Authorizing Statue

215.36 Intangible property.
215.37 Property trust relationship.

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

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

About this part.

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

Subpart A—General
215.1
215.2
215.3
215.4
215.5

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

TERMINATION AND ENFORCEMENT

Subpart B—Pre-Award Requirements

215.60 Purpose of termination and enforcement.
215.61 Termination.
215.62 Enforcement.

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

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

Subpart C—Post-Award Requirements

SIONS

FINANCIAL AND PROGRAM MANAGEMENT

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

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

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

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

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

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§ 215.1

2 CFR Ch. II (1–1–12 Edition)

prescribes policies or specific requirements that differ from the standards
provided in this part, the provisions of
the statute shall govern.
(2) The provisions of subparts A
through D of this part shall be applied
by Federal agencies to recipients. Recipients shall apply the provisions of
those subparts to subrecipients performing substantive work under grants
and agreements that are passed
through or awarded by the primary recipient, if such subrecipients are organizations described in paragraph (a) of
this section.
(3) This part does not apply to grants,
contracts, or other agreements between the Federal Government and
units of State or local governments
covered by OMB Circular A–102,
‘‘Grants and Cooperative Agreements
with State and Local Governments’’ 1
and the Federal agencies’ grants management common rule (see § 215.5)
which standardize the administrative
requirements Federal agencies impose
on State and local grantees. In addition, subawards and contracts to State
or local governments are not covered
by this part. However, this part applies
to subawards made by State and local
governments to organizations covered
by this part.
(4) Federal agencies may apply the
provisions of subparts A through D of
this part to commercial organizations,
foreign governments, organizations
under the jurisdiction of foreign governments, and international organizations.
(c) OMB responsibilities. OMB is responsible for:
(1) Issuing and maintaining the guidance in this part.
(2) Interpreting the policy requirements in this part and providing assistance to ensure effective and efficient
implementation.
(3) Reviewing Federal agency regulations implementing the guidance in
this part, as required by Executive
Order 12866.
(4) Granting any deviations to Federal agencies from the guidance in this
part, as provided in § 215.4. Exceptions
will only be made in particular cases

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

Subpart A—General
§ 215.1

Purpose.

This part establishes uniform administrative requirements for Federal
grants and agreements awarded to institutions of higher education, hospitals, and other non-profit organizations. Federal awarding agencies shall
not impose additional or inconsistent
requirements, except as provided in
§§ 215.4, and 215.14 or unless specifically

1 See 5 CFR 1310.9 for availability of OMB
circulars.

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§ 215.2

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required by Federal statute or executive order. Non-profit organizations
that implement Federal programs for
the States are also subject to State requirements.

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

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

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§ 215.2

2 CFR Ch. II (1–1–12 Edition)

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

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

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OMB Circulars and Guidance

§ 215.2

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

money, or property in lieu of money,
made under an award by a recipient to
an eligible subrecipient or by a subrecipient to a lower tier subrecipient.
The term includes financial assistance
when provided by any legal agreement,
even if the agreement is called a contract, but does not include procurement of goods and services nor does it
include any form of assistance which is
excluded from the definition of
‘‘award’’ in § 215.2(e).
(gg) Subrecipient means the legal entity to which a subaward is made and
which is accountable to the recipient
for the use of the funds provided. The
term may include foreign or international organizations (such as agencies of the United Nations) at the discretion of the Federal awarding agency.
(hh) Supplies means all personal property excluding equipment, intangible
property, and debt instruments as defined in this section, and inventions of
a contractor conceived or first actually
reduced to practice in the performance
of work under a funding agreement
(‘‘subject inventions’’), as defined in 37
CFR part 401, ‘‘Rights to Inventions
Made by Nonprofit Organizations and
Small Business Firms Under Government Grants, Contracts, and Cooperative Agreements.’’
(ii) Suspension means an action by a
Federal awarding agency that temporarily withdraws Federal sponsorship
under an award, pending corrective action by the recipient or pending a decision to terminate the award by the
Federal awarding agency. Suspension
of an award is a separate action from
suspension under Federal agency regulations implementing E.O. 12549 (51 FR
6370, 3 CFR, 1986 Comp., p. 189) and E.O.
12689 (54 FR 34131, 3 CFR, 1989 Comp., p.
235), ‘‘Debarment and Suspension.’’
(jj) Termination means the cancellation of Federal sponsorship, in whole or
in part, under an agreement at any
time prior to the date of completion.
(kk) Third party in-kind contributions
means the value of non-cash contributions provided by non-Federal third
parties. Third party in-kind contributions may be in the form of real property, equipment, supplies and other expendable property, and the value of
goods and services directly benefiting

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§ 215.3

2 CFR Ch. II (1–1–12 Edition)

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

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

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

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

Subpart B—Pre-Award
Requirements
§ 215.10 Purpose.
Sections 215.11 through 215.17 prescribe forms and instructions and other
pre-award matters to be used in applying for Federal awards.

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

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

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§ 215.15
agency regulations implementing E.O.s
12549 and 12689, ‘‘Debarment and Suspension.’’ Under those regulations, certain parties who are debarred, suspended or otherwise excluded may not
be participants or principals in Federal
assistance awards and subawards, and
in certain contracts under those
awards and subawards.

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

[70 FR 51879, Aug. 31, 2005]

§ 215.14 Special award conditions.
If an applicant or recipient: has a history of poor performance, is not financially stable, has a management system that does not meet the standards
prescribed in this part, has not conformed to the terms and conditions of
a previous award, or is not otherwise
responsible, Federal awarding agencies
may impose additional requirements as
needed, provided that such applicant or
recipient is notified in writing as to:
the nature of the additional requirements, the reason why the additional
requirements are being imposed, the
nature of the corrective action needed,
the time allowed for completing the
corrective actions, and the method for
requesting reconsideration of the additional requirements imposed. Any special conditions shall be promptly removed once the conditions that
prompted them have been corrected.

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

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

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

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2 CFR Ch. II (1–1–12 Edition)
data to performance data and develop
unit cost information whenever practical.
(b) Recipients’ financial management
systems shall provide for the following.
(1) Accurate, current and complete
disclosure of the financial results of
each federally-sponsored project or
program in accordance with the reporting requirements set forth in § 215.52. If
a Federal awarding agency requires reporting on an accrual basis from a recipient that maintains its records on
other than an accrual basis, the recipient shall not be required to establish
an accrual accounting system. These
recipients may develop such accrual
data for its reports on the basis of an
analysis of the documentation on hand.
(2) Records that identify adequately
the source and application of funds for
federally-sponsored activities. These
records shall contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, outlays, income and interest.
(3) Effective control over and accountability for all funds, property and
other assets. Recipients shall adequately safeguard all such assets and
assure they are used solely for authorized purposes.
(4) Comparison of outlays with budget amounts for each award. Whenever
appropriate,
financial
information
should be related to performance and
unit cost data.
(5) Written procedures to minimize
the time elapsing between the transfer
of funds to the recipient from the U.S.
Treasury and the issuance or redemption of checks, warrants or payments
by other means for program purposes
by the recipient. To the extent that the
provisions of the Cash Management Improvement Act (CMIA) (Pub. L. 101–453)
govern, payment methods of State
agencies, instrumentalities, and fiscal
agents shall be consistent with CMIA
Treasury-State Agreements or the
CMIA default procedures codified at 31
CFR part 205, ‘‘Withdrawal of Cash
from the Treasury for Advances under
Federal Grant and Other Programs.’’
(6) Written procedures for determining the reasonableness, allocability
and allowability of costs in accordance
with the provisions of the applicable

§ 215.16 Resource Conservation and
Recovery Act.
Under the Act, any State agency or
agency of a political subdivision of a
State which is using appropriated Federal funds must comply with section
6002. Section 6002 requires that preference be given in procurement programs to the purchase of specific products containing recycled materials
identified in guidelines developed by
the Environmental Protection Agency
(EPA) (40 CFR parts 247–254). Accordingly, State and local institutions of
higher education, hospitals, and nonprofit organizations that receive direct
Federal awards or other Federal funds
shall give preference in their procurement programs funded with Federal
funds to the purchase of recycled products pursuant to the EPA guidelines.
§ 215.17 Certifications and representations.
Unless prohibited by statute or codified regulation, each Federal awarding
agency is authorized and encouraged to
allow recipients to submit certifications and representations required
by statute, executive order, or regulation on an annual basis, if the recipients have ongoing and continuing relationships with the agency. Annual certifications and representations shall be
signed by responsible officials with the
authority to ensure recipients’ compliance with the pertinent requirements.

