The Elderly and Persons With Disabilities Program Guidance and Application Instructions
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|Number C 9070.1E|
|U.S. Department of Transportation|
|Federal Transit Administration|
- PURPOSE. This circular is a reissuance of guidance on the administration of the capital assistance program for the elderly and persons with disabilities under 49 U.S.C. § 5310, and guidance for the preparation of grant applications. This revision incorporates provisions of the Transportation Equity Act for the 21st Century (TEA-21) and reflects the Fderal Transit Administration's (FTA) move to electronic grantmaking and management.
- CANCELLATION. This circular cancels FTA Circular 9070.1D.
- Federal transit laws, 49 U.S.C. §§ 5301 et seq. (also, 49 U.S.C. Chapter 53).
- Federal highway and surface transportation laws, Title 23, United States Code (Highways).
- Transportation Equity Act for the 21st Century, Pub. L. No. 105-178 (1998)
- Intermodal Surface Transportation Efficiency Act of l991, Pub. L. No. 102-240 (1991).
- Americans with Disabilities Act of 1990, as amended, 42 U.S.C. §§ 12101 et seq.
- Section 504 of the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 794.
- Title VI of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000d.
- Clean Air Act, as amended, 42 U.S.C. §§ 7401 et seq. and scattered sections of 29 U.S.C.
- Lobbying Restrictions, 31 U.S.C. § 1352.
- Congressional Declaration of Policy Respecting Insular Areas, 48 U.S.C. § 1469a.
- Executive Order No. 11246, "Equal Employment Opportunity," as amended by Executive Order No. 11375, "Amending Executive Order 11246 Relating to Equal Employment Opportunity," 42 U.S.C. § 2000(e).
- U.S. Department of Transportation (U.S. DOT) regulations, "Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments," 49 C.F.R. Part 18.
- U.S. DOT regulations, "Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-profit Organizations," 49 C.F.R. Part 19.
- U.S. DOT regulations, "New Restrictions on Lobbying," 49 C.F.R. Part 20, modified as necessary by section 10(b) of the Lobbying Disclosure Act of 1995 (which amends 31 U.S.C. § 1352)
- U.S. DOT regulations, "Participation of Minority Business Enterprise in Department of Transportation Programs," 49 C.F.R. Part 23.
- U.S. DOT regulations, "Nondiscrimination on the Basis of Handicap in Programs and Activities Receiving or Benefiting from Federal Financial Assistance," 49 C.F.R. Part 27.
- U.S. DOT regulations, "Drug-Free Workplace Requirements (Grants)," 49 C.F.R. Part 29, subpart F.
- U.S. DOT regulations, "Transportation Services for Individuals with Disabilities (ADA)," 49 C.F.R. Part 37.
- U.S. DOT regulations, "Americans With Disabilities (ADA) Accessibility Specifications for Transportation Vehicles," 49 C.F.R. Part 38.
- FTA regulations, "Capital Leases," 49 C.F.R. Part 639.
- FTA regulations, "Buy America Requirements," 49 C.F.R. Part 661.
- FTA regulations, "Pre-Award and Post-Delivery Audits of Rolling Stock Purchases," 49 C.F.R. Part 663.
- FTA regulations, "Bus Testing," 49 C.F.R. Part 665.
- Joint Federal Highway Administration/FTA regulations, "Planning Assistance and Standards," 23 C.F.R. Part 450 and 49 C.F.R. Part 613.
- U.S. Department of Treasury regulations, "Rules and Procedures for Funds Transfers," 31 C.F.R. Part 205.
- U.S. Office of Management and Budget (OMB) Circular A-87, Revised, "Cost Principles for State and Local Governments."
- OMB Circular A-122, Revised, "Cost Principles for Non-Profit Organizations."
- OMB Circular A-133, Revised, "Audits of States, Local Governments, and Non-Profit Organizations."
- U.S. Government Services Administration (GSA), "Catalog of Federal Domestic Assistance."
- FTA Circular 4220.1D, "Third Party Contracting Requirements," dated 4-15-96.
- FTA Circular 5010.1C, "Grant Management Guidelines," dated 10-1 98.
- FTA "Best Practices Procurement Manual," 10-25-96.
- GSA, "Lists of Parties Excluded from Federal Procurement and Nonprocurement Programs."
WAIVER. FTA reserves the right to waive any requirements of this circular to the extent permitted by law.
Gordon J. Linton
This document may be made available in accessible formats upon request.
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Revised Circular (9070.1E) Re: The Elderly and Persons With Disabilities Program
400 Seventh St. S.W.
Washington, D.C. 20590
It is a pleasure to issue the revised circular for the Federal Transit Administration's Elderly and Persons with Disabilities Program. FTA Circular 9070.1E provides program guidance and application procedures for the state-administered capital assistance program for transportation services designed to meet the needs of the elderly and persons with disabilities throughout the country.
The main purpose of this circular revision is to reflect provisions of the Transportation Equity Act for the 21st Century (TEA-21), although there are no major changes to the Elderly and Persons with Disabilities Program. The state management reviews have continued to provide information that has been very useful to us as we strive to provide clear and accurate guidance. In addition, application and grant management procedures in this revision reflect FTA's progress toward making and managing grants entirely through our electronic system.
I look forward to FTA's ongoing partnership with the states as we work together to ensure that the elderly and persons with disabilities continue to be served by the many dedicated agencies throughout the Nation that have come to depend on the funding they receive under this very important transportation assistance program.
Gordon J. Linton
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Chapter I: Program Overview
- SECTION 5310 STATUTORY AUTHORITY Under 49 U.S.C. § 5310(a)(2), the Federal Transit Administration's (FTA) elderly and persons with disabilities program, authorizes the Secretary to make grants to the chief executive officer of each state for allocation to:
- private nonprofit corporations and associations for the specific purpose of assisting them in providing transportation services meeting the special needs of elderly persons and persons with disabilities when the transportation service provided under Section 5310(a)(1) is unavailable, insufficient, or inappropriate
- public bodies approved by the state to coordinate services for the elderly and persons with disabilities; or
- public bodies which certify to the Governor that no nonprofit corporations or associations are readily available in an area to provide the service.
In addition, Section 5310(a)(1) grants the Secretary of Transportation authority to make grants and loans to state and local governmental authorities to help them provide mass transportation service planned, designed, and carried out to meet the special needs of elderly individuals and individuals with disabilities. The provisions of Section 5310(a)(1) are implemented in the course of administering FTA's ongoing capital grant programs authorized by Sections 5307, 5309, and 5311.
The code assigned to the Section 5310 program in the Catalogue of Federal Domestic Assistance is 20.513.
- PROGRAM GOAL. The goal of the Section 5310 program is to improve mobility for the elderly and persons with disabilities throughout the country. Toward this goal, FTA provides financial assistance for transportation services planned, designed, and carried out to meet the special transportation needs of the elderly and persons with disabilities in all areas--urbanized, small urban, and rural. The program requires coordination of federally assisted programs and services in order to make the most efficient use of Federal resources.
- STATE ROLE IN PROGRAM ADMINISTRATION. The state agency designated by the chief executive officer has he principal authority and responsibility for administering the Section 5310 program. The state agency's responsibilities include: notifying eligible local entities of funding availability; developing project selection criteria; determining applicant eligibility; selecting projects for funding; and ensuring that all subrecipients comply with Federal requirements. Eligible nonprofit organizations or public bodies must apply directly to the designated state agency for assistance under this program.
Funds are obligated based on the annual program of projects included in a statewide grant application. FTA does not conduct project-by-project review and approval of each project. The state agency ensures that local applicants and project activities are eligible and in compliance with Federal requirements, that private for-profit transportation providers are provided an opportunity to participate to the maximum extent feasible, and that the program provides for maximum feasible coordination of transportation services assisted under Section 5310 with transportation services assisted by other Federal sources. In addition, the state monitors local projects; ensures that all program activities are included in a statewide transportation improvement program (STIP); and oversees project audits and closeouts. The state certifies to FTA annually that the state and subrecipients have met or will meet all Federal requirements. Once FTA has approved the application, funds are available for state administration and for allocation to individual subrecipients within the state.
Under U.S. Department of Transportation regulations, "Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments," 49 C.F.R. Part 18 (sometimes referred to as the common rule), the state relies on its own laws and procedures in the areas of financial management systems, equipment, and procurement for itself and its public body subrecipients. For private nonprofit agencies, grant management requirements are contained in 49 C.F.R. Part 19, "Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and other Non-profit Organizations." States may have uniform requirements for all of their grantees, both private nonprofit agencies and public bodies, as long as such requirements are not inconsistent with Part 19.
- FTA ROLE IN PROGRAM ADMINISTRATION. FTA Headquarters is responsible for: providing overall policy and program guidance for the Section 5310 program, apportioning funds annually to the states, and conducting national program review and evaluation. A national meeting of state program managers is convened biennially.
