Illinois Administrative Code › Title 47 - HOUSING AND COMMUNITY DEVELOPMENT › Part 1 - STANDARD GRANT ADMINISTRATIVE REQUIREMENTS › Appendix B - Office of Management and Budget Circular A-110

Current through Register Vol. 48, No. 28, July 12, 2024
Grants and Agreements with Institutions of Higher Education,
				Hospital, and Other Nonprofit Organization
Uniform Administrative Requirements
(July 20, 1976)
Attachment A: Cash Depositories
1. This attachment sets forth standards governing
				the use of banks and other institutions as depositories of funds advanced under
				grants and other agreements.
2. Except for situations described in paragraphs 3,
				4, and 5, no Federal sponsoring agency shall:
a. Require physical segregation of cash depositories
				for funds which are provided to a recipient.
b. Establish any eligibility requirements for cash
				depositories for funds which are provided to a recipient.
3. A separate bank account shall be required when
				applicable letter-of-credit agreements provide that drawdowns will be made when
				the recipient's checks are presented to the bank for payment.
4. Any moneys advanced to a recipient which are
				subject to the control or regulation of the United States or any of its
				officers, agents or employees (public moneys as defined in Treasury Circular
				No. 176 ( 31 CFR 202(1984) ), as amended) must be deposited in a bank with
				Federal Deposit Insurance Corporation (FDIC) insurance coverage and the balance
				exceeding the FDIC coverage must be collaterally secured.
5. Consistent with the national goal of expanding
				the opportunities for minority business enterprises, recipients and
				subrecipients shall be encouraged to use minority banks (a bank which is owned
				at least 50 percent by minority group members).
Attachment B: Bonding and Insurance
1. This attachment sets forth bonding and insurance
				requirements for grants and other agreements with recipients. No other bonding
				and insurance requirements shall be imposed other than those normally required
				by the recipient.
2. Except as otherwise required by law, a grant or
				other agreement that requires the contracting (or subcontracting) for
				construction or facility improvements shall provide for the recipient to follow
				its own requirements relating to bid guarantees, performance bonds, and payment
				bond unless the construction contract or subcontract exceeds $100,000. For
				those contracts or subcontracts exceeding $100,000, the Federal agency may
				accept the bonding policy and requirements of the grantee provided the Federal
				agency has made a determination that the Government's interest is adequately
				protected. If such a determination has not been made, the minimum requirements
				shall be as follows:
a. A bid guarantee from each bidder equivalent to
				five percent of the bid price. - The "bid guarantee" shall consist of a firm
				commitment such as a bid bond, certified check, or other negotiable instrument
				accompanying a bid as assurance that the bidder will, upon acceptance of his
				bid, execute such contractual documents as may be required within the time
				specified.
b. A performance bond on the part of the contractor
				for 100 percent of the contract price. - A "performance bond" is one executed
				in connection with a contract to secure fulfillment of all the contractor's
				obligations under such contract.
c. A payment bond on the part of the contractor for
				100 percent of the contract price. - A "payment bond" is one executed in
				connection with a contract to assure payment as required by law of all persons
				supplying labor and material in the execution of the work provided for in the
				contract.
3. Where the Federal Government guarantees or
				insures the repayment of money agency, at its discretion, may require adequate
				bonding and insurance if the bonding and insurance requirements of the
				recipient are not deemed adequate to protect the interest of the Federal
				Government. (See 47 Ill. Adm. Code
				1.50(c),
				Cash Management)
4. The Federal sponsoring agency may require
				adequate fidelity bond coverage where the recipient has no coverage and the
				bond is needed to protect the Government's interest.
5. Where bonds are required in the situations
				described above, the bonds shall be obtained from companies holding
				certificates of authority as acceptable sureties ( 31 CFR 223 ).
Attachment C: Retention and Custodial Requirement for
				Records
1. This attachment sets forth record retention
				requirements for grants and other agreements with recipients. Federal
				sponsoring agencies shall not impose any record retention requirements upon
				recipients other than those described below.
2. Except for paragraph 1, this attachment also
				applies to subrecipients as referred to in paragraph 5 of the basic
				circular.
3. Financial records, supporting documents,
				statistical records, and all other records pertinent to an agreement shall be
				retained for a period of three years, with the following qualifications:
a. If any litigation, claim or audit is started
				before the expiration of the 3-year period, the records shall be retained until
				all litigations, claims, or audit findings involving the records have been
				resolved.
b. Records for nonexpendable property acquired with
				Federal funds shall be retained for 3 years after its final disposition.
c. When records are transferred to or maintained by
				the Federal sponsoring agency, the 3-year retention requirements is not
				applicable to the recipient.
4. The retention period starts from the date of the
				submission of the final expenditure report or, for grants and other agreements
				that are renewed annually, from the date of the submission of the annual
				financial status report.
5. Recipient organizations should be authorized by
				the Federal sponsoring agency, if they so desire, to substitute microfilm
				copies in lieu of original records. (The Department will forward all requests
				to microfilm records to the Local Records Commission, which will render a
				decision based on the Local Records Commission Regulations (44 Ill. Adm. Code
				4000) of the Local Records Commission and Local Records Act (Ill. Rev. Stat.
				1983, ch. 116, pars. 43.102 et seq.).)
6. The Federal sponsoring agency shall request
				transfer of certain records to its custody from recipient organizations when it
				determines that the records possess long-term retention value. However, in
				order to avoid duplication record-keeping, a Federal sponsoring agency may make
				arrangements with recipient organizations to retain any records that are
				continuously needed for joint use. (The Department will take possession of
				grant records only when the Grantee no longer exists.)