Subpart C—Post Award
Requirements
FINANCIAL AND PROGRAM MANAGEMENT

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§ 215.20 Purpose of financial and program management.
Sections 215.21 through 215.28 prescribe standards for financial management systems, methods for making
payments and rules for: satisfying cost
sharing and matching requirements,
accounting for program income, budget
revision approvals, making audits, determining allowability of cost, and establishing fund availability.
§ 215.21 Standards for financial management systems.
(a) Federal awarding agencies shall
require recipients to relate financial

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Federal cost principles and the terms
and conditions of the award.
(7) Accounting records including cost
accounting records that are supported
by source documentation.
(c) Where the Federal Government
guarantees or insures the repayment of
money borrowed by the recipient, the
Federal awarding agency, at its discretion, may require adequate bonding
and insurance if the bonding and insurance requirements of the recipient are
not deemed adequate to protect the interest of the Federal Government.
(d) The Federal awarding agency may
require adequate fidelity bond coverage
where the recipient lacks sufficient
coverage to protect the Federal Government’s interest.
(e) Where bonds are required in the
situations described above, the bonds
shall be obtained from companies holding certificates of authority as acceptable sureties, as prescribed in 31 CFR
part 223, ‘‘Surety Companies Doing
Business with the United States.’’

the actual disbursements by the recipient organization for direct program or
project costs and the proportionate
share of any allowable indirect costs.
(c) Whenever possible, advances shall
be consolidated to cover anticipated
cash needs for all awards made by the
Federal awarding agency to the recipient.
(1) Advance payment mechanisms include, but are not limited to, Treasury
check and electronic funds transfer.
(2) Advance payment mechanisms are
subject to 31 CFR part 205.
(3) Recipients shall be authorized to
submit requests for advances and reimbursements at least monthly when
electronic fund transfers are not used.
(d) Requests for Treasury check advance payment shall be submitted on
SF–270, ‘‘Request for Advance or Reimbursement,’’ or other forms as may be
authorized by OMB. This form is not to
be used when Treasury check advance
payments are made to the recipient
automatically through the use of a predetermined payment schedule or if precluded by special Federal awarding
agency instructions for electronic
funds transfer.
(e) Reimbursement is the preferred
method when the requirements in
§ 215.12(b) cannot be met. Federal
awarding agencies may also use this
method on any construction agreement, or if the major portion of the
construction project is accomplished
through private market financing or
Federal loans, and the Federal assistance constitutes a minor portion of the
project.
(1) When the reimbursement method
is used, the Federal awarding agency
shall make payment within 30 days
after receipt of the billing, unless the
billing is improper.
(2) Recipients shall be authorized to
submit request for reimbursement at
least monthly when electronic funds
transfers are not used.
(f) If a recipient cannot meet the criteria for advance payments and the
Federal awarding agency has determined that reimbursement is not feasible because the recipient lacks sufficient working capital, the Federal
awarding agency may provide cash on a
working capital advance basis. Under
this procedure, the Federal awarding

§ 215.22 Payment.
(a) Payment methods shall minimize
the time elapsing between the transfer
of funds from the United States Treasury and the issuance or redemption of
checks, warrants, or payment by other
means by the recipients. Payment
methods of State agencies or instrumentalities shall be consistent with
Treasury-State CMIA agreements or
default procedures codified at 31 CFR
part 205.
(b) Recipients are to be paid in advance, provided they maintain or demonstrate the willingness to maintain:
(1) Written procedures that minimize
the time elapsing between the transfer
of funds and disbursement by the recipient, and
(2) Financial management systems
that meet the standards for fund control and accountability as established
in § 215.21. Cash advances to a recipient
organization shall be limited to the
minimum amounts needed and be
timed to be in accordance with the actual, immediate cash requirements of
the recipient organization in carrying
out the purpose of the approved program or project. The timing and
amount of cash advances shall be as
close as is administratively feasible to

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§ 215.22

2 CFR Ch. II (1–1–12 Edition)

agency shall advance cash to the recipient to cover its estimated disbursement needs for an initial period generally geared to the awardee’s disbursing cycle. Thereafter, the Federal
awarding agency shall reimburse the
recipient for its actual cash disbursements. The working capital advance
method of payment shall not be used
for recipients unwilling or unable to
provide timely advances to their subrecipient to meet the subrecipient’s actual cash disbursements.
(g) To the extent available, recipients shall disburse funds available from
repayments to and interest earned on a
revolving fund, program income, rebates, refunds, contract settlements,
audit recoveries and interest earned on
such funds before requesting additional
cash payments.
(h) Unless otherwise required by statute, Federal awarding agencies shall
not withhold payments for proper
charges made by recipients at any time
during the project period unless paragraphs (h)(1) or (2) of this section
apply.
(1) A recipient has failed to comply
with the project objectives, the terms
and conditions of the award, or Federal
reporting requirements.
(2) The recipient or subrecipient is
delinquent in a debt to the United
States as defined in OMB Circular A–
129, ‘‘Managing Federal Credit Programs.’’ Under such conditions, the
Federal awarding agency may, upon
reasonable notice, inform the recipient
that payments shall not be made for
obligations incurred after a specified
date until the conditions are corrected
or the indebtedness to the Federal Government is liquidated.
(i) Standards governing the use of
banks and other institutions as depositories of funds advanced under awards
are as follows.
(1) Except for situations described in
paragraph (i)(2) of this section, Federal
awarding agencies shall not require
separate depository accounts for funds
provided to a recipient or establish any
eligibility requirements for depositories for funds provided to a recipient.
However, recipients must be able to account for the receipt, obligation and
expenditure of funds.

(2) Advances of Federal funds shall be
deposited and maintained in insured
accounts whenever possible.
(j) Consistent with the national goal
of expanding the opportunities for
women-owned
and
minority-owned
business enterprises, recipients shall be
encouraged to use women-owned and
minority-owned banks (a bank which is
owned at least 50 percent by women or
minority group members).
(k) Recipients shall maintain advances of Federal funds in interest
bearing accounts, unless paragraphs
(k)(1), (2) or (3) of this section apply.
(1) The recipient receives less than
$120,000 in Federal awards per year.
(2) The best reasonably available interest bearing account would not be expected to earn interest in excess of $250
per year on Federal cash balances.
(3) The depository would require an
average or minimum balance so high
that it would not be feasible within the
expected Federal and non-Federal cash
resources.
(l) For those entities where CMIA
and its implementing regulations at 31
CFR part 205 do not apply, interest
earned on Federal advances deposited
in interest bearing accounts shall be
remitted annually to Department of
Health and Human Services, Payment
Management System, Rockville, MD
20852. Interest amounts up to $250 per
year may be retained by the recipient
for administrative expense. State universities and hospitals shall comply
with CMIA, as it pertains to interest. If
an entity subject to CMIA uses its own
funds to pay pre-award costs for discretionary awards without prior written
approval from the Federal awarding
agency, it waives its right to recover
the interest under CMIA.
(m) Except as noted elsewhere in this
part, only the following forms shall be
authorized for the recipients in requesting advances and reimbursements. Federal agencies shall not require more than an original and two
copies of these forms.
(1) SF–270, Request for Advance or
Reimbursement. Each Federal awarding agency shall adopt the SF–270 as a
standard form for all nonconstruction
programs when electronic funds transfer or predetermined advance methods

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§ 215.23
(1) The certified value of the remaining life of the property recorded in the
recipient’s accounting records at the
time of donation.
(2) The current fair market value.
However, when there is sufficient justification, the Federal awarding agency may approve the use of the current
fair market value of the donated property, even if it exceeds the certified
value at the time of donation to the
project.
(d) Volunteer services furnished by
professional and technical personnel,
consultants, and other skilled and unskilled labor may be counted as cost
sharing or matching if the service is an
integral and necessary part of an approved project or program. Rates for
volunteer services shall be consistent
with those paid for similar work in the
recipient’s organization. In those instances in which the required skills are
not found in the recipient organization,
rates shall be consistent with those
paid for similar work in the labor market in which the recipient competes for
the kind of services involved. In either
case, paid fringe benefits that are reasonable, allowable, and allocable may
be included in the valuation.
(e) When an employer other than the
recipient furnishes the services of an
employee, these services shall be valued at the employee’s regular rate of
pay (plus an amount of fringe benefits
that are reasonable, allowable, and allocable, but exclusive of overhead
costs), provided these services are in
the same skill for which the employee
is normally paid.
(f) Donated supplies may include
such items as expendable equipment,
office supplies, laboratory supplies or
workshop and classroom supplies.
Value assessed to donated supplies included in the cost sharing or matching
share shall be reasonable and shall not
exceed the fair market value of the
property at the time of the donation.
(g) The method used for determining
cost sharing or matching for donated
equipment, buildings and land for
which title passes to the recipient may
differ according to the purpose of the
award, if paragraphs (g)(1) or (2) of this
section apply.
(1) If the purpose of the award is to
assist the recipient in the acquisition

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are not used. Federal awarding agencies, however, have the option of using
this form for construction programs in
lieu of the SF–271, ‘‘Outlay Report and
Request for Reimbursement for Construction Programs.’’
(2) SF–271, Outlay Report and Request for Reimbursement for Construction Programs. Each Federal awarding
agency shall adopt the SF–271 as the
standard form to be used for requesting
reimbursement for construction programs. However, a Federal awarding
agency may substitute the SF–270
when the Federal awarding agency determines that it provides adequate information to meet Federal needs.
§ 215.23 Cost sharing or matching.
(a) All contributions, including cash
and third party in-kind, shall be accepted as part of the recipient’s cost
sharing or matching when such contributions meet all of the following criteria.
(1) Are verifiable from the recipient’s
records.
(2) Are not included as contributions
for any other federally-assisted project
or program.
(3) Are necessary and reasonable for
proper and efficient accomplishment of
project or program objectives.
(4) Are allowable under the applicable cost principles.
(5) Are not paid by the Federal Government under another award, except
where authorized by Federal statute to
be used for cost sharing or matching.
(6) Are provided for in the approved
budget when required by the Federal
awarding agency.
(7) Conform to other provisions of
this part, as applicable.
(b) Unrecovered indirect costs may be
included as part of cost sharing or
matching only with the prior approval
of the Federal awarding agency.
(c) Values for recipient contributions
of services and property shall be established in accordance with the applicable cost principles. If a Federal awarding agency authorizes recipients to donate buildings or land for construction/
facilities acquisition projects or longterm use, the value of the donated
property for cost sharing or matching
shall be the lesser of paragraphs (c)(1)
or (2) of this section.

