[Federal Register Volume 61, Number 200 (Tuesday, October 15, 1996)]
[Notices]
[Pages 53757-53759]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-26247]
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AGENCY FOR INTERNATIONAL DEVELOPMENT
Notice
Pursuant to Section 207(d) of the Agricultural Trade and
Development and Assistance Act of 1954, as amended, (otherwise known as
Pub. L. 480), notice is hereby given that the Pub. L. 480 Title II
Draft Close-Out Guidance is being made available to interested parties
for the required thirty (30) day comment period.
Individuals who wish to receive a copy of the draft guidelines
should contact: Office of Food for Peace, Room 323, SA-8, Agency for
International Development, Washington, D.C. 20523-0809. Contact person:
Gwen Johnson, (703) 351-0110. Individuals who have questions or
comments on the draft guidelines, should contact Susan Morawetz at
(703) 351-0135.
The thirty day comment period will begin on the date that this
announcement is published in the Federal Register.
Dated: September 26, 1996.
William T. Oliver,
Director, Office of Food for Peace.
PUBLIC LAW 480, TITLE II CLOSE-OUT PLAN GUIDANCE
Background
This guidance should be used by all Title II projects that are in
the process of closing out, and the documents described below should be
used as a reference in preparing a close-out plan. Cooperating Sponsors
(CSs) should plan to submit close-up plans to the Office of Food for
Peace (FFP) six months prior to the expiration of the project/activity
authorization, unless there have been discussions with BHR/FFP
concerning continuation of the project.
I. Reference Documents
A. USAID Regulation 11, Section 211.11 Suspension, termination and
expiration of program.
This section states, in pertinent parts, that:
``(a) Termination or Suspension by A.I.D.* * * When a program is
terminated or suspended, title to commodities which have been
transferred to the cooperating sponsor, or monetized proceeds, program
income and real or personal property procured with monetized proceeds
or program income shall, at the written request of USAID, the
Diplomatic Post or AID/W, be transferred to the U.S. Government by the
cooperating sponsor or shall otherwise be transferred by the
cooperating sponsor as directed by A.I.D. Any then excess commodities
on hand at the time the program is terminated shall be disposed of in
accordance with Section 211.5 (o) and (p) or as otherwise instructed by
USAID or the Diplomatic Post.''
``(b) Expiration of Program. Upon expiration of the approved
program under circumstances other than those described in paragraph
(a), the cooperating sponsor shall deposit with the U.S. Disbursing
Officer, American Embassy, with instructions to credit the deposit to
CCC Account No. 20FT401, any remaining monetized proceeds or program
income, or the cooperating sponsor shall obtain approval from AID/W for
the use of such monetized proceeds or program income, or real or
personal property procured with such proceeds or income, for purposes
consistent with those authorized for support from A.I.D.''
Based on the above, all remaining property, funds and commodities
must be accounted for at the termination of the project and transferred
to the USG, unless USAID approves a plan to allow the Cooperating
Sponsor (CS) to use or dispose of the assets. Thus, the close-out plan
must be negotiated between USAID and the Cooperating Sponsor for the
disposition of all remaining assets.
B. OMB Circular A-110 and Handbook 13--Grants:
In preparing the guidance, BHR/FFP has followed the following:
(1) OMB Circular A-110;
(2) AID Handbook (HB) 13 for grants;
(3) AID's codification of OMB Circular A-110, called 22 CFR 226;
and
(4) AID's Automated Directives System (ADS) Chapter 591 on
Financial Audits of USAID Contractors, Grantees and Host Government
Recipients (which will soon be available on the Internet).
Note that Circular A-110 pertains to all U.S. Government-supported
grants and agreements, and HB 13 interprets sections of A-110 relevant
for AID-funded agreements. Per HB 13, close-out is defined as follows:
``The closeout of a grant or cooperative agreement is the process by
which AID determines that all applicable administrative actions and all
required work of the grant or cooperative agreement have been completed
by the recipient and AID * * *''
Handbook 13 also states that ``AID closeout procedures include the
following requirements:
a. Upon request, AID shall make prompt payments to a recipient for
allowable reimbursable costs under the grant or cooperative agreement
being closed out.
b. The recipient shall immediately refund any balance of
unobligated (unencumbered) cash that AID has advanced or paid and that
is not authorized to be retained by the recipient for use in other
grants or cooperative agreements.