The FTA regional offices have the day-to-day responsibility for administration of the program. Regional office activities include: reviewing and approving state grant applications; obligating funds; working with states to implement the annual program; providing technical assistance; receiving state certifications and amendments to the program of projects; monitoring and closing grants; reviewing and approving state management plans; and conducting certain oversight reviews, including state management reviews which are conducted every three years or as circumstances warrant.
- RELATIONSHIP TO OTHER PROGRAMS.
Section 5311, the Nonurbanized Area Formula Program. The Section 5311 program makes Federal funds available to the states to assist in the development, improvement and use of public transportation systems in rural and small urban areas. While the overall objectives of the Section 5311 and Section 5310 programs differ (that is, the former is to provide transportation to the general public in non-urbanized areas and the latter is to serve the elderly and persons with disabilities in both rural and urbanized areas), there are parallels which make it desirable for states to consider both resources and plan for their use in a complementary way.
With few exceptions, the two programs are administered by the same state agency. Many Section 5311 subrecipients are private nonprofit organizations, and in some cases a single agency receives both Section 5310 and Section 5311 funding. In other cases, subrecipients of Section 5310 funds seek to participate in coordinated service arrangements which also include Section 5311 funded organizations. FTA encourages participation in such coordinated efforts as long as the coordinated services will continue to meet the purposes of both programs. FTA has made the guidelines for both programs as consistent as possible in order to simplify program administration.
Under Section 5311, the Rural Transit Assistance Program (RTAP) provides for technical assistance, training, and related support services in nonurbanized areas. Section 5310 providers may participate in RTAP sponsored activities, at the state's discretion, as long as the activities are primarily designed and delivered to benefit nonurbanized transit providers.
Flexible Funds. Surface Transportation Program (STP) funds, among others, are a source of flexible funds for both highway and transit projects. At the state's discretion, these flexible funds may be used for transit capital projects (which under Section 5310 include acquiring transportation service under contract) that meet the special needs of elderly persons and persons with disabilities.
- COORDINATION WITH OTHER FEDERAL PROGRAMS.
- The Council on Access and Mobility. U.S. DOT and the U.S. Department of Health and Human Services (DHHS) have been working together since 1986 to improve the coordination of programs funded by the two departments. The council has recently changed its name from the Joint Federal Coordinating Council on Human Service Transportation to the Council on Access and Mobility. The council meets quarterly to address transportation coordination issues and regional Federal officials have established regional working groups to undertake a series of regional initiatives addressing specific areas of coordination. States are encouraged to participate in these regional initiatives and to encourage their subrecipients of Section 5310 and Section 5311 funds to participate in coordinated systems at the local level, along with recipients of funds from the programs of DHHS. Concern about Federal barriers to coordination may be brought to the attention of the council through the FTA Regional Administrators. The state annually assures that the statewide program provides for maximum feasible coordination of transportation services funded under Section 5310 with transportation services assisted by other Federal sources.
- Coordination Mandate. TEA-21 includes a new requirement for local governmental agencies and nonprofit organizations that receive assistance from Federal sources other than the FTA for nonemergency transportation services. To the extent feasible, these agencies are now required to participate and coordinate with recipients of assistance from FTA in the design and delivery of transportation services.
- Welfare to Work. States are encouraged to take a leadership role in providing transportation resources for welfare reform initiatives. In addition to FTA and state transit funding, funding is available under Department of Labor jobs programs and Department of Health and Human Services Temporary Assistance to Needy Families (TANF), as described in joint guidance published by DOT, DOL, and DHHS on May 27, 1998.
- Public Lands and Indian Reservations. Under TEA-21, transit facilities within public lands, national parks, and Indian reservations are now an eligible use of funds available for public lands highways, park roads and parkways, and Indian reservation roads (Chapter 2 of Title 23). These funds will be administered directly by the appropriate Federal land management agency (for example, the Bureau of Indian Affairs for the Indian Reservations Roads Program), but they must be included within the state transportation improvement program [49 U.S.C. 5304(c)(6)]. In developing the program of projects for Section 5310, the state should be aware of any transit capital projects tribes may have developed with Indian reservation roads funds.
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Chapter II: General Program Information
- STATE AGENCY DESIGNATION. The Governor of each state designates an agency with the requisite legal, financial, and staffing capabilities to receive and administer Federal funds under this program. The designated state agency is the grantee for all Section 5310 funds within the state, and applies to FTA for these funds on behalf of private nonprofit agencies and eligible local public bodies within the state. Designations remain in effect until changed by the Governor by official notice of redesignation to the FTA regional administrators.
- APPORTIONMENT OF SECTION 5310 FUNDS. Section 5310 funds are apportioned among the states by a formula which is based on the number of elderly persons and persons with disabilities in each state according to the latest available U.S. census data. The annual apportionment for each state is published in the Federal Register following the enactment of the annual DOT appropriations act.
- FUNDS AVAILABILITY. Section 5310 funds are available to the states only for the fiscal year in which they are apportioned. Any funds remaining unobligated at the end of the fiscal year are added to the next year's program apportionment and are reapportioned among all the states.
- TRANSFER OF FUNDS.
- Transfer to Other FTA Programs. Within 90 days of the end of the Federal fiscal year, Section 5310 funds shall be available to the Governor for transfer to supplement funds apportioned to the state under Section 5311(c) for nonurbanized areas, or Section 5307 for urbanized areas under 200,000 population. Section 5333(b) certification requirements apply as appropriate for the program to which funds are transferred. The period of availability for the transferred funds is that of the receiving program: the fiscal year in which the funds are transferred plus two in the case of Section 5311(c) and the fiscal year in which the funds are transferred plus three in the case of Section 5307. Transferred Section 5310 funds may be used only for non-operating costs, and do not change the amount available for state administration under either the Section 5310 program or the receiving program.
- Transfer of Flexible Funds. Flexible funds may be transferred to the Section 5310 program for use by the state. Transferred funds will be treated under the program requirements applicable to Section 5310. The funds are available for obligation by the state during the year in which they are transferred.
- Notification of Transfers. The FTA regional administrator must be notified of a state's wish to have funds trasferred so that FTA can initiate the transfer. For transfers of Section 5310 funds to the Section 5307 program for UZAs under 200,000 population or Section 5311(c), and for transfers of flexible funds, the notification must indicate the amount of funds transferred and the program to which they are being transferred. If a state knows early in the fiscal year that Section 5310 funds will be transferred to the Section 5307 or 5311 program, the regional administrator should be notified so that FTA can begin processing the transfer, even though the transferred funds would not be available for obligation under the receiving program until the last quarter of the fiscal year.
- ELIGIBLE SUBRECIPIENTS. There are three categories of eligible subrecipients of Section 5310 funds:
- Private nonprofit organizations. A nonprofit organization is a corporation or association determined by the Secretary of the Treasury to be an organization described by 26 U.S.C. § 501(c) which is exempt from taxation under 26 U.S.C. § 501(a) or one which has been determined under state law to be nonprofit and for which the designated state agency has received documentation certifying the status of the nonprofit organization.
- Public bodies that certify to the Governor that no nonprofit corporations or associations are readily available in an area to provide the service.
- Public bodies approved by the state to coordinate services for elderly persons and persons with disabilities.
Local public bodies eligible to apply for Section 5310 funds as coordinators of services for elderly persons and persons with disabilities are those designated by the state to coordinate human service activities in a particular area. Examples of such eligible public bodies are a county agency on aging or a public transit provider which that state has identified as the lead agency to coordinate transportation services funded by multiple Federal or state human service programs.
- STATE ADMINISTRATIVE EXPENSES. Up to $25,000 or 10 percent of the state's total fiscal year apportionment, whichever is greater, may be used as the Federal share of program administration costs (Section 5310 administrative funds). Program administration costs or expenses consist of those costs or expenses incurred by the state in implementing and managing the entire Section 5310 program, including previously funded projects, if necessary. Thus, Section 5310 administrative funds are not specific to one grant, but may help to pay the ongoing administrative costs of previous Section 5310 projects that require further staff effort. FTA treats the limitation on Section 5310 administrative funds as applicable to Section 5310 funds apportioned to the state over time, not necessarily to the apportionment for a particular fiscal year. FTA encourages the states to include all the available Section 5310 administrative funds they intend to use routinely in each annual grant application. However, a state may accumulate the "entitlement" to Section 5310 administrative funds over several years to augment the funds available for a special administrative need in a subsequent year. The period over which unused Section 5310 administrative funds are accumulated may not exceed three years. If a state includes program administration expenses in excess of the 10 percent or $25,000 limitation in its grant application, it should document the unused Section 5310 administrative funds from prior years available to augment the amount of Section 5310 administrative funds in the current apportioment.
Eligible program administrative costs may include, but are not limited to, general administrative and overhead costs, staff salaries, office supplies, and development of specifications for vehicles and equipment. Guidance on eligible costs is in Office of Management and Budget (OMB) Circular A-87.
