Water: Section 319 Nonpoint Source Management Program
Applying for and Administering CWA Section 319 Grants:
United States Environmental Protection Agency
State-EPA NPS Partnership
Grants Management Work Group
On this Page
- Purpose and Use of This Manual
- Chapter 1. Overview of Section 319 Program
- Chapter 2. Federal Requirements for Pre-award and Application Phase
- Chapter 3. Post-award Federal Requirements for State Grants: The Implementation Phase
- Chapter 4. Federal Requirements for Project Closeout Phase
The purpose of this manual is to provide an overview of federal requirements that will help guide state and territory1 nonpoint source agency staff when they apply for and administer grants awarded under section 319 of the Clean Water Act. Incorporating the legal, administrative, financial, and programmatic requirements into a single document will help to ensure consistency among the grant distribution processes of the states. In addition, this manual can be used to train new staff who are unfamiliar with section 319 and to help existing staff when applying for and using section 319(h) grant funds. This manual focuses on procedural requirements and does not address all of the substantive requirements codified in the law and in EPA's published guidelines. The reader should refer to the specific requirements when needed and contact the appropriate U.S. Environmental Protection Agency (EPA) regional project officer to ask specific questions and to request up-to-date information on section 319 guidance and forms. Appropriate Internet citations are provided and hyperlinked throughout the document and summarized in Appendix A. This guide applies only to state programs. American Indian tribes should refer to EPA's Web site (Tribal Nonpoint Source Information) for the annual Tribal Guidance and the Tribal Nonpoint Source Planning Handbook (USEPA, 1997).
The document is divided into four chapters. The first chapter gives a brief overview of section 319 and provides basic information about section 319 grants. Chapter 2 describes what should be expected during the pre-award phase. It describes the section 319(h) grant application process in more detail, focusing on specifications for the state agency application and work plan that must be submitted to EPA. Chapter 3 presents information on the financial, reporting, and record-keeping requirements associated with the post-award phase of a section 319(h) grant. Chapter 4 explains the steps required to close out a section 319 grant. Appendices with pertinent forms, subawardee requirements, and additional information are included at the end of this document.
This manual is accurate and up-to-date as of February 2003. It will be updated periodically to reflect any new requirements and guidelines.
Overview of Section 319 Program
Purpose of Grants
Section 319 was added to the Clean Water Act (CWA) in 1987 to establish a national program to address nonpoint sources of water pollution. The leading cause of water quality degradation in the United States, nonpoint source pollution originates from diffuse or scattered sources rather than a defined point like a pipe outlet. Agriculture, forestry, construction, and urban activities are some of the leading nonpoint sources of pollution. As rainfall and snowmelt move over the land, they pick up pollutants, carry them, and deposit them into ground water and waterbodies such as lakes, rivers, streams, wetlands, and coastal waters. Section 319(h) specifically authorizes EPA to award grants to states with approved Nonpoint Source Assessment Reports and Nonpoint Source Management Programs. The funds are to be used to implement programs and projects designed to reduce nonpoint source pollution. As required by section 319(h), the state's Nonpoint Source Management Program describes the state program for nonpoint source management and serves as the basis for how funds are spent. In addition, a variety of other funding sources are available under the CWA (e.g., sections 106, 320, and 604(b) and the State Revolving Fund) or through other federal agencies (e.g., Environmental Quality Incentive Program [EQIP] funds from U.S. Department of Agriculture). When applicable, these other funding sources should be used to fund nonpoint source projects.
Every year section 319 funds are allocated to each state according to a national allocation formula based on the total annual appropriation for the section 319 grant program. The allocation formula is contained in Appendix G of EPA's 1997 Nonpoint Source Guidance (USEPA, 1996).
Since 1999 section 319(h) funds have been awarded to state nonpoint source agencies in two categories—incremental funds and base funds. Incremental funds, a $100 million portion that EPA has designated for the development and implementation of watershed-based plans and Total Maximum Daily Loads (TMDLs) for impaired waters, should be used to restore impaired waters. Base funds, funds other than incremental funds, are used to provide staffing and support to manage and implement the state Nonpoint Source Management Program. Base funds help in implementing projects to identify and address nonpoint source problems and threats, as well as funding activities that involve specific waterbodies in that state or statewide or regional projects. A portion of these funds (up to 20 percent) may be used for planning and assessment activities such as conducting assessments, developing TMDLs, and creating programs to solve nonpoint source problems. EPA has issued supplemental grant guidelines, in addition to the 1997 Nonpoint Source Guidance, that identify priority activities to be funded with section 319 incremental and base funds.
The CWA requires EPA to award section 319(h) grants to the state nonpoint source agency, designated by the governor, to implement its approved Nonpoint Source Management Program to help achieve and maintain beneficial uses of water, such as swimming or fishing. EPA-approved state Nonpoint Source Management Programs provide the framework for determining which activities are eligible for funding under section 319(h). In general, these activities include nonregulatory or regulatory programs for compliance and enforcement, technical assistance, financial assistance, education, training, technology transfer, demonstration projects, and monitoring to assess the success of specific nonpoint source projects, to the extent these activities are related to controlling nonpoint source pollution. Specific requirements regarding allowable costs are provided in applicable grant regulations and Office of Management and Budget (OMB) circulars.
A state becomes eligible to receive EPA funding for 319(h) grants upon the Agency's approval of the state's Nonpoint Source Assessment Report and Nonpoint Source Management Program. States may make funds available through subawards (e.g., contracts, subgrants) to both public and private entities, including local governments, tribal authorities, cities, counties, regional development centers, local school systems, colleges and universities, local nonprofit organizations, state agencies, federal agencies, watershed groups, for-profit groups, and individuals. Subawards to individuals are limited to demonstration projects. The state selects recipients of subawards based on its program priorities. States must award contracts consistent with the procurement requirements and with state requirements under grants at Title 40 of the Code of Federal Regulations (CFR), section 31.36 (Procurement). A summary of federal statutes, regulations, and OMB circulars applicable to states, along with their related Web sites, is provided in Appendix A.
A state may use section 319(h) funds for the following activities if the activities are a part of its approved Nonpoint Source Management Program:
- Updating and refocusing the state Nonpoint Source Management Program and Nonpoint Source Assessments to improve program effectiveness. States may use up to 20 percent of their base section 319 allocation for this purpose. States should refine their programs to reflect their most pressing needs and highest-priority water quality problems. Activities and analyses that may be funded include establishing indicators and milestones, developing TMDLs and watershed plans, and improving assessment efforts (USEPA, 1996, 2001a).
- Implementing ground water protection activities. Ground water activities are eligible for section 319 grants if they are identified in the state's Nonpoint Source Management Program, Ground Water Protection Strategy, or Comprehensive State Ground Water Protection Program (CWA section 319(h)(5)(D); USEPA, 1996).
- Funding urban storm water runoff activities if those activities meet all of the following conditions: (1) the activities are not specifically required by a draft or final National Pollutant Discharge Elimination System (NPDES) permit, and (2) the activities do not directly implement a draft or final NPDES permit. Activities that might meet the above requirements include technical assistance; monitoring to address implementation strategies; best management practices (BMPs); information and education programs; technology transfer and training; and development and implementation of regulations, policies, and local ordinances to address storm water runoff (USEPA, 1996).
- Funding abandoned mine land reclamation projects designed to protect water quality if those activities meet both of the following conditions: (1) the activities are not specifically required by a draft or final NPDES permit, and (2) the activities do not directly implement a draft or final NPDES permit. Activities that might meet the above requirements include remediation of water pollution from abandoned mines or portions of abandoned mines, mapping and planning of remediation, monitoring, technical assistance, information and education programs, technology transfer and training, and development and implementation of policies addressing abandoned mine lands (USEPA, 1996).
- Implementing lake protection and restoration activities except for in-lake work such as aquatic macrophyte harvesting or dredging unless the sources of pollution have been addressed sufficiently to ensure that the pollution being remediated will not reoccur. States are encouraged to use section 319 funding for eligible activities that might have been funded in previous years under CWA section 314 (Clean Lakes Program) (USEPA, 1996, 1999).
Section 319(h) grant funds are eligible for inclusion in Performance Partnership Grants (PPGs). PPGs enable states and interstate agencies to combine funds from more than one environmental program grant into a single grant with a single budget (40 CFR 35.130). Recipients need to account for total PPG expenditures subject to the requirements of section 35.130; they do not need to account for PPG funds in accordance with the requirements of the funds' original sources. The PPG is designed to
- Strengthen partnerships between EPA and state and interstate agencies through joint planning, priority-setting, and better deployment of resources.
