and subgrantees shall disburse program income,
rebates, refunds, contract settlements, audit recoveries and interest earned on such funds before requesting
additional cash payments.
(f) Withholding payments.
(1) Unless otherwise required by Federal statute, awarding agencies shall not withhold payments for proper charges
incurred by grantees or subgrantees unless—
(i) The grantee or subgrantee has failed to comply with grant award conditions or
(ii) The grantee or subgrantee is indebted to the United States.
(2) Cash withheld for failure to comply with grant award condition, but without suspension of the grant, shall be
released to the grantee upon subsequent compliance. When a grant is suspended, payment adjustments will be made
in accordance with § 13.43(c).
(3) A Federal agency shall not make payment to grantees for amounts that are withheld by grantees or subgrantees
from payment to contractors to assure satisfactory completion of work. Payments shall be made by the Federal
agency when the grantees or subgrantees actually disburse the withheld funds to the contractors or to escrow
accounts established to assure satisfactory completion of work.
(g) Cash depositories.
(1) Consistent with the national goal of expanding the opportunities for minority business enterprises, grantees and
subgrantees are encouraged to use minority banks (a bank which is owned at least 50 percent by minority group
members). A list of minority owned banks can be obtained from the Minority Business Development Agency,
Department of Commerce, Washington, DC 20230.
(2) A grantee or subgrantee shall maintain a separate bank account only when required by Federal-State agreement.
(h) Interest earned on advances. Except for interest earned on advances of funds exempt under the Intergovernmental
Cooperation Act (31 U. S. C. 6501 et seq.) and the Indian Self-Determination Act (23 U. S. C. 450, grantees and
subgrantees shall promptly, but at least quarterly, remit interest earned on advances to the Federal agency. The
grantee or subgrantee may keep interest amounts up to $100 per year for administrative expenses.
§ 13.22 Allowable costs.
(a) Limitation on use of funds. Grant funds may be used only for:
(1) The allowable costs of the grantees, subgrantees and cost- type contractors, including allowable costs in the form
of payments to fixed- price contractors; and
(2) Reasonable fees or profit to cost type contractors but not any fee or profit (or other increment above allowable
costs) to the grantee or subgrantee.
(b) Applicable cost principles. For each kind of organization, there is a set of Federal principles for determining allowable
costs. Allowable costs will be determined in accordance with the cost principles applicable to the organization incurring
the costs. The following chart lists the kinds of organizations and the applicable cost principles.
For the costs of a— State, local or Indian tribal government. Use the principles in—OMB Circular A– 87.
For the costs of a— Private nonprofit organization other than an (1) institution of higher education, (2) hospital, or
(3) organization named in OMB Circular A–122 as not subject to that circular. Use the principles in—OBM Circular A–
122.
For the costs of a—Educational institutions. Use the principles in— OMB Circular A– 21.
For the costs of a—For- profit organization other than a hospital and an organization named in OBM Circular A– 122
as not subject to that circular. Use the principles in—48 CFR part 31. Contract Cost Principles and Procedures, or
uniform cost accounting standards that comply with cost principles acceptable to the Federal agency.
§ 13.23 Period of availability of funds.
(a) General. Where a funding period is specified, a grantee may charge to the award only costs resulting from obligations
of the funding period unless carryover of unobligated balances is permitted, in which case the carryover balances may be
charged for costs resulting from obligations of the subsequent funding period.
(b) Liquidation of obligations. A grantee must liquidate all obligations incurred under the award not later than 90 days
after the end of the funding period(or as specified in a program regulation) to coincide with the submission of the annual
Financial Status Report(SF– 269). The Federal agency may extend this deadline at the request of the grantee.
§ 13.24 Matching or cost sharing.
(a) Basic rule: Costs and contributions acceptable. With the qualifications and exceptions listed in paragraph (b) of this
section, a matching or cost sharing requirement may be satisfied by either or both of the following:
(1) Allowable costs incurred by the grantee, subgrantee or a cost- type contractor under the assistance agreement.
This includes allowable costs borne by non- Federal grants or by others cash donations from non- Federal third
parties.
(2) The value of third party in- kind contributions applicable to the period to which the cost sharing or matching
requirements applies.
(b) Qualifications and exceptions
(1)Costs borne by other Federal grant agreements. Except as provided by Federal statute, a cost sharing or matching
requirement may not be met by costs borne by another Federal grant. This prohibition does not apply to income
earned by a grantee or subgrantee from a contract awarded under another Federal grant.
(2) General revenue sharing. For the purpose of this section, general revenue sharing funds distributed under 31
U.S.C. 6702 are not considered Federal grant funds.
(3) Cost or contributions counted towards other Federal costs- sharing requirements. Neither costs nor the values of
third party in- kind contributions may count towards satisfying a cost sharing or matching requirement of a grant
agreement if they have been or will be counted towards satisfying a cost sharing or matching requirement of another
Federal grant agreement, a Federal procurement contract, or any other award of Federal funds.
(4) Costs financed by program income. Costs financed by program income, as defined in § 13.25, shall not count
towards satisfying a cost sharing or matching requirement unless they are expressly permitted in the terms of the
assistance agreement. (This use of general program income is described in § 13.25 (g).
(5) Services or property financed by income earned by contractors. Contractors under a grant may earn income from
the activities carried out under the contract in addition to the amounts earned from the party awarding the contract.
No costs of services or property supported by this income may count toward satisfying a cost sharing or matching
requirement unless other provisions of the grant agreement expressly permit this kind of income to be used to meet
the requirement.
(6) Records. Costs and third party in kind contributions counting towards satisfying a cost sharing or matching
requirement must be verifiable from the records of grantees and subgrantee or cost- type contractors. These records
must show how the value placed on third party in- kind contributions was derived. To the extent feasible, volunteer
services will be supported by the same methods that the organization uses to support the allocability of regular
personnel costs.
(7) Special standards for third party in kind contributions.
(i) Third party in kind contributions count towards satisfying a cost sharing or matching requirement only where,
if the party receiving the contributions were to pay for them, the payments would be allowable costs.
(ii) Some third party in- kind contributions are goods and services that, if the grantee, subgrantee, or contractor
receiving the contribution had to pay for them, the payments would have been an indirect costs. Costs sharing or
matching credit for such contributions shall be given only if the grantee, subgrantee, or contractor has
established, along with its regular indirect cost rate, a special rate for allocating to individual projects or programs
the value of the contributions.
(iii) A third party in- kind contribution to a fixed- price contract may count towards satisfying a cost sharing or
matching requirement only if it results in:
(A) An increase in the services or property provided under the contract (without additional cost to the grantee or
subgrantee) or
(B) A cost savings to the grantee or subgrantee.
(iv) The values placed on third party in kind contributions for cost sharing or matching purposes will conform to
the rules in the succeeding sections of this part. If a third party in- kind contribution is a type not treated in those
sections, the value placed upon it shall be fair and reasonable.
(c) Valuation of donated services
(1) Volunteer services. Unpaid services provided to a grantee or subgrantee by individuals will be valued at rates
consistent with those ordinarily paid for similar work in the grantee’s or subgrantee’s organization. If the grantee or
subgrantee does not have employees performing similar work, the rates will be consistent with those ordinarily paid
by other employers for similar work in the same labor market. In either case, a reasonable amount for fringe benefits
may be included in the valuation.
(2) Employees of other organizations. When an employer other than a grantee, subgrantee, or cost- type contractor
furnishes free of charge the services of an employee in the employee’s normal line of work, the services will be
valued at the employee’s regular rate of pay exclusive of the employee’s fringe benefits and overhead costs. If the
services are in a different line of work, paragraph(c)(1) of this section applies.
(d) Valuation of third party donated supplies and loaned equipment or space.
(1) If a third party donates supplies, the contribution will be valued at the market value of the supplies at the time of
donation.
(2) If a third party donates the use of equipment or space in a building but retains title, the contribution will be
valued at the fair rental rate of the equipment or space.
(e) Valuation of third party donated equipment, buildings, and land. If a third party donates equipment, buildings, or
land, and title passes to a grantee or subgrantee, the treatment of the donated property will depend upon the purpose of
the grant or subgrant, as follows:
(1) Awards for capital expenditures. If the purpose of the grant or subgrant is to assist the grantee or subgrantee in
the acquisition of property, the market value of that property at the time of donation may be counted as cost
sharing or matching,
(2) Other awards. If assisting in the acquisition of property is not the purpose of the grant or subgrant, paragraphs
(e)(2) (i) and (ii) of this section apply:
(i) If approval is obtained from the awarding agency, the market value at the time of donation of the donated
equipment or buildings and the fair rental rate of the donated land may be counted as cost sharing or matching.
In the case of a subgrant, the terms of the grant agreement may require that the approval be obtained from the
Federal agency as well as the grantee. In all cases, the approval may be given only if a purchase of the
equipment or rental of the land would be approved as an allowable direct cost. If any part of the donated
property was acquired with Federal funds, only the non- Federal share of the property may be counted as cost
sharing or matching.
(ii) If approval is not obtained under paragraph (e)(2)(i) of this section, no amount may be counted for donated
land, and only depreciation or use allowances may be counted for donated equipment and buildings. The
depreciation or use allowances for this property are not treated as third party in- kind contributions. Instead, they
are treated as costs incurred by the grantee or subgrantee. They are computed and allocated (usually as indirect
costs) in accordance with the cost principles specified in § 13.22, in the same way as depreciation or use
allowances for purchased equipment and buildings. The amount of depreciation or use allowances for donated
equipment and buildings is based on the property’s market value at the time it was donated.
(f) Valuation of grantee or subgrantee donated real property for construction/ acquisition. If a grantee or subgrantee
donates real property for a construction or facilities acquisition project, the current market value of that property may be
counted as cost sharing or matching. If any part of the donated property was acquired with Federal funds, only the non-
Federal share of the property may be counted as cost sharing or matching.
(g) Appraisal of real property. In some cases under paragraphs (d), (e) and (f) of this section, it will be necessary to
establish the market value of land or a building or the fair rental rate of land or of space in a building. In these cases, the
Federal agency may require the market value or fair rental value be set by an independent appraiser, and that the value
or rate be certified by the grantee. This requirement will also be imposed by the grantee on subgrantees.
§ 13.25 Program income.
(a) General. Grantees are encouraged to earn income to defray program costs. Program income includes income from
fees for services performed, from the use or rental of real or personal property acquired with grant funds, from the sale
of commodities or items fabricated under a grant agreement, and from payments of principal and interest on loans made
with grant funds. Except as otherwise provided in regulations of the Federal agency, program income does not include
interest on grant funds, rebates, credits, discounts, refunds, etc. and interest earned on any of them.