- ELIGIBLE CAPITAL EXPENSES. Funds for the Section 5310 program are available for capital expenses to support the provision of transportation services to meet the special needs of elderly persons and persons with disabilities. Examples of capital expenses include, but are not limited to:
- radios and communication equipment;
- vehicle shelters;
- wheelchair lifts and restraints;
- vehicle rehabilitation; manufacture, or overhaul;
- preventive maintenance, defined as all maintenance costs;
- extended warranties which do not exceed the industry standard;
- microcomputer hardware and software;
- initial component installation costs;
- vehicle procurement, testing, inspection and acceptance costs;
- lease of equipment when lease is more cost effective than purchase (The state must establish criteria for determining cost effectiveness, including non-economic factors such as management efficiency, availability of equipment, and staffing capabilities. While the U.S. DOT regulations at 49 CFR Part 639, "Capital Leases," do not apply to Section 5310 subrecipients, they contain guidelines which may be useful to the state in making the cost effectiveness comparison.); and
- acquisition of transportation services under a contract, lease, or other arrangement. Eligible capital expenses may also include, at the option of the subrecipient, the acquisition of transportation services under a contract, lease or other arrangement. Both capital and operating costs associated with contracted service are eligible expenses. User-side subsidies are considered one form of eligible arrangement. The state, as recipient, has the option to decide whether to provide funding for such acquired services. Funds may be requested for contracted services covering a time period of more than one year.
- the introduction of new technology, through innovative and improved products, into mass transportation; and
- transit related intelligent transportation systems.
- FEDERAL/LOCAL MATCHING REQUIREMENTS.
- General. The Federal share of eligible capital and program administrative costs may not exceed 80 percent of the net cost of the program. The local share of eligible capital and administrative costs shall be no less than 20 percent of the net cost of the program. All of the local share must be provided from sources other than Federal funds except where specific legislative language of a Federal program permits its funds to be used to match other Federal funds. Some examples of non-Federal sources of local match which may be used for any or all of the local share include: state or local appropriations; dedicated tax revenues; private donations; and net income generated from advertising and concessions. Non-cash share such as donations, volunteered services, or in-kind contributions are eligible to be counted toward the local match as long as the value of each is documented and supported, and represents a cost which would otherwise be eligible under the program.
- Exceptions. The Federal share is 90 percent for vehicle-related equipment required by the Clean Air Act Amendments of 1990 (CAAA) or the Americans with Disabilities Act of 1990 (ADA). It is only the incremental cost of the equipment required by the ADA or CAAA that may be funded at 90 percent, not the entire cost of the vehicle, even if the vehicle is purchased for use in service required by the ADA or CAAA. States wishing to apply for assistance at the higher match ratio should consult the FTA regional office for further guidance regarding methods of computing the incremental cost before submitting an application.
- CONSOLIDATION OF GRANTS TO INSULAR AREAS. Certain FTA grants to insular areas may be consolidated under the provisions of 48 U.S.C. § 1469a. This provision permits Federal agencies to streamline and consolidate certain grant-in-aid programs available to the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands. These insular areas receive Section 5311 apportionments, RTAP allocations, and Section 5310 apportionments annually. Specifically, 48 U.S.C. § 1469a permits:
- Federal agencies to consolidate any or all grants to each of the insular areas and to waive requirements for matching funds, applications, and reports with respect to the consolidated grants; and
- Each insular area to use the consolidated grant funds for any purpose or program authorized for any of the consolidated grants.
FTA implements this consolidation of Section 5310, Section 5311, and RTAP funding into a single grant by transferring funds from one section to another. The insular areas may transfer all or a portion of the funds apportioned for Section 5310, Section 5311, or RTAP, for use under any of these sections. This should improve the efficiency of grant making and grant management for these areas which have small staff resources and receive small amounts of funds under each of these programs. In addition, 48 U.S.C. § 1469a(d) allows an agency to waive any local matching share requirements for grants to insular areas. Those insular areas interested in submitting applications for consolidated grants and/or local share waivers should notify the appropriate FTA regional office for application procedures and consolidation requirements. Among other things, the insular area should identify the intended use of consolidated funds and should show that the transportation of elderly persons and persons with disabilities will not be adversely affected. Applications should be submitted in accordance with the appropriate program circular, as determined by FTA.
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Chapter III: Program Development
- PLANNING REQUIREMENTS. Section 5310 projects in urbanized areas must be included in a Transportation Improvement Program (TIP) approved by the MPO and the Governor. With limited exceptions, all Federally funded highway or transit projects, incuding those listed in a TIP, must be included in a Statewide Transportation Improvement Program (STIP) jointly approved by FTA and FHWA. For purposes of the STIP, the state may group its planned expenditures of Section 5310 funds into statewide projects, such as vehicle acquisitions or services contracted for rural and urban recipients, and state administration costs. States must coordinate with MPOs and local transit providers when selecting Section 5310 projects. For further information on planning requirements, see the FTA/FHWA planning regulations at 23 C.F.R. Part 450 and 49 C.F.R. Part 613.
TEA-21 includes a new requirement that, to the extent feasible, governmental agencies and nonprofit organizations that receive assistance from other Federal agencies for nonemergency transportation services shall participate and coordinate with FTA recipients in the design and delivery of transportation services and be included in the planning for those services.
- PROGRAM OF PROJECTS. The state's annual program of projects submitted to FTA for approval lists the subrecipients and indicates whether they are private nonprofit agencies or public bodies, designates whether they serve urbanized or nonurbanized populations, and identifies any Indian tribal agencies. In addition, the program of projects includes a brief description of the projects, total project cost and Federal share for each project, and the amount of funds required for state administration. The total Federal funding level for the program of projects cannot exceed the total amount of Section 5310 funds available. Upon submission of the annual program of projects and other application requirements, FTA will review, approve, and obligate funds for the total amount of funds requested. The projects within the program of projects should be implemented within two years of grant award to the state. Grants not fully implemented within two years are subject to being terminated and closed out by FTA and the remaining funds deobligated.
- CATEGORIES OF APPROVAL. FTA's approval of a program of projects does not reflect unconditional approval of all projects within the program. Nor does FTA's approval of a program of projects reflect unconditional approval of all prospective subrecipients identified in the program. FTA recognizes that not all projects in a state program of projects may be at the same stage of development, and therefore, not all applications to the state may be complete at the time the state forwards its annual program of projects to FTA. FTA also recognizes that all subrecipients identified in the program of projects may not yet be in compliance with all applicable Federal requirements. To expedite grant award, FTA allows states to separate projects and funds included in its program of projects into three different categories, depending on how completely Federal requirements have been met.
- Category A. This category includes projects certified by the state as having met all the Federal statutory and administrative requirements for project approval applicable to both the project activities and subrecipient that will carry out those activities. Upon grant award, FTA's approval of Category A projects is unconditional. Upon execution of the grant agreement, the state may start drawing down funds to implement projects in Category A. Most, if not all, of the projects included in the state's program of projects are expected to be in this category.
- Category B. Projects in Category B are those projects the state anticipates approving during the current year, but which have not met all of the Federal statutory or administrative requirements or are proposed to be implemented by a subrecipient that has not yet met all applicable Federal requirements. When the necessary Federal requirements have been satisfied for a project, FTA's approval of that project becomes unconditional, and the project may be advanced to Category A. Cash drawdowns for that project may commence after the state advances it to Category A. If a state can list all its projects in Category A, it would not list any projects in Category B.
- Category C. This optional category represents a "program reserve" and is designed to accommodate unanticipated project and program needs. This program reserve may include no more than 10 percent of the total amount of the state's annual Section 5310 apportionment. It is expected that all funds in this category will be allocated either to new projects capable of meeting the applicable Federal requirements or to budget adjustments in Category A and B projects within twelve months of grant approval. FTA reserves the right to deobligate funds not allocated to specific projects within one year of FTA grant approval.
- APPROVAL. FTA awards grants on a quarterly release cycle. States submitting a complete and acceptable grant application by the first business day of a quarter will be awarded a grant by the end of that quarter. FTA awards grants and obligates funds for the total amount the state requests for all three categories. FTA grant award constitutes FTA approval of the state's annual program of projects. But FTA approval of the Section 5310 program of projects does not constitute unqualified approval of each project in the program. Grant award does constitute FTA approval of those projects in Category A. Thus the state may draw down Federal funds immediately upon execution of the grant agreement. Grant award also constitutes FTA's approval of those projects in Category B on the condition that all applicable Federal requirements will be met. The state must ensure that those requirements are met and advance the projects to Category A before funds can be drawn down to support those projects. In addition, the grant award obligates Federal funds for Category C projects and constitutes approval of Category C projects, not identified at the time of award, that have met or will meet all applicable Federal requirements. The state, however, is expected to allocate Federal funds awarded for Category C within one year to new or existing projects that have met or will meet all of the necessary statutory and administrative requirements.
- REVISIONS TO PROGRAM OF PROJECTS. The scope of the grant is the approved program of projects in its entirety. The addition of Federal funds to the approved program of projects is a change in the scope of the approved program of projects and requires an amendment of the grant agreement. Other revisions to the approved program of projects, as set forth below, do not constitute a change in scope.