7. The head of the Federal sponsoring agency and the
				Comptroller General of the United States, or any of their duly authorized
				representative, shall have access to any pertinent books, documents, papers,
				and records of the recipient organization, and their subrecipients, to make
				audits, examinations, excerpts and transcripts.
8. Unless otherwise required by law, no Federal
				sponsoring agency shall place restrictions on recipient organizations that will
				limit public access to the records of recipient organizations that are
				pertinent to a grant or agreement except when the agency can demonstrate that
				such records must be kept confidential and would have been excepted from
				disclosure pursuant to the Freedom of Information Act (
				5
				U.S.C. 552 ) if the records had belonged to
				the Federal sponsoring agency.
Attachment D: Program Income
1. Federal sponsoring agencies shall apply the
				standards set forth in this attachment in requiring recipient organizations to
				account for program income related to projects financed in whole or in part
				with Federal funds. Program income represents gross income earned by the
				recipient from the federally supported activities. Such earnings exclude
				interest earned on advances and may include, but will not be limited to, income
				from service fees, sale of commodities, usage or rental fees, and royalties on
				patents and copyrights.
2. Interest earned on advances of Federal funds
				shall be remitted to the Federal agency except for interest earned on advances
				to States or instrumentalities of a State as provided by the Intergovernmental
				Cooperation Act of 1968 ( Public Law 90-577 ).
3. Proceeds from the sale of real and personal
				property either provided by the Federal Government or purchased in whole or in
				part with Federal funds, shall be handled in accordance with Attachment N to
				this circular pertaining to property management.
4. Unless the agreement provides otherwise,
				recipients shall have no obligation to the Federal Government with respect to
				royalties received as a result of copyrights or patents produced under the
				grant or other agreement (see paragraph 8, Attachment N).
5. All other program income earned during the
				project period shall be retained by the recipient and, in accordance with the
				grant or other agreement, shall be:
a. Added to funds committed to the project by the
				Federal sponsoring agency and recipient organization and be used to further
				eligible program objectives;
b. used to finance the non-federal share of the
				project when approved by the Federal sponsoring agency; or
c. Deducted from the total project costs in
				determining the net costs on which the Federal share of costs will be
				based.
Attachment E: Cost Sharing and Matching
1. This attachment sets forth criteria and
				procedures for the allow- ability of cash and in-kind contributions made by
				recipients or subrecipients (as referred to in paragraph 5 of the basic
				circular), or third parties in satisfying cost sharing and matching
				requirements of Federal sponsoring agencies. This attachment also establishes
				criteria for the evaluation of in-kind contributions made by third
				parties.
2. The following definitions apply for the purpose
				of this attachment:
a. Project costs. - Project costs (as set forth in
				the applicable Federal cost principles) incurred by a recipient and the value
				of the in-kind contributions made by the recipient or third parties in
				accomplishing the objectives of the grant or other agreement during the project
				or program period.
b. Cost sharing and matching. - In general cost
				sharing and matching represent that portion of project or program costs not
				borne by the Federal Government.
c. Cash contributions. - Cash contributions
				represent the recipients cash outlay, including the outlay of money contributed
				to the recipient by non-Federal third parties.
d. In-kind contributions. - In-kind contributions
				represent the value of noncash contributions provided by the recipients and
				non-Federal third parties. Only when authorized by Federal legislation, may
				property purchased with Federal funds be considered as the recipient's in-kind
				contributions. In-kind contributions may be in the form of charges for real
				property and non-expendable personal property, and the value of goods and
				services directly benefiting and specifically identifiable to the project or
				program.
3. General guidelines for computing cost sharing or
				matching are as follows:
a. Cost sharing or matching may consist of:
(1) Charges incurred by the recipient as project
				costs. (Not all charges require cash outlays by the recipient during the
				project period: examples are depreciation and use charges for building and
				equipment.)
(2) Project costs financed with cash contribution or
				donated to the recipient by other non-Federal public agencies and institutions,
				and private organizations and individuals, and
(3) Project costs represented by services and real
				and personal property, or used thereof, donated by other non-Federal publics
				agencies and institutions, and private organizations and individuals.
b. All contributions both cash and in-kind, shall be
				accepted as part of the recipient's cost sharing and matching when such
				contributions meet all of the following criteria:
(1) Are verifiable from the recipient's
				records;
(2) Are not included as contributions for any other
				federally- assisted program;
(3) Are necessary and reasonable for proper and
				efficient accomplishment of project objectives;
(4) Are types of charges that would be allowable
				under the applicable cost principles;
(5) Are not paid by the Federal Government under
				another assistance agreement (unless the agreement is authorized by Federal law
				to be used for cost sharing or matching);
(6) Are provided for in the approved budget when
				required by the Federal agency; and
(7) Conform to other provisions of this
				attachment
4. Specific procedures for the recipients in
				establishing the value of in-kind contribution from non-Federal third parties
				are set forth below:
a. Valuation of volunteer services. - Volunteer
				services may be furnished by professional and technical personnel, consultants,
				and other skilled and unskilled labor. Volunteer services may be counted as
				cost sharing or matching if the service is an integral and necessary part of an
				approved program. ("Integral and necessary" is defined as an allowable cost for
				the program if purchased.)
(1) Rates for volunteer services. - Rates for
				volunteers should be consistent with those paid for similar work in the
				recipient's organization. In those instances in which the required skills are
				not found in the recipient organization, rates should be consistent with those
				paid for similar work in the labor market in which recipient competes for the
				kind of services involved. (Rates shall be based on the Department of
				Employment Security's Occupational Employment Statistics Survey.)