(b) Definition of program income. Program income means gross income received by the grantee or subgrantee directly
generated by a grant supported activity, or earned only as a result of the grant agreement during the grant period.
During the grant period is the time between the effective date of the award and the ending date of the award reflected in
the final financial report.
(c) Cost of generating program income. If authorized by Federal regulations or the grant agreement, costs incident to
the generation of program income may be deducted from gross income to determine program income.
(d) Governmental revenues. Taxes, special assessments, levies, fines, and other such revenues raised by a grantee or
subgrantee are not program income unless the revenues are specifically identified in the grant agreement or Federal
agency regulations as program income.
(e) Royalties. Income from royalties and license fees for copyrighted material, patents, and inventions developed by a
grantee or subgrantee is program income only if the revenues are specifically identified in the grant agreement or Federal
agency regulations as program income. (See § 13.34)
(f) Property. Proceeds from the sale of real property or equipment will be handled in accordance with the requirements of
§§ 13.31 and 13.32.
(g) Use of program income. Program income shall be deducted from outlays which may be both Federal and non-Federal
as described below, unless the Federal agency regulations or the grant agreement specify another alternative (or a
combination of the alternatives.) In specifying alternatives, the Federal agency may distinguish between income earned
by the grantee and income earned by subgrantees and between the sources, kinds, or amounts of income. When Federal
agencies authorize the alternatives in paragraphs (g) (2) and (3) of this section, program income in excess of any limits
stipulated shall also be deducted from outlays.
(1) Deduction. Ordinarily program income shall be deducted from total allowable costs to determine the net allowable
costs. Program income shall be used for current costs unless the Federal agency authorizes otherwise. Program
income which the grantee did not anticipate at the time of the award shall be used to reduce the Federal agency
and grantee contributions rather than to increase the funds committed to the project.
(2) Addition. When authorized, program income may be added to the funds committed to the grant agreement by
the Federal agency and the grantee. The program income shall be used for the purposes and under the
conditions of the grant agreement.
(3) Cost sharing or matching. When authorized, program income may be used to meet the cost sharing or matching
requirement of the grant agreement. The amount of the Federal grant award remains the same.
(i) Income after the award period. There are no Federal requirements governing the disposition of program income
earned after the end of the award period (i. e, until the ending date of the final financial report, see paragraph (a) of
this section), unless the terms of the agreement or the Federal agency regulations provide otherwise.
§ 13.26 Non- Federal audit.
(a) Basic rule. Grantees and subgrantees are responsible for obtaining audits in accordance with 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.’’ The audits shall be made by an independent auditor in accordance with generally
accepted government auditing standards covering financial audits.
(b) Subgrantees. State or local governments, as those terms are defined for purposes of the Single Audit Act
Amendments of 1996, that provide Federal awards to a subgrantee, which expends $300,000 or more (or other amount
as specified by OMB) in Federal awards in a fiscal year, shall:
(1) Determine whether State or local subgrantees have met the audit requirements of the Act and whether
subgrantees covered by OMB Circular A–110, ‘‘ Uniform Administrative Requirements for Grants and Agreements
with Institutions of Higher Education, Hospitals, and Other Non- Profit Organizations,’’ have met the audit
requirements of the Act. Commercial contractors (private for- profit and private and governmental organizations)
providing goods and services to State and local governments are not required to have a single audit performed.
State and local governments should use their own procedures to ensure that the contractor has complied with
laws and regulations affecting the expenditure of Federal funds;
(2) Determine whether the subgrantee spent Federal assistance funds provided in accordance with applicable laws
and regulations. This may be accomplished by reviewing an audit of the subgrantee made in accordance with the
Act, Circular A– 110, or through other means (e. g, program reviews) if the subgrantee has not had such an
audit;
(3) Ensure that appropriate corrective action is taken within six months after receipt of the audit report in instance of
noncompliance with Federal laws and regulations;
(4) Consider whether subgrantee audits necessitate adjustment of the grantee’s own records; and
(5) Require each subgrantee to permit independent auditors to have access to the records and financial statements.
(c) Auditor selection. In arranging for audit services, § 13.36 shall be followed.
[53 FR 8079, 887, Mar. 11, 1988, as amended at 62 FR 45939, 45945, Aug. 29, 1997]
CHANGES, PROPERTY, AND SUBAWARDS
§ 13.30 Changes.
(a) General. Grantees and subgrantees are permitted to rebudget within the approved direct cost budget to meet
unanticipated requirements and may make limited program changes to the approved project. However, unless waived by
the awarding agency, certain types of post- award changes in budgets and projects shall require the prior written
approval of the awarding agency.
(b) Relation to cost principles. The applicable cost principles (see § 13.22) contain requirements for prior approval of
certain types of costs. Except where waived, those requirements apply to all grants and subgrants even if paragraphs (c)
through (f) of this section do not.
(c) Budget changes
(1) Nonconstruction projects. Except as stated in other regulations or an award document, grantees or subgrantees
shall obtain the prior approval of the awarding agency whenever any of the following changes is anticipated under a
nonconstruction award:
(i) Any revision which would result in the need for additional funding.
(ii) Unless waived by the awarding agency, cumulative transfers among direct cost categories, or, if applicable,
among separately budgeted programs, projects, functions, or activities which exceed or are expected to exceed
ten percent of the current total approved budget, whenever the awarding agency’s share exceeds $100,000.
(iii) Transfer of funds allotted for training allowances (i. e, from direct payments to trainees to other expense
categories.)
(2) Construction projects. Grantees and subgrantees shall obtain prior written approval for any budget revision which
would result in the need for additional funds.
(3) Combined construction and nonconstruction projects. When a grant or subgrant provides funding for both
construction and nonconstruction activities, the grantee or subgrantee must obtain prior written approval from the
awarding agency before making any fund or budget transfer from nonconstruction to construction or vice versa.
(d) Programmatic changes. Grantees or subgrantees must obtain the prior approval of the awarding agency whenever
any of the following actions is anticipated:
(1) Any revision of the scope or objectives of the project (regardless of whether there is an associated budget
revision requiring prior approval.)
(2) Need to extend the period of availability of funds.
(3) Changes in key persons in cases where specified in an application or a grant award. In research projects, a
change in the project director or principal investigator shall always require approval unless waived by the
awarding agency.
(4) Under nonconstruction projects, contracting out, subgranting (if authorized by law) or otherwise obtaining the
services of a third party to perform activities which are central to the purposes of the award. This approval
requirement is in addition to the approval requirements of § 13.36 but does not apply to the procurement of
equipment, supplies, and general support services.
(e) Additional prior approval requirements. The awarding agency may not require prior approval for any budget revision
which is not described in paragraph (c) of this section.
(f) Requesting prior approval.
(1) A request for prior approval of any budget revision will be in the same budget formal the grantee used in its
application and shall be accompanied by a narrative justification for the proposed revision.
(2) A request for a prior approval under the applicable Federal cost principles (see § 13.22) may be made by letter.
(3) A request by a subgrantee for prior approval will be addressed in writing to the grantee. The grantee will
promptly review such request and shall approve or disapprove the request in writing. A grantee will not approve any
budget or project revision which is inconsistent with the purpose or terms and conditions of the Federal grant to the
grantee. If the revision, requested by the subgrantee would result in a change to the grantee’s approved project
which requires Federal prior approval, the grantee will obtain the Federal agency’s approval before approving the
subgrantee’s request.
§ 13.31 Real property.
(a) Title. Subject to the obligations and conditions set forth in this section, title to real property acquired under a grant or
subgrant will vest upon acquisition in the grantee or subgrantee respectively.
(b) Use. Except as otherwise provided by Federal statutes, real property will be used for the originally authorized
purposes as long as needed for that purpose, and the grantee or subgrantee shall not dispose of or encumber its title or
other interests.
(c) Disposition. When real property is no longer needed for the originally authorized purpose, the grantee or subgrantee
will request disposition instructions from the awarding agency. The instructions will provide for one of the following
alternatives:
(1) Retention of title. Retain title after compensating the awarding agency. The amount paid to the awarding agency
will be computed by applying the awarding agency’s percentage of participation in the cost of the original purchase to
the fair market value of the property. However, in those situations where a grantee or subgrantee is disposing of real
property acquired with grant funds and acquiring replacement real property under the same program, the net
proceeds from the disposition may be used as an offset to the cost of the replacement property.
(2) Sale of property. Sell the property and compensate the awarding agency. The amount due to the awarding
agency
will be calculated by applying the awarding agency’s percentage of participation in the cost of the original purchase to
the proceeds of the sale after deduction of any actual and reasonable selling and fixing- up expenses. If the grant is
still active, the net proceeds from sale may be offset against the original cost of the property. When a grantee or
subgrantee is directed to sell property, sales procedures shall be followed that provide for competition to the extent
practicable and result in the highest possible return.
(3) Transfer of title. Transfer title to the awarding agency or to a third party designated/approved by the awarding
agency. The grantee or subgrantee shall be paid an amount calculated by applying the grantee or subgrantee’s
percentage of participation in the purchase of the real property to the current fair market value of the property.
§ 13.32 Equipment.
(a) Title. Subject to the obligations and conditions set forth in this section, title to equipment acquired under a grant or
subgrant will vest upon acquisition in the grantee or subgrantee respectively.
(b) States. A State will use, manage, and dispose of equipment acquired under a grant by the State in accordance with
State laws and procedures. Other grantees and subgrantees will follow paragraphs (c) through (e) of this section.
(c) Use.
(1) Equipment shall be used by the grantee or subgrantee in the program or project for which it was acquired
as long as needed, whether or not the project or program continues to be supported by Federal funds. When no
longer needed for the original program
or project, the equipment may be
used in other activities currently or
previously supported by a Federal
agency.
(2) The grantee or subgrantee shall also make equipment available for use on other projects or programs currently or
previously supported by the Federal Government, providing such use will not interfere with the work on the projects
or program for which it was originally acquired. First preference for other use shall be given to other programs or
projects supported by the awarding agency. User fees should be considered if appropriate.
(3) Notwithstanding the encouragement in § 13.25 (a) to earn program income, the grantee or subgrantee must not
use equipment acquired with grant funds to provide services for a fee to compete unfairly with private companies
that provide equivalent services, unless specifically permitted or contemplated by Federal statute.