- Revisions Not Requiring Prior FTA Notification. Subsequent to grant approval by FTA, the state may make the following revisions, which do not constitute a change in scope, without prior notification to FTA; however, these changes must be reflected in a revised program of projects forwarded to FTA.
- Deleting projects from the program of projects if the project cost is less than $250,000 or 10 percent of the total of the program of projects, whichever is greater.
- Allocating Category C funds to existing projects.
- Reallocating funds within an approved program of projects among approved projects within a local area or from one local area to another. This includes adjustments of local project funding levels to accommodate changes in vehicles or equipment requirements.
- Advancing projects from Category B to Category A, provided the projects and prospective subrecipients are in compliance with all applicable Federal requirements, and the state has no information suggesting otherwise.
- Adding equipment or property transferred from a subrecipient to another subrecipient listed in the program of projects, regardless of whether the items were originally funded from a different grant.
- Revisions Requiring Prior FTA Notification but not FTA Approval. The state must notify FTA when making the following revisions, which do not constitute a change in scope:
- Allocating Category C funds to new projects, provided the projects and prospective subrecipients are in compliance with all applicable Federal requirements, and the state has no information suggesting otherwise;
- Reallocating funds to new projects, provided the projects and prospective subrecipients are in compliance with all applicable Federal requirements, and the state has no information suggesting otherwise; and
- Deleting or reducing a project by more than $250,000 or 10 percent of the total program of projects, whichever is greater.
- Revisions Requiring FTA Approval. The state must obtain FTA approval when advancing to Category A any prospective subrecipient with serious questions of compliance with Federal requirements remaining unresolved.
- Update of Program of Projects. The most recently updated program of projects submitted by the state to FTA in its annual report or in the course of making revisions will be considered the current approved program of projects, incorporated by reference in the grant agreement.
- COSTS INCURRED PRIOR TO GRANT APPROVAL. Costs may be incurred under the Section 5310 program prior to FTA approval of a grant. Authority to incur any eligible Section 5310 program costs in advance of possible future Federal participation extends to all funds made available for the program within a particular authorization period. In order for the pre-award costs to be eligible for subsequent reimbursement, the project must have met all FTA statutory, procedural and contractual requirements. Specific information is included in FTA's annual apportionment notice.
- LABOR PROTECTIONS. Section 5333(b) requires that, as a condition of assistance from FTA, fair and equitable arrangements must be made to protect the interests of employees affected by such assistance. The Department of Labor (DOL) is responsible under Federal law for the administration of Section 5333(b).
Section 5310 gives the Secretary of Transportation the discretion to determine the terms and conditions "necessary and appropriate" for grants under this section. In 1974 the Secretary determined that it was not "necessary or appropriate" to apply the conditions of Section 5333(b) to subrecipients participating in the Section 5310 program. Nevertheless, case-by-case determinations of the applicability of 49 U.S.C. § 5333(b) will be made for all transfers of "flex funds" for Section 5310 purposes.
- PUBLIC HEARINGS. Public body applicants must afford an adequate opportunity for a public hearing, and such hearings must be held if someone with a significant economic, social, or environmental interest in the matter requests a hearing.
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Chapter IV: Application Instructions
- STATE APPLICATION TO FTA. Each state agency should submit an application for its annual apportionment to the appropriate FTA regional office. Grant applications are submitted electronically, and FTA approves and manages grants electronically. Guidance and training for use FTA's electronic system may be obtained by contacting the FTA regional office. The application should include:
- Standard Form 424. All information required by OMB Standard Form 424, "Application for Federal Assistance," (revised April 1988) must appear or be entered in the appropriate windows of the electronic system. This information must be completed in its entirety, including information pertaining to any delinquent indebtedness to the U.S. Government, and be attested to with the appropriate official's Personal Identification Number (PIN), or signed by the individual indicated on the Authorizing Resolution.
- Program of Projects. The program of projects should: identify funds for program administration; include a list of agencies that will be funded, with the total amount of funds and Federal share for each agency; list the type and number of vehicles and equipment to be purchased; indicate amount of funds to be used for contracted services; identify tribal agencies; designate whether the agency serves an urbanized or non-urbanized area; and whether the agency is a private nonprofit agency or a public body. Text files and spreadsheets can be imported into the electronic application as part of the project description.
- Project Budget. A line item budget is submitted for each grant. So that FTA can include Section 5310 capital acquisition in its program reports and analyses of Federal transit funding, grantees are asked to provide details of proposed capital purchases according to the activity codes contained in Exhibit A.
- Project Implementation Plan. As part of its application, the state should submit a plan estimating significant milestones such as vehicle procurements and agreements with subrecipients, and project completion date.
- Record of Approved and Rejected Funding Requests. A requirement specific to the Section 5310 program is that the state maintain a record of approved and rejected Section 5310 funding requests that identifies applicants that are minority organizations or that provide assistance to minority communities. In the past, states were required to submit this list with their annual grant application, but states may now keep this information on file for review during a state management or other review.
- Annual Certifications and Assurances. Before FTA may award a Federal grant, the applicant must provide to FTA all certifications and assurances required by Federal laws and regulations. At the beginning of each Federal fiscal year, FTA publishes and makes available electronically a Federal Register Notice which provides a comprehensive compilation of certifications and assurances to be used in connection with all Federal assistance programs administered by FTA during that fiscal year. The notice requires the applicant and its attorney to certify compliance with the appropriate requirements. The state should attest to all certifications and assurances that apply to any programs under which the state expects to seek FTA assistance during the Federal fiscal year.
- SUBRECIPIENT APPLICATION TO THE STATE. Before a state agency can provide the FTA with required assurances, the state agency should receive sufficient documentation from all subrecipients to support the assurances. In addition to any other documentation the state agency may require, the state should receive from each subrecipient, either as a one-time submission or with each application, as appropriate:
- Project Description. The application should include sufficient information for the states to be able to evaluate the eligibility of the proposed project, and the recipient's legal, financial, technical and managerial capability to implement the project and maintain any project property.
- Certification and Assurances. The subrecipient must provide certifications and assurances required of each grantee (except those applicable only to direct grantees), and all those applicable to the particular project (for example, the lobbying certification if the application exceeds $100,000). The Section 5310 certification required annually of the state lists the certification and assurances that the state must have on file from subrecipients before a project may be included in Category A. The state may use the FTA annual notice of required certifications and assurances as a model to ensure that all required certification and assurances are obtained from the subrecipients and are worded accurately.
- Coordination. The application should describe how FTA assisted services are or will be coordinated with other federally funded agencies and private transportation providers in the service area. TEA-21 requires that to the extent feasible, governmental agencies and nonprofit organizations that receive assistance from other Federal agencies for nonemergency transportation services shall participate and coordinate with FTA recipients in the design and delivery of transportation services and be included in the planning for those services.
- Public Involvement. Public body applicants are required to afford an opportunity for a public hearing; to hold that hearing unless no one requests one; to consider the economic, social, and environmental effects of the project; and to find the project consistent with official plans for the area. The application should document that this requirement has been met (including a copy of the published notice, hearing record, if one was held, and summary of efforts to involve the private sector to the maximum extent feasible, etc.).
- Civil Rights. If any lawsuits or complaints have been received or acted on, or compliance reviews conducted, since the applicant's most recent Title VI submission, these and other relevant civil rights activities should be described in the application.
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Chapter V: Program Management
- INTRODUCTION. Although the program management requirements for the Section 5310 program are similar to those of other FTA programs, FTA recognizes the unique nature of this program and, therefore, the following guidance is provided to assist the states in carrying out their program. For issues not specifically addressed in this circular or other Federal guidance, refer to FTA Circular 5010.1C, "Grant Management Guidelines."
- PROGRAM ADMINISTRATIVE REQUIREMENTS. The basic grant management requirements for state and local governments are contained in "Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments," 49 C.F.R. Part 18, referred to as the "common rule." The basic intent of Part 18 is to shift the emphasis from national uniformity to uniformity of procedures and requirements within a state, in order to provide greater flexibility to the states in standardizing the management of related state and Federal programs. For private nonprofit agencies (both direct recipients and subrecipients of the state), grant management requirements are contained in "Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and other Non-profit Organizations," 49 C.F.R. Part 19. The basic intent of Part 19 is to establish nationally uniform procedures and requirements for all private nonprofit organizations.
Under the common rule, administrative requirements for a state's public body subrecipients are more flexible than those for local government grantees in the areas of financial management systems, procurement, and equipment. Detailed discussion of these areas follows below. Part 19 does not allow states to pass down state procedures in these areas to subrecipients which are private nonprofit entities. However, as long as the state procedures are consistent with Part 19, the state may apply the same procedures for all subrecipients.
