Ordinance No. 8,077970911 -22
ORDINANCE NO. 8077
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, AUTHORIZING THE CITY MANAGER TO EXECUTE AND THE
CITY CLERK TO ATTEST TO A PROFESSIONAL SERVICES AGREEMENT
WITH STANLEY E. FURCE, INDIVIDUALLY AND D/B /A/ RESEARCH
INTERNATIONAL; AUTHORIZING PAYMENT FOR SERVICES UNDER THE
CONTRACT FROM GRANT FUNDS; AND PROVIDING FOR THE EFFECTIVE
DATE THEREOF.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS:
Section 1: That the City Council of the City of Baytown, Texas, hereby authorizes and
directs the City Manager and the City Clerk of the City of Baytown to execute and attest to a
Professional Services Agreement with Stanley E. Furce, individually and d/b /a/ Research
International. A copy of said contract is attached hereto, marked Exhibit "A ", and made a part
hereof for all intents and purposes.
Section 2: That the City Council of the City of Baytown authorizes payment to
Stanley E. Furce, individually and d/b /a/ Research International, in accordance with Grant/Award
Number I7PHNP516, and all compensation for services performed under the contract will be from
these grant funds.
Section 3: This ordinance shall take effect immediately from and after its passage by the
City Council of the City of Baytown.
INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the
City of Baytown this the 11 `h day of September, 1997.
PETE C. ALFARO, Mayor
ATTEST:
EILEEN PzHALL, City Clerk
APPROVED AS TO FORM:
3�
ACIO RAMIREZ, SR., City Attorney
c:1 MyDocumenulCounciMeptember ll-Icocntfl'rofServAgreeFurce. I I .doe
® Professional Services Agreement
Between
The City of Baytown
and
Stanley E. Furce, Individually and d/b /a Research International
STATE OF TEXAS §
COUNTY OF HARRIS §
This Agreement ( "this Agreement ") shall evidence the terms by which the City of Baytown
,(the "City") engages Stanley E. Furce, Individually and d/b /a Research International, an independent
contractor (the "Contractor "), for the purpose of performing the services hereinafter enumerated in
relation to the Houston High Intensity Drug Trafficking Area ( "HIDTA "), with such additional
duties and responsibilities as may be hereinafter prescribed from time to time by the Office of
National Drug Control Policy (''ONDCP ") and the HIDTA Executive Committee.
The Agreement is contingent on funding by Grant/Award Number I7PHNP516 made
available through the Office of National Drug Control Policy ( "ONDCP ").
1. Term of Agreement: The term of this Agreement shall be the twelve month period
commencing on October 1, 1997, through September 30, 1998.
2. Services: Contractor agrees to perform the professional services as directed by
the HIDTA Executive Committee and ONDCP, including, but not limited to, the
following:
a. serving as a liaison between the United States Attorney's Office ( "USAO "),
the ONDCP and other HIDTA's throughout the country and the various law
enforcement agencies and initiatives within the Houston HIDTA;
b. reviewing threat assessments /strategies budget proposals to ensure the
initiatives conform to the goals of the national HIDTA program and the
overall Houston HIDTA focus;
C. providing creative input and direction for the HIDTA program;
d. coordinating, preparing and timely submitting the HIDTA reports required
by the ONDCP and the Administrative Services Section, Executive Office of
® the United States Attorneys;
EXHIBIT A
Professional Services Aareement
Stanley E. Furce, Individually and d/b /a Research Intemational, Page I
® e. evaluating individual HIDTA - funded initiatives to ensure their focus
complies with the target assessment and strategy developed for the overall
Houston HIDTA;
f. developing and maintaining an inventory of all specialized equipment
obtained and utilized by the HIDTA;
g. developing and maintaining an inventory of equipment obtained and
maintained with USAO/HIDTA funds and supplying to the City an inventory
listing of equipment purchased through funds supplied pursuant to this
Agreement;
h. developing and maintaining procedures for tracking the various law
enforcement statistics for all the HIDTA components;
establishing a Houston HIDTA -wide accounting system to track program
funding and establish an audit trail;
J. serving as an independent, interagency mediation resource and liaison for
agency heads and the initiatives' leadership;
k. maintaining contacts and work with other HIDTA Directors throughout the
country to develop and ensure a coordinated national focus for the various
HIDTA's with shared information and resources as appropriate;
evaluating the effectiveness of agency case development and USAO
prosecution follow -up and developing improved interactions
(communications) among agencies and USAO;
M. working with DOD groups, national communications companies, other
HIDTA groups and local initiative technicians to develop ADP systems
which most effectively meet the needs of HIDTA yet remain within the
guidelines of various agency headquarters;
n. reviewing budget submissions and reprogramming requests to ensure
integrity of HIDTA - budget expenditures;
o. coordinating with initiative leaders to avoid duplication of effort through the
various HIDTA initiatives and maximize the use of HIDTA personnel and
material resources;
P. working with the USAO LECC Coordinator to develop joint training for
HIDTA personnel; and
Professional Services Agreement
Stanley E. Furce. Individually and d/b /a Research International, Page 2
® q. complying with the Financial and Administrative Guidelines
established by trio HIDTA Assistance Center, as amended, which are
attached hereto as Exhibit "A" and incorporated herein for all intents
and purposes.
The City's only responsibility under this Contract is to administer the cooperative
agreement contract between the ONDCP and the City by supplying the ONDCP the
proper documentation regarding any payment due the Contractor and disbursing such
funds to the Contractor. Such contract is attached hereto as Exhibit "B" and made
a part hereof for all intents and purposes.
3. Relationship: Contractor is and shall at all times be an independent contractor and
is not to be considered an agent or employee of the City.
4. Payment: As full payment for those professional /personal services rendered in
accordance with this Agreement, the City shall disburse to Contractor the amount
approved by ONDCP for professional services during the term of this Agreement.
5. Expense Reimbursement: Contractor shall be entitled to reimbursement for
certain approved expenses incurred while performing the services contained in this
Agreement in accordance with Payment and Expense Reimbursement over the term
of this Agreement. The balance of this budgeted expense fund may revert to
Contractor at the conclusion of this Agreement with the approval of the ONDCP or
its designee.
6. Payment and Expense Reimbursement Approval:
Payment for services rendered shall be paid on a monthly basis. Contractor shall
submit a monthly billing indicating the monthly payment and shall submit the
original receipts for expenses to be reimbursed. All requests for payment and/or
reimbursement shall be reviewed and approved for payment by the ONDCP or its
designee prior to submission to the City.
All requests for expense reimbursement submitted shall be in conformance with
current published guidelines used in the administration of the High Intensity Drug
Trafficking Area Grant Programs.
7. Payment and Expense Reimbursement Processing:
Contractor shall submit approved invoices to the Chief of Police for payment and
reimbursement. The Chief of Police shall arrange for the payment of such invoices
through the appropriate City of Baytown processes.
S. Taxes: Contractor shall be solely responsible for any and all federal, state and local
tax consequences that result from his receipt of any payments or reimbursements paid
in accordance with this Agreement.
Professional Services Agreement
Stanley E. Furce Individually and d/b /a Research International, Page 3
® 9. Automobile Restrictive Use:Contractor shall be provided an automobile for use
during official Houston HIDTA business. Contractor shall be obligated to reimburse
the City for any personal use of said automobile. Such reimbursement will then be
routed to the ONDCP, if appropriate.
10. Termination: This Agreement may be terminated by either party at any time without
cause; provided, however, should the Contractor terminate this Agreement, the
Contractor shall give the City seven (7) days' written notice of his intent to terminate
the Agreement. Contractor understands that should Mr. Furce no longer be able to
perform the services required herein for any reason, this entire Agreement shall
automatically terminate without notice. In any event, at the termination of this
Agreement, the Contractor shall receive as his sole compensation, payment for the
services actually performed in accordance with the payment provision of article 4
hereof plus any expenses to which he is due and owing at the time of the termination.
11. Notice: All notices required to be given hereunder shall be given in writing
by telecopier, overnight, or facsimile transmission, certified or registered mail or by
hand delivery at the respective addresses of the parties set forth herein or at such
other address as may be designated in writing by either party. Notice given by mail
shall be deemed given three (3) days after the date of mailing thereof to the following
address:
CONTRACTOR
Stanley E. Furce, Individually and d /b /a Research International
Attn. Stanley E. Furce
68 Prides Crossing Drive
The Woodlands, TX 77381
Telephone: (713) 567 -9557
Fax: (713) 718 -3392
OWNER
City of Baytown
Attn: City Manager
P.O. Box 424
Baytown, TX 77522
Telephone: (281) 420 -6501
Fax: (281) 420 -6586
12. Miscellaneous Provisions:
(a) This Agreement shall not bestow any rights upon any third party, but rather,
® shall bind and benefit the Contractor and the City only.
Professional Services A- reement
Stanlev E. Furce, Individually and d/b /a Research Intemational, Page 4
® (b) This Agreement contains all the agreements of the parties relating to the
subject matter hereof and is the full and final expression of the agreement between
the parties.
(c) INDEMNITY
The Contractor, his officers, agents and employees agrees to and shall
indemnify, hold harmless, and defend the City, its officers, agents and
employees, from and against any and all claims, losses, damages, causes of
action, suits and liability of every kind, including all expenses of litigation,
court costs, and attorneys' fees, for any and all injuries to or death of any
person or for damages arising out of or in connection with the services
performed or advice given by the Contractor, his officers, agents or employees
pursuant to this Agreement, where such damages are caused in whole or in
part by the negligence of the City, its officers agents and /or employees and /or
the sole or joint negligence of the Contractor, its officers agents and /or
employees.' It is the expressed intention of the parties hereto, both the
Contractor and the City, that*the indemnity provided for in this paragraph is
indemnity by the Contractor to indemnify and protect the City, its officers,
agents and employees (i) from the consequences of the negligence of the City,
its officers, agents or employees, whether that negligence is the SOLE or a
CONCURRING cause of the resulting injury, death or damage, and /or (ii)
from the consequences of the negligence of the Contractor, its officers, agents
and /or employees, whether that negligence is the sole or concurring cause of
the resulting injury, death or damage.
IN THE EVENT THAT ANY ACTION OR PROCEEDING IS BROUGHT
AGAINST THE CITY BY REASON OF ANY OF THE ABOVE THE CONTRACTOR
FURTHER AGREES AND COVENANTS TO DEFEND THE ACTION OR
PROCEEDING BY LEGAL COUNSEL ACCEPTABLE TO THE CITY.
Upon termination or expiration of this Agreement, the parties hereto agree that
the above - referenced indemnity and the release contained in subsection (d) of this
section shall not expire but shall remain in effect.
(d) Contractor does hereby, for himself, his officers, agents, employees,
successors, assigns, personal representatives, heirs, executors, and administrators,
collectively referred to in this paragraph as "Contractor," release, acquit, and forever
discharge the City, its officers, agents, and employees, collectively referred to in this
paragraph as "City," of and from any and all debts, damages, claims, causes of
action, suits, liabilities, and demands of whatever nature, which Contractor might
now have or that might subsequently accrue by reason of any matter or thing
whatsoever and particularly growing out of or in any way connected with, directly
or indirectly, this Agreement and /or the services to be performed pursuant to the
Professional Services Atreement
Stanley E. Furce, Individually and d/b /a Research International, Page 5
® same, including, but not limited to, any claims for any workers' compensation, health
insurance or any other benefit provided.by the City to its officers and/or employees;
any claims challenging the constitutionality or legality of any provision of this
Agreement; any and all existing or future common law, statutes, civil rights, or
constitutional claims; and any tort claims of any nature.
(e) Contractor covenants and agrees that he will not employ any individual to
perform the services hereinbefore described pursuant to this Agreement unless such
individual has signed a release and indemnity agreement releasing and indemnifying
the City from all claims, losses, damages, causes of action, suits and liability of every
kind, regardless of any negligence on the part of the City. Such release and indemnity
agreement must be in accordance with and provide at a minimum the same
protections to the City as afforded in subsections (c) and (d) hereinabove.
(f) Notwithstanding anything to the contrary contained in this Agreement, the
City and the Contractor hereby agree that no claim or dispute between the City and
the Contractor arising out of or relating to this Agreement shall be decided by any
arbitration proceeding including, without limitation, any proceeding under the
Federal Arbitration Act (9 U.S.C. Section I - 14), or any applicable State arbitration
statue, including, but not limited to, the Texas General Arbitration Act, provided that
in the event that the City is subjected to an arbitration proceeding notwithstanding
this provision, the Contractor consents to be joined in the arbitration proceeding if
the Contractor's presence is required or requested by the City of complete relief to be
recorded in the arbitration proceeding,
(g) Neither the Contractor nor the City shall sell, assign, or transfer any of its
rights or obligations under this Agreement in whole or in part without prior written
consent of the other party.