(4) When acquiring replacement equipment, the grantee or subgrantee may use the equipment to be replaced as a
trade- in or sell the property and use the proceeds to offset the cost of the replacement property, subject to the
approval of the awarding agency.
(d) Management requirements. Procedures for managing equipment (including replacement equipment, whether acquired
in whole or in part with grant funds, until disposition takes place will, as a minimum, meet the following requirements:
(1) Property records must be maintained that include a description of the property, a serial number or other
identification number, the source of property, who holds title, the acquisition date, and cost of the property,
percentage of Federal participation in the cost of the property, the location, use and condition of the property, and
any ultimate disposition data including the date of disposal and sale price of the property.
(2) A physical inventory of the property must be taken and the results reconciled with the property records at least
once every two years.
(3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the
property. Any loss, damage, or theft shall be investigated.
(4) Adequate maintenance procedures must be developed to keep the property in good condition.
(5) If the grantee or subgrantee is authorized or required to sell the property, proper sales procedures must be
established to ensure the highest possible return.
(e) Disposition. When original or replacement equipment acquired under a grant or subgrant is no longer needed for the
original project or program or for other activities currently or previously supported by a Federal agency, disposition of the
equipment will be made as follows:
(1) Items of equipment with a current per- unit fair market value of less than $5,000 may be retained, sold or
otherwise disposed of with no further obligation to the awarding agency.
(2) Items of equipment with a current per unit fair market value in excess of $5,000 may be retained or sold and the
awarding agency shall have a right to an amount calculated by multiplying the current market value or proceeds from
sale by the awarding agency’s share of the equipment.
(3) In cases where a grantee or subgrantee fails to take appropriate disposition actions, the awarding agency may
direct the grantee or subgrantee to take excess and disposition actions.
(f) Federal equipment. In the event a grantee or subgrantee is provided federally-owned equipment:
(1) Title will remain vested in the Federal Government.
(2) Grantees or subgrantees will manage the equipment in accordance with Federal agency rules and procedures, and
submit an annual inventory listing.
(3) When the equipment is no longer needed, the grantee or subgrantee will request disposition instructions from the
Federal agency.
(g) Right to transfer title. The Federal awarding agency may reserve the right to transfer title to the Federal Government
or a third part named by the awarding agency when such a third party is otherwise eligible under existing statutes. Such
transfers shall be subject to the following standards:
(1) The property shall be identified in the grant or otherwise made known to the grantee in writing.
(2) The Federal awarding agency shall issue disposition instruction within 120 calendar days after the end of the
Federal support of the project for which it was acquired. If the Federal awarding agency fails to issue disposition
instructions within the 120 calendar- day period the grantee shall follow § 13.32(e).
(3) When title to equipment is transferred, the grantee shall be paid an amount calculated by applying the percentage
of participation in the purchase to the current fair market value of the property.
§ 13.33 Supplies.
(a) Title. Title to supplies acquired under a grant or subgrant will vest, upon acquisition, in the grantee or subgrantee
respectively.
(b) Disposition. If there is a residual inventory of unused supplies exceeding $5,000 in total aggregate fair market value
upon termination or completion of the award, and if the supplies are not needed for any other federally sponsored
programs or projects, the grantee or subgrantee shall compensate the awarding agency for its share.
§ 13.34 Copyrights.
The Federal awarding agency reserves a royalty- free, nonexclusive, and irrevocable license to reproduce, publish or
otherwise use, and to authorize others to use, for Federal Government purposes:
(a) The copyright in any work developed under a grant, subgrant, or contract under a grant or subgrant; and
(b) Any rights of copyright to which a grantee, subgrantee or a contractor purchases ownership with grant support.
§ 13.35 Subawards to debarred and suspended parties.
Grantees and subgrantees must not make any award or permit any award (subgrant or contract) at any tier to any party
which is debarred or suspended or is otherwise excluded from or ineligible for participation in Federal assistance
programs under Executive Order 12549, ‘‘ Debarment and Suspension.’’
§ 13.36 Procurement.
(a) States. When procuring property and services under a grant, a State will follow the same policies and procedures it
uses for procurements from its non-Federal funds. The State will ensure that every purchase order or other contract
includes any clauses required by Federal statutes and executive orders and their implementing regulations. Other
grantees and subgrantees will follow paragraphs (b) through (i) in this section.
(b) Procurement standards.
(1) Grantees and subgrantees will use their own procurement procedures which reflect applicable State and local laws
and regulations, provided that the procurements conform to applicable Federal law and the standards identified in
this section.
(2) Grantees and subgrantees will maintain a contract administration system which ensures that contractors perform
in accordance with the terms, conditions, and specifications of their contracts or purchase orders.
(3) Grantees and subgrantees will maintain a written code of standards of conduct governing the performance of
their employees engaged in the award and administration of contracts. No employee, officer or agent of the grantee
or subgrantee shall participate in selection, or in the award or administration of a contract supported by Federal funds
if a conflict of interest, real or apparent, would be involved. Such a conflict would arise when:
(i) The employee, officer or agent,
(ii) Any member of his immediate family,
(iii) His or her partner, or
(iv) An organization which employs, or is about to employ, any of the above, has a financial or other interest in
the firm selected for award. The grantee’s or subgrantee’s officers, employees or agents will neither solicit nor
accept gratuities, favors or anything of monetary value from contractors, potential contractors, or parties to
subagreements. Grantee and subgrantees may set minimum rules where the financial interest is not substantial
or the gift is an unsolicited item of nominal intrinsic value. To the extent permitted by State or local law or
regulations, such standards or conduct will provide for penalties, sanctions, or other disciplinary actions for
violations of such standards by the grantee’s and subgrantee’s officers, employees, or agents, or by contractors
or their agents. The awarding agency may in regulation provide additional prohibitions relative to real, apparent,
or potential conflicts of interest.
(4) Grantee and subgrantee procedures will provide for a review of proposed procurements to avoid purchase of
unnecessary or duplicative items. Consideration should be given to consolidating or breaking out procurements to
obtain a more economical purchase. Where appropriate, an analysis will be made of lease versus purchase
alternatives, and any other appropriate analysis to determine the most economical approach.
(5) To foster greater economy and efficiency, grantees and subgrantees are encouraged to enter into State and local
intergovernmental agreements for procurement or use of common goods and services.
(6) Grantees and subgrantees are encouraged to use Federal excess and surplus property in lieu of purchasing new
equipment and property whenever such use is feasible and reduces project costs.
(7) Grantees and subgrantees are encouraged to use value engineering clauses in contracts for construction projects
of sufficient size to offer reasonable opportunities for cost reductions. Value engineering is a systematic and creative
analysis of each contract item or task to ensure that its essential function is provided at the overall lower cost.
(8) Grantees and subgrantees will make awards only to responsible contractors possessing the ability to perform
successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters
as contractor integrity, compliance with public policy, record of past performance, and financial and technical
resources.
(9) Grantees and subgrantees will maintain records sufficient to detail the significant history of a procurement. These
records will include, but are not necessarily limited to the following: rationale for the method of procurement,
selection of contract type, contractor selection or rejection, and the basis for the contract price.
(10) Grantees and subgrantees will use time and material type contracts only—
(i) After a determination that no other contract is suitable, and
(ii) If the contract includes a ceiling price that the contractor exceeds at its own risk.
(11) Grantees and subgrantees alone will be responsible, in accordance with good administrative practice and sound
business judgment, for the settlement of all contractual and administrative issues arising out of procurements. These
issues include, but are not limited to source evaluation, protests, disputes, and claims. These standards do not relieve
the grantee or subgrantee of any contractual responsibilities under its contracts. Federal agencies will not substitute
their judgment for that of the grantee or subgrantee unless the matter is primarily a Federal concern. Violations of
law will be referred to the local, State, or Federal authority having proper jurisdiction.
(12) Grantees and subgrantees will have protest procedures to handle and resolve disputes relating to their
procurements and shall in all instances disclose information regarding the protest to the awarding agency. A protestor
must exhaust all administrative remedies with the grantee and subgrantee before pursuing a protest with the Federal
agency. Reviews of protests by the Federal agency will be limited to:
(i) Violations of Federal law or regulations and the standards of this section (violations of State or local law will be
under the jurisdiction of State or local authorities) and
(ii) Violations of the grantee or subgrantee’s protest procedures for failure to review a complaint or protest.
Protests received by the Federal agency other than those specified above will be referred to the grantee or
subgrantee.
(c) Competition.
(1) All procurement transactions will be conducted in a manner providing full and open competition consistent with
the standards of section 13.36. Some of the situations considered to be restrictive of competition include but are
not limited to:
(i) Placing unreasonable requirements on firms in order for them to qualify to do business,
(ii) Requiring unnecessary experience and excessive bonding,
(iii) Noncompetitive pricing practices between firms or between affiliated companies,
(iv) Noncompetitive awards to consultants that are on retainer contracts,
(v) Organizational conflicts of interest,
(vi) Specifying only a ‘‘ brand name’ product instead of allowing ‘‘ an equal’ product to be offered and describing
the performance of other relevant requirements of the procurement, and
(vii) Any arbitrary action in the procurement process.
(2) Grantees and subgrantees will conduct procurements in a manner that prohibits the use of statutorily or
administratively imposed in- State or local geographical preferences in the evaluation of bids or proposals, except in
those cases where applicable Federal statutes expressly mandate or encourage geographic preference. Nothing in this
section preempts State licensing laws. When contracting for architectural and engineering (A/ E) services, geographic
location may be a selection criteria provided its application leaves an appropriate number of qualified firms, given the
nature and size of the project, to compete for the contract.
(3) Grantees will have written selection procedures for procurement transactions. These procedures will ensure that
all solicitations:
(i) Incorporate a clear and accurate description of the technical requirements for the material, product, or service
to be procured. Such description shall not, in competitive procurements, contain features which unduly restrict
competition. The description may include a statement of the qualitative nature of the material, product or service
to be procured, and when necessary, shall set forth those minimum essential characteristics and standards to
which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all
possible. When it is impractical or uneconomical to make a clear and accurate description of the technical
requirements, a ‘‘ brand name or equal’ description may be used as a means to define the performance or other
salient requirements of a procurement. The specific features of the named brand which must be met by offerors
shall be clearly stated; and
(ii) Identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or
proposals.
(4) Grantees and subgrantees will ensure that all pre-qualified lists of persons, firms, or products which are used in
acquiring goods and services are current and include enough qualified sources to ensure maximum open and free
competition. Also, grantees and subgrantees will not preclude potential bidders from qualifying during the solicitation
period.