- Provide state and interstate agencies with the flexibility to direct resources where they are most needed to address environmental and public health priorities.
- Link program activities more effectively with environmental and public health goals and program outcomes.
- Foster development and implementation of innovative approaches such as pollution prevention, ecosystem management, and community-based environmental protection strategies.
- Provide savings by streamlining administrative requirements.
Grant Requirements and Guidelines
Section 319 grant recipients must meet all applicable statutory, regulatory, and other requirements, as well as rules established in grant guidelines documents. Statutory laws are codified in the United States Code and are created and approved by the United States Congress and the President. Federal agencies write regulations to set specific rules that pertain to a particular statutory law. The regulations are published yearly in the Code of Federal Regulations. Circulars published by OMB contain administrative requirements and set forth allowable costs under grants. Table 1 lists some of the particular requirements in each of the three categories described above that pertain to section 319(h) grants. Although all the requirements apply to recipients of section 319 funds, nonprofit organizations should focus on 40 CFR part 30 and OMB Circulars A-110, A-122, and A-133 whereas states should focus on part 31 and OMB Circulars A-87, A-102, and A-133 (see Appendix A for a summary and related Web pages). Statutes in addition to the CWA may also be applicable, and they are described on the "Assurances" form (Standard Form 424B). The sources of requirements are cited throughout this document, allowing the reader to seek additional information as necessary. When applying for 319(h) grants, the state must be familiar with these requirements as well as EPA's Nonpoint Source Program guidance or guidelines. In addition, state-specific requirements and priorities (e.g., procurement requirements, environmental review requirements) must be considered.
Table 1. Primary Requirements Applicable to Section 319(h) Grants
|Categories of Requirements
||Requirements applicable to 319(h) grants|
||Clean Water Act sections 101, 205, 208, 303, 319|
||40 CFR parts 7, 29, 30, 31, 32, 34, 35A|
||A-21, A-87, A-102, A-122, A-133|
|EPA Grant Guidelines
||Nonpoint Source Program and Grants Guidance for Fiscal Year 1997 and Future Years, annual supplemental guidance documents|
Both the state agencies and subawardees receiving section 319(h) funds must comply with applicable federal laws, regulations, OMB circulars, and grant rules. It is the responsibility of the state agency to ensure that the grant subawardees are aware of these regulations and that their projects are designed in compliance with them. All section 319(h) grants to states must be consistent with applicable provisions of EPA's general grant regulations, including 40 CFR part 31 and part 35, subpart A.
Funded activities and projects also must meet specific EPA requirements for section 319(h) grants, as described in the Nonpoint Source Guidance for the Award of Section 319 Grants in FY 1997 (USEPA, 1996) and supplemental EPA guidelines for FY 2000 through FY 2003 (USEPA 1999, 2000, 2001a, 2002). These guidelines highlight requirements from the CWA, 40 CFR part 31 and part 35, subpart A, and EPA policy. The EPA grant guidelines, issued annually, describe priorities for funding, especially those for incremental funds. In FY 2004 EPA plans to issue consolidated grant guidelines, which will replace the FY 1997 through FY 2003 guidance and guidelines. Please refer to EPA's Web site (Laws, Regulations, Treaties) for the latest version. Highlights of specific requirements in the EPA guidelines include the following:
- Approved Nonpoint Source Management Program. Funded activities or projects must lead to accomplishing the objectives stated in the approved Nonpoint Source Management Program (40 CFR 35.260). Grant work plans should link the funded activities or projects to the relevant element(s) of the state's Nonpoint Source Management Program. Work plans should indicate which federal, state, and local agencies are responsible for implementing each project or activity.
- Environmental grant. All grants must be awarded as Environmental Program Grants under 40 CFR 35.101.
- Maintenance of effort. States must maintain their aggregate expenditures from all other sources for programs to control pollution added to the navigable waters in the state and to improve the quality of such waters at or above the average level of expenditures in FY 1985 and FY 1986 (CWA 319(h)(9)).
- Match. The federal share may not exceed 60 percent of the Nonpoint Source Management Program implementation cost, and the nonfederal share must be provided by nonfederal sources. The nonfederal share for the entire grant must be at least 40 percent (CWA section 319(h)(3); 40 CFR 35.265).
- Administrative cost. If the state is awarded its section 319 funds in a section 319 grant, the administrative costs may not exceed 10 percent of the funding (CWA section 319(h)(12); 40 CFR 35.268). Administrative costs include salaries, overhead, or indirect costs for services provided and charged against general activities and programs carried out with the grant. The costs of enforcement and regulatory activities, education, training, technical assistance, demonstration projects, and technology transfer are not subject to the 10 percent limitation. This requirement does not apply to a PPG that includes section 319 funds (40 CFR 35.134(c)).
- Availability for obligation. Funds awarded to states will remain available for the entire fiscal year for which the funds were awarded. Any funds not obligated by the end of the fiscal year will become available to EPA to administer to other states in the next fiscal year (CWA section 319(h)(6)).
The term obligate does not mean "to expend"; it means that the state must commit the section 319(h) funds to be expended. EPA defines an obligation (by a recipient) as "the amount of funds which a recipient legally earmarks for expenditure through orders placed, payrolls, subagreements awarded, travel authorizations and other transactions" (USEPA, 1996).
- Evaluation and reporting. States are required to meet annual reporting requirements and Grants Reporting and Tracking System (GRTS) requirements. Refer to Chapter 3 for more detail on reporting requirements and GRTS.
- Satisfactory progress. The Regional Administrator may not award section 319 grant funds to a state unless the Regional Administrator determines that the state has made satisfactory progress during the previous fiscal year in meeting the schedule of milestones specified in the state's Nonpoint Source Management Program (CWA 319(h)(8)). The EPA regional office issues a written determination that the state has made satisfactory progress during the previous fiscal year and includes it in each section 319 grant, or in a separate document prior to award of the grant.
- Cost-sharing and demonstration projects. States may use section 319(h) grant funds for cost-sharing to persons only if the costs are related to implementing demonstration projects (CWA section 319(h)(7); 40 CFR 35.268).
Demonstration projects are a tool often used to show the overall effectiveness of an adopted approach in solving a particular water quality problem. Demonstration projects may be funded in a variety of locations because doing so can demonstrate the projects' utility in a watershed's various hydrogeological and sociological settings.
In high-priority watersheds, states may supplement section 319 cost-share to individuals with additional cost-share from state funds. When such an approach is followed, the total cost share to an individual from section 319, state, and other federal (e.g., USDA) funds must not exceed 100 percent of the total cost of the practice and be in compliance with all other applicable funding requirements (USEPA, 1996).
Overview of the 319(h) Grant ProcessAlthough this document is written for state nonpoint source agencies, it is important to understand the major roles that EPA and subawardees also play in the grant process. Figure 1 illustrates the "big picture" of the 319(h) grant process by showing the interrelationship of the roles of EPA, the state nonpoint source agency, and the subawardees. The specific timing of the steps in the grant process varies by state and by region and depends on when the annual budget becomes available.
Federal Requirements for Pre-award and Application Phase
Each year Congress appropriates funds to EPA for the section 319 grant program. A portion of this amount is allocated for tribal grants; the remainder is allocated to the state nonpoint source agencies according to a national allocation formula. Once EPA has a final budget, EPA notifies the states of their base and incremental section 319 grant allocations. EPA headquarters provides funds to the EPA regions, which are then awarded to the states based on approved work plans. A state may award funds through subawards (contracts or subgrants) to other entities in accordance with the state's Nonpoint Source Management Program and procurement requirement
Time Line for Applications
The general schedule for coordinating the section 319(h) grant application with EPA is as follows:
EPA provides funding targets for the following fiscal year and may issue nonpoint source guidance.
|States submit draft work plans to EPA regions.||April–May|
|EPA regions conduct their reviews of state and provide written comments agencies.||Within 6 weeks of applications receipt from stateto state|
|States submit their final work plans and grant applications to EPA regions.||At least 60 days prior to proposed funding period|
|Final work plans are reviewed; if all requirementsare met, EPA region awards grant as quickly as possible.||Within 60 days of receipt from state|
|States obligate funds. States are expected to obligate section 319(h) grant funds as quickly as possible and begin to implement the activities described in the approved work plan. The state shouldobligate the funds within 1 year of grant award.||As quickly as possible, within first year|
The exact dates for the application schedule vary from state to state. The EPA regional office and the state should agree to a more detailed schedule. State nonpoint source agencies establish a similar schedule for soliciting project proposals from subawardees. Appendix B provides a list of all of the state nonpoint source office Web sites (as of February 2003).
