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National Association of State Community Services Programs and the U.S. Department of Energy – Weatherization Assistance Programs. REGULATORY REVIEW. 10 CODE OF FEDERAL REGISTRATIONS 600 MAJOR SUBPARTS. Subpart A - General Subpart B - Grants to Other Than State and Local Governments

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National Association of State Community Services Programs and the U.S. Department of Energy – Weatherization Assistance Programs


10 code of federal registrations 600 major subparts
  • Subpart A - General
  • Subpart B - Grants to Other Than State and Local Governments
  • Subpart C - Grants to State and Local Governments
  • Subpart D - Cooperative Agreement
  • Subpart E - Audits
grant application requirements

This section prescribes the forms and instructions to be used in applying for federal assistance.

Applicants are not required to submit more than the original and two copies of preapplications and applications.

For amendments to a previously submitted application only the affected pages need be submitted.

debarment and suspension
Debarment and Suspension
  • Recipients shall comply with the debarment and suspension common rule.
special restrictive conditions requirements

Defines under what circumstances a grantee will be considered high-risk: history of unsatisfactory performance, financially unstable, management system that does not meet standards, nonconformance in prior awards, or not otherwise responsible.

Awarding agency will provide written explanation of conditions and corrective action.

financial management standards requirements

Financial management systems must meet the following minimum standards:

  • Provide for accurate, current, and complete disclosure for all financial activities.
  • Maintain records that identify the source and use of funds.
accounting system that does not segregate funds
Accounting system that Does not segregate funds


Grant 1

Grant 2

Grant 3

Weatherization Grant

ARRA Weatherization Grant

accounting system that does segregate funds
Accountingsystem that Does segregate funds


Weatherization Grant

ARRA Weatherization Grant

financial management standards requirements cont

Financial management systems must meet the following minimum standards:

  • Internal Control. Maintain effective control and accountability for all grant cash, property, and other assets.
  • Budget Control. Compare actual expenditures with budgeted amounts on a periodic basis.
financial management standards requirements cont1

Budget Control

  • Serves to link programmatic and financial activities.
  • Prevents cost overruns.
  • Helps staff responsible for specific activities to maintain control over expenditures.
financial management standards requirements cont2

Financial management systems must meet the following minimum standards:

  • Allowable Cost. Determine allowable costs by OMB cost principles, program regulations, and grant agreement.
financial management standards requirements cont3

Financial management systems must meet the following minimum standards:

  • Source Documentation. Have records supported by source documentation.
  • Case Management. Have procedures to minimizing time elapsing between the transfer of funds and disbursement of funds.
payment requirements

All methods and procedures for payment shall minimize the time elapsing between the transfer of funds and disbursement by the subgrantee.

The methods that can be used are:

  • Advances (for grantees if they meet standards)
  • Reimbursements (when requirements are not met or for construction contracts.)
  • Working capital advances (if a subgrantee cannot meet the criteria for advance payments.)
payment requirements cont
  • Recipients must also expend program income, rebates, refunds, and audit recoveries before requesting additional federal cash payments.
  • Payments cannot be withheld unless:
    • Recipient has failed to comply with grant award conditions.
    • Recipient is indebted to the United States.
  • Recipients are encouraged to use minority owned banks.
allowable cost requirements
  • The allowable costs referenced in 10 CFR 600 are detailed in separate OMB Circulars
    • OMB Circular A-87 -Cost Principles for State and Local Governments.
    • OMB Circular A-122 -Cost Principles for Non-Profit Organizations.
period availability of funds requirements
  • Where a funding period is specified, a grantee may charge to the award only costs resulting form obligations during the funding period.
cost sharing requirements

All Contributions, including cash and in-kind, shall be accepted as part of recipient’s cost sharing or matching if they:

  • are verifiable through records,
  • are not counted for other federal programs
  • are necessary for completion of the project,
  • are allowable under the cost principles,
  • are not paid by other federal funds (unless approved by statute),
  • are provided for in the approved budget, and
  • conform to other provisions of the financial management circulars.
program income requirements

Program income is gross income generated by a grant supported activity, or earned only as a result of the grant agreement during the grant period.

