3 EDGAR 74.2 – DefinitionsEquipment means tangible nonexpendable personal property including exempt property charged directly to the award having a useful life of more than one year and an acquisition cost of $5,000 or more per unit. However, consistent with recipient policy, lower limits may be established.Prior approval means written approval by an authorized official evidencing prior consent.
4 EDGAR 74.25 – Revision of budget and program plans (a) The budget plan is the financial expression of the project or program as approved during the award process. It may include either the Federal and non-Federal share, or only the Federal share, depending upon ED requirements. It shall be related to performance for program evaluation purposes whenever appropriate.(b) Recipients are required to report deviations from budget and program plans, and request prior approvals for budget and program plan revisions, in accordance with this section.(c) For nonconstruction awards, recipients shall request prior approvals from ED for one or more of the following program or budget related reasons:
5 EDGAR 74.25 – Revision of budget and program plans (1) Change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval).(2) Change in a key person specified in the application or award document.(3) The absence for more than three months, or a 25 percent reduction in time devoted to the project, by the approved project director or principal investigator.(4) The need for additional Federal funding.(5) The transfer of amounts budgeted for indirect costs to absorb increases in direct costs, or vice versa, if approval is required by the Secretary.
6 EDGAR 74.25 – Revision of budget and program plans (6) The inclusion, unless waived by the Secretary, of costs that require prior approval in accordance with OMB Circular A-21—Cost Principles for Institutions of Higher Education . . .(7) The transfer of funds allotted for training allowances (direct payment to trainees) to other categories of expense.(8) Unless described in the application and funded in the approved awards, the subaward, transfer or contracting out of any work under an award. This provision does not apply to the purchase of supplies, material, equipment, or general support services.(d) No other prior approval requirements for specific items are imposed unless a deviation has been approved by OMB.
7 EDGAR 74.25 – Expanded Authority (e) Except for requirements listed in paragraphs (c)(1) and (c)(4) of this section, the Secretary may waive cost-related and administrative prior written approvals required by this part and OMB Circulars A-21 and A-122. These waivers may authorize recipients to do any one or more of the following:(1) Incur pre-award costs 90 calendar days prior to award or more than 90 calendar days with the prior approval of the Secretary. All pre-award costs are incurred at the recipient's risk (i.e., the Secretary is under no obligation to reimburse these costs if for any reason the recipient does not receive an award or if the award is less than anticipated and inadequate to cover these costs).
8 EDGAR 74.25 – Expanded Authority (2)(i) Initiate a one-time extension of the expiration date of the award of up to 12 months unless one or more of the following conditions apply:(A) The terms and conditions of award prohibit the extension.(B) The extension requires additional Federal funds.(C) The extension involves any change in the approved objectives or scope of the project.(ii) For one-time extensions, the recipient shall notify the Secretary in writing with the supporting reasons and revised expiration date at least 10 days before the expiration date specified in the award.This one-time extension may not be exercised merely for the purpose of using unobligated balances.
9 EDGAR 74.25 – Expanded Authority (3) Carry forward unobligated balances to subsequent funding periods.(4) For awards that support research, unless the Secretary provides otherwise in the award or in ED's regulations, the prior approval requirements described in paragraph (e) of this section are automatically waived (i.e., recipients need not obtain prior approvals) unless one of the conditions included in paragraph (e)(2)(i) of this section applies.
10 EDGAR 74.25 – Expanded Authority (f) The Secretary may restrict the transfer of funds among direct cost categories or programs, functions and activities for awards in which the Federal share of the project exceeds $100,000 and the cumulative amount of the transfers exceeds or is expected to exceed 10 percent of the total budget as last approved by the Secretary. The Secretary does not permit a transfer that would cause any Federal appropriation or part thereof to be used for purposes other than those consistent with the original intent of the appropriation.(g) All other changes to nonconstruction budgets, except for the changes described in paragraph (j) of this section, do not require prior approval.
11 EDGAR – EquipmentThe recipient's property management standards for equipment acquired with Federal funds and federally-owned equipment shall include all of the following:(1) Equipment records shall be maintained accurately and shall include the following information:(i) A description of the equipment.(ii) Manufacturer's serial number, model number, Federal stock number, national stock number, or other identification number.(iii) Source of the equipment, including the award number.(iv) Whether title vests in the recipient or the Federal Government.
12 EDGAR – Equipment(v) Acquisition date (or date received, if the equipment wasfurnished by the Federal Government) and cost.(vi) Information from which one can calculate the percentage ofFederal participation in the cost of the equipment (not applicable to equipment furnished by the Federal Government).(vii) Location and condition of the equipment and the date the information was reported.(viii) Unit acquisition cost.(ix) Ultimate disposition data, including date of disposal and sales price or the method used to determine current fair market value where a recipient compensates ED for its share.
13 EDGAR – Equipment(2) Equipment owned by the Federal Government must be identified to indicate Federal ownership.(3) A physical inventory of equipment must be taken and the results reconciled with the equipment records at least once every two years. Any differences between quantities determined by the physical inspection and those shown in the accounting records must 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 equipment.