Before receiving a section 319(h) grant, a state must meet the requirements described in this chapter. Federal requirements are included in the CWA, Title 40 of the CFR, OMB circulars, and EPA guidelines, as highlighted previously in Table 1. Because EPA must award 319 funds to state nonpoint source agencies, states should focus on CFR part 31 and part 35, subpart A, and OMB Circulars A-87, A-102, and A-133. In turn, states then provide funding to the other entities. Depending on the kind of organization receiving funds (e.g., state or local agency, nonprofit, university), different regulations and OMB circulars apply. If funds are awarded to a state, local, or Indian tribal government, 40 CFR part 31 regulations apply. In addition, 40 CFR 31.22 clearly outlines the OMB circulars with cost principles applicable to subawardees (contract or grant). If funds are awarded to institutions of higher education, hospitals, and other nonprofit organizations, 40 CFR part 30 regulations and OMB Circulars A-110, A-122, and A-133 apply. States are responsible for informing subawardees of the federal requirements that the subawardees must meet. These requirements are outlined in Appendix C.
Preparing an Application
Each state section 319(h) grant application package must include the appropriate application forms, work plan, and project costs (40 CFR 35.104, 40 CFR part 31, subpart B). The application must be submitted at least 60 days before the beginning of the proposed funding period (40 CFR 35.105).
Application forms. Standard Forms 424 ("Application for Federal Assistance"), 424A ("Budget Information"), and 424B ("Assurances") must be included in the grant application package submitted to EPA. Other federal forms, including Form 4700-4 ("Preaward Compliance Review Report"), Form 5700-49 ("Certification Regarding Debarment, Suspension, and Other Responsibility Matters"), Standard Form LLL ("Disclosure of Lobbying Activities"), and "Certification Regarding Lobbying," also must be completed and submitted to EPA in the application package. Copies of these federal forms are provided in Appendix D and can also be found on the On-Line Grant Application Kit Web site. Following are highlights of specific federal requirements that apply to state recipients of federal funds.
Nondiscrimination. 40 CFR 7.30 prohibits discrimination under any program or activity receiving EPA assistance on the basis of race, color, national origin, gender, handicap, or age. It also requires that recipients of federal funds provide public notification that they do not discriminate (40 CFR 7.95).
Lobbying. Federal restrictions regarding lobbying are provided in 40 CFR 34.100, OMB Circular A-87, and OMB Circular A-122. Federal grant funds may not be used to influence (or attempt to influence) a federal employee or a member of the United States Congress. If nonfederal funds have been used to influence (or attempt to influence) a federal employee or a member of Congress, the grantee must submit Standard Form LLL ("Disclosure of Lobbying Activities").
Drug-free Workplace. 40 CFR 32.600 requires recipients of section 319(h) grant funds to certify that they maintain a drug-free workplace. By signing and submitting the section 319(h) grant application, the applicant certifies that he or she will not engage in the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance in conducting any grant-related activity.
Work plan. The work plan is a part of the application and is negotiated between the grant applicant and the EPA project officer and managers. It reflects consideration of such factors as national program guidance; goals, objectives, and priorities proposed by the applicant; other jointly identified needs or priorities; and the planning target. It may identify priority activities from the Nonpoint Source Management Program for funding in the next fiscal year and is the basis for management and evaluation of performance under the grant. The work plan must specify the following, consistent with 40 CFR 35.107, 35.115, and 35.268:
- Work plan components to be funded under the grant. A work plan component is a negotiated set of work plan commitments established in the grant agreement. A work plan may have one or more work plan components.
- The estimated work years and estimated funding amounts for each work plan component.
- The work plan commitments for each work plan component and a time frame for their accomplishment. Work plan commitments are the outputs and outcomes associated with each work plan component, as established in the grant agreement. The work plan must be consistent with applicable federal statutes, regulations, circulars, and executive orders and with EPA delegations, approvals, or authorizations (40 CFR 35.107(b)(3)). It must also be consistent with EPA's grant guidelines.
- A performance evaluation process and reporting schedule in accordance with 40 CFR 35.115. The joint evaluation process must provide for:
- A discussion of accomplishments as measured against work plan commitments.
- A discussion of the cumulative effectiveness of the work performed under all work plan components.
- A discussion of existing and potential problem areas.
- Suggestions for improvement, including, where feasible, schedules for making improvements.
- EPA will ensure that the required evaluations are performed according to a negotiated schedule and that copies of evaluation reports are placed in official files and provided to the recipient (40 CFR 35.115(d)).
- The roles and responsibilities of the state and EPA in carrying out the work plan commitments.
- In work plans that include significant watershed projects (where costs exceed $50,000), a brief synopsis (two to three pages) of the watershed implementation plan outlining the problem(s) to be addressed, the project goals and objectives, and environmental indicators or performance measures to be used to evaluate the success of the project (40 CFR 35.268).
Budget. The budget provides estimated costs to accomplish the activities included in the work plan. These costs must be necessary, reasonable, and consistent with federal cost principles and policies. The following are descriptions of different types of costs. OMB Circular A-87 identifies allowable costs, some of which are highlighted here.
Administrative costs. Administrative costs include salaries, overhead, and direct or indirect costs for services provided and charged against activities and programs carried out with section 319 funds. Note that only 10 percent of funding in a section 319 grant may be used for administrative costs. The cost of implementing enforcement and regulatory activities, education, training, technical assistance, demonstration projects, and technology transfer programs are not subject to the 10 percent limitation (CWA section 319(h)(12); 40 CFR 35.268; USEPA, 1996). This limitation on administrative costs does not apply to PPGs that include section 319 funds.
Direct costs. Direct costs are costs directly related to accomplishing the project, and they may include administrative costs. These costs include the purchase of equipment, supplies, materials, outside services, and travel.
Equipment. Equipment costs greater than $5,000 must have prior EPA approval (40 CFR 31.32). States should discuss equipment purchases with the EPA regional office as early in the application process as possible.
Indirect costs. The state must have a state-approved indirect cost rate proposal and provide a copy to EPA. This document substantiates the basis for costs that are common or joint to more than one cost objective.
Personnel costs. The costs for labor, considered personnel costs, should be broken down by job classification (e.g., laborer, scientist, volunteer). Multiplying cost per hour by number of hours worked yields the total personnel costs.
Matching funds. For section 319 grants to states, EPA may provide up to 60 percent of the approved work plan costs in any fiscal year. For PPGs that include section 319 funds, the cost-share attributable to the 319 funds included in the PPG is either the amount of funding required to meet the section 319 match requirement or the amount of funding required to meet the maintenance of effort requirement, whichever is greater (40 CFR 31.136). The nonfederal share of costs must be provided from nonfederal sources. With the qualifications and exceptions listed in section 31.24(b), a matching or cost-sharing requirement may be satisfied by either or both of the following:
- Allowable costs incurred by the grantee, subawardee, or a cost-type contractor under the assistance agreement. These include costs borne by nonfederal grants or by cash donations from nonfederal third parties.
- The value of third party in-kind contributions (e.g., donated personnel time, supplies, equipment) applicable to the period to which the cost-sharing or matching requirements apply.
The following items may not be used as matching funds:
- Other federal funds, including in-kind services by staff, other than those which are available to match other federal grants by law.
- Unallowable costs for the project/program (e.g., lobbying). Refer to 40 CFR parts 30 and 31 and OMB Circulars A-87 and A-122 for more detail.
The required nonfederal match can be calculated in two easy steps:
- The federal share divided by the federal percentage equals the total project cost.
- The total project cost minus the federal share equals the recipient's share.
- $75,000 (federal share) ÷ 60% (federal percentage) = $125,000 (total project cost)
- $125,000 (total project cost) - $75,000 (federal share) = $50,000 (recipient share)
During the application phase, the applicant is encouraged to fulfill the following roles and responsibilities:
- Seek informal or formal assistance to answer questions concerning the technical or administrative requirements of the grant.
- Respond to inquiries from the EPA project officer and EPA grants management office concerning the application.
- Revise the application based on comments received from the EPA project officer and EPA grants management office.
- Sign the award offer within 3 weeks of receipt from EPA. (If the applicant does not sign the award within 3 weeks, the EPA award official may withdraw the offer per EPA policy.)