c. AID shall obtain from the recipient within 90 calendar days
after the date of completion of the grant or cooperative agreement all
financial, performance, and other reports required as the condition of
the grant or cooperative agreement. AID may grant extensions when
requested by the recipient.
d. When authorized by the grant or cooperative agreements, AID
shall make a settlement for any upward or downward adjustments to AID's
share of costs after these reports are received.
e. The recipient shall account for any property acquired with AID
funds, or received from the Government in accordance with the
provisions of paragraph 1T of this chapter.
f. In the event a final audit has not been performed prior to the
closeout of the grant or cooperative agreement, AID shall retain the
right to recover an appropriate amount after fully considering the
recommendations on questioned costs resulting from the final audit.''
C. USAID Regulation 2, Overseas Shipments of Supplies by Voluntary Non-
Profit Relief Agencies
Cooperating Sponsors that received PL480 funds for Ocean, Inland,
Internal Transportation, Storage and Handling (ITSH) should also report
on the status of these funds in their close-out plans. ITSH would only
apply to CSs implementing emergency rather than development programs.
USAID
[[Page 53758]]
Regulation 2 for Shipping should be referenced for this purpose.
II. Regulations and Sources of USAID Funds
Regulation 11 (22 CFR, Part 211) pertains to use and disposition of
Title II resources. However, because Reg. 11 does not contain specific
grant agreement language, AID's Handbook 13 is typically used as
guidance in the management of Section 202(e) grants. Thus, this
handbook, any provisions that are part of a CS's grant agreement, as
well as the 22 CFR (Part 226.71--Close Out Procedures) should be
referenced when closing out Section 202(e) grants and activities.
Likewise, if a CS has received Development Assistance (DA) resources
(most likely through a Mission-funded grant), the CS should use
Handbook 13 and 22. CFR, Sub-Part D for reference.
Note on Relationship of This Guidance to Other AID Regulations
and Instructions: Grants and cooperative agreements negotiated with
USAID frequently contain standard provisions for closing them out.
The close-out provisions in these grant agreements should be
consistent with provisions found in the regulations and handbooks
cited above. The food-aid related grants most likely to contain
close-out language include the following: Section 202(e),
Institutional Strengthening Grants (ISGs), and Development
Assistance Grants provided by the Mission for Title II program
support.
It is also important to note that because most food aid projects
receive more than one type of funding (e.g. Title II commodities,
202(e), ISGs, ITSH, etc.), CSs will be expected to follow the close-
out regulations associated with each of these resources (as
stipulated in the grant agreement or funding document). The guidance
contained herewith is not intended to replace any of the regulations
associated with specific funding sources, but rather to provide a
format in which CSs can report to BHR/FFP and USAID Missions their
overall plans for closing out a specific food aid program,
regardless of the source of funding.
III. Responsibilities Within USAID
Note that BHR/FFP serves as Grants Officer for Section 202(e)
grants and handles Title II-related issues; M/OP serves as Grants
Officer for Institutional Strengthening Grants, Matching Grants and
other DA-funded support from Washington. If grants were provided
directly by Missions to CSs, the Mission grants officer will need to be
consulted on termination of the grant during close out. Although
coordination with several offices could be required depending upon the
source of funds, in all cases, both the Mission and BHR/FFP should be
consulted during close out and receive copies of the CS's close-out
plans. The CS should also expect to work closely with the Mission in
determining the feasibility of various close-out options.
Although Missions and FFP should both be consulted during close-
out, note that final approval of close-out plans will be carried out in
accordance with the signed agreements between USAID and the Cooperating
Sponsors, and approved as follows:
Title II commodities, Section 202(e), monetization proceeds, and
ITSH: Final approval will be provided by BHR/FFP with Mission
concurrence.
Development Assistance Funds, Including FFP-provided Institutional
Strengthening Grants: Final approval will be provided by the cognizant
grants officer whose office awarded the grant. This would likely be the
Mission (if the funds were Mission provided) or the Office of
Procurement in AID/Washington.
Guidelines For Preparing Plan
To assist in preparation of close-out plans for submission to
Missions and USAID/W, BHR/FFP is providing the following guidance for
submission of closeout plans by all CSs:
I. Summary on Close-Out
(1) Provide a brief summary of why the project is being suspended/
terminated and the implications, if any, for the country and Title II
beneficiaries, the project, and the CS's in-country operations.
