03-15814. Guidance for Distributing Fiscal Year 2003 Contract Support Funds and Indian Self-Determination Funds

AGENCY:

Bureau of Indian Affairs, Interior.

ACTION:

Notice of methodology for distribution and use of FY 2003 Contract Support Funds and Indian Self-Determination Funds.

SUMMARY:

The Bureau of Indian Affairs (BIA) is publishing this notice to inform the public, the tribes, and Federal staff of the methodology that we will use in distributing Contract Support Funds (CSF) and Indian Self-Determination Funds (ISDF) for FY 2003. We distribute these funds as authorized by the Indian Self-Determination and Education Assistance Act of 1975, and financed by funds appropriated by the Snyder Act. We are publishing the methodology to ensure that eligible recipients and responsible federal employees are aware of program operations for this fiscal year. We are not establishing regulations.

DATES:

The “FY 2003 CSF Needs Report” is due July 15, 2003. Final distribution of Contract Support Funds will occur on or about July 31, 2003. We will distribute ISDF on a first-come first-serve basis until funds are depleted.

ADDRESSES:

Submit the “FY 2003 CSF Needs Report” to: Harry Rainbolt, Bureau of Indian Affairs, Office of Tribal Services, 1951 Constitution Avenue NW., MS 320-SIB, Washington, DC 20240.

FOR FURTHER INFORMATION CONTACT:

Harry Rainbolt, [phone].

SUPPLEMENTARY INFORMATION:

Title I and Title IV of Pub. L. 93-638, the Indian Self-Determination and Education Assistance Act of 1975, authorizes BIA to distribute annually CSF and ISDF. In making these distributions for FY 2003, BIA will follow the procedures in this notice.

The FY 2003 ISDF requirements for new and expanded contracts and self-governance funding agreements may be submitted to BIA throughout the year as the need arises.

Part 1—Contract Support Funds

1.1 What Is the Purpose of Contract Support Funds (CSF)?

BIA provides CSF to meet the indirect cost need identified for ongoing/existing self-determination contracts and self-governance compacts that are financed with funds appropriated to us under the Snyder Act.

1.2 What Is Designated as an Ongoing/Existing Contract or Funding Agreement?

An ongoing/existing contract or annual funding agreement is a BIA program operated under a self-determination contract or self-governance compact on an ongoing basis, which was entered into before the current fiscal year.

1.3 What Criteria Does BIA Use To Determine CSF Amounts for Existing Contracts and Annual Funding Agreements?

(1) All contracted or compacted programs, functions, services or activities included in annual funding agreements in the previous fiscal year and continued in the current fiscal year that are financed with funds appropriated to BIA;

(2) Direct funding increases because of inflation adjustments and general budget increases for programs financed with funds appropriated to BIA;

(3) Programs, functions, services, or activities started or expanded in the current fiscal year that are a result of a change in priorities from other already contracted, annual funding agreement programs, functions, services, or activities financed with funds appropriated to BIA;

(4) CSF differentials associated with tribally-operated schools that receive indirect costs through the application of the administrative cost grant formula. These differentials must be calculated under the criteria prescribed in the “Choctaw” decision dated September 18, 1992, issued by the contracting officer, Eastern Area Office. Copies of this decision can be obtained by calling the telephone number provided in the FOR FURTHER INFORMATION CONTACT section. Tribes that received differential funding under this category in the past are eligible to receive funding from this account. Tribes that did not receive differential funding under this category in the past may be eligible for funding from the ISDF;

(5) Funds available for Indian Child Welfare Act (ICWA) programs or reprogrammed from ICWA programs to other programs will be considered ongoing for purposes of payment of contract support costs; and

(6) Programs, functions, services, or activities funded from sources other than those listed above that were contracted in the previous year and are to be continued under contract in the current year are considered ongoing.

1.4 Does an Increase or Decrease in the Level of Funding From Year to Year Affect the Designation of an Ongoing/Existing Contract or Annual Funding Agreement?

No.

1.5 How Does BIA Determine Eligibility for CSF?

All self-determination contractors and self-governance tribes/consortia with either an approved indirect cost rate, current indirect cost rate proposal, or an approved current lump sum agreement are eligible to receive CSF.

1.6 Can I Use Current Fiscal Year CSF To Pay Prior Year Indirect Cost Shortfalls?

No. The use of current CSF to pay prior year indirect cost shortfalls is not authorized.

1.7 Are There Any Restrictions on Distributing CSF for Indirect Costs?

Yes. The following conditions must be met before BIA distributes CSF to pay indirect costs:

(1) Programs, functions, services, activities, or portions thereof, must be financed with funds appropriated to BIA under the Snyder Act; and

(2) Programs, functions, services, activities, or portions thereof, must be included in a self-determination contract or a self-governance funding agreement with BIA.

1.8 Is There Any Other Restriction on Distributing CSF for Indirect Costs?

Yes. Self-determination contracts or self-governance agreements that receive appropriated funds from other Federal agencies, the Department of the Interior bureaus, offices, or other sources are not eligible to receive CSF.