- VEHICLE USE. FTA encourages maximum use of vehicles funded under the Section 5310 program. Consistent with the requirements of 49 C.F.R. Parts 18 and 19, vehicles are to be used first for program related needs and, beyond the purposes for which a Section 5310 grant are made, to meet other transportation needs of elderly persons and persons with disabilities, to meet other Federal program or project needs, and finally for other local transportation needs. Vehicles may be used:
- For Section 5310 Project and Program Purposes. The states should consider how best to meet the needs of all the elderly and persons with disabilities in a particular community in their project selection process. The program must provide for maximum feasible coordination with transportation services assisted by other Federal sources. Subrecipients should be encouraged to the extent feasible to also provide service to elderly persons and persons with disabilities not affiliated with their agency, as well as to the general public on an incidental basis if such service does not interfere with transportation services for the elderly and persons with disabilities. In some situations it may be appropriate to provide Section 5310 assistance to an agency to provide transportation exclusively to its own clients, but even in situations in which it is not feasible for the agency to provide services to those in the community beyond its own clients, that agency must, when practicable, make the vehicle itself available to provide transportation service to other elderly persons and persons with disabilities at times the agency is not using the vehicle for grant-related purposes. The recipient shall use the vehicle in the project or program for which it was acquired as long as needed, even if the project does not continue to receive Federal funding.
- For other Federal Programs or Project Purposes. During the period the vehicle is used to serve the project or program needs for which it was acquired, the subrecipient shall make it available for use on other projects or programs, as long as such other use does not interfere with the service for which the vehicle was originally acquired. First preference for such other use will be given to other projects or programs sponsored by FTA, and second preference will be given to projects or programs sponsored by other Federal agencies. Finally, vehicles may be used by non-federally funded providers, first to meet the needs of elderly persons and persons with disabilities, and then to serve the transportation needs of the general public on an incidental basis.
- When No Longer Needed for Original Project or Program Purposes. If the original subrecipient no longer needs the vehicle for the purposes for which it was acquired, the state may choose to keep the vehicle in use for Section 5310 program purposes by transferring the vehicle to another subrecipient. The transfer may be shown in the program of projects for any active grant. It does not have to be in the grant under which the equipment or property was originally funded. Once the vehicle is no longer needed for Section 5310 program purposes, the vehicle may be used first in connection with other FTA-sponsored activities, and then for activities sponsored by other Federal agencies.
- For Meal Delivery. Transit service providers receiving assistance under this section may coordinate and assist in providing meal delivery services for homebound persons on a regular basis if the meal delivery services do not conflict with the provision of transit services or result in a reduction of service to transit passengers. The number and size of vehicles applied for under Section 5310 must be determined only by the number of passengers to be transported, not meal delivery capacity. Section 5310 funds may not be used to purchase special vehicles to be used solely for meal delivery or to purchase specialized equipment such as racks or heating or refrigeration units related to meal delivery.
- LEASING VEHICLES ACQUIRED WITH SECTION 5310 FUNDS. Vehicles acquired under the Section 5310 program may be leased to other entities such as local public bodies or agencies, other private nonprofit agencies, or private for-profit operators. Under such a lease, the lessee operates the vehicles on behalf of the Section 5310 subrecipient and provides transportation to the subrecipient's clientele as described in the grant application.
The lease between the Section 5310 subrecipient and the lessee contains the terms and conditions that must be met in providing transportation service to the elderly and persons with disabilities. Because the purpose of the Section 5310 grant is to provide transportation service to the elderly and persons with disabilities, other uses of the vehicle are permitted only as long as such uses do not interfere with service to the elderly and persons with disabilities.
The state, being responsible for ensuring that the terms and conditions of the original grant with FTA are met, must agree, in writing, to each lease between the subrecipient and the lessee. Such an agreement should specify that the leased vehicle shall be used to provide transportation service to the elderly and persons with disabilities, that the vehicle may be used for incidental purposes only after the needs of these individuals have been met, and that the subrecipient or state must retain title to the vehicle.
- CONTROL AND RESPONSIBILITY. When vehicles or other equipment acquired with Section 5310 funds are operated by an entity other than the subrecipient, control and responsibility for the operation of the vehicles or other equipment must remain with the subrecipient unless transfer of the control and responsibility is made to another subrecipient authorized by the designated state agency to accept control and responsibility for those vehicles or equipment.
- TITLE TO VEHICLES. State administering agencies may hold title to Section 5310 vehicles or title may be held by the subrecipient. If the state administering agency holds title, contractual arrangements must be made to ensure that the public or private nonprofit subrecipient maintains continuing control over the vehicle to carry out project purposes. In certain cases, it may be beneficial for subrecipients to include other state or local governmental entities in the title to Section 5310 vehicles in order to take advantage of blanket insurance rates or to participate in bulk purchases of fuel, maintenance and supplies available to those governmental entities. The state administering agency may, in its discretion, permit this practice if it results in a direct benefit to the recipient in providing special service, provided that the subrecipient maintains continuing control over the vehicle and the vehicle continues to be used for its authorized purposes. In such instances, the parties involved should enter into written agreements assuring the requisite safeguards and control. In summary, either the state or the subrecipient must hold title, consistent with this paragraph, to any vehicles leased to public bodies or to private for-profit organizations.
- SATISFACTORY CONTINUING CONTROL. When capital equipment is acquired or improved for use by any entity in providing special transportation services designed to meet the needs of elderly persons and persons with disabilities, provisions must be made to assure satisfactory continuing control of that capital equipment. While the state agency serving as the FTA grantee may delegate these responsibilities to another entity, the state is ultimately responsible for compliance with this requirement.
- CAPITAL RESERVE ACCOUNTS. Recipients of Section 5310 vehicles are permitted to establish capital reserve accounts to replace existing equipment as long as no FTA funds or proceeds from the sale or lease of FTA assisted property are placed in those accounts.
- EQUIPMENT MANAGEMENT.
- General. Under the common rule, a state will use, manage, and dispose of equipment acquired under a Section 5310 grant in accordance with state laws and procedures. Procedures and requirements for public body recipients that are not states and their subrecipients are more explicit. States may elect to adopt the procedures established in 49 C.F.R. Part 18 for other public body subrecipients, or use them as a guide in developing state procedures for equipment use, management, and disposition, but are not required to do so. States may use the same procedures for private nonprofit subrecipients as for public body subrecipients so long as those procedure are consistent with 49 C.F.R. Part 19.
- Vehicle Useful Life and Replacement Standards. In keeping with the intent of the common rule that states be given greater flexibility in managing and disposing of equipment, FTA elects not to apply to Section 5310 and 5311 its policies regarding useful life standards for vehicles, vehicle replacement, or the requirement to use the straight line depreciation method for determining fair market value and FTA reimbursement. Instead, FTA holds states responsible for establishing and implementing their own rolling stock requirement for all categories of vehicles acquired under the Section 5310 and Section 5311 programs. For these two programs, FTA permits state grantees to:
- establish their own minimum useful life standards for vehicles;
- use their own procedures for determining fair market value; and
- develop their own policies and procedures for maintenance and replacement of vehicles. Maintenance requirements and insurance coverage must be adequate to protect the Federal interest in the vehicle within the useful life determined by the state.
- Disposition. States and their subrecipients follow state laws and procedures for disposing of equipment. States are not required to return FTA proceeds from the disposition of equipment, regardless of the fair market value at the time the equipment is sold. States are to follow their own procedures regarding the use of proceeds which may allow certain selling and handling expenses to be kept by the subrecipient if vehicles are sold. All other proceeds must remain in use for mass transportation services. This applies to all equipment currently in use which was purchased with Section 5310 funds. This blanket disposition instruction satisfies the provision of 49 C.F.R. Part 19 requiring private non-profit organizations to seek disposition instructions from the Federal awarding agency.
- PROCUREMENT. When procuring property, supplies, equipment or services under an FTA grant, the state will follow the same policies and procedures it used for procurement from its non-Federal funds, to the extent permitted by Federal statutes and regulations. While the Federal threshold for small purchases is currently $100,000, the state may set a lower threshold for itself and its subrecipients. The state may impose state procedures on subrecipients which are public bodies. However, because of differences between 49 C.F.R. Part 18 and 49 C.F.R. Part 19, FTA third party contracting requirements are fewer for states and subrecipients that are local or tribal governments than for subrecipients that are private nonprofit organizations. For the sake of consistency, the state may choose to use the more detailed FTA requirements included in FTA Circular 4220.1D for all subrecipients as part of its state procurement procedures.
In some cases, a state may choose to provide Section 5310 assistance to a subrecipient through an intermediary recipient. For example, for public policy reasons, the state might pass funds to a nonprofit organization through a local public body. The arrangement between the first tier and second tier subrecipient is not a third party contract if the ultimate recipient would otherwise be statutorily eligible under Section 5310 to receive funds directly from the state and the ultimate subrecipient intends to use those funds to pursue its own elderly and persons with disabilities project.
Procurement procedures used by states and their subrecipients, however, must comply with the following specific Federal procurement requirements:
- States. State procurement practices must comply with a minimum of five specific Federal requirements contained in FTA Circular 4220.1D. These include a five-year limitation on contract period of performance, a requirement for full and open competition, a prohibition against geographic preferences, the use of Brooks Act procedures for procurement of architectural engineering services if the state has not adopted a statute governing procurement of such services, and inclusion in contracts of all Federal clauses required by Federal statutes and executive orders and their implementing regulations. These clauses are identified in specific Federal regulations cited in FTA's Master Agreement incorporated by reference into the grant agreement. Additional technical assistance for third party contracting is available in FTA's Best Practices Procurement Manual.
