UNITED STATES DEPARTMENT OF AGRICULTURE

Rural Utilities Service 

RUS BULLETIN 1780-12

RD-GD-2014-76

SUBJECT: Grant Agreements

TO: State Directors, Rural Development 

ATTN: Rural Utilities Service Program Directors 

EFFECTIVE DATE: Date of approval 

OFFICE OF PRIMARY INTEREST: Assistant Administrator, Water and Environmental Programs 

INSTRUCTIONS: This bulletin replaces previous versions

AVAILABILITY: This Bulletin is available on the Internet at

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

PURPOSE: To provide the grant agreement to be used for Water and Waste System Grants, Exhibit

A, and for Emergency Community Water Assistance Grants, Exhibit B. 

_______________________________ ___1/27/2014______

JACQUELINE M. PONTI-LAZARUK Date 

Assistant Administrator 

Water and Environmental Programs 

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.
RUS Bulletin 1780-12 

 Exhibit A 

Approved

OMB No. 0572-0121 

Exp. 05/2021 Page 1 

Water and Waste System Grant Agreement 

United States Department of Agriculture 

Rural Utilities Service

THIS AGREEMENT dated , , between

a public corporation organized and operating under

(Authorizing Statute) 

herein called ``Grantee,'' and the United States of America acting through the Rural Utilities Service, Department 

of Agriculture, herein called ``Grantor,'' WITNESSETH: 

WHEREAS 

Grantee has determined to undertake a project of acquisition, construction, enlargement, or capital improvement 

of a (water) (waste) system to serve the area under its jurisdiction at an estimated cost of $ 

and has duly authorized the undertaking of such project. 

Grantee is able to finance not more than $ of the development costs through

revenues, charges, taxes or assessments, or funds otherwise available to Grantee resulting in a reasonable user 

charge. 

Said sum of $ 

development costs.

has been committed to and by Grantee for such project 

Grantor has agreed to grant the Grantee a sum not to exceed $ or percent

of said project development costs, whichever is the lesser, subject to the terms and conditions established by the 

Grantor. Provided, however, that the proportionate share of any grant funds actually advanced and not needed 

for grant purposes shall be returned immediately to the Grantor. The Grantor may terminate the grant in whole, 

or in part, at any time before the date of completion, whenever it is determined that the Grantee has failed to 

comply with the Conditions of the grant. 

As a condition of this grant agreement, the Grantee assures and certifies that it is in compliance with and will 

comply in the course of the agreement with all applicable laws, regulations, Executive orders and other generally 

applicable requirements, including those set out in 7 CFR 3015.205(b), which hereby are incorporated into this 

agreement by reference, and such other statutory provisions as are specifically set forth herein. 

NOW, THEREFORE, In consideration of said grant by Grantor to Grantee, to be made pursuant to 

Section 306(a) of The Consolidated Farm and Rural Development Act for the purpose only of defraying a part 

not to exceed percent of the project development costs, as defined by applicable Rural Utilities Service 

instructions. 

Grantee Agrees That Grantee Will: 

A. Cause said project to be constructed within the total sums available to it, including said grant, in

accordance with the project plans and specifications and any modifications thereof prepared by Grantee and 

approved by Grantor. 
RUS Bulletin 1780-12 

Exhibit A 

Page 2 

B. Permit periodic inspection of the construction by a representative of Grantor during construction. 

C. Manage, operate and maintain the system, including this project if less than the whole of said system, 

continuously in an efficient and economical manner. 

D. Make the services of said system available within its capacity to all persons in Grantee's service area 

without discrimination as to race, color, religion, sex, national origin, age, marital status, or physical or mental 

handicap (possess capacity to enter into legal contract for services) at reasonable charges, including 

assessments, taxes, or fees in accordance with a schedule of such charges, whether for one or more classes of 

service, adopted by resolution dated , , as may be modified from time to time by 

Grantee. The initial rate schedule must be approved by Grantor. Thereafter, Grantee may make such 

modifications to the rate system as long as the rate schedule remains reasonable and nondiscriminatory. 

