Managing Your EPA Grant
The intention of this section is to provide you (the Grantee) with information that will help you to properly manage your grant. EPA's grant regulations are located under Title 40 of the Code of Federal Regulations (CFR), Parts 29 through 47. You must comply with these regulations in their entirety. Non-profits and institutions of higher education should pay particular attention to 40 CFR Part 30; State and local governments are governed by 40 CFR Part 31.
The information provided here is not intended to serve as a replacement for the grant regulations, but instead is designed to provide you with a better understanding of the regulatory requirements.
Table of Contents
The EPA Project Officer (PO) is your primary point of contact. The PO's name and phone number is listed on the grant agreement.
The following individuals may also be contacted if you have specific questions regarding:
Administrative IssuesFor questions concerning general administrative issues, contact your Grants Specialist. The Grants Specialist's name and phone number is listed on the grant agreement.
For questions regarding the ASAP or EFT process, contact Las Vegas Finance Office at 702-798-2485.
Minority Business/Women-Owned Business Utilization
For questions concerning EPA's goal for selecting MBEs or WBEs , contact Small and Disadvantaged Business Utilization Manager, at 215-814-5404.
For questions concerning civil rights, contact Equal Employment Opportunity Manager, at 215-814-5326.
For questions concerning quality assurance requirements, contact your EPA Project Officer.top
When EPA awards a grant to your organization, you will receive two signed original copies of the grant agreement. The most important step at this time is for your authorized representative to sign both copies of the agreement, which indicates your acceptance of the award. One copy of the signed agreement must be returned to EPA within 21 days. The other copy should be kept for your records. After EPA has received the signed copy, you will be able to request payment for grant-related expenses using one of the approved payment methods:
The Debt Collection Improvement Act of 1996 requires that Federal payments be made by electronic funds transfer. In order to comply with the Act, a recipient must receive payments via one of two electronic methods available to them:
Automated Standard Application for Payments (ASAP)
ASAP is an automated drawdown system sponsored by the U.S. Department of the Treasury. Recipients must enroll with Treasury. Additional information concerning ASAP and enrollment can be obtained by contacting the EPA Las Vegas Finance Center, at (702) 798-2485, or by visiting www.fms.treas.gov/asap.
Under this payment mechanism, the recipient initiates, via ASAP, an electronic or voice-activated telephone payment request which is approved or rejected based on the amount of available funds authorized by EPA in the recipient’s account. Approved funds are credited to the recipient organization at the financial institution identified on the recipient’s ASAP enrollment application.
Electronic Funds Transfer (EFT)
Under this payment mechanism, the recipient submits an EPA Payment Request Form to EPA for approval. Approved funds are credited to the recipient organization at its designated financial institution. In order to receive EFT payments the recipient must first complete and return the ACH Vendor/Miscellaneous Payment Enrollment form (SF 3881) to the EPA Las Vegas Finance Center. The Enrollment form can be found by visiting
http://www.epa.gov/ocfo/finservices/payinfo.htm#grants. Upon receipt and processing of the enrollment form, the LVFC will send you an email message with your EFT Control Number, a Recipient's manual and the required forms. Additional information concerning EFT can be obtained by contacting the EPA Las Vegas Finance Center, at (702) 798-2485.
The following regulations and Office of Management and Budget (OMB) Circulars apply to the management of your grant:
Code of Federal Regulations (CFR)
The CFR is organized by Title, Chapter, and Part. EPA grant regulations can be found at:
Title 40: Protection of the Environment:
Chapter 1: The Environmental Protection Agency, Parts 29 through 47
For more information, see "Links to Other Related Information".
The following OMB Circulars apply to the management of your EPA grant:
OMB Circular Title
A-21 Cost Principals for Educational Institutions
A-87 Cost Principals for State, Local, and Indian Tribal Governments
A-122 Cost Principals for Non-Profit Organizations
A-133 Audits of States, Local Governments, and Non-Profit Organizations
For more information, see "Links to Other Related Information".
How do I account for costs ?
You are required to adequately track and document all grant expenses. We recommend that you consider the following in order to establish a system which meets Federal requirements:
1. Your accounting system must track costs by grant as well as by expense category (e.g., supplies, equipment, etc.). A good starting point in establishing expense categories is to refer to the budget categories listed in the EPA grant agreement.
2. You must ensure that all costs are allowable and acceptable. If you have any questions as to the allowability of costs, refer to the applicable OMB Circular for your organization, or contact your EPA Project Officer prior to incurring those costs.
3. Maintain good records. Make sure that all invoices, payroll expenses, etc. are filed along with all supporting information (e.g., contracts, time cards, etc.).