(2) Volunteers employed by other organizations. -
				When an employer other than the recipient furnishes the services of an
				employee, these services shall be valued at the employee's regular rate of pay
				(exclusive of fringe benefits and overhead cost) provided these services are in
				the same skill for which the employee is normally paid.
b. Valuation of donated, expendable personal
				property. - Donated expendable personal property includes such items as
				expendable equipment, office supplies, laboratory supplies or workshop and
				classroom supplies. Value assessed to expendable personal property included in
				the cost or matching share should be reasonable and should not exceed the
				market value of the property at the time of the donation.
c. Valuation of donated, nonexpendable personal
				property, buildings, and land or use thereof.
(1) The method used for charging cost sharing or
				matching for donated nonexpendable personal property, buildings and land may
				differ according to the purpose of the grant or other agreement as
				follows:
(a) If the purpose of grant or other agreement is to
				assist the recipient in the acquisition of equipment, buildings or land, the
				total value of the donated property may be claimed as cost sharing or
				matching.
(b) If the purpose of the agreement is to support
				activities that require the use of equipment, buildings or land, depreciation
				or use charges for equipment and buildings may be made. The full value of
				equipment or other capital assets and fair rental charges for land may be
				allowed provided that the Federal agency has approved the charges.
(2) The value of donated property will be determined
				in accordance with the usual accounting policies of the recipient with the
				following qualifications.
(a) Land and buildings. - The value of donated land
				and buildings may not exceed its fair market value, at the time of donation to
				the recipient as established by an independent appraiser (e.g., certified real
				property appraiser or GSA representatives) and certified by a responsible
				official of the recipient.
(b) Nonexpendable personal property. - The value of
				donated nonexpendable personal property shall not exceed the fair market value
				of equipment and property of the same age and condition at the time of
				donation.
(c) Use of space. - The value of donated space shall
				not exceed the fair rental value of comparable space as established by an
				independent appraisal of comparable space and facilities in a privately-owned
				building in the same locality.
(d) Loaned equipment. - The value of loaned
				equipment shall not exceed its fair rental value.
5. The following requirements pertain to the
				recipient's supporting records for in-kind contributions from non-Federal third
				parties.
a. Volunteer services must be documented and, to the
				extent feasible, support by the same methods used by the recipient for its
				employees.
b. The basis for determining the valuation for
				personal services, material, equipment, buildings and land must be
				documented.
Attachment F: Standards for Financial Management Systems
1. This attachment prescribes standards for
				financial management systems of recipients. Federal sponsoring agencies shall
				not impose additional standards on recipients unless specifically provided for
				in the applicable statutes (e.g., the Joint Funding Simplification Act, P.L.
				93-510 ) or other attachments to this circular. However, Federal sponsoring
				agencies are encouraged to make suggestions and assist recipients in
				establishing or improving financial management systems when such assistance is
				needed or requested.
2. Recipients' financial management systems shall
				provide for:
a. Accurate, current and complete disclosure of the
				financial results of each federally sponsored project or program in accordance
				with the reporting requirements set forth in Attachment G to this circular.
				When a Federal sponsoring agency requires reporting on an accrual basis, the
				recipient shall not be required to establish an accrual accounting system but
				shall develop such accrual data for its reports on the basis of an analysis of
				the documentation on hand.
b. Records that identify adequately the source and
				application of funds for federally sponsored activities. These records shall
				contain information pertaining to Federal awards, authorizations, obligations,
				unobligated balances, assets, outlays, and income.
c. Effective control over and accountability for all
				funds, property and other assets. Recipients shall adequately safeguard all
				such assets and shall assure that they are used solely for authorized purposes.
				(See 47 Ill. Adm. Code
				1.90,
				Financial Management Standards.)
d. Comparison of actual outlays with budget amounts
				for each grant or other agreement. Whenever appropriate or required by the
				Federal sponsoring agency, financial information should be related to
				performance and unit cost data.
e. Procedures to minimize the time elapsing between
				the transfer of funds from the U.S. Treasury and the disbursement by the
				recipient, whenever funds are advanced by the Federal Government. When advances
				are made by a letter-of-credit method, the recipient shall make drawdowns as
				close as possible to the time of making disbursements.
f. Procedures for determining the reasonableness,
				allowability and allocability of costs in accordance with the provisions of the
				applicable Federal cost principles and the terms of the grant or other
				agreement.
g. Accounting records that are supported by source
				documentation.
h. Examinations in the form of audits or internal
				audits. Such audits shall be made by qualified individuals who are sufficiently
				independent of those who authorize the expenditure of Federal funds, to produce
				unbiased opinions, conclusions or judgments. These examinations are intended to
				ascertain the effectiveness of the financial management systems and internal
				procedures that have been established to meet the terms and conditions of the
				agreements. It is intended that each agreement awarded to the recipient be
				examined. Generally, examinations should be conducted on an organization wide
				basis to test the fiscal integrity of financial transactions, as well as
				compliance with the terms and conditions of the Federal grants and other
				agreements. Such tests would include an appropriate sampling of Federal
				agreements. Examinations will be conducted with reasonable frequency, on a
				continuing basis or at scheduled intervals, usually annually, but not less
				frequently than every two years. The frequency of these examinations shall
				depend upon the nature, size and the complexity of the activity. These
				examinations do not relieve Federal agencies of their audit responsibilities,
				but may affect the frequency and scope of such audits.
i. A systematic method to assure timely and
				appropriate resolution of audit findings and recommendations.
