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          Subject:  INTEGRATED GRANT ADMINISTRATION (IGA) 
                    PROGRAM - FISCAL PROCEDURES

          10-43-00  Scope
          10-43-10  Authority
          10-43-20  Background
          10-43-30  Participating Agency (AP) Role
          10-43-40  Lead Agency (LA) Role
          10-43-50  Headquarters vs Regional Fiscal Office Role
          10-43-60  Carry-over Balances

          10-43-00  SCOPE

This chapter sets forth the Department's fiscal policy and procedure for
implementing the Integrated Grant Administration (IGA) Program.  This
Program involves all Federal assistance programs except programs for the
support of construction or for acquisition of land.  The separate Federal
programs from which funds are requested in an integrated grant
application must involve funds from two or more Federal Departments or
agencies and must have a relationship through a commonality of purpose or
ability to support related goals and be part of an overall strategy to
achieve a common objective.  The Program operates in compliance with all
statutory requirements for Federal assistance.

          10-43-10  AUTHORITY

     A.   Authority is contained in:

               1.   Title IV, Section 401 (a) and 403 of the Intergovernmental
          Cooperation Act of 1968 and the President's Memorandum of
          November 8, 1968, to the Director of the Office of Management
          and Budget (33 FR 16487).
               2.   Section 601 of the Economy Act of 1932 (31 USC 686).
               3.   Reorganization Plan No. 2 of 1970, as implemented by Executive
          Order No. 11541 of July 1, 1970.

     B.   This Chapter implements the IGA program, which is a vital part of
     the President's Federal Assistance Review effort, as set forth in:

               1.   The Office of Management and Budget (a) IGA memorandum of
          January 14, 1972, and (b) guidelines for Awarding IGA Grant
          Funds Using the Consolidated Working Fund and the Letter of
          Credit, dated July 12, 1972.

               2.   The Treasury Reporting Requirements for Integrated Grant
          Administration (IGA) Program Instructions.


               3.   HEW Grants Administration Manual Circular No. 72.2, dated June
          15, 1972.

     C.   Fiscal year 1972 and 1973 projects will be operated on a pilot
     basis with subsequent evaluation of the program to determine
     whether the program will become permanent.

     D.   The Participating Agency Grant Award Notice, IGA Form F,
     constitutes the authority for the lead agency finance office to
     charge the participating agencies' appropriations or fund accounts
     on its monthly statement of Transactions, SF-224, for the amount of
     the payment vouchers on letters of credit charged to the Integrated
     Funding Consolidated Working Fund or SF-1081 reimbursement vouchers
     to the Grant Payment Systems (NIH or HS).

     E.   The lead agency regular consolidated working fund should be used to
     fund the IGA projects.  The annual Consolidated Working Fund shall
     be utilized (the most restrictive period of availability)
     regardless of whether the participating agency funds are advanced
     from multiple year or no year accounts.

     F.   Every effort shall be made by the Lead Agency to award the IGA
     grant before June 30 for all projects for which IGA Form F's have
     been received from the Participating Agencies.  The failure to make
     the IGA award by June 30 must result in deobligation of the
     Participating Agency obligations and 1/12 cash advance and re-
     establishment thereof under the next succeeding fiscal year
     accounts.

     G.   The existing agency letter of Credit systems and Departmental Grant
     Payment System shall be utilized to fund the IGA grantees.

          10-43-20  BACKGROUND

     A.   Program Objectives.  The Integrated Grant Administration Program
     enables public agencies to apply for a number of Federal Assistance
     grants by a single application.  The application is processed by a
     task force consisting of members of participating agencies, both
     Federal and State, under the auspices of the Federal Regional
     Council, and the approved grant is administered by a lead Federal
     agency.  The objectives of the Program are:

               1.   To provide a mechanism by which the State and local government
          can be given assistance in a timely and unified fashion.

               2.   To enhance the capability of Federal Regional Councils to
          assist in solving critical State & local govt problems.

               3.   To encourage greater State involvement (financial and
          technical) in solving local problems.
               4.   To encourage work program development, whereby State and local
          planning agencies jointly undertake common or coordinated
          activities and share staff.

               5.   To synchronize, wherever possible, the funding cycles of
          federal, State, and local agencies.

               6.   To coordinate the monitoring of project completion, as well as
          requests for changes and expansion.

               7.   To foster cooperation on the Federal, State, & local levels.

               8.   To cut red tape, eliminate duplication, and minimize
          overlapping at the Federal levels by:

                         (a)  Utilizing a single application and work plan for
               programs requiring the financial support of two or more
               Federal agencies.

                         (b)  Utilizing a common financial reporting system.

                         (c)  Utilizing a coordinated audit concept.

                         (d)  Utilizing a common completion report.

                         (e)  Utilizing the administrative requirements of the lead
               agency "core" program while waiving the administrative
               requirements of other participating agency funding
               programs.

                         (f)  Providing for identification of and compliance with all
               legislative requirements of funding programs.

     B.   DEFINITIONS

               1.   Applicant or eligible applicant means States, State
          departments or agencies, counties or municipalities, regional
          entities (interstate), local public authorities, interstate
          districts, sponsor group representatives, Indian governing
          bodies, and councils of governments.  Integrated grants will
          be awarded to a single agency only, although other agencies
          may participate as co-applicants.

               2.   Participating Federal agency includes any agency in the
          executive branch of the Federal Government from which
          assistance is requested.
          
               3.   Federal assistance program means programs that provide
          assistance through grant or contractual arrangements.
          
               4.   Integrated grant includes Federal funds from several Federal
          assistance programs which contribute materially to the
          accomplishment of a single program or closely related programs
          expressed in a single application.

               5.   Element is an identifiable major unit of work related to
          program objectives and goals and is the basis for establishing
          the eligibility of the program for the Federal assistance
          required.

