APPENDIX B 

25 CFR PART 900 

INDIAN SELF-DETERMINATION AND 

EDUCATION ASSISTANCE ACT 

AMENDMENTS, SUBPART F 

STANDARDS FOR TRIBAL OR 

TRIBAL ORGANIZATION 

MANAGEMENT SYSTEMS 
[Code of Federal Regulations]


[Title 25, Volume 1]


[Revised as of April 1, 2001]


From the U.S. Government Printing Office via GPO Access


[CITE: 25CFR900.35]


[Page 1004]


TITLE 25--INDIANS


CHAPTER V--BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR, AND


INDIAN HEALTH SERVICE, DEPARTMENT OF HEALTH AND HUMAN SERVICES


PART 900--CONTRACTS UNDER THE INDIAN SELF-DETERMINATION AND EDUCATION


ASSISTANCE ACT--Table of Contents


Subpart F--Standards for Tribal or Tribal Organization Management


Systems


Sec. 900.35 What is the purpose of this subpart?


General


This subpart contains the minimum standards for the management


systems used by Indian tribes or tribal organizations when carrying out


self-determination contracts. It provides standards for an Indian tribe


or tribal organization's financial management system, procurement


management system, and property management system.


Sec. 900.36 What requirements are imposed upon Indian tribes or tribal


organizations by this subpart?


When carrying out self-determination contracts, Indian tribes and


tribal organizations shall develop, implement, and maintain systems that


meet these minimum standards, unless one or more of the standards have


been waived, in whole or in part, under section 107(e) of the Act and


subpart K.


Sec. 900.37 What provisions of Office of Management and Budget (OMB)


circulars or the ``common rule'' apply to self-determination contracts?


The only provisions of OMB Circulars and the only provisions of the


``common rule'' that apply to self-determination contracts are the


provisions


[[Page 1005]]


adopted in these regulations, those expressly required or modified by


the Act, and those negotiated and agreed to in a self-determination


contract.


Sec. 900.38 Do these standards apply to the subcontractors of an Indian


tribe or tribal organization carrying out a self-determination contract?


An Indian tribe or tribal organization may require that some or all

of the standards in this subpart be imposed upon its subcontractors when


carrying out a self-determination contract.


Sec. 900.39 What is the difference between a standard and a system?


(a) Standards are the minimum baseline requirements for the


performance of an activity. Standards establish the ``what'' that an


activity should accomplish.


(b) Systems are the procedural mechanisms and processes for the day-


to-day conduct of an activity. Systems are ``how'' the activity will be


accomplished.


Sec. 900.40 When are Indian tribe or tribal organization management


standards and management systems evaluated?


(a) Management standards are evaluated by the Secretary when the


Indian tribe or tribal organization submits an initial contract


proposal.


(b) Management systems are evaluated by an independent auditor


through the annual single agency audit report that is required by the


Act and OMB Circular A-128.


Sec. 900.41 How long must an Indian tribe or tribal organization keep


management system records?


The Indian tribe or tribal organization must retain financial,


procurement and property records for the minimum periods described


below. Electronic, magnetic or photographic records may be substituted


for hard copies.


(a) Financial records. Financial records include documentation of


supporting costs incurred under the contract. These records must be


retained for three years from the date of submission of the single audit


report to the Secretary.


(b) Procurement records. Procurement records include solicitations,


purchase orders, contracts, payment histories and records applicable of


significant decisions. These records must be retained for three years


after the Indian tribe or tribal organization or subcontractors make


final payment and all other pending matters are closed.


(c) Property management records. Property management records of real


and personal property transactions must be retained for three years from


the date of disposition, replacement, or transfer.


(d) Litigation, audit exceptions and claims. Records pertaining to


any litigation, audit exceptions or claims requiring management systems


data must be retained until the action has been completed.


Standards for Financial Management Systems


Sec. 900.42 What are the general financial management system standards that


apply to an Indian tribe carrying out a self-determination contract?


An Indian tribe shall expend and account for contract funds in


accordance with all applicable tribal laws, regulations, and procedures.


Sec. 900.43 What are the general financial management system standards that


apply to a tribal organization carrying out a self-determination contract?