1.9 How Can Tribes or Tribal Organizations Find Funding To Pay for Their Indirect Cost Needs for Programs That Are Excluded From Receiving CSF?

Those programs that are not eligible to receive CSF or IDSF to cover indirect cost needs must use program-appropriated funds to cover their indirect cost needs. For example, funding for Indian Reservation Roads construction is transferred to BIA from the Federal Highway Trust Fund by the Department of Transportation. Therefore, this program is excluded from receiving CSF and must use allowable program funds to cover indirect cost needs.

1.10 How Does BIA Determine the Amount of CSF a Tribe or Tribal Organization Is Eligible To Receive?

BIA determines the amount of CSF a tribe or tribal organization is eligible to receive by taking the tribe's or tribal organization's direct cost base (DCB) and multiplying it by the indirect cost rate (ICR).

(DCB × ICR = 100 percent CSF need)

1.11 How Does BIA Decide What Direct Cost Base To Use To Determine CSF Need?

BIA uses the following procedures to determine the direct cost base:

If a tribe's direct cost base is . . .	Then BIA will make the following adjustments . . .
(1) Total direct cost, less capital expenditures and pass-through	(1) Total direct cost × indirect cost rate = 100 percent CSF need.
(2) Total salaries and wages	(2) Funding amounts for everything except salaries and wages will be excluded. (Total salaries and wages × indirect cost rate = 100 percent CSF need.)
(3) A negotiated lump sum, which is the total current year program funds, less capital expenditures and pass-through	(3) Capital expenditures and pass-through funds will be excluded. (Total direct cost × lump sum rate = 100 percent CSF need.)

1.12 How Does BIA Determine What Indirect Cost Rate To Use When Calculating the Amount of CSF That Eligible Tribes or Tribal Organizations Will Receive?

When calculating the amount of CSF that eligible tribes or tribal organizations will receive, BIA uses the following procedures:

If . . .	Then . . .
(1) The tribe or tribal organization has an approved indirect cost rate or an indirect cost proposal currently under consideration by the National Business Center (NBC)	(1) The Regional Director or Office of Self-Governance Director must use the tribe's or tribal organization's current indirect cost.
(2) The tribe or tribal organization proposes to use the prior-year approved rate or the rate that is in the current proposal under consideration by the NBC*	(2) The most current of the two rates must be used in determining the amount to award.
(3) The tribe or tribal organization can document that it is unable to negotiate an indirect cost rate because of circumstances beyond its control and requests a lump sum amount	(3) The Awarding Officials may negotiate a reasonable lump sum amount with the tribe or tribal organization for FY 2003.**
*This rate is temporary and subject to finalization through negotiation with NBC and may result in actual over- or under-recovery of indirect costs.
**Beginning with 2004 enacted appropriations, a reasonable lump sum amount must not exceed 15 percent of total current-year program funds, less capital expenditures and pass-through.

1.13 What Happens if the “CSF Needs Report” Identifies an Overall BIA CSF Need That Exceeds Available CSF?

The CSF distribution will be made on a pro rata basis so that all eligible tribes and tribal organizations receive the same percentage of their reported need. For example, if the pro rata amount is 92 percent, each tribe or tribal organization will receive 92 percent of its identified indirect cost need.

1.14 How Does BIA Compute the Indirect Cost Need?

BIA uses one of the following formulas when determining a tribe's or tribal organization's CSF need:

(1) Total direct cost × indirect cost rate = Indirect cost need.

(2) Total salaries and wages × indirect cost rate = Indirect cost need.

(3) Direct cost base × lump sum rate = Indirect cost need.

1.15 Are Construction Contracts Eligible for CSF?

No additional CSF funds are authorized to meet these costs. All administrative or indirect costs must come from the total funding provided for the construction project.

1.16 Who Is Responsible for Submitting the “CSF Needs Report” to the Office of Tribal Services (OTS)?

Each regional office and the Office of Self-Governance must submit a “CSF Needs Report” for ongoing/existing contracts and annual funding agreements.

1.17 How Does BIA Distribute CSF to Tribes and Tribal Organizations?

(1) In the initial distribution of CSF, BIA will distribute to each regional office and the Office of Self-Governance 85 percent of the total amount of CSF provided in the previous fiscal year. From this 85 percent, the regional office will award 75 percent of the CSF need identified for each contract or annual funding agreement that meets the established criteria.

(2) In the second or final allotment of CSF, all tribal contractors and self-governance tribes/consortia will receive a pro-rated share of the CSF, based on the program funds in the contract or annual funding agreement at that time.

1.18 What Can a Contractor Do To Cover Its Total CSF Needs if the CSF Provided Are Insufficient?

If your CSF funds are insufficient, you may reprogram funds to make up deficiencies to recover your full indirect cost need. This reprogramming authority is limited to funds in the Tribal Priority Allocation (TPA) portion of the BIA budget or annual funding agreement.