               6.   Objectives are specific, attainable ends toward which
          concentrated effort is directed.  When achieved, objectives
          represent significant and measurable progress toward the
          attainment of a broader, longer-range goal. 
          Characteristically, objectives are subordinate to goals, are
          of narrower and shorter range in nature, have a reasonable
          probability of attainment within specified time periods and
          resources, and are attained through measurable and
          quantifiable achievements.

               7.   Goals are normally stated in terms of the fulfillment of broad
          public needs, the achievement of predetermined levels of
          excellence, or the alleviation of major problems. 
          Characteristically, goals are enduring statements of purpose,
          often not attainable in the short term.

               8.   Work plan is a translation of the objectives and goals of the
          applicant's proposal into elements and sub-elements.  The work
          plan should present a schedule of work efforts and allocation
          of resources for the duration of the funding period.

     C.   RESPONSIBILITIES.  Responsibilities for implementing the provisions
     of this Program are:

               1.   Office of Management and Budget.  The Office of Management and
          Budget (OMB) shall evaluate the effectiveness of this program
          and initiate such changes as experience during the pilot
          period indicated.

               2.   Federal Regional Councils.  The Federal Regional Council
          shall:

                         (a)  Receive integrated grant proposals and determine which
               proposals are to be accepted for processing;

                         (b)  Designate coordinating officers, who shall assist the
               applicant in identifying eligible supporting Federal
               assistance programs that have a strong probability of
               approval by the participating Federal Agencies, and
               shall serve as chairman of the task forces:
                         (c)  Establish task forces, composed of representatives from
               participating Federal agencies (to include those Federal
               agencies which are not permanent members of the Federal
               Regional Councils) and State funding agencies, which are
               responsible for the expeditious processing of the
               application, advising the applicant of potential sources
               of funding, making or obtaining the program decision,
               arranging for the monitoring of project performance;

                         (d)  Designate the lead agencies, which shall administer the
               approved integrated grants in accordance with the
               provisions of this Chapter and serve as the agent of
               other participating grant agencies in matters concerning
               the receipt, delivery, review, and audit of funds,
               oversight of project progress and performance, approval
               of modifications in the work plan and associated funding
               changes, and project termination.

                                   (1)  To the extent possible, the lead agency
                    determination, if placed in DHEW, shall be
                    assigned to a participating financial assistance
                    program which is administered from the Regional
                    Office.  The Regional Director or his designee
                    shall have an overview responsibility to assure
                    effective and prudent management of the project
                    from the total objective point of view.

               3.   Participating Federal agencies.  The participating Federal
          agencies shall:

                         (a)  Accept report forms and procedures developed for the
               Integrated Grant Administration Program and waive, where
               necessary, the non-statutory administrative and fiscal
               requirements of agency grant programs.

                         (b)  Serve as lead agency when designated.

                         (c)  Promulgate internal procedures to provide prompt and
               coordinated agency review of an integrated grant
               application.

                         (d)  Transfer approved grant funds to the consolidated
               working account in a timely manner.

                         (e)  Advance to the lead agency, in accordance with Section
               601 of the Economy Act of 1932, an amount representing
               the cost of services to be rendered by the lead agency
               in administering the integrated grants when such costs
               are billed (see 10-43-40A).

                         (f)  Provide, as authorized by law and as part of its grant-
               processing responsibilities, a program of technical
               assistance to assist applicants to meet their planned
               objectives.  This aspect will be coordinated by the lead
               agency.

               4.   State agencies.  Those State agencies electing to participate
          in this Program will be expected to:

                         (a)  Serve as a member of the task force and participate in
               all activities concerned with the submission, review and
               approval of an integrated grant application.

                         (b)  Make its funds available to the grantee, upon approval
               of the application, in accordance with its established
               procedures, but coordinated with the Federal delivery of
               funds.

                         (c)  Accept the single integrated applications and the
               related financial reporting procedures as fully meeting
               its need without imposing further requirements on the
               applicants.

                         (d)  Participate with Federal grantor agencies in program
               surveillances, including on-site evaluation.

          10-43-30  PARTICIPATING AGENCY (PA) ROLE

     A.   Commitments.  In accordance with provisions of the Office of
     Management and Budget Memorandum of January 14, 1972, and HEW
     Grants Administration Manual Circular No. 72.2, each appropriate
     financial assistance grants management officer will cause a
     commitment to be established to the extent supported by a Federal
     Regional Council (FRC) accepted proposal and confirmation to the
     coordinating officer of the availability of grant funds.  (Exhibits
     10-43-1-1, 2, 3, 4 and 5)

     B.   Obligations.  Based upon the approved formal grantee IGA
     application, and request from the lead agency, the Participating
     Agency grants management officer shall issue IGA Form F (Exhibit
     10-43-3) which must identify any unique or specific legislative
     requirements together with an authorization to advance 1/12th of
     the award to the Lead Agency, both of which shall be forwarded to
     the Participating Agency local fiscal office for obligation,
     liquidation of the commitment, and issuance of SF-1081.  IGA form F
     shall be prepared in sufficient copies to also meet the needs of
     the lead agency.

     C.   Initial Advance (Payment and Liquidation).  The funding agency
     shall advance 1/12th of the IGA Form F annual obligation to the
     lead agency.  This amount shall be recorded as an advance, and
     liquidation of the obligation (estimated accruals for delivered
     services for the month).  See also Section 10-43-40! 5 (c), second
     paragraph.

     D.   Reporting on Monthly SF-224.  The initial advance (net
     disbursement) shall be reported by the Participating Agency fiscal
     office on the monthly SF-224.