4. File all expense records by expense category. In the case of multiple grant awards, each grant should have its own master file.
5. Your accounting system should enable you to provide financial information, in a report format, summarized by expense category (i.e., a general ledger report). This system will also help support your payment requests to EPA.
How do I account for matching funds?
Many of EPA's grant programs require the grantee to contribute a cost-share or to match the Federal funds provided for the project.
Match requirements may be satisfied by any combination of the following:
1. Recipient contributions (services, property and/or cash).
2. Third party in-kind contributions (services, property and/or cash).
3. Program Income, if authorized by EPA at the time of the grant award. For additional information, refer to the section entitled "What is program income, and what are my responsibilities".
To be counted as match, contributions must meet all of the following criteria:
1. Verifiable, i.e., well documented. Records should also reflect how the value of the cost was calculated.
2. Necessary and reasonable.
3. Identified in the approved budget listed in the grant agreement.
4. Allowable and acceptable under OMB Cost Principles.
5. Not used as a match for another Federal grant.
The following may not be used as match:
1. Costs charged to another Federal grant.
2. Funds received from another Federal grant (Unless authorized by Federal law).
3. Costs financed by program income unless authorized by EPA at the time of the grant award. For additional information, refer to the section entitled "What is program income, and what are my responsibilities".
4. Services or property financed by income earned by contractors under the assistance agreement.
What is program income and what are my responsibilities?
Program income is gross income received by the grantee or sub-grantee directly generated by a grant supported activity, or earned only as a result of the grant agreement during the grant period.
Examples of program income include, but are not limited to:
1. Fees for services funded by the grant.
2. Income generated from the use or rental of property acquired with grant funds.
3. Income from the sale of commodities or items fabricated under a grant agreement.
4. Income from the payment of principal and interest on loans made with grant funds.
How to account for program income.
All program income should be deducted from the total grant expenses to determine net allowable grant expenses. However, when appropriate, EPA may add a condition to the grant at time of award or amendment, authorizing one or more of the following uses of program income:
1. Addition of the income to the total funds committed to the project. In this case, the income must be used to further eligible project activities.
2. Used to meet the cost-share or match requirement of the project.
If program income is generated during the project period of the grant and that income was not anticipated at the time your grant was awarded, contact your EPA Project Officer immediately for guidance on the treatment of the income.
Recipients have no obligation to the Federal Government regarding
program income generated after the end of the project period.
What reports will I be required to submit?
Periodic reports from your organization provide EPA with information regarding the status of your project. There are two basic types of reports that you need to submit - Administrative and Technical.
1. Federal Financial Report (FFR)
The Federal Financial Report (FFR), SF-425, provides information concerning the status of funds expended on the project. Final FFRs are due to EPA no later than 90 days after the end of the budget/project period. Interim or annual FFR submissions may also be required according to the terms and conditions of your assistance agreement. All FFRs should be sent to the Las Vegas Financial Center (LVFC). Additional LVFC information can be found at: http://www.epa.gov/ocfo/finservices/lvcontacts.htm
2. Minority Business Enterprise and Women-Owned Business Enterprise Utilization Report (MBE/WBE)
The MBE/WBE Utilization Report, EPA Form 5700-52A, provides information concerning the dollar amount of procurements (contracts and purchases) that you directed to MBEs/WBEs. Unless otherwise specified in the grant award, the report must be submitted to the Regional Small and Disadvantaged Business Utilization Manager by October 30 of each year.
Generally, your work plan for the project and/or the grant award
will specify the frequency and types of technical reports that are
required. If there are no specific requirements listed, you must
submit a final performance report to the EPA Project Officer within
90 calendar days after project completion.
What records do I need to maintain and for how long?
Financial records, technical reports, grant work products, and all other supporting documents for your grant must be kept for three years from the date that the final financial status report was submitted to EPA.
1. If there is an audit, claim or litigation regarding the grant which began before the end of the three year period, the records must be kept until all matters are resolved.
2. Real property (land, buildings) and equipment records must be kept for three years after the equipment/property is disposed.
3. Some EPA programs, like Superfund, have special record retention requirements. Your EPA Project Officer will advise you if additional requirements apply to your grant.
The Federal Government has the right to timely and unrestricted access to any and all records that pertain to the grant award.
How do I differentiate between sub-awards and vendor transactions?
Awards of financial assistance by the primary grantee to eligible sub-recipients for the purpose of providing support or stimulation to accomplish a public purpose. This includes financial assistance when provided by any legal agreement, even if the you call the agreement a contract or a grant. Sub-award agreements are sometimes also referred to as "Pass-Through" funds. Sub-awards do not include the procurement or acquisition of goods or services.