(h) failure of either party hereto to insist on the strict performance of any of the
agreements herein or to exercise any rights or remedies accruing thereunder upon
default or failure of performance shall not be considered a waiver of the right to insist
on and to enforce by an appropriate remedy, strict compliance with any other
obligation hereunder to exercise any right or remedy occurring as a result of any
future default or failure of performance.
(1) This Agreement shall in all respects be interpreted and construed in
accordance with and governed by the laws of the State of Texas and the City,
regardless of the place of its execution or performance. The place of making and the
place of performance for all purposes shall be Baytown, Harris County, Texas.
0) All parties agree that should any provision of this Agreement be determined
• to be invalid or unenforceable, such determination shall not affect any other term of
this Agreement, which shall continue in full force and effect.
Professional Services Aereenient
Stanlev E. Furce, Individually and d/b /a Research International, Page 6
•
(k) In the event of any ambiguity in any of the terms of this contract, it shall not
be construed for or against any party hereto on the basis that such party did or did not
author the same.
(l) The officers executing this Agreement on behalf of the parties hereby confirm
that such officers have full authority to execute this Agreement and to bind the party
he /she represents.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment in multiple
copies, each of which shall be deemed to be an original, but all of which shall constitute but one and
the same amendment, this day of September, 1997.
CONTRACTOR:
STANLEY E. FURCE, Individually and d/b /a
Research International
CITY OF BAYTOWN, TEXAS:
BOBBY ROUNTREE, City Manager
ATTEST:
Eileen P. Hall, City Clerk
APPROVED AS TO FORM:
dkinjaclo Ramirez, Sr., y Attorney
Professional Services Agreement
Stanley E. Furce, Individu_allv_an_d d /b /a Research International, Page 7
0 §
STATE OF TEXAS §
COUNTY OF HARRIS §
Before me, on this day, personally appeared STANLEY E. FURCE, INDIVIDUALLY AND
D/B /A RESEARCH INTERNATIONAL, on behalf of himself and Research International, known
to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to
me that he executed the same for the purposes and consideration therein expressed.
SUBSCRIBED AND SWORN TO before me on the day of September, 1997.
Notary Public in and for the State of Texas
• OkIW�policc1 111DTA. FurceI997- 981 'rovcssiuiialScrvicesAgreemcnt
Professional Services A,reenient
Stanlev E. Furce, Individually and d /b /a Research International, Page 8
HIDTA
Assistance Center
Financial
Pc M-
A
C;ul*deli*nes
� January, 1996
EXHIBIT A
C
•
Office of National Drug Control Policy
Financial and Administrative Guide
HIDTA Cooperative Agreement
Table of Contents
Topic Pagc
Part I - General Information
Chapter I :Uniform Administrative Requirements l
Chapter 2: Legislative Authority 1
Chapter 3: Definitions
Part H - Pre Award Requirements
Chapter 1: Application Process 4
Chapter 2: Conditions of Award and Acceptance 9
Chapter 3: Standards for Financial Management Systems 10
Part III - Post Award Requirements
Chapter I: Payments
13
Chapter 2: Period of Availability of Funds
13
Chapter 3: Program income
15
Chapter 4: Adjustments to Awards
16
Chapter 5: Property
17
Chapter 6: Allowable Costs
21
Chapter 7: Procurements Under Awards of Federal Assistance
24
Chapter 8: Monitoring and Reporting Program Performances
26
Chapter 9: Financial Reporting
26
Chapter 10: Retention and Access Requirements for Records
26
Chapter 11: Sanctions
27
Chapter 12: Termination for Convenience
27
Chapter 13: Costs Requiring Prior Approval
2S
Chapter 14: Unallowable Costs
31
Chanter 15: Close -out
33
Chapter 16: Audit Requirements
ATTACHMENT A Special Conditions HIDTA Cooperative Agreements 37
ATTACHMENT B Control and Use of Confidential Funds 40
ATTACHMENT C Request For Award Period Extension 48
HIDTA Assistance Center
8401 Northwest 53rd Terrace, Suitc 200
Miami, Florida 33166
305) 716 -3000
•
Office of National Drug Control Policy
Financial and Administrative Guide
HIDTA Cooperative Agreement
..
41
1/96
PART I - GENERAL INT'ORMA.TION
Chapter 1 :Uniform Administrative Requirements
Grants issued to state, local, and federally recognized Indian tribal governments are subject to the
administrative requirements of the Uniform Requirements for Grants and Cooperative .-,kf!retmencs
known as the Common Rule as codified in 21 CFR Pan 1403. Grants to institutions of higher
education, hospitals, and other nonr)rofit organizations are to be administered in accordance with
the uniform requirements of OMB Circular A -1 10. The standards set forth in the ON-DCP
Financial and Administrative Guide are consistent with the administrative requirements of these two
circulars.
This document is provided for the use of all recipients and their subrecipients. This Manual is to
serve as the primary reference for financial management and grant administration. Specific
organizations which are to use the Manual include:
1. Direct Recipients. Cooperative agreement recipients shall adhere to the provisions of this
Manual. Requirements of a programmatic and technical nature for recipients of cooperative
agreements awards are contained in the program guidance.
2. Subrecipients. Units of government and other organizations receiving federal financial
assistance from the State shall adhere to applicable State laws and procedures. The Circulars and
Common Rules specific to that organization type should also apply.
3. Individuals. Individuals from the above organizations who may use this Manual include:
administrators, financial management specialists, grants management specialists, accountants and
auditors. These individuals are to use the Manual as their financial policy reference in executing
their duties under agency - funded programs and projects.
4. Contractors. This ,vfarival is not for the direct use of contractors. However, direct
recipients should ensure that monitoring of organizations under contract to them is performed in a
manner that will ensure compliance with their overall financial management requirements.
Chapter 2: Legislative Authority
HIGH INTENSITY DRUG TRAFFICKING AREAS
AUTHORIZATION: Anti -Drug Abuse Act of 1988, Public Law 100 -690.
OBIECTIVES: The High Intensity Drug Trafficking Areas (HIDTAs) -- designated by the Director
of the Office of National Drug Control Policy- -are the most critical drug trafficking areas of the
United States. Local, State, and Federal partnerships, embodied in the HIDTA Executive
Committees, of these areas are provided resources for jointly reducing drug trafficking activities- -
particularly those activities which have a harmful impact in other areas of the United States.
Chapter 3: Definitions
Administrative requirements are set forth at 21 CFR Part 1403 for state and local units of
government.
Award The funding mechanism may take the form of grants, cooperative agreements, contracts
and/or other agreements.
Awarding agency may be an agency of the federal government or the direct or indirect recipient of
federal funds.
CFR is the Code of Federal Regulations. The Office of national Drug Control Policy publishes its
regulations in Title 21 of the CFR.
Close -out is a process in which the awarding agency determines that all applicable administrative
actions and all required wort: of the award have been completed by the recipient and the awarding
agency.
Cooperative agreements are awarded to States, units of local government or private organizations
at the discretion of the award agency. Cooperative agreements are utilized when substantial
involvement is anticipated between the awarding agency and the recipient during performance of
the contemplated activity.
Contracts are entered into by the awarding agency, recipients or subrecipients and commercial
(profit - making) and nonprofit organizations. With the exception of a few justified sole source
situations, contracts are awarded via competitive processes to procure a good or service.
Domestic travel includes travel within and between Canada, the United States and its territories
and possessions.
Equipment Tangible nonexpendable personal property having a useful life of more than 1 year and
an acquisition cost of 55,000 or more per unit. A recipient/subrecipient may use its own definition
of equipment provided that such definition would at least include all equipment defined above.
Foreign travel includes any travel outside of Canada and the United States and its territories and
possessions.
Interagency agreements and purchase of service arrangements are usually entered into by two
governmental units or agencies. Such funding arrangements are negotiated by the entities involved.
Pass - through is an obligation on the part of the States to make funds available to units of local
governments, combinations of local units, or other specified groups or organizations.
is
Personal property Personal property means property of any hind except real property. it may be
tangible (having physical existence) or intangible (having no physical existence, such as patents,
inventions, and copynghts).
Preagreement costs are defined as those costs Which are considered necessary to the project but
occur prior to the starting date of the award period.
Prior approval means written approval by the authorized official evidencing consent prior to a
budgetary or programmatic change in the axvard.
Program income means Bross income earned by the recipient, during the funding period, as a
direct result of the award. Direct result is defined as a specific act or set of activities that are
directly attributable to grant funds and which are directly related to the goals and objectives of the
project.
Real property. Real Property means land, land improvements, structures, and appurtenances
thereto, excluding movable machinery and equipment.
Recipient means an individual and/or organization that receives federal financial assistance directly
from the federal agency.
Subrecipient means an individual and/or organization that receives federal financial assistance from
the direct recipient of federal funds.
Suspension is temporary withdrawal of authority to incur expenditures against grant funds pending
corrective action by the grantee or a decision to terminate the award.
Termination is the permanent withdrawal of authority to incur expenditures against previously
awarded funds before that authority would otherwise expire.
0
PART 11 - PRE AWARD REQUD�-,ENENTS
® Chapter 1: Application Process
Eligible Recipients. Cooperative agreements are awarded to State and local government units
and State and local law enforcement agencies located within the specific geographical areas
outlined in the National Drug Control Strategy.
Program Announcements. Programmatic and technical requirements relating to the IiIDTA
grants are contained in the Program Guidance available from the awarding agency. The awarding
agency announces the programs which it has developed for funding under its cooperative
agreement award program. These announcements are published in the FEDERAL REGISTER.
The awarding agency is required to assure that awards meet certain legislative, regulatory, and
administrative requirements. This agency's policy is to provide assurance that awards are only for
allowable, allocable, fair and reasonable costs. Awards must be made only to eligible rec�p�ents.
Applicants must possess the responsibiliry and financial management/fiscal integrity capability
necessary to adequately and appropriately administer Federal funds. The awarding agency will
follow the requirements stipulated in the administrative requirements for grants and agreements that
are codified at! 1 CFR Part 1403.
The awarding agency will hold a recipient accountable for any overpayment, audit disallowance or
any other breach of award that results in a debt owed to the Federal Government. The awarding
agency shall apply interest, penalties, and administrative costs to a delinquent debt owed by a
debtor pursuant to the Federal Claims Collection Standards and OMB Circular A -129.
The awarding agency wi11 perform Financial analysis of project applications includes.
(1) Performing a cost analysis of each project application considered for funding by the
awarding agency;
Cost analysis includes obtaining cost breakdowns, verifying cost data, evaluating specific
elements of costs, and examining data to determine the.necessiry, reasonableness, allowability,
mi
allocability, and appropriateness of the proposed cost. The form and eanent of such an analysis will
be determined by the awarding agency.
(2) Determining the adequacy of the applicant's accounting system and operations to ensure
that Federal funds, if awarded, will be expended in a judicious manner.
(3) Reviewing delinquency status of Federal debt and other prescreening information. The
awarding agency will take such information into account when considering the application for
award.
4
Review of nonprocurement debarment and suspension certification prior to recommendation
for or against an award. The government wide common rule for debarment and suspension and
• drug -free workplace, 21 CFR, Part 1404, provides guidance on requirements that recipients shall
meet in order to receive Federal funds.
•
(1) Title 21 CFR Part 1404 provides that executive departments and agencies shall participate
in-a system for debarment and suspension from programs and activities involving Federal financial
and nonfinancial assistance and benefits. Debarment or suspension of a participant in a program by
one Agency has government wide effect. It is the policy of the Federal Government to conduct
business only with responsible persons and these guidelines will assist agencies in carrying out this
policy.
(2) Certification Regarding Debarment, Suspension Ineligibility and Other Responsibility
Matters Primary Covered Transactions must be completed and submitted by recipients of
cooperative agreement awards to the awarding agency's program offices during the application
stage.
(�) Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion -
Lower Tier Covered Transactions. This requirement includes persons, corporations, etc, who have
critical influence on or substantive control over the award. The direct recipient will be responsible
for monitoring the submission and maintaining the official subrecipieni certifications.