Pre-Award and Application Phase Frequently Asked Questions
Q. What is the Assurances form and is it required for section 319(h) grants?
A. The Assurances form is Standard Form 424B (Appendix D). Applicants for section 319(h) grant funds must sign this form to certify that they will be able to meet the federal laws and other requirements applicable to all federally assisted projects (e.g., Davis-Bacon Act, Hatch Act, National Environmental Policy Act, National Historic Preservation Act). These requirements are listed and explained on Standard Form 424B.
Q. When do the wage rules set forth in the Davis-Bacon Act apply to section 319 funds?
A. The Davis-Bacon Act is applicable only to 319 grants that fund construction of treatment works. CWA section 212 defines construction and treatment works for grants under Title II. Although the section 212 definition can be used as a guide for determining whether a project is a treatment works for purposes of section 319(h) grants, the section 212 definition includes items that may not be "treatment works" in common understanding (e.g., storage facilities that do not provide treatment). For such projects, the Davis-Bacon Act (40 U.S.C §§ 176a–276a-7) requires that wages for laborers and mechanics working on specific, federally funded projects be set at the current wage rate for that region. Specifically, the act requires that each contract over $2,000 for the construction, alteration, or repair of public buildings or public works follow the minimum wages to be paid to various classes of laborers and mechanics employed under the contract.
Q. Are the requirements in the National Environmental Policy Act applicable to section 319 funds?
A. No. CWA section 511(c)(1) states that the only EPA actions under the CWA subject to the NEPA requirements for "major federal action significantly affecting the quality of the human environment" are new source permits and grants for the construction of publicly owned treatment works. Section 319 grants do not fit within either category and are therefore not subject to NEPA requirements.
Q. I have misplaced my copy of Standard Form LLL. Where can I get another copy?
A. Copies of all required federal forms can be found on the On-Line Grant Application Kit Web site.
Q. Is there a required format for a state work plan?
A. The state may use any format it chooses, as long as the required information is included and meets the needs of EPA's regional office. The state is encouraged to consider the following:
- Include a narrative description or introduction of the approach taken for each of the major work plan categories.
- Clearly identify the output or product, including the due date, that will result from each activity.
- Keep the master work plan and budget up-to-date, and report any changes in accordance with 40 CFR 35.114. Discuss work plan and budget revisions with EPA before making changes. Assign numbers to work plan revisions for easy tracking.
- Appropriate monitoring and assessment of work plan activities, including watershed project implementation, is an essential component of evaluating the effectiveness of a nonpoint source program. The work plan should include specific assessment activities and sharing of success stories and lessons learned.
Q. What elements must a state include in developing and implementing a successful watershed-based plan using 319 funds?
A. The state should always remember to incorporate the following nine elements listed in the nonpoint source guidance for fiscal year 2003 (USEPA, 2001b):
- An identification of the sources that will need to be controlled to achieve load reductions established in the state's nonpoint source TMDL or any other goals identified in the watershed-based plan.
- An estimate of the load reductions expected from the management measures described.
- A description of the nonpoint source management measures needed to achieve load reduction and identification of the critical areas in which the measures will need to be implemented to achieve the nonpoint source TMDL.
- An estimate of the assistance (financial and technical) and authorities the state anticipates having to rely on to implement the plan.
- An information/education component, which the state will use to enhance public understanding of the project and encourage public involvement in the nonpoint source management measures.
- A schedule for implementing the nonpoint source management measures identified in the plan.
- A schedule of interim, measurable milestones that can be used to determine whether nonpoint source management measures or other control actions are being implemented.
- A set of criteria that can be used to determine whether substantial progress is being made toward the water quality standards and, if not, criteria that will help to determine whether the nonpoint source TMDL should be revised.
- A monitoring component to evaluate how effective the implementation efforts are as measured against the set of criteria developed as described previously.
Post-award Federal Requirements for State Grants: Implementation Phase
After receiving a section 319(h) award, states must meet several federal requirements in Title 40 of the CFR, OMB circulars, and EPA guidelines. Following are highlights of specific financial, reporting, and other requirements that apply to state recipients of federal funds.
40 CFR 31.36 requires that all procurement transactions be conducted in a way that provides open and free competition. Purchases for projects must be made on a competitive basis to ensure that fair and reasonable prices are obtained for goods and services. Federal regulations require documentation of cost or price analysis in connection with every procurement action regardless of amount. Additional details are provided under "Procurement Methods" following this section.
Conflict of Interest
40 CFR 31.36(a)(3) requires standards of conduct to avoid conflict of interest. Recipients of federal funds may not participate in the selection, award, or administration of a contract if real or apparent conflict of interest would result. Conflict of interest would arise if an employee, organization officer, agent, immediate family member, partner, or organization that employs any of the above-mentioned persons (1) has a financial (or other interest) in a firm selected for award or (2) solicits or accepts gratuities, favors, or items of monetary value from contractors or subawardees. Disciplinary actions are required for violations of standards of conduct.
40 CFR 31.34 grants EPA a royalty-free, nonexclusive, and irrevocable license to reproduce, publish, or otherwise use, and to authorize others to use for federal government purposes, (1) the copyright in any work developed under a grant, subgrant, or contract under a grant or subgrant and (2) any rights of copyright to which a grantee, subawardee, or contractor purchases ownership with grant support.
Financial requirements for states and subawardees of section 319(h) grant funds are categorized by the following topics: allowable costs, matching funds, and state-specific requirements regarding the payment process.
Allowable costs. All costs charged to EPA grants must be eligible, necessary, and reasonable for performing the tasks outlined in the approved project work plan. The costs, including match, must be incurred during the period of performance of the project. The costs also must be allowable, meaning that they must conform to specificfederal requirements (40 CFR parts 30 and 31; OMB Circulars A-87 and A-122). In addition, costs must be well documented.
When the total amount of all federal grant funds exceeds $300,000, an independent audit is required in accordance with the specifications of OMB Circular A-133. In addition, projects are subject to independent audits by EPA's Office of the Inspector General at any time. They may also be reviewed periodically by EPA's accounting and grants management staff to ensure proper management of grant funds.
Matching funds. Matching funds are the portion of the allowable project costs that the grant recipient (or third party) contributes to a grant or cooperative agreement. State recipients of section 319(h) grant funds must provide a nonfederal match as described in Chapter 2. All matching funds must be included in the project work plan and budget and be part of the grant's "total project costs." All matching funds must conform to the same laws, regulations, and grant conditions as the federal funds in the grant (CWA section 319(h)(3), 40 CFR 35.265).
Payment processes. Payment to state nonpoint source agencies for section 319(h) grant-sponsored activities is usually made through an electronic fund transfer on a reimbursement or an advance payment basis. The state must maintain the expense details and make them available on request.
EPA's payments for designated individual contractors (excluding overhead) retained by the state or for subawardees' contractors (or subcontractors) are limited to the maximum daily rate for a GS-18. Maximum daily rates may change annually or more often. The current 2003 rate is set at $513.60. This amount does not include transportation and subsistence costs, in accordance with normal travel reimbursement practices. States or subawardees may pay consultants more than this amount, but the excess amount may not be paid with federal grant funds. State-determined payment processes are used to pay subawardees. The length of time for subawardees to receive payment from states varies by state (Public Law 99-591, 40 CFR 31.36(j)).
Roles and responsibilities of states within the payment process include the following (40 CFR 31.20):
- Maintaining records that adequately identify the source and use of funds for the federally sponsored activities.
- Maintaining effective control over and accountability for all federal funds, property, and other assets.
- Routinely comparing actual expenditures with budget amounts for each federally sponsored project or program.
- Setting procedures for determining the reasonableness, eligibility, and allowability of costs.
- Maintaining financial records that are supported by original source documentation (e.g., invoices, canceled checks, receipts, timesheets, contracts).
- Providing accurate, current, and complete disclosure of financial records of the federally sponsored project or program, as requested by EPA.
- Minimizing the elapse of time between a transfer of funds from the U.S. Treasury and disbursement whenever advance payment procedures are used.
Operation and Maintenance
Grant recipients are obligated to continue operating and maintaining measures and practices that have been funded with section 319 funds. Grantees must also include in subawards a provision that the subawardee will also properly operate and maintain practices implemented through a 319 project (USEPA, 1996, 2002).
Amendments and other changes to the grant are governed by 40 CFR 35.114. For significant changes to the work plan commitments, the state must obtain the prior approval of EPA in writing. EPA, in consultation with the state, will document these revisions, including budgeted amounts associated with the revisions.