E. Adjust its operating costs and service charges from time to time to provide for adequate operation and 

maintenance, emergency repair reserves, obsolescence reserves, debt service and debt service reserves. 

F. Expand its system from time to time to meet reasonably anticipated growth or service requirements in 

the area within its jurisdiction. 

G. Provide Grantor with such periodic reports as it may require and permit periodic inspection of its 

operations by a representative of the Grantor. 

H. To execute any agreements required by Grantor which Grantee is legally authorized to execute. If 

any such agreement has been executed by Grantee as a result of a loan being made to Grantee by Grantor 

contemporaneously with the making of this grant, another agreement of the same type need not be executed in 

connection with this grant. 

I. Upon any default under its representations or agreements set forth in this instrument, Grantee, at the 

option and demand of Grantor, will repay to Grantor forthwith the original principal amount of the grant stated 

herein above with the interest at the rate of 5 percentum per annum from the date of the default. Default by the 

Grantee will constitute termination of the grant thereby causing cancellation of Federal assistance under the 

grant. The provisions of this Grant Agreement may be enforced by Grantor, at its option and without regard to 

prior waivers by it previous defaults of Grantee, by judicial proceedings to require specific performance of the 

terms of this Grant Agreement or by such other proceedings in law or equity, in either Federal or State courts, as 

may be deemed necessary by Grantor to assure compliance with the provisions of this Grant Agreement and the 

laws and regulations under which this grant is made. 

J. Return immediately to Grantor, as required by the regulations of Grantor, any grant funds actually 

advanced and not needed by Grantee for approved purposes. 

K. Use the real property including land, land improvements, structures, and appurtenances thereto, for 

authorized purposes of the grant as long as needed. 

1. Title to real property shall vest in the recipient subject to the condition that the Grantee shall use the 

real property for the authorized purpose of the original grant as long as needed. 

2. The Grantee shall obtain approval by the Grantor agency for the use of the real property in other 

projects when the Grantee determines that the property is no longer needed for the original grant 

purposes. Use in other projects shall be limited to those under other Federal grant programs or programs 

that have purposes consistent with those authorized for support by the Grantor. 
RUS Bulletin 1780-12 

Exhibit A 

Page 3 

3. When the real property is no longer needed as provided in 1 and 2 above, the Grantee shall request

disposition instructions from the Grantor agency or its successor Federal agency. The Grantor agency

shall observe the following rules in the disposition instructions:

(a) The Grantee may be permitted to retain title after it compensates the Federal Government in

an amount computed by applying the Federal percentage of participation in the cost of the original

project to the fair market value of the property.

(b) The Grantee may be directed to sell the property under guidelines provided by the Grantor

agency. When the Grantee 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.

[Revision 1, 04/17/1998]

(c) The Grantee may be directed to transfer title to the property to the Federal Government

provided that in such cases the Grantee shall be entitled to compensation computed by applying

the Grantee's percentage of participation in the cost of the program or project to the current fair

market value of the property.

This Grant Agreement covers the following described real property (use continuation sheets as necessary).

L. Abide by the following conditions pertaining to equipment which is furnished by the Grantor or acquired

wholly or in part with grant funds. Equipment means tangible, non-expendable, personal property having a 

useful life of more than one year and an acquisition cost of $5,000 or more per unit. A grantee may use its own 

definition of equipment provided that such definition would at least include all equipment defined above. 

[Revision 1, 04/17/1998]

1. Use of equipment.

(a) The Grantee shall use the equipment in the project for which it was acquired as long as needed.

When no longer needed for the original project, the Grantee shall use the equipment in connection

with its other Federally sponsored activities, if any, in the following order of priority:

(1) Activities sponsored by the Grantor.

(2) Activities sponsored by other Federal agencies.

