[Federal Register Volume 63, Number 190 (Thursday, October 1, 1998)]
[Notices]
[Pages 52693-52696]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-26319]
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ENVIRONMENTAL PROTECTION AGENCY
[FRL-6171-1]
Implementation Order to Streamline Small Grants
AGENCY: Environmental Protection Agency.
ACTION: Notice.
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SUMMARY: The Environmental Protection Agency is issuing an
Implementation Order to Streamline Small Grants. The purpose of the
order is to simplify and
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improve the administration of Small Grants. The Agency has determined
that small grant recipients should not be subject to the same
administrative requirements and procedures as larger grant recipients.
The Small Grants Order does not change EPA's regulatory or statutory
requirements. This policy will allow the Agency more time to focus on
technical assistance to grantees and promoting partnerships.
DATES: The Order becomes effective October 1, 1998.
FOR FURTHER INFORMATION CONTACT: Linda Yancey, Grants Administration
Division, Environmental Protection Agency, 401 M Street, SW (3903R),
Washington, DC 20460 (202) 564-5352.
SUPPLEMENTARY INFORMATION: The Order follows and is available for
viewing on the Internet at http://www.epa.gov/
ogd/. The Funding Recommendation, Decision and Approval Package
identified as an attachment to the policy is not included in this
notice since it is used as an internal Agency document only.
Implementation Order to Streamline Small Grants
Classification No. 5700.2
Approval Date 9/1/98
1. Purpose. To simplify and improve administration of small grants
and cooperative agreements without compromising standards of
accountability.
2. Applicability. This order applies to all grants and cooperative
agreements (hereinafter referred to as ``small grants'' or ``grants'')
$100,000 or less in Federal funds; have budget and project periods
which are of the same duration; and for which the total amount of
Federal grant funds is obligated at the time of award. This order does
not apply to the following: Performance Partnership grants; Fellowship
grants; loans; Senior Environmental Employment (SEE) Program
Cooperative Agreements; Environmental Program Grants to State,
Interstate and Local agencies; Construction Grants; Superfund
Cooperative Agreements awarded under 40 CFR Part 35, Subpart O; and the
State Revolving Fund Program Capitalization Grants.
This order does not relieve recipients from complying with any
statute or regulation. The order clarifies situations when a more
flexible approach can be used if a grant award is $100,000 or less. EPA
considers submission of an application by a small grant recipient as
the applicant's assurance that it will meet the following criteria: (1)
a satisfactory performance record for completion of projects and
subagreements; (2) sound fiscal management including accounting and
auditing procedures adequate to control property, funds, and assets;
and (3) technical qualifications, experience, organization, and
facilities adequate to carry out the project, or a demonstrated ability
to obtain these.
Agency officials must comply with this order unless the applicant/
recipient is a high risk grantee under 40 CFR 31.12 or is subject to
special award conditions under 40 CFR 30.14.
3. Effective date. This policy is effective for all new grants
awarded on or after October 1, 1998.
4. Background. The number of EPA grant programs has increased five-
fold over the past ten years with a dramatic increase in grant awards
of $100,000 or less on average. These small awards account for about
50% of new project grant awards, but less than 5% of the respective
assistance dollars awarded.
Current practice subjects all grant awards regardless of the dollar
amount to the same administrative requirements and procedures. This
order reduces the administrative burden for both the EPA and the
applicant/recipient while maintaining sufficient accountability. Its
intent is to increase customer satisfaction and to focus EPA's limited
resources on larger dollar grant programs.
5. Definitions.
a. Advance Payment. A payment made by Treasury check or other
appropriate payment mechanism to a recipient either before outlays are
made by the recipient or through the use of pre-determined payment
schedules.
b. Approval Official. An EPA official delegated the authority to
approve or reject applications for assistance and the technical/
programmatic terms and conditions of proposed assistance projects.
c. Award Official. The EPA official with the authority to execute
assistance agreements and to take other actions authorized by 40 CFR
Chapter I, Subchapter A and by EPA Orders.
d. Funding Recommendation, Decision and Approval Package. The EPA
Program Office's memorandum containing the decision and justification
to fund an assistance proposal. The memorandum is sent to the Grants
Management Office (GMO) as part of the assistance funding package. (See
attached suggested Model Funding Recommendation, Decision and Approval
Package).
e. Indirect Cost Rate Proposal. The documentation prepared by an
organization to substantiate its claim for the reimbursement of
indirect costs.
f. Supplemental Funding. Additional funding over and above what was
agreed upon in the grant agreement for a given budget period.