A sub-award should be used if the sub-recipient:
1. Will have the responsibility for making decisions regarding the work to be performed, and
2. Uses the funds to perform the project for their own purposes.
Note: The sub-recipient has the responsibility to adhere to applicable Federal requirements, i.e., OMB Circulars, Federal grant regulations and statutes.
Purchases of goods and services are not considered to be sub-awards. Typically, these items are acquired through either purchase orders or contracts. You must follow the grant procurement requirements when purchasing these items. For additional information, refer to the section entitled "What must I do to procure goods and services with grant funds".
A vendor transaction should be used when:
1. The goods or services are directly provided to your organization for your use;
2. You specify the requirements for the service/goods; and,
3. Your organization has control over the service being performed.
What must I do to issue sub-awards?
Sub-awards should be written agreements and should include the following items:
1. Information sufficient to identify the Federal Program/Agency that provided the initial funds, such as:
a. Catalog of Domestic Federal Assistance Number
b. Federal agency's name
c. Federal Award Number (Grant Number) and title of the project
2. Federal requirements that apply to the sub-recipient, usually incorporated by reference.
3. Any supplemental requirements from your organization.
4. A description of the work to be performed.
5. Duration of the project.
6. Amount of funds being provided, including matching funds required.
7. Access to records and record retention requirements.
All sub-recipient awards must be closely monitored. Your organization is responsible for ensuring that these awards are used for purposes in compliance with federal laws, regulations, and grant program requirements. Your organization is also responsible for ensuring that the performance goals are achieved and the project is completed.
Keeping detailed records of your monitoring activities is highly recommended!
How do I avoid conflict of interest when procuring goods and services with grant funds?
No employee, officer or agent of your organization may participate in the selection, award or administration of a procurement action if a conflict of interest, either real or apparent, would be involved.
Conflicts of interest occur when an employee, officer, or agent, any member of his/her immediate family, his/her partner, or an organization which employs or is about to employ any of these individuals, has a financial or other interest in the firm selected for an award.
Your organization must have a written standard of conduct to provide guidance for employees regarding their conduct in the award and administration of procurements. The standard should also include disciplinary actions that will be applied if an employee violates these written standards.
What must I do to procure goods or services with grant funds?
Your organization is required to develop written procedures covering all procurement actions. At a minimum, the procedures must comply with Federal requirements. When procuring goods or services with EPA grant funds, you are required to use and document a competitive process.
How do I compete?
1. Write a Proposal (Statement of Work) and estimate costs
2. Obtain bids for the Proposal
a. Estimated cost > $100K - Requires formal advertisement (newspapers, trade magazines, etc.). Your organization may choose to use a lower threshold.
b. Estimated cost < $100K - May use
formal advertisement or direct contact of 3 known vendors.
3. Perform and document an analysis of all bids received.
4. Select the contractor and prepare a written contract.
In certain instances, exceptions to the competitive requirement may be allowed. The exceptions are:
1. The work can be completed by only one source. For
a. Highly specialized knowledge or skills are required, or
b. No other sources are available.
2. Emergency situations
Both exceptions may require prior EPA approval. Contact your EPA project officer before proceeding.
Finally - Documentation of the steps and decisions that you made to award each contract is extremely important !
Are there any rules regarding management of supplies and equipment that were purchased with grant funds ?
It is important that you understand the difference between supplies and equipment, since the treatment of and accounting for each is somewhat different.
Non-expendable personal property having a useful life of more than one year and a cost of $5,000 or more per unit.
All tangible, personal property other than equipment.
What do I do if I purchased equipment under my grant?
States may use, manage, and dispose of equipment purchased in accordance
with State laws and procedures. All other organizations must adhere
to the following:
1. Equipment must be used in the program or project for which it was acquired as long as needed even if the project is no longer supported by EPA.
2. A control system must be developed to ensure adequate safeguards against loss, damage, or theft, adequate property records must be maintained, and a physical inventory must be completed at least once every two years.
3. When acquiring replacement equipment, the equipment may be used as a trade-in or may be sold, with the proceeds used to offset the cost of the replacement equipment.
How do I dispose of equipment (items which are no longer needed)?
When no longer needed for the original project, the equipment may be used in other activities currently or previously supported by a Federal agency.
When actually disposing of equipment (items which are no longer
needed for the original project or for other Federally funded activities),
the following applies:
Fair Market Value < $5,000 per unit May be retained, sold or otherwise disposed of with no further obligation to the Federal government.
Fair Market Value > $5,000 per unit Contact your EPA Project Officer for disposition instructions.
What do I do if I purchased supplies under my grant?