- Subrecipients that are Public Entities. Subrecipients that are public entities such as local or Indian tribal governments must comply with the same Federal requirements governing state procurements. States are responsible for ensuring that subrecipients are aware of and comply with Federal requirements.
- Subrecipients that are Private Nonprofit Organizations. Subrecipients that are private nonprofit organizations must comply with FTA procurement requirements contained in FTA Circular 4220.1D. States are responsible for ensuring that private nonprofit subrecipients are aware of and comply with these additional requirements.
- Pre-Award and Post-Delivery Reviews. Procurements for vehicles, other than sedans or unmodified vans, must be audited in accordance with FTA regulation, "Pre-Award and Post-Delivery Audits of Rolling Stock Purchases," 49 C.F.R. Part 663. Additional guidance is available in a manual, "Conducting Pre-Award and Post-Delivery Reviews for Bus Procurement," published May 1, 1995. The regulation requires any recipient or subrecipient that purchases rolling stock for use in revenue service with funds obligated after October 24, 1991, to conduct a pre-award and post delivery review to assure compliance with its bid specifications, Buy America requirements, and Federal motor vehicle safety requirements. and to complete specific certifications. Purchase of more than ten vehicles, other than unmodified vans or sedans, requires in-plant inspection. In the case of consolidated state procurements on behalf of multiple subrecipients, the in-plant inspection requirement is triggered only if any single subrecipient will receive more than ten vehicles.
- New Model Bus Testing. Any new bus models must be tested at the FTA sponsored test facility in Altoona, PA, before FTA funds can be expended to purchase them (49 C.F.R. Part 665). This requirement applies to all buses and modified vans, but not to unmodified vans, including vans with raised roofs or lifts installed in strict conformance with the original equipment manufacturer modification guidelines. A new model is defined as a model that has not been used in mass transportation service in the United States before October 1, 1988, or a model that has been used in such service but which, after September 30, 1988, is being produced with a major change in configuration or components. A major change in "configuration" is defined as a change which may have a significant impact on vehicle handling and stability or structural integrity. A major change in "components" is defined as a change in one or more of the vehicle's major components such as the engine, transmission, suspension, axle, or steering.
Purchasers of new model buses should ensure that the manufacturer has complied with the testing requirement by requesting a copy of the bus testing report from the Altoona Bus Testing Center, 6th Avenue and 45th Street, Altoona, Pennsylvania, 16602. The telephone number is (814) 949-7944. Before expending any FTA funds for a new model bus, the purchaser must certify that it has obtained the report. Information in the reports may be useful to operators early in the vehicle procurement process, for example when writing specifications.
Other requirements related to procurement, including Buy America, debarment and suspension, and requirements for including disadvantaged businesses in contracting opportunities is discussed in Chapter VI.
- AUDITS. States and subrecipients are responsible for: ensuring that audits are performed pursuant to the requirements as implemented in OMB Circular A-133, revised, "Audits of States, Local Governments, Non-Profit Organizations," (including any future amendments thereto); resolving audit findings; and bringing problems to FTA's attention. FTA has not required an annual financial audit of a subrecipient when assistance is provided solely in the form of capital equipment procured directly by the state. Even if the amount of FTA funds the state passes to a particular subrecipient does not trigger the requirement for an audit, the state should obtain and review A-133 audit reports prepared for subrecipients which are required to be audited because their total Federal funds from all sources exceed the threshold amount of $300,000.
OMB has issued an audit compliance supplement for FTA grants. It should be noted that while the guidance contained in the supplement may be helpful to auditors, it is specific to the Section 5307 and 5309 programs, and not all of the provisions are applicable to the Section 5310 program. The state may wish to make this program circular and relevant state program guidance available to auditors of its subrecipients.
- CLOSEOUT. States should initiate project closeout with subrecipients within 90 days after all funds are expended and all work activities for the project have been completed. The states should similarly initiate program of project closeout with FTA within 90 days after all work activities for the program of projects are completed. A final financial status report and a final budget and final program of projects are to be submitted electronically required at the time of closeout. FTA expects Section 5310 grants awarded for a specific program of projects to be completed within two years. Although this circular provides the state a great deal of flexibility in developing and subsequently revising programs of projects, it is not FTA's intent that grants be continually revised or amended in ways which will excessively prolong the life of the grant, and result in a large number of active Section 5310 grants. If small amounts of funds remain in an inactive grant, the state should request that the funds be deobligated and the project be closed out.
- REPORTING REQUIREMENTS.
- Annual Program Status Report. By October 31 of each year, the state should electronically submit to FTA for each active grant a program status report (as part of the milestones report) covering the 12-month period ending September 30. These status reports are intended to meet minimal program information needs at the regional and national levels. The report should consist of an updated program of projects and revised budget project for each approved program of projects which contains active projects. The updated versions should reflect project descriptions, changes in projects from one category to another, and adjustments within budget categories. The updated program of projects can be imported into the project summary section of the status report. If revisions to the program of projects result in changes to the line item budget for the grant, these changes should be submitted as budget revisions. For activity line items for which milestones were established at the time of grant application (for example, for vehicle procurements), revised milestone dates are entered as part of the annual report. If the estimated completion date for the grant has changed, the revised date should be entered. Significant civil rights compliance issues occurring during the year (such as Title VI, EEO, or DBE complaints against the state or subrecipients) should be addressed in the annual narrative report.
- Financial Status Report. On an annual basis, the state must electronically provide a financial status report for each active grant for the period ending September 30. For the purpose of this report, funds are considered encumbered when agreements are signed with subrecipients. Reports should be prepared using the accrual method of accounting.
- DBE Reports. Annually, states must submit a statewide DBE program including goals for the utilization of DBEs by the state, if it is over a specified funding threshold, and by subrecipients which exceed the threshold. The threshold is exclusive of transit vehicle purchases. The states must submit contracting activity reports for itself and its subrecipients: semi-annually for the entities required to submit a DBE program with goals, and annually for others. Detailed requirements are described in Chapter VI.
- FINANCIAL MANAGEMENT.
- State Financial Management Systems. The common rule requires a state to expend and account for grant funds for itself and its public body subrecipients in accordance with state laws and procedures for expending and accounting for its own funds. Fiscal control and accounting procedures of the state, as well as its public body subrecipients and cost-type contractors must be sufficient to:
- permit preparation of reports described in this circular and reports necessary to comply with other program requirements; and
- permit the tracing of funds to a level of expenditures adequate to establish that such funds have not been used in violation of the restrictions and prohibitions applicable to the program.
Private nonprofit subrecipients must comply with the standards for financial management systems provided in 49 C.F.R. Part 19 only if the state provides subrecipients with the funds to purchase vehicles directly. If states purchase vehicles and equipment for subrecipients and subrecipients receive no cash, this requirement does not apply.
- FTA Payment Procedure. FTA makes all payments by electronic funds transfer, regardless of the amount of money involved.
- Electronic Clearing House Operation (ECHO) Payments. Most payments are made under the ECHO system, by means of an ECHO Control Number (ECN) assigned to the state. The state agrees to comply with the ECHO requirements contained in the Department of the Treasury Regulations, 31 C.F.R. Part 205, "Rules and Procedures for Funds Transfers," and as established by the "Guidelines for Disbursements" set forth in FTA's ECHO System Operations Manual. In general:
- The state may initiate cash drawdowns only when actually needed for immediate disbursement required for project purposes. The state must disburse the funds drawn down according to their Treasury-State Agreement or Subpart B of 31 C.F.R. Part 205. The state's access to the ECHO System may be revoked or suspended, or other remedies may be invoked, if the state fails to expend the Federal funds or to return the funds to FTA within a reasonable period, or is unwilling or unable to establish procedures that will minimize the time elapsing between cash advances and the disbursements.
- Costs incurred and available balances are reported annually on an accrual basis, in electronic format on the annual Financial Status Report in FTA's electronic system.
- The state agrees to provide for control of and accountability for all project funds consistent with Federal requirements and procedures for use of the ECHO system.
- The state may not draw down funds for a project in an amount that would exceed the sum obligated by FTA or the current available balance for the project.
- The state shall limit drawdowns to eligible project costs and ensure that subrecipients also follow applicable financial requirements.
State Financial Records. FTA does not maintain detailed financial records on individual projects within a program of projects. Financial records, supporting documentation, and all other records pertinent to a grant must be retained by the designated state agency (and its subrecipients) and must be made readily available to authorized representatives of the U.S. Department of Transportation and the Comptroller General of the United States for a period of three years. The retention period starts on the date the state electronically submits the final Financial Status Report. If any litigation, claim or audit is started before the expiration of the three-year period, the records must be retained beyond the three-year period until all litigation, claims, or audit finding involving the records have been resolved.