     E.   Subsequent Payments.  Subsequent payments (charges to the
     participating agency appropriations or funds) will be processed by
     the lead agency on its monthly SF-224, Statement of Transactions. 
     A notification (Journal Voucher) of such charges by the lead agency
     will be provided each participating agency fiscal office to support
     the entry to the PA's accounting system.  These payments must be
     excluded from the PA's monthly SF-224.

     F.   Reports.  Copy of each quarterly and final Element Financial
     Report, IGA Form H (Exhibit 10-43-5), will be forwarded to each
     P.A. together with appropriate lead agency progress report and
     other related information.

     G.   Program Officer/Fiscal Officer Role.  The program officer shall
     evaluate applications, determine extent of support, process usual
     commitment document, issue the IGA Form F (Exhibit 10-43-3) obli-
     gation document, evaluate progress reports received from the lead
     agency and provide technical assistance, as needed, and review
     internal financial reports issued by the fiscal officer.  The
     fiscal officer shall provide accounting and disbursement support
     for the program officer and be the participating agency contact
     point with the lead agency fiscal officer.

     The transaction codes to be used are shown in Exhibit 10-43-6.

          Exhibit 10-43-7 presents a general systems flow chart on the
     relationship of the participating agencies to the lead agency to
     the grantee.

          10-43-40  LEAD AGENCY (LA) ROLE

     A.   Lead agency administration.  Following the transfer of
     administrative responsibilities, the lead agency becomes the single
     Federal point of contact for the grantee on all matters concerned
     with the administration of the funds awarded for the project and
     the monitoring of project operations.  The lead agency (1) makes
     arrangements with the participating Federal agencies for the
     funding agreements (Participating Agency Grant Award Notice IGA
     Form F, Exhibit 10-43-3) and for the transfer of the initial 1/12th
     advance of funds into a Consolidated Working Fund account; (2)
     obtains allotments and operating plans; (3) issues from the working
     account a single Notification of Integrated Grant Award(s) to the
     grantee agency; (4) authorizes and coordinates the flow of Federal
     funds; (arranges for and coordinates program monitoring; (6)
     receives and processes fiscal and performance reports; (7) keeps
     participating Federal agencies informed of project progress; (8)
     arranges for a coordinated audit of the project at regular
     intervals; (9) monitors timely submittal of continuation
     application; and (10) reviews actual unobligated balances carried
     forward with the estimated amounts and causes adjustment of funding
     agreements and IGA award when necessary.

          If the lead agency cannot consummate the integrated grant award by
     June 30 the P.A. obligations cease to meet the requirements of a
     valid obligation.  In this event, the lead agency program office
     must notify all parties involved with the funding processes, as
     soon as possible to cancel the IGA Form F obligations, return the
     advances, cancel the CWF allotment, and reprocess all actions under
     the succeeding appropriation accounts when funds become available.

          Further, the LA shall estimate administrative costs for performing
     lead agency activities and shall determine and assess each PA's
     share of such costs.  However, the LA may elect to waive assessing
     the pro rata share of administrative costs to each PA whenever
     these costs are nominal and the accounting costs exceed any return
     to the LA.  In the interest of facilitating implementation of the
     IGA program it is the policy of DHEW that all administrative costs
     of the LA will be absorbed and that assessment of such costs to
     each PA will be absorbed and that assessment of such costs to each
     PA will be waived pending a policy determination by the
     Consolidated Funding Advisory Committee.

               1.   Notification of the integrated grant award.  The award is for
          a single amount representing the total of all direct Federal
          assistance authorized for the project.  The funds as shown in
          an approved grant award represent budgetary and obligational
          authority to the grantee for the funding period.  The lead
          agency issues the award to the grantee agency in letter form. 
          The award will cover at least the following:

                         (a)  Identification (CAN) of the supporting Federal programs
               and the amount approved by each.

                         (b)  Any special conditions imposed with the grant approval,
               to include the grantee's matching funds requirements.

                         (c)  A statement that the grantee is to comply with the
               approved work plan and budget, the Standard Provisions
               in Part III of the OMB memorandum of January 14, 1972,
               Federal laws, regulations and policies relating to the
               project.

                         (d)  Federal Grant Award Number assigned by the FRC but
               compatible with the lead agency's automated accounting
               systems data requirements.

                         (e)  An appropriate payment provision relating to the letter
               of credit and identification of the issuing office.

                    Standard Form 240, in accordance with OMB Circular No. A-98
          and General Administration Manual Chapter 1-145, shall be
          prepared by the Lead Agency program office for the IGA award. 
          Pending revision of the Standard Form 240, the several funding
          programs shall be listed by Federal Assistance Catalog Number
          and amount in the remarks section of the form.

               2.   Funding procedure.  The grantee will be funded either:

                         (a)  Through the Departmental Grants Payment System (operated
               by the National Institutes of Health) which pays awards
               to hospitals, educational, and other non-profit private
               institutions, local units of Government, and States
               operating under single letter of credit (one letter of
               credit to a single point in the State for all HEW
               programs.  At this time single letters of credit are in
               operation for the State of Nebraska, Arizona, New York
               for health and education programs only, and the Georgia
               Department of Human Resources).

                                   (1)  Pays by letter of credit (over $250,000 of total
                    awards per annum).

                                   (2)  Request for advances for reimbursement, (Exhibit
                    10-44-3 (over $100,000 but less than $250,000 of
                    total awards per annum.)

                                   (3)  Automatic payment ($100,000 less of total awards
                    per annum), or

                         (b)  Through the DHEW agency letter of credit systems
               (operated by the DHEW Lead Agency headquarters fiscal
               offices) which pay awards to State agencies not
               operating under single letter of credit and qualified
               Headstart grantees.

                                   (1)  Pays by letter of credit (over $250,000 of total
                    awards per annum.)