The methods for treatment of program income include:

  • Addition
  • Deduction
  • Cost Sharing
program income requirements cont

Unless authorized by Federal regulations or the grant agreement, program income will be treated as gross program income. Unless authorized, program income shall be deducted from the total allowable costs.

There are no Federal requirements governing the disposition of program income earned after the end of the award period unless the regulations or agreement states differently.

non federal audit requirements

State and local governments and non-profit organizations will be subject to the audit requirements in OMB A-133.

budget and project revisions requirements

Recipients are permitted to rebudget within the approved direct cost budget to meet unanticipated requirements and make very limited program changes.

The applicable cost principles which require prior approval shall apply.

Prior approval is required based on specific clauses within the grant agreement and in the following instances where

  • a revision would result in the need for additional funds;
  • Cumulative transfers would exceed 10% of the total budget if the grant is over $100,000;
  • Funds allotted for training were transferred;
  • There is a revision in the scope of objectives;
  • Contracting out of any work;
budget and project revisions requirements1
  • There is a need to extend the period of availability of funds;
  • There is a change in key persons who are central to the purpose of the project or
  • Absence of Project Director or Principal Investigator for more than 3 months or 25% of time

Requests for prior approval will be in the same format as used in the application. The approval must be in writing.

real property and equipment requirements

Real property means land and structures.

Title to real property will vest with the grantee or subgrantee.

The awarding agency will provide instructions for disposition of real property when it is no longer needed.

real property and equipment requirements cont

Equipment is defined as tangible, nonexpendable personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit.

Title to equipment acquired under a grant or subgrant will vest with the grantee or recipient unless specified.

Equipment shall be used for the program or project it was acquired. The equipment may be used for other Federally supported projects if it does not interfere with the project for which it was originally acquired.

Equipment shall not be used to provide services to non-federal outside organizations for a fee less than private companies charge.

real property and equipment requirements cont1
  • If replacement equipment is needed the equipment to be replaced may be used as a trade-in.
  • The property management requirements include the following:
      • Property records must include a description, serial number, source, title, cost, acquisition date, percent of Federal participation, location, use, condition, and ultimate disposition.
      • Physical inventory must be done at least every two years.
      • A control system to ensure safeguards against loss, damage, or theft.
      • Adequate maintenance procedures.
      • Proper sales procedures. Items with a fair market value (F.M.V.) of $5,000 or less that are no longer needed can be disposed of with no further obligations. Items over $5,000 F.M.V. require the awarding agency to receive its fair share.
real property and equipment requirements cont2

Federally owned equipment requires a recipient to submit an annual inventory listing. When the equipment is no longer needed a subgrantee will request disposition instructions from the Federal agency.

supplies requirements

Title to supplies acquired under an award will vest with the recipient.

If there is a residual inventory of unused supplies exceeding $5,000 in total fair market value upon termination or completion of the award and if the supplies are not needed for any other federally sponsored programs the recipient shall compensate the awarding agency for its share.

federal procurement regulations


  • Recipient is responsible for all procurement contractual and administrative issues
  • Maintain Code of Conduct
  • All procurement transactions must provide for open and free competition
grantees and subgrantees must have written procurement procedures that include
Grantees and Subgrantees must have written procurement procedures that include:
  • Procedures that avoid the purchase of unnecessary or duplicative items.
  • Analysis of lease and purchase alternatives.
  • Preference for products and services that conserve natural resources and protect the environment.
  • Grantees are encouraged to enter into State and local inter-governmental agreements for purchasing common goods and services.
  • Grantees are encouraged to use Federal excess and surplus property.
  • Procedures to ensure awards are only to responsible contractors.
  • Records that detail the significant history of a procurement.
  • Grantees will have protest procedures.