(4) To summarize, the debarment and suspension common rule requires that both recipients and
their subrecipients certify they will comply with the debarment and suspension common rule. There
is no dollar threshold for certification.
Review of the government wide drug -free workplace certification prior to recommendation for
government
wide common rule for debarment and suspension and
or against an award. The
drug -free workplace, 21 CFR Part 1404, provides guidance on requirements that recipients shall
meet in order to receive Federal funds.
Subpart F of 21 CFR Pan 1404 implements the statutory requirements of the Drug -Free
Workplace Act of 1988. All recipients receiving awards from any Federal Agency shall certify to
that Agency that they will maintain a drug -free workplace, or, in the case of a recipient, who is an
individual, certify to the Agency that his or her conduct of award activity will be drug -free. If a
recipient makes a false certification, the recipient is subject to suspension, termination and
debarment.
(1) The State agency responsible for administering the award shall submit a drug -free
workplace certification to the award agency and shall be responsible for obtaining a drug -free
workplace certification from each State agency that is subawarded funds. Subrectpients who are
not State agencies are not required to submit a drug -free workplace certification.
5
(2) A recipient is required to make the requited certification for each award. The one exception
to this rule is that 'a recipient who is a State, including a State agency may elect to make a single
annual certification to each award agency whichit obtains awards, rather than making a separate
• certification for each award or work place. Only one such annual certification need be made to each
Federal Agency which will cover all of that State agency's workplaces.
(3) The organizational recipient certifies that it will provide a drug -free workplace by:
•
a. Publishing a statement notifying employees that the unlawful manufacture,
distribution, dispensing, possession or use of a controlled substance is prohibited in
the recipient's workplace and specifying the actions that will be taken against
employees for violation of such prohibition.
b. Establishing a drug -free awareness program to inform employees about:
The dangers of drug abuse in the workplace;
2. The recipient's policy of maintaining a drug -free workplace;
3. Any available drug counseling, rehabilitation, and employee assistance
programs; and
4. The penalties that may be imposed upon employees for drug abuse violations
occurring in the workplace.
C. Making it a requirement that each employee to be engaged in the performance of the
award be given a copy of the employer's statement about drugs in the workplace.
d. Notifying the employee that, as a condition of employment under the award, the
employee will:
Abide by terms of the statement; and
2. Notify the employer of any criminal drug statute conviction for a
violation occumng in the workplace not later than 5 days after such
conviction.
e. Notifying the award agency within 10 days after receiving notice from an employee
or otherwise receiving actual notice of such conviction.
f. Taking one of the following actions, within 30 days of receiving notice with respect
to any employee who is so convicted:
0
•
1. Taking appropriate personnel action against such an employee, up
to and includinz termination; or
1) Requiring such employee to participate satisfactorily in a drug abuse
assistance or rehabilitation program approved for such purposes by a
Federal, State, or local health, law enforcement, or other appropriate agency,
S. Making a good faith effort to continue to maintain a drug -free workplace.
(4) To summarize, the drug -free workplace common rule requires that ONLY direct recipients
of federal awards certify they will comply with the drug free workplace common rule. There is no
dollar threshold for certification.
Review of the government wide lobbying restrictions certification prior to recommendation for
or against an award. The government wide common rule for restrictions on lobbying, 21 CFR Part
1405, provides guidance on requirements that recipients shall meet in order to receive Federal
funds.
The following restrictions on Iobbyina are applicable to all recipients, and subrecipients. Interim
Final Guidance for New Restrictions on Lobbying was published in the Federal Register in
December 1989. A proposed Common Rule was published in the Federal Register in February
1990 providing guidance on the restrictions (disclosure, certification, reporting, etc, requirements)
on lobbying. The new restrictions on lobbying are as follows:
(1) No Federally appropriated funds may be expended by the recipient of a Federal award,
cooperative agreement, or contract to pay a person for influencing or attempting to influence an
officer or employee of any Agency, .a .Member of Congress, an officer or employee of Congress, or
an employee of a Member of Congress in connection with any of the following covered Federal
actions: the awarding of any Federal contract, the making of any Federal award, the entering into of
any cooperative agreement, and the extension, continuation renewal, amendment, or modification
of any Federal contract, award, or cooperative agreement.
(2) Each person who requests or receives from an Agency.an initial Federal contract, award, or
cooperative agreement (including subcontracts, subawards, and contracts under cooperative
agreements) exceeding 5100,000 shall 6le with that Agency a certification regarding lobbying. The
certification shall be submitted to the Agency making your award. Each person is certifying that:
a. They have not made, and will not make, any payment for lobbying activity.
b. If any non- Federakfunds have been paid or will be paid to any person they will
complete and submit a "Disclosure of Lobbying Activities" form (Standard Form
LLL).
7
C. The language of this certification will be included in their award documents for ali
subawards at all tiers (including subcontracts, subawards, and contracts under
® awards and cooperative agreements) and that all subrecipients shat! certify and
disclose accordingly.
d. Each person if applicable shall submit the Disclosure Form to the Agency malting their awl
The recipient or subrecipient is responsible for reporting lobbying actwities of its employer
the employee's tenure is less than 130 working days within I year immediately preceding th
date of the recipient's or subrecipients application or proposal submission.
e. A subrecipierit, who requests or receives Federal funds exceeding 5100,000 shall be
required to file with the agency making their award, a certification, and a Disclosure
Form, if applicable. All certifications shall be maintained by the agency malting the
award and all Disclosure Forms shall be forwarded from tier to tier until received by the fec
agency making the award. That agency shall forward all Disclosure Forms to the awarding
agency.
(3) The requirements in the "New Restrictions on Lobbying" DO NOT apply to Federally recognized
Indian tribes or, tribal organizations, or any other Indian organization with respect to expenditures
specifically permitted by other Federal law.
(4) Each person shall file a Disclosure Form at the end of each calendar quarter in which there occurs
event that requires disclosure or that materially affects the accuracy of the information contained in any
Disclosure Form previously filed by such persons. Examples of such events are:
a. A cumulative increase of 525,000 or more in the amount paid or expected to be paid
for influencing or attempting to influence a covered Federal action;
b. A change in the person(s) or individual(s) influencing or attempting to influence a
covered Federal action; or
C. A change in the officer(s), employee(s), or member(s) contacted to influence or
attempt to influence a covered Federal action.
(5) Penalties and enforcement of lobbying restrictions shall be as follows:
a. Any person who makes an expenditure prohibited by the New Restrictions on
Lobbying shall be subject to a civil penalty of not less than 510,000 and not more
than 5100,000 for each such expenditure.
b. Any person who fails to file or amend the Disclosure Form to be filed or amended, if
required, shall be subject to a civil penalty of not less than 510,000 and not more
than 5100,000 for each such failure.
E
(6) To summarize, the common rule for lobbying requires certification that recipients and their
stibrecipients certify they will comply with the lobbying common rule. This requirement is only for
awards made exceeding 5100,000.
To comply with the certification requirements provided in the common rules for lobbying, drug -free
workplace and suspension and debarment, so that recipients do not have to sign three certifications,
we have combined them into ONDCP Form entitled "Certifications Regarding Lobbying,
Debarment, Suspension and Other Responsibility Matters, and Drug -free Workplace
Requirements."
Policy on Making Awards. It is the policy of this agency that it will not make an award to any
applicant who has an overdue audit report or an open audit report where the recipient has not
attempted to respond or has taken no action to resolve findings. Every applicant for funding is on
notice that unless they are in compliance with the audit requirements, their application may be
rejected. Exceptions to this policy are by recommendation of ONDCP, HDTA Office,
Chapter 2: Conditions of Award and Acceptance
Award Document. After completion of the internal review process, applications designated for
approval are formally awarded in the form of an issuance of an Award Document. This document
includes:
Name of recipient and subrecipient (if applicable)
' .Award period
Type of Federal funds
.Amount of Federal funds
. Award number
Special conditions that the recipientlsubrecipient must meet if the award is accepted.
This award notification is applicable to all award applications approved for award. Correspondence
concerning the award should refer to the designated award number shown on the Award
Document.
Acceptance Procedures. The Award Document constitutes the operative document obligating
and reserving Federal funds for use by the recipient in execution of the program or project covered
by the award. Such obligation may be terminated without further cause if the recipient fads to
affirm its timely utilization of the award by signing and returning the signed acceptance to the
award agency WITHIN 45 DAYS from the date of award. No Federal funds will be disbursed to
the .recipient until the signed acceptance has been received by the awarding agency.
9
Special Conditions include terms and conditions of the award. The special conditions applied to
the HTDTA cooperative agreements are included in Attachment A.
Federal Obligation Process. After an award has been signed by the federal awarding agency, the
amount of the award is considered an obligation of the Federal Government and is recorded as such
in-its accounting system. Appropriated funds are thereby reserved against the award until all
monies are expended by the recipient and subrecipient or, in case of non - utilization of funds within
statutory or other time limits, appropriated funds revert to the awarding agency through
deobligation of the unused balance.
Chapter 3: Standards for Financial Management Systems
All recipients are required to establish and maintain accounting systems and financial records to
accurately account for funds awarded to them.
State recipients shall expend and account for grant funds in accordance with State laws and
procedures for expending and accounting for its own funds. Subrecipients of States shall follow
the financial management requirements imposed on them by States. (State and local procedures
must ensure subrecipients comply with the financial management standards found at 21 CFR Part
1403.)
Accounting System
The recipient is responsible for establishing and maintaining an adequate system of accounting and
internal controls for itself and for ensuring that an adequate system exists for each of its
subrecipients. An acceptable and adequate accounting system is considered to be one which.
(1) Accurate, current, and complete disclosure of all financial transactions related to the
HTDTA initiative;
(2) Effective control over, and accountability for, funds, property, and other assets;
(3) Records that adequately identify the receipt and disbursement of funds;
(4) Records of expenditures by the cost categories of the approved project budget and the
comparison of actual expenditures against budget estimates;
(5) Source documentation, e.g., invoices, travel reports, purchase orders, for all project
expenses;
(6) Procedures that assure timely and appropriate resolution of audit findings and
recommendations.
E
Commingling of Funds. Federal agencies shall not reauire physical segregation of cash deposits
or the establishment of any eligibility requirements for funds which are provided to a recipient.
® However, the accounting systems of all recipients :and subrecipients, must ensure that agency funds
are not commingled with funds from other Federal agencies. Each award must be accounted for
separately. Recipients and subrecipients are prohibited from commingling funds on either a
program -by- program basis or a project -by- project basis.
Funds specifically budgeted and/or received for one project may not be used to support another.
Where a recipient's or subrecipient's accounting system cannot comply with this requirement, the
recipient or subrecipient shall establish a system to provide adequate fund accountability for each
project which it has been awarded.
Recipient and Subrecipient Responsibilities include:
(1) Reviewing Financial Operations. Direct recipients should be familiar with, and periodically
monitor, their subrecipient's financial operations, records, system, and procedures. Pariicular
attention should be directed to the maintenance of current financial data.
(2) Recording Financial Activities. The subrecipient's award or contract obligation, as well as
cash advances and other financial activities, should be recorded in the books of the recipient in
summary form. Subrecipient expenditures. should be recorded on the books of the recipient, or
evidenced by report forms duly filed by the subrecipient. Non - Federal contributions applied to
programs or projects by subrecipients should likewise be recorded, as should any program income
resulting from program operations.
(3) Budgeting and Budget Review. The recipient should ensure that each subrecipient prepares
an adequate budget on which its award commitment will be based. The detail of each project
budget should be maintained on file by the recipient.
(4) Accounting for Non - Federal Contributions. Recipients will ensure, that the requirements,
limitations, and regulations pertinent to non - Federal contributions are applied.
(5) Audit Reouirement. Recipients are required to ensure that subrecipients have met the
necessary audit requirements contained in this manual. .
(6) Reporting Irregularities. Recipients and their subrecipients are responsible for promptly
notifying the grantor agency and the Federal cognizant audit agency of any illegal acts or
irregularities and of proposed and actual actions, if any. Illegal acts and irregularities include
conflicts of interest, falsification of records or reports, and misappropriation of funds or other
assets.
(7) Debarred and Suspended 0r anizations. Recipients and subrecipients must not award or
permit any award at any level to any party which is debarred or suspended from participation in
Federal assistance programs. For details regarding debarment procedures. (See 21 CFR, Part 1404,
•
Government wide Debarment and Suspension (Nonprocurement) and Government wide
Requirements for Drug -free Workplace (Grants.)
