RUS Bulletin 1780-25

UNITED STATES DEPARTMENT OF AGRICULTURE

Rural Utilities Service

RUS BULLETIN 1780-25 

RD-GD-2020-113

SUBJECT: Construction of Public Works and Development Facilities (EDA)

TO: RUS Water and Environmental Programs Staff.

EFFECTIVE DATE: Date of approval.

OFFICE OF PRIMARY INTEREST: Water and Environmental Programs. 

AVAILABILITY: This Bulletin is available on the Internet at 

http://www.rurdev.usda.gov/RDU_Bulletins_Water_and_Environmental.html 

PURPOSE: This bulletin is issued to establish a memorandum of 

understanding between the Economic Development Administration, 

Department of Commerce, and Department of Agriculture regarding 

supplementary grant assistance. 

DISCLAIMER: The contents of this guidance document does not have the force and effect of law and is 

not meant to bind the public in any way. This document is intended only to provide clarity to the public 

regarding existing requirements under the law or agency policies. 
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MEMORANDUM OF UNDERSTANDING 

BETWEEN

THE ECONOMIC DEVELOPMENT ADMINISTRATION - 

DEPARTMENT OF COMMERCE

AND

THE Farmers Home Administration - 

DEPARTMENT OF AGRICULTURE 

REGARDING

SUPPLEMENTARY GRANT ASSISTANCE FOR THE CONSTRUCTION OF 

PUBLIC WORKS AND DEVELOPMENT FACILITIES

I INTRODUCTION.

1 Section 101 of the Public Works and Economic Development Act of 1965 (Public Law 

89-136, as amended) authorizes the Secretary of Commerce to make direct grants, grants

supplementary thereto, and grants supplementary to basic grants from other Federal programs.

Notwithstanding any requirement that may otherwise be applicable to the Federal program

involved, supplementary grants shall be used for the sole purpose of increasing the Federal

contribution to specific projects in eligible areas under such programs above the fixed maximum

portion of the cost of such project otherwise authorized by the applicable law, but in no event

shall the non-Federal share of the aggregate cost of any project be less than 20 percent of such

cost.

2 In determining the amount of any supplementary grant available to any project, 

consideration will be given to the (a) relative needs of the area, (b) the nature of the project to be 

assisted, and (c) the amount of such fair user charges or other revenues as the project may 

reasonably be expected to generate in excess of those which would amortize the local share of 

initial costs and provide for its successful operation and maintenance (including depreciation).

II PROJECTS RECEIVING A BASIC GRANT FROM THE Farmers Home Administration 

UNDER THE CONSOLIDATED FARMERS HOME ADMINISTRATION ACT OF 1961 (Public

Law 87-128, as amended):

1 If an area qualifies under Public Law 89-136, as amended, for a maximum grant rate in 

excess of the fixed maximum portion authorized under Public Law 87-128, as amended, for 

development costs, as defined in Section 306(a) (4) (A) of that Act, the applicant may request 

additional grant funds from the Economic Development Administration to supplement the basic 

grant requested from the Farmers Home Administration. Total Federal participation may not 

exceed the maximum grant rate established by EDA for the area in which the project is located.
RUS Bulletin 1780-25

2 If the amount of grant assistance requested from FHA is available and the project appears 

approvable, the FHA State Office will refer the applicant to the appropriate EDA Area Office to 

discuss the proposed project and the need for supplementary grant assistance.

3 At the time EDA decides it will consider the project for a supplementary grant, it will advise 

FHA and furnish the applicant with EDA application forms, together with pertinent instructions, 

and advise the applicant to show on these forms the amount of the basic grant being requested 

from FHA. The method of financing and project costs shown on both the FHA application and 

the EDA application must be identical.

4 Prior to EDA approval of a supplementary grant, FHA will provide EDA with the following 

statements:

a That the estimated cost of the project is reasonable and that the requested basic grant 

and the supplementary grant, together with the funds to be supplied by the applicant, are, in 

FHA's judgment, sufficient to complete the project.

b That the funds to be supplied by the applicant are available or that FHA is reasonably 

satisfied that the applicant has the capability of supplying such funds.

c That FHA is reasonably satisfied that the applicant will provide sufficient operating 

funds to assure the successful and continuing operation of the facility.

d That adequate safeguards have been established to eliminate the possibility of the 

supplementary grant exceeding the authorized percentage relationship to the total cost of the 

project.