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§ 215.24

2 CFR Ch. II (1–1–12 Edition)

of equipment, buildings or land, the
total value of the donated property
may be claimed as cost sharing or
matching.
(2) If the purpose of the award is to
support activities that require the use
of equipment, buildings or land, normally only depreciation or use charges
for equipment and buildings may be
made. However, the full value of equipment or other capital assets and fair
rental charges for land may be allowed,
provided that the Federal awarding
agency has approved the charges.
(h) The value of donated property
shall be determined in accordance with
the usual accounting policies of the recipient, with the following qualifications.
(1) The value of donated land and
buildings shall not exceed its fair market value at the time of donation to
the recipient as established by an independent appraiser (e.g., certified real
property appraiser or General Services
Administration representative) and
certified by a responsible official of the
recipient.
(2) The value of donated equipment
shall not exceed the fair market value
of equipment of the same age and condition at the time of donation.
(3) The value of donated space shall
not exceed the fair rental value of comparable space as established by an independent appraisal of comparable space
and facilities in a privately-owned
building in the same locality.
(4) The value of loaned equipment
shall not exceed its fair rental value.
(5) The following requirements pertain to the recipient’s supporting
records for in-kind contributions from
third parties.
(i) Volunteer services shall be documented and, to the extent feasible, supported by the same methods used by
the recipient for its own employees.
(ii) The basis for determining the
valuation for personal service, material, equipment, buildings and land
shall be documented.

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§ 215.24

related to projects financed in whole or
in part with Federal funds.
(b) Except as provided in paragraph
(h) of this section, program income
earned during the project period shall
be retained by the recipient and, in accordance with Federal awarding agency
regulations or the terms and conditions of the award, shall be used in one
or more of the ways listed in the following.
(1) Added to funds committed to the
project by the Federal awarding agency
and recipient and used to further eligible project or program objectives.
(2) Used to finance the non-Federal
share of the project or program.
(3) Deducted from the total project or
program allowable cost in determining
the net allowable costs on which the
Federal share of costs is based.
(c) When an agency authorizes the
disposition of program income as described in paragraphs (b)(1) or (b)(2) of
this section, program income in excess
of any limits stipulated shall be used in
accordance with paragraph (b)(3) of
this section.
(d) In the event that the Federal
awarding agency does not specify in its
regulations or the terms and conditions of the award how program income
is to be used, paragraph (b)(3) of this
section shall apply automatically to
all projects or programs except research. For awards that support research, paragraph (b)(1) of this section
shall apply automatically unless the
awarding agency indicates in the terms
and conditions another alternative on
the award or the recipient is subject to
special award conditions, as indicated
in § 215.14.
(e) Unless Federal awarding agency
regulations or the terms and conditions of the award provide otherwise,
recipients shall have no obligation to
the Federal Government regarding program income earned after the end of
the project period.
(f) If authorized by Federal awarding
agency regulations or the terms and
conditions of the award, costs incident
to the generation of program income
may be deducted from gross income to
determine program income, provided
these costs have not been charged to
the award.

Program income.

(a) Federal awarding agencies shall
apply the standards set forth in this
section in requiring recipient organizations to account for program income

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§ 215.25

(g) Proceeds from the sale of property
shall be handled in accordance with the
requirements of the Property Standards (see § 215.30 through § 215.37).
(h) Unless Federal awarding agency
regulations or the terms and condition
of the award provide otherwise, recipients shall have no obligation to the
Federal Government with respect to
program income earned from license
fees and royalties for copyrighted material, patents, patent applications,
trademarks, and inventions produced
under an award. However, Patent and
Trademark Amendments (35 U.S.C. 18)
apply to inventions made under an experimental, developmental, or research
award.

(6) The inclusion, unless waived by
the Federal awarding agency, of costs
that require prior approval in accordance with any of the following, as applicable:
(i) 2 CFR part 220, ‘‘Cost Principles
for Educational Institutions (OMB Circular A–21);’’
(ii) 2 CFR part 230, ‘‘Cost Principles
for Non-Profit Organizations (OMB Circular A–122);’’
(iii) 45 CFR part 74, Appendix E,
‘‘Principles for Determining Costs Applicable to Research and Development
under Grants and Contracts with Hospitals;’’ and
(iv) 48 CFR part 31, ‘‘Contract Cost
Principles and Procedures.’’
(7) The transfer of funds allotted for
training allowances (direct payment to
trainees) to other categories of expense.
(8) Unless described in the application and funded in the approved
awards, the subaward, transfer or contracting out of any work under an
award. This provision does not apply to
the purchase of supplies, material,
equipment or general support services.
(d) No other prior approval requirements for specific items may be imposed unless a deviation has been approved by OMB.
(e) Except for requirements listed in
paragraphs (c)(1) and (c)(4) of this section, Federal awarding agencies are authorized, at their option, to waive costrelated and administrative prior written approvals required by 2 CFR parts
220 and 230 (OMB Circulars A–21 and A–
122). Such waivers may include authorizing recipients to do any one or more
of the following.
(1) Incur pre-award costs 90 calendar
days prior to award or more than 90
calendar days with the prior approval
of the Federal awarding agency. All
pre-award costs are incurred at the recipient’s risk (i.e., the Federal awarding agency is under no obligation to reimburse such costs if for any reason
the recipient does not receive an award
or if the award is less than anticipated
and inadequate to cover such costs).
(2) Initiate a one-time extension of
the expiration date of the award of up
to 12 months unless one or more of the
following conditions apply. For one-

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§ 215.25 Revision of budget and program plans.
(a) The budget plan is the financial
expression of the project or program as
approved during the award process. It
may include either the Federal and
non-Federal share, or only the Federal
share, depending upon Federal awarding agency requirements. It shall be related to performance for program evaluation purposes whenever appropriate.
(b) Recipients are required to report
deviations from budget and program
plans, and request prior approvals for
budget and program plan revisions, in
accordance with this section.
(c) For nonconstruction awards, recipients shall request prior approvals
from Federal awarding agencies for one
or more of the following program or
budget related reasons.
(1) Change in the scope or the objective of the project or program (even if
there is no associated budget revision
requiring prior written approval).
(2) Change in a key person specified
in the application or award document.
(3) The absence for more than three
months, or a 25 percent reduction in
time devoted to the project, by the approved project director or principal investigator.
(4) The need for additional Federal
funding.
(5) The transfer of amounts budgeted
for indirect costs to absorb increases in
direct costs, or vice versa, if approval
is required by the Federal awarding
agency.

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§ 215.26

2 CFR Ch. II (1–1–12 Edition)

time extensions, the recipient must notify the Federal awarding agency in
writing with the supporting reasons
and revised expiration date at least 10
days before the expiration date specified in the award. This one-time extension may not be exercised merely for
the purpose of using unobligated balances.
(i) The terms and conditions of award
prohibit the extension.
(ii) The extension requires additional
Federal funds.
(iii) The extension involves any
change in the approved objectives or
scope of the project.
(3) Carry forward unobligated balances to subsequent funding periods.
(4) For awards that support research,
unless the Federal awarding agency
provides otherwise in the award or in
the agency’s regulations, the prior approval requirements described in this
paragraph (e) are automatically waived
(i.e., recipients need not obtain such
prior approvals) unless one of the conditions included in paragraph (e)(2) applies.
(f) The Federal awarding agency
may, at its option, restrict the transfer
of funds among direct cost categories
or programs, functions and activities
for awards in which the Federal share
of the project exceeds $100,000 and the
cumulative amount of such transfers
exceeds or is expected to exceed 10 percent of the total budget as last approved by the Federal awarding agency. No Federal awarding agency shall
permit a transfer that would cause any
Federal appropriation or part thereof
to be used for purposes other than
those consistent with the original intent of the appropriation.
(g) All other changes to nonconstruction budgets, except for the changes described in paragraph (j) of this section,
do not require prior approval.
(h) For construction awards, recipients shall request prior written approval promptly from Federal awarding
agencies for budget revisions whenever
paragraphs (h)(1), (2) or (3) of this section apply.
(1) The revision results from changes
in the scope or the objective of the
project or program.
(2) The need arises for additional
Federal funds to complete the project.