3. Primary recipients shall require subrecipients
				(as defined in paragraph 5 of the basic circular) to adopt the standards in
				paragraph 2, above except for the requirement in subparagraph 2e, regarding the
				use of the letter-of-credit method and that part of subparagraph 2a, regarding
				reporting forms and frequencies prescribed in Attachment G to this
				circular.
Attachment G: Financial Reporting Requirements
1. This attachment prescribes uniform reporting
				procedures for recipients to: summarize expenditures made and Federal funds
				unexpended for each award, report the status of Federal cash advanced, request
				advances and reimbursement when the letter-of-credit method is not used; and
				promulgates standard forms incident thereto.
2. The following definitions apply for purposes of
				this attachment:
a. Accrued expenditures. - Accrued expenditures are
				the charges incurred by the recipient during a given period requiring the
				provision of funds for (1) goods and other tangible property received; (2)
				services performed by employees, contractors, subrecipients, and other payees,
				and (3) other amounts becoming owed under programs for which no current
				services or performance is required.
b. Accrued income. - Accrued income is the sum of
				(1) earnings during a given period from (i) services performed by the
				recipient; and (ii) goods and other tangible property delivered to purchasers;
				and (2) amounts becoming owed to the recipient for which no current services or
				performance is required by the recipient.
c. Federal funds authorized. - Federal funds
				authorized are the total amount of Federal funds obligated by the Federal
				Government for use by the recipient. This amount may include any authorized
				carry-over of unobligated funds from prior fiscal years when permitted by law
				or agency regulation.
d. In-kind contributions. - In-kind contributions
				are defined in Attachment E to this circular.
e. Obligations. - Obligations are the amounts of
				orders placed, contracts and grants awarded, services received, and similar
				transactions during a given period that will require payment by the recipient
				during the same or a future period.
f. Outlays. - Outlays or expenditures represent
				charges made to the project or program. They may be reported on a cash or
				accrual basis. For reports prepared on a cash basis, outlays are the sum of
				actual cash disbursements for direct charges for goods and services, the amount
				of indirect expense charged, the value of in-kind contributions applied, and
				the amount of cash advances and payments made to subrecipients. For reports
				prepared on an accrual basis, outlays are the sum of actual cash disbursements
				for direct charges for goods and services, the amount of indirect expense
				incurred, the value of in-kind contributions applied, and the net increase (or
				decrease) in the amounts owed by the recipient for goods and other property
				received, for services performed by employees, contractors, subrecipients and
				other payees and other amounts becoming owed under programs for which no
				current services or performance are required.
g. Program income. - Program income is defined in
				Attachment D of this circular. It may be reported on a cash or accrual basis,
				whichever is used for reporting outlays.
h. Unobligated balance. - The unobligated balance is
				the portion of the funds authorized by the Federal sponsoring agency that has
				not been obligated by the recipient and is determined by deducting the
				cumulative obligations from the cumulative funds authorized.
i. Unliquidated obligations. - For reports prepared
				on a cash basis, unliquidated obligations represent the amount of obligations
				incurred by the recipient that has not been paid. For reports prepared on an
				accrued expenditure basis, they represent the amount of obligations incurred by
				the recipient for which an outlay has not been recorded.
Attachment H: Monitoring and Reporting Program
				Performance
1. This attachment sets forth the procedures for
				monitoring and reporting program performance of recipients.
2. Recipients shall monitor the performance under
				grants and other agreements and, where appropriate, ensure that time schedules
				are being met, projected work units by time periods are being accomplished, and
				other performance goals are being achieved. This review shall be made for each
				program, function, or activity of each agreement as set forth in the approved
				application or award document.
3. Recipients shall submit a performance report
				(technical report) for each agreement that briefly presents the following
				information for each program, function, or activity involved as prescribed by
				the Federal sponsoring agency:
a. A comparison of actual accomplishments with the
				goals established for the period, the findings of the investigator, or both. If
				the output of programs or projects can be readily quantified, such quantitative
				data should be related to cost data for computation of units costs.
b. Reasons why established goals were not
				met.
c. Other pertinent information including, when
				appropriate, analysis and explanation of cost overruns or high unit
				costs.
4. Between the required performance reporting dates,
				events may occur that have significant impact upon the project or program. In
				such instances, the recipient shall inform the Federal sponsoring agency as
				soon as the following types of conditions become known:
a. Problems, delays, or adverse conditions that will
				materially affect the ability to attain program objectives, prevent the meeting
				of time schedules and goals, or preclude the attainment of project work units
				by established time periods. This disclosure shall be accompanied by a
				statement of the action taken, or contemplated, and any Federal assistant
				needed to resolve the situation.
b. Favorable developments or events that enable time
				schedules to be met sooner than anticipated or more work units to be produced
				than originally projected.
5. If any performance review conducted by the
				recipient discloses the need for change in the budget estimates, the recipient
				shall submit a request for budget revision.
6. The Federal sponsoring agency shall make site
				visits as frequently as practicable to:
a. Review program accomplishments and management
				control systems, and
b. Provide such technical assistance as may be
				required.
Attachment N: Property Management Standards
1. This attachment prescribes uniform standards
				governing management of property furnished by the Federal Government or whose
				cost was charged to a project supported by a Federal grant or other agreement.
				Federal sponsoring agencies shall require recipients to observe these standards
				under grants and other agreements and shall not impose additional requirements
				unless specifically required by Federal law. The recipient may use its own
				property management standards and procedures provided it observes the
				provisions of this attachment. This attachment also applies to subrecipients as
				referred to in paragraph 5 of the basic circular.