e That the amount of the supplementary grant will be reduced to the extent actual costs 

of a project fall below estimated costs; however, the savings in such cases may be applied to a 

proportionate reduction of the supplementary grant and basic grant when necessary to conform 

to limitations imposed by statute.

f That the amount of the FHA grant for the particular project is as great as would have 

been approved in the absence of the supplementary grant. If the basic grant is less than the 

50% maximum portion authorized under Public Law 87-128, as amended, FHA will include a 

statement certifying that grant funds uncommitted for its current fiscal year are insufficient to 

permit approval of the maximum authorized portion.
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g That the construction contract(s) for project work will contain binding provisions for 

payment of prevailing wage rates as determined by the Secretary of Labor in accordance with the 

Davis-Bacon Act as amended, (40 USC 276a - 276a-5).

5 If EDA will not make a supplementary grant, it will advise FHA and the applicant 

accordingly.

6 Prior to approval of the supplementary grant, EDA will obtain from the applicant and 

substantial beneficiaries, if any, executed assurances of compliance with the regulations of Title 

15, Subtitle A, Part 8, of the Code of Federal Regulations issued by the Department of 

Commerce in effectuation of Title VI of the Civil Rights Act of 1964. EDA will also obtain 

executed Certificates of Non-Relocation from the applicant and substantial beneficiaries, where 

applicable.

7 When EDA approves a supplementary grant, it will inform FHA of such approval and will 

take immediate steps to transfer the funds to the U. S. Treasury account of the Rural Utilities 

Service on Standard Form 1151. At the same time, EDA will inform the applicant that an EDA 

supplementary grant has been authorized, and that the EDA Grant Offer, together with the terms 

and conditions of the EDA Offer, will be transmitted to the applicant by FHA.

8 FHA will tender the EDA Grant Offer within a sufficient period of time to allow acceptance 

of the offer before the end of the fiscal year within which the EDA project has been approved. 

The FHA State Program Official will notify the EDA Area Director immediately upon receipt of 

acceptance of the offer.

9 After acceptance of the EDA grant offer, FHA will assume full responsibility for the 

supervision of the project and disbursement of the grant funds.

10 FHA will supply the EDA Area Office at reasonable intervals with progress reports on the 

project and advise the Area Office whenever unusual problems are encountered. The EDA Area 

Office will advise the FHA State Office of the reports needed.

11 FHA will comply with the reporting requirements for transferred funds as outlined in 

Economic Development Memorandum 2.03-7, "Reporting of Funds Transfers by Participating 

Agencies," a copy of which is attached hereto.
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12 Should an EDA loan also be involved, FHA will, upon request of EDA, furnish a current 

construction status report to EDA at the time loan advances are requested and at the time of the 

loan closing. FHA will notify the EDA Area Office when final inspection is to take place and 

permit an EDA representative to be present at the final inspection. Also, FHA will, upon request 

of the EDA Area Office, permit an EDA representative to inspect the project during construction 

where such inspection is necessary in connection with the loan.

13 FHA will advise EDA of the completion of the project and submit a final report on the 

costs of the project in sufficient detail to permit a reasonable review of expenditures.

14 Since maximum use of local labor in construction of the project will facilitate attainment 

of the objectives of the Public Works and Economic Development Act of 1965, this matter should 

be given consideration in arrangements with all contractors retained in connection with project 

construction.

FOR THE FOR THE

ECONOMIC DEVELOPMENT FARMERS HOME

ADMINISTRATION ADMINISTRATION

/s/ Ross D. Davis /s/Howard Bertsch

Assistant Secretary for Administrator 

Economic Development

August 27, 1968 October 11, 1968

Date Date

Attachment 1
RUS Bulletin 1780-25

UNITED STATES OF AMERICA 

DEPARTMENT OF COMMERCE

ASSISTANT SECRETARY AND DIRECTOR OF ECONOMIC DEVELOPMENT 

MANUAL OF ECONOMIC DEVELOPMENT ORDERS

ECNOMIC DEVELOPMENT ORDER 2.03-7

SUBJECT

REPORTING OF FUND TRANSFERS BY PARTICIPATING AGENCIES

REFERENCES EFECTIVE DATE: 3-3-67

SUPPLEMENT:

SUPERSEDES: MEDO Memorandum 

2.03-7, "Reporting by Participating Agencies," dated 

August 1, 1966

APPROVED

Chief, Accounting Division Director, Office of Administration

Section Section Title Page

1 Purpose 1

2 General 2

3 Transfers of Supplementary Grant Funds ---------------- 2

4 Transfers of Funds for Administrative Support, and for 

Specific Projects or Studies Pertaining to Technical 

Assistance, Management, or Research--------------------3

5 Mailing Address for Reports --------------------------- 4

6 Effect on Other Orders -------------------------------- 4

SECTION 1. PURPOSE

The purpose of the Order is to prescribe reporting requirements which must be included 

in all agreements to advance funds to other Federal agencies for:

a. Supplementary grants.