(d) Methods of procurement to be followed
(1) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal
procurement methods for securing services, supplies, or other property that do not cost more than the simplified
acquisition threshold fixed at 41 U. S. C. 403(11) (currently set at $100,000.) If small purchase procedures are used,
price or rate quotations shall be obtained from an adequate number of qualified sources.
(2) Procurement by sealed bids (formal advertising.) Bids are publicly solicited and a firm- fixed- price contract (lump
sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and
conditions of the invitation for bids, is the lowest in price. The sealed bid method is the preferred method for
procuring construction, if the conditions in § 13.36(d)(2)(i) apply.
(i) In order for sealed bidding to be feasible, the following conditions should be present:
(A) A complete, adequate, and realistic specification or purchase description is available;
(B) Two or more responsible bidders are willing and able to compete effectively and for the business; and
(C) The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be
made principally on the basis of price.
(ii) If sealed bids are used, the following requirements apply:
(A) The invitation for bids will be publicly advertised and bids shall be solicited from an adequate number of
known suppliers, providing them sufficient time prior to the date set for opening the bids;
(B) The invitation for bids, which will include any specifications and pertinent attachments, shall define the items
or services in order for the bidder to properly respond;
(C) All bids will be publicly opened at the time and place prescribed in the invitation for bids;
(D) A firm fixed- price contract award will be made in writing to the lowest responsive and responsible bidder.
Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs shall
be considered in determining which bid is lowest. Payment discounts will only be used to determine the low
bid when prior experience indicates that such discounts are usually taken advantage of; and
(E) Any or all bids may be rejected if there is a sound documented reason.
(3) Procurement by competitive proposals. The technique of competitive proposals is normally conducted with more
than one source submitting an offer, and either a fixed- price or cost reimbursement type contract is awarded. It is
generally used when conditions are not appropriate for the use of sealed bids. If this method is used, the following
requirements apply:
(i) Requests for proposals will be publicized and identify all evaluation factors and their relative importance. Any
response to publicized requests for proposals shall be honored to the maximum extent practical;
(ii) Proposals will be solicited from an adequate number of qualified sources;
(iii) Grantees and subgrantees will have a method for conducting technical evaluations of the proposals received
and for selecting awardees;
(iv) Awards will be made to the responsible firm whose proposal is most advantageous to the program, with price
and other factors considered; and
(v) Grantees and subgrantees may use competitive proposal procedures for qualifications- based procurement of
architectural/ engineering (A/ E) professional services whereby competitors’ qualifications are evaluated and the
most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. The method,
where price is not used as a selection factor, can only be used in procurement of A/E professional services. It
cannot be used to purchase other types of services though A/E firms are a potential source to perform the
proposed effort.
(4) Procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source,
or after solicitation of a number of sources, competition is determined inadequate.
(i) Procurement by noncompetitive proposals may be used only when the award of a contract is infeasible under
small purchase procedures, sealed bids or competitive proposals and one of the following circumstances applies:
(A) The item is available only from a single source;
(B) The public exigency or emergency for the requirement will not permit a delay resulting from competitive
solicitation;
(C) The awarding agency authorizes noncompetitive proposals; or
(D) After solicitation of a number of sources, competition is determined inadequate.
(ii) Cost analysis, i. e, verifying the proposed cost data, the projections of the data, and the evaluation of the
specific elements of costs and profits, is required.
(iii) Grantees and subgrantees may be required to submit the proposed procurement to the awarding agency for
pre- award review in accordance with paragraph (g) of this section.
(e) Contracting with small and minority firms, women’s business enterprise and labor surplus area firms.
(1) The grantee and subgrantee will take all necessary affirmative steps to assure that minority firms, women’s
business enterprises, and labor surplus area firms are used when possible.
(2) Affirmative steps shall include:
(i) Placing qualified small and minority businesses and women’s business enterprises on solicitation lists;
(ii) Assuring that small and minority businesses, and women’s business enterprises are solicited whenever they are
potential sources;
(iii) Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum
participation by small and minority business, and women’s business enterprises;
(iv) Establishing delivery schedules, where the requirement permits, which encourage participation by small and
minority business, and women’s business enterprises;
(v) Using the services and assistance of the Small Business Administration, and the Minority Business Development
Agency of the Department of Commerce; and
(vi) Requiring the prime contractor, if subcontracts are to be let, to take the affirmative steps listed in paragraphs
(e)(2) (i) through (v) of this section.
(f) Contract cost and price.
(1) Grantees and subgrantees must perform a cost or price analysis in connection with every procurement action
including contract modifications. The method and degree of analysis is dependent on the facts surrounding the
particular procurement situation, but as a starting point, grantees must make independent estimates before receiving
bids or proposals. A cost analysis must be performed when the offeror is required to submit the elements of his
estimated cost, e. g, under professional, consulting, and architectural engineering services contracts. A cost analysis
will be necessary when adequate price competition is lacking, and for sole source procurements, including contract
modifications or change orders, unless price reasonableness can be established on the basis of a catalog or market
price of a commercial product sold in substantial quantities to the general public or based on prices set by law or
regulation. A price analysis will be used in all other instances to determine the reasonableness of the proposed
contract price.
(2) Grantees and subgrantees will negotiate profit as a separate element of the price for each contract in which there
is no price competition and in all cases where cost analysis is performed. To establish a fair and reasonable profit,
consideration will be given to the complexity of the work to be performed, the risk borne by the contractor, the
contractor’s investment, the amount of subcontracting, the quality of its record of past performance, and industry
profit rates in the surrounding geographical area for similar work.
(3) Costs or prices based on estimated costs for contracts under grants will be allowable only to the extent that costs
incurred or cost estimates included in negotiated prices are consistent with Federal cost principles (see § 13.22.)
Grantees may reference their own cost principles that comply with the applicable Federal cost principles.
(4) The cost plus a percentage of cost and percentage of construction cost methods of contracting shall not be used.
(g) Awarding agency review.
(1) Grantees and subgrantees must make available, upon request of the awarding agency, technical specifications on
proposed procurements where the awarding agency believes such review is needed to ensure that the item and/or
service specified is the one being proposed for purchase. This review generally will take place prior to the time the
specification is incorporated into a solicitation document. However, if the grantee or subgrantee desires to have the
review accomplished after a solicitation has been developed, the awarding agency may still review the specifications,
with such review usually limited to the technical aspects of the proposed purchase.
(2) Grantees and subgrantees must on request make available for awarding agency pre- award review procurement
documents, such as requests for proposals or invitations for bids, independent cost estimates, etc. when:
(i) A grantee’s or subgrantee’s procurement procedures or operation fails to comply with the procurement
standards in this section; or
(ii) The procurement is expected to exceed the simplified acquisition threshold and is to be awarded without
competition or only one bid or offer is received in response to a solicitation; or
(iii) The procurement, which is expected to exceed the simplified acquisition threshold, specifies a ‘‘ brand name’
product; or
(iv) The proposed award is more than the simplified acquisition threshold and is to be awarded to other than the
apparent low bidder under a sealed bid procurement; or
(v) A proposed contract modification changes the scope of a contract or increases the contract amount by more
than the simplified acquisition threshold.
(3) A grantee or subgrantee will be exempt from the pre- award review in paragraph (g)(2) of this section if the
awarding agency determines that its procurement systems comply with the standards of this section.
(i) A grantee or subgrantee may request that its procurement system be reviewed by the awarding agency to
determine whether its system meets these standards in order for its system to be certified. Generally, these
reviews shall occur where there is a continuous high- dollar funding, and third party contracts are awarded on a
regular basis.
(ii) A grantee or subgrantee may self-certify its procurement system. Such self- certification shall not limit the
awarding agency’s right to survey the system. Under a self- certification procedure, awarding agencies may wish
to rely on written assurances from the grantee or subgrantee that it is complying with these standards. A grantee
or subgrantee will cite specific procedures, regulations, standards, etc, as being in compliance with these
requirements and have its system available for review.
(h) Bonding requirements. For construction or facility improvement contracts or subcontracts exceeding the simplified
acquisition threshold, the awarding agency may accept the bonding policy and requirements of the grantee or subgrantee
provided the awarding agency has made a determination that the awarding agency’s interest is adequately protected. If
such a determination has not been made, the minimum requirements shall be as follows:
(1) A bid guarantee from each bidder equivalent to five percent of the bid price. The ‘‘ bid guarantee’ shall consist of
a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as
assurance that the bidder will, 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 contract price. A ‘‘ payment bond’ is one
executed in connection with a contract to assure payment as required by law of all persons supplying labor and
material in the execution of the work provided for in the contract.
(i) Contract provisions. A grantee’s and subgrantee’s contracts must contain provisions in paragraph (i) of this section.
Federal agencies are permitted to require changes, remedies, changed conditions, access and records retention,
suspension of work, and other clauses approved by the Office of Federal Procurement Policy.
(1) Administrative, contractual, or legal remedies in instances where contractors violate or breach contract terms, and
provide for such sanctions and penalties as may be appropriate. (Contracts more than the simplified acquisition
threshold)
(2) Termination for cause and for convenience by the grantee or subgrantee including the manner by which it will be
effected and the basis for settlement. (All contracts in excess of $10,000.)
(3) Compliance with Executive Order 11246 of September 24, 1965, entitled ‘‘ Equal Employment Opportunity,’’ as
amended by Executive Order 11375 of October 13, 1967, and as supplemented in Department of Labor regulations
(41 CFR chapter 60.) (All construction contracts awarded in excess of $10,000 by grantees and their contractors or
subgrantees.)
(4) Compliance with the Copeland ‘‘ Anti- Kickback’ Act (18 U. S. C. 874) as supplemented in Department of Labor
regulations (29 CFR Part 3.) (All contracts and subgrants for construction or repair.)
(5) Compliance with the Davis- Bacon Act (40 U. S. C. 276a to 276a–7) as supplemented by Department of Labor
regulations (29 CFR Part 5.) (Construction contracts in excess of $2000 awarded by grantees and subgrantees when
required by Federal grant program legislation.)
(6) Compliance with Sections 103 and 107 of the Contract Work Hours and Safety Standards Act (40 U. S. C. 327–
330) as supplemented by Department of Labor regulations (29 CFR Part 5.) (Construction contracts awarded by
grantees and subgrantees in excess of $2000, and in excess of $2500 for other contracts which involve the
employment of mechanics or laborers.)