6. Policy. This order establishes simplified and streamlined
policies for small grants. Receipt of a small grant does not relieve
the applicant/recipient from compliance with any statute, circular or
regulation. In furtherance of this new approach, EPA establishes the
following for Small Grants:
a. Limitation on Number of Application Copies Required for
Submission. Applicants are required to submit only the original
application and one copy to EPA unless otherwise required by the
regulations.
b. Abbreviated Workplan and Resume. The narrative workplan should
not exceed five pages in length. The workplan must include: 1) a
summary of specific objectives, expected outcomes and deliverables; and
2) a discussion of the budget and how the budget relates to the
objectives, outcomes and deliverables in the workplan. Resumes and
supplementary biographical information, if any, should not exceed an
additional two pages.
c. Budget. Applicants are not required to submit supporting budget
detail over and beyond the object class categories identified on the
applicant's Form 424A (formal budget page). The EPA Program Office
should base the reasonableness of the cost of the grant on their
evaluation of the workplan, using their technical knowledge and
previous experience with similar work. The workplan should stand on its
own merit in support of project costs. If the Program Office is unable
to make a determination solely on this basis, they should first request
additional information on how the workplan supports the budget.
However, there may be some circumstances where evaluating the workplan
alone is insufficient to make a reasonableness determination. In these
situations, the Program Office or Grants Management Office may request
additional supporting budget information.
d. Recipients Without Negotiated Indirect Cost Rates (ICR). Those
applicants requesting reimbursement for indirect costs and who do not
have an established indirect cost rate with a Federal agency must
prepare an Indirect Cost Rate Proposal but are only required to retain
it in their files, subject to audit. The proposal must be based on
guidance in the EPA Booklet ``Preparing Indirect Cost Proposals for
Grants and Contracts'' (August 1990).
e. Projects Must Be Fully Funded By The Program Office. The EPA
Approval Official must fully fund the project at
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the time of award. The EPA Award Official must obligate the entire
amount of a small grant at the time of award. However, from time-to-
time, emergency, unusual or unanticipated circumstances warrant
additional funds being added to a grant. Additional funding for
unanticipated or unusual circumstances to a small grant is permissible
provided the entire grant (original grant + additional funding) does
not exceed $100,000. The intent is to provide flexibility for
infrequent and unusual situations. Once the additional funds cause the
grant to exceed the $100,000 threshold, the additional funding segment
is not entitled to the Small Grant policy and procedures.
f. Streamlined Funding Recommendation Process. Grants Management
Offices should streamline their Funding Recommendation package
documenting program approval/funding requests. They may utilize the
attached Model Small Grants Funding Recommendation, Decision and
Approval Package.
g. Terms and Conditions. For small grant awards, GMOs must keep
administrative terms and conditions to a minimum. Specifically, terms
and conditions which merely restate statutory or regulatory
requirements shall be eliminated. Instead, the GMOs will provide
recipients with copies of the relevant regulatory requirements.
However, terms and conditions detailing reporting requirements may be
included in the assistance agreement at the discretion of the GMO or
Program Office.
h. Limitation on Length of Award Document. The GMO will ensure that
the EPA award document will, to the maximum extent possible, not exceed
four pages in length.
i. Payment Policy.
All Small Grant Recipients. GMOs will work with Program Offices and
Servicing Finance Offices to ensure small grant payments are made
quickly. To ensure expeditious reimbursement of payment requests,
recipients of small grants should submit requests for payment directly
to the EPA Servicing Finance Office. Recipients shall be reimbursed for
grant-related eligible, allocable, allowable, and reasonable costs up
to the amount of the grant which have been incurred and which the
recipients are currently and legally obligated to pay. Project Officers
and GMOs shall monitor grantee performance and compliance with
applicable rules, and when appropriate, may recommend withholding or
requiring prior approval of future grant payments.
Small Grants $5,000 or Less. Recipients of small grants up to and
including $5,000 may request an advance payment of up to eighty (80)
percent of the total Federal share of the project by submitting a
Request for Advance or Reimbursement (Form SF-270) upon acceptance of
the assistance agreement. The remaining twenty (20) percent will be
reimbursed to the recipient upon satisfactory completion of the Final
Project Report and Final Financial Status Report.