(b) During the time that equipment is held for use on the property for which it was acquired, the

Grantee shall make it available for use on other projects if such other use will not interfere with the

work on the project for which the equipment was originally acquired. First preference for such other

use shall be given to Grantor sponsored projects. Second preference will be given to other

Federally sponsored projects.
RUS Bulletin 1780-12 

Exhibit A 

Page 4 

2. Disposition of equipment. When the Grantee no longer needs the equipment as provided in paragraph

(a) above, the equipment may be used for other activities in accordance with the following standards:

(a) Equipment with a current per unit fair market value of less than $5,000. The Grantee may use

the equipment for other activities without reimbursement to the Federal Government or sell the

equipment and retain the proceeds.

(b) Equipment with a current per unit fair market value of $5,000 or more. The Grantee may retain

the equipment for other uses provided that compensation is made to the original Grantor 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 or

proceeds from sale of the equipment. If the Grantee has no need for the equipment and the

equipment has further use value, the Grantee shall request disposition instructions from the original

Grantor agency.

The Grantor 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, in accordance with the guidelines of the Federal Property Management Regulations 

(FPMR), to the General Services Administration by the Grantor agency to determine whether a 

requirement for the equipment exists in other Federal agencies. The Grantor agency shall issue 

instructions to the Grantee no later than 120 days after the Grantee requests and the following 

procedures shall govern: 

(1) If so instructed or if disposition instructions are not issued within 120 calendar days after

the Grantee's request, the Grantee shall sell the equipment and reimburse the Grantor

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 Grantee shall be

permitted to deduct and retain from the Federal share ten percent of the proceeds for

Grantee's selling and handling expenses.

(2) If the Grantee is instructed to ship the equipment elsewhere the Grantee shall be

reimbursed by the benefiting Federal agency with an amount which is computed by applying

the percentage of the Grantee participation in the cost of the original grant project or

program to the current fair market value of the equipment, plus any reasonable shipping or

interim storage costs incurred.

(3) If the Grantee is instructed to otherwise dispose of the equipment, the Grantee shall be

reimbursed by the Grantor agency for such costs incurred in its disposition.

3. The Grantee's property management standards for equipment shall also include:

(a) Records which accurately provide for: a description of the equipment; manufacturer's serial

number or other identification number; acquisition date and cost; source of the equipment;

percentage (at the end of budget year) of Federal participation in the cost of the project for which

the equipment was acquired; location, use and condition of the equipment and the date the

information was reported; and ultimate disposition data including sales price or the method used to

determine current fair market value if the Grantee reimburses the Grantor for its share.

(b) A physical inventory of equipment shall be taken and the results reconciled with the equipment

records at least once every two years to verify the existence, current utilization, and continued need

for the equipment.
RUS Bulletin 1780-12 

Exhibit A 

Page 5 

(c) 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.

(d) Adequate maintenance procedures shall be implemented to keep the equipment in good

condition.

(e) Proper sales procedures shall be established for unneeded equipment which would provide for

competition to the extent practicable and result in the highest possible return.

This Grant Agreement covers the following described equipment(use continuation sheets as necessary).

M. Provide Financial Management Systems which will include:

1. Accurate, current, and complete disclosure of the financial results of each grant. Financial reporting

will be on an accrual basis.

2. Records which identify adequately the source and application of funds for grant-supported activities.

Those records shall contain information pertaining to grant awards and authorizations, obligations,

unobligated balances, assets, liabilities, outlays, and income.

3. Effective control over and accountability for all funds, property and other assets. Grantees shall

adequately safeguard all such assets and shall assure that they are used solely for authorized purposes.

4. Accounting records supported by source documentation.

N. Retain financial records, supporting documents, statistical records, and all other records pertinent to

the grant for a period of at least three years after grant closing except that the records shall be retained beyond 

the three-year period if audit findings have not been resolved. Microfilm or photo copies or similar methods may 

be substituted in lieu of original records. The Grantor and 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 

Grantee's government which are pertinent to the specific grant program for the purpose of making audits, 

examinations, excerpts and transcripts. 

O. Provide information as requested by the Grantor to determine the need for and complete any

necessary Environmental Impact Statements. 

P. Provide an audit report prepared in accordance with Grantor regulations to allow the Grantor to

determine that funds have been used in compliance with the proposal, any applicable laws and regulations and 

this Agreement. 