All procurement transactions will be conducted in a manner providing full and open competition. There must be written selection procedures. Also, the solicitation must include a clear and accurate description of the service or material being procured.

methods of procurement
Methods of Procurement
  • Small purchase procedures for services and goods that will not cost more than $25,000 in the aggregate.
  • Sealed bids (formal advertising).
  • Competitive proposals.
  • Non-competitive proposals may only be used when the item is available from one source, emergency situations, the awarding agency authorizes, or competition is determined inadequate. Pre-award review may be required.
methods of procurement1
Methods of Procurement

Sealed Bid Proposals:

  • Made early in the procurement cycle:
    • Allows vendors time to prepare their bids to meet the specification of the solicitation
  • Solicitation information includes:
    • What is being purchased
    • Terms & conditions the vendors must meet
    • Where & when sealed bids will be opened
methods of procurement2
Methods of Procurement

Sealed Bid Proposals:

  • Awards are made to the lowest priced responsible vendor:
    • Capable of compliance will all bid specification
    • Capability of performing the work
    • Has administrative capacity
  • Award becomes – a firm, fixed price contract
methods of procurement3
Methods of Procurement

Sealed Bid Proposals:

  • Vendor’s payments:
      • Lump sum - paid for successful performance
      • Unit price - paid for each deliverable unit is completed in the contract
  • Must have at least 2 responsive suppliers competing for contract
methods of procurement4
Methods of Procurement

Competitive Proposal Procurements:

  • Proposal types:
      • Request for Proposal
      • Request for Quotation
      • Request for Information
methods of procurement5
Methods of Procurement

Competitive Proposal Procurements:

  • Publicized method same as sealed competitive process (invitation for bids)
  • All evaluation factor publicized & their importance
  • All vendor submittals received and evaluated
  • Proposals must be solicited from a number of qualified sources
  • Organization must have a method for conducting technical evaluation of all proposals & for selecting awardees
methods of procurement6
Methods of Procurement

Competitive Proposal Procurements:

  • Award made to the most responsive firm whose proposal is most advantageous to the program
    • Price and other factors considered to determine most advantageous offer
  • Must have at least 2 responsive suppliers competing for contract
methods of procurement7
Methods of Procurement

Non Competitive Procurements:

  • Non competitive procurements must be approved by funding agency before awarding
  • Organization must devise & document its own analysis process to ensure fair prices are being charged
  • Non competitive contracts become negotiated contracts
  • Organization determines what level of organizational leadership is required to approve this method
methods of procurement8
Methods of Procurement

Non Competitive Procurements:

  • May be used only when it is not feasible for:
    • Small purchase procedures
    • Sealed bid or competitive proposals

and one of the following conditions applies:

    • Item only available from a single source
    • Emergency exist that will not permit a delay resulting from completive biding
methods of procurement9
Methods of Procurement

Non Competitive Procurements:

  • Organization authorized noncompetitive proposals
  • After solicitation of a number of sources, competitive is determined as inadequate

Cost analysis is required which verifies:

  • Proposed cost data
  • Projection of the data
  • Evaluation of costs and profits

Grantees are to encourage minority firms, women’s business enterprises, and labor surplus area firms.


Grantees must make available proposed procurement technical specifications upon request by the awarding agency.


The bonding requirements of a recipient will be accepted if the awarding agency’s interest is adequately protected. If not, there are specific requirements described in 10 CFR 600.

performance report requirements

Performance reports shall not be required more frequently than quarterly or, less frequently than annually.

Periodically report progress in meeting program objectives. This must include comparison of accomplishments with planned objectives.

Quarterly and semi-annual reports will be due 30 days after the reporting period. Annual and final reports will be due 90 days after expiration date.

record retention requirements

Grantee and subgrantees must retain records for three years after submitting the final expenditure report.

Records must be maintained until completion of action on all litigation, claims, negotiation, or audit. For property and equipment the retention period starts upon disposition.

close out requirements

The Federal agency will require the following final reports:

  • Standard Form 269 - Financial Status Report
  • Standard Form 270 - Request for Advance or Reimbursement, if applicable
  • Final performance or progress report

The recipient will submit an invention disclosure, if applicable.

The recipient will submit a Federally-owned property report.