                                   (2)  Pays by Treasury check for supplemental amounts
                    required in excess of the letter of credit
                    (monthly or quarterly) ceiling, or

                         (c)  Through the lead Agency Local Fiscal Office which pays
               awards to grantees not qualifying under either of the
               above payment systems.

                                   (1)  Pays by treasury check based upon Request for
                    Advances or Reimbursement.  (Exhibit 10-44-3) (for
                    total awards of $100,000 but less than $250,000.)

                                   (2)  Pays by Treasury check on a predetermined monthly
                    schedule (for total awards less than $100,000 per
                    annum.)
          
                    It is anticipated that IGA grant awards will exceed $250,000. 
          A new letter of credit may have a quarterly drawdown
          limitation which will be an amount equal to 15 per cent more
          than the estimated quarterly requirements (Summary of
          Estimated Disbursements by Quarter - IGA Form E, Exhibit 10-
          43-2) or a monthly drawdown limitation plus 5 percent more may
          be used under existing letter of credits; however, in no case
          may the total drawdown for the grant period exceed the total
          funds awarded.

                    The lead agency fiscal office shall prepare a memorandum
          similar to Exhibit 10-43-11 to the Division of Consolidated
          Funding, DAS-B, ASC, OS requesting that the Office of
          Management and Budget be notified when a letter of credit is
          used to finance an IGA award which has a monthly ceiling
          rather than a quarterly ceiling as prescribed for IGA use. 
          The memorandum shall be prepared for each IGA award and
          forwarded to the appropriate central payment (letter of
          credit) system.  If a new letter of credit with a quarterly
          ceiling is issued or an existing one is modified to cover the
          IGA award the memorandum shall be so annotated and returned to
          the lead agency fiscal officer.  If a new letter of credit
          with a monthly ceiling is issued or an existing one is
          modified to cover the IGA award the memorandum shall be signed
          by an official of the central payment system and forwarded to
          the Division of Consolidated Funding.

                    The instruction to grantees shall emphasize that they should
          make drawdowns against the letter of credit only as needed for
          current disbursement purposes.  Federal cash on hand must be
          kept to a minimum during the entire period.  Drawdowns and
          disbursements of Federal funds will take into account the use
          of other funds available for the project.  Unless other
          arrangements have been approved for the grant award, grantee
          matching funds will be spent concurrently with the drawdowns
          and disbursement of Federal funds.
.
               3.   Project surveillance and reporting.  This includes the
          following activities: handling grantee request for changes or
          revisions in project as approved; receiving and analyzing the
          Quarterly Cash Report Exhibit 10-43-4, and Element Financial
          Report Exhibit 10-43-5; arranging for site visits; reporting
          to participating agencies on project progress; conferring with
          the grantee for compliance with any special conditions
          included with the grant award; and arranging for assistance in
          the preparation of and receiving the continuation application.

                         (a)  Quarterly Cash Report.  This report is prepared to
               indicate the disposition of Federal funds in lieu
               thereof: advanced to the grantee and concurrent
               disposition of other funds approved for the project. 
               The grantee must submit the report (Exhibit 10-43-4) no
               later than 15 working days after the end of the
               reporting quarter to the paying office from or through
               which the grant funds were received.

                              The lead agency letter of credit system will analyze
               Quarterly Cash Report in terms of the actual drawdown of
               funds in relation to the estimated need for funds during
               that quarter, and the amount of Federal cash on hand. 
               The grantee shall be asked to explain any significant
               excess cash on hand.

                         (b)  Element Financial Report.  The report, IGA Form H
               (Exhibit 10-43-5), shows the source of funds to which
               element disbursements are charged.  The report is
               submitted quarterly.  The lead agency may request the
               Element Financial Report or the Quarterly Cash Report
               more often during the funding period if more frequent
               reporting is necessary.  Such action could be required
               if the grantee's use of project funds departs
               significantly from the work plans and the grantee has
               not discussed the reasons for such deviation with the
               lead agency prior to its occurrence.

                              The lead agency will analyze the Element Financial
               Report by comparing it with grantee's planned
               disbursements as reflected in the Summary of Estimated
               Disbursements by Quarter, IGA Form E (Exhibit 10-43-2). 
               If the report indicates the project disbursements are
               deviating more than 25 percent from planned
               disbursements, the grantee must explain such differences
               to the lead agency.

                              When a single element or sub-element is being supported
               by two or more eligible Federal programs, the percentage
               of support to be provided by each program shall be
               defined by the grantee and the concerned grantor
               agencies before the integrated grant is approved.  If
               all of the federal programs involved in a single element
               or sub-element are eligible to finance all phases of the
               work, the grantee will show the total charges for the
               element or sub-element on the Element Financial Report,
               and based upon the agreed percentage of support by each
               program, the lead agency will distribute the charges to
               the appropriate supporting Federal programs.  If funds
               from a given Federal program are eligible for use on
               only certain phases of work of any element or sub-
               element, and funds from one or more Federal programs are
               used for the remainder of the work, the grantee must
               keep separate accounts within the element or sub-element
               by source of Federal funds and report the charges for
               each Federal program within the element on the Element
               Financial report.

                              The use of program funds by the grantee must be in
               accordance with statutory program requirements and is
               dependent on the grantee conformance with the approved
               project budget, and the work plan.  Unauthorized and
               significant departure from the grant budget and work
               schedules can result in a discontinuance (i.e.
               deobligation/cancellation) of the integrated grant
               award.

                              The Element Financial Report will be submitted within 30
               calendar days after the end of each calendar quarter of
               the funding periods.  The final report will be due
               within 90 calendar days after completion of the project
               period.

                              The Consolidated Funding Notice of Grant Awarded shall
               specify to the grantee whether there is a legal
               requirement for an accrual basis report.  If there is
               such a requirement and the grantee's accounting records
               are not normally kept on the accrual basis, the grantee
               should develop such information through an analysis of
               the documentation on hand or on the basis of best
               estimates.  Unless legally required to submit an accrual
               basis report, the grantee shall report on the same basis
               as its accounting system.