Grant recipients may use their own procurement procedures provided that the procedures conform to applicable federal laws and standards as described in 40 CFR 31.36 (e.g., contract administrative system, written code of conduct). Grants and subawards may not be made to any party that has been debarred or suspended or is considered ineligible for participation in federal assistance programs.
The grantee may contract or subcontract funds to an eligible recipient based on purpose and state procurement systems. See 40 CFR 31.3 and 31.37 and OMB Circular A-87 for federal definitions and requirements of contracts and subgrants. Examples of methods that may be used in conjunction with section 319(h) grants are small purchase procedures, sealed bids, competitive proposals, and noncompetitive proposals. Refer to 40 CFR 31.36 for more detail on federal requirements.
Contracting with Small and Minority Businesses. Recipients of section 319(h) grants that employ subcontractors must take steps to ensure that minority and women-owned firms are used when possible. Steps are identified in 40 CFR 31.36.
Subgrants. A state must follow 40 CFR 31.37 when awarding and administering subgrants to tribal and local governments. The state must also follow its own laws and procedures and must (1) include a provision in a subgrant to ensure that subgrantees are aware that they must comply with applicable requirements mentioned in (2) and (3) that follow, (2) ensure that every subgrant includes any clauses required by federal statute, and (3) ensure that subgrantees are aware of federal requirements imposed on them by accepting the agreement (see Appendix C).
Property management and procedures are detailed in 40 CFR part 31 and OMB Circulars A-21, A-87, and A-122. Property (e.g., equipment) purchased in whole or in part with federal funds should be properly managed (e.g., inventory, control system, maintenance, disposition). Depending on acquisition costs, different requirements might apply.
Section 319(h) grant projects often include monitoring components to measure the effectiveness of the project. When environmental data are being collected during the course of a section 319 project, a Quality Assurance Project Plan (QAPP) must be developed in accordance with specific EPA guidelines (40 CFR 31.45 and 30.54). QAPPs outline the procedures that a monitoring project will use to make sure that samples are collected, data are stored, and reports are written to ensure quality high enough to meet the needs of the project. QAPPs must be approved by EPA or the state agency before sampling and monitoring begin. Specific QAPPs should be discussed with the regional EPA project officer. Specific guidelines on writing a QAPP are provided on EPA's Web site at Guidance for Quality Assurance Project Plans (PDF) (111 pp, 401K) and The Volunteer Monitor's Guide To Quality Assurance Project Plans.
Section 319 grant recipients are required to retain all records pertaining to federally sponsored activities or projects for 3 years (unless involved in legal activity or separate arrangements have been made with awardees and subawardees) after the date of submission of the final financial status report or final date of reconciliation of outstanding issues (40 CFR 31.42). The records must be available and accessible to EPA (or to the state in the case of subawards), as requested, for review or audit. The state should ensure that agreements with subawardees specify outputs, milestones, and reporting and record-keeping requirements in memoranda of agreement, contracts, or other appropriate documents. Where a subawardee will provide a portion of the state's match, the state should ensure that adequate records are kept with respect to that portion. 40 CFR 31.41 specifies that grantees may not impose more burdensome requirements on subawardees than they are subject to themselves.
All section 319(h) grants are subject to EPA's general grant regulations at 40 CFR parts 31 (Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments) and 35, subpart A (Environmental Program Grants), which specify various basic grant reporting requirements for awarding grants to states and localities. Section 319(h) contains additional provisions related to reporting, such as (1) authorization for EPA to request information, data, and reports as necessary to determine a state's continuing eligibility to receive section 319 grants and (2) a requirement for states to report annually on their progress in meeting milestones, including available information on reductions of nonpoint source pollutant loadings and on improvement to water quality achieved by implementing nonpoint source pollution control practices.
The basic reporting requirements specified by CWA section 319(h) are grantee performance reports, nonpoint source progress reports, and financial status reports. EPA also requires reporting through the section 319 Grants Reporting and Tracking System (GRTS).
Grantee performance reports. Grantee performance reports must be submitted annually unless the reporting agency requires quarterly or semiannual reports (40 CFR 31.40). EPA guidelines state that these reports should be submitted twice a year. The guidelines also specify that the performance reports be two to three pages in length and include a performance/milestone summary, slippage reports (providing reasons for delays in meeting scheduled milestones and actions taken to correct any current or anticipated problems), and any additional pertinent information. In addition, final reports are due 90 days after the expiration or termination of grant support (USEPA, 1996).
Financial status reports. Grant recipients are required to submit Standard Form 269 or 269a (Appendix D) to report on the financial status of funds under each grant. States are usually required to submit these forms once per year. Final financial status reports are due within 90 days of termination or expiration of a grant agreement (40 CFR 31.41; USEPA, 1996).
Nonpoint source progress reports (annual reports). The CWA requires states to submit annual nonpoint source progress reports, which address milestone progress, resulting decreases in pollutant loadings, and other water quality improvements contained in not only the grant work plan but also the state's Nonpoint Source Management Program (CWA section 319(h)(11)). EPA suggests the following components: (1) brief summary of progress meeting milestones and objectives; (2) milestone matrix with the applicable project, completion date, and percent completed; (3) discussion of federal agency activities to support the state in reaching its milestones; and (4) summary of loading reductions, water quality improvement, and measures of environmental progress (USEPA, 1996). EPA may periodically provide updated guidance for the annual report.
Grants Reporting and Tracking System. GRTS is a Web-enabled data system that allows states and EPA to manage and report data on section 319 grants (USEPA, 2001b). GRTS allows for efficient data entry and includes password protection. States are encouraged to attach final project reports completed under their grants to the Project Evaluation field in GRTS. If states so choose, they may let subawardees enter their project data into the system, easing the burden on state staff. Table 2 presents the FY 2003 data elements that must be entered into GRTS, based on EPA's 2001 Memorandum Regarding Reporting Requirements (2001b). The Agency may update this information as appropriate. Check EPA's Web site at Laws, Regulations, Treaties for the most current information.
|Table 2. Mandated FY 2003 GRTS Elements|
Number of State Employees
Amount of 319(h) Funds Allocated to Sub-State Recipient
|Nonpoint Source Program or Project Title||Nonpoint Source Budget 319(h) Funds|
|Nonpoint Source Primary Category of Pollution||Type of Lake/Pond/Reservoir Activity (if applicable)|
|Nonpoint Source Primary Functional Category of Activity||Expenditure breakdown for main source categories in Primary Category of Pollution field|
|Nonpoint Source Secondary Category of Pollution||Link to TMDLs checkoff|
|Nonpoint Source Secondary Functional Category of Activity||Project DescriptionLoad Reductions (Nutrients and/or Sediments)|
|Nonpoint Source Pollutant Type||Modeling or Monitoring checkoff|
|Nonpoint Source Waterbody Type||Name of Model|
|- Waterbody on 303(d) list (Yes/No)||Wetlands/Streambanks/Shorelines|
|- UWA category||Best Management Practices|
|- Priority for TMDL development||BMP Implementation Project (Yes/No)|
|Stream Reach Code||Nonpoint Source Program or Project Completion Code/Date|
|HUC code||Nonpoint Source Program or Project Start Code/Date|
Note: Although only the above fields are required nationally, some regions and states use optional GRTS fields to fulfill some of the other reporting requirements discussed in this section.
Responsibilities to Subawardees
States are expected to work closely with subawardees throughout the project's life, review all reporting and financial paperwork submitted by subawardees, conduct site visits, and act as a liaison to other state programs if needed. States are also expected to inform subawardees of the federal requirements that must be met. See Appendix C for highlights of these requirements. States are required to include information from subawardees' progress reports in the states' performance reports and annual reports. Finally, states are expected to properly close out projects with grant subawardees and enter nonpoint source information into GRTS.
Post-Award Frequently Asked Questions
Q. Is the state allowed to spend 319 funds on any of the following items: food; award programs; giveaways like t-shirts, pencils, and Frisbees; graduate school tuition; land purchase; vehicle purchase; teacher training; meeting with other federal programs (e.g., Underground Injection Control); other agency staff time (e.g., NRCS, USFS)?
A. States and regions should refer to OMB Circular A-87 (C). It provides basic guidelines on factors affecting allowability and the list of selected items of cost. These guidelines will help determine allowable costs. Regions and states should discuss questions on specific items as soon as possible. Some items are clearly prohibited (e.g., promotional items and entertainment). The allowability of other items (food, capital expenditures) is not as clear and should be discussed and explained consistent with OMB Circular A-87.