(2) Provide a brief summary of resources provided over the life of
the project by USAID, the CS, the host government, other donors and
beneficiaries. Also briefly summarize the sectors supported, and the
location in the country where investments were made.
(3) Provide a brief summary (by component if relevant) of where the
project is at this point in meeting its stated goals and objectives,
and where it will be at the date of close out.
(4) State whether there have been any recent audits of the project
(or will be) and the status of resolving outstanding audit
recommendations. Attach a copy of the audit to the close-out plan or
send separately to the USAID Mission and BHR/FFP (if this has not
already occurred).
(5) State whether there have been (or will be) a final or impact
evaluation of the project. If it has been completed, attach a copy of
the evaluation to the close-out plan or send separately to the USAID
Mission and BHR/FFP (if this has not already occurred). If an
evaluation has not been completed but is planned, discuss briefly plans
to carry out the evaluation and if possible, attach the evaluation
Scope of Work (SOW).
II. Lessons Learned
Provide a brief summary of lessons learned from the project that
might be relevant to design, implementation and evaluation of other
Title II projects, either in the present country or others.
III. Close-Out Schedule
Provide a detailed implementation plan and schedule for closing out
the project that details the disposition of property and equipment; the
termination of staff; the finalization of all audits, evaluations and
required reports; the settling of claims; and other critical
activities.
IV. Final Reports
Provide any reports (e.g. final report, Annual Results Report,
Final Evaluation) required either in the project agreement, or in
writing by USAID.
V. Disposition of Commodities, Assets, Equipment, and Funds
(1) Commodities: Prior to the project completion date, all
commodities should be distributed to the intended recipients. If this
is not possible, the CS should propose an alternative solution, and
advise the Mission and BHR/FFP of the quantities, location and
condition of the food.
(2) Non-expendable property/equipment procured through Section
202(e), monetization or other USAID-provided funds: The close-out plan
should include an inventory of all non-expendable property/equipment
procured with funds provided by USAID, or obtained through a
monetization of Title II commodities with a unit acquisition cost
exceeding $5000, and with a useful life estimated to exceed two years.
The CS should describe how it proposes to dispose of each piece of
property and what will be done with the proceeds if the items are sold.
(Note: For additional information on and definitions of non-
expendable property/equipment (as defined by the U.S. Government),
please check OMB Circular 110, Subpart A and/or USAID's 22 CFR,
sections 226.2, 226.34 and 226.71).
(3) Monetization-Generated Local Currency and Program Income
(a) The close-out plan should identify the balance of local
currency and program income that will remain at the date of close out.
Note that local currency and program income should include all
resources applied to implementation of the subject Title II
[[Page 53759]]
project, including Title II and Title III monetization proceeds,
interest and reflows, container funds and beneficiary contributions. If
a balance is anticipated, the close-out plan should describe a proposed
use or transfer of the remaining monetization proceeds. Proposed uses
must be consistent with those authorized in USAID Regulation 11,
Section 211.5.
(b) If USAID authorizes use of remaining local currency and program
income by the cooperating sponsor, to ensure that the resources are
being used for the agreed-upon purpose, the CS will be expected to
report annually on how these funds, as well as any interest and
reflows, are being used. USAID and the CS will negotiate the length of
time this annual reporting shall continue, based upon what makes sense
given the agreed-upon activities. Use of the funds should also be
reflected in the CS's annual A-133 audit.
For use of local currencies and program income in revolving
accounts or similar mechanisms, in addition to the aforementioned
reports and audits, it is likely that the appropriate Food for Peace
Officer/USAID Food Aid manager will have to actually monitor the
account's first use of the post-program funds (one revolution or one
cycle of the revolving account after close-out).
(4) Dollar resources (from Section 202(e), Mission provided Development
Assistance (DA) funding, and Title II Transportation Funding)
(a) As stated in the background section, for any dollar resources
provided by USAID for support of food aid programs, the Cooperating
Sponsor should follow any close-out guidance attached as standard
provisions to its grant agreement.
(b) The CS should provide detailed information on all outstanding
invoices that will be submitted for ocean and inland transportation
charges applicable to the close-out project/activity. Only invoices for
reported charges can be honored.