14 EDGAR – Equipment(4) A control system must be in effect to insure adequate safeguards to prevent loss, damage, or theft of the equipment. Any loss, damage, or theft of equipment shall be investigated and fully documented; if the equipment was owned by the Federal Government, the recipient shall promptly notify the Secretary.(5) Adequate maintenance procedures must be implemented to keep the equipment in good condition.
15 EDGAR 74.53 – Record Retention (b) Financial records, supporting documents, statistical records, and all other records pertinent to an award shall be retained for a period of three years from the date of submission of the final expenditure report.
16 EDGAR 75.730 – Records Related to Grant Funds A grantee shall keep records that full show:The amount of funds under the grantHow the grantee uses the fundsThe total costs of the projectThe share of that cost provided from other sourcesOther records to facilitate an effective audit
17 EDGAR 75.731 & 75.732 – Records Related to Compliance and Performance – A grantee shall keep records to show its compliance with program requirements.– A grantee shall keep records of significant project experiences and results.The grantee shall use the records to(1) Determine progress in accomplishing project objectives; and(2) Revise those objectives if necessary.
18 Can you . . .Carry forward $10,000 from one year to the next year?
19 Can you . . .Hire a new advisor for your project without prior written approval?
20 Can you . . .Purchase a copy machine that costs $2,500?
21 Cost Guidelines – OMB Circulars Which OMB Circular Do I Follow? Although there are six grant circulars, you are only covered by three of them, depending on type of entity:States, local governments, and Indian Tribes follow:A-87 for cost principlesA-102 for administrative requirements, andA-133 for audit requirementsEducational Institutions (even if part of a State or local government) follow:A-21 for cost principlesA-110 for administrative requirements, andNon-Profit Organizations follow:A-122 for cost principles
22 OMB Circular A-21 C. Basic Considerations: Factors affecting allowability of costs.Reasonable: Is it defensible? Is it prudent? Is it necessary?Allocable: Does it advance your work? Does it benefit your project?Consistent treatment: Does it meet established policies at your institution?Conform to limitations.
23 C3. Reasonable CostsA cost may be considered reasonable if the nature of the goods or services acquired or applied, and the amount involved therefore, reflect the action that a prudent person would have taken under the circumstances prevailing at the time the decision to incur the cost was made.
24 C4. Allocable Costsa. A cost is allocable to a particular cost objective (i.e., a specific function, project, sponsored agreement, department, or the like) if the goods or services involved are chargeable or assignable to such cost objective in accordance with relative benefits received or other equitable relationship.
25 J.1. Advertising & Public Relations Costs a. The term advertising costs means the costs of advertising media and corollary administrative costs. Advertising media include magazines, newspapers, radio and television, direct mail, exhibits, electronic or computer transmittals, and the like.b. The term public relations includes community relations and means those activities dedicated to maintaining the image of the institution or maintaining or promoting understanding and favorable relations with the community or public at large or any segment of the public.
26 J.1. Advertising & Public Relations Costs (continued) c. The only allowable advertising costs are those that are solely for:(1) The recruitment of personnel required for the performance by the institution of obligations arising under a sponsored agreement (See also subsection b. of section J.42, Recruiting);(2) The procurement of goods and services for the performance of a sponsored agreement;(3) The disposal of scrap or surplus materials acquired in the performance of a sponsored agreement except when non-Federal entities are reimbursed for disposal costs at a predetermined amount; or(4) Other specific purposes necessary to meet the requirements of the sponsored agreement.
27 J.1. Advertising & Public Relations Costs (continued) d. The only allowable public relations costs are:(1) Costs specifically required by the sponsored agreement;(2) Costs of communicating with the public and press pertaining to specific activities or accomplishments which result from performance of sponsored agreements (these costs are considered necessary as part of the outreach effort for the sponsored agreement); or(3) Costs of conducting general liaison with news media and government public relations officers, to the extent that such activities are limited to communication and liaison necessary keep the public informed on matters of public concern, such as notices of Federal contract/grant awards, financial matters, etc.
28 J.1. Advertising & Public Relations Costs (continued) f. Unallowable advertising and public relations costs include the following:(1) All advertising and public relations costs other than as specified in subsections 1.c, 1.d and 1.e.(2) Costs of meetings, conventions, convocations, or other events related to other activities of the institution, including:(a) Costs of displays, demonstrations, and exhibits;(b) Costs of meeting rooms, hospitality suites, and other special facilities used in conjunction with shows and other special events; and(c) Salaries and wages of employees engaged in setting up and displaying exhibits, making demonstrations, and providing briefings;(3) Costs of promotional items and memorabilia, including models, gifts, and souvenirs;(4) Costs of advertising and public relations designed solely to promote the institution.