(3) A revision is desired which involves specific costs for which prior
written approval requirements may be
imposed consistent with applicable
OMB cost principles listed in § 215.27.
(i) No other prior approval requirements for specific items may be imposed unless a deviation has been approved by OMB.
(j) When a Federal awarding agency
makes an award that provides support
for both construction and nonconstruction work, the Federal awarding agency may require the recipient to request
prior approval from the Federal awarding agency before making any fund or
budget transfers between the two types
of work supported.
(k) For both construction and nonconstruction awards, Federal awarding
agencies shall require recipients to notify the Federal awarding agency in
writing promptly whenever the amount
of Federal authorized funds is expected
to exceed the needs of the recipient for
the project period by more than $5000
or five percent of the Federal award,
whichever is greater. This notification
shall not be required if an application
for additional funding is submitted for
a continuation award.
(l) When requesting approval for
budget revisions, recipients shall use
the budget forms that were used in the
application unless the Federal awarding agency indicates a letter of request
suffices.
(m) Within 30 calendar days from the
date of receipt of the request for budget revisions, Federal awarding agencies
shall review the request and notify the
recipient whether the budget revisions
have been approved. If the revision is
still under consideration at the end of
30 calendar days, the Federal awarding
agency shall inform the recipient in
writing of the date when the recipient
may expect the decision.
[69 FR 26281, May 11, 2004, as amended at 70
FR 51880, Aug. 31, 2005]

§ 215.26 Non-Federal audits.
(a) Recipients and subrecipients that
are institutions of higher education or
other non-profit organizations (including hospitals) shall be subject to the
audit requirements contained in the
Single Audit Act Amendments of 1996
(31 U.S.C. 7501–7507) and revised OMB

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§ 215.29

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

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§ 215.27

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

§ 215.28

Period of availability of funds.

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

Conditional exemptions.

(a) OMB authorizes conditional exemption from OMB administrative requirements and cost principles circulars for certain Federal programs with
statutorily-authorized
consolidated
planning and consolidated administrative funding, that are identified by a
Federal agency and approved by the
head of the Executive department or
establishment. A Federal agency shall
consult with OMB during its consideration of whether to grant such an exemption.
(b) To promote efficiency in State
and local program administration,
when Federal non-entitlement programs with common purposes have specific statutorily-authorized consolidated planning and consolidated administrative funding and where most of
the State agency’s resources come
from non-Federal sources, Federal
agencies may exempt these covered
State-administered,
non-entitlement
grant programs from certain OMB
grants management requirements. The
exemptions would be from:
(1) The requirements in 2 CFR part
225, ‘‘Cost Principles for State, Local,
and Indian Tribal Governments (OMB
Circular
A–87)’’
other
than
the
allocability of costs provisions that are
contained in subsection C.3 of appendix
A to that part;
(2) The requirements in 2 CFR part
220, ‘‘Cost Principles for Educational
Institutions (OMB Circular A–21)’’
other than the allocability of costs provisions that are contained in paragraph
C.4 in section C of the appendix to that
part;
(3) The requirements in 2 CFR part
230, ‘‘Cost Principles for Non-Profit Organizations (OMB Circular A–122)’’

Allowable costs.

For each kind of recipient, there is a
set of Federal principles for determining allowable costs. Allowability of
costs shall be determined in accordance with the cost principles applicable
to the entity incurring the costs. Thus,
allowability of costs incurred by State,
local or federally-recognized Indian
tribal governments is determined in
accordance with the provisions of 2
CFR part 225, ‘‘Cost Principles for
State, Local, and Indian Tribal Governments (OMB Circular A–87.’’ The allowability of costs incurred by non-profit
organizations is determined in accordance with the provisions of 2 CFR part
230, ‘‘Cost Principles for Non-Profit Organizations (OMB Circular A–122).’’ The
allowability of costs incurred by institutions of higher education is determined in accordance with the provisions of 2 CFR part 220, ‘‘Cost Principles for Educational Institutions
(OMB Circular A–21).’’ The allowability
of costs incurred by hospitals is determined in accordance with the provisions of appendix E of 45 CFR part 74,
‘‘Principles for Determining Costs Applicable to Research and Development
Under Grants and Contracts with Hospitals.’’ The allowability of costs incurred by commercial organizations
and those non-profit organizations listed in Attachment C to Circular A–122 is
determined in accordance with the pro-

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§ 215.30

2 CFR Ch. II (1–1–12 Edition)

other than the allocability of costs provisions that are in paragraph A.4 in
section A of appendix A to that part;
(4) The administrative requirements
provisions of part 215 (OMB Circular A–
110, ‘‘Uniform Administrative Requirements for Grants and Agreements with
Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations,’’); and
(5) The agencies’ grants management
common rule (see § 215.5).
(c) When a Federal agency provides
this flexibility, as a prerequisite to a
State’s exercising this option, a State
must adopt its own written fiscal and
administrative requirements for expending and accounting for all funds,
which are consistent with the provisions of 2 CFR part 225, ‘‘Cost Principles for State, Local, and Indian
Tribal Governments (OMB Circular A–
87)’’ and extend such policies to all subrecipients. These fiscal and administrative requirements must be sufficiently
specific to ensure that: funds are used
in compliance with all applicable Federal statutory and regulatory provisions, costs are reasonable and necessary for operating these programs,
and funds are not be used for general
expenses required to carry out other
responsibilities of a State or its subrecipients.

§ 215.31

§ 215.32

PROPERTY STANDARDS

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of

property

Real property.

Each Federal awarding agency shall
prescribe requirements for recipients
concerning the use and disposition of
real property acquired in whole or in
part under awards. Unless otherwise
provided by statute, such requirements, at a minimum, shall contain
the following.
(a) Title to real property shall vest in
the recipient subject to the condition
that the recipient shall use the real
property for the authorized purpose of
the project as long as it is needed and
shall not encumber the property without approval of the Federal awarding
agency.
(b) The recipient shall obtain written
approval by the Federal awarding agency for the use of real property in other
federally-sponsored projects when the
recipient determines that the property
is no longer needed for the purpose of
the original project. Use in other
projects shall be limited to those under
federally-sponsored
projects
(i.e.,
awards) or programs that have purposes consistent with those authorized
for support by the Federal awarding
agency.
(c) When the real property is no
longer needed as provided in paragraphs (a) and (b) of this section, the
recipient shall request disposition instructions from the Federal awarding
agency or its successor Federal awarding agency. The Federal awarding
agency shall observe one or more of the
following disposition instructions.
(1) The recipient may be permitted to
retain title without further obligation
to the Federal Government after it
compensates the Federal Government
for that percentage of the current fair
market value of the property attributable to the Federal participation in
the project.

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

§ 215.30 Purpose
ards.

Insurance coverage.

Recipients shall, at a minimum, provide the equivalent insurance coverage
for real property and equipment acquired with Federal funds as provided
to property owned by the recipient.
Federally-owned property need not be
insured unless required by the terms
and conditions of the award.

stand-

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

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§ 215.34
(b) Exempt property. When statutory
authority exists, the Federal awarding
agency has the option to vest title to
property acquired with Federal funds
in the recipient without further obligation to the Federal Government and
under conditions the Federal awarding
agency considers appropriate. Such
property is ‘‘exempt property.’’ Should
a Federal awarding agency not establish conditions, title to exempt property upon acquisition shall vest in the
recipient without further obligation to
the Federal Government.

(2) The recipient may be directed to
sell the property under guidelines provided by the Federal awarding agency
and pay the Federal Government for
that percentage of the current fair
market value of the property attributable to the Federal participation in
the project (after deducting actual and
reasonable selling and fix-up expenses,
if any, from the sales proceeds). When
the recipient is authorized or required
to sell the property, proper sales procedures shall be established that provide
for competition to the extent practicable and result in the highest possible return.
(3) The recipient may be directed to
transfer title to the property to the
Federal Government or to an eligible
third party provided that, in such
cases, the recipient shall be entitled to
compensation for its attributable percentage of the current fair market
value of the property.

§ 215.34 Equipment.
(a) Title to equipment acquired by a
recipient with Federal funds shall vest
in the recipient, subject to conditions
of this section.
(b) The recipient shall not use equipment acquired with Federal funds to
provide services to non-Federal outside
organizations for a fee that is less than
private companies charge for equivalent services, unless specifically authorized by Federal statute, for as long
as the Federal Government retains an
interest in the equipment.
(c) The recipient shall use the equipment in the project or program for
which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds and shall not encumber the
property without approval of the Federal awarding agency. When no longer
needed for the original project or program, the recipient shall use the equipment in connection with its other federally-sponsored activities, in the following order of priority:
(1) Activities sponsored by the Federal awarding agency which funded the
original project, then
(2) Activities sponsored by other Federal awarding agencies.
(d) During the time that equipment
is used on the project or program for
which it was acquired, the recipient
shall make it available for use on other
projects or programs if such other use
will not interfere with the work on the
project or program for which the equipment was originally acquired. First
preference for such other use shall be
given to other projects or programs
sponsored by the Federal awarding
agency that financed the equipment;

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§ 215.33 Federally-owned and exempt
property.
(a) Federally-owned property. (1) Title
to federally-owned property remains
vested in the Federal Government. Recipients shall submit annually an inventory listing of federally-owned
property in their custody to the Federal awarding agency. Upon completion
of the award or when the property is no
longer needed, the recipient shall report the property to the Federal awarding agency for further Federal agency
utilization.
(2) If the Federal awarding agency
has no further need for the property, it
shall be declared excess and reported to
the General Services Administration,
unless the Federal awarding agency
has statutory authority to dispose of
the property by alternative methods
(e.g., the authority provided by the
Federal Technology Transfer Act (15
U.S.C. 3710 (I)) to donate research
equipment to educational and non-profit organizations in accordance with
E.O. 12821, ‘‘Improving Mathematics
and Science Education in Support of
the National Education Goals’’ (57 FR
54285, 3 CFR, 1992 Comp., p. 323)). Appropriate instructions shall be issued
to the recipient by the Federal awarding agency.