2. The following definitions apply for the purpose
				of this attachment:
a. Real property. - Real property means land,
				including land improvements, structures and appurtenances thereto, but
				excluding movable machinery and equipment.
b. Personal property. - Personal property of any
				kind except real property. It may be tangible-having physical existence, or
				intangible-having no physical existence, such as patents, inventions and
				copyrights.
c. Nonexpendable personal property. - Nonexpendable
				personal property means tangible personal property having a useful life of more
				than one year and an acquisition cost of $300 or more per unit. A recipient may
				use its own definition of nonexpendable personal property provided that the
				definition would at least include all tangible personal property as defined
				above.
d. Expendable personal property. - Expendable
				personal property refers to all tangible personal property other than
				nonexpendable property.
e. Excess property. - Excess property means property
				under the control of any Federal agency that, as determined by the head
				thereof, is no longer required for its needs or the discharge of its
				responsibilities.
f. Acquisition cost of purchased nonexpendable
				personal property. - Acquisition cost of an item of purchased nonexpendable
				personal property means the net invoice unit price of the property including
				the cost of modifications, attachments, accessories, or auxiliary apparatus
				necessary to make the property usable for the purpose for which it was
				acquired. Other charges such as the cost of installation, transportation,
				taxes, duty or protective in-transit insurance, shall be included or excluded
				from the unit acquisition cost in accordance with the recipient's regular
				accounting practices.
g. Exempt property. - Exempt property means tangible
				personal property acquired in whole or in part with Federal funds, and title to
				which is vested in the recipient without further obligation to the Federal
				Government except as provided in subparagraph 6a below. Such unconditional
				vesting of title will be pursuant to any Federal legislation that provides the
				Federal sponsoring agency with adequate authority.
3. Real property. - Each Federal sponsoring agency
				shall prescribe requirements for recipients concerning the use and disposition
				of real property acquired partly or wholly under grants or other agreements.
				Unless otherwise provided by statute, such requirements, as a minimum, shall
				contain the following:
a. Title to real property shall vest in the
				recipient subject to the condition that the recipient shall use the real
				property for the authorized purpose of the project, as long as it is
				needed.
b. The recipient shall obtain approval by the
				Federal sponsoring agency for the use of real property in other projects when
				the recipient determines that the property is no longer needed for the purpose
				of the original project. Use in other projects shall be limited to those under
				other federally sponsored projects (i.e., grants or other agreements) or
				programs that have purposes consistent with those authorized for support by the
				Federal sponsoring agency.
c. When the real property is no longer needed as
				provided in a and b above, the recipient shall request disposition instructions
				from the Federal sponsoring agency or its successor Federal sponsoring agency.
				The Federal sponsoring agency shall observe the following rules in the
				disposition instructions:
(1) The recipient 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.
(2) The recipient may be directed to sell the
				property under guidelines provided by the Federal sponsoring agency and pay the
				Federal Government an amount computed by applying the Federal percentage of
				participation in the cost of the original project to the proceeds from sale
				(after deducting actual and reasonable selling and fix-up expenses, if any,
				from the sales proceeds). When the recipient is authorized or required to sell
				the property, proper sales procedures shall be established that provide for
				competition to the extent practicable and result in the highest possible
				return.
(3) The recipient may be directed to transfer title
				to the property to the Federal Government provided that in such cases the
				recipient shall be entitled to compensation computed by applying the
				recipient's percentage of participation in the cost of the program or project
				to the current fair market value of the property.
4. Federally-owned nonexpendable personal property.
				- Title to federally-owned property remains vested in the Federal Government.
				Recipients shall submit annually an inventory listing of federally-owned
				property in their custody to the Federal sponsoring agency. Upon completion of
				the agreement or when the property is no longer needed, the recipient shall
				report the property to the Federal sponsoring agency for further agency
				utilization.
If the Federal sponsoring agency has no further need
				for the property, it shall be declared excess and reported to the General
				Services Administration. Appropriate disposition instructions will be issued to
				the recipient after completion of the Federal agency review.
5. Exempt property. - When statutory authority
				exists, (e.g., P.L. 85-934,
				42 U.S.C.
				1982 ) title to nonexpendable personal
				property acquired with project funds, shall be vested in the recipient upon
				acquisition unless it is determined that to do so is not in furtherance of the
				objectives of the Federal sponsoring agency. When title is vest in the
				recipient, the recipient shall have no other obligation or accountability to
				the Federal Government for its use or disposition except as provided in 6a
				below.
6. Other nonexpendable property. - When other
				nonexpendable tangible personal property is acquired by a recipient with
				project funds, title shall not be taken by the Federal Government but shall
				vest in the recipient subject to the following conditions:
a. Right to transfer title. - For items of
				nonexpendable personal property having a unit acquisition cost of $1,000 or
				more, the Federal sponsoring agency may reserve the right to transfer the title
				to the Federal Government or to a third party named by the Federal Government
				when such third party is otherwise eligible under existing statutes. Such
				reservation shall be subject to the following standards.
(1) The property shall be appropriately identified
				in the grant or other agreement or otherwise made known to the recipient in
				writing.
(2) The Federal sponsoring agency shall issue
				disposition instructions within 120 calendar days after the end of the Federal
				support of the project for which it was acquired. If the Federal sponsoring
				agency fails to issue disposition instructions within the 120 calendar day
				period, the recipient shall apply the standards of subparagraphs 6b and 6c as
				appropriate.
(3) When the Federal sponsoring agency exercises its
				right to take title, the personal property shall be subject to the provisions
				for federally-owned nonexpendable property discussed in paragraph 4,
				above.
(4) When title is transferred either to the Federal
				Government or to a third party the provisions of subparagraph 6c(2)(b) should
				be followed.
b. Use of other tangible nonexpendable property for
				which the recipient has title.