(c) If there are ITSH resources remaining at the end of the
project, these funds can be used in other countries approved in the
Procurement Authorization and Purchase Request (PA/PR). Otherwise, the
ITSH funds will be deobligated and returned to the U.S. Government. In
all cases, the CS will need to submit a pipeline analysis and proposal
for using or returning remaining ITSH funds to FFP's Emergency Response
Division, prior to any movement of funds.
(d) As with remaining monetized funds, the close-out plan should
identify the source and balance of all dollar resources (including
interest and reflows) that will remain at the date of close out. If a
balance is anticipated, the close-out plan should include a proposed
use or transfer of the remaining dollar proceeds. Proposed uses must be
consistent with those authorized in USAID Regulation 11. Note that
because dollar resources require the greatest degree of monitoring by
the U.S. Government, USAID Offices and Missions will be encouraged not
to approve the reprogramming of remaining U.S. dollar resources after
close-out, but rather to have these funds returned to the U.S.
Government.
(e) If USAID should authorize the use of remaining dollar resources
by the cooperating sponsor, to ensure that the resources are being used
for the agreed-upon purposes, the CS will be expected to report
annually on how these funds, as well as any interest and reflows, are
being used. USAID and the CS will negotiate the length of time this
annual reporting shall continue, as well as the likelihood of on-site
monitoring by the appropriate regional or other Food For Peace Officer/
USAID Food Aid manager, based upon what makes sense given the agreed-
upon activities. Use of the funds should also be reflected in the CS's
annual A-133 audit.
VI. Outstanding Claims
(a) All outstanding claims resulting from damage, loss or improper
distribution of commodities must be completed prior to termination of
the Title II agreement. These must be done in accordance with section
211.9 of Regulation 11.
(b) It is recommended that before the close-out plan is submitted,
the CS notify USAID (the Mission and BHR/FFP) in writing if there are
losses for which it is directly responsible pursuant to Reg. 11,
Section 211.9(d). These cases will need to be individually reviewed by
USAID and by the U.S. Department of Agriculture's (USDA's) Office of
Debt Management, which should be contacted at the following: USDA
Office of Debt Management, Kansas City Management Office, P.O. Box
419205, Kansas City, MO 64141-6205, phone: (816) 926-6158.
(c) It is also advisable that before the close-out plan is
submitted, the CS notify the Mission and BHR/FFP if there are losses
due to the fault of others, pursuant to Reg. 11, Section 211.9(e), and
whether the CS has filed a claim, made demands for collection, and
pursued legal action. These cases will have to be individually reviewed
by USAID and by USDA.
VII. Audit
(a) A U.S.-based non-profit organization is required to submit its
OMB Circular A-133 Audits within 13 months after the close of its
fiscal year, which shall be accepted as fulfilling the close-out audit
requirements. Individual close-out audits (of specific country
projects) will only be requested when a specific need is identified by
USAID personnel, and coordinated with the Office of Procurement's
Contract Audit Management Branch (M/OP/PS/CAM). (Ref. ADS 591.5.8).
(b) For non-U.S.-based organizations, the contract/grant officer
shall determine whether a close-out audit shall be conducted based on a
review of the organization's audits covering all of the fiscal year
periods for the agreements to be closed out. A request for a specific
close-out audit shall be made by USAID personnel to the cognizant
Regional Inspector General's Office (Ref. ADS 591.5.8).
(c) Should an audit concern arise regarding receipt and
disbursement of Title II program and grant funds, such records shall be
retained for 3 years from the receipt by USAID of the audit report.
VIII. Personnel
To the extent that the CS must discharge and/or reassign staff as a
result of this program termination, the CS must comply with all
discharge, reassignment and severance laws of the host country. The
close-out plan should describe how this will be accomplished and the
associated costs.
IX. Close-Out Budget
The CS should provide a budget detailing all costs associated with
close-out (e.g. legal resolution of claims, payment of loans,
disposition of property, completion of audits and evaluations, and
termination of personnel). The plan should clearly identify whether
these expenditures were planned in the original program budget, or
whether additional resources will be needed to meet these expenses. If
the latter, the plan should describe how the CS plans to cover these
unanticipated expenses.
X. Other Relevant Information
If there is other information relevant to the close-out of this
Title II project which has not been requested in other parts of this
guidance, the CS should provide this information under item X.
[FR Doc. 96-26247 Filed 10-11-96; 8:45 am]
BILLING CODE 6116-01-M