                              Grantees will submit a copy of the Element Financial
               Report to each State grantor agency, and sufficient
               copies to the lead agency to provide a copy for each
               participating Federal program.  The lead agency will
               forward the reports to each Federal participating agency
               together with an analysis of the report, and a
               computation of the total amount which should be used to
               adjust the amount of funds advanced for the integrated
               grants.

               4.   Revisions in project operations or budget.  The lead agency
          will make program and funding decisions subject only to
          limitations agreed to with the participating agencies.  In
          cases where direct contact by the participating Federal
          agencies with the grantee appears necessary, the lead agency
          will make the necessary arrangements.

                    At least two site visits will be scheduled during the funding
          period with representatives from the lead agency and
          participating grantor agencies to review project operations,
          discuss problems, and consider possible changes.  The first
          visit shall be made not later than 45 days after the close of
          the first quarter, and the second in the seventh or eighth
          month of the funding period.

                    Requests for budget increases will be made to the lead agency
          but may require processing by the Federal Regional Council. 
          Grantees must submit revised work plans and budget summary in
          support of any requested increase in funds.

     5.   Internal Accounting Procedures

                         (a)  Use of Consolidated Working Fund.  The regular annual
               Consolidated Working Fund of the lead agency shall be
               utilized to fund the IGA projects.

                         (b)  Participating Agency Grant Award Notice, IGA Form F. 
               All IGA Form F's (three copies) must be received before
               the IGA award to the grantee may be issued.  If
               difficulty or unreasonable delays are experienced in
               obtaining these forms the lead Agency representative to
               the Federal Regional Council should be requested to
               contact the tardy Participating Agency representative to
               the Federal Regional Council, or other appropriate
               official to the end of resolving the problem and
               providing the necessary documentation.  The three copies
               of each IGA Form F shall be approved by the lead agency
               grants management officer.  One copy shall be retained
               and one copy of each shall be forwarded to the lead
               agency fiscal office and the lead agency budget or
               financial management office.

                         (c)  Initial Advance.  Receivables to the Consolidated
               Working Fund account must be identified in appropriate
               subsidiary accounts against which the advances
               (deposits) and the direct charges to the P.A.
               appropriations are credited (7 GAO 6.9).  The lead
               agency accounting system should identify the
               participating agencies and amounts of receivables and
               advances by use of vendor codes, or when operative, by
               Central Registry system Identification numbers in the
               "Primary Recipient" field of the standard input format. 
               If the system cannot accomplish the identification of
               the source of funds and amounts in the above manner,
               then it will be necessary to assign a separate CAN for
               each source of funds (participating agency funding
               program).  The internal Machine Number Descriptor File,
               Exhibit 3-30-4, for each such CAN should include a three
               digit suffix number to the CWF appropriation symbol
               which will identify each source of funds.

                              The lead agency fiscal office shall initiate the SF-1081
               for 1/12th of the IGA Form F's and send to the
               participating agency fiscal office for completion and
               forwarding to Treasury.  Deviations to the 1/12th
               advance requirement are not allowed unless justified in
               writing and approved by the Deputy Assistant Secretary,
               Finance.

                              The deposit (negative disbursement) will be recorded on
               the Lead Agencies' regular monthly SF-224 against the
               Consolidated Working Fund Symbol.

                         (d)  Advice of Allotment.  The designated lead agency grants
               management officer upon receipt of all IGA Form F's
               shall request the Agency Budget Office to issue an
               advice of allotment and automatic apportionment and the
               necessary operating plans (obligational based and/or
               cost based).  A separate CAN may be issued for control
               of the Allotment.  (Although the credits to account 455
               from TC 012 will be associated with several CAN's
               identifying the source of such funds, the debit to
               account 455 under TC 013 will be associated with the CAN
               assigned for control of the allotment.)  If the
               alternative in (c) above is utilized all transactions
               will be recorded under the single CAN issued for control
               of the allotment.

                         (e)  Issuance of Integrated Grant Award.  The integrated
               grant award is issued to the grantee.  As a minimum, the
               standard provisions set forth in part III of OMB
               memorandum of January 14, 1972, must be included in the
               integrated grant award.  The award shall be recorded
               using the same CAN as used for the allotment or a
               separate CAN may be assigned for the obligation,
               accrual/costs, payment and income aspects of the award.

                         (f)  Letter of Credit Withdrawal Vouchers or Equivalent.  In
               DHEW the Letter of Credit Systems are financed either
               (1) through Grant Management Funds where amounts are
               withdrawn without identification of the amounts by
               awards, or (2) through charges direct to the program
               appropriation or fund when the total amount withdrawn is
               broken down and identified on the back of the withdrawal
               voucher by grant or program.

                                   (1)  Grant Management Funds.  NIH (Departmental) and HS
                    operate letter of credit grant payment systems
                    through use of Grant Management Funds.  Grantee
                    Letter of Credit withdrawal vouchers are disbursed
                    from the Grants Management Fund and are shown as
                    net disbursements on the monthly special letter of
                    credit SF-224.  These amounts are distributed
                    during the following month, on an estimated basis
                    to each grant award.  The total amount by
                    CAN/appropriation are charged to the funding
                    appropriations and credited (reimbursed) to the
                    Grant Management Fund.  That portion applicable to
                    the IGA award is charged to the Consolidated
                    Working Fund.  The lead agency headquarters fiscal
                    office will process the SF-1081 for these charges
                    and will promptly notify the local lead agency
                    fiscal office of the amount of charge to the CWF
                    for each appropriate IGA award.  The local fiscal
                    office will prepare the Journal Voucher to credit
                    the CWF for that amount in excess of the initial
                    1/12th advance and will charge the participating
                    agency accounts for their share of this excess. 
                    The local lead agency fiscal office will
                    immediately forward a copy of the Journal Voucher
                    to each Participating Agency Finance Office for
                    recording in their accounts during the same month. 
                    The participa-ting Agency must exclude these
                    payment from their regular monthly SF-224.  The
                    local lead agency fiscal office will report these
                    charges and credits on its regular monthly SF-224. 
                    On this basis the agency records should be in
                    agreement with the Treasury Report, BA-R 6653,
                    Undisbursed Appropriation Accounts.