(1) The recipient shall use the property in the
				project or program for which it was acquired as long as needed, whether or not
				the project or program continues to be supported by Federal funds. When no
				longer needed for the original project or program, the recipient shall use the
				property in connection with its other federally sponsored activities, in the
				following order of priority:
(a) Activities, in the following order of
				priority;
(b) Activities sponsored by other Federal
				agencies.
(2) Shared use. - During the time that nonexempt
				nonexpendable personal property is held for use on the project or program for
				which it was acquired, the recipient shall make it available for use on other
				projects or programs if such other use will not interfere with the work on the
				project or program for which the property was originally acquired. First
				preference for such other use shall be given to other projects or programs
				sponsored by the Federal agency that financed the property; second preference
				shall be given to projects or programs sponsored by other Federal agencies. If
				the property is owned by the Federal Government, use on other activities not
				sponsored by the Federal Government shall be permissible if authorized by the
				Federal agency. User charges should be considered if appropriate.
c. Disposition of other nonexpendable property. -
				When the recipient no longer needs the property as provided in 6b above, the
				property may be used for other activities in accordance with the following
				standards:
(1) Nonexpendable property with a unit acquisition
				cost of less than $1,000. - The recipient may use the property for other
				activities without reimbursement to the Federal Government or sell the property
				and retain the proceeds.
(2) Nonexpendable personal property with a unit
				acquisition cost of $1,000 or more. - The recipient may retain the property for
				other uses provided that compensation is made to the original Federal
				sponsoring agency or its successor. The amount of compensation shall be
				computed by applying the percentage of Federal participation in the cost of the
				original project or program to the current fair market value of property. If
				the recipient has no need for the property and the property has further use
				value, the recipient shall request disposition instructions from the original
				sponsoring agency. The Federal sponsoring agency shall determine whether the
				property can be used to meet the agency's requirements. If no requirement
				exists within that agency, the availability of the property shall be reported
				to the General Services Administration by the Federal agency to determine
				whether a requirement for the property exists in other Federal agencies. The
				Federal sponsoring agency shall issue instructions to the recipient no later
				than 120 days after the recipient's request and the following procedures shall
				govern:
(a) If so instructed or if disposition instructions
				are not issued within 120 calendar days after the recipient's request, the
				recipient shall sell the property and reimburse the Federal sponsoring agency
				an amount computed by applying to the sales proceeds the percentage of Federal
				participation in the cost of the original project or program. However, the
				recipient shall be permitted to deduct and retain from the Federal share $100
				or ten percent of the proceeds, whichever is greater, for the recipient's
				selling and handling expenses.
(b) If the recipient is instructed to ship the
				property elsewhere, the recipient shall be reimbursed by the benefiting Federal
				agency with an amount which is computed by applying the percentage of the
				recipient's participation in the cost of the original grant project or program
				to the current fair market value of the property, plus any reasonable shipping
				or interim storage costs incurred.
(c) If the recipient is instructed to otherwise
				dispose of the property, the recipient shall be reimbursed by the Federal
				sponsoring agency for such costs incurred in its disposition.
(d) Property management standards for nonexpendable
				property. - The recipient's property management standards for nonexpendable
				personal property shall include the following procedural requirements:
(1) Property records shall be maintained accurately
				and shall include:
(a) A description of the property.
(b) Manufacturer's serial number, model number,
				Federal stock number, national stock number, or other identification
				number.
(c) Source of the property, including grant or other
				agreement number.
(d) Whether title vests in the recipient or the
				Federal Government.
(e) Acquisition date (or date received, if the
				property was furnished by the Federal Government) and cost.
(f) Percentage (at the end of the budget year) of
				the project or program for which the property was acquired. (Not applicable to
				property furnished by the Federal Government.)
(g) Location, use the and condition of the property
				and the date the information was reported.
(h) Unit acquisition cost.
(i) Ultimate disposition data, including date of
				disposal and sales price or the method used to determine current fair market
				value where a recipient compensates the Federal sponsoring agency for its
				share.
(2) Property owned by the Federal Government must be
				marked to indicate Federal ownership.
(3) A physical inventory of property shall be taken
				and the results reconciled with the property records at least once every two
				years. Any differences between quantities determined by the physical inspection
				and those shown in the account records shall be investigated to determine the
				causes of the difference. The recipient shall, in connection with the
				inventory, verify the existence, current utilization, and continued need for
				the property.
(4) A control system shall be in effect to insure
				adequate safeguards to prevent loss, damage, or theft of the property. Any
				loss, damage, or theft of nonexpendable property shall be investigated and
				fully documented; if the property was owned by the Federal Government, the
				recipient shall promptly notify the Federal sponsoring agency.
(5) Adequately maintenance procedures shall be
				implemented to keep the property in good condition.
(6) Where the recipient is authorized or required to
				sell the property, proper sales procedures shall be established which would
				provide for competition to the extent practicable and result in the highest
				possible return.
7. Expendable personal property. - Title to
				expendable personal property shall vest in the recipient upon acquisition. If
				there is a residual inventory of such property exceeding $1,000 in total
				aggregate fair market value, upon termination or completion of the grant or
				other agreement, and the property is not needed for any other federally
				sponsored project or program, the recipient shall retain the property for use
				on nonfederally sponsored activities, or sell it, but must in either case,
				compensate the Federal Government for its share. The amount of compensation
				shall be computed in the same manner as nonexpendable personal property.