A tribal organization shall expend and account for contract funds in


accordance with the procedures of the tribal organization.


Sec. 900.44 What minimum general standards apply to all Indian tribe or


tribal organization financial management systems when carrying out a self-


determination contract?


The fiscal control and accounting procedures of an Indian tribe or


tribal organization shall be sufficient to:


(a) Permit preparation of reports required by a self-determination


contract and the Act; and


(b) Permit the tracing of contract funds to a level of expenditure


adequate to establish that they have not been used in violation of any


restrictions or prohibitions contained in any


[[Page 1006]]


statute that applies to the self-determination contract.


Sec. 900.45 What specific minimum requirements shall an Indian tribe or


tribal organization's financial management system contain to meet these


standards?


An Indian tribe or tribal organization's financial management system


shall include provisions for the following seven elements.


(a) Financial reports. The financial management system shall provide


for accurate, current, and complete disclosure of the financial results


of self-determination contract activities. This includes providing the


Secretary a completed Financial Status Report, SF 269A, as negotiated


and agreed to in the self-determination contract.


(b) Accounting records. The financial management system shall


maintain records sufficiently detailed to identify the source and


application of self-determination contract funds received by the Indian


tribe or tribal organization. The system shall contain sufficient


information to identify contract awards, obligations and unobligated


balances, assets, liabilities, outlays, or expenditures and income.


(c) Internal controls. The financial management system shall


maintain effective control and accountability for all self-determination


contract funds received and for all Federal real property, personal


property, and other assets furnished for use by the Indian tribe or


tribal organization under the self-determination contract.


(d) Budget controls. The financial management system shall permit


the comparison of actual expenditures or outlays with the amounts


budgeted by the Indian tribe or tribal organization for each self-


determination contract.


(e) Allowable costs. The financial management system shall be


sufficient to determine the reasonableness, allowability, and


allocability of self-determination contract costs based upon the terms


of the self-determination contract and the Indian tribe or tribal


organization's applicable OMB cost principles, as amended by the Act and


these regulations. (The following chart lists certain OMB Circulars and


suggests the entities that may use each, but the final selection of the


applicable circular may differ from those shown, as agreed to by the


Indian tribe or tribal organization and the Secretary. Agreements


between an Indian tribe or tribal organization and the Secretary


currently in place do not require renegotiation.) Copies of these

------------------------------------------------------------------------

------------------------------------------------------------------------

------------------------------------------------------------------------

circulars are available from the Executive Office of the President,


Publications Service, 725 17th Street N. W., Washington, D. C. 20503.


Type of tribal organization Applicable OMB cost circular


Tribal Government...................... A-87, ``Cost Principles for


State, Local and Indian Tribal


Governments.''


Tribal private non-profit other than: A-122, ``Cost Principles for


(1) an institution of higher Non-Profit Organizations.''


education, (2) a hospital, or (3) an


organization named in OMB Circular A-


122 as not subject to that circular.


Tribal educational institution......... A-21, ``Cost Principles for


Educational Institutions.''


(f) Source documentation. The financial management system shall


contain accounting records that are supported by source documentation,


e.g., canceled checks, paid bills, payroll records, time and attendance


records, contract award documents, purchase orders, and other primary


records that support self-determination contract fund expenditures.


(g) Cash management. The financial management system shall provide


for accurate, current, and complete disclosure of cash revenues


disbursements, cash-on-hand balances, and obligations by source and


application for each Indian tribe or tribal organization, and


subcontractor if applicable, so that complete and accurate cash


transactions may be prepared as required by the self-determination


contract.


[[Page 1007]]


Sec. 900.46 What requirements are imposed upon the Secretary for financial


management by these standards?


The Secretary shall establish procedures, consistent with Treasury


regulations as modified by the Act, for the transfer of funds from the


United States to the Indian tribe or tribal organization in strict


compliance with the self-determination contract and the annual funding


agreement.


Procurement Management System Standards


Sec. 900.47 When procuring property or services with self-determination


contract funds, can an Indian tribe or tribal organization follow the same


procurement policies and procedures applicable to other Indian tribe or


tribal organization funds?