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§ 215.34

2 CFR Ch. II (1–1–12 Edition)

second preference shall be given to
projects or programs sponsored by
other Federal awarding agencies. If the
equipment is owned by the Federal
Government, use on other activities
not sponsored by the Federal Government shall be permissible if authorized
by the Federal awarding agency. User
charges shall be treated as program income.
(e) When acquiring replacement
equipment, the recipient may use the
equipment to be replaced as trade-in or
sell the equipment and use the proceeds to offset the costs of the replacement equipment subject to the approval of the Federal awarding agency.
(f) The recipient’s property management standards for equipment acquired
with Federal funds and federally-owned
equipment shall include all of the following:
(1) Equipment records shall be maintained accurately and shall include the
following information.
(i) A description of the equipment.
(ii) Manufacturer’s serial number,
model number, Federal stock number,
national stock number, or other identification number.
(iii) Source of the equipment, including the award number.
(iv) Whether title vests in the recipient or the Federal Government.
(v) Acquisition date (or date received, if the equipment was furnished
by the Federal Government) and cost.
(vi) Information from which one can
calculate the percentage of Federal
participation in the cost of the equipment (not applicable to equipment furnished by the Federal Government).
(vii) Location and condition of the
equipment and the date the information was reported.
(viii) Unit acquisition cost.
(ix) Ultimate disposition data, including date of disposal and sales price
or the method used to determine current fair market value where a recipient compensates the Federal awarding
agency for its share.
(2) Equipment owned by the Federal
Government shall be identified to indicate Federal ownership.
(3) A physical inventory of equipment
shall be taken and the results reconciled with the equipment records at
least once every two years. Any dif-

ferences between quantities determined by the physical inspection and
those shown in the accounting records
shall be investigated to determine the
causes of the difference. The recipient
shall, in connection with the inventory, verify the existence, current utilization, and continued need for the
equipment.
(4) A control system shall be in effect
to insure adequate safeguards to prevent loss, damage, or theft of the
equipment. Any loss, damage, or theft
of equipment shall be investigated and
fully documented; if the equipment was
owned by the Federal Government, the
recipient shall promptly notify the
Federal awarding agency.
(5) Adequate maintenance procedures
shall be implemented to keep the
equipment in good condition.
(6) Where the recipient is authorized
or required to sell the equipment, proper sales procedures shall be established
which provide for competition to the
extent practicable and result in the
highest possible return.
(g) When the recipient no longer
needs the equipment, the equipment
may be used for other activities in accordance with the following standards.
For equipment with a current per unit
fair market value of $5000 or more, the
recipient may retain the equipment for
other uses provided that compensation
is made to the original Federal awarding agency or its successor. The
amount of compensation shall be computed by applying the percentage of
Federal participation in the cost of the
original project or program to the current fair market value of the equipment. If the recipient has no need for
the equipment, the recipient shall request disposition instructions from the
Federal awarding agency. The Federal
awarding
agency
shall
determine
whether the equipment can be used to
meet the agency’s requirements. If no
requirement exists within that agency,
the availability of the equipment shall
be reported to the General Services Administration by the Federal awarding
agency to determine whether a requirement for the equipment exists in other
Federal agencies. The Federal awarding agency shall issue instructions to
the recipient no later than 120 calendar

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OMB Circulars and Guidance

§ 215.36

days after the recipient’s request and
the following procedures shall govern.
(1) If so instructed or if disposition
instructions are not issued within 120
calendar days after the recipient’s request, the recipient shall sell the
equipment and reimburse the Federal
awarding agency an amount computed
by applying to the sales proceeds the
percentage of Federal participation in
the cost of the original project or program. However, the recipient shall be
permitted to deduct and retain from
the Federal share $500 or ten percent of
the proceeds, whichever is less, for the
recipient’s selling and handling expenses.
(2) If the recipient is instructed to
ship the equipment elsewhere, the recipient shall be reimbursed by the Federal Government by an amount which
is computed by applying the percentage of the recipient’s participation in
the cost of the original project or program to the current fair market value
of the equipment, plus any reasonable
shipping or interim storage costs incurred.
(3) If the recipient is instructed to
otherwise dispose of the equipment, the
recipient shall be reimbursed by the
Federal awarding agency for such costs
incurred in its disposition.
(4) The Federal awarding agency may
reserve the right to transfer the title
to the Federal Government or to a
third party named by the Federal Government when such third party is otherwise eligible under existing statutes.
Such transfer shall be subject to the
following standards.
(i) The equipment shall be appropriately identified in the award or otherwise made known to the recipient in
writing.
(ii) The Federal awarding agency
shall issue disposition instructions
within 120 calendar days after receipt
of a final inventory. The final inventory shall list all equipment acquired
with grant funds and federally-owned
equipment. If the Federal awarding
agency fails to issue disposition instructions within the 120 calendar day
period, the recipient shall apply the
standards of this section, as appropriate.
(iii) When the Federal awarding
agency exercises its right to take title,

the equipment shall be subject to the
provisions for federally-owned equipment.
§ 215.35 Supplies and other expendable property.
(a) Title to supplies and other expendable property shall vest in the recipient upon acquisition. If there is a
residual inventory of unused supplies
exceeding $5000 in total aggregate
value upon termination or completion
of the project or program and the supplies are not needed for any other federally-sponsored project or program,
the recipient shall retain the supplies
for use on non-Federal sponsored activities or sell them, but shall, in either case, compensate the Federal Government for its share. The amount of
compensation shall be computed in the
same manner as for equipment.
(b) The recipient shall not use supplies acquired with Federal funds to
provide services to non-Federal outside
organizations for a fee that is less than
private companies charge for equivalent services, unless specifically authorized by Federal statute as long as
the Federal Government retains an interest in the supplies.
§ 215.36

Intangible property.

(a) The recipient may copyright any
work that is subject to copyright and
was developed, or for which ownership
was purchased, under an award. The
Federal awarding agency(ies) reserve a
royalty-free, nonexclusive and irrevocable right to reproduce, publish, or
otherwise use the work for Federal purposes, and to authorize others to do so.
(b) Recipients are subject to applicable regulations governing patents and
inventions, including government-wide
regulations issued by the Department
of Commerce at 37 CFR part 401,
‘‘Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants,
Contracts and Cooperative Agreements.’’
(c) The Federal Government has the
right to:
(1) Obtain, reproduce, publish or otherwise use the data first produced
under an award.

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§ 215.37

2 CFR Ch. II (1–1–12 Edition)

(2) Authorize others to receive, reproduce, publish, or otherwise use such
data for Federal purposes.
(d) (1) In addition, in response to a
Freedom of Information Act (FOIA) request for research data relating to published research findings produced under
an award that was used by the Federal
Government in developing an agency
action that has the force and effect of
law, the Federal awarding agency shall
request, and the recipient shall provide, within a reasonable time, the research data so that they can be made
available to the public through the procedures established under the FOIA. If
the Federal awarding agency obtains
the research data solely in response to
a FOIA request, the agency may charge
the requester a reasonable fee equaling
the full incremental cost of obtaining
the research data. This fee should reflect costs incurred by the agency, the
recipient, and the applicable subrecipients. This fee is in addition to any fees
the agency may assess under the FOIA
(5 U.S.C. 552(a)(4)(A)).
(2) The following definitions apply
for purposes of paragraph (d) of this
section:
(i) Research data is defined as the recorded factual material commonly accepted in the scientific community as
necessary to validate research findings,
but not any of the following: Preliminary analyses, drafts of scientific papers, plans for future research, peer reviews, or communications with colleagues. This ‘‘recorded’’ material excludes physical objects (e.g., laboratory
samples). Research data also do not include:
(A) Trade secrets, commercial information, materials necessary to be held
confidential by a researcher until they
are published, or similar information
which is protected under law; and
(B) Personnel and medical information and similar information the disclosure of which would constitute a
clearly unwarranted invasion of personal privacy, such as information that
could be used to identify a particular
person in a research study.
(ii) Published is defined as either
when:
(A) Research findings are published
in a peer-reviewed scientific or technical journal; or

(B) A Federal agency publicly and officially cites the research findings in
support of an agency action that has
the force and effect of law.
(iii) Used by the Federal Government
in developing an agency action that
has the force and effect of law is defined as when an agency publicly and
officially cites the research findings in
support of an agency action that has
the force and effect of law.
(e) Title to intangible property and
debt instruments acquired under an
award or subaward vests upon acquisition in the recipient. The recipient
shall use that property for the originally-authorized purpose, and the recipient shall not encumber the property without approval of the Federal
awarding agency. When no longer needed for the originally authorized purpose, disposition of the intangible property shall occur in accordance with the
provisions of § 215.34(g).
[69 FR 26281, May 11, 2004, as amended at 70
FR 51881, Aug. 31, 2005]

§ 215.37

Property trust relationship.