The state's financial records should adequately document the computation of the Federal share and the provision of the required local share for each kind of project. The eligibility of any ADA, Clean Air Act, or bicycle projects for which the increased Federal share is claimed should be adequately documented.
- PROGRAM MANAGEMENT DOCUMENTATION AND REVIEW.
- State Management Plan. The State Management Plan (SMP) is a document which describes the state's policies and procedures in administering the Section 5310 program. The SMP for the Section 5311 program may be included in the same document. All states are required to have an approved SMP on file in the FTA regional office. Additions or amendments to the SMP must be made and submitted to FTA for approval whenever a state significantly changes its management of the program, or when new program management requirements are imposed by FTA. Guidance on the contents of the SMP is included in Chapter VII.
- FTA Management Review. FTA's administration of Section 5310 results in relatively little Federal involvement in the day-to-day program activities of the recipients. FTA does not review individual applications from local recipients. In order to ensure that program objectives are being carried out, FTA regional staff, with contractor assistance, conduct periodic state level management reviews of the program, once every three years, or as circumstances warrant. The SMP is the basic background document used in reviewing the state programs. This review includes an inspection of the documentation on file at the regional office, a visit to state offices to examine procedures that the states in administering the program, and includes local site visits to subrecipients. The review assesses the accuracy and adequacy of the SMP, and may result in recommendations for changes to the SMP. Preliminary findings are presented at an exit conference, followed by a draft report. The state has an opportunity to comment on the report and to take corrective actions before a final report is issued. The regional office follows up on corrective actions required in the final report.
FTA periodically conducts State Management Review seminars to help states understand the Federal requirements being reviewed and to provide technical assistance. Contact the regional office for a current schedule of seminars.
FTA also conducts more specific compliance reviews in particular areas, for example, financial management, procurement, drug and alcohol testing compliance, and the various aspects of civil rights compliance, usually in response to a risk assessment or other indication of a possible problem. Reviews of a subrecipient are coordinated with the state.
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Chapter VI: Other Provisions
- CIVIL RIGHTS COMPLIANCE. All recipients and subrecipients of FTA assistance are responsible for compliance with all civil rights requirements applicable to transit-related projects, including the nondiscrimination prohibitions of 49 U.S.C. § 5332, and of Title VI of the Civil Rights Act of 1964, as amended; the Equal Employment Opportunity (EEO) requirements of Executive Order No. 11246 as amended by Executive Order No. 11375; FTA's Disadvantaged Business Enterprise program requirements; and the Federal protections for persons with disabilities of Section 504 of the Rehabilitation Act of 1973, as amended, and the Americans with Disabilities Act of 1990, as amended (ADA). The specific civil rights obligations of both the state and subrecipients of Section 5310 funds in each area of civil rights compliance are summarized in this chapter. For further guidance, refer to the Federal laws, regulations, and executive orders cited in this chapter. FTA's regional civil rights officers or headquarters civil rights staff will also provide current guidance on request.
- Review Process. The designated state agency is responsible both for complying with civil rights requirements and for monitoring compliance by subrecipients of Section 5310 funding. The state submits information to FTA and/or FHWA on a regular basis as required by FTA, and maintains information submitted by subrecipients. The state's process for monitoring subrecipients should be included in the state management plan. FTA conducts periodic state management reviews which include an assessment of whether or not the state appears to have adequate procedures in place to ensure compliance by itself and its subrecipients.
As the result of a state management review, a civil rights review, a complaint investigation, or a routine information submission, FTA may make a determination of compliance or probable noncompliance. If FTA makes a finding of probable noncompliance, technical assistance is provided to resolve outstanding issues informally. If voluntary compliance is not achieved, other administrative remedies may be considered. FTA's approval of a state's program of projects does not constitute unconditional approval of each prospective subrecipient or project within that program, as explained in Chapter III, paragraphs 3 and 5. FTA reserves the right to instruct the state to defer provision of Section 5310 funds to any subrecipient whose civil rights compliance comes into question until FTA finds the subrecipient in compliance satisfactory to FTA.
- Nondiscrimination. 49 U.S.C. § 5332 states that "a person [defined broadly] may not be excluded from participating in, denied a benefit of, or discriminated against under, a project, program, or activity receiving financial assistance [from FTA] because of race, color, creed, national origin, sex, or age." The statute gives FTA responsibility and authority for enforcing compliance with this provision and Title VI of the Civil Rights Act of 1964, as amended, by withholding financial assistance or referring the matter for civil action by the Attorney General.
- Title VI of the 1964 Civil Rights Act. Title VI of the 1964 Civil Rights Act, Section 601, states:
No person in the United States shall, on the grounds of race, color or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.
FTA specifies both general requirements and program specific requirements for Title VI compliance. The following requirements supersede conflicting requirement of FTA guidance issued before publication of this circular.
- DOT and FTA Title VI Standard Assurance. The state submits its assurance to FTA and retains those from subrecipients. While these are one-time assurances, the requirement may also be satisfied by signing the nondiscrimination assurance included in FTA's annual notice of certifications and assurances.
- General Requirement. The state shall maintain for itself and its subrecipients a description of any complaints alleging discrimination in service delivery filed within the past year together with a statement of status or outcome of each such complaint.
- Program-Specific Requirements. The state must keep on file a record of approved and rejected funding requests that identifies applicants that are minority organizations or that provide assistance to minority communities. In addition, the following should be documented in the state management plan:
- A description of the process by which the state develops the annual program of projects submitted to FTA as part of its Section 5310 grant application.
- A description of the state's criteria for selecting providers to participate in the program, especially its efforts to include subrecipients serving significant minority populations.
- A description of the state's efforts to assist subrecipients in applying for Section 5310 assistance, especially any efforts made to assist minority organizations or those that serve primarily minority populations.
- A description of the state's ongoing process to monitor subrecipients' compliance with Title VI, such as site visits to each subrecipient, review checklists, etc.
- EEO Compliance. The state is responsible both for its own compliance and for assuring FTA that all subrecipients are in compliance with FTA's EEO objectives, in accordance with FTA requirements. If the state or any subrecipient meets the threshold established by FTA (receipt of $1,000,000 or more in the previous Federal fiscal year, and 50 or more mass transit related employees), it must submit an EEO program. The state may require any documentation it deems necessary from subrecipients to ensure that they do not discriminate in employment on the basis of race, color, creed, national origin, sex, age, or disability. For state departments of transportaiotn and state agencies, DOT, through a memorandum of understanding, has designated FHWA to receive all state EEO programs. Subrecipients that are required to submit an EEO program should submit the program to the state rather than to FTA or FHWA. FTA will review subrecipient programs during a state management review or other compliance review of the state.
- Section 504 and ADA Program Requirements. Section 504 of the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 794, prohibits discrimination on the basis of handicap by recipients of Federal financial assistance. The Americans with Disabilities Act of 1990, as amended, (ADA) specifies the Federal civil rights of individuals with disabilities as well as imposing specific requirements on public and private providers of transportation. Section 5310 recipients must comply with 49 C.F.R. Parts 27, 37, and 38, implementing the ADA and amending the Section 504 rule. Among other provisions, the regulations: prohibit discrimination against individuals with disabilities; require that vehicles acquired be accessible to and usable by individuals with disabilities, including individuals using wheelchairs (with limited exceptions for demand responsive systems providing equivalent service to individuals with disabilities or a demonstration of inability to obtain an accessible vehicle despite good faith efforts to do so). In addition, recipients of any FTA funds should be aware that they also have responsibilities under other provisions of ADA in the areas of employment, public accommodations, and telecommunications.
- Disadvantaged Business Enterprise Program. FTA recipients must take necessary and reasonable steps to ensure that disadvantaged business enterprises have the maximum opportunity to compete for and perform contracts. Certain applicants for FTA funds are required to submit a DBE program and set transit DBE goals.
- Applicants for funds in excess of $250,000, exclusive of transit vehicle purchases, are required to prepare and submit DBE programs and to set and submit transit goals for DBE participation.
For states, the thresholds apply to all FTA funds the state retains. For subrecipients, the thresholds apply to all FTA funds.
The state meets the program requirement as part of the state DOT's DBE submission to FHWA. Subrecipients submit DBE programs to the state. FTA will look at subrecipient programs during a state management review or other compliance review of the state.
The state must submit a transit DBE goal to FTA if either the state or any subrecipient applies for funds in excess of a threshold. In setting a DBE goal, the state needs to include only the contracting opportunities of entities applying for funds in excess of threshold amounts. States file contracting activity reports with the FTA regional office semi-annually on entities that receive FTA funds in excess of threshold amounts, and annually for other entities (i.e., those not required to set goals).
- The state is responsible for informing all subrecipients of their responsibility to make a reasonable effort to use DBE firms, providing information to the subrecipients about the availability of such firms, monitoring subrecipient contracting activity for DBE compliance, and reporting to FTA at required intervals on DBE contracting activities.