Q. Agree to account for and to return to Grantor interest earned on grant funds pending their

disbursement for program purposes when the Grantee is a unit of local government. States and agencies or 

instrumentality’s of states shall not be held accountable for interest earned on grant funds pending their 

disbursement. 
RUS Bulletin 1780-12 

Exhibit A 

Page 6 

R. Not encumber, transfer or dispose of the property or any part thereof, furnished by the Grantor or

acquired wholly or in part with Grantor funds without the written consent of the Grantor except as provided in 

item K above. 

S. To include in all contracts for construction or repair a provision for compliance with the Copeland

``Anti-Kick Back'' Act (18 U.S.C. 874) as supplemented in Department of Labor regulations (29 CFR, Part 3). 

The Grantee shall report all suspected or reported violations to the Grantor. 

T. To include in all contracts in excess of $100,000 a provision that the contractor agrees to comply with

all the requirements of the Clean Air Act (42 U.S.C. §7414 ) and Section 308 of the Water Pollution Control Act 

(33 U.S.C. §1318) relating to inspection, monitoring, entry, reports, and information, as well as all other 

requirements specified in Section 114 of the Clean Air Act and Section 308 of the Water Pollution Control Act 

and all regulations and guidelines issued thereunder after the award of the contract. In so doing the Contractor 

further agrees: 

[Revision 1, 11/20/1997]

1. As a condition for the award of contract, to notify the Owner of the receipt of any communication from

the Environmental Protection Agency (EPA) indicating that a facility to be utilized in the performance of

the contract is under consideration to be listed on the EPA list of Violating Facilities. Prompt notification is

required prior to contract award.

2. To certify that any facility to be utilized in the performance of any nonexempt contractor subcontract is

not listed on the EPA list of Violating Facilities pursuant to 40 CFR Part 32 as of the date of contract

award.

[Revision 1, 11/20/1997]

3. To include or cause to be included the above criteria and the requirements in every nonexempt

subcontract and that the Contractor will take such action as the Government may direct as a means of

enforcing such provisions.

As used in these paragraphs the term ``facility'' means any building, plan, installation, structure, mine, vessel or 

other floating craft, location, or site of operations, owned, leased, or supervised by a Grantee, cooperator, 

contractor, or subcontractor, to be utilized in the performance of a grant, agreement, contract, subgrant, or 

subcontract. Where a location or site of operation contains or includes more than one building, plant, installation, 

or structure, the entire location shall be deemed to be a facility except where the Director, Office of Federal 

Activities, Environmental Protection Agency, determines that independent facilities are co-located in one 

geographical area. 

Grantor Agrees That It: 

A. Will make available to Grantee for the purpose of this Agreement not to exceed

$ which it will advance to Grantee to meet not to exceed percent of the project

development costs of the project in accordance with the actual needs of Grantee as determined by Grantor. 

B. Will assist Grantee, within available appropriations, with such technical assistance as Grantor deems

appropriate in planning the project and coordinating the plan with local official comprehensive plans for sewer 

and water and with any State or area plans for the area in which the project is located. 

C. At its sole discretion and at any time may give any consent, deferment, subordination, release,

satisfaction, or termination of any or all of Grantee's grant obligations, with or without valuable consideration, 

upon such terms and conditions as Grantor may determine to be (1) advisable to further the purpose of the grant 

or to protect Grantor's financial interest therein and (2) consistent with both the statutory purposes of the grant and 

the limitations of the statutory authority under which it is made. 
RUS Bulletin 1780-12 

Exhibit A 

Page 7 

Termination of This Agreement 

This Agreement may be terminated for cause in the event of default on the part of the Grantee as provided 

in paragraph I above or for convenience of the Grantor and Grantee prior to the date of completion of the grant 

purpose. Termination for convenience will occur when both the Grantee and Grantor agree that the continuation 

of the project will not produce beneficial results commensurate with the further expenditure of funds. 