(7) Notice of awarding agency requirements and regulations pertaining to reporting.
(8) Notice of awarding agency requirements and regulations pertaining to patent rights with respect to any discovery
or invention which arises or is developed in the course of or under such contract.
(9) Awarding agency requirements and regulations pertaining to copyrights and rights in data.
(10) Access by the grantee, the subgrantee, the Federal grantor agency, the Comptroller General of the United
States, or any of their duly authorized representatives to any books, documents, papers, and records of the
contractor which are directly pertinent to that specific contract for the purpose of making audit, examination,
excerpts, and transcriptions.
(11) Retention of all required records for three years after grantees or subgrantees make final payments and all other
pending matters are closed.
(12) Compliance with all applicable standards, orders, or requirements issued under section 306 of the Clean Air Act
(42 U. S. C. 1857( h)), section 508 of the Clean Water Act (33 U. S. C. 1368), Executive Order 11738, and
Environmental Protection Agency regulations (40 CFR part 15.) (Contracts, subcontracts, and subgrants of amounts
in excess of $100,000)
(13) Mandatory standards and policies relating to energy efficiency which are contained in the state energy
conservation plan issued in compliance with the Energy Policy and Conservation Act (Pub. L. 94– 163, 89 Stat. 871.)
[53 FR 8078, 8087, Mar. 11, 1988, as amended at 60 FR 19639, 19645, Apr. 19, 1995]
§ 13.37 Subgrants.
(a) States. States shall follow state law and procedures when awarding and administering subgrants (whether on a cost
reimbursement or fixed amount basis) of financial assistance to local and Indian tribal governments. States shall:
(1) Ensure that every subgrant includes any clauses required by Federal statute and executive orders and their
implementing regulations;
(2) Ensure that subgrantees are aware of requirements imposed upon them by Federal statute and regulation;
(3) Ensure that a provision for compliance with § 13.42 is placed in every cost reimbursement subgrant; and
(4) Conform any advances of grant funds to subgrantees substantially to the same standards of timing and amount
that apply to cash advances by Federal agencies.
(b) All other grantees. All other grantees shall follow the provisions of this part which are applicable to awarding agencies
when awarding and administering subgrants (whether on a cost reimbursement or fixed amount basis) of financial
assistance to local and Indian tribal governments. Grantees shall:
(1) Ensure that every subgrant includes a provision for compliance with this part;
(2) Ensure that every subgrant includes any clauses required by Federal statute and executive orders and their
implementing regulations; and
(3) Ensure that subgrantees are aware of requirements imposed upon them by Federal statutes and regulations.
(c) Exceptions. By their own terms, certain provisions of this part do not apply to the award and administration of
subgrants:
(1) Section 13.10;
(2) Section 13.11;
(3) The letter- of- credit procedures specified in Treasury Regulations at 31 CFR part 205, cited in § 13.21; and
(4) Section 13.50.
REPORTS, RECORDS RETENTION, AND ENFORCEMENT
§ 13.40 Monitoring and reporting program performance.
(a) Monitoring by grantees. Grantees are responsible for managing the day to day operations of grant and subgrant
supported activities. Grantees must monitor grant and subgrant supported activities to assure compliance with applicable
Federal requirements and that performance goals are being achieved. Grantee monitoring must cover each program,
function or activity.
(b) Nonconstruction performance reports. The Federal agency may, if it decides that performance information available
from subsequent applications contains sufficient information to meet its programmatic needs, require the grantee to
submit a performance report only upon expiration or termination of grant support. Unless waived by the Federal agency
this report will be due on the same date as the final Financial Status Report.
(1) Grantees shall submit annual performance reports unless the awarding agency requires quarterly or semi-annual
reports. However, performance reports will not be required more frequently than quarterly. Annual reports shall be
due 90 days after the grant year, quarterly or semi- annual reports shall be due 30 days after the reporting period.
The final performance report will be due 90 days after the expiration or termination of grant support. If a justified
request is submitted by a grantee, the Federal agency may extend the due date for any performance report.
Additionally, requirements for unnecessary performance reports may be waived by the Federal agency.
(2) Performance reports will contain, for each grant, brief information on the following:
(i) A comparison of actual accomplishments to the objectives established for the period. Where the output of the
project can be quantified, a computation of the cost per unit of output may be required if that information will be
useful.
(ii) The reasons for slippage if established objectives were not met.
(iii) Additional pertinent information including, when appropriate, analysis and explanation of cost overruns or
high unit costs
(3) Grantees will not be required to submit more than the original and two copies of performance reports
(4) Grantees will adhere to the standards in this section in prescribing performance reporting requirements for
subgrantees.
(c) Construction performance reports. For the most part, on-site technical inspections and certified percentage of
completion data are relied on heavily by Federal agencies to monitor progress under construction grants and subgrants.
The Federal agency will require additional formal performance reports only when considered necessary, and never more
frequently than quarterly.
(d) Significant developments. Events may occur between the scheduled performance reporting dates which have
significant impact upon the grant or subgrant supported activity. In such cases, the grantee must inform the Federal
agency as soon as the following types of conditions become known:
(1) Problems, delays, or adverse conditions which will materially impair the ability to meet the objective of the award.
This disclosure must include a statement of the action taken, or contemplated, and any assistance needed to resolve
the situation.
(2) Favorable developments which enable meeting time schedules and objectives sooner or at less cost than
anticipated or producing more beneficial results than originally planned.
(e) Federal agencies may make site visits as warranted by program needs.
(f) Waivers, extensions.
(1) Federal agencies may waive any performance report required by this part if not needed.
(2) The grantee may waive any performance report from a subgrantee when not needed. The grantee may extend
the due date for any performance report from a subgrantee if the grantee will still be able to meet its performance
reporting obligations to the Federal agency.
§ 13.41 Financial reporting.
(a) General.
(1) Except as provided in paragraphs (a) (2) and (5) of this section, grantees will use only the forms specified in
paragraphs (a) through (e) of this section, and such supplementary or other forms as may from time to time be
authorized by OMB, for:
(i) Submitting financial reports to Federal agencies, or
(ii) Requesting advances or reimbursements when letters of credit are not used.
(2) Grantees need not apply the forms prescribed in this section in dealing with their subgrantees. However, grantees
shall not impose more burdensome requirements on subgrantees.
(3) Grantees shall follow all applicable standard and supplemental Federal agency instructions approved by OMB to
the extend required under the Paperwork Reduction Act of 1980 for use in connection with forms specified in
paragraphs (b) through (e) of this section. Federal agencies may issue substantive supplementary instructions only
with the approval of OMB. Federal agencies may shade out or instruct the grantee to disregard any line item that the
Federal agency finds unnecessary for its decision-making purposes.
(4) Grantees will not be required to submit more than the original and two copies of forms required under this part.
(5) Federal agencies may provide computer outputs to grantees to expedite or contribute to the accuracy of
reporting. Federal agencies may accept the required information from grantees in machine usable format or computer
printouts instead of prescribed forms.
(6) Federal agencies may waive any report required by this section if not needed.
(7) Federal agencies may extend the due date of any financial report upon receiving a justified request from a
grantee.
(b) Financial Status Report
(1) Form. Grantees will use Standard Form 269 or 269A, Financial Status Report, to report the status of funds for all
nonconstruction grants and for construction grants when required in accordance with paragraph (e)(2)(iii) of this
section.
(2) Accounting basis. Each grantee will report program outlays and program income on a cash or accrual basis as
prescribed by the awarding agency. If the Federal agency requires accrual information and the grantee’s accounting
records are not normally kept on the accural basis, the grantee shall not be required to convert its accounting system
but shall develop such accrual information through and analysis of the documentation on hand.
(3) Frequency. The Federal agency may prescribe the frequency of the report for each project or program. However,
the report will not be required more frequently than quarterly. If the Federal agency does not specify the frequency
of the report, it will be submitted annually. A final report will be required upon expiration or termination of grant
support.
(4) Due date. When reports are required on a quarterly or semiannual basis, they will be due 30 days after the
reporting period. When required on an annual basis, they will be due 90 days after the grant year. Final reports will
be due 90 days after the expiration or termination of grant support.
(c) Federal Cash Transactions Report—
(1) Form.
(i) For grants paid by letter or credit, Treasury check advances or electronic transfer of funds, the grantee will
submit the Standard Form 272, Federal Cash Transactions Report, and when necessary, its continuation sheet,
Standard Form 272a, unless the terms of the award exempt the grantee from this requirement.
(ii) These reports will be used by the Federal agency to monitor cash advanced to grantees and to obtain
disbursement or outlay information for each grant from grantees. The format of the report may be adapted as
appropriate when reporting is to be accomplished with the assistance of automatic data processing equipment
provided that the information to be submitted is not changed in substance.
(2) Forecasts of Federal cash requirements. Forecasts of Federal cash requirements may be required in the ‘‘Remarks’
section of the report.
(3) Cash in hands of subgrantees. When considered necessary and feasible by the Federal agency, grantees may be
required to report the amount of cash advances in excess of three days’ needs in the hands of their subgrantees or
contractors and to provide short narrative explanations of actions taken by the grantee to reduce the excess
balances.
(4) Frequency and due date. Grantees must submit the report no later than 15 working days following the end of
each quarter. However, where an advance either by letter of credit or electronic transfer of funds is authorized at an
annualized rate of one million dollars or more, the Federal agency may require the report to be submitted within 15
working days following the end of each month.
(d) Request for advance or reimbursement
(1) Advance payments. Requests for Treasury check advance payments will be submitted on Standard Form 270,
Request for Advance or Reimbursement. (This form will not be used for drawdowns under a letter of credit, electronic
funds transfer or when Treasury check advance payments are made to the grantee automatically on a predetermined
basis.)
(2) Reimbursements. Requests for reimbursement under nonconstruction grants will also be submitted on Standard
Form 270. (For reimbursement requests under construction grants, see paragraph (e)(1) of this section.)
(3) The frequency for submitting payment requests is treated in paragraph (b)(3) of this section.
(e) Outlay report and request for reimbursement for construction programs.
(1) Grants that support construction activities paid by reimbursement method.
(i) Requests for reimbursement under construction grants will be submitted on Standard Form 271, Outlay Report
and Request for Reimbursement for Construction Programs. Federal agencies may, however, prescribe the
Request for Advance or Reimbursement form, specified in paragraph (d) of this section, instead of this form.
(ii) The frequency for submitting reimbursement requests is treated in paragraph (b)(3) of this section.