8. Intangible property
a. Inventions and patents. - If any program produces
				patentable items, patent rights, processes, or inventions, in the course of
				work sponsored by the Federal Government, such fact shall be promptly and fully
				reported to the Federal sponsoring agency. Unless there is a prior agreement
				between the recipient and the Federal sponsoring agency on disposition of such
				items, the Federal sponsoring agency shall determine whether protection on the
				invention or discovery shall be sought. The Federal sponsoring agency will also
				determine how the rights in the invention or discovery - including rights under
				any patent issued there on - shall be allocated and administered in order to
				protect the public interest consistent with "Government Patent Policy"
				(President's Memorandum for Heads of Executive Departments and Agencies, August
				23, 1971, and statement of Government Patent Policy as printed in 36 F.R.
				16889).
b. Copyrights. - Except as otherwise provided in the
				terms and conditions of the agreement, the author or the recipient organization
				is free to copyright any books, publications, or other copyrightable materials
				developed in the course of or under a Federal agreement, but the Federal
				sponsoring agency shall reserve a royalty-free, nonexclusive and irrevocable
				right to reproduce, publish, or otherwise use, and to authorize others to use,
				the work for Government purposes.
Attachment O: Procurement Standards
1. This attachment provides standards for use by
				recipients in establishing procedures for the procurement of supplies,
				equipment, construction and other services with Federal funds. These standards
				are furnished to ensure that such materials and services are obtained in an
				effective manner and in compliance with the provisions of applicable Federal
				law and executive orders. No additional procurement standards or requirements
				shall be imposed by the Federal sponsoring agencies upon recipients unless
				specifically required by Federal statute or executive orders.
2. The standards contained in this attachment do not
				relieve the recipient of the contractual responsibilities arising under its
				contracts. The recipients is the responsible authority, without recourse to the
				Federal sponsoring agency regarding the settlement and satisfaction of all
				contractual and administrative issues arising out of procurements entered into,
				in support of a grant or other agreement. This includes disputes, claims,
				protests of award, source evaluation or other matters of a contractual nature.
				Matters concerning violation of law are to be referred to such local, State or
				Federal authority as may have proper jurisdiction.
3. Recipients may use their own procurement policies
				and procedures. However, all recipients shall adhere to the standards set forth
				in paragraphs 3 and 4.
a. The recipient shall maintain a code or standards
				of conduct that shall govern the performance of its officers, employees or
				agents engaged in the awarding and administration of contracts using Federal
				funds. No employee, officer or agent shall participate in the selection, award
				or administration of a contract in which Federal funds are used, where, to his
				knowledge, he or his immediate family, partners, or organization in which he or
				his immediate family or partner has a financial interest or with whom he is
				negotiating or has any arrangement concerning prospective employment. The
				recipients' officers, employees or agents shall neither solicit nor accept
				gratuities, favor or anything of monetary value from contractors or potential
				contractors. Such standards shall provide for disciplinary actions to be
				applied for violations of such standards by the recipients' officers, employees
				or agents.
b. All procurement transactions shall be conducted
				in a manner to provide, to the maximum extent practical, open and free
				competition. The recipient should be alert to organizational conflicts of
				interest or noncompetitive practices among contractors that may restrict or
				eliminate competition or otherwise restrain trade. In order to ensure objective
				contractor performance and eliminate unfair competitive advantage, contractors
				that develop or draft specifications, requirements, statements of work,
				invitations for bids and/or requests for proposals should be excluded from
				competing for such procurements. Awards shall be made to the bidder/offeror
				whose bid/offer is responsive to the solicitation and is most advantageous to
				the recipient, price and other factors considered. Solicitations shall clearly
				set forth all requirements that the bidder/offeror must fulfill in order for
				his bid/offer to be evaluated by the recipient. Any and all bids/offers may be
				rejected when it is in the recipient's interest to do so.
c. All recipients shall establish procurement
				procedures that provide for, at a minimum, the following procedural
				requirements.
(1) Proposed procurement actions shall follow a
				procedure to assure the avoidance of purchasing unnecessary or duplicative
				items. Where appropriate, an analysis shall be made of lease and purchase,
				alternatives to determine which would be the most economical, practice
				procurement.
(2) Solicitations for goods and services shall be
				based upon a clear and accurate description of the technical requirements for
				the materials, product or service to be procured. Such a description shall not,
				in competitive procurements, contain features which unduly restrict
				competition. "Brand name or equal" descriptions may be used as a means to
				define the performance or other salient requirements of a procurement, and when
				so used the specific features of the named brand which must be met by
				bidders/offerors shall be clearly specified.
(3) Positive efforts shall be made by the recipients
				to utilize small business and minority-owned business sources of supplies and
				services. Such efforts should allow these sources the maximum feasible
				opportunity to compete for contracts utilizing Federal funds.
(4) The type of procuring instruments used, e.g.,
				fixed price contracts, cost reimbursable contracts, purchase orders, incentive
				contracts, shall be determined by the recipient but must be appropriate for the
				particular procurement and for promoting the best interest of the program
				involved. The "cost-plus-a-percentage-of-cost" method of contracting shall not
				be used.
(5) Contracts shall be made only with responsible
				contractors who possess the potential ability to perform successfully under the
				terms and conditions of a proposed procurement. Consideration shall be given to
				such matters as contractor integrity, record of past performance, financial and
				technical resources or accessibility to other necessary resources.
(6) All proposed sole source contracts or where only
				one bid or proposal is received in which the aggregate expenditure is expected
				to exceed $5,000 shall be subject to prior approval at the discretion of the
				Federal sponsoring agency.