In witness whereof Grantee on the date first above written has caused these presence to be executed by 

its duly authorized 

attested and its corporate seal affixed by its duly authorized

Attest:

By 

(Title) 

By 

(Title) 

UNITED STATES OF AMERICA 

RURAL UTILITIES SERVICE 

By 

(Title) 

According to the Paperwork Reduction Act of 1995, an agency may not conduct or sponsor, and person is not required to respond to, a collection 

of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0572-0121. The 

time required to complete this information collection is estimated to average 1 hour per response, including the time for reviewing instructions, 

searching existing data sources, gathering and maintaining the data needed and completing and reviewing the collection of information. 
 RUS Bulletin 1780-12 

 Exhibit B 

Approved

OMB No. 0572-0121 

Exp. 05/2021 Page 1 

ECWAG Grant Agreement 

United States Department of Agriculture 

Rural Utilities Service

THIS AGREEMENT dated , , between

a public corporation organized and operating under

(Authorizing Statute) 

herein called ``Grantee,'' and the United States of America acting through the Rural Utilities Service, Department 

of Agriculture, herein called ``Grantor,'' WITNESSETH: 

WHEREAS 

Grantee has determined to undertake a project of acquisition, construction, enlargement, or capital improvement 

of a (water) (waste) system to serve the area under its jurisdiction at an estimated cost of $ 

and has duly authorized the undertaking of such project. 

Grantee is able to finance not more than $ of the development costs through

revenues, charges, taxes or assessments, or funds otherwise available to Grantee resulting in a reasonable user 

charge. 

Said sum of $ 

development costs.

has been committed to and by Grantee for such project 

Grantor has agreed to grant the Grantee a sum not to exceed $ or percent

of said project development costs, whichever is the lesser, subject to the terms and conditions established by the 

Grantor, provided, however, that the proportionate share of any grant funds actually advanced and not needed for 

grant purposes shall be returned immediately to the Grantor. Grant funds not expended within two years of 

obligation will be canceled. The Grantor may terminate the grant in whole, or in part, at any time before the date 

of completion, whenever it is determined that the Grantee has failed to comply with the Conditions of the grant. 

As a condition of this grant agreement, the Grantee assures and certifies that it is in compliance with and will 

comply in the course of the agreement with all applicable laws, regulations, Executive orders and other generally 

applicable requirements, including those set out in 7 CFR 3015.205(b), which hereby are incorporated into this 

agreement by reference, and such other statutory provisions as are specifically set forth herein. 

NOW, THEREFORE, In consideration of said grant by Grantor to Grantee, to be made pursuant to 

Section 306(a) of The Consolidated Farm and Rural Development Act for the purpose only of defraying a part 

not to exceed percent of the project development costs, as defined by applicable Rural Utilities Service 

instructions. 

Grantee Agrees That Grantee Will: 

A. Cause said project to be constructed within the total sums available to it, including said grant, in

accordance with the project plans and specifications and any modifications thereof prepared by Grantee and 

approved by Grantor. 
RUS Bulletin 1780-12 

Exhibit B 

Page 2 

B. Permit periodic inspection of the construction by a representative of Grantor during construction.

C. Manage, operate and maintain the system, including this project if less than the whole of said system,

continuously in an efficient and economical manner. 

D. Make the services of said system available within its capacity to all persons in Grantee's service area

without discrimination as to race, color, religion, sex, national origin, age, marital status, or physical or mental 

handicap (possess capacity to enter into legal contract for services) at reasonable charges, including 

assessments, taxes, or fees in accordance with a schedule of such charges, whether for one or more classes of 

service, adopted by resolution dated , , as may be modified from time to time by 

Grantee. The initial rate schedule must be approved by Grantor. Thereafter, Grantee may make such 

modifications to the rate system as long as the rate schedule remains reasonable and nondiscriminatory. 

E. Adjust its operating costs and service charges from time to time to provide for adequate operation and

maintenance, emergency repair reserves, obsolescence reserves, debt service and debt service reserves. 

F. Expand its system from time to time to meet reasonably anticipated growth or service requirements in

the area within its jurisdiction. 