j. Simplified Minority Business Enterprise/Women's Business
Enterprise Reporting Requirements. Small Grant recipients awarded
assistance agreements under 40 CFR Part 30 (i.e., Institutions of
Higher Education, Hospitals and other Non-Profit Organizations) will
meet MBE/WBE reporting requirements by submitting a MBE/WBE Utilization
Form (Standard Form 5700-52A) on an annual basis. The reports are due
within one month after the end of the Federal fiscal year. Small Grant
recipients awarded assistance agreements under 40 CFR Part 31 (i.e.,
State and Local Governments) will meet MBE/WBE reporting requirements
by submitting a MBE/WBE Utilization Form (Standard Form 5700-52A) on a
quarterly basis. The reports are due within one month after the end of
each Federal fiscal year quarter.
k. Final Technical or Performance Report. Recipients are not
required to submit more than the original and two copies of the final
technical or performance report. The report must include actual
outcomes based on the objectives identified in the workplan.
l. Pre-award Costs Permitted. Small Grant recipients awarded
assistance agreements under 40 CFR Part 30 may incur allowable pre-
award costs up to 90 calendar days prior to award without the prior
written approval of EPA. However, all pre-award costs are incurred at
the recipient's risk (i.e., EPA is under no obligation to reimburse
such costs if for any reason the applicant does not receive an award or
if the award is less than anticipated and inadequate to cover such
costs); and EPA will only allow pre-award costs without prior written
approval if there are sufficient programmatic reasons for incurring the
expenditures prior to the award (e.g., time constraints, weather
factors, etc.), they are in conformance with the appropriate cost
principles, and any procurement complies with the requirements of this
policy. Further, recipients may be reimbursed for pre-award costs they
incur 90 days prior to award provided they include such costs in the
application and the application in its entirety is approved by EPA.
7. Roles and Responsibilities.
In addition to the roles and responsibilities cited in Section 5,
``Policy'', the following are actions the Grants Management Office,
Program Office and recipient are expected to take:
a. Grants Management Office
(1) Develop and distribute application kits.
(2) Provide the same level of advice, technical assistance and
guidance to potential applicants and small award recipients as they
would to any other recipients.
(3) Ensure application includes all essential information (e.g.,
assurances, certifications, narrative).
(4) Ensure that all elements of the application and funding package
comply with EPA's legal and regulatory requirements.
(5) Review application and determine eligibility of EPA assistance
recipients to receive indirect costs.
(6) Determine that the grantee has sound financial management.
(7) Prepare awards/amendments.
(8) Monitor the financial and management aspects of awards through
reviews of reports, correspondence, site visits, or other appropriate
means.
(9) Ensure timely close out of awards when all project work in the
agreement is completed.
b. Program Office
(1) Ensure applicant's workplan reasonably and clearly explains how
the activities will be accomplished, and contains well-defined
commitments and outputs that foster accountability.
(2) Determine that the applicant has technical qualifications to
perform the work.
(3) Review the workplan and budget (along with the GMO) to
determine appropriateness and reasonableness of the project, whether
they comply with program regulations and guidelines, and identify any
deficiencies in the application.
(4) If the proposal is approved, prepare and forward a funding
recommendation, which consists of the following primary documents: (1)
Commitment Notice (EPA Form 2550-9), and (2) Decision Documentation
(See Model Small Awards Decision Memo) to the appropriate GMO.
(5) Monitor the recipient's progress on the project.
(6) Conduct periodic reviews to assure that the recipient is
complying with applicable regulations and programmatic terms and
conditions of the agreement.
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(7) Ensure that any/all deliverables required under the award are
received, and are acceptable in a timely manner.
c. Recipient
(1) Expend and account for funds in accordance with the assistance
agreement, program regulations and statutes.
(2) Maintain sound fiscal management.
(3) Comply with all applicable reporting requirements, including
submitting timely Financial Status Reports, Final Technical Reports,
Property Reports and MBE/WBE Reports.
8. Additional References.
a. Federal Grant and Cooperative Agreement Act of 1977 (FGCAA), 31
U.S.C. 6301-6308.
b. 40 CFR Parts 30, 31, 35, 40, 45, and 47.
c. OMB Circular A-110.
d. OMB Circular A-102.
e. OMB Circular A-133.
f. OMB Circular A-87.
g. EPA Assistance Administration (AA) Manual.
h. EPA--Managing Your Financial Assistance Agreement--Project
Officer Responsibilities.
i. EPA 96-1 Indirect Cost Policy for Nonprofit Organizations and
Educational Institutions.
9. For Further Information: For further information regarding this
Order, please contact: Chief, Policy, Information and Training Branch,
Grants Administration Division on (202) 564-5325.
(Agency Policy)
Dated September 24, 1998.
Gary M. Katz,
Director, Grants Administration Division.
[FR Doc. 98-26319 Filed 9-30-98; 8:45 am]
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