Q. Can time spent in training count toward the match?
A. According to OMB Circular A-87, the cost of training provided for employee development is allowable.
Q. Can the project match be less than 40 percent?
A. CWA section 319(h) requires that the state match be at least 40 percent of the total program costs of the EPA grant. However, the state may decide what match percentage is required for specific projects funded under that grant. The project match for subawardees can vary from zero to 100 percent, depending on the state.
Q. Which federal agency funds, if any, can be counted toward the nonfederal match?
Q. What documents must be maintained in grant files and in project files?
A. States are required to maintain all financial and programmatic records, supporting documents, statistical records, and other pertinent information. For example, typical documents for grant files might include financial status reports, contracts, memoranda of agreement, and agreements with subawardees. Project files should include nonpoint source progress reports.
Q. If I need to make a change to the budget or work plan, what should I do?
A. The state must seek EPA's approval for significant changes in work plan commitments or to the budget. The state should discuss such changes in the work plan or budget with the EPA Project Officer as soon as possible. Other changes do not require EPA's approval unless the grant agreement imposes such requirements on a specific requirement for a specific period of time. More detailed information is provided at 40 CFR 35.114.
Q. What documentation is needed for indirect cost rules?
A. Copies of the current state-negotiated rates should be included with the grant application.
Q. When the state (or subawardee) produces a report with section 319(h) funds, does it become federal government property?
A. 40 CFR 31.34 states that EPA has the authority to reproduce, publish, or otherwise use, and to authorize others to use for federal government purposes, the materials produced with section 319(h) funds.
Federal Requirements for Project Closeout Phase
Several steps must be completed for the state to close out a nonpoint source project or program grant (40 CFR 31.50). After subawardees close out their projects with the state, the state closes out its grant to EPA. First, the state should make sure that all tasks and projects identified in the grant work plan have been completed. If all such tasks and projects have been completed, the state should submit a final performance report to EPA within 90 days of the grant's expiration.
In addition, within 90 days of the grant's expiration, the state should request final payment from EPA and must submit a final financial status report. Prior to grant closeout, EPA conducts a grant evaluation. During this phase, the grant recipient is responsible for responding to any inquiries from the EPA project officer or EPA grants management specialist. Many grants include additional grant conditions, and the state should ensure that all such conditions have been met. All remaining grant funds or outstanding grant funds must be reconciled. Property purchased under the grant should be returned to EPA or disposed of per agreement. Any disposition of property can be negotiated with EPA. Any final grant amendments should be prepared and submitted to EPA for approval if necessary. Once the grant obligations have been met, the EPA project officer issues closeout certification. States must retain all records for 3 years after submission of the final financial status report (40 CFR 31.42).
Project Closeout Frequently Asked Questions
Q. What documentation is needed to close out a project?
A. States should submit a final performance report, final financial status report, and any other reports required as a condition of the grant. Contact the EPA project officer for clarification of report contents.
Q. Once the grant expires, what should be done with equipment and other items purchased with section 319(h) grant funds?
A. 40 CFR 31.31 and 31.32 and OMB Circular A-87, Attachment B.19, discuss the requirements for disposition of equipment and real property. Equipment and other items must be returned to EPA or disposed of per agreement with the awarding agency (EPA or the state). Factors affecting disposition include cost and whether the item is federal property. In addition, the EPA guidelines (FY 2002, FY 2003) require that states include provisions in subcontracts and subgrants that any management practices implemented will be properly maintained for an appropriate number of years.
Project Closeout Checklist
Verify that work plan tasks have been completed.
Reconcile any remaining or outstanding grant funds.
Negotiate with EPA regarding disposition of property purchased with grant funds.
Submit final progress report.
Submit final project report.
Request final payment from EPA.
Submit final financial status report.
Respond to inquiries during EPA Grant Evaluation.
Retain all grant records for 3 years after submission of final financial status report.
USEPA. 1996. (Nonpoint Source Program and Grants Guidance for Fiscal Year 1997 and Future Years. U.S. Environmental Protection Agency, Office of Water, Washington, DC.
USEPA. 1999. Memorandum from Robert H. Wayland III, Director, Office of Wetlands, Oceans, and Watersheds, regarding Supplemental Guidance for the Award of Section 319 Nonpoint Source Grants in FY 2000. December 21, 1999.
USEPA. 2000. Memorandum from Robert H. Wayland III, Director, Office of Wetlands, Oceans, and Watersheds, regarding Supplemental Guidance for the Award of Section 319 Nonpoint Source Grants in FY 2001. November 21, 2000.
USEPA. 2001a. Memorandum from Robert H. Wayland III, Director, Office of Wetlands, Oceans, and Watersheds, regarding Supplemental Guidelines for the Award of Section 319 Nonpoint Source Grants to States and Territories in FY 2002 and Subsequent Years. September 5, 2001.
USEPA. 2001b. Memorandum from Robert H. Wayland III, Director, Office of Wetlands, Oceans, and Watersheds, regarding Modifications to Nonpoint Source Reporting Requirements for Section 319 Grants.
USEPA. 2002. Memorandum from Robert H. Wayland III, Director, Office of Wetlands, Oceans, and Watersheds, regarding Supplemental Guidelines for the Award of Section 319 Nonpoint Source Grants to States and Territories in FY 2003. August 26, 2002.
Summary of Federal Statutes, Regulations, and OMB Circulars Applicable to States
Clean Water Act Section 319
The Federal Water Pollution Control Act, as amended in 1972 and 1987, is collectively known as the Clean Water Act (CWA). The objective of the CWA is to restore and maintain the chemical, physical, and biological integrity of the Nation's waters and, where attainable, to achieve a level of water quality that provides for the protection and propagation of fish, shellfish, and wildlife, and for recreation in and on the water. In 1987 Congress amended the act and added section 319 for the purpose of addressing nonpoint source pollution. CWA section 319 established baseline requirements for state and territorial nonpoint source management programs and authorized national funding to support implementation of approved management programs. CWA section 319(h) is the principal authority for EPA funding dedicated to nonpoint source pollution control.
Title 40 (Protection of the Environment) of the Code of Federal Regulations
Title 40 of the CFR, including parts 1 through 790, is published in October or November of each year. Only parts 1 through 51 apply to grants. The CFR codifies changes to EPA grant regulations that have been published in the Federal Register in the previous year (July 1 to June 30). 40 CFR parts 7, 29, 30, 31, 32, 34, and 35A pertain to section 319(h) grant recipients and subawardees.
Part 7 (Nondiscrimination in Program Receiving Federal Assistance from the Environmental Protection Agency). 40 CFR part 7 prohibits discrimination under any program or activity receiving EPA assistance on the basis of race, color, national origin, gender, or handicap. Part 7 outlines the following requirements:
- Submission of an assurance with a grant application that the grant applicant will comply with the requirements of part 7.
- Maintenance of compliance information during the life of the grant and for 3 years after completing the project.
- Public notification that the grantee does not discriminate on the basis of race, color, national origin, gender, or handicap.
Part 7 also describes EPA's compliance procedures. The full text of part 7 is provided at e-CFR - Title 40--Protection of the Environment, Chapter 1, Part 7 .
Part 29 (Intergovernmental Review of Environmental Protection Agency Programs and Activities). 40 CFR part 29 requires EPA to provide an opportunity for consultation between federal representatives and state and local elected officials. This intergovernmental review is intended to determine the views of state and local elected officials, provide notice of proposed federal financial assistance from EPA to the state government, and communicate specific state plans and actions as early in a program planning cycle as is reasonably feasible. The full text of part 29 is provided at e-CFR - Title 40--Protection of the Environment, Chapter 1, Part 29 .
Part 30 (Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations). 40 CFR part 30 establishes uniform administrative requirements for federal grants and agreements awarded to institutions of higher education, hospitals, and other nonprofit organizations. Part 30 outlines pre-award policies, post-award requirements, and after-the-award requirements, which are very similar to those covered under 40 CFR part 31 (Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments), described below. Nonprofit organizations that implement federal programs for the states are also subject to state requirements. The full text of part 30 is provided at e-CFR - Title 40--Protection of the Environment, Chapter 1, Part 30 .