(7) Some form of price or cost analysis should be
				made in connection with every procurement action. Price analysis may be
				accomplished in various ways, including the comparison of price quotations
				submitted, market prices and similar indicia, together with discounts. Cost
				analysis is the review and evaluation of each element of cost to determine
				reasonableness, allocability and allowability.
(8) Procurement records and files for purchase in
				excess of $10,000 shall include the following:
(a) Basis for contractor selection;
(b) Justification for lack of competition when
				competitive bids or offers are not obtained;
(c) Basis for award cost or price.
(9) A system for contract administration shall be
				maintained to ensure contractor conformance with terms, conditions and
				specifications of the contract, and to ensure adequate and timely followup of
				all purchases.
4. The recipient shall include, in addition to
				provisions to define a sound and complete agreement, the following provisions
				in all contracts. These provisions shall also be applied to
				subcontractors.
a. Contracts in excess of $10,000 shall contain
				contractual provisions or conditions that will allow for administrative,
				contractual or legal remedies in instances in which contractors violate or
				breach contract terms, and provide for such remedial actions as may be
				appropriate.
b. All contracts in excess of $10,000 shall contain
				suitable provisions for termination by the recipient including the manner by
				which termination will be effected and the basis for settlement. In addition,
				such contracts shall describe conditions under which the contract may be
				terminated for default as well as conditions where the contract may be
				terminated because of circumstances be beyond the control of the
				contractor.
c. In all contracts for construction or facility
				improvement awarded for more than $100,000, recipients shall observe the
				bonding requirements provided in Attachment B to this circular.
d. All contracts awarded by recipients and their
				contractors or subgrantees having a value of more than $10,000, shall contain a
				provision requiring compliance with Executive Order 11246, entitled "Equal
				Employment Opportunity," as amended by Executive Order 11375, and as
				supplemented in Department of Labor regulations ( 41 CFR, Part 60 ).
e. All contracts and subgrants in excess of $2,000
				for construction or repair awarded by recipients and subrecipients shall
				include 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 ). This Act provides that each contractor or
				subgrantee shall be prohibited from inducing, by any means, any person employed
				in the construction, completion, or repair of public work, to give up any part
				of the compensation to which he is otherwise entitled. The recipient shall
				report all suspected or reported violations to the Federal sponsoring
				agency.
f. When required by the Federal program legislation,
				all construction contracts awarded by the recipients and subrecipients of more
				than $2,000 shall include a provision for compliance with the Davis-Bacon Act (
				40 U.S.C. 276 a to a-7) and as supplemented by Department of Labor regulations
				( 29 CFR, Part 5 ). Under this Act contractors shall be required to pay wages
				to laborers and mechanics at a rate not less than the minimum wages specified
				in a wage determination made by the Secretary of Labor. In addition,
				contractors shall be required to pay wages not less than once a week. The
				recipient shall place a copy of the current prevailing wage determination
				issued by the Department of Labor in each solicitation and the award of a
				contract shall be conditioned upon the acceptance of the wage determination.
				The recipient shall report all suspected or reported violations to the Federal
				sponsoring agency.
g. Where applicable, all contracts awarded by
				recipients in excess of $2,000 for construction contracts and in excess of
				$2,500 for other contracts that involve the employment of mechanics or
				laborers, shall include a provision for compliance with sections 103 and 107 of
				the Contract Work Hours and Safety Standards Act (
				40 U.S.C.
				327 -
				330 ) as supplemented by
				Department of Labor regulations ( 29 CFR, Part 5 ). Under section 103 of the
				Act, each contractor shall be required to compute the wages of every mechanic
				and laborer on the basis of a standard work day of 8 hours and a standard work
				week of 40 hours. Work in excess of the standard workday or workweek is
				permissible provided that the worker is compensated at a rate of not less than
				1 1/2 times the basic rate of pay for all hours worked in excess of 8 hours in
				any calendar day or 40 hours in the workweek. Section 107 of the Act is
				applicable to construction work and provides that no laborer or mechanic shall
				be required to work in surroundings or under working conditions which are
				unsanitary, hazardous or dangerous to his health and safety as determined under
				construction safety and health standards promulgated by the Secretary of Labor.
				These requirements do not apply to the purchases of supplies or materials or
				articles ordinarily available on the open market, or contracts for
				transportation or transmission of intelligence.
h. Contracts or agreements, the principal purpose of
				which is to create, develop or improve products, processes or methods, or for
				exploration into fields that directly concern public health, safety or welfare;
				or contracts in the field of science or technology in which there has been
				little significant experience outside of work funded by Federal assistance,
				shall contain a notice to the effect that matters regarding rights to
				inventions and materials generated under the contract or agreement are subject
				to the regulations issued by the Federal sponsoring agency and the recipient.
				The contractor shall be advised as to the source of additional information
				regarding these matters.
i. All negotiated contracts (except those of $10,000
				or less) awarded by recipients shall include a provision to the effect that the
				recipient, the Federal sponsoring agency, the Comptroller General of the United
				States, or any of their duly authorized representatives, shall have access to
				any books, documents, papers and records of the contractor which are directly
				pertinent to a specific program for the purpose of making audits, examinations,
				excerpts and transcriptions.
j. Contracts and subgrants of amounts in excess of
				$100,000 shall contain a provision that requires the recipient to agree to
				comply with all applicable standards, orders or regulations issued pursuant to
				the Clear Air Act of 1970 ( 42 U.S.C. 187 et seq.) and the Federal Water
				Pollution Control Act (
				33 U.S.C.
				1251 et seq.) as amended. Violations shall be
				reported to the Federal sponsoring agency and the Regional Office of the
				Environmental Protection Agency.
Amended at 10 Ill. Reg. 3585, effective February 3,
				  1986