G. Provide Grantor with such periodic reports as it may require and permit periodic inspection of its

operations by a representative of the Grantor. 

H. To execute any agreements required by Grantor which Grantee is legally authorized to execute. If

any such agreement has been executed by Grantee as a result of a loan being made to Grantee by Grantor 

contemporaneously with the making of this grant, another agreement of the same type need not be executed in 

connection with this grant. 

I. Upon any default under its representations or agreements set forth in this instrument, Grantee, at the

option and demand of Grantor, will repay to Grantor forthwith the original principal amount of the grant stated 

herein above with the interest at the rate of 5 percentum per annum from the date of the default. Default by the 

Grantee will constitute termination of the grant thereby causing cancellation of Federal assistance under the 

grant. The provisions of this Grant Agreement may be enforced by Grantor, at its option and without regard to 

prior waivers by it previous defaults of Grantee, by judicial proceedings to require specific performance of the 

terms of this Grant Agreement or by such other proceedings in law or equity, in either Federal or State courts, as 

may be deemed necessary by Grantor to assure compliance with the provisions of this Grant Agreement and the 

laws and regulations under which this grant is made. 

J. Return immediately to Grantor, as required by the regulations of Grantor, any grant funds actually

advanced and not needed by Grantee for approved purposes. The Applicant will ensure grant activities are

implemented in a timely, efficient, and economical manner.  Grant fund not expended within two years of

obligation will be canceled.  

K. Use the real property including land, land improvements, structures, and appurtenances thereto, for

authorized purposes of the grant as long as needed. 

1. Title to real property shall vest in the recipient subject to the condition that the Grantee shall use the

real property for the authorized purpose of the original grant as long as needed.

2. The Grantee shall obtain approval by the Grantor agency for the use of the real property in other

projects when the Grantee determines that the property is no longer needed for the original grant

purposes. Use in other projects shall be limited to those under other Federal grant programs or programs

that have purposes consistent with those authorized for support by the Grantor.
RUS Bulletin 1780-12 

Exhibit B 

Page 3 

3. When the real property is no longer needed as provided in 1 and 2 above, the Grantee shall request

disposition instructions from the Grantor agency or its successor Federal agency. The Grantor agency

shall observe the following rules in the disposition instructions:

(a) The Grantee may be permitted to retain title after it compensates the Federal Government in

an amount computed by applying the Federal percentage of participation in the cost of the original

project to the fair market value of the property.

(b) The Grantee may be directed to sell the property under guidelines provided by the Grantor

agency. When the Grantee 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.

[Revision 1, 04/17/1998]

(c) The Grantee may be directed to transfer title to the property to the Federal Government

provided that in such cases the Grantee shall be entitled to compensation computed by applying

the Grantee's percentage of participation in the cost of the program or project to the current fair

market value of the property.

This Grant Agreement covers the following described real property (use continuation sheets as necessary).

L. Abide by the following conditions pertaining to equipment which is furnished by the Grantor or acquired

wholly or in part with grant funds. Equipment means tangible, non-expendable, personal property having a 

useful life of more than one year and an acquisition cost of $5,000 or more per unit. A grantee may use its own 

definition of equipment provided that such definition would at least include all equipment defined above. 

[Revision 1, 04/17/1998]

1. Use of equipment.

(a) The Grantee shall use the equipment in the project for which it was acquired as long as needed.

When no longer needed for the original project, the Grantee shall use the equipment in connection

with its other Federally sponsored activities, if any, in the following order of priority:

(1) Activities sponsored by the Grantor.

(2) Activities sponsored by other Federal agencies.

(b) During the time that equipment is held for use on the property for which it was acquired, the

Grantee shall make it available for use on other projects if such other use will not interfere with the

work on the project for which the equipment was originally acquired. First preference for such other

use shall be given to Grantor sponsored projects. Second preference will be given to other

Federally sponsored projects.
RUS Bulletin 1780-12 

Exhibit B 

Page 4 

2. Disposition of equipment. When the Grantee no longer needs the equipment as provided in paragraph

(a) above, the equipment may be used for other activities in accordance with the following standards:

(a) Equipment with a current per unit fair market value of less than $5,000. The Grantee may use

the equipment for other activities without reimbursement to the Federal Government or sell the

equipment and retain the proceeds.