Real property, equipment, intangible
property and debt instruments that are
acquired or improved with Federal
funds shall be held in trust by the recipient as trustee for the beneficiaries
of the project or program under which
the property was acquired or improved.
Agencies may require recipients to
record liens or other appropriate notices of record to indicate that personal or real property has been acquired or improved with Federal funds
and that use and disposition conditions
apply to the property.
PROCUREMENT STANDARDS
§ 215.40 Purpose
standards.

of

procurement

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

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§ 215.44

of applicable Federal statutes and executive orders. No additional procurement standards or requirements shall
be imposed by the Federal awarding
agencies upon recipients, unless specifically required by Federal statute or
executive order or approved by OMB.

§ 215.43 Competition.
All procurement transactions shall
be conducted in a manner to provide,
to the maximum extent practical, open
and free competition. The recipient
shall be alert to organizational conflicts of interest as well as noncompetitive practices among contractors that
may restrict or eliminate competition
or otherwise restrain trade. In order to
ensure objective contractor performance and eliminate unfair competitive
advantage, contractors that develop or
draft
specifications,
requirements,
statements of work, invitations for
bids and/or requests for proposals shall
be excluded from competing for such
procurements. Awards shall be made to
the bidder or offeror whose bid or offer
is responsive to the solicitation and is
most advantageous to the recipient,
price, quality and other factors considered. Solicitations shall clearly set
forth all requirements that the bidder
or offeror shall fulfill in order for the
bid or offer to be evaluated by the recipient. Any and all bids or offers may
be rejected when it is in the recipient’s
interest to do so.

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§ 215.41 Recipient responsibilities.
The standards contained in this section do not relieve the recipient of the
contractual responsibilities arising
under its contract(s). The recipient is
the responsible authority, without recourse to the Federal awarding agency,
regarding the settlement and satisfaction of all contractual and administrative issues arising out of procurements
entered into in support of an award or
other agreement. This includes disputes, claims, protests of award, source
evaluation or other matters of a contractual nature. Matters concerning
violation of statute are to be referred
to such Federal, State or local authority as may have proper jurisdiction.
§ 215.42 Codes of conduct.
The recipient shall maintain written
standards of conduct governing the
performance of its employees engaged
in the award and administration of
contracts. No employee, officer, or
agent shall participate in the selection,
award, or administration of a contract
supported by Federal funds if a real or
apparent conflict of interest would be
involved. Such a conflict would arise
when the employee, officer, or agent,
any member of his or her immediate
family, his or her partner, or an organization which employs or is about to
employ any of the parties indicated
herein, has a financial or other interest
in the firm selected for an award. The
officers, employees, and agents of the
recipient shall neither solicit nor accept gratuities, favors, or anything of
monetary value from contractors, or
parties to subagreements. However, recipients may set standards for situations in which the financial interest is
not substantial or the gift is an unsolicited item of nominal value. The
standards of conduct shall provide for
disciplinary actions to be applied for
violations of such standards by officers, employees, or agents of the recipient.

§ 215.44 Procurement procedures.
(a) All recipients shall establish written procurement procedures. These
procedures shall provide for, at a minimum, that paragraphs (a)(1), (2) and
(3) of this section apply.
(1) Recipients avoid purchasing unnecessary items.
(2) Where appropriate, an analysis is
made of lease and purchase alternatives to determine which would be
the most economical and practical procurement for the Federal Government.
(3) Solicitations for goods and services provide for all of the following.
(i) A clear and accurate description
of the technical requirements for the
material, product or service to be procured. In competitive procurements,
such a description shall not contain
features which unduly restrict competition.
(ii) Requirements which the bidder/
offeror must fulfill and all other factors to be used in evaluating bids or
proposals.
(iii) A description, whenever practicable, of technical requirements in
terms of functions to be performed or

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§ 215.45

2 CFR Ch. II (1–1–12 Edition)

performance required, including the
range of acceptable characteristics or
minimum acceptable standards.
(iv) The specific features of ‘‘brand
name or equal’’ descriptions that bidders are required to meet when such
items are included in the solicitation.
(v) The acceptance, to the extent
practicable and economically feasible,
of products and services dimensioned in
the metric system of measurement.
(vi) Preference, to the extent practicable and economically feasible, for
products and services that conserve
natural resources and protect the environment and are energy efficient.
(b) Positive efforts shall be made by
recipients to utilize small businesses,
minority-owned firms, and women’s
business enterprises, whenever possible. Recipients of Federal awards
shall take all of the following steps to
further this goal.
(1) Ensure that small businesses, minority-owned firms, and women’s business enterprises are used to the fullest
extent practicable.
(2) Make information on forthcoming
opportunities available and arrange
time frames for purchases and contracts to encourage and facilitate participation by small businesses, minority-owned firms, and women’s business
enterprises.
(3) Consider in the contract process
whether firms competing for larger
contracts intend to subcontract with
small
businesses,
minority-owned
firms, and women’s business enterprises.
(4) Encourage contracting with consortiums of small businesses, minorityowned firms and women’s business enterprises when a contract is too large
for one of these firms to handle individually.
(5) Use the services and assistance, as
appropriate, of such organizations as
the Small Business Administration and
the Department of Commerce’s Minority Business Development Agency in
the solicitation and utilization of
small businesses, minority-owned firms
and women’s business enterprises.
(c) The type of procuring instruments
used (e.g., fixed price contracts, cost reimbursable contracts, purchase orders,
and incentive contracts) shall be determined by the recipient but shall be ap-

propriate for the particular procurement and for promoting the best interest of the program or project involved.
The
‘‘cost-plus-a-percentage-of-cost’’
or ‘‘percentage of construction cost’’
methods of contracting shall not be
used.
(d) Contracts shall be made only with
responsible contractors who possess
the potential ability to perform successfully under the terms and conditions of the proposed procurement.
Consideration shall be given to such
matters as contractor integrity, record
of past performance, financial and
technical resources or accessibility to
other necessary resources. In certain
circumstances, contracts with certain
parties are restricted by agencies’ implementation of E.O.s 12549 and 12689,
‘‘Debarment and Suspension.’’
(e) Recipients shall, on request, make
available for the Federal awarding
agency, pre-award review and procurement documents, such as request for
proposals or invitations for bids, independent cost estimates, etc., when any
of the following conditions apply.
(1) A recipient’s procurement procedures or operation fails to comply with
the procurement standards in the Federal awarding agency’s implementation
of this part.
(2) The procurement is expected to
exceed the small purchase threshold
fixed at 41 U.S.C. 403 (11) (currently
$25,000) and is to be awarded without
competition or only one bid or offer is
received in response to a solicitation.
(3) The procurement, which is expected to exceed the small purchase
threshold, specifies a ‘‘brand name’’
product.
(4) The proposed award over the
small purchase threshold is to be
awarded to other than the apparent
low bidder under a sealed bid procurement.
(5) A proposed contract modification
changes the scope of a contract or increases the contract amount by more
than the amount of the small purchase
threshold.
§ 215.45

Cost and price analysis.

Some form of cost or price analysis
shall be made and documented in the
procurement files in connection with

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§ 215.48

every procurement action. Price analysis may be accomplished in various
ways, including the comparison of
price quotations submitted, market
prices and similar indicia, together
with discounts. Cost analysis is the review and evaluation of each element of
cost to determine reasonableness,
allocability and allowability.

conditions where the contract may be
terminated because of circumstances
beyond the control of the contractor.
(c) Except as otherwise required by
statute, an award that requires the
contracting (or subcontracting) for
construction or facility improvements
shall provide for the recipient to follow
its own requirements relating to bid
guarantees, performance bonds, and
payment bonds unless the construction
contract
or
subcontract
exceeds
$100,000. For those contracts or subcontracts exceeding $100,000, the Federal awarding agency may accept the
bonding policy and requirements of the
recipient, provided the Federal awarding agency has made a determination
that the Federal Government’s interest
is adequately protected. If such a determination has not been made, the
minimum requirements shall be 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 shall,
upon acceptance of his bid, execute
such contractual documents as may be
required within the time specified.
(2) A performance bond on the part of
the contractor for 100 percent of the
contract price. A ‘‘performance bond’’
is one executed in connection with a
contract to secure fulfillment of all the
contractor’s obligations under such
contract.
(3) A payment bond on the part of the
contractor for 100 percent of the contract price. A ‘‘payment bond’’ is one
executed in connection with a contract
to assure payment as required by statute of all persons supplying labor and
material in the execution of the work
provided for in the contract.
(4) Where bonds are required in the
situations described herein, the bonds
shall be obtained from companies holding certificates of authority as acceptable sureties pursuant to 31 CFR part
223, ‘‘Surety Companies Doing Business
with the United States.’’
(d) All negotiated contracts (except
those for less than the small purchase
threshold) awarded by recipients shall
include a provision to the effect that

§ 215.46 Procurement records.
Procurement records and files for
purchases in excess of the small purchase threshold shall include the following at a minimum:
(a) Basis for contractor selection;
(b) Justification for lack of competition when competitive bids or offers
are not obtained; and
(c) Basis for award cost or price.