If, upon termination or completion of the grant, you have a remaining inventory of supplies with a total fair market value greater than $5,000, you will be required to reimburse EPA for its share of the value of the inventory.
Are there any additional requirements that I need to be concerned about?
In addition to the standard Federal grant requirements, EPA awards have several additional requirements:
Minority Business Enterprises (MBE) and Women-Owned Business Enterprises(WBE) Utilization
EPA grant programs promote the utilization of MBEs/WBEs for all procurement actions, i.e., the purchase of supplies, equipment or services. Each EPA grant document lists the "fair share" objective that your organization should try to achieve. Basically, you must ensure that opportunities are made available to MBEs/WBEs. You can do that by following the six affirmative action steps listed below:
1. Ensure that MBEs/WBEs are used to the fullest extent practicable
2. Make information on forthcoming opportunities available and arrange time frames for purchases and contracts to encourage and facilitate participation by MBEs/WBEs
3. Consider in the contract process whether firms competing for larger contracts intend to subcontract with MBEs/WBEs
4. Encourage contracting with consortiums of MBEs/WBEs when a contract is too large for one of these firms to handle individually
5. Use the services and assistance, as appropriate,
of such organizations as the Small Business Administration and the
Department of Commerce's Minority Business Development Agency to
6. If awarding to a prime contractor, ensure that the prime follows the affirmative action steps listed above.
EPA also needs to know how successful you were. Therefore, you must periodically report to EPA on your utilization of MBEs/WBEs utilization until the project is completed. For additional information, refer to the section entitled "What reports will I be required to submit".
If your project involves environmentally related measurements or data generation, you must develop and implement quality assurance practices sufficient to produce data adequate to meet project objectives, and to minimize loss of data due to out-of-control conditions or malfunctions. Contact the EPA Project Officer for further clarification regarding Quality Assurance management and project plans.
All non-federal entities that expend $500,000 or more in a year in Federal awards are required to conduct a single or program-specific audit for that year. The audits are to be conducted in accordance with the provisions of OMB Circular A-133. We recommend that you refer to the Circular for further information.
What if I am unable to complete my project within the project dates shown on the grant award?
If you are not able to complete the project within the original project period, it is important that you discuss the situation with your EPA Project Officer as soon as possible. The EPA Project Officer may agree to extend the project period so that the project can be completed.
To request an extension, you must submit a written request to the EPA Project Officer at least 10 days before the project expires. Your request should provide information regarding the reason why the project will not be completed on time, and why it is necessary to continue the project. The request should also specify the additional length of time needed for completion.
The EPA Grants Office will notify you 30 days before the expiration date of the project and, at that time, will provide you with instructions about closing out the grant. You have 90 days calendar days after the project is completed to submit all the required financial, performance and any other reports. During this time, any excess funds paid to you must be returned to EPA. Contact your EPA Grants Specialist for guidance if you need to return money to EPA.
When all the close out requirements have been satisfied, the EPA
Grants Office will issue a final letter to notify you that the grant
is officially closed. This letter will also provide information
about your responsibility for retaining records after the grant
is closed. For additional information, refer to the section entitled
"What records do I need to maintain, and for how long".
What should I expect if my grant is reviewed or audited?
As part of EPA's oversight of your assistance agreement, your project may be selected for a review and/or an audit. The review or audit could occur either during the course of the project, or as part of the final close-out phase of the grant. Generally, the reviews and audits completed by EPA are as follows:
EPA Region III Grants and Audit Management Branch (GAMB)
For grants awarded by EPA Region III, the GAMB is responsible for the administrative oversight of your agreement. Part of this responsibility includes the on-site review of your administrative operations. The overall purpose of an on-site visit by the GAMB is to:
1. Ensure that your organization has the necessary systems in place to manage your agreement.
2. Assist your organization with the overall management of your grant, and to recommend changes where necessary.
3. Make certain that the costs incurred under the grant
When the review is complete, a report will be issued to your organization detailing any concerns and recommendations. The GAMB will work with you to resolve those concerns.
EPA Office of the Inspector General (OIG)
The EPA OIG is responsible for completing audits for all of EPA's grants. These audits generally involve the review of all financial documentation (e.g., accounting reports, contracts, invoices) in support of the total grant-related expenses incurred by your organization.
When the audit is complete, the OIG recommends the acceptance and/or disallowance of costs in a report issued to EPA Region III. Based on the OIG's recommendation and input from your organization, the EPA Regional Administrator will make a final determination of allowable costs under the project.
If, either through a review or audit, it is determined that you have incurred costs which are found to be unallowable (in accordance with OMB Cost Principles), and/or cannot be supported by source documentation (contracts, invoices, cancelled checks, etc., you may be required to reimburse EPA for those costs.top