(b) Equipment with a current per unit fair market value of $5,000 or more. The Grantee may retain

the equipment for other uses provided that compensation is made to the original Grantor 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 or

proceeds from sale of the equipment. If the Grantee has no need for the equipment and the

equipment has further use value, the Grantee shall request disposition instructions from the original

Grantor agency.

The Grantor 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, in accordance with the guidelines of the Federal Property Management Regulations 

(FPMR), to the General Services Administration by the Grantor agency to determine whether a 

requirement for the equipment exists in other Federal agencies. The Grantor agency shall issue 

instructions to the Grantee no later than 120 days after the Grantee requests and the following 

procedures shall govern: 

(1) If so instructed or if disposition instructions are not issued within 120 calendar days after

the Grantee's request, the Grantee shall sell the equipment and reimburse the Grantor

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 Grantee shall be

permitted to deduct and retain from the Federal share ten percent of the proceeds for

Grantee's selling and handling expenses.

(2) If the Grantee is instructed to ship the equipment elsewhere the Grantee shall be

reimbursed by the benefiting Federal agency with an amount which is computed by applying

the percentage of the Grantee participation in the cost of the original grant project or

program to the current fair market value of the equipment, plus any reasonable shipping or

interim storage costs incurred.

(3) If the Grantee is instructed to otherwise dispose of the equipment, the Grantee shall be

reimbursed by the Grantor agency for such costs incurred in its disposition.

3. The Grantee's property management standards for equipment shall also include:

(a) Records which accurately provide for: a description of the equipment; manufacturer's serial

number or other identification number; acquisition date and cost; source of the equipment;

percentage (at the end of budget year) of Federal participation in the cost of the project for which

the equipment was acquired; location, use and condition of the equipment and the date the

information was reported; and ultimate disposition data including sales price or the method used to

determine current fair market value if the Grantee reimburses the Grantor for its share.

(b) A physical inventory of equipment shall be taken and the results reconciled with the equipment

records at least once every two years to verify the existence, current utilization, and continued need

for the equipment.
RUS Bulletin 1780-12 

Exhibit B 

Page 5 

(c) 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.

(d) Adequate maintenance procedures shall be implemented to keep the equipment in good

condition.

(e) Proper sales procedures shall be established for unneeded equipment which would provide for

competition to the extent practicable and result in the highest possible return.

This Grant Agreement covers the following described equipment(use continuation sheets as necessary).

M. Provide Financial Management Systems which will include:

1. Accurate, current, and complete disclosure of the financial results of each grant. Financial reporting

will be on an accrual basis.

2. Records which identify adequately the source and application of funds for grant-supported activities.

Those records shall contain information pertaining to grant awards and authorizations, obligations,

unobligated balances, assets, liabilities, outlays, and income.

3. Effective control over and accountability for all funds, property and other assets. Grantees shall

adequately safeguard all such assets and shall assure that they are used solely for authorized purposes.

4. Accounting records supported by source documentation.

N. Retain financial records, supporting documents, statistical records, and all other records pertinent to

the grant for a period of at least three years after grant closing except that the records shall be retained beyond 

the three-year period if audit findings have not been resolved. Microfilm or photo copies or similar methods may 

be substituted in lieu of original records. The Grantor and 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 

Grantee's government which are pertinent to the specific grant program for the purpose of making audits, 

examinations, excerpts and transcripts. 

O. Provide information as requested by the Grantor to determine the need for and complete any

necessary Environmental Impact Statements. 

P. Provide an audit report prepared in accordance with Grantor regulations to allow the Grantor to

determine that funds have been used in compliance with the proposal, any applicable laws and regulations and 

this Agreement. 