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§ 215.47 Contract administration.
A system for contract administration
shall be maintained to ensure contractor conformance with the terms,
conditions and specifications of the
contract and to ensure adequate and
timely follow up of all purchases. Recipients shall evaluate contractor performance and document, as appropriate, whether contractors have met
the terms, conditions and specifications of the contract.
§ 215.48 Contract provisions.
The recipient shall include, in addition to provisions to define a sound and
complete agreement, the following provisions in all contracts. The following
provisions shall also be applied to subcontracts.
(a) Contracts in excess of the small
purchase threshold shall contain contractual provisions or conditions that
allow for administrative, contractual,
or legal remedies in instances in which
a contractor violates or breaches the
contract terms, and provide for such
remedial actions as may be appropriate.
(b) All contracts in excess of the
small purchase threshold shall contain
suitable provisions for termination by
the recipient, including the manner by
which termination shall be effected
and the basis for settlement. In addition, such contracts shall describe conditions under which the contract may
be terminated for default as well as

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2 CFR Ch. II (1–1–12 Edition)

the recipient, the Federal awarding
agency, the Comptroller General of the
United States, or any of their duly authorized representatives, shall have access to any books, documents, papers
and records of the contractor which are
directly pertinent to a specific program for the purpose of making audits,
examinations,
excerpts
and
transcriptions.
(e) All contracts, including small
purchases, awarded by recipients and
their contractors shall contain the procurement provisions of appendix A to
this part, as applicable.
REPORTS AND RECORDS
§ 215.50 Purpose
records.

of

reports

and

Sections 215.51 through 215.53 set
forth the procedures for monitoring
and reporting on the recipient’s financial and program performance and the
necessary standard reporting forms.
They also set forth record retention requirements.

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§ 215.51 Monitoring and reporting program performance.
(a) Recipients are responsible for
managing and monitoring each project,
program, subaward, function or activity supported by the award. Recipients
shall monitor subawards to ensure subrecipients have met the audit requirements as delineated in § 215.26.
(b) The Federal awarding agency
shall prescribe the frequency with
which the performance reports shall be
submitted. Except as provided in
§ 215.51(f), performance reports shall
not be required more frequently than
quarterly or, less frequently than annually. Annual reports shall be due 90
calendar days after the grant year;
quarterly or semi-annual reports shall
be due 30 days after the reporting period. The Federal awarding agency may
require annual reports before the anniversary dates of multiple year awards
in lieu of these requirements. The final
performance reports are due 90 calendar days after the expiration or termination of the award.
(c) If inappropriate, a final technical
or performance report shall not be required after completion of the project.

(d) When required, performance reports shall generally contain, for each
award, brief information on each of the
following.
(1) A comparison of actual accomplishments with the goals and objectives established for the period, the
findings of the investigator, or both.
Whenever appropriate and the output
of programs or projects can be readily
quantified, such quantitative data
should be related to cost data for computation of unit costs.
(2) Reasons why established goals
were not met, if appropriate.
(3) Other pertinent information including, when appropriate, analysis
and explanation of cost overruns or
high unit costs.
(e) Recipients shall not be required to
submit more than the original and two
copies of performance reports.
(f) Recipients shall immediately notify the Federal awarding agency of developments that have a significant impact on the award-supported activities.
Also, notification shall be given in the
case of problems, delays, or adverse
conditions which materially impair the
ability to meet the objectives of the
award. This notification shall include a
statement of the action taken or contemplated, and any assistance needed
to resolve the situation.
(g) Federal awarding agencies may
make site visits, as needed.
(h) Federal awarding agencies shall
comply with clearance requirements of
5 CFR part 1320 when requesting performance data from recipients.
§ 215.52 Financial reporting.
(a) The following forms or such other
forms as may be approved by OMB are
authorized for obtaining financial information from recipients.
(1) SF–269 or SF–269A, Financial Status Report.
(i) Each Federal awarding agency
shall require recipients to use the SF–
269 or SF–269A to report the status of
funds for all nonconstruction projects
or programs. A Federal awarding agency may, however, have the option of
not requiring the SF–269 or SF–269A
when the SF–270, Request for Advance
or Reimbursement, or SF–272, Report
of Federal Cash Transactions, is determined to provide adequate information

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OMB Circulars and Guidance

§ 215.52

to meet its needs, except that a final
SF–269 or SF–269A shall be required at
the completion of the project when the
SF–270 is used only for advances.
(ii) The Federal awarding agency
shall prescribe whether the report shall
be on a cash or accrual basis. If the
Federal awarding agency requires accrual information and the recipient’s
accounting records are not normally
kept on the accrual basis, the recipient
shall not be required to convert its accounting system, but shall develop
such accrual information through best
estimates based on an analysis of the
documentation on hand.
(iii) The Federal awarding agency
shall determine the frequency of the
Financial Status Report for each
project or program, considering the
size and complexity of the particular
project or program. However, the report shall not be required more frequently than quarterly or less frequently than annually. A final report
shall be required at the completion of
the agreement.
(iv) The Federal awarding agency
shall require recipients to submit the
SF–269 or SF–269A (an original and no
more than two copies) no later than 30
days after the end of each specified reporting period for quarterly and semiannual reports, and 90 calendar days
for annual and final reports. Extensions of reporting due dates may be approved by the Federal awarding agency
upon request of the recipient.
(2) SF–272, Report of Federal Cash
Transactions.
(i) When funds are advanced to recipients the Federal awarding agency
shall require each recipient to submit
the SF–272 and, when necessary, its
continuation sheet, SF–272a. The Federal awarding agency shall use this report to monitor cash advanced to recipients and to obtain disbursement information for each agreement with the
recipients.
(ii) Federal awarding agencies may
require forecasts of Federal cash requirements in the ‘‘Remarks’’ section
of the report.
(iii) When practical and deemed necessary, Federal awarding agencies may
require recipients to report in the
‘‘Remarks’’ section the amount of cash
advances received in excess of three

days. Recipients shall provide short
narrative explanations of actions taken
to reduce the excess balances.
(iv) Recipients shall be required to
submit not more than the original and
two copies of the SF–272 15 calendar
days following the end of each quarter.
The Federal awarding agencies may require a monthly report from those recipients receiving advances totaling $1
million or more per year.
(v) Federal awarding agencies may
waive the requirement for submission
of the SF–272 for any one of the following reasons:
(A) When monthly advances do not
exceed $25,000 per recipient, provided
that such advances are monitored
through other forms contained in this
section;
(B) If, in the Federal awarding agency’s opinion, the recipient’s accounting
controls are adequate to minimize excessive Federal advances; or,
(C) When the electronic payment
mechanisms provide adequate data.
(b) When the Federal awarding agency needs additional information or
more frequent reports, the following
shall be observed.
(1) When additional information is
needed to comply with legislative requirements, Federal awarding agencies
shall issue instructions to require recipients to submit such information
under the ‘‘Remarks’’ section of the reports.
(2) When a Federal awarding agency
determines that a recipient’s accounting system does not meet the standards
in § 215.21, additional pertinent information to further monitor awards may
be obtained upon written notice to the
recipient until such time as the system
is brought up to standard. The Federal
awarding agency, in obtaining this information, shall comply with report
clearance requirements of 5 CFR part
1320.
(3) Federal awarding agencies are encouraged to shade out any line item on
any report if not necessary.
(4) Federal awarding agencies may
accept the identical information from
the recipients in machine readable format or computer printouts or electronic outputs in lieu of prescribed formats.

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2 CFR Ch. II (1–1–12 Edition)

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

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§ 215.53 Retention and access requirements for records.
(a) This section sets forth requirements for record retention and access
to records for awards to recipients.
Federal awarding agencies shall not
impose any other record retention or
access requirements upon recipients.
(b) Financial records, supporting documents, statistical records, and all
other records pertinent to an award
shall be retained for a period of three
years from the date of submission of
the final expenditure report or, for
awards that are renewed quarterly or
annually, from the date of the submission of the quarterly or annual financial report, as authorized by the Federal awarding agency. The only exceptions are the following.
(1) If any litigation, claim, or audit is
started before the expiration of the 3year period, the records shall be retained until all litigation, claims or
audit findings involving the records
have been resolved and final action
taken.
(2) Records for real property and
equipment acquired with Federal funds
shall be retained for 3 years after final
disposition.
(3) When records are transferred to or
maintained by the Federal awarding
agency, the 3-year retention requirement is not applicable to the recipient.
(4) Indirect cost rate proposals, cost
allocations plans, etc. as specified in
§ 215.53(g).
(c) Copies of original records may be
substituted for the original records if
authorized by the Federal awarding
agency.
(d) The Federal awarding agency
shall request transfer of certain
records to its custody from recipients
when it determines that the records
possess long term retention value.
However, in order to avoid duplicate
recordkeeping, a Federal awarding
agency may make arrangements for recipients to retain any records that are
continuously needed for joint use.