                                        Exhibit 10-43-9 depicts the timing of financial
                    transaction in DHEW when the IGA awards are funded
                    through Management Funds.

                                   (2)  Charged Directly to Program Appropriations: OE,
                    SRS, and OS (Headstart) operate letter of credit
                    system wherein the grantee either identifies on
                    back of the withdrawal voucher the amount
                    requested for each award (CAN) or the entire
                    amount pertains to only one award (Headstart).  In
                    all instances the withdrawal voucher amounts for
                    IGA awards are charged (disbursed) directly from
                    the Consolidated Working Fund.  These charges will
                    be reported on the lead agency special letter of
                    credit SF-224 for the month in which the
                    withdrawal vouchers were accomplished.  To the
                    extent the amount withdrawn exceeds the initial
                    participating agency advance a credit to the CWF
                    shall be shown on this same SF-224 and charges to
                    the Participating Agency appropriations will be
                    shown.  These charges should be allocated on the
                    basis of each accounts share to the total.  These
                    estimated amounts will be adjusted to actual based
                    upon the IGA grantee quarterly Element Financial
                    Report, IGA Form H.

                                        The lead agency shall immediately prepare a
                    Journal Voucher to charge the participating agency
                    appropriations and to credit the Consolidated
                    Working Fund.  A copy of the JV shall be sent to
                    each Participating Agency Finance Office for
                    recording in their accounts during the subsequent
                    month.  The Participating Agency must exclude
                    these amounts from their regular monthly SF-224. 
                    On this basis the agency records will always be
                    one month behind the Treasury Report, BA-R 6653,
                    Undisbursed Appropriation Account.

                                        Exhibit 10-43-10 depicts the timing of financial
                    transactions in DHEW when the IGA awards are
                    funded directly from the CWF by letter of credits.

                                   (3)  Direct Check Payments by Local Lead Agency Fiscal
                    Office.  Upon payment of the monthly cash request
                    or predetermined amount the payment shall be
                    allocated to the participating program
                    appropriations, credited to the CWF and documented
                    on a Journal Voucher.  The JV shall be forwarded
                    immediately to the P.A. fiscal office for
                    recording in their accounts during the same month. 
                    The amount of payment to the grantee, and the
                    charges to the P.A. appropriations and credit to
                    the CWF as documented by the Journal Vouchers
                    shall be reported by the local lead agency fiscal
                    office on the monthly SF-224.

                                        Exhibit 10-43-12 depicts the timing of financial
                    transactions in DHEW when the IGA awards are
                    funded directly from the CWF by Treasury check.

                         (g)  Audits.  The Federal Regional Council will designate the
               audit lead agency.   Normally, DHEW Audit Agency will
               make necessary arrangements for audit of the IGA
               grantees when an HEW Agency has been designated as the
               lead agency.  The agency designated to conduct the audit
               shall coordinate its audit with the participating
               Federal, State and local government agencies as provided
               in OMB Circular No. A-73.

                              The audits shall, to the fullest extent feasible, rely
               on audits performed by State or local government staffs
               or certified or licensed independent public accountants
               engaged by them.  At a minimum, an annual audit is
               required of the financial operations of the grantee.  A
               copy of the audit report shall be forwarded to each
               grantor agency within six months after the close of the
               period.

                              In addition, the General Accounting Office shall make
               audits as it deems necessary.

                         (h)  Program Officer/Fiscal Officer Role.  The program
               officer shall perform all the functions of the lead
               agency grants management officer in reviewing,
               monitoring, and coordinating assistance to the grantee
               in the performance of the project, and coordinates the
               flow of documents with the agency budget office and the
               local fiscal officer.  The local fiscal officer shall
               provide accounting and disbursement support for the
               program officer and shall coordinate with the
               headquarters agency fiscal office, the central payment
               system, as appropriate, and with the participating
               agency fiscal officers.
                    
                              The transaction codes to be used are shown in Exhibit
               10-43-6.

          10-43-50  HEADQUARTERS VS REGIONAL FISCAL OFFICE ROLE

The lead agency headquarters fiscal office will process the allotment and
operating plans on behalf of the lead agency regional office.  It will
also process the charges to the Consolidated Working Fund represented by
estimated drawdown (SF-1081) from the Grant Management Fund payment
systems.  These payments shall be reported on the headquarters office
regular monthly SF-224.  The billing information from the Grant
Management Funds (see 10-43-40 A5 (f) (1) ) insofar as the CWF's are
concerned shall be reported no later than the 20th of the same month of
the payment to the Grant Management Fund, by the headquarters office to
the regional fiscal offices in order for the regional fiscal officer (1)
to prepare the Journal Voucher (2) to include on the regional regular SF-
224 for the same month the credit to the CWF and the proportionate share
thereof charged to each of the participating agency's appropriation or
fund symbols and (3) to forward a copy of the Journal Voucher to each
participating agency.  This action will avoid negative cash balances in
the CWF at month end.