1.19 Can Funds From Other BIA Programs That Are Not in the TPA Be Used To Meet a CSF Shortfall?

No. Congressional appropriation language does not provide authority for BIA to reprogram funds from other Bureau programs to meet any CSF shortfall. However, appropriation language provides individual tribes authority to reprogram funds from within its total TPA base to meet any CSF shortfalls.

Part 2—Indian Self-Determination Funds

2.1 What Are Indian Self-Determination Funds (ISDF)?

The ISDF are funds that pay the CSF and start-up costs for new or expanded contracts or annual funding agreements.

2.2 What Are the Definitions of the Terms “New Contract or Annual Funding Agreement” and “Expanded Contract or Annual Funding Agreement'?

(a) A new contract or annual funding agreement is defined as the initial transfer of a program, function, service, or activity previously operated by BIA to a tribe, tribal organization or consortium.

(b) An expanded contract or annual funding agreement is defined as a contract or annual funding agreement which has become enlarged, during the current fiscal year, through the assumption of additional programs, functions, services, or activities (or portion thereof) previously operated by BIA.

2.3 How Are ISDF Distributed?

BIA provides ISDF on a “first-come, first-served” basis. BIA funds requests at 100 percent of the “identified need” until the ISDF are depleted.

2.4 How Does BIA Distribute ISDF for a New and Expanded Contract or Annual Funding Agreement?

Each regional office or the Office of Self-Governance must submit an “ISDF Needs Report” to the Office of Tribal Services when a new contract or annual funding agreement is awarded, or when existing contracts or annual funding agreements are expanded.

2.5 What Must a Complete “ISDF Request Package” for New and Expanded Contracts/Annual Funding Agreements Contain?

A complete request package for a new/expanded annual funding agreement must contain:

(1) Indirect cost needs; and

(2) Startup cost needs.

2.6 What Happens if Requests Are Received After the ISDF Have Been Depleted?

The ISDF request will not be funded for the fiscal year. However, requests received after the ISDF have been depleted will be considered first for ISDF funding in the following fiscal year.

2.7 How Does BIA Compute the Indirect Cost Need?

We compute the indirect cost need following the indirect cost base computation methodology provided in this announcement.

2.8 How Does BIA Determine What Indirect Cost Rate To Use When Calculating the Amount of ISDF That Eligible Tribes or Tribal Organizations Will Receive?

When calculating the amount of ISDF that eligible tribes or tribal organizations will receive, BIA uses the following procedures:

If . . .	Then . . .
(1) The tribe or tribal organization has an approved indirect cost rate or an indirect cost proposal currently under consideration by the National Business Center (NBC)	(1) The Regional Director or Office of Self-Governance Director must use the tribe's or tribal organization's current indirect cost
(2) The tribe or tribal organization proposes to use the prior-year approved rate or the rate that is in the current proposdal under consideration by the NBC *	(2) The most current of the two rates must be used in determining the amount to award
(3) The tribe or tribal organization can document that it is unable to negotiate an indirect cost rate because of circumstances beyond its control and requests a lump sum amount	(3) The Awarding Officials may negotiate a reasonable lump sum amount (not to exceed 10 percent) with the tribe or tribal organization for FY 2003.**
* This rate is temporary and subject to finalization through negotiation with NBC and may result in actual over- or under-recovery of indirect cost.
** Beginning with 2004 enacted appropriations, a reasonable lump sum amount must not exceed 15 percent of total current-year program funds, less capital expenditure and pass-through.

2.9 What Are Considered “Startup Costs”?

Startup costs are direct costs for items that are identified in the program operational budget for the new or expanded contract/annual funding agreements. These costs must be allowable costs, allocable to the new or expanded program, reasonable, and a one-time cost only within the context of the operational budget.

2.10 What Information for a “Startup Cost” Request Must I Include in the ISDF Request Package?

The request must contain:

(1) A copy of the program operational budget for the new or expanded contract/annual funding agreement activity, with the startup cost items identified;

(2) A copy of the program operational budget narrative; and

(3) Documentation of the provision of technical assistance and negotiation in regard to the startup cost items.

2.11 Will BIA Consider Funding Requests That Do Not Meet the Requirements of 2.10?

No. BIA will not consider funding ISDF requests that do not contain the items in section 2.10 of this notice.

2.12 Are There Any Contracts or Agreements That Cannot Receive ISDF?

Yes. Self-determination contracts or self-governance agreements that receive appropriated funds from Department of the Interior bureaus, offices, or other sources other than BIA are not eligible to receive ISDF.

2.13 Are There Any Guidelines That Can Be Used To Help Provide Technical Assistance?

Yes. Use the “Guidance for Contract Support Costs” handbook to assist in negotiating and providing technical assistance for startup costs.

2.14 What Happens to an Incomplete ISDF Request?

OTS will return the request to the office of origin for proper completion and re-submission.

Dated: June 13, 2003.

Aurene M. Martin,

Acting Assistant Secretary—Indian Affairs.