Where the conduct of a program or one of its components is delegated to a subrecipient. the direct
recipient is responsible for all aspects of the program including proper accounting and financial
record beeping by the subrecipient. Responsibilities include the accounting of receipts and
expenditures, cash management, the maintaining of adequate financial records, and the refunding of
expenditures disallowed by audits.
Cash Depositories. Tn accordance with the administrative requirements for government and
nongovernmental entities, recipients are encouraged to use rninonry banks (banks which are owned
at least 50 percent by minority group members). A list of minority owned banks may be obtained
from the iV;:.inonry Business Development Agency, Department of Commerce, Washington, D.C.
20230,
Supplanting. A written certification must be provided to the awarding agency that Federal funds
will not be used to supplant State or local funds. Federal funds must be used to supplement the
existence of funds for program activities not replace those funds which have been appropriated for
the same purpose.
12
PART Ill - POST AWARD REQU]RE�IVENTS
® Chapter l: Payments
The Office of National Drug Control Policy ( ONDCP) offers two Methods of Payment of grant
funds: Vendor Express or Treasury Check.
Vendor Express is available for grant recipients who do not have a personal computer with a
modem but want to receive payments electronically to their bank. The bank must be FDIC insured.
It is desirable that the bank be a member of the Federal Reserve System. The account must be
interest bearing. All payments greater than 525,000 must be made by Eelectronic Funds Transfer.
Recipients must request a waiver from this provision for payments less than 525,000. To be
established on Vendor Express, ONDCP requires the grantee to complete the Vendor Express
enrollment form, SF 388 i. This will provide the banking information needed to make payments to
the proper bank account. To request a payment, the grantee must submit a Request for Advance or
Reimbursement form SF 270. Copies of invoices, payroll registers, and canceled checks must
accompany the SF 270 to provide documentation for the reimbursement request. Request for
advances will be accompanied by detail specifying the obligation. Documentation of how the
advance was spent must be submitted before another advance or reimbursement can be requested.
Upon receipt, review, and approval of the SF 270, ONDCP will notify Treasury to electronically
send funds to the grantee's bank account.
Treasury Check.. Grantees who do not use Vendor Express will be paid by a Treasury Check.
Grant recipients send in a completed SF 270 form to request a payment. Upon review and
approval, ONDCP will submit a Schedule for Payment to Treasury for the requested amount.
Treasury will issue and mail the check directly to the grantee within three to four days after
receiving the Schedule for Payment.
Minimum Cash on Hand. Whatever payment method is used, recipient organizations should
request funds based upon immediate disbursement requirements. Funds will generally not be paid
in a lump sum, but rather disbursed over time as project costs are incurred or anticipated.
Recipients should time their draw down requests to ensure that Federal cash on hand is the
minimum needed for disbursements to be made immediately or within a few days.
Chapter 2: Period of Avaiiability of Funds
Funding Fiscal Year. Cooperative Agreements made by ONDCP are awarded for a specified time
and a particular award period is established for each award (usually 12).
Obligation of Funds. Any funds not properly obligated by the recipient within the award period
will lapse and revert to the awarding agency.
13
Expenditure of Funds. Cooperative Agreement funds which have been properly obligated by the
end of the award period will have 90 days in which to be liquidated (expended). Any funds not
® liquidated at the end of the 90 -day period will lapse and revert to the award agency.
Award Extensions. Cooperative Agreements may be awarded an extension of the obligation date
in. response to a written request for an extension stating the need for the extension and indicating
the additional time required. Written requests must be submitted in the 90 calendar days before the
end date of the award. To request an automatic 6 month extension, submit the Request for
Extension Form (Attachment C).
The extension allowable for any project period is generally 6 months and requests for retroactive
extension of project periods will not be considered. Generally, only one extension per award will
be permitted. Application for an extension of the obligation period of a program or set of programs
beyond 6 months must be justified by extraordinary circumstances beyond the control of the
recipient and subrecipient.
Extensions will only be considered if the extension criteria established below are met by the
recipient at the time the request for the extension of the obligation deadline is submitted to the
awarding agency for approval. Modifications of the general extension policy stated above are at
the discretion of the awarding agency. Extension of the expenditure deadline date is allowable for
all awards upon written request for the extension and written approval by the awarding agency.
The extension criteria for extending the obligation or expendirure deadline for a project, program or
set of programs includes the following:
(1) Financial Reports. There must be on file with the awarding agency, current and acceptable
Financial Status Reports, SF 269's, and all identified financial issues must be resolved.
(2) Special Conditions. All special conditions attached to the award must be satisfied except
those conditions that must be fulfilled in the remaining period of the award. This also includes the
performance and resolution of audits in a timely manner.
(3) Justification. A narrative justification must be submitted with the project or program
extension request. Complete details must be provided, including, the justification and the
extraordinary circumstances which require the proposed extension. Explain the effect of a denial of
the request on the project or program.
(4) Approval. The awarding agency is expected to take action on any proposed extension
request within 15 work days after receipt of the request.
(5) Extension Avoidance. To avoid the need to make a request to extend the obligation or
expenditure deadline of a program, all subawards should be made at least 6 months prior to the end
of the obligation deadline for the award.
14
n
Chapter 3: Program Income
Examples of Program Income and the Policies.Governing the Disposition of the
Various Types of Program Income.
(l) Asset Seizures and Forfeitures. Income received from the sale of seized and forfeited assets
(persona.) or real property) or from seized and forfeited money shall follow the "Addition Method "
of handling program income unless an alternate method for handling program income is designated
in the recipient's award document. The following policies apply to program income from asset
seizures and forfeitures:
a. Program income, with the approval of the'recipient/subrecipient, may be retained by
the entity earning the program income or used by the recipient for any purpose that
furthers the objectives of the legislation under which the grant was made.
(2) Other Guidelines. In the absence of other restrictions on disposition contained within the
award or the terms and conditions ofthe project, program income shall be added to the funds
committed in the agreement (Addition Method of handling program income). The program income
shall be used by the recipient/subrecipient for any purpose that furthers the broad objectives of the
legislation under which the award was made (i.e., expanding the project or program, continuing the
project or program that furthers the broad objectives of the State, obtaining equipment or other
assets needed for the project or program or for other activities that further the statute's objectives).
a. Responsibilities The awarding agency's recipients will be responsible
for the implementation and compliance of program income guidelines.
b. Accountabilirv. All income generated as a direct result of an agency funded project
shall be deemed program income. It must be used for the purposes and under the
conditions applicable to the award. The Federal portion of program income must be
accounted for up to the same ratio of Federal participation as funded in the project
or program.
Recovery of Costs Incurred by State and Local Law Enforcement Agencies." Section 7624,
Reimbursement to State and Local Law Enforcement Agencies, has been added to Subchapter B of
Chapter 78 of the Internal.Revenue Code of 1986.
(1) Authorization of Reimbursement. When a State or local law enforcement agency provides
information to the Internal Revenue Service (IRS) that substantially contributes to the recovery of
Federal taxes imposed with respect to illegal drug - related activities (or money laundering in
connection with such activities), the agency may be reimbursed by IRS for costs incurred in the
investigation (including but not limited to reasonable expenses, per diem, salary, and overtime) not
to exceed 14 percent of the sum recovered.
15
. (2) Records. The IRS maintains records of the receipt of information from a contributing
agency and shall notify the agency when monies have been recovered as the result of such
information. Following such notification, the agency shall submit a statement detailing the investi-
gative costs it incurred. Where more than one State or local agency has given information, the IRS
equitably allocates investigative costs among the agencies not to exceed an aggregate amount of 10
percent of the taxes recovered.
(3) No Duplicate Reimbursement. No State or local agency may receive reimbursement under
SS 7624 if reimbursement-has been received by the agency under a Federal or State forfeiture
program or under State revenue laws.
(4) Grantor Agency Funds. If the info rmation/investi2ation is performed with grantor agency
funds, the reimbursement received from MS would be program income and subject to the program
income guidelines discussed above.
Chapter 4: Adjustments to Awards
All requests for programmatic and/or administrative budget changes must be submitted in a timely
manner by the recipient/subrecipient. All requests for changes to the approved award shall be
carefully reviewed by the applicable authority for both consistency with this Manual and their
contribution to project goals and objectives.
Reprogramming of Funds
Reprogramrrting of funds requires different levels of approval based on the amount to be
reprogrammed and whether the reprogramming is intra agency or intra initiative. In al] cases the
recipient is responsible for maintaining detailed records of the reprogramming activities and
forwarding notification to your IOTA Director regarding reprogramming activities as they occur.
Funds up to 10% of the total award, may be reprogrammed between budget categories without
prior approval provided that the reprogranuning is within the same agency and the same initiative.
This 10% is applied to a singular reprogramming or the aggregate of reprogramming per funding
year.
Any reprogramming of funds in excess of 10% of the award, or when aggregate reprogramming
will.exceed 10% of award, requires the written approval of your HIDTA director. The
reprogramming must be within the same agency and the same initiative.
Reprogramming of funds between agencies or initiatives require the written approval of the
ONDCP HIDTA Office, regardless of the dollar value of the reprogramming.
H
Chapter 5: Property
® :i,c uisition of Property. Reci Tents /subrecipients are required to be prudent in the acquisition
q P �3 P q q
and management of property with federal funds. Expenditure of funds for the acquisition of new
propertyy, when suitable property required for the'successful execution of projects is already
available within the recipient or subrecipient organization, will be considered an unnecessary
expenditure.
Screening. Careful screening should take place before acquiring property in order to ensure that it
is needed with particular consideration given to whether equipment already in the possession of the
recipient/subrecipient organization can meet identified needs. While there is no prescribed standard
for such review, recipient/subrecipient procedures may establish levels of review dependent on
factors such as the cost of the proposed equipment and the size of the recipient or subrecipient
organization. The establishment of a screening committee may facilitate the process; however, a
recipient or subrecipient may utilize other management techniques which it finds effective as a basis
for. determining that the property is needed and that it is not already available within the recipient's
organization.
The awarding agency's program monitors must ensure that the screening referenced above takes
place and that the recipient/subrecipient has an effective system for property management.
Recipients /subrecipients are hereby informed that if the awarding agency is made aware that the
recipient /subrecipient does not employ an adequate property management system, project costs
associated with the acquisition of the property may be disallowed.
Loss, Damage or Theft of Equipment. Recipients/subrecipients are responsible for replacing or
repairing the property which is willfully or negligently lost, stolen, damaged or destroyed. Any
loss, damage, or theft of the property must be investigated and fully documented and made pan of
the official project records.
Equipment and Nonexpendable Personal Property Acquired with Cooperative A- reement
Funds
(1) Title to equipment acquired with federal funds will vest upon acquisition in the recipient
subject to the obligations and conditions set forth in 21 CFR Pan 1403 for state and local units of
government.
(2) Use
A State shall use equipment acquired under an award by the State in accordance with State laws
and procedures.
Other government recipients and subrecipients shall use equipment in the accordance with the
Following:
17
a Equipment must be used by the recipient or subrecipient in the program or project
® 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 ort2inai
program or project, the equipment may be used in other activities currently or
previously supported by a Federal`Agency.
•
b The recipient or subrecipient shall also make equipment available for use on other
projects or programs currently or previously supported by the Federal Government,
providing such use does not interfere with the work on the projects or programs for
which it was originally acquired. First preference for other use shall be given to
other programs or projects supported by the awarding agency. User fees should be
considered, and treated as program income to the project, if appropriate.
c Notwithstanding program income, the recipient or subrecipient shall not use
equipment acquired with funds to provide services for a fee to compete unfairly with
private companies that provide equivalent services, unless specifically permitted or
contemplated by Federal starue.
d When acquiring replacement equipment, recipients or subrecipients may use the
equipment to be replaced as a trade -in or sell the equipment and use the proceeds to
offset the cost of the replacement equipment subject to the written approval of the
awarding agency.
(3) Management
a. A State shall manage its equipment acquired under an award in accordance with
State laws and procedures.
b. Other government recipient and subrecipient procedures for managing equipment
(including replacement), whether acquired in whole or in part with project funds,
will, as a minimum, meet the following requirements:
Property records must be maintained which include:
Description of the property
Serial number or other identification number
Source of the property
Identification of who holds the title
Acquisition date
Cost of the property
Percentage of Federal participation in the cost of the property
Location of the property
13
Use and condition of the property
Disposition data including the date of disposal and sale price
® 2. A physical inventory of the property must be taken and the results
reconciled with the property records at least every 2 years.