(2) Grants that support construction activities paid by letter of credit, electronic funds transfer or Treasury check
advance.
(i) When a construction grant is paid by letter of credit, electronic funds transfer or Treasury check advances, the
grantee will report its outlays to the Federal agency using Standard Form 271, Outlay Report and Request for
Reimbursement for Construction Programs. The Federal agency will provide any necessary special instruction.
However, frequency and due date shall be governed by paragraphs (b) (3) and (4) of this section.
(ii) When a construction grant is paid by Treasury check advances based on periodic requests from the grantee,
the advances will be requested on the form specified in paragraph (d) of this section.
(iii) The Federal agency may substitute the Financial Status Report specified in paragraph (b) of this section for
the Outlay Report and Request for Reimbursement for Construction Programs.
(3) Accounting basis. The accounting basis for the Outlay Report and Request for Reimbursement for Construction
Programs shall be governed by paragraph (b)(2) of this section.
§ 13.42 Retention and access requirements for records.
(a) Applicability.
(1) This section applies to all financial and programmatic records, supporting documents, statistical records, and other
records of grantees or subgrantees which are:
(i) Required to be maintained by the terms of this part, program regulations or the grant agreement, or
(ii) Otherwise reasonably considered as pertinent to program regulations or the grant agreement.
(2) This section does not apply to records maintained by contractors or subcontractors. For a requirement to place a
provision concerning records in certain kinds of contracts, see § 13.36( i)(10).
(b) Length of retention period.
(1) Except as otherwise provided, records must be retained for three years from the starting date specified in
paragraph(c) of this section.
(2) If any litigation, claim, negotiation, audit or other action involving the records has been started before the
expiration of the 3- year period, the records must be retained until completion of the action and resolution of all
issues which arise from it, or until the end of the regular 3- year period, whichever is later.
(3) To avoid duplicate record-keeping, awarding agencies may make special arrangements with grantees and
subgrantees to retain any records which are continuously needed for joint use. The awarding agency will request
transfer of records to its custody when it determines that the records possess long-term retention value. When the
records are transferred to or maintained by the Federal agency, the 3-year retention requirement is not applicable to
the grantee or subgrantee.
(c) Starting date of retention period
(1) General. When grant support is continued or renewed at annual or other intervals, the retention period for the
records of each funding period starts on the day the grantee or subgrantee submits to the awarding agency its single
or last expenditure report for that period. However, if grant support is continued or renewed quarterly, the retention
period for each year’s records starts on the day the grantee submits its expenditure report for the last quarter of the
Federal fiscal year. In all other cases, the retention period starts on the day the grantee submits its final expenditure
report. If an expenditure report has been waived, the retention period starts on the day the report would have been
due.
(2) Real property and equipment records. The retention period for real property and equipment records starts from
the date of the disposition or replacement or transfer at the direction of the awarding agency.
(3) Records for income transactions after grant or subgrant support. In some cases grantees must report income
after the period of grant support. Where there is such a requirement, the retention period for the records pertaining
to the earning of the income starts from the end of the grantee’s fiscal year in which the income is earned.
(4) Indirect cost rate proposals, cost allocations plans, etc. This paragraph applies to the following types of
documents, and their supporting records: indirect cost rate computations or proposals, cost allocation plans, and any
similar accounting computations of the rate at which a particular group of costs is chargeable (such as computer
usage chargeback rates or composite fringe benefit rates).
(i) If submitted for negotiation. If the proposal, plan, or other computation is required to be submitted to the
Federal Government (or to the grantee) to form the basis for negotiation of the rate, then the 3- year retention
period for its supporting records starts from the date of such submission.
(ii) If not submitted for negotiation. If the proposal, plan, or other computation is not required to be submitted to
the Federal Government (or to the grantee) for negotiation purposes, then the 3-year retention period for the
proposal plan, or computation and its supporting records starts from end of the fiscal year (or other accounting
period) covered by the proposal, plan, or other computation.
(d) Substitution of microfilm. Copies made by microfilming, photocopying, or similar methods may be substituted for the
original records.
(e) Access to records
(1) Records of grantees and subgrantees. The awarding agency and the Comptroller General of the United States, or
any of their authorized representatives, shall have the right of access to any pertinent books, documents, papers, or
other records of grantees and subgrantees which are pertinent to the grant, in order to make audits, examinations,
excerpts, and transcripts.
(3) Expiration of right of access. The rights of access in this section must not be limited to the required retention
period but shall last as long as the records are retained.
(f) Restrictions on public access. The Federal Freedom of Information Act (5 U. S. C. 552) does not apply to records
Unless required by Federal, State, or local law, grantees and subgrantees are not required to permit public access to their
records.
§ 13.43 Enforcement.
(a) Remedies for noncompliance. If a grantee or subgrantee materially fails to comply with any term of an award,
whether stated in a Federal statute or regulation, an assurance, in a State plan or application, a notice of award, or
elsewhere, the awarding agency may take one or more of the following actions, as appropriate in the circumstances:
(1) Temporarily withhold cash payments pending correction of the deficiency by the grantee or subgrantee or more
severe enforcement action by the awarding agency,
(2) Disallow (that is, deny both use of funds and matching credit for) all or part of the cost of the activity or action
not in compliance,
(3) Wholly or partly suspend or terminate the current award for the grantee’s or subgrantee’s program,
(4) Withhold further awards for the program, or
(5) Take other remedies that may be legally available.
(b) Hearings, appeals. In taking an enforcement action, the awarding agency will provide the grantee or subgrantee an
opportunity for such hearing, appeal, or other administrative proceeding to which the grantee or subgrantee is entitled
under any statute or regulation applicable to the action involved.
(c) Effects of suspension and termination. Costs of grantee or subgrantee resulting from obligations incurred by the
grantee or subgrantee during a suspension or after termination of an award are not allowable unless the awarding agency
expressly authorizes them in the notice of suspension or termination or subsequently. Other grantee or subgrantee costs
during suspension or after termination which are necessary and not reasonably avoidable are allowable if:
(1) The costs result from obligations which were properly incurred by the grantee or subgrantee before the effective
date of suspension or termination, are not in anticipation of it, and, in the case of a termination, are non-cancelable,
and,
(2) The costs would be allowable if the award were not suspended or expired normally at the end of the funding
period in which the termination takes effect.
(d) Relationship to Debarment and Suspension. The enforcement remedies identified in this section, including suspension
and termination, do not preclude grantee or subgrantee from being subject to ‘‘ Debarment and Suspension’ under E. O.
12549 (see § 13.35.)
§ 13.44 Termination for convenience.
Except as provided in § 13.43 awards may be terminated in whole or in part only as follows:
(a) By the awarding agency with the consent of the grantee or subgrantee in which case the two parties shall agree upon
the termination conditions, including the effective date and in the case of partial termination, the portion to be
terminated, or
(b) By the grantee or subgrantee upon written notification to the awarding agency, setting forth the reasons for such
termination, the effective date, and in the case of partial termination, the portion to be terminated. However, if, in
the case of a partial termination, the awarding agency determines that the remaining portion of the award will not
accomplish the purposes for which the award was made, the awarding agency may terminate the award in its entirety
under either § 13.43 or paragraph (a) of this section.
Subpart D— After- The- Grant Requirements
§ 13.50 Closeout.
(a) General. The Federal agency will close out the award when it determines that all applicable administrative actions and
all required work of the grant has been completed.
(b) Reports. Within 90 days after the expiration or termination of the grant, the grantee must submit all financial,
performance, and other reports required as a condition of the grant. Upon request by the grantee, Federal agencies may
extend this timeframe. These may include but are not limited to:
(1) Final performance or progress report.
(2) Financial Status Report (SF 269) or Outlay Report and Request for Reimbursement for Construction Programs
(SF– 271) (as applicable)
(3) Final request for payment (SF– 270) (if applicable.)
(4) Invention disclosure (if applicable.
(4) Federally- owned property report: In accordance with § 13.32(f), a grantee must submit an inventory of all
federally owned property (as distinct from property acquired with grant funds) for which it is accountable and
request disposition instructions from the Federal agency of property no longer needed.
(c) Cost adjustment. The Federal agency will, within 90 days after receipt of reports in paragraph (b) of this section,
make upward or downward adjustments to the allowable costs.
(d) Cash adjustments.
(1) The Federal agency will make prompt payment to the grantee for allowable reimbursable costs.
(2) The grantee must immediately refund to the Federal agency any balance of unobligated (unencumbered) cash
advanced that is not authorized to be retained for use on other grants.
§ 13.51 Later disallowances and adjustments.
The closeout of a grant does not affect:
(a) The Federal agency’s right to disallow costs and recover funds on the basis of a later audit or other review;
(b) The grantee’s obligation to return any funds due as a result of later refunds, corrections, or other transactions;
(c) Records retention as required in § 13.42;
(d) Property management requirements in §§ 13.31 and 13.32; and
(e) Audit requirements in § 13.26
§ 13.52 Collection of amounts due.
(a) Any funds paid to a grantee in excess of the amount to which the grantee is finally determined to be entitled under
the terms of the award constitute a debt to the Federal Government. If not paid within a reasonable period after
demand, the Federal agency may reduce the debt by:
(1) Making an administrative offset against other requests for reimbursements,
(2) Withholding advance payments otherwise due to the grantee, or
(3) Other action permitted by law.
(b) Except where otherwise provided by statutes or regulations, the Federal agency will charge interest on an overdue
debt in accordance with the Federal Claims Collection Standards (4 CFR Chapter II.) The date from which interest is
computed is not extended by litigation or the filing of any form of appeal.
Subpart E— Entitlement [Reserved]
44 C.F.R. PART 14—ADMINISTRATION OF GRANTS: AUDITS OF STATE AND LOCAL GOVERNMENTS
Title 44 - Emergency Management and Assistance
Title
44: Emergency Management and Assistance
PART 14—ADMINISTRATION OF GRANTS: AUDITS OF STATE AND LOCAL GOVERNMENTS
Section
Contents
§ 14.1 Scope
of part.
§ 14.2 Non-Federal
audits.
Appendix
A to Part 14—OMB Circular A–128, “Audits of State
and Local Governments”
Authority: Reorganization Plan No. 3 of 1978; E.O. 12127, E.O. 12148, 31 U.S.C. 7505.
Source: 51 FR 24347, July 3, 1986, unless otherwise noted.
(a) This part contains standards for non-Federal audits of recipients of financial assistance from the Federal Emergency Management Agency (herein called recipients). This includes, without limitation, assistance under the Disaster Relief Act of 1974 as amended, and the Federal Civil Defense Act of 1950, as amended.