Q. Agree to account for and to return to Grantor interest earned on grant funds pending their

disbursement for program purposes when the Grantee is a unit of local government. States and agencies or 

instrumentality’s of states shall not be held accountable for interest earned on grant funds pending their 

disbursement. 
RUS Bulletin 1780-12 

Exhibit B 

Page 6 

R. Not encumber, transfer or dispose of the property or any part thereof, furnished by the Grantor or

acquired wholly or in part with Grantor funds without the written consent of the Grantor except as provided in 

item K above. 

S. To include in all contracts for construction or repair a provision for compliance with the Copeland

``Anti-Kick Back'' Act (18 U.S.C. 874) as supplemented in Department of Labor regulations (29 CFR, Part 3). 

The Grantee shall report all suspected or reported violations to the Grantor. 

T. To include in all contracts in excess of $100,000 a provision that the contractor agrees to comply with

all the requirements of the Clean Air Act (42 U.S.C. §7414 ) and Section 308 of the Water Pollution Control Act 

(33 U.S.C. §1318) relating to inspection, monitoring, entry, reports, and information, as well as all other 

requirements specified in Section 114 of the Clean Air Act and Section 308 of the Water Pollution Control Act 

and all regulations and guidelines issued thereunder after the award of the contract. In so doing the Contractor 

further agrees: 

[Revision 1, 11/20/1997]

1. As a condition for the award of contract, to notify the Owner of the receipt of any communication from

the Environmental Protection Agency (EPA) indicating that a facility to be utilized in the performance of

the contract is under consideration to be listed on the EPA list of Violating Facilities. Prompt notification is

required prior to contract award.

2. To certify that any facility to be utilized in the performance of any nonexempt contractor subcontract is

not listed on the EPA list of Violating Facilities pursuant to 40 CFR Part 32 as of the date of contract

award.

[Revision 1, 11/20/1997]

3. To include or cause to be included the above criteria and the requirements in every nonexempt

subcontract and that the Contractor will take such action as the Government may direct as a means of

enforcing such provisions.

As used in these paragraphs the term ``facility'' means any building, plan, installation, structure, mine, vessel or 

other floating craft, location, or site of operations, owned, leased, or supervised by a Grantee, cooperator, 

contractor, or subcontractor, to be utilized in the performance of a grant, agreement, contract, subgrant, or 

subcontract. Where a location or site of operation contains or includes more than one building, plant, installation, 

or structure, the entire location shall be deemed to be a facility except where the Director, Office of Federal 

Activities, Environmental Protection Agency, determines that independent facilities are co-located in one 

geographical area. 

Grantor Agrees That It: 

A. Will make available to Grantee for the purpose of this Agreement not to exceed

$ which it will advance to Grantee to meet not to exceed percent of the project

development costs of the project in accordance with the actual needs of Grantee as determined by Grantor. 

B. Will assist Grantee, within available appropriations, with such technical assistance as Grantor deems

appropriate in planning the project and coordinating the plan with local official comprehensive plans for sewer 

and water and with any State or area plans for the area in which the project is located. 

C. At its sole discretion and at any time may give any consent, deferment, subordination, release,

satisfaction, or termination of any or all of Grantee's grant obligations, with or without valuable consideration, 

upon such terms and conditions as Grantor may determine to be (1) advisable to further the purpose of the grant 

or to protect Grantor's financial interest therein and (2) consistent with both the statutory purposes of the grant and 

the limitations of the statutory authority under which it is made. 
RUS Bulletin 1780-12 

Exhibit B 

Page 7 

Termination of This Agreement 

This Agreement may be terminated for cause in the event of default on the part of the Grantee as provided 

in paragraph I above or for convenience of the Grantor and Grantee prior to the date of completion of the grant 

purpose. Termination for convenience will occur when both the Grantee and Grantor agree that the continuation 

of the project will not produce beneficial results commensurate with the further expenditure of funds. 

In witness whereof Grantee on the date first above written has caused these presence to be executed by 

its duly authorized 

attested and its corporate seal affixed by its duly authorized

Attest:

By 

(Title) 

By 

(Title) 

UNITED STATES OF AMERICA 

RURAL UTILITIES SERVICE 

By 

(Title) 

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