29 J.3. Alcoholic Beverages J.9. Communication Costs Costs of alcoholic beverages are unallowable.J.9. Communication CostsCosts incurred for telephone services, local and long distance telephone calls, telegrams, postage, messenger, electronic or computer transmittal services and the like are allowable.
30 J.10. Compensation for Personal Services (1)(b) The apportionment of employees’ salaries and wages which are chargeable to more than one sponsored agreement or other cost objective will be accomplished by methods which will:(1) be in accordance with Sections A.2 & C,(2) produce an equitable distribution of charges for employee’s activities, and(3) distinguish the employees’ direct activities from their F & A Activities.
31 J.16. Employee morale, health, and welfare costs and costs a. The costs of employee information publications, health or first-aid clinics and/or infirmaries, recreational activities, employee counseling services, and any other expenses incurred in accordance with the institution's established practice or custom for the improvement of working conditions, employer- employee relations, employee morale, and employee performance are allowable.b. Such costs will be equitably apportioned to all activities of the institution. Income generated from any of these activities will be credited to the cost thereof unless such income has been irrevocably set over to employee welfare organizations.
32 J.17. Entertainment CostsCosts of entertainment, including amusement, diversion, and social activities and any costs directly associated with such costs (such as tickets to shows or sports events, meals, lodging, rentals, transportation, and gratuities) are unallowable.
33 J.18. Equipment and other Capital Expenditures "Equipment" means an article of nonexpendable, tangible personal property having a useful life of more than one year and an acquisition cost which equals or exceeds the lesser of the capitalization level established by the organization for financial statement purposes, or $5000.
34 J.28. Lobbyinga. Notwithstanding other provisions of this Circular, costs associated with the following activities are unallowable: (1) Attempts to influence the outcomes of any Federal, State, or local election, referendum, initiative, or similar procedure, through in kind or cash contributions, endorsements, publicity, or similar activity;
35 J.28. Lobbying (continued) (3) Any attempt to influence (i) the introduction of Federal or State legislation (ii) the enactment or modifications of any pending Federal or State legislation through communication with any member or employee of the Congress or State legislature (including efforts to influence...)
36 J.30. Maintenance and Repair Costs incurred for necessary maintenance, repair or upkeep of property (including Federal property unless otherwise provided for) which neither add to the permanent value of the property nor appreciably prolong its intended life but keep it in an efficient operating condition, are allowable.
37 J.31. Material & Supplies Cost a. Costs incurred for materials, supplies, and fabricated parts necessary to carry out a sponsored agreement are allowable.b. Purchased materials and supplies shall be charged at their actual prices, net of applicable credits. Withdrawals from general stores or stockrooms should be charged at their actual net cost under any recognized method of pricing inventory withdrawals, consistently applied. Incoming transportation charges are a proper part of materials and supplies costs.c. Only materials and supplies actually used for the performance of a sponsored agreement may be charged as direct costs.d. Where federally-donated or furnished materials are used in performing the sponsored agreement, such materials will be used without charge.
38 J.32. Meetings & Conferences Costs of meetings and conferences, the primary purpose of which is the dissemination of technical information, are allowable. This includes costs of meals, transportation, rental of facilities, speakers' fees, and other items incidental to such meetings or conferences. But see section J.17, Entertainment costs.
39 J.33. Memberships, subscriptions & professional activity cost Costs of the institution's membership in business, technical and professional organizations are allowable.Costs of the institution's subscriptions to business, professional and technical periodicals are allowable.Costs of meetings and conferences when the primary purpose is the dissemination of technical information, are allowable. This includes costs of meals, transportation, rental of facilities, and other items incidental to such meetings or conferences.
40 J.33. Memberships, subscriptions and professional activity costs (continued) d. Costs of membership in any civic or community organization are unallowable. e. Costs of membership in any country club or social or dining club or organization are unallowable.
41 38. Proposal CostsProposal Costs are the costs of preparing bids or proposals on potential government and nongovernment sponsored agreements or projects, including the development of data necessary to support the institution's bids or proposals. Proposal costs of the current accounting period of both successful and unsuccessful bids and proposals normally should be treated as F & A (facilities and administration) costs and allocated currently to all activities of the institution. (i.e. not chargeable to the federal grant).
42 43. Rental costs of buildings and equipment Subject to the limitations described in subsections b. through d. of this section, rental costs are allowable to the extent that the rates are reasonable in light of such factors as: rental costs of comparable property, if any; market conditions in the area; alternatives available; and, the type, life expectancy, condition, and value of the property leased. Rental arrangements should be reviewed periodically to determine if circumstances have changed and other options are available.
43 J.53. Travel CostsGeneral: Travel costs are the expenses for transportation, lodging, subsistence, and related items incurred by employees who are in travel status on official business of the institution. Such costs may be charged on an actual basis, on a per diem or mileage basis in lieu of actual costs incurred, or in a combination of the two, provided the method used is applied to an entire trip and not to selected days of the trip, and results in charges, and is in accordance with institution's travel policy and practices consistently applied to institutional travel activities.