(b) FEMA may not impose on recipients additional requirements concerning non-Federal audits. However, it may provide recipients with suggestions and assistance on this subject.
(a) Governmental recipients. Recipients that are governments shall comply with OMB Circular A–128 including any amendments published in the Federal Register by OMB. The Circular is codified verbatim as Appendix A to this part.
(b) Grant or contract audits. Recipients of $25,000 or more, but less than $100,000 in Federal financial assistance that choose not to have an organization wide single audit must conduct individual grant or contract audits on all FEMA awards over $25,000.
(c) Submission of audit reports. All copies of audit reports that a recipient is required under OMB Circular A–128 to submit to FEMA shall be addressed to the FEMA District Inspector General responsible for the FEMA Region in which the recipient is located. The FEMA Office of Inspector General will distribute copies as appropriate within the Agency. Recipients therefore are not required to send their audit reports to any FEMA officials other than the responsible District Inspector General.
Appendix A to Part 14—OMB Circular A–128, “Audits of State and Local Governments”
EXECUTIVE OFFICE OF THE PRESIDENT
Office of Management and Budget
CIRCULAR NO. A–128
April 12, 1985
To the Heads of Executive Departments and Establishments.
Subject: Audits of State and Local Governments.
1. Purpose. This Circular is issued pursuant to the Single Audit Act of 1984, Public Law 98–502. It establishes audit requirements for State and local governments that receive Federal aid, and defines Federal responsibilities for implementing and monitoring those requirements.
2. Supersession. The Circular supersedes Attachment P, “Audit Requirements,” of Circular A–102, “Uniform requirements for grants to State and local governments.”
3. Background. The Single Audit Act builds upon earlier efforts to improve audits of Federal aid programs. The Act requires State or local governments that receive $100,000 or more a year in Federal funds to have an audit made for that year. Section 7505 of the Act requires the Director of the Office of Management and Budget to prescribe policies, procedures and guidelines to implement the Act. It specifies that the Director shall designate “cognizant” Federal agencies, determine criteria for making appropriate charges to Federal programs for the cost of audits, and provide procedures to assure that small firms or firms owned and controlled by disadvantaged individuals have the opportunity to participate in contracts for single audits.
4. Policy. The Single Audit Act requires the following:
a. State or local governments that receive $100,000 or more a year in Federal financial assistance shall have an audit made in accordance with this Circular.
b. State or local governments that receive between $25,000 and $100,000 a year shall have an audit made in accordance with this Circular, or in accordance with Federal laws and regulations governing the programs they participate in.
c. State or local governments that receive less than $25,000 a year shall be exempt from compliance with the Act and other Federal audit requirements. These State and local governments shall be governed by audit requirements prescribed by State or local law or regulation.
d. Nothing in this paragraph exempts State or local governments from maintaining records of Federal financial assistance or from providing access to such records to Federal agencies, as provided for in Federal law or in Circular A–102, “Uniform requirements for grants to State or local governments.”
5. Definitions. For the purposes of this Circular the following definitions from the Single Audit Act apply:
a. Cognizant agency means the Federal agency assigned by the Office of Management and Budget to carry out the responsibilities described in paragraph 11 of this Circular.
b. Federal financial assistance means assistance provided by a Federal agency in the form of grants, contracts, cooperative agreements, loans, loan guarantees, property, interest subsidies, insurance, or direct appropriations, but does not include direct Federal cash assistance to individuals. It includes awards received directly from Federal agencies, or indirectly through other units of State and local governments.
c. Federal agency has the same meaning as the term agency in section 551(1) of title 5, United States Code.
d. Generally accepted accounting principles has the meaning specified in the generally accepted government auditing standards.
e. Generally accepted government auditing standards means the Standards For Audit of Government Organizations, Programs, Activities, and Functions, developed by the Comptroller General, dated Febuary 27, 1981.
f. Independent auditor means:
(1) A State or local government auditor who meets the independence standards specified in generally accepted government auditing standards; or
(2) A public accountant who meets such independence standards.
g. Internal controls means the plan of organization and methods and procedures adopted by management to ensure that:
(1) Resource use is consistent with laws, regulations, and policies;
(2) Resources are safeguarded against waste, loss, and misuse; and
(3) Reliable data are obtained, maintained, and fairly disclosed in reports.
h. Indian tribe means any Indian tribe, band, nations, or other organized group or community, including any Alaskan Native village or regional or village corporations (as defined in, or established under, the Alaskan Native Claims Settlement Act) that is recognized by the United States as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.
i. Local government means any unit of local government within a State, including a county, a borough, municipality, city, town, township, parish, local public authority, special district, school district, intrastate district, council of governments, and any other instrumentality of local government.
j. Major Federal Assistance Program, as defined by Public Law 98–502, is described in the Attachment to this Circular.
k. Public accountants means those individuals who meet the qualification standards included in generally accepted government auditing standards for personnel performing government audits.
l. State means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and the Trust Territory of the Pacific Islands, any instrumentality thereof, and any multi-State, regional, or interstate entity that has governmental functions and any Indian tribe.
m. Subrecipient means any person or government department, agency, or establishment that receives Federal financial assistance to carry out a program through a State or local government, but does not include an individual that is a beneficiary of such a program. A subrecipient may also be a direct recipient of Federal financial assistance.
6. Scope of audit. The Single Audit Act provides that:
a. The audit shall be made by an independent auditor in accordance with generally accepted government auditing standards covering financial and compliance audits.
b. The audit shall cover the entire operations of a State or local government or, at the option of that government, it may cover departments, agencies or establishments that received, expended, or otherwise administered Federal financial assistance during the year. However, if a State or local government receives $25,000 or more in General Revenue Sharing Funds in a fiscal year, it shall have an audit of its entire operations. A series of audits of individual departments, agencies, and establishments for the same fiscal year may be considered a single audit.
c. Public hospitals and public colleges and universities may be excluded from State and local audits and the requirements of this Circular. However, if such entities are excluded, audits of these entities shall be made in accordance with statutory requirements and the provisions of Circular A–110, “Uniform requirements for grants to universities, hospitals, and other nonprofit organizations.”
d. The auditor shall determine whether:
(1) The financial statements of the government, department, agency or establishment present fairly its financial position and the results of its financial operations in accordance with generally accepted accounting principles;
(2) The organization has internal accounting and other control systems to provide reasonable assurance that it is managing Federal financial assistance programs in compliance with applicable laws and regulations; and
(3) The organization has complied with laws and regulations that may have material effect on its financial statements and on each major Federal assistance program.
7. Frequency of audit. Audits shall be made annually unless the State or local government has, by January 1, 1987, a constitutional or statutory requirement for less frequent audits. For those governments, the cognizant agency shall permit biennial audits, covering both years, if the government so requests. It shall also honor requests for biennial audits by governments that have an administrative policy calling for audits less frequent than annual, but only for fiscal years beginning before January 1, 1987.
8. Internal control and compliance reviews. The Single Audit Act requires that the independent auditor determine and report on whether the organization has internal control systems to provide reasonable assurance that it is managing Federal assistance programs in compliance with applicable laws and regulations.
a. Internal control review. In order to provide this assurance the auditor must make a study and evaluation of internal control systems used in administering Federal assistance programs. The study and evaluation must be made whether or not the auditor intends to place reliance on such systems. As part of this review, the auditor shall:
(1) Test whether these internal control systems are functioning in accordance with prescribed procedures.
(2) Examine the recipient's system for monitoring subrecipients and obtaining and acting on subrecipient audit reports.
b. Compliance review. The law also requires the auditor to determine whether the organization has complied with laws and regulations that may have a material effect on each major Federal assistance program.
(1) In order to determine which major programs are to be tested for compliance, State and local governments shall identify in their accounts all Federal funds received and expended and the programs under which they were received. This shall include funds received directly from Federal agencies and through other State and local governments.
(2) The review must include the selection and testing of a representative number of charges from each major Federal assistance program. The selection and testing of transactions shall be based on the auditor's professional judgment considering such factors as the amount of expeditures for the program and the individual awards; the newness of the program or changes in its conditions; prior experience with the program, particularly as revealed in audits and other evaluations (e.g., inspections, program reviews); the extent to which the program is carried out through subrecipients; the extent to which the program contracts for goods or services; the level to which the program is already subject to program reviews or other forms of independent oversight; the adequacy of the controls for ensuring compliance; the expectation of adherence or lack of adherence to the applicable laws and regulations; and the potential impact of adverse findings.
(a) In making the test of transactions, the auditor shall determine whether:
—The amounts reported as expenditures were for allowable services, and
—The records show that those who received services or benefits were eligible to receive them.
(b) In addition to transaction testing, the auditor shall determine whether:
—Matching requirements, levels of effort and earmarking limitations were met,
—Federal financial reports and claims for advances and reimbursements contain information that is supported by the books and records from which the basic financial statements have been prepared, and
—Amounts claimed or used for matching were determined in accordance with OMB Circular A–87, “Cost principles for State and local governments,” and Attachment F of Circular A–102, “Uniform requirements for grants to State and local governments.”
(c) The principal compliance requirements of the largest Federal aid programs may be ascertained by referring to the Compliance Supplement for Single Audits of State and Local Governments, issued by OMB and available from the Government Printing Office. For those programs not covered in the Compliance Supplement, the auditor may ascertain compliance requirements by researching the statutes, regulations, and agreements governing individual programs.
(3) Transactions related to other Federal assistance programs that are selected in connection with examinations of financial statements and evaluations of internal controls shall be tested for compliance with Federal laws and regulations that apply to such transactions.
9. Subrecipients. State or local governments that receive Federal financial assistance and provide $25,000 or more of it in a fiscal year to a subrecipient shall:
a. Determine whether State or local subrecipients have met the audit requirements of this Circular and whether subrecipients covered by Circular A–110, “Uniform requirements for grants to universities, hospitals, and other nonprofit organizations,” have met that requirement;
b. Determine whether the subrecipient spent Federal assistance funds provided in accordance with applicable laws and regulations. This may be accomplished by reviewing an audit of the subrecipient made in accordance with this Circular, Circular A–110, or through other means (e.g., program reviews) if the subrecipient has not yet had such an audit;
c. Ensure that appropriate corrective action is taken within six months after receipt of the audit report in instances of noncompliance with Federal laws and regulations;
d. Consider whether subrecipient audits necessitate adjustment of the recipient's own records; and
e. Require each subrecipient to permit independent auditors to have access to the records and financial statements as necessary to comply with this Circular.