The lead agency headquarters fiscal office will charge the Consolidated
Working Fund for the amount of letter of credit drawdowns where such
amounts are charged directly to program appropriations (see 10-43-40 A5
(f) (2)).  The headquarters fiscal office shall telephone the Regional
Fiscal Office to identify the monthly amount of the drawdown (charge to
the CWF).  The Regional Fiscal Office will determine the extent to which
the drawdowns exceed the initial advance and the amounts and
participating agency account symbols to be charged and will provide this
information to the headquarters fiscal office.  The credit to the CWF and
charges to the participating agency accounts must be included on the same
special letter of credit monthly SF-224 as the withdrawal vouchers.  The
headquarters office shall prepare the Journal Voucher, and forward to the
Regional Financial Management Officer who will be responsible for
forwarding copies to the participating agencies.  This action will avoid
negative cash balances in the CWF at month end.

The Quarterly Cash Reports should be forwarded by the IGA grantee
directly to the fiscal office administering the letter of credit payment
system.  The Element Financial Report should be forwarded to the Regional
Lead Agency program officer for review and approval.  A copy of the
approved report shall be forwarded to the Regional Financial Management
Office within 15 days of the receipt thereof.  The RFMO will record the
necessary adjustments between the estimated expenditures and the actual
for the reported time period only for those IGA awards financed through
the agency letter of credit payment systems.  The Departmental Grant
Payment System (NIH) will make these adjustments automatically.

DHEW Accounting Manual Circular No. 701, dated May 28, 1970 is applicable
to this Chapter.  If there are any inconsistencies between this Chapter
and the Circular the Provisions of the Chapter shall apply.

Exhibit 10-43-8 presents a general systems flow chart on the relationship 
in the lead agency between the program, budget, and finance offices in
the setting where some functions are performed at headquarters while
other functions are performed at the regional office.

          10-43-60  CARRY OVER BALANCES

     A.   Since the IGA projects normally will extend for more than one year
     but not more than five years the project period funding method will
     be used (Grants Administration Manual Chapter 1-85).  That is, the
     estimated unobligated balance of the award, at the grantee level,
     is considered as part of the availability for the subsequent years
     continuation award.  When the grantee withdraws funds under the
     subsequent years award the FIFO basis of charging the Consolidated
     Working Funds will be used.  That is, the drawdowns during the
     subsequent period first must be charged to the previous years
     appropriation (CAN) until the carry over balances are consumed, the
     remaining drawdowns shall be charged to the then current year
     appropriation (CAN).

     B.   Adjustments Related to Carry Over Balances

               1.   Adjustments must be made for any significant difference
          between actual unobligated balances carried forward in the
          Final Element Financial Report for the expired budget period
          and the estimated unobligated balance carried forward in the
          continuation award for the current budget period.  The lead
          agency shall obtain an amended IGA Form F from the appropriate
          funding programs and issue an amended IGA award to the grantee
          to cover the adjustment.

               2.   Any estimated unobligated balance associated with a particular
          element or activity which is to be completed in one budget
          period and therefore is not part of the work plan for the
          subsequent budget period must be reflected in the approved
          budget for the continuation award as a negative item for that
          work element.  The actual amount as adjusted in (1) above must
          be adjusted back to the participating agency funding program
          appropriation from the lead agency consolidated working fund.
     
               3.   All unobligated/unexpended grantee balances of Federal funds
          must be returned to the lead agency at the completion of the
          project period.  Such funds may be returned to the appropriate
          participating agency funding program appropriation(s) by SF-
          1081 or lapsed to the general funds of the Treasury from the
          consolidated working fund..                                
                                
                                
                                
                                
                                
             IGA FORM A (12/71) - (FRONT AND BACK)
                                
            APPLICATION FOR FEDERAL/STATE ASSISTANCE
                                
                               FOR
                                
      INTEGRATED FUNDING FOR PROJECT GRANT AND INSTRUCTIONS
                                
                                
                                
                                
               NOT AVAILABLE IN ELECTRONIC FORMAT
                                
                                
                                
                                
                                .                                
                                
                                
                                
                                
                                
             IGA FORM B (12/71) - (FRONT AND BACK)
                                
            APPLICATION FOR INTEGRATED PROJECT GRANT
                                
             ELEMENT FUNDING TABLE AND INSTRUCTIONS
                                
                                
                                
                                
               NOT AVAILABLE IN ELECTRONIC FORMAT
                                
                                .                                
                                
                                
                                
                                
                                
             IGA FORM C (12/71) - (FRONT AND BACK)
                                
            APPLICATION FOR INTEGRATED PROJECT GRANT
                                
               ELEMENT WORK PLAN AND INSTRUCTIONS
                                
                                
                                
                                
               NOT AVAILABLE IN ELECTRONIC FORMAT.                                
                                
                                
                                
                                
                                
             IGA FORM D (12/71) - (FRONT AND BACK)
                                
            APPLICATION FOR INTEGRATED PROJECT GRANT
                                
              SUMMARY BUDGET PLAN AND INSTRUCTIONS
                                
                                
                                
                                
               NOT AVAILABLE IN ELECTRONIC FORMAT.                                
                                
                                
                                
                                
                                
            IGA FORM D-1 (12/71) - (FRONT AND BACK)
                                
            APPLICATION FOR INTEGRATED PROJECT GRANT
                                
CONSOLIDATION OF GRANT PROGRAM FUNDS REQUESTED AND INSTRUCTIONS
                                
                                
                                
                                
               NOT AVAILABLE IN ELECTRONIC FORMAT.                                
                                
                                
                                
                                
                                
             IGA FORM E (12/71) - (FRONT AND BACK)
                                
            APPLICATION FOR INTEGRATED PROJECT GRANT
                                
 SUMMARY OF ESTIMATED DISBURSEMENTS BY QUARTER AND INSTRUCTIONS
                                
                                
                                
                                
               NOT AVAILABLE IN ELECTRONIC FORMAT.                                
                                
                                
                                
                                
                                
             IGA FORM F (12/71) - (FRONT AND BACK)
                                
