Appendix D to Part 1138 - Terms and Conditions for SUB Article IV, “Financial and Program Management Requirements for Subawards”
2:1.2.8.6.18.12.64.3.59 : Appendix D
Appendix D to Part 1138 - Terms and Conditions for SUB Article IV,
“Financial and Program Management Requirements for Subawards”
Unless modified as provided in § 1138.5, a DoD Component's
general terms and conditions must use the following wording for SUB
Article IV.
SUB Article IV. Financial and Program Management Requirements for
Subawards. (DECEMBER 2014)
Section A. Purposes of this article in relation to other
articles.
1. This article specifies administrative requirements concerning
financial and program management that you must include in the terms
and conditions of each cost-type subaward that you make under this
award to a domestic entity.
2. It thereby addresses the flow down to subrecipients of
requirements with which you must comply under FMS Articles I
through VII of this award.
3. SUB Article XII of this award addresses which of these
administrative requirements you must include in any fixed-amount
subaward that you make, if you are authorized to make fixed-amount
subawards under this award.
Section B. Financial management system standards. You
must include in any subaward you make under this award the
requirements of:
1. Sections A through C of FMS Article I of this award if the
subrecipient is a State;
2. Sections B and C of FMS Article I if the subrecipient is an
institution of higher education, nonprofit organization, local
government, or Indian tribe; or
3. 32 CFR 34.11 if the subrecipient is a for-profit entity.
Section C. Payments.
1. Subawards to States. You must include the provisions
of Section A of FMS Article II of this award in each subaward you
make to a State;
2. Subawards to institutions of higher education, nonprofit
organizations, local governments, and Indian tribes. The
following paragraphs specify requirements you must include in
subawards to institutions of higher education, nonprofit
organizations, local governments, and Indian tribes.
a. Payment method.
i. If you are authorized to request advance payments under this
award, you must authorize a subrecipient to request advance
payments unless:
(A) The subrecipient does not maintain, or demonstrate the
willingness to maintain, written procedures that minimize the time
elapsing between its receipt of each payment and its disbursement
of the funds for project or program purposes;
(B) You impose a requirement for the subrecipient to be paid by
reimbursement as a result of your risk evaluation of the
subrecipient under SUB Article II of this award.
(C) The subaward is for construction.
ii. If you do not authorize advance payments for one of the
reasons given in paragraph C.2.a.i of this article, you must
specify either reimbursement or working capital advances as the
payment method in accordance with OMB guidance in 2 CFR
200.305(b)(3) and (4).
b. Payment timing and amount.
i. Advances. You must limit advance payments to the
minimum amounts needed and time the payments to be in accordance
with the subrecipient's actual, immediate cash requirements in
carrying out the project or program under the subaward. The timing
and amount of your advance payments to the subrecipient must be as
close as is administratively feasible to the subrecipient's actual
disbursements for direct project costs and the proportionate share
of any allowable indirect costs. Your subawards also must include
the requirements of paragraphs B.2.b and c of FMS Article II to
specify costs subrecipients must exclude from amounts of their
advance payment requests.
ii. Reimbursements or working capital advances. You must
follow OMB guidance in 2 CFR 200.305(b)(3) and (4) concerning
timing and amount of reimbursements or working capital
advances.
c. Frequency of requests. You must allow the subrecipient
to request advance payments or reimbursements, including those
associated with the working capital advance payment method, as
often as it wishes if you pay using electronic funds transfers and
at least monthly otherwise.
d. Other requirements.
i. In any subaward that was subject to our consent, you must
include the requirements of paragraph B.5 of FMS Article II of this
award concerning withholding of payments.
ii. You must include the provisions of paragraph B.6 of FMS
Article II concerning depositories in each subaward that authorizes
the subrecipient to request advance payments.
3. Subawards to for-profit entities. The provision
concerning payments in each subaward you make to a for-profit
entity must conform to the requirements in 32 CFR 34.12.
Section D. Allowable costs, period of availability of funds,
and fee and profit.
1. You must include in each cost-type subaward a requirement
that the allowability of costs under the subaward (and any
lower-tier subawards or procurement transactions into which the
subrecipient enters) must be determined in accordance with the
applicable cost principles identified in Section A of FMS Article
III of this award, as well as the clarification in Section B of
that article if it applies to those cost principles.
2. You must specify in each subaward the period of availability
of funds for any project or program purpose so that the period
neither begins before nor ends after the period during which you
may use funds available to you under this award for that same
project or program purpose.
3. You must include in each subaward the provisions concerning
fee or profit that are in Section D of FMS Article III of this
award.
Section E. Revision of budget and program plans. You must
include in each subaward provisions requiring the subrecipient to
request your approval for any change in the subaward budget or
program that would cause a budget or program change under this
award for which Section B of FMS Article IV requires you to first
obtain our prior approval. You may not approve any budget or
program revision that is inconsistent with the purpose or terms and
conditions of this award.
Section F. Non-Federal audits. You must include a
provision in each subaward that you make under this award to
require the subrecipient entity to comply with the audit
requirements applicable to that entity, as specified in either
Section A or Section B of FMS Article V.
Section G. Cost sharing or matching requirements. If you
make a subaward under which the subrecipient may provide
contributions or donations of cash or third-party in-kind
contributions to be counted toward any cost sharing or matching
that is required under this award, you must include provisions in
that subaward to specify:
1. The criteria governing the allowability as cost sharing or
matching of the types of cash or third-party in-kind contributions
that the subrecipient may contribute or donate. Those criteria are
specified in:
a. Sections B through D of FMS Article VI of this award if the
subaward is to a State, institution of higher education, nonprofit
organization, local government, or Indian tribe.
b. The provisions of 32 CFR 34.13(a) if the subaward is to a
for-profit entity.
2. The methods for determining and documenting the values of
those contributions or donations to be counted as cost sharing or
matching. Those methods are specified in:
a. Sections E and F of FMS Article VI of this award if the
subaward is to a State, institution of higher education, nonprofit
organization, local government, or Indian tribe.
b. The provisions of 32 CFR 34.13(b) if the subaward is to a
for-profit entity.
Section H. Program income. You must include requirements
concerning program income in subawards, as follows:
1. In each subaward to a State, institution of higher education,
nonprofit organization, local government, or Indian tribe:
a. You must require the subrecipient to account to you when it
earns any program income under the subaward or uses it, so that you
can prepare reports you are required to submit to us. If the
award-specific terms and conditions of this award require you to
account for program income earned after the period of performance,
you must include a corresponding requirement in your subawards.
b. You must include the provisions of Sections A through D of
FMS Article VII of this award.
c. You may specify the deduction, addition, or cost-sharing or
matching alternative - described in 2 CFR 1128.720(b) - or a
combination of those alternatives, for the subrecipient's use of
any program income it earns. However, you still must comply with
the alternative specified in Section E of FMS Article VII and any
applicable award-specific terms and conditions for the total amount
of program income earned, which includes amounts earned by you and
your subrecipients. For example, if we require you to use the
deduction alternative, you may authorize a subrecipient to use the
addition alternative if you reduce the funding allocated for
portions of the project or program that you or other subrecipients
perform to make the required reduction in the total award
amount.
2. In each subaward to a for-profit entity, you must include the
provisions of 32 CFR 34.14, with the appropriate method specified
for disposition of program income.