10. Relation to other audit requirements. The Single Audit Act provides that an audit made in accordance with this Circular shall be in lieu of any financial or financial compliance audit required under individual Federal assistance programs. To the extent that a single audit provides Federal agencies with information and assurances they need to carry out their overall responsibilities, they shall rely upon and use such information. However, a Federal agency shall make any additional audits which are necessary to carry out its responsibilities under Federal law and regulation. Any additional Federal audit effort shall be planned and carried out in such a way as to avoid duplication.
a. The provisions of this Circular do not limit the authority of Federal agencies to make, or contract for audits and evaluations of Federal financial assistance programs, nor do they limit the authority of any Federal agency Inspector General or other Federal audit official.
b. The provisions of this Circular do not authorize any State or local government or subrecipient thereof to constrain Federal agencies, in any manner, from carrying out additional audits.
c. A Federal agency that makes or contracts for audits in addition to the audits made by recipients pursuant to this Circular shall, consistent with other applicable laws and regulations, arrange for funding the cost of such additional audits. Such additional audits include economy and efficiency audits, program results audits, and program evaluations.
11. Cognizant agency responsibilities. The Single Audit Act provides for cognizant Federal agencies to oversee the implementation of this Circular.
a. The Office of Management and Budget will assign cognizant agencies for States and their subdivisions and larger local governments and their subdivisions. Other Federal agencies may participate with an assigned cognizant agency, in order to fulfill the cognizance responsibilities. Smaller governments not assigned a cognizant agency will be under the general oversight of the Federal agency that provides them the most funds whether directly or indirectly.
b. A cognizant agency shall have the following responsibilities:
(1) Ensure that audits are made and reports are received in a timely manner and in accordance with the requirements of this Circular.
(2) Provide technical advice and liaison to State and local governments and independent auditors.
(3) Obtain or make quality control reviews of selected audits made by non-Federal audit organizations, and provide the results, when appropriate, to other interested organizations.
(4) Promptly inform other affected Federal agencies and appropriate Federal law enforcement officials of any reported illegal acts or irregularities. They should also inform State or local law enforcement and prosecuting authorities, if not advised by the recipient, of any violation of law within their jurisdiction.
(5) Advise the recipient of audits that have been found not to have met the requirements set forth in this Circular. In such instances, the recipient will be expected to work with the auditor to take corrective action. If corrective action is not taken, the cognizant agency shall notify the recipient and Federal awarding agencies of the facts and make recommendations for followup action. Major inadequacies or repetitive substandard performance of independent auditors shall be referred to appropriate professional bodies for disciplinary action.
(6) Coordinate, to the extent practicable, audits made by or for Federal agencies that are in addition to the audits made pursuant to this Circular; so that the additional audits build upon such audits.
(7) Oversee the resolution of audit findings that affect the programs of more than one agency.
12. Illegal acts or irregularities. If the auditor becomes aware of illegal acts or other irregularities, prompt notice shall be given to recipient management officials above the level of involvement. (See also paragraph 13(a)(3) of this appendix for the auditor's reporting responsibilities.) The recipient, in turn, shall promptly notify the cognizant agency of the illegal acts or irregularities and of proposed and actual actions, if any. Illegal acts and irregularities include such matters as conflicts of interest, falsification of records or reports, and misappropriations of funds or other assets.
13. Audit Reports. Audit reports must be prepared at the completion of the audit. Reports serve many needs of State and local governments as well as meeting the requirements of the Single Audit Act.
a. The audit report shall state that the audit was made in accordance with the provisions of this Circular. The report shall be made up of at least:
(1) The auditor's report on financial statements and on a schedule of Federal assistance; the financial statements; and a schedule of Federal assistance, showing the total expenditures for each Federal assistance program as identified in the Catalog of Federal Domestic Assistance. Federal programs or grants that have not been assigned a catalog number shall be identified under the caption “other Federal assistance.”
(2) The auditor's report on the study and evaluation of internal control systems must identify the organization's significant internal accounting controls, and those controls designed to provide reasonable assurance that Federal programs are being managed in compliance with laws and regulations. It must also identify the controls that were evaluated, the controls that were not evaluated, and the material weaknesses identified as a result of the evaluation.
(3) The auditor's report on compliance containing:
—A statement of positive assurance with respect to those items tested for compliance, including compliance with law and regulations pertaining to financial reports and claims for advances and reimbursements;
—Negative assurance on those items not tested;
—A summary of all instances of noncompliance; and
—An identification of total amounts questioned, if any, for each Federal assistance award, as a result of noncompliance.
b. The three parts of the audit report may be bound into a single report, or presented at the same time as separate documents.
c. All fraud abuse, or illegal acts or indications of such acts, including all questioned costs found as the result of these acts that auditors become aware of, should normally be covered in a separate written report submitted in accordance with paragraph 13f of this appendix.
d. In addition to the audit report, the recipient shall provide comments on the findings and recommendations in the report, including a plan for corrective action taken or planned and comments on the status of corrective action taken on prior findings. If corrective action is not necessary, a statement describing the reason it is not should accompany the audit report.
e. The reports shall be made available by the State or local government for public inspection within 30 days after the completion of the audit.
f. In accordance with generally accepted government audit standards, reports shall be submitted by the auditor to the organization audited and to those requiring or arranging for the audit. In addition, the recipient shall submit copies of the reports to each Federal department or agency that provided Federal assistance funds to the recipient. Subrecipients shall submit copies to recipients that provided them Federal assistance funds. The reports shall be sent within 30 days after the completion of the audit, but no later than one year after the end of the audit period unless a longer period is agreed to with the cognizant agency.
g. Recipients of more than $100,000 in Federal funds shall submit one copy of the audit report within 30 days after issuance to a central clearinghouse to be designated by the Office of Management and Budget. The clearinghouse will keep completed audits on file and follow up with State and local governments that have not submitted required audit reports.
h. Recipients shall keep audit reports on file for three years from their issuance.
14. Audit Resolution. As provided in paragraph 11, the cognizant agency shall be responsible for monitoring the resolution of audit findings that affect the programs of more than one Federal agency. Resolution of findings that relate to the programs of a single Federal agency will be the responsibility of the recipient and that agency. Alternate arrangements may be made on a case-by-case basis by agreement among the agencies concerned.
Resolution shall be made within six months after receipt of the report by the Federal departments and agencies. Corrective action should proceed as rapidly as possible.
15. Audit workpapers and reports. Workpapers and reports shall be retained for a minimum of three years from the date of the audit report, unless the auditor is notified in writing by the cognizant agency to extend the retention period. Audit workpapers shall be made available upon request to the cognizant agency or its designee or the General Accounting Office, at the completion of the audit.
16. Audit Costs. The cost of audits made in accordance with the provisions of this Circular are allowable charges to Federal assistance programs.
a. The charges may be considered a direct cost or an allocated indirect cost, determined in accordance with the provision of Circular A–87, “Cost principles for State and local governments.”
b. Generally, the percentage of costs charged to Federal assistance programs for a single audit shall not exceed the percentage that Federal funds expended represent of total funds expended by the recipient during the fiscal year. The percentage may be exceeded, however, if appropriate documentation demonstrates higher actual cost.
17. Sanctions. The Single Audit Act provides that no cost may be charged to Federal assistance programs for audits required by the Act that are not made in accordance with this Circular. In cases of continued inability or unwillingness to have a proper audit, Federal agencies must consider other appropriate sanctions including:
—Withholding a percentage of assistance payments until the audit is completed satisfactorily,
—Withholding or disallowing overhead costs, and
—Suspending the Federal assistance agreement until the audit is made.
18. Auditor Selection. In arranging for audit services State and local governments shall follow the procurement standards prescribed by Attachment O of Circular A–102, “Uniform requirements for grants to State and local governments.” The standards provide that while recipients are encouraged to enter into intergovernmental agreements for audit and other services, analysis should be made to determine whether it would be more economical to purchase the services from private firms. In instances where use of such intergovernmental agreements are required by State statutes (e.g., audit services) these statutes will take precedence.
19. Small and Minority Audit Firms. Small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals shall have the maximum practicable opportunity to participate in contracts awarded to fulfill the requirements of this Circular. Recipients of Federal assistance shall take the following steps to further this goal:
a. Assure that small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals are used to the fullest extent practicable.
b. Make information on forthcoming opportunities available and arrange timeframes for the audit so as to encourage and facilitate participation by small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals.
c. Consider in the contract process whether firms competing for larger audits intend to subcontract with small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals.
d. Encourage contracting with small audit firms or audit firms owned and controlled by socially and economically disadvantaged individuals which have traditionally audited government programs and, in such cases where this is not possible, assure that these firms are given consideration for audit subcontracting opportunities.
e. Encourage contracting with consortiums of small audit firms as described in paragraph (a) of section 19 of this appendix when a contract is too large for an individual small audit firm or audit firm owned and controlled by socially and economically disadvantaged individuals.
f. Use the services and assistance, as appropriate, of such organizations as the Small Business Administration in the solicitation and utilization of small audit firms or audit firms owned and controlled by socially and economically disadvantaged individuals.
20. Reporting. Each Federal agency will report to the Director of OMB on or before March 1, 1987, and annually thereafter on the effectiveness of State and local governments in carrying out the provisions of this Circular. The report must identify each State or local government or Indian tribe that, in the opinion of the agency, is failing to comply with the Circular.
21. Regulations. Each Federal agency shall include the provisions of this Circular in its regulations implementing the Single Audit Act.
22. Effective date. This Circular is effective upon publication and shall apply to fiscal years of State and local governments that begin after December 31, 1984. Earlier implementation is encouraged. However, until it is implemented, the audit provisions of Attachment P to Circular A–102 shall continue to be observed.
23. Inquiries. All questions or inquiries should be addressed to Financial Management Division, Office of Management and Budget, telephone number 202/395–3993.
24. Sunset review date. This Circular shall have an independent policy review to ascertain its effectiveness three years from the date of issuance.
David A. Stockman,Director.
Attachment—Circular A–128
Definition of Major Program as Provided in Public Law 98–502
“Major Federal Assistance Program,” for State and local governments having Federal assistance expenditures between $100,000 and $100,000,000, means any program for which Federal expenditures during the applicable year exceed the larger of $300,000, or 3 percent of such total expenditures.
Where total expenditures of Federal assistance exceed $100,000,000, the following criteria apply:
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