Part 31 (Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments). 40 CFR part 31 establishes uniform administrative requirements for federal grants to and agreements with state and local governments. Table A-1 outlines the requirements of part 31. The full text of part 31 is provided at e-CFR - Title 40--Protection of the Environment, Chapter 1, Part 31 .
|Table A-1. Overview of 40 CFR Part 31|
Part 32 (Governmental Debarment and Suspension [Non-Procurement]). 40 CFR part 32 states that anyone who has been debarred or suspended by a government agency must be excluded from all federal financial and nonfinancial assistance. By signing and submitting a section 319(h) proposal, grant applicants certify that they have not been debarred or suspended by a government agency. Part 32 also requires that as a condition of their grant, grantees must certify to EPA that they maintain a drug-free workplace. By signing and submitting the section 319(h) proposal, the grant applicant certifies that he or she will not engage in the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance in conducting any activity with the grant. The full text of Part 32 is provided at e-CFR - Title 40--Protection of the Environment, Chapter 1, Part 32 .
Part 34 (New Restrictions on Lobbying: Interim Final Rule). 40 CFR part 34 prohibits the use of federal grant funds to influence (or attempt to influence) a federal employee. It also requires the submission of Standard Form LLL ("Disclosure of Lobbying Activities") if nonfederal funds have been used to influence (or attempt to influence) a federal employee. The full text of part 34 is provided at e-CFR - Title 40--Protection of the Environment, Chapter 1, Part 34 .
Part 35A (Environmental Program Grants). 40 CFR part 35, subpart A, applies to all environmental program grants including section 319(h). It establishes administrative grant requirements that supplement the requirements described under parts 30 and 31. Table A-2 outlines the requirements of part 35, subpart A. The full text of part 35, subpart A, is provided at e-CFR - Title 40--Protection of the Environment, Chapter 1, Part 35 .
|Table A-2. Overview of 40 CFR Part 35, Subpart A|
|Performance Partnership Grant||
|Nonpoint Source Management Grant||
Office of Management and Budget Circulars
The Office of Management and Budget (OMB) issues government-wide circulars for managing grants that apply to all federal executive agencies. When these agencies are required to apply the directives, the effect on grantees is often the same as regulation. OMB circulars are expected to have a continuing effect for 2 years or more. Among the circulars relevant to grant administration are those related to administrative requirements, cost principles, and audits. Several such circulars directly apply to section 319(h) grants—Circulars A-21, A-87, A-102, A-122, and A-133.
A-21 (Cost Principles for Educational Institutions). Circular A-21 establishes the principles for determining costs applicable to grants with educational institutions. See the full text of Circular A-21.
A-87 (Cost Principles for State, Local, and Indian Tribal Governments). Circular A-87 establishes the principles and standards for determining the allowable costs incurred by state, local, and federally recognized American Indian tribal governments under grants with the federal government. All subawards are also subject to these cost principles unless the subaward is to a college, university, hospital, or other nonprofit organization. (Such entities are covered under different OMB circulars.) Circular A-87 provides the basic guidelines for allowable costs (e.g., must be necessary, reasonable, authorized, and documented), as well as an explanation of direct and indirect costs. Selected cost items are defined specifically as allowable (e.g., accounting, materials, and supplies) or unallowable (e.g., alcoholic beverages, entertainment). See the full text of Circular A-87.
A-102 (Grants and Cooperative Agreements with State and Local Governments). Circular A-102 establishes guidelines for consistency and uniformity in federal agencies' management of grants with state, local, and federally recognized Indian tribal governments. See the full text of Circular A-102 .
A-122 (Cost Principles for Non-Profit Organizations). Circular A-122 establishes principles for determining costs of grants with nonprofit organizations. All subawards are subject to those federal cost principles applicable to the particular type of organization; that is, if a subaward is issued to a nonprofit organization, this circular applies, and if a subaward is issued to a local government, Circular A-87 applies. Circular A-122 provides the basic guidelines for allowable costs (e.g., must be reasonable, allocable, and documented), as well as an explanation of direct and indirect costs. Allocation of indirect costs, determination of indirect cost rates, and negotiation and approval of indirect cost rates are described. Selected cost items are defined specifically as allowable (e.g., communication costs, professional services) or unallowable (e.g., alcoholic beverages, lobbying). See the full text of Circular A-122 .
A-133 (Audits of States, Local Governments, and Non-Profit Organizations). Circular A-133 establishes standards for obtaining consistent and uniform audits of states, local governments, and nonprofit organizations expending federal awards regardless of whether they are recipients or subawardees. Audits must be conducted according to generally accepted government auditing standards. Entities that expend at least $300,000 of total federal funds in a year must have an audit conducted for that year. EPA may request program-specific audits. The grant recipient has the following audit responsibilities:
- Identify all federal awards received and expended.
- Maintain awards in compliance with laws, regulations, and grant provisions.
- Prepare appropriate financial statements, including the schedule of expenditures.
- Ensure that audits are properly performed and submitted on time.
- Follow up and take corrective action on audit findings.
Circular A-133 describes the required contents of an audit reporting package, which must be submitted to a federal clearinghouse. Subawardees also must submit a copy of a reporting package to each pass-through entity (e.g., state nonpoint source agency). Additional subawardee responsibilities are outlined in Circular A-133; see the full text of Circular A-133 .
EPA Guidelines on CWA Section 319(h) Grants
EPA developed specific guidelines in May 1996 for the award of section 319(h) grants beginning in fiscal year 1997. The guidelines describe criteria and processes for states and territories to upgrade their Nonpoint Source Management Programs, summarize statutory and regulatory provisions that apply to the award of nonpoint source grants, and provide guidance designed to assist states and territories in implementing effective programs and projects. These guidelines have been supplemented annually to reflect changes in the grant process and criteria. The 1997 Nonpoint Source Guidance and each supplemental guidance are listed in Table A-3, along with other section 319-related requirements. The Web site for future guidance updates also is provided.
Table A-3. EPA Guidelines
|Nonpoint Source Program and Grants Guidance for Fiscal Year 1997 and Future Years
|Process and Criteria for Funding State and Territorial Nonpoint Source Management Programs in FY 1999
|Supplemental Guidance for the Award of Section 319 Nonpoint Source Grants in FY 2000||http://www.epa.gov/owow/Section319/fy2000.html|
|Supplemental Guidelines for the Award of Section 319 Nonpoint Source Grants in FY 2001||http://www.epa.gov/owow/nps/Section319/fy2001.html|
|Supplemental Guidelines for the Award of Section 319 Nonpoint Source Grants to States and Territories in FY 2002 and Subsequent Years||http://www.epa.gov/owow/nps/Section319/fy2002.html|
|Supplemental Guidelines for the Award of Section 319 Nonpoint Source Grants to States and Territories in FY 2003||http://www.epa.gov/owow/nps/Section319/319guide03.html|
|Modifications to Nonpoint Source Reporting Requirements for Section 319 Grants|
|Further guidance updates|
State Nonpoint Source Program Web Sites
Federal Requirements for Section 319(h) Grants to Subawardees
State nonpoint source agencies frequently use 319(h) grants to fund local implementation projects as subawards. Recipients of these subawards ("subawardees") are required to meet certain federal requirements because these are federal funds initially awarded by EPA. To facilitate compliance, a list of federal requirements that apply to subawardees of section 319(h) grants is provided here.
Federal requirements are included in Title 40 of the CFR, OMB circulars, and EPA guidelines. Depending on the kind of organization receiving funds (state or local agency, nonprofit, university, etc.), different regulations and OMB circulars apply. For a local government, 40 CFR part 31 and OMB Circulars A-87, A-102, and A-133 apply. 40 CFR 31.22 clearly outlines the OMB circulars for cost principles applicable to subawardees (contract or subgrant). For an institution of higher education, hospital, or nonprofit organization, 40 CFR part 30 regulations and OMB Circulars A-110, A-122, A-133 apply.
In addition to federal requirements, states often require that subawardees meet certain state-specific requirements, that either comply with state requirements or are needed for the state to comply with the federal requirements.
Following are highlights of specific financial, reporting, and other federal requirements that apply to subawardees of 319 funds.
Federal Grant Requirements for the Pre-award and Application Phase
- Drug-free Workplace. 40 CFR 32.600 requires subawardees of section 319(h) grant funds to certify that they maintain a drug-free workplace. By signing and submitting the section 319(h) grant application, the applicant certifies that he or she will not engage in the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance in conducting any grant-related activity.
- Application or proposal, including work plan (scope of work) and budget. Subawardees of section 319(h) grants must develop a work plan and budget as part of their application. The work plan is negotiated between the applicant and the state nonpoint source agency. It reflects consideration of such factors as the requirements and criteria identified in a request for proposal, and/or state program guidance; goals, objectives, and priorities. In general, work plans often include the following:
- Work plan goals, outcomes and outputs.