•
A control system must exist to ensure adequate safeguards to
prevent: Loss, Damage, or Theft of the property.
4. Adequate maintenance procedures must exist to keep the property
in good condition.
If the recipient or subrecipient is authorized or required to sell the
property, proper sales procedures must be established to ensure the highest
possible return.
(4) Disposition
a. A State shall dispose of its equipment acquired under the award by the State in
accordance with State laws and procedures.
b. Other government recipients and subrecipients shall dispose of the equipment when
original or replacement equipment acquired under the award or subaward is no
longer needed for the original project or program or for other activities currently or
previously supported by a Federal Agency. Disposition of the equipment will be
made as follows:
Items with a current per -unit fair market value of less than 55,000 may be
retained, sold or otherwise disposed of with no further obligation to the
awarding agency.
Items with a current per unit fair market value in excess of 55,000 may
be retained or sold and the awarding agency shall have a right to an amount
calculated by multiplying the current market value or proceeds from sale by
the awarding agency's share of the equipment. Seller is also eligible for sale
cost.
In cases where a recipient or subrecipient fails to take appropriate
disposition actions, the awarding agency may direct the recipient or
subrecipient to take other disposition actions.
(5) Transfer of7itle The awarding agency may reserve the right to transfer title to property
acquired with Federal funds that have a unit cost of 55,000 or more to the Federal Government or a
Le
L]
•
third parry named by the awarding agency, when such a third parry is otherwise eligible under
existing statutes. Such transfers are subject to the following standards:
a. The property must be identified in the award or otherwise made known to the
recipient in writing.
b. The awarding 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
awarding agency fails to issue disposition instructions within the I20 calendar day
period, the recipient shall follow standards set in 21 CFR Parts 1403
When title to property is transferred, the recipient shall be paid an amount calculates
by applying the percentage of participation in the purchase to the current fair market
value of the property.
Federal Equipment. In the event a recipient or subrecipient is provided federally owned
equipment, the following requirements apply:
(I) Title remains vested in the Federal Government.
(2) Recipients or subrecipients shall manage the equipment in accordance with awarding agency
rules and procedures, and submit an annual inventory listing.
(3) When the equipment is no longer needed, the recipient or subrecipient shall request
disposition instructions from the awarding agency.
Replacement of Property (Equipment and Nonexpendnble Personal Property). When an item
of property is no longer efficient or serviceable but the recipient /subrecipient continues to need the
property in its cnminal justice system, the recipient/subrecipient may replace the property through
trade -in or sale and subsequent purchase of new property, provided the following are met:
(l) Similar Function Replacement property must
property and must be of the same nature or character,
quality.
serve the same function as the oriuinal
although not necessarily of the same trade or
(2) Credits Value credited for the property, if the property is traded in, must be related to its
fair market value.
(3) Time Purchase of replacement property must take place soon enough after the sale of the
property to show that the sale and the purchase are related.
20
CJ
(4) - Compensation When acquiring replacement property, the recipient/ subrecipient may use
the property to be replaced as a trade -in or the proceeds from the sale of the property to onset the
cost of the new property.
(5) Prior Aoproval State subrecipients shall obtain the written perrrussion of the State to use
the provisions of this section prior to entering into negotiation for the replacement or trade -in of
property.
Retention of Property Records. Records for equipment, nonexpendable personal property, and
real property shall be retained for a period of 3 years from the date of the disposition or
replacement or transfer at the discretion of the awarding agency. If any litigation, claim, or audit is
started before the expiration of the 3 -year period, the records shall be retained until all litigation,
claims, or audit findings involving the records have been resolved.
Chapter 6: Allowable Costs
The governing OMB Circulars for costs include:
Oi1M Circular A -87, Cost Principles for State and Local Units of Governments
OMB Circular A -1 22, Cost Principles for Non -Profit Organizations
OMB Circular A -21, Cost Principles for Educational Institutions
Allowable costs are those costs identified in the circulars mentioned above. In addition, costs must
be reasonable, allocable, necessary to the project acid comply with the funding statute requirements.
Discussion of the certain elements of cost follows:
Compensation for Personal Services
Two or More Federal Grant Programs. Where salaries apply to execution of two or more grant
programs or cost activities, proration of costs to each acriviry must be made based on time and /or
effort reports. In cases where two or more grants constirute one identified activity or program,
salary charges to one grant may be allowable after written permission is obtained from the awarding
agency. Salary supplements including severance provisions and other benefits with nonfederal
funds are prohibited without approval of the awarding agency. (Refer to OMB Circular A -87, or
OMB Circular A -21.)
Extra Wort;
(l) A State or local government employee may be employed by a recipient or subrecipient in
addition to his full -time job provided the work is performed on the employee's own time and:
21
•
a. The compensation is reasonable and consistent with that paid for similar wort: in
other activities of State or local government;
b. The employment arrangement is approved arid proper under State or local
regulations (no conflict of interest); and
The time and/or services provided is supported by adequate documentation.
(2) To avoid problems arising from overtime, holiday pay, night differential, or related payroll
regulations, such employment arrangements should normally be made by the recipient or
subrecipient directly with the individual, unless there has been a transfer or loan of the employee for
which his regular and overtime services provided are to be charged to or reimbursed by the
recipient or subrecipient. Overtime and night differential payments are allowed only to the extent
the payment for such services is in accordance with the policies of the State or unit(s) of local
government and has the approval of the State or the awarding agency, whichever is applicable.
THE OVERTDVE PRENL EUM SHOULD BE PRORATED AMONG THE VARIOUS JOBS .AND
NOT CHARGED EXCLUSIVELY TO THE AWARDING AGENCY FUNDS.
(3) Payment of these premiums will be for work performed by award or subaward employees in
excess of the established work week (usually 40 hours). Payment of continued overtime is subject
to periodic review by the awarding agency.
Award Purposes and Dual Compensation. Charges ofthe time of State and local government
employees assigned to the cooperative agreement may be reimbursed to the extent they are directly
and exclusively related to the award.
IN NO CASE IS DUAL COMPENSATION ALLOWABLE.
That is, an employee of a unit of government may not receive compensation from their unit or
agency of government AND from an award for a single period oftime (e.g., 1 p.m. to 5 p.m.), even
though such work may benefit both activities.
Travel
Travel costs are allowable as expenses by employes who are in travel status on official business.
These costs must be in accordance with Federal or an organizationally approved travel policy.
Domestic Travel Recipients may follow their own established travel regulations. If a recipient
does not have an established travel policy, the recipient must abide by the Federal travel
regulations. Subrecipients of States must follow their State's established travel regulations. If a
State does not have an established travel policy, the subrecipient must abide by the Federal travel
rates.
,Y)
Foreign Travel includes any travel outside of Canada and the United States and its territories and
possessions. However, for a recipient or subrecipient located outside Canada and the United States
and its territories and possessions, foreign travel means travel outside that country. Prior approval
is required for all foreign travel.
Space
The cost of space in privately or publicly owned buildings used for the benefit of the program is
allowable subject to the conditions stated below:
The total cost of space may not exceed the rental cost of comparable space and facilities in
a privately -owned building in the same locality.
The cost of space procured for program usage may not be charged to the program for
periods of nonoccupancy, without authorization of the Federal awarding agency.
Rental Cost The rental cost of space-in a privately -owned building is allowable. Similar costs for a
publicly -owned building are allowable where "rental rate" systems, or equivalent systems that
adequately reflect actual costs, are employed. Such charges must be determined on the basis of
actual cost (including depreciation based on the useful He of the building, interest paid or accrued,
operation and maintenance, and other allowable costs). Where these costs are included in rental
charges, they may not be charged elsewhere. No costs will be included for purchases or
construction that were originally financed by the Federal Government.
Maintenance and Operation The cost of utilities, insurance, security, janitorial services, elevator
service, upkeep of grounds, normal repairs and alterations and the like, are allowable to the extent
they are not otherwise included in rental or other charges for space.
Rearraneements and Alterations Costs incurred for rearrangement and alteration of facilities
required specifically for the award program or those that materially increase the value or useful life
of the facility are allowable when specifically approved by the awarding agency.
Depreciation and Use Allowances on Public, -Owned Buildings Depreciation or a use allowance on
idle or excess facilities is NOT ALLOWABLE, except.when specifically authorized by the Federal
awarding agency.
Occupancy of Space Under Rental- Purchase or a Lease with Option -to- Purchase Agreement The
cost of space procured under such arrangements is allowable when specifically approved by the
award agency.
23
C
Chapter 7: Procurements Under Awards of Federal Assistance
Procurement Standards
0) General A State shall follow the same policies and procedures it uses for procurement from
its non - Federal funds. The State shall ensure that every purchase order or other contract includes
any clauses required by Federal statutes and executive orders and their implementing regulations.
Subrecipients of States shall follow the procurement requirements imposed upon them by States.
Other recipients and subrecipients will follow Common Rule of Grants.
(2) Standards Recipients and subrecipients shall use their own procurement procedures and
regulations, provided that the procurement conform to applicable Federal law and the standards
identified in the Procurement Standards Sections of 21 CFR Parts 1403. Any recipient/subrecipient
whose procurement system has been certified by a Federal Agency is not subject to prior approval
requirements of 21 CFR Pans 1403. The awarding agency's prior approval will only be required
for areas beyond limits of the recipientlsubrecipient certification.
(3) Adequate Competition All procurement transactions whether negotiated or competitively
bid and without regard to dollar value shall be conducted in a manner so as to provide maximum
open and free competition. All sole source procurements in excess of 5100,000 must receive prior
approval of the awarding agency. Interagency agreements between units of government are
excluded from this provision.
(4) Noncompetitive Practices The recipient/subrecipient shall be alert to organizational
conflicts of interest or noncompetitive practices among contractors which may restrict or eliminate
competition or otherwise restrain trade. Contractors that develop or draft specifications,
requirements, statements of work and/or RFD's for a proposed procurement shall be excluded from
bidding or submitting a proposal to compete for the award of such procurement. An exemption to
this regulation requires the prior approval of the awarding agency and is only given in unusual
circumstances such as when a nonprofit organization is acting as the agent for the State or local
unit of government. Any request for exemption must be submitted in writing to the awarding
agency.
Construction Requirements The following policies and procedures relevant to construction are
applicable to recipient/subrecipients. For the purpose of determining the appropriate fund ratios for
construction projects, refer to the legislation which authorizes the construction.
Construction means the erection, acquisition, renovation, repair, remodeling or expansion of new
or existing buildings or other physical facilities, and the acquisition or installation of initial
equipment. Initial equipment includes heating, plumbing, air conditioning, and electrical services
and similar fixed equipment items b. u.t does not include equipment not inherently a part of the
facility, such as office furniture and equipment.
24
(1) Qualifications When considering the use of agency funds for construction,
recipients /subrecipients must be cognizant of the following qualifications as to their use:
a. Costs which are incurred as a incidental and necessary part of a program and which
are for renovation, remodeling, maintenance, and repair costs which do not
constitute capital. expenditures ARE allowable but may NOT exceed 10 percent of
total project costs. .
b. The total cost of a construction project includes the cost of site preparation,
including demolition of existing structures. Any proceeds realized for site
preparation activities (e.g., salvage value of structures demolished or the proceeds
from sale of timber) shall be applied to the project (program income) and used to
reduce the total cost of the construction project.
C. Payment of relocation costs shall be in accordance with the "Uniform Relocation
Assistance and Real Property Acquisition Policy Act of 1970."
(2) Special Fiscal Conditions for Construction Projects. Funds for construction or facility
improvement, which require letting of a contract amounting to S; 00,000 or more to a private
company or individual shall require:
a. A bid guarantee equivalent to 5 percent of the bid price. The bid guarantee must
consist of a firm commitment such as bid bond, certified check, or negotiable
instrument accompanying a bid as assurance than the bidder will, upon acceptance of
his bid, execute such contractual documents as may be required within the time
specified after the forms are presented to him/her.
b. A performance bond on the pan of the contractor for 100 percent of the contract
price. "Performance bond" means a bond 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 ensure 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 the payment of money borrowed by a recipient
or subrecipient, the State may, at its discretion, require adequate bonding and insurance if the
bonding or insurance requirements of the recipient or subrecipient are not deemed sufficient to
protect adequately the interest of the Federal government. In those instances where construction of
facility improvements for less than 5100,000 are contemplated and the subrecipient does not have
any requirements for bid guarantees, performance bonds and payments bonds, the State will impose
State requirements on the subrecipients.