Indian tribes and tribal organizations shall have standards that


conform to the standards in this subpart. If the Indian tribe or tribal


organization relies upon standards different than those described below, it


shall identify the standards it will use as a proposed waiver in the initial


contract proposal or as a waiver request to an existing


contract.

Sec. 900.48 If the Indian tribe or tribal organization does not propose


different standards, what basic standards shall the Indian tribe or tribal


organization follow?


(a) The Indian tribe or tribal organization shall ensure that its


vendors and/or subcontractors perform in accordance with the terms,


conditions, and specifications of their contracts or purchase orders.


(b) The Indian tribe or tribal organization shall maintain written


standards of conduct governing the performance of its employees who


award and administer contracts.


(1) No employee, officer, elected official, or agent of the Indian


tribe or tribal organization shall participate in the selection, award,


or administration of a procurement supported by Federal funds if a


conflict of interest, real or apparent, would be involved.


(2) An employee, officer, elected official, or agent of an Indian


tribe or tribal organization, or of a subcontractor of the Indian tribe


or tribal organization, is not allowed to solicit or accept gratuities,


favors, or anything of monetary value from contractors, potential


contractors, or parties to sub-agreements, with the following


exemptions. The Indian tribe or tribal organization may exempt a


financial interest that is not substantial or a gift that is an


unsolicited item of nominal value.


(3) These standards shall also provide for penalties, sanctions, or


other disciplinary actions for violations of the standards.


(c) The Indian tribe or tribal organization shall review proposed


procurements to avoid buying unnecessary or duplicative items and ensure the


reasonableness of the price. The Indian tribe or tribal organization should


consider consolidating or breaking out procurement to obtain more economical


purchases. Where appropriate, the Indian tribe or tribal organization shall


compare leasing and purchasing alternatives to determine which is more


economical.


(d) The Indian tribe or tribal organization shall conduct all major


procurement transactions by providing full and open competition, to the


extent necessary to assure efficient expenditure of contract funds and


to the extent feasible in the local area.


(1) Indian tribes or tribal organizations shall develop their own


definition for ``major procurement transactions.''


(2) As provided in sections 7 (b) and (c) of the Act, Indian


preference and tribal preferences shall be applied in any procurement


award.


(e) The Indian tribe or tribal organization shall make procurement


awards only to responsible entities who have the ability to perform


successfully under the terms and conditions of the proposed procurement.


In making this judgment, the Indian tribe or tribal organization will


consider such matters as the contractor's integrity, its compliance with


public policy, its record of past performance, and its financial and


technical resources.


(f) The Indian tribe or tribal organization shall maintain records


on the significant history of all major procurement transactions. These


records may include, but are not limited to,


[[Page 1008]]


the rationale for the method of procurement, the selection of contract


type, the contract selection or rejection, and the basis for the


contract price.

(g) The Indian tribe or tribal organization is solely responsible,


using good administrative practice and sound business judgment, for


processing and settling all contractual and administrative issues


arising out of a procurement. These issues include, but are not limited


to, source evaluation, protests, disputes, and claims.


(1) The settlement of any protest, dispute, or claim shall not


relieve the Indian tribe or tribal organization of any obligations under a


self-determination contract.


(2) Violations of law shall be referred to the tribal or Federal


authority having proper jurisdiction.


Sec. 900.49 What procurement standards apply to subcontracts?


Each subcontract entered into under the Act shall at a minimum:


(a) Be in writing;


(b) Identify the interested parties, their authorities, and the


purposes of the contract;


(c) State the work to be performed under the contract;


(d) State the process for making any claim, the payments to be made, and


the terms of the contract, which shall be fixed; and


(e) Be subject to sections 7 (b) and (c) of the Act.


Sec. 900.50 What Federal laws, regulations, and Executive Orders apply to


subcontractors?


Certain provisions of the Act as well as other applicable Federal


laws, regulations, and Executive Orders apply to subcontracts awarded


under self-determination contracts. As a result, subcontracts should


contain a provision informing the recipient that their award is funded


with Indian Self-Determination Act funds and that the recipient is


responsible for identifying and ensuring compliance with applicable


Federal laws, regulations, and Executive Orders. The Secretary and the


Indian tribe or tribal organization may, through negotiation, identify


all or a portion of such requirements in the self-determination contract and,


if so identified, these requirements should be identified in subcontracts.