- The estimated time and funding required to complete each work plan outcome and output.
- Evaluation process and reporting schedule.
- Roles and responsibilities of the state and applicant.
- Other state specific requirements, as appropriate.
- Lobbying. Federal restrictions regarding lobbying are provided in 40 CFR 34.100 and OMB Circulars A-87 and A-122. Federal grant funds may not be used to influence (or attempt to influence) a federal employee. If nonfederal funds have been used to influence (or attempt to influence) a federal employee, the subawardee must submit Standard Form LLL ("Disclosure of Lobbying Activities").
- Nondiscrimination. 40 CFR 7.30 prohibits discrimination under any program or activity receiving EPA assistance on the basis of race, color, national origin, gender, handicap, or age. It also requires that recipients of federal funds provide public notification that they do not discriminate (40 CFR 7.95).
Grant Requirements for the Post-award Phase
As in the pre-award and application phase, the subawardee must meet several requirements after receiving the award.
- Competition.40 CFR 31.36 requires that all procurement transactions be conducted in a way that provides open and free competition. Purchases for projects must be made on a competitive basis to ensure that fair and reasonable prices are obtained for goods and services. Federal regulations require documentation of cost or price analysis in connection with every procurement action regardless of amount.
- Conflict of Interest. 40 CFR 31.36 requires standards of conduct to avoid conflict of interest. Recipients of federal funds may not participate in the selection, award, or administration of a contract if real or apparent conflict of interest would result.
- Copyrights. 40 CFR 31.34 grants EPA a royalty-free, nonexclusive, and irrevocable license to reproduce, publish, or otherwise use, and to authorize others to use for federal government purposes, (1) the copyright in any work developed under a subgrant, or contract under a grant or subgrant, and (2) any rights of copyright to which a subawardee or a contractor purchases ownership with grant support.
- Financial Specifications. Financial requirements for subawardees of section 319(h) grant funds are categorized by the following topics: allowable costs, matching funds, and state-specific requirements regarding the payment process.
- Allowable costs. All costs charged to EPA grants must be eligible, necessary, and reasonable for performing the tasks outlined in the approved project work plan. The costs, including match, must be incurred during the period of performance of the project. The costs also must be allowable, meaning that the costs must conform to specific federal requirements (40 CFR parts 30 and 31; OMB Circulars A-87 and A-122). In addition, costs must be well documented.
- Financial management. 40 CFR 31.20 requires that subawardees meet specific standards regarding financial reporting, accounting records, internal control, budget control, allowable cost, source documentation, and cash management.
- Matching funds. Matching funds are the portion of the allowable project costs that the subawardee (or third party) contributes to a grant or cooperative agreement. Subawardees may be required to provide matching funds, although the percent amount varies from state to state. All matching funds must conform to the same laws, regulations, and grant conditions as the federal funds in the grant (CWA section 319(h)(3), 40 CFR 35.265). Subawardees should check with their state project officer for state-specific matching fund requirements.
- Payment processes. EPA's payments for subawardees' contractors (excluding overhead) is limited to the maximum daily rate for a GS-18. Maximum daily rates may change annually or more often. The current 2003 rate is set at $513.60. This amount does not include transportation and subsistence costs, in accordance with normal travel reimbursement practices. Subawardees may pay consultants more than this amount, but the excess amount may not be paid with federal grant funds. State-determined payment processes are used to pay subawardees. The length of time for subawardees to receive payment from states varies by state (Public Law 99-591, 40 CFR 31.36(j)).
- Operation and Maintenance. Subawardees are required to properly operate and maintain any management practices implemented with 319 funds (USEPA, 1996).
- Procurement Methods. Subawardees may use their own procurement procedures provided that the procedures conform to applicable federal laws and standards as described in 40 CFR 31.36. Subawards may not be made to any party that has been debarred or suspended or is considered ineligible for participation in federal assistance programs.
- Contracting with small and minority businesses. Recipients of section 319(h) grants that employ subcontractors must comply with the six affirmative steps described in 40 CFR 31.36 to ensure that minority- and women-owned firms are used when possible.
- Property Management. Property management and procedures are detailed in 40 CFR part 31 and OMB Circulars A-21, A-87, and A-122. Property (e.g., equipment, supplies) purchased in whole or in part with federal funds should be itemized. Property purchased with these funds must be returned to the state nonpoint source agency or EPA or disposed of per agreement with the awarding agency upon completion of the project (or termination of the contract).
- Quality Assurance. When environmental data are being collected during the course of a section 319 project, a Quality Assurance Project Plan (QAPP) must be followed in accordance with specific EPA guidelines (40 CFR 31.45 and 30.54). QAPPs outline the procedures that a monitoring project will use to make sure that samples are collected, data are stored, and reports are written to ensure quality high enough to meet the needs of the project. Subawardees should discuss QAPP requirements with the state as early in the grant process as possible. Specific guidelines on writing a QAPP are provided at Guidance for Quality Assurance Project Plans (PDF) (111 pp, 401K) and The Volunteer Monitor's Guide To Quality Assurance Project Plans.
- Record-Keeping Specifications. Section 319 grant recipients are required to retain all records pertaining to federally sponsored activities or projects for 3 years after the date of submission of the final financial status report or final date of reconciliation of outstanding issues (40 CFR 31.42). The records must be available and accessible to the state or EPA, as requested, for review or audit.
- Reporting Specifications. All section 319(h) grants are subject to EPA's general grant regulations at 40 CFR parts 31 and 35, subpart A, which specify various basic grant reporting requirements. Section 319(h) contains additional provisions.
The basic reporting requirements specified include subaward performance reports, nonpoint source progress reports, and financial status reports, although states might refer to them by different names, such as project report or NPS project progress report (CWA section 319(h)). States may also require subawardees to report project information through the section 319 Grants Reporting and Tracking System (GRTS). See Table 2 in Chapter 4 for examples of GRTS information that might be requested.
Reporting requirements for the subawardees are identified in their agreement with the state nonpoint source agency. Although there are no specific federal reporting requirements for subawardees, the subaward agreement is often tailored to enable the states to comply with state requirements and to acquire the information needed to comply with the federal requirements. States often require subawardees to submit expenditure reports, progress reports, draft and final reports, and other information necessary for project tracking and closeout.
Grant Requirements for the Project Closeout Phase
The subawardee must close out its nonpoint source project grant with the state by completing several steps (40 CFR 31.50). Requirements are state-specific and should be discussed with the awarding agency. The following are examples of what could be required by the state.
- Complete All Project Tasks. The subawardee should make sure that all tasks identified in the project work plan have been completed.
- Submit Final Project Report. The subawardee should also prepare a final project report, in which the subawardee presents a summary of the project. Format and content requirements are state-specific, and therefore the subawardee should check with the awarding entity on their reporting requirements.
- Request Final Payment. Within a specified time after the grant's expiration, per agreement with the state, the subawardee should request final payment.
- Submit a Final Financial Status Report. Within a specified time after the grant's expiration, per agreement with the state, the subawardee should submit a final financial status report.
- Additional Responsibilities. The subawardee is responsible for responding to any inquiries from the state project officer or grants management specialist. All remaining grant funds or outstanding grant funds must be reconciled. Property purchased under the grant should be returned to the state or disposed of per agreement. Any dispositions concerning property can be negotiated with the state. All records must be retained for 3 years (40 CFR 31.50).
Standard Form 424 ("Application for Federal Assistance") (PDF) (2 pp, 175K)
Standard Form 424A ("Budget Information") (PDF) (2 pp, 1.5MB)
Standard Form 424B ("Assurances") (PDF) (2 pp, 81K)
EPA Form 4700-4 ("Preaward Compliance Review Report") (PDF) (2 pp, 22K)
EPA Form 5700-49 ("Certification Regarding Debarment, Suspension, and Other Responsibility Matters") (PDF) (1 pp, 201K)
Certification Regarding Lobbying (PDF) (1 pp, 15K)
Standard Form LLL ("Disclosure of Lobbying Activities") (PDF) (2 pp, 31K)
Standard Form 270 ("Request for Advance or Reimbursement") (PDF) (2 pp, 165K)
EPA Form 5700-52A ("MBE/WBE Utilization Report") (PDF) (5 pp, 63K)
Standard Form 269 ("Financial Status Report") (PDF) (2 pp, 146K)