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Attachment 1

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2.03-71b

3-3-67

b. Technical assistance and management research projects and/or studies.

c. Support activity (administrative and operating expenses).

SECTION 2. GENERAL

This Order, which provides a schedule showing financial reporting requirements, shall be 

made a part of each agreement to transfer funds to another agency for the purposes listed in 

Section 1. Performing agencies need not submit reports for work performed on a reimbursable 

basis if EDA is billed monthly and bills are received by the tenth of the following month. Such 

billings will suffice as a source of accrued expenditure data.

SECTION 3. TRANSFERS OF SUPPLEMENTARY GRANT FUNDS

.01 SF-1151, "Nonexpenditure Transfer Authorization":

SF-1151, "Nonexpenditure Transfer Authorization," will be used for transfers of 

supplementary grant funds.

.02 Required Reports:

The following reports shall be required in all agreements involving transfers of 

supplementary grant funds:

a. Monthly Reports due by the tenth day after the end of the month showing cumulative 

totals, first by appropriation, and then by projects thereunder, of:

(1) Obligations.

(2) Accrued expenditures.

(3) Cash disbursements.

Estimated amounts may be reported for obligations and accrued 

expenditures, but actual amounts which agree with the SF-224 "Statement of 

Transactions," must be reported for cash disbursements. Attached as Exhibit 1 

is the suggested form for the monthly report.
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3.02 2.03-0

3-3-67

b. Quarterly Report on SF-133, "Report of Budget Status," due by the 15th day after the 

end of the quarter, supported by a schedule showing by project:

(1) Obligations.

(2) Accrued expenditures.

(3) Cash disbursements in agreement with those reported on the SF-224, 

"Statement of Transactions."

NOTE: A supporting schedule for SF-133 will not be required if the monthly report 

shows actual obligations and accrued expenditures.

c. Annual Reports, as follows:

(1) SF-220, "Statement of Financial Condition," as required by Treasury Circular 

No. 966, due by September 20 for the year ending June 30.

(2) Treasury Form BA-R 2108, as required by Treasury Circular No. 965, due by 

September 20 for the year ending June 30.

(3) Report on Federal grants-in-aid to States and payments to individuals, as 

required by Treasury Circular No. 1014, due by September 20 for the year ending 

June 30.

(4) Report to be submitted by May 31, showing estimated unobligated funds as of 

June 30. Upon receipt of the report, the Accounting Division will make a 

determination as to disposal of the unobligated funds.

SECTION 4._TRANSFERS OF FUNDS FOR ADMINISTRATIVE SUPPORT, AND FOR 

SPECIFIC PROJECTS OR STUDIES PERTAINING TO TECHNICAL ASSISTANCE, 

MANAGEMENT, OR RESEARCH

.01 Use of SF-1081, "Voucher and Schedule of Withdrawals and Credits":

SF-1081 will be used for transfers of funds for administrative support and for 

specific projects or studies pertaining to technical assistance, management, or 

research.
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2.03-04.02

3-3-67

.02 Required Reports

The following reports shall be required in agreements involving transfers of funds 

for the purposes cited in paragraph 4.01:

a. Monthly Report, due by the 10th day after the end of the month, listing estimated 

accrued expenditures by appropriation and projects thereunder.

b. Quarterly Report, due by the 15th day after the end of the quarter, listing actual 

accrued expenditures by appropriation and projects thereunder.

c. Annual Report, due by May 31, showing estimated unobligated funds as of June 30. 

Upon receipt of the report, the Accounting Division will make a determination as to 

disposal of the unobligated funds.

SECTION 5. MAILING ADDRESS FOR REPORTS

Agencies should mail the reports required in this Order to the following address: 

Chief, Accounting Division

Office of Administration

Economic Development Administration

U.S. Department of Commerce 

Washington, D.C. 20230

SECTION 6. EFFECT ON OTHER ORDERS

This Order supersedes MEDO Memorandum 2.03-7, "Reporting by Participating 

Agencies," dated August 1, 1966, and any other instructions which may be in conflict with 

its provisions.

INDEX CHANGE

Change M/2.03-7 to 2.03-7 (page 20)