Property Management System Standards


Sec. 900.51 What is an Indian tribe or tribal organization's property


management system expected to do?


An Indian tribe or tribal organization's property management system


shall account for all property furnished or transferred by the Secretary for


use under a self-determination contract or acquired with contract funds. The


property management system shall contain requirements for the use, care,


maintenance, and disposition of Federally-owned and other property as


follows:


(a) Where title vests in the Indian tribe, in accordance with tribal law


and procedures; or


(b) In the case of a tribal organization, according to the internal


property procedures of the tribal organization.


Sec. 900.52 What type of property is the property management system required


to track?


The property management system of the Indian tribe or tribal

organization shall track:


(a) Personal property with an acquisition value in excess of $5,000


per item;


(b) Sensitive personal property, which is all personal property that is


subject to theft and pilferage, as defined by the Indian tribe or tribal


organization. All firearms shall be considered sensitive personal property;


and


(c) Real property provided by the Secretary for use under the


contract.


Sec. 900.53 What kind of records shall the property management system


maintain?


The property management system shall maintain records that


accurately describe the property, including any serial number or other


identification number. These records should contain information such as


the source, titleholder, acquisition date, cost, share of Federal


participation in the cost, location, use and condition of the property,


and the date of disposal and sale price, if any.


[[Page 1009]]


Sec. 900.54 Should the property management system prescribe internal


controls?


Yes. Effective internal controls should include procedures:


(a) For the conduct of periodic inventories;


(b) To prevent loss or damage to property; and


(c) To ensure that property is used for an Indian tribe or tribal


organization's self-determination contract(s) until the property is


declared excess to the needs of the contract consistent with the Indian


tribe or tribal organization's property management system.


Sec. 900.55 What are the standards for inventories?


A physical inventory should be conducted at least once every 2


years. The results of the inventory shall be reconciled with the Indian


tribe or tribal organization's internal property and accounting records.


Sec. 900.56 What maintenance is required for property?


Required maintenance includes the performance of actions necessary


to keep the property in good working condition, the procedures


recommended by equipment manufacturers, and steps necessary to protect


the interests of the contractor and the Secretary in any express


warranties or guarantees covering the property.


Sec. 900.57 What if the Indian tribe or tribal organization chooses not to


take title to property furnished or acquired under the contract?


If the Indian tribe or tribal organization chooses not to take title to


property furnished by the government or acquired with contract funds, title


to the property remains vested in the Secretary. A list of


Federally-owned property to be used under the contract shall be included in


the contract.

Sec. 900.58 Do the same accountability and control procedures described


above apply to Federal property?


Yes, except that requirements for the inventory and disposal of


Federal property are different.


Sec. 900.59 How are the inventory requirements for Federal property


different than for tribal property?


There are three additional requirements:


(a) The Indian tribe or tribal organization shall conduct a physical


inventory of the Federally-owned property and reconcile the results with the


Indian tribe or tribal organization's property records annually, rather than


every 2 years;


(b) Within 90 days following the end of an annual funding agreement, the


Indian tribe or tribal organization shall certify and submit to the Secretary


an annual inventory of all Federally-owned real and personal property used in


the contracted program; and


(c) The inventory shall report any increase or decrease of $5,000 or more


in the value of any item of real property.


Sec. 900.60 How does an Indian tribe or tribal organization dispose of


Federal personal property?


The Indian tribe or tribal organization shall report to the


Secretary in writing any Federally-owned personal property that is worn


out, lost, stolen, damaged beyond repair, or no longer needed for the


performance of the contract.


(a) The Indian tribe or tribal organization shall state whether the


Indian tribe or tribal organization wants to dispose of or return the


property.


(b) If the Secretary does not respond within 60 days, the Indian


tribe or tribal organization may return the property to the Secretary,


who shall accept transfer, custody, control, and responsibility for the


property (together with all associated costs).

April 2002 

FISCAL YEAR 2003 

PART TWO 

APPLICATION 

FORM 

(PHS 5161-1, revised 7/00) 

Department of Health and Human Services 

Public Health Service 

Indian Health Service