25
LJ
Chapter 8: Monitoring and Reporting Program Performances
Program Reports These reports are prepared in a riart-ative fashion in order to present information
relevant to the performance of a plan, program, or project.
HDTA Annual Report
2. Initiative Annual Reports
Both reports are due August 31st. A detailed format for report requirements is found in the Annual
Fiscal Year Program Guidance.
Chapter 9: Financial Reporting
In order to obtain financial information concerning the use of Federal funds, the awarding agency
requires that recipients of these funds submit timely reports for review. These reports are
consistent with the manner of reporting as set forth in 21 CFR Parts 1403.
Financial Status Report (SF 269A) This report is required from all recipients for each active
quarter on a calendar - quarter basis. In accordance with the requirements set forth in the UP, the
quarterly report shall be submitted by the recipient to the awarding agency within 30 days after the
end of the calendar quarter. ONDCP will allow a 15 day additional (grace) period for submission
of the quarterly SF 269A Report. The final report is due 90 days after the end of the award period
or any extension thereof. This report is designed to reflect summary financial information relating
to Federal and non - Federal obligations and outlays. Outlays and unpaid obligations must be
reported at the implementing agency level, e.g., recipient or subrecipient.
Chapter 10: Retention and Access Requirements for Records
Retention of Records In accordance with the requirements set forth in 21 CFR Part 1403, all
financial records, supporting documents, statistical records and all other records pertinent to award
shall be retained by each organization for at least 3 years following the closure of their most recent
audit report. Retention is required for purposes of Federal examination and audit. State or local
governments may impose record retention and maintenance requirements in addition to those
prescribed.
(1) Coverage The retention requirement extends to books of original entry, source documents
supporting accounting transactions, .the general ledger, subsidiary ledgers, personnel and payroll
records, canceled checks, and related documents and records. Source documents include copies of
all awards, applications and required recipient financial and narrative reports. Personnel and payroll
records shall include the time and attendance reports for all individuals reimbursed under the award,
26
whether they are employed full -time or part -time. Time and effort reports are also required for
consultants.
(2) Retention Period, The 3 year retention period starts from the date of the submission of the
closure of the single audit report which covers the grant period. If any litigation, claim,
negotiation, audit or other action involving the records has been started before the expiration of the
3 year period, the records must be retained until completion of the action and resolution of all
issues which arise from it or until the end of the regular 3 year period, whichever is later.
Maintenance of Records Recipients of funds are expected to see that records of different Federal
fiscal periods are separately identified and so maintained that information desired may be readily
located. Recipients are also obligated to protect records 'adequately against fire or other damage.
When records are stored away from the recipient's principal office, a written index of the location
of records stored should be on hand and ready access should be assured. .
Access to Records The awarding agency and the Comptroller Genera) of the United States, or any
of their authorized representatives, shall have the right of access to any pertinent books,
documents, papers, or other records of recipients which are pertinent to the award, in order to
make audits, examinations, excerpts, and transcripts. The right of access must not be limited to the
required retention period but shall last as long as the records are retained.
Chapter 11: Sanctions
If a recipient materially fails to comply with the terms and conditions of an award, whether stated in
a Federal statute, regulation, assurance, application, or notice of award may take one or more of
the following actions, as appropriate in the circumstances.
(! } Temporarily withhold cash payments pending correction of the deficiency by the
recipient.
(2) Disallow (that is, deny both use of funds and any applicable matching credit for) all
or pan of the cost of the activity or action not in compliance.
(3) Wholly or partly suspend or terminate the current award.
(4) Withhold further awards for the project or program.
(5) Take other remedies that may be legally available.
Chapter 12: Termination for Convenience
!. :.
The awarding agency's right to terminate any project will normally be exercised only where it has
reason to believe that the recipientlsubreciplent is mishandling project funds or is unable to carry
27
out the project properly in accordance with public policy and terms and conditions of the award. In
the event that the project is terminated, the awarding agency will
® Notiry the recipient in writing of its decision,
.7
Specify the reason
Accord the recipientlsubrecipient a reasonable time to terminate project operations
Request the recipient seek support from other sources.
A project which is prematurely terminated will be subject to the same requirements regarding audit,
record keeping, and submission of reports as a project which runs for the duration of the project
period.
Chapter 13: Costs Requiring Prior Approval
Written approval is required and for those costs specified in OMB Circulars A21, A -87, and A -122
as "Costs Allowable With Approval of Award Agency" or costs which contain special limitations.
Where prior approval is required in this section, the awarding agency will be the approval authority
for all recipients and for the State when it is the implementing recipient. Where prior approval
authority for subrecipients is required, it will be vested in the State unless specified as being
"RETAl\i ED BY THE FEDERAL AWARD AGENCY," as identified below.
The intention of the awarding agency is not to require approval of all changes within the listed cost
categories, but only for those aspects or elements which specifically require prior approval. Also,
the establishment of dollar expenditure levels in this section is intended to Furnish blanket approval
for modest project related outlays. Costs above such levels may also receive approval upon
submission of appropriate data and justification.
Responsibility for Prior Approval
Cooperative Agreement Awards: The awarding agency reviews for approval, all costs identified in
this section when the recipient is the direct beneficiary of the goods or services to be purchased or
supplied.
Procedure for Requesting Prior Approval. Requests must be in writing and justified with an
explanation to permit review of the allowabiliry. They may be submitted:
(1) Through inclusion in the budget or other components of an award or subaward application;
or
2S
(2) As a separate written request to the appropriate authority as described above.
0 Costs Requiring Prior Approval
.7
(1) Criminal iustice information and communication systems that are to be funded shall be
designed and programmed to maximize the use of standard and readily available computer
equipment and programs. Applicants involved in the development of criminal justice information
systems should utilize the past experience of those agencies which have successfully implemented
such systems. A detailed requirements analysis should be performed and a search for existing
software that could meet the identified requirements should be made before new software is
developed. If new software is developed, it shall be designed and documented so that other
criminal justice agencies will be able to use it with minor modifications and at minimum cost. A
recipient or subrecipient shall request approval prior to arranging for copyright of computer
software and programs.
Prior approval is NOT REQUIRED for the LEASE or RENTAL of such equipment,
nevertheless, assurance must be provided that leases or rentals greater than
5100,000 are obtained in accordance with Federal procurement standards.
b. Where the amount of the acquisition exceeds 5100,000, prior approval is
REQUIRED for the acquisition of equipment (out right purchase, lease- purchase
agreement, or other method of purchase).
PRIOR APPROVAL AUTHORITY IS RETAINED BY THE FEDERAL.
AWARDING AGENCY.
A review of ADP equipment procurement shall be REQUIRED and should include a
review of the description of the equipment to be purchased. This review shall be
documented in writing for the file and shall require the (award agency) to certify that
the procurement is consistent with the following requirements:
The ADP equipment of the type to be purchased was identified within the award
applications and is necessary and sufficient to meet the project goals.
The ADP equipment procurement is in compliance with existing Federal agency,
State, and local laws and regulations.
A purchaseflease comparison has been conducted demonstrating that it is more
advantageous to purchase rather than lease the ADP equipment under consideration.
g. If software development is involved, it has been demonstrated that computer
software already produced and available will not meet the needs of the award.
29
Ll
h. If the ADP equipment procurement is to be sole - source, and that procurement is
more than 5100,000, than documentation must have been submitted to justify the
action.
(2) Equipment and Other Capital Expenditures. Equipment and other capital assets, including
repairs which materially increase their useful life; are allowable if the recipient/subrecipient has
received prior approval.
a. Where expenditures for equipment are not fully justified by the budget and budget
narrative, the awarding agency may require that the type, quantity estimated, unit or
other information be provided through the issuance of special conditions to the
award.
b. In reviewing equipment acquisition budgets and proposals, the following principles
should be adhered to:
No other equipment owned by the recipient/subrecipient is suitable for the
effort.
No requests for luxury vehicles will be approved. Vehicle requests should
be reasonable, and recipients shall usually follow IRS guidelines for vehicles
for business use. Vehicles purchased via State or local central procurement
activities as part of a unit of government fleet are generally accepted as
reasonable.
Federal funds are not used to provide reimbursement for the purchase of
equipment already owned by the recipient/subrecipient.
(Exception: Equipment that has been purchased for a common pool and will
be charged to the award at cost value is ALLOWABLE. Equipment that has
already been purchased and charged to other activities of the organization
would NOT be an ALLOWABLE expense to the award.
4. Equipment purchased and used commonly for two or more programs has
been appropriately prorated to each activity.
(4) Preagreement Costs. Prior approval is required for preagreement costs. Costs which were
incurred prior to the start date of the award may be charged to the project only if they receive prior
approval from the awarding agency.
(5) Proposal Costs. Costs to projects for preparing proposals for potential Federal awards
require PRIOR APPROVAL.
30
The obligation or expenditure of funds, or
0 b. The performance or modification,. of an activity under a award/sub award project,
where such approval is required.
Chapter 14: UnalloNvable Costs
The governing OMB Circulars for costs include:
OMB Circular A -87, Cost Principles for State and Local Units of Governments
OMB Circular A -1 22, Cost Principles for Non -Profit Organizations
OMB Circular A -21, Cost Principles for Educational Institutions
Land Acquisition. The funding legislation specifies that no Federal award involving the renting,
leasing, or construction of buildings or other physical facilities shall be used for land acquisition.
Accordingly, land acquisition costs are unallowable.
Compensation of Federal Employees. Salary payments, consulting fees or other remuneration of
full -time Federal employees are unallowable costs.
Travel of Federal Employees. Costs of transportation, lodging, subsistence, and related travel
expenses of award agency employees are unallowable charges. Travel expenses of other Federal
employees for advisory committees or other program or project duties or assistance are allowable if
they have been:
(1) Approved by the Federal employee's Department or Agency; and
(2) Included as an identifiable item in the funds budgeted for the project or subsequently
submitted for approval.
Bonuses or Commissions The recipient or subrecipient is prohibited from paying any bonus or
commission to any individual or organization for the purpose of obtaining approval of an
application for award assistance. Bonuses to officers or board members of profit or nonprofit
organizations is determined to be a profit or fee and is unallowable.
Military Type Equipment Cost for such items as armored vehicles, explosive devices, and other
items typically associated with the military arsenal, excluding automatic weapons, are unallowable.
Exceptions MAY be made by the awarding agency upon a written request and justification from the
recipient.
31
r]
Lobbying All recipients and subrecipients must comply with the provisions of the Government
wide Common Rule on Restrictions on Lobbying, as appropriate. Refer to Par 11, Chapter I for
more specifics about those provisions.
The following lobbying cost prohibition is applicable to all recipients of funding.
(1) Attempting to influence the outcome of any Federal, State, or local election, referendurr>,
initiative, or similar procedure, through in -kind or cash contributions, endorsements, publicity, or
similar activity;
(2) Establishing, administering, contributing to, or paying the expenses of a political parry,
campaign, political action committee, or other organization established for the purpose of
influencing the outcome of elections;
Activities that are exempt from the above coverage:
(1) Providing a technical and factual presentation of information on a topic directly related to
the performance of an award, through hearing testimony, statements or lerters to the Congress or a
State legislature, or subdivision, member, or cognizant staff member thereof, in response to a
documented request (including a Congressional Record notice requesting testimony or statements
for the record at a regularly scheduled hearing) made by the recipient member, legislative body or
subdivision, or a cognizant staff member there of; provided such information is readily obtainable
and may be readily put in deliverable form; and further provided that costs under this section for
travel, lodging or meals are unallowable unless incurred to offer testimony at a regularly scheduled
Congressional hearing pursuant to a written request for such presentation made by the Chairman or
Ranking Minority Member of the Committee or Subcommittee conducting such hearing.
(2) Any lobbying made unallowable by the above paragraph to influence State legislation in
order to directly reduce the cost or to avoid material impairment of the organization's authority to
perform under the award.
(3) Any activity specifically authorized by statue to be undertaken with funds from an award.
Fund Raising Costs of organized fund raising, including financial campaigns, endowment drives,
solicitation of gifts and bequests, and similar expenses incurred solely to raise capital or obtain
contributions, may not be charged either as direct or indirect costs against the award. Neither the
salary of persons engaged in such activities nor indirect costs associated with those salaries may be
charged to the award, except insofar as such persons perform other funding - related activities.
An organization may accept donations (i.e., goods, space, services) as long as the value of the
donations is not charged as a direct or indirect cost to the awards.