Cost and cash adjustments will be made as appropriate.

the cost principles address four major areas
  • Basic Guidelines for Costs
  • Cost Allocation Plan
  • Indirect Cost
  • Allowability for selected costs
basic guidelines for costs
  • Costs are allowable if they are necessary and reasonable, not prohibited under state or local laws, conform to laws and regulations, given consistent treatment, comply with generally accepted accounting principles, and are not included as a cost under other federal programs.
  • Allocable costs assigned must be in proportion to the benefits received, cannot be shifted to overcome deficiencies in other programs, must be supported by a cost allocation plan.
  • Applicable credits are to be used to reduce expenditures applicable to a given grant.
  • The total cost of a grant program is comprised of the allowable direct and allowable indirect costs less applicable credits.
allocation of costs
  • Identify each of the shared costs that should be allocated.
  • Identify each of the shared costs that will be included as part of the indirect cost pool, if applicable.
  • Determine the method in which costs will be allocated so that each program is paying proportionately for the benefits from the cost.
  • Prepare the cost allocation plan and submit for internal approval.
steps in preparing a cost allocation plan
  • Identify the service and costs of each service to be allocated.
  • Determine the method (unit) for allocating the costs of each service to user programs.
  • Allocate costs mathematically to user programs.
direct cost allocation plan documentation

The following supporting information would be a part of a cost allocation plan.

  • List of grants, contracts and agreements.
  • Agency organization chart.
  • Job description - for each general and administrative staff person.
  • Work sheet for each individual showing personnel and non personnel costs, chargeable hours and calculation of that employee's billing rate.
  • Summary of non-personnel general administrative costs and allocation to each general and administrative position.
  • Copy of the previous audit report supporting the total general and administrative costs use in these calculations.
  • Copy of the time sheet form which will be used by general and administrative staff.
  • Copy of the monthly billings summary form that will be used to invoice each program.
  • Space cost allocation for each property
indirect costs
  • Indirect costs are shared costs, to be distributed by an indirect cost rate, that must be grouped into one or more equitable cost pools to determine appropriate rate(s).
  • A formal indirect cost proposal must be submitted and approved. Once approval is granted, charges can then be distributed by means of an indirect cost rate.
  • Application of indirect cost rates must be supported by formal accounting records available for auditing.
  • Indirect costs (or administrative costs) are no different than direct costs in that they have to be allowable under the federal government cost principles.
types of indirect cost rates
  • Predetermined rate - negotiated, usually for one year and not subject to adjustment.
  • Fixed rate with carry forward - adjusted in future period.
  • Final rate - not subject to adjustment.
  • Provisional rate - temporarily subject to adjustment.
cognizant agency
  • Receive the grantee's indirect cost proposal.
  • Review it in the detail it deems necessary to reach a conclusion.
  • Try to reach an agreement with the proposing agency on a rate both will find acceptable.
key points to remember
  • Costs included as indirect costs should not also be charged directly to programs.
  • All costs could be charged to programs on a direct basis, if one wanted to incur the time and expenses to do so.
  • Costs must be allowable under the cost principles.
  • Funds spent on administrative costs are unavailable for programmatic use.
  • Funds spent on administrative costs, which are not charged to the program receiving the benefit, must be paid for by other funds of the agency.
  • Many funding sources limit the amount of total administrative costs (direct and indirect).
monitoring subgrantees 12 steps to financial monitoring
Monitoring Subgrantees12 Steps To Financial Monitoring

Step One: Review Financial Policies and Procedures

Step Two: Review the Procurement Policies

Step Three: Review the Cost Allocation Plan

Step Four: Review the Financial Audit Report

monitoring subgrantees 12 steps to financial monitoring con t
Monitoring Subgrantees12 Steps To Financial Monitoring (con’t)

Step Five: Review the Planned Production and the Actual Production

Step Six: Review the Planned Expenditures and the Actual Expenditures

Step Seven: Validate that the Financial Policies and Procedures are being Adhered to.

Step Eight: Validate that the Procurement Policies are being Followed

monitoring subgrantees 12 steps to financial monitoring con t1
Monitoring Subgrantees12 Steps To Financial Monitoring (con’t)

Step Nine: Validate that the Cost Allocation Plan is applied to all Programs

Step Ten: Assess if Corrective Action has been taken on all Audit Findings

Step Eleven: Test Expenditures

Step Twelve: Evaluate Cash on Hand