(e) The Federal awarding agency, the
Inspector General, Comptroller General of the United States, or any of
their duly authorized representatives,
have the right of timely and unrestricted access to any books, documents, papers, or other records of recipients that are pertinent to the
awards, in order to make audits, examinations, excerpts, transcripts and
copies of such documents. This right
also includes timely and reasonable access to a recipient’s personnel for the
purpose of interview and discussion related to such documents. The rights of
access in this paragraph are not limited to the required retention period,
but shall last as long as records are retained.
(f) Unless required by statute, no
Federal awarding agency shall place
restrictions on recipients that limit
public access to the records of recipients that are pertinent to an award, except when the Federal awarding agency
can demonstrate that such records
shall be kept confidential and would
have been exempted from disclosure
pursuant to the Freedom of Information Act (5 U.S.C. 552) if the records
had belonged to the Federal awarding
agency.
(g) Indirect cost rate proposals, cost allocations plans, etc. Paragraphs (g)(1)
and (g)(2) of this section apply to the
following types of documents, and their
supporting records: indirect cost rate
computations or proposals, cost allocation plans, and any similar accounting
computations of the rate at which a
particular group of costs is chargeable
(such as computer usage chargeback
rates or composite fringe benefit
rates).
(1) If submitted for negotiation. If the
recipient submits to the Federal
awarding agency or the subrecipient
submits to the recipient the proposal,
plan, or other computation to form the
basis for negotiation of the rate, then
the 3-year retention period for its supporting records starts on the date of
such submission.
(2) If not submitted for negotiation. If
the recipient is not required to submit
to the Federal awarding agency or the
subrecipient is not required to submit
to the recipient the proposal, plan, or

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§ 215.62

other computation for negotiation purposes, then the 3-year retention period
for the proposal, plan, or other computation and its supporting records
starts at the end of the fiscal year (or
other accounting period) covered by
the proposal, plan, or other computation.
TERMINATION AND ENFORCEMENT
§ 215.60 Purpose of termination and
enforcement.
Sections 215.61 and 215.62 set forth
uniform suspension, termination and
enforcement procedures.

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§ 215.61 Termination.
(a) Awards may be terminated in
whole or in part only if paragraphs
(a)(1), (2) or (3) of this section apply.
(1) By the Federal awarding agency,
if a recipient materially fails to comply with the terms and conditions of an
award.
(2) By the Federal awarding agency
with the consent of the recipient, in
which case the two parties shall agree
upon the termination conditions, including the effective date and, in the
case of partial termination, the portion
to be terminated.
(3) By the recipient upon sending to
the Federal awarding agency written
notification setting forth the reasons
for such termination, the effective
date, and, in the case of partial termination, the portion to be terminated.
However, if the Federal awarding agency determines in the case of partial
termination that the reduced or modified portion of the grant will not accomplish the purposes for which the
grant was made, it may terminate the
grant in its entirety under either paragraphs (a)(1) or (2) of this section.
(b) If costs are allowed under an
award, the responsibilities of the recipient referred to in § 215.71(a), including those for property management as
applicable, shall be considered in the
termination of the award, and provision shall be made for continuing responsibilities of the recipient after termination, as appropriate.
§ 215.62 Enforcement.
(a) Remedies for noncompliance. If a recipient materially fails to comply with

the terms and conditions of an award,
whether stated in a Federal statute,
regulation, assurance, application, or
notice of award, the Federal awarding
agency may, in addition to imposing
any of the special conditions outlined
in § 215.14, take one or more of the following actions, as appropriate in the
circumstances.
(1) Temporarily withhold cash payments pending correction of the deficiency by the recipient or more severe
enforcement action by the Federal
awarding agency.
(2) Disallow (that is, deny both use of
funds and any applicable matching
credit for) all or part of the cost of the
activity or action not in compliance.
(3) Wholly or partly suspend or terminate the current award.
(4) Withhold further awards for the
project or program.
(5) Take other remedies that may be
legally available.
(b) Hearings and appeals. In taking an
enforcement action, the awarding
agency shall provide the recipient an
opportunity for hearing, appeal, or
other administrative proceeding to
which the recipient is entitled under
any statute or regulation applicable to
the action involved.
(c) Effects of suspension and termination. Costs of a recipient resulting
from obligations incurred by the recipient during a suspension or after
termination of an award are not allowable unless the awarding agency expressly authorizes them in the notice
of suspension or termination or subsequently. Other recipient costs during
suspension or after termination which
are necessary and not reasonably
avoidable are allowable if paragraphs
(c)(1) and (2) of this section apply.
(1) The costs result from obligations
which were properly incurred by the recipient before the effective date of suspension or termination, are not in anticipation of it, and in the case of a termination, are noncancellable.
(2) The costs would be allowable if
the award were not suspended or expired normally at the end of the funding period in which the termination
takes effect.
(d) Relationship to debarment and suspension. The enforcement remedies
identified in this section, including

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2 CFR Ch. II (1–1–12 Edition)

suspension and termination, do not
preclude a recipient from being subject
to debarment and suspension under
E.O.s 12549 and 12689 and the Federal
awarding agency implementing regulations (see § 215.13).

an award, the Federal awarding agency
shall retain the right to recover an appropriate amount after fully considering the recommendations on disallowed costs resulting from the final
audit.

Subpart D—After-the-Award
Requirements

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

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

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

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

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charge interest on an overdue debt in
accordance with 4 CFR Chapter II,
‘‘Federal Claims Collection Standards.’’

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

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

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2 CFR Ch. II (1–1–12 Edition)

member of Congress in connection with obtaining any Federal contract, grant or any
other award covered by 31 U.S.C. 1352. Each
tier shall also disclose any lobbying with
non-Federal funds that takes place in connection with obtaining any Federal award.
Such disclosures are forwarded from tier to
tier up to the recipient.
8. Debarment and Suspension (E.O.s 12549
and 12689)—A contract award with an
amount expected to equal or exceed $25,000
and certain other contract awards (see 2 CFR
180.220) shall not be made to parties listed on
the government-wide Excluded Parties List
System, in accordance with the OMB guidelines at 2 CFR part 180 that implement E.O.s
12549 (3 CFR, 1986 Comp., p. 189) and 12689 (3
CFR, 1989 Comp., p. 235), ‘‘Debarment and
Suspension.’’ The Excluded Parties List System contains the names of parties debarred,
suspended, or otherwise excluded by agencies, as well as parties declared ineligible
under statutory or regulatory authority
other than E.O. 12549.
[69 FR 26281, May 11, 2004, as amended at 70
FR 51879, Aug. 31, 2005]

PARTS 216–219 [RESERVED]
PART 220—COST PRINCIPLES FOR
EDUCATIONAL
INSTITUTIONS
(OMB CIRCULAR A–21)
Sec.
220.5 Purpose.
220.10 Scope.
220.15 Policy.
220.20 Applicability.
220.25 OMB responsibilities.
220.30 Federal agency responsibilities.
220.35 Effective date of changes.
220.40 Relationship to previous issuance.
220.45 Information contact.
APPENDIX A TO PART 220—PRINCIPLES FOR DETERMINING COSTS APPLICABLE TO GRANTS,
CONTRACTS, AND OTHER AGREEMENTS WITH
EDUCATIONAL INSTITUTIONS
AUTHORITY: 31 U.S.C. 503; 31 U.S.C. 1111; 41
U.S.C. 405; Reorganization Plan No. 2 of 1970;
E.O. 11541, 35 FR 10737, 3 CFR, 1966–1970, p.
939.
SOURCE: 70 FR 51881, Aug. 31, 2005, unless
otherwise noted.

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§ 220.5

Purpose.

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

§ 220.10

Scope.

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

Policy.

The principles in this part are designed to provide that the Federal Government bear its fair share of total
costs, determined in accordance with
generally accepted accounting principles, except where restricted or prohibited by law. Agencies are not expected to place additional restrictions
on individual items of cost. The successful application of cost accounting
principles requires development of mutual understanding between representatives of educational institutions and
of the Federal Government as to their
scope, implementation, and interpretation.
§ 220.20

Applicability.

(a) All Federal agencies that sponsor
research and development, training,
and other work at educational institutions shall apply the provisions of Appendix A to this part in determining
the costs incurred for such work. The
principles shall also be used as a guide
in the pricing of fixed price or lump
sum agreements.
(b) Each federal agency that awards
defense-related contracts to a Federally Funded Research and Development
Center (FFRDC) associated with an
educational institution shall require
the FFRDC to comply with the Cost
Accounting Standards and with the
rules and regulations issued by the
Cost Accounting Standards Board and
set forth in 47 CFR part 99.
§ 220.25

OMB responsibilities.

OMB is responsible for:
(a) Issuing and maintaining the guidance in this part.
(b) Interpreting the policy requirements in this part and providing assistance to ensure effective and efficient
implementation.

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