32
A recipient may also expend funds, in accordance with approved award terms, to seek hirufe
funding sources to "institutionalize" the project, but not for purpose of raising funds to finance
® related or complementary project activities.
Nothing in this section should be read to prohibit.a recipient from engaging in fund raising activities
as long as such activities are not financed by Federal or non - Federal award funds.
•
Chapter 16: Closeout
Recipient Close -out Requirements. Within 90 days after the end date of the award or any
approved extension thereof (revised end date) the following documents must be submitted by the
recipient to the awarding agency.
(1) Financial Status Report The FINAL Financial Status Report will be submitted on the
SF269 Form with the "Final" box checked. This FINAL report of expenditures must have no
unliquidated obligations and must indicate the exact balance -of unobligated funds. Any
unobligated/unexpended funds will be deobligated from the award amount of the awarding agency.
Recipients.on a check - issued basis, who have drawn down funds in excess of their
obligation/expenditures, shall return unused funds to the award agency at the same time they submit
the final report. Recipients must report obligations and expenditures at the recipient/subrecipient
level.
(2) Final Progress Report This report should be prepared in accordance with instructions
provided in the program guidance..
Chapter 16: Audit Requirements
This chapter establishes responsibilities for the audit of organizations receiving agency funds. The
intent of this chapter is to identify the policies for determining the proper and effective use of public
funds rather than to prescribe detailed procedures for the conduct of an audit.
Audit Objectives Awards are subject to conditions of fiscal, program, and general administration
to which the recipient expressly agrees. Accordingly, the audit objective is to review the recipient's
administration of funds and required non - Federal contributions for the purpose of determining
whether the recipient has:
(1) Established an accounting system integrated with adequate internal fiscal and management
controls to provide full accountability for revenues, expenditures, assets, and liabilities. This
system should provide reasonable assurance that the organization is managing Federal financial
assistance programs in compliance with applicable laws and regulations.
33
(2) Prepared financial statements which are presented fairly, in accordance with generally
accepted accounting principles.
® (3) Prepared financial reports (which may include Financial Status Reports, Cash Reports, and
Claims for Advances and Reimbursements) which contain accurate and reliable financial data, and
are presented in accordance with the terms of applicable agreements.
•
(4) Expended Federal funds in accordance with the terms of applicable agreements and those
provisions of Federal law or regulations that could have a material effect on the financial
statements, or on the awards tested:
Reporting Requirements
Independent auditors should follow the requirements prescribed in OMB Circulars A -128 and
A -133.
If the auditor becomes aware of illegal acts or other irregularities, prompt notice shall be given to
recipient management officials above the level of involvement. The recipient, in turn, shall
promptly notify the cognizant Federal agency of the illegal acts or irregularities and of proposed
and actual actions, if any.
All awarding agency personnel have the responsibility to inform the Office of National Drug
Control Policy, EMTA Financial Manager, and State and local law enforcement agencies or
prosecuting authorities, as appropriate, of any known violations of the law within their respective
area of jurisdiction.
Failure to Comply
Failure to have audits performed as required may result in the withholding of new awards and /or
withholding of funds or change in the method of payment on active grants.
Audit Thresholds
Audit thresholds are established by OMB Circulars A -128 and A -133. Refer to the applicable
Circular to determine status of program as it relates to audit requirements.
Due Dates for Audit Reports These audits are due to the cognizant Federal Agency not later than
13 months after the end of the recipient's fiscal year. Audit reports shall be subnutted to the
recipient's cognizant Federal Agency. Details regarding audit report submission is addressed in a
special condition to the award.
Audit Compliance Techniques used to determine recipient compliance with Federal requirements
when an organization -wide audit ins not conducted include:
Obtaining audits from recipient that were made in accordance with the "Government
Auditing Standards"
34
Relying on previous audits performed on recipient's operations
® Desk reviews b Yprogram officials of project documentation
Project audits by auditors or auditors obtained by recipients
Evaluations of recipient's operations by program officials
Resolution of Audit Reports
Timely action on recommendations by responsible management officials is an integral part of the
effectiveness of an audit. Each recipient shall have policies and procedures for responding to audit
recommendations by designating officials responsible for:
Following -up
Maintaining a record of the action taken on recommendations and time schedules,
Implementing audit recommendations,
Submitting periodic reports to the Federal cognizant audit agency on
recommendations and actions taken.
Providing an audit special condition on all subawards.
This special condition contains information, such as the audit report period, required audit report
submission date, and name and address of cognizant Federal Agency. The policy of the awarding
agency is not to make new awards to applicants who are not in compliance with the audit
requirements.
The awarding agency monitors the audit requirements through its audit tracking system. The
awarding agency is responsible for tracking audit reports received through the audit process until
resolved and closed.
Audit of Subrecipients When subawards are made to another organization(s), the recipient shall
require that subrecipients comply with the audit requirements set forth in this chapter. Recipients
are responsible for ensuring that subrecipient audit reports are received, and for resolving any audit
findings. Known or suspected violations of any law encountered during audits, including fraud,
theft, embezzlement, forgery, or other serious irregularities, must be communicated to the recipient.
Full -Scope Auditing In addition to arranging and providing for the organizational, financial and
compliance audits required by OMB circulars, individual recipients and subrecipients are
encouraged to provide for additional audit coverage, as deemed appropriate. The additional audit
M
coverage that may be provided should be determined based on the circumstance surrounding the
particular organization function, program, or activity to be audited, management needs, and
iavailable audit capability. Additional audit coverage could involve such organizational
determinations as related to:
(1.) Are resources managed and used in an economical and efficient manner?
(2) Are desired results and objectives achieved in an effective manner?
(3) Are the organization's accounting system and system of internal controls acceptable prior to
the receipt of grantor agency funds?
(4) Are the organization's systems and controls adequate to detect fraud, waste, and abuse?
C
36
ATTAC$MENT A
® Special Conditions
HIDTA Cooperative Agreements
0
The following special conditions are incorporated into each award document.
1. In order to provide for compatibility, integration, coordination, and cost effectiveness in the
use, procurement, and operation of ADP systems, equipment, and software, grantees are
encouraged and authorized to enter into joint purchase or service agreements on a reimbursable or
nortreimbursable bases with other ETA award recipients.. Award recipients are authorized and
encouraged to enter into joint purchases or service agreements with other HIDTA award recipients.
2. No federal funds shall be used to supplant state or local funds that would otherwise be made
available for project purposes.
1 The operating principles found in 28 CFR Part 23, which pertain to information collection
and management or criminal intelligence systems, shall apply to any such systems supported by this
award.
4. Prior to expenditure of confidential fiends, the'award recipient or subrecipient shall sign a
certification indicating that he or she has read, understands, and agrees to abide by all of the
conditions pertaining to confidential fund expenditures as set forth in Attachment B to the ONDCP
Financial and Administrative Guide for Cooperative Agreements. This certification should be
submitted to the HIDTA Assistance Center.
5. The award recipient agrees to account for and use program income, including but not
limited to asset forfeitures, in accordance with the "Common Rule" and the ONDCP Financial and
Administrative Guide for Cooperative Agreements. Moreover, the use of program income must be
consistent with the National Drug Control Strategy.
6. Where furniture has been approved in the budget, the grantee will make every effort to
utilized existing State and local surplus property prior to the purchase of any furniture, including
computer furniture or items of similar nature.
7. The award recipient may not use designated aircraft assigned to HTDTA- approved task
operations and initiatives for the transport of VIP Executive(s) or similar circumstances not relating
to the goals and objectives of state and local law enforcement programs.
8. The budget submitted with.the proposal is approved. Funds up to 10% of the total award,
may be reprogrammed between budget categories without prior approval provided that the
reprogramming is within the same agency and the same initiative. This 10% is applied to a singular
reprogramming or the aggregate of reprogramming per funding year.
37
is
l
Any reprogramming of funds in excess of 10% of the award, or when aggregate reprogramming
will exceed 10% of award, requires the written approval of your =TA director. The
reprogramming must be within the same agency and the same uutiative.
Reprogramming of funds between agencies or initiatives require the written approval of the
ONDCP HIDTA Office, regardless of the dollar value of the reprogramming.
In alf cases the recipient is responsible for maintaining detailed records of the reprogramming
activities and forwarding notification to your IDTA Director regarding reprogramming activities
as they occur. The IDTA Director must forward a copy to the HIDTA Assistance Center.
9. The recipient agrees to comply with the organizational audit requirements of OMB Circular
A -128, "Audits of State and Local Governments." in conjunction with the beginning date of the
award, the audit report period of the state or local.government entity to be audited under the single
audit requirement is July 1, 1995 to June 30, 1996. The audit report must be submitted no latter
than July 31, 1997 and for each audit cycle thereafter covering the entire award period as originally
approved or amended. The management letter must be submitted with the audit report.
Subsequent audits must be submitted no later than thirteen (13) months after the close of the
recipient organization's audited fiscal year. The submission of the audit report shall be as follows:
An original and one copy shall be sent to the cognizant Federal Agency. Also, a copy of the
audit report shad] be sent to The EMTA Assistance Center, 8401 Northwest 53rd Terrace, Suite
200, Miami, Florida 33166.
10. The recipient agrees to submit operation reports as defined in the Current Year Program
Guidance.
11. Equipment acquired under the grant program must be used by the recipient in the program
or project 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 program, the
equipment may be used in other activities supported by the Federal agency, The recipient may
dispose of the original equipment when no longer needed or supported by the grantor agency.
Inventory lists must be supplied to the HIDTA Director to facilitate the sharing of equipment within
and between the =TA's. Items to be inventoried include Communications, Computer & Related
Equipment, Surveillance Equipment, Photo, Vehicles, Video, and Weapons.
12. The recipient will be permitted to designate funds that would be matched or shared,
however, these matched or shared funds will not constitute an obligation on behalf of the recipient.
13. Budget item subnussions for equipment and other contract items are accepted as best
estimate only and are not deemed approved at that price. Recipients are required to assure such
items are not currently available, are not duplicative or excessive, and should make market surveys
and obtain the best prices available.
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14. The recipient acknowledges that failure to submit an acceptable Equal Employment
Opportunity Plan (if recipient is required to subntit one pursuant to 28 CFR section 42.302), that is
approved by the Office of Civil Rights, is a violation of its Certified .Assurances and may result in
the suspension of the drawdown of funds.
15. The recipient agrees to complete and keep on file, as appropriate, Imrnigration and
Naturalization Service Employment Eligibility Verification Form (I -9). This form is to be used by
recipients of federal funds to verify that person are eligible to work in the United States.
GRANTEE ACCEPTANCE OF SPECIAL CONDITIONS
MA.RA GIULIANT7
Typed Name
MAYOR
T ;tie
Signature)
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2 -9 -��
Date
ATTA.CEMENT B
® Control and Use of Confidential Funds
This guideline articulates procedures for the use and control of confidential funds by projects
funded by the Office of National Drug Control Policy. The provisions in this guideline apply to all
recipients /subrecipients involved in the administration of Cooperative Agreements containing
confidential funds.
DEFINITIONS FOR TYPES OF SPECIAL LAW ENFORCEI MNT OPERATIONS
1. Purchase of Services (P /S). This category includes travel or transportation of a nonfederal
officer or an informant; the lease of an apartment, business front, luxury -type automobiles, aircraft
or boat, or similar effects to create or establish the appearance of affluence; and/or meals,
beverages, entertainment and similar expenses (including by money and flash rolls, etc.) for
undercover purposes, within reasonable limits.
2, Purchase of Evidence (P/E). This category is for the purchase of evidence and/or
contraband such as narcotics and dangerous drugs, firearms, stolen property, counterfeit tax
stamps, etc., required to determine the existence of a crime or to establish the identity of a
participant in a crime.
3. Purchase of Special Information (P/I). This category included the payment of monies to an
informant for specific information. All other informant expenses would be classified under P/S and
charged accordingly.
POLICY
Confidential funds are those monies allocated to purchase of services, purchase of evidence and
pushes of specific information. These funds should only be allocated:
When the particular merits of a program/inves6gation warrant the expenditure of these
funds.
2. When a signed certification that the project director has read, understands, and agrees to
abide by the provisions of the Guideline is received for all projects that are involved with
confidential funds from either Federal or matching funds. The signed certification must be
submitted and approved at the time of grant application.