            INTEGRATED GRANT ADMINISTRATION PROGRAM
                                
    PARTICIPATING AGENCY GRANT AWARD NOTICE AND INSTRUCTIONS
                                
                                
                                
                                
               NOT AVAILABLE IN ELECTRONIC FORMAT.                                
                                
                                
                                
                                
                                
             IGA FORM G (12/71) - (FRONT AND BACK)
                                
            INTEGRATED GRANT ADMINISTRATION PROGRAM
                                
             QUARTERLY CASH REPORT AND INSTRUCTIONS
                                
                                
                                
                                
               NOT AVAILABLE IN ELECTRONIC FORMAT.                                
                                
                                
                                
                                
                                
             IGA FORM H (12/71) - (FRONT AND BACK)
                                
            INTEGRATED GRANT ADMINISTRATION PROGRAM
                                
         ELEMENT FINANCIAL CASH REPORT AND INSTRUCTIONS
                                
                                
                                
                                
               NOT AVAILABLE IN ELECTRONIC FORMAT.                                
                                
                                
                       TRANSACTION CODES
                                
                                
                                
                                
                             ACTION
                                
                                
                              DHEW
                         PARTICIPATING
                             AGENCY
                                
                     DHEW LEAD AGENCY - CWF
                                
                                
                                
                                
                        UTILIZING DEPT'L
                         GRANT PAYMENT
                             SYSTEM
                        UTILIZING AGENCY
                        LETTER OF CREDIT
                             SYSTEM
                          DIRECT CHECK
                            PAYMENT
                                
                                
                           COMMITMENT
                           IGA FORM F
                   IGA FORM F AND AUTOMATIC 
                          APPORTIONMENT
                           ALLOTMENT
                           IGA AWARD
                                040
                                060
                                
                                
                                
                                
                          012 AND 023   
                                
                                
                                
                            012 AND 023
                                
                                
                                
                           012 AND 023
                                
                                
                     1/12TH ADVANCE SF-1081
                       ESTIMATED ACCRUAL
                                062
                                082 
                                  239
                                 239 
                                 239
                                
                                
                      PAYMENTS TO GRANTEE
                     EST ACCRUAL (PAYMENTS)
                                
                                  062
                                  082
                                  063
                                  086
                                 064
                                 088
                                
                                
                      SF-224 CREDIT TO CWF
                                
                                  239
                                  239
                                 239
                                
                                
                      SF-224 CHARGE TO PA
                     EST ACCRUAL (PAYMENTS)
                                062
                                082
                                
                                
                                
                                
                                
                    QTRLY ELEMENT FINANCIAL
                             REPORT
                           AUTOMATIC
                           ADJUSTMENT
                               -082
                               +084
                          AUTOMATIC      
                            ADJUSTMENT
                                 -082
      +084                        
                                 -086
                                 +087
                                -088
                               +090 
                                
                                
                    EST ACCRUAL PAYMENTS TO
                      EXTENT OF CARRYOVER
                         BALANCES (FIFO)
                     BALANCE OF EST DRAWDOWN
                                
                                
                                092
                                082
                                   
                                
                                  092
                              082        
                                
                                
                                  094
                                  086
                                
                                
                                 095
                                 088
                                
                                
                           FINAL ROE
                                059
                                  059
                                  059
                                 059
                                
                                .                                
                                
                                
                                
                                
                                
                                
                                
                   GENERAL SYSTEMS FLOW CHART
                                
            PARTICIPATING AGENCY/LEAD AGENCY/GRANTEE
                                
                                
                                
                                
                                
                                
               NOT AVAILABLE IN ELECTRONIC FORMAT.                                
                                
                                
                                
                                
                                
                                
                                
                   GENERAL SYSTEMS FLOW CHART
                                
           LEAD AGENCY - RELATIONSHIP OF HEADQUARTERS
                FUNCTIONS TO REGIONAL FUNCTIONS
                                
                                
                                
                                
                                
                                
               NOT AVAILABLE IN ELECTRONIC FORMAT.                                
                                
                                
                                
                                
                                
                                
                                
                 TIMING OF FISCAL ACTIONS CHART
                                
                (FUNDED THROUGH MANAGEMENT FUND)
                                
                                
                                
                                
                                
                                
               NOT AVAILABLE IN ELECTRONIC FORMAT.                                
                                
                                
                                
                                
                                
                                
                                
                 TIMING OF FISCAL ACTIONS CHART
                                
              (FUNDED FROM DIRECT APPROPRIATIONS)
                                
                                
                                
                                
                                
                                
               NOT AVAILABLE IN ELECTRONIC FORMAT.                       SAMPLE MEMORANDUM
                                

          DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE
                    OFFICE OF THE SECRETARY
                                
MEMORANDUM

          DATE      :

               TO        :    Director, Division of Consolidated Funding
                              DHEW/OS/ASC/DAS-B
                              330 Independence Avenue, S.W.
                              Washington, D.C. 20201

               THRU      :    Central Payment (Letter of Credit) System
               Address:



               FROM      :    



               SUBJECT   :    Issuance of Letter of Credit with Monthly Ceiling      
               to IGA Grantee


                              In accordance with IGA procedural requirements you are

               hereby notified that an IGA award has been issued to     


                                           In the amount of $          

               and that this award is funded through a letter of credit

                              which has a monthly ceiling rather than a quarterly 

               ceiling.


                              Please notify the Office of Management and Budget of
               this

               action.



                         Lead Agency Fiscal Officer
.                                
                                
                                
                                
                                
                                
                                
                                
                 TIMING OF FISCAL ACTIONS CHART
                                
     (FUNDED FROM DIRECT APPROPRIATIONS BY TREASURY CHECK)
                                
                                
                                
                                
                                
                                
               NOT AVAILABLE IN ELECTRONIC FORMAT