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Figure 1. SAIMPLE CERT- MCATION
CONFMENTLA.L FUNDS CERTIFICATION
This is to certify that I have read, understood, and agree to abide by all of the conditions for
confidential funds as set forth in the effective edition of ONDCP Financial and Administrative
Guide.
Date: Signature:
Project Director
Grant No.:
PROCEDURES
Each project agency authorized to disburse confidential funds must develop and follow internal
procedures which incorporate the following elements. Deviations from these elements must receive
prior approval of The Office of National Drug Control Policy.
1. Imprest Fund. The funds authorized will be established in an imprest fund which is
controlled by a bonded cashier.
2. Advance of Funds. The supervisor of the unit to which the imprest funds is assigned must
authorize all advances of funds for the purchase of information. Such authorization must specify
the information be received, the amount of expenditures, and assume name of informant.
3. Informant Files. Informant files are confidential files of the true names, assumed names, and
signature of all informants to whom payments of confidential expenditures have been made. To the
extent possible, pictures and/or fingerprints of the informant payee should also be maintained.
Refer to the "Documentation" paragraph of this attachment for a list of required documents for the
informant files.
4. Cash Receipts.
a. The cashier shall receive from the agent or officer authorized to make a confidential
payment, receipt for cash advanced -to him/her for such purposes.
b. The agent or officer shall receive from the informant payee a receipt for cash paid to
him/her.
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Figure 2. SAMPLE RECEIPT OF Iii rFOR-MANT PAYEE
RECEIPT
For and in consideration of the sale and delivery to the State, County, or City of
of information or evidence identified as follows:
I hereby acknowledge receipt of S (numerical & word amount entered bv- oavee)
paid to me by the State, County, or City of
Date: Payee:
(Signature)
Case Agent/Ofncer:
Witness:
Case or Reference:
5. Receipt for Purchase of Information. An informant payee receipt shall identify the exact
amount paid to and received by the informant payee on the date executed. Cumulative or
anticipatory receipts are not permitted. Once the receipt has been completed no alteration is
allowed. The agent shall prepare an informant payee receipt containing the following information:
a. The jurisdiction initiating the payment.
b. A description of the information/evidence received.
C. The amount of payment, both in numeral and word form.
d. The date on which the payment was made.
e. The signature of the informant payee.
f. The signature of the case agent or officer making payment.
g. The signature of the at least one other officer witnessing the payment.
h. The signature of the first line supervisor authorizing and certifying the payment.
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6. Review and Certification. The signed receipt form the informant payee with a
memorandum detailing the information received shall be forwarded to the agent or officer in
® charge. The agent or officer in charge shall compare the signatures. He/she shall also evaluate the
information received in relation to the expense incurred, and add his/her evaluation remarks to the
report of the agent or officer who made the expenditure form the imprest funds. The certification
will be witnessed by the agent or officer in charge on the basis of the report and informant payee's
receipt.
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7. - Reporting of Funds. Each project shall prepare a reconciliation report on the imprest funds
on a quarterly basis. Information to be included in the reconciliation report will be the assumed
name of the informant payee, the amount received, the nature of the information given, and to what
extent this information contributed to the investigation. Recipients /Subreciptents shall retain the
reconciliation report in their files and shall be available for review unless the State agency requests
that the report be submitted to them on a quarterly basis.
8. Record and Audit Provisions. Each project and member agency must maintain specific
records of each confidential fund transaction. At a rr nimurn, these records must consist of all
documentation concerning the request for funds, processing (to include the review and
approve/disapprove), modifications, closure or impact material, and receipts and/or other
documentation necessary to justify and track all expenditures. Refer to Documentation, Item 2
under Informant Files, for a list of documents which should be in an informant files. In projects
where funds are used for confidential expenditures, it will be understood that all of the above
records, expect the true name of the informant, are subject to the record and audit provision of
grantor agency legislation.
IIVFOR IANT FILES
1. Security. A separate file should be established for each informant for accounting purposes.
Informant files should be kept in a separate and secure storage facility, segregated from any other
files, and under the exclusive control of the office head or an employee designated by hinilher. The
facility should be locked at all times when unattended. Access to these files should be limited to
those employees who have a necessary legitimate need. AN informant file should not leave the
immediate area expect for review by a management official or the handling agent, and should be
returned prior to the close of business hours. Sign -out logs should be kept indicating the date,
informant number, time in and out, and the signature of the person reviewing the file.
2. Documentation. Each file should include the following information :
a. Informant Payment Record, kept on top of the file. This record provides a summary
of informant payments.
b. Informant Establishment Record, including complete identifying and location data,
plus any other documents connected with the informant's establishment.
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c. Current photograph and fingerprint card (or FBI/State Criminal Identification
Number).
® d. Agreement with Cooperating Individual.
e. Receipt for Purchase of Information.
f. Copies of all debriefing reports (except for the Headquarters case file).
g. Copies of case initiation reports bearing on the utilization of the informant (except
for the Headquarters case file).
h. Copies of statements signed by the informant (unsigned copies will be placed in
appropriate investigative files).
i. Any administrative correspondence pertaining to the informant, including
documentation of any representations made on his behalf or any other normonetary considerations
furnished.
Any deactivation report or declaration of any unsatisfactory informant.
INFORMANT iYL-A NAGEMENT AND UTILIZATION
All persons who will be utilized as informants should be established as such. The specific
procedures required in establishing a person as an informant may vary from jurisdiction to
jurisdiction but, at a minimum, should include the following:
I. Assianment of an informant code name to protect the informant's identity.
2. An informant code boot: controlled by the office head or his/her designee containing:
a. Informant's code number
b. Type of informant (i.e., informant, defendant/informant, restricted- usehnformant
C. Informant's true name.
d. Name of establishing law enforcement officer
e. Date the establishment is approved
f. Date of deactivation
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CJ
;. Establish each informant file in accordance with Documentation, Item 2, under Informant
Files.
4. For each informant in an active status,. the agent should review the informant file on a
quarterly basis to assure it contains all relevant and current information. Where a ivLATERIAL. face
that was earlier reported on the Establishment Record is no longer correct (e.g., a change in
criminal status, means of locating him/her. etc.), a supplemental establishing report should be
submitted with the correct entry.
5. All informants being established should be checked in all available criminal indices.. If a
verified FBI number is available,'request a copy of the criminal records from the FBI. Where a
verified FBI number is not available, the informant should be fingerprinted with a copy sent to the
FBI and appropriate State authorities for analysis. The informant may be utilized on a provisional
basis while awaiting a response from the FBI.
PAYMENTS TO INFORMANTS'
1. Any person who is to receive payments charged against PE/PI funds should be established
as an informant. This includes person who may otherwise be categorized as sources of information
or informants under the control of another agency. The amount of payment should be
commensurate with the value of services and/or information provided and should be based on the
following factors:
a. The level of the targeted individual, organization or operation.
b. The amount of the actual or potential seizure.
C. The siQ.nificance of the contribution made by the informant to the desired objectives.
?. There are various circumstances in which payments to informants may be made:
a. Payments for Information and/or Active Participation. When an informant assists in
developing an investigation, either through supplying information or actively participating in it,
he/she may be paid for his/her service either in a lump sum or in staggered payments. Payments for
information leading to a seizure, with no defendants, should be held to minimum.
b. Payment for Informant Protection. When an informant needs protection, law
enforcement agencies may absorb the expenses of relocation. These expenses may include travel for
the informant and his/her immediate family, movement and/or storage of household goods, and
living expense at the new location for a specific period to time ( not to exceed 6 months).
Payments should not exceed the amounts authorized law enforcement employees for these
activities. ,.
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C. Payments to Informants of Another Agency. To use or pay another agency's
.informant, he/she should be established as an informant. These payments should not be a
duplication of a payment from another agency; however, sharing a payment is acceptable.
3. Documentation of payments to informants is critical and should be accomplished on a
receipt for purchase of information. Payment should be made and witnessed by two law
enforcement officers and authorized payment amounts should be established and reviewed by at
least the first line supervisory level. in unusual circumstances, a non-officer employee or an officer
of another law enforcement agency may serve as witness. In all instances, the original signed
receipt must be submitted to the project director fro review and recordkeeping.
ACCOUNTING AND CONTROL PROCEDURES ' .
Special accounting and control procedures should govern the use and handling of confidential
expenditures, as described below:
1. It is important that expenditures which conceptually should be charged to PE/PI/PS are in
fact so charged. It is only in this manner that these funds may be properly managed at all levels,
and accurate forecasts of projected needs be made. .
2. Each law enforcement entity should apportion its PE/PI/FS allowance throughout its
jurisdiction and delegate authority to approve PFJPI/PS expenditures to those offices, as it deems
appropriate.
3. Headquarters management should establish guidelines authotiang offices to spend up to a
predetermined limit of their total allowance on any on buy or investigation.
4. In exercising his/her authority to approve these expenditures, the supervisor should
consider: (1) the significance.of the investigation; (2) the need for this expenditure to further the
investigation; and (3) anticipated expenditures in other investigations. Funds for PE/PI/PS
expenditures should be advanced to the officer for specific purpose. If they are not expended for
that purpose, they should be returned to the cashier. They should not be used for another purpose
without first returning them and repeating the authorization and advance process based on the new
purpose.
5. Funds for PE/PI/PS expenditure should be advanced to the officer on suitable receipt form.
receipt for purchase of information or a voucher for purchase of evidence should be completed to
document funds used in the purchase of evidence or funds paid or advanced to an informant.
b. For security purposes there should be a 48 -hour limit on the amount of time funds advanced
for PE/PI/PS expenditure may be held outstanding. If it becomes apparent at any point within the
48 -hour period that the expenditure will not materialize, then the funds should be returned to the
advancing cashier as soon as possible. An extension of the 48 -hour limit may be granted by the
level of management that approved the advance. Factors to consider in granting such an extension
are the amount of funds involved, the degree of security under which the funds are being held, how
U911
long an extension is required, and the signzncance of the expenditure. Such extensions should be
limited to 48 hours. Beyond this, the funds should be returned and readvanced, if necessary.
® Regardless of circumstances, within 48 hours ofthe advance, the funds cashier should be presented
with either the unexpended funds, an executed voucher payment for information or purchase of
evidence or written notification by management that an extension has been granted.
7.' . Purchase of Services expenditures, when not endangering the safety of the office or
informant, need to be supported by canceled tickets, receipts lease agreements, etc. If not
available, the office head, or his immediate subordinate, must certify that the expenditures were
necessary and justify why supporting documents were not obtained.
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Executive O ficr of the President
AWARD
6. Out: 7131197
Oflce of National Drug Control Policy
C:ooperative Ao t:emcnC
p3ye _ 1_ „r'1
1. Recipient Name and Address
4. Award Number 17P1-f`'PS 16
City of Saytewil
3. Projctt Title
Adminl31raiion & Operat:•oml Support
Unit
5. Proj=Period Fran 111197 Tn 17.131/97
10. ALmuu-1t of"ibis Aw ard S 13;,173
2401 NWkat Street
Baytown, T.-xas 77520
Budgtt Pcriod: From 111/97 To 12/31197
IA. ReclplcntIR1%VcndurNo,
6. Out: 7131197
7. Actior.
I] Initial
p Supplunc:ticnl
2. Subrtcjp ;wtN=candnddress
R. Suppl=cntNuinh:z
Modification R2
2A. Suhrcuipwnt IRSNendoe Nu.
9. Pcrrious Award Aalount 5 283,882
3. Projctt Title
Adminl31raiion & Operat:•oml Support
Unit
10. ALmuu-1t of"ibis Aw ard S 13;,173
1 I. Tutal Award S
417.060
Rpmal Conditions (-neck, It app tc4 e
Special Condirou9 euachcd to thu original award apply to this modification.
i3. Startrtory Authority fur Gr_ r. Puhiic LZW
I00 -6!k
'
I
i1i -aOWWAFAf Ak.oLNLY AIIJIKUVAi.QM§G3ZaMMMO Ke PI=NI A r. I 1 1' KCF
4. 1 ypea sne anG i Lc or . pftovirtn U, r ype ant a t u c or Auih�rtzca to clp.ent�
0(6Ciil Official
Rich Yamamoto Bobby Rountrco
F1WTA Director City Manag -�r
16. Sip=rurc ufApptovine O.. \)JC)> ()fficial Signzturu ut'Autlto d itecipicnt 17A. I>IfL
Z-7 �� I S/ (� T
Agency Use Onl
18. AccnttnCMg C;asSifcation Code I 19. 1JIDTA A iN A R )