The state meets the program requirement as part of the state DOT's DBE submission to FHWA. Subrecipients submit DBE programs to the state. FTA will look at subrecipient programs during a state management review or other compliance review of the state. In special cases FTA may allow a project-specific DBE program in lieu of a standard program.
The state must submit a transit DBE goal to FTA if either the state or any subrecipient applies for funds in excess of a threshold. In setting a DBE goal, the state needs to include only the contracting opportunities of entities applying for funds in excess of threshold amounts. States file contracting activity reports with the FTA regional office semi-annually on entities that receive FTA funds in excess of threshold amounts, and annually for other entities (i.e., those which were not required to set goals).
- SAFETY JURISDICTION. FTA's authority in the area of transit safety is set forth in Section 5329. FTA may withhold further financial assistance from any recipient who fails to correct any condition which FTA believes "creates a serious hazard of death or injury." FTA's authority to investigate and make findings in certain safety-related areas is permissive, not mandatory.
- DRUG-FREE WORKPLACE. Direct grantees must comply with the Drug-Free Workplace Act of 1988 (41 U.S.C.§ 702), as implemented by 49 C.F.R. §§ 29.600 et seq. The requirements, including a drug-free workplace certification, apply only to the states as FTA's direct grantees, not to subrecipients.
- BUY AMERICA. Section 5323(j) provides that, with exceptions, Federal funds may not be obligated for mass transportation projects unless steel, iron, and manufactured products used in such projects are produced in the United States. Section 5310 recipients and subrecipients must conform with FTA regulations, 49 C.F.R. Part 661, and any amendments thereto. Buy America requirements apply to all purchases, including materials or supplies funded as operating costs, if the purchase exceeds the threshold for small purchases (currently $100,000).
There are four exceptions to this basic requirement, which may be the basis for a waiver. First, the requirement will not apply if its application is not in the public interest. Second, the requirement will not apply if materials and products being procured are not produced in the United States in sufficient and reasonably available quantities and of satisfactory quality. Third, the requirement will not apply in a case involving the procurement of buses and other rolling stock (including train control, communication, and traction power equipment) if the cost of components and subcomponents which are produced in the United States is more than 60 percent of the cost of all components and subcomponents of the vehicles or equipment, and if final assembly takes place in the United States. The meaning of final assembly is further described in the FTA guidance on Buy America Requirements, dated March 18, 1997, which applies to all buses manufactured on or after September 1, 1999 and purchased with FTA funds. Fourth, the requirement will not apply if the inclusion of domestic material will increase the overall project contract by more than 25 percent. Requests for Buy America waivers under the non-availability, price differential, and public interest exceptions require FTA approval but the waiver for rolling stock meeting the domestic content and final assembly requirements does not. FTA has issued a general waiver for selected items, including all purchases under the Federal small purchase threshold, currently $100,000.
TEA-21 included a provision which allows a manufacturer or supplier to correct an incomplete certification or a certification of noncompliance after bid opening under certain circumstances if submission of the incorrect certification was the result of an inadvertent or clerical error.
- ENVIRONMENTAL PROTECTION. The vehicles, radio and computer equipment and other related equipment items routinely purchased under the Section 5310 program do not involve significant environmental impacts. Those projects are referred to as "categorical exclusions" in FTA's procedures because those types of projects have been categorically excluded from FTA's requirements to prepare environmental documentation. If questions or concerns arise about any unusual projects proposed, the FTA regional office should be consulted regarding environmental requirements.
The Clean Air Act, as amended, establishes many new substantive requirements in order to bring into attainment by prescribed dates those air quality regions which currently violate the national ambient air quality standards. Of these requirements, Section 5310 grantees must be aware of the transportation/air quality conformity review process. In general, transportation plans, programs, and projects must be found to conform with approved state (air quality) implementation plans (SIP) before they can be funded by FHWA or FTA.
Other Clean Air Act requirements may apply to Section 5310 recipients, e.g., phase-in of more stringent bus emissions standards. The FTA regional office can supply up-to-date information on various provisions of the Clean Air Act related to mobile sources.
- COMMERCIAL DRIVER'S LICENSE. All drivers of vehicles designed to transport more than 15 persons (including the driver) must have a Commercial Driver's License (CDL). Mechanics who drive the vehicles must also have a CDL.
- PRIVATE SECTOR PARTICIPATION. Section 5323(a)(1) requires that FTA-funded projects provide for the participation of private mass transportation companies to the maximum extent feasible. While FTA no longer prescribes a particular private sector participation process, the basic requirement stands. The statewide and metropolitan planning process is assumed to adequately address private sector concerns. However, if the state's planning process does not address Section 5310 projects in rural transit areas in sufficient detail to provide adequate notice to potential private operators in those rural service areas, the state may need to adopt supplemental procedures to be able to make the required assurance.
- RESTRICTIONS ON LOBBYING. Federal financial assistance may not be used to influence any Member of Congress or an officer or employee of any agency in connection with the making of any Federal contract, grant, or cooperative agreement. The state, subrecipients, and third party contractors at any tier awarded FTA assistance exceeding $100,000 must sign a certification so stating and must disclose the expenditure of non-Federal funds for such purposes (49 C.F.R. Part 20). Other Federal laws also govern lobbying activities. For example, Federal funds may not be used for lobbying Congressional Representatives or Senators indirectly, such as by contributing to a lobbying organization or funding a grass-roots campaign to influence legislation (18 U.S.C. § 1352). General advocacy for transit and providing information to legislators about the services a recipient provides in the community are not prohibited, nor is using non-Federal funds for lobbying, so long as the required disclosures are made.
- DEBARMENT AND SUSPENSION. The purpose of the so-called "integrity" certification required of the state as primary grantee, and the second tier certification required of subrecipients and contractors receiving more than $100,000, is to ensure that Section 5310 funds are not given to anyone who has been debarred, suspended, ineligible, or voluntarily excluded from participation in federally-assisted transactions. Only contractors and subcontractors that receive contracts in excess of the Federal small purchase threshold (currently $100,000) must submit certifications. The U.S. General Services Administration (GSA) issues a document titled, "Lists of Parties Excluded from Federal Procurement or Nonprocurement Programs" monthly. The list is available on the GSA website: (http//www.gsa.gov/index). The burden of disclosure is on those debarred or suspended. If at any time the grantee or other covered entity learns that a certification it made or received was erroneous when submitted or if circumstances have changed, disclosure to FTA is required.
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Chapter VII: State Management Plans
- GENERAL. The state management plan (SMP) is a document which describes the state's policies and procedures for administering the Section 5310 program. Each state is required to have an approved SMP on file with the appropriate FTA regional office and to update it regularly to incorporate changes in program management or new requirements. An opportunity for public comment should be allowed before significant revisions are made. The state may include the SMP for the Section 5311 program in the same document. Certain contents of the SMP, such as the project selection criteria, should be coordinated with the Statewide Transportation Plan. All public documents developed under a grant from FTA must be prepared and submitted in electronic format.
- PURPOSE. The SMP is intended to facilitate both state management and FTA oversight by documenting the state's procedures and policies for administering the Section 5310 program. The SMP should be a document which is useful to the state and subrecipients, as well as to FTA. At a minimum, this document must include the state's program objectives, policies, procedures, and administrative requirements, in a form readily accessible to potential local subrecipients, state staff, FTA, and the public. The SMP's primary purposes are to serve as the basis for FTA to perform state-level management reviews of the program, and to provide public information on the state's administration of the Section 5310 program. It may also be used internally by the state as a program guide for local project applicants. If the state has relevant documentation that provides the same information requested for the SMP, that documentation may be included by reference, as an attachment.
- STATE MANAGEMENT PLAN CONTENT. While there is no prescribed format for the SMP, the plan should address the following topics and provide the information as requested for each topic below:
- Program Goals and Objectives. Describe the philosophy and policy underlying the state's management of the Section 5310 program. Include a description of any process which exists for establishing long-term goals for providing transportation service to elderly persons and persons with disabilities in the state.
- Roles and Responsibilities. Specify the agency designated by the Governor to administer the Section 5310 program. The respective roles and responsibilities of the state agency and its subdivisions, other state agencies or review boards, local governments, private providers, local applicants, and other involved parties should be clearly explained.
- Eligible Subrecipients. Describe which entities are eligible to apply for funds, and describe any state eligibility requirements that are more restrictive than Federal eligibility requirements. Include criteria used to determine which public bodies are approved by the state to apply for Section 5310 funding as coordinators of services for elderly persons and persons with disabilities, as well as criteria used for public bodies certifying that there are no nonprofit organizations readily available in an area to provide Section 5310 service.
- Local Share and Local Funding Requirements. Describe any state policies on provision of local matching share. Include a description of any state programs which provide matching funds for Section 5310.
- Project Selection Criteria and Method of Distributing Funds. Describe the state's criteria for selecting projects and distributing funds among various applicants. Whether the state uses a formula for allocation, imposes its own limitations on use of the funds, or uses an entirely discretionary selection process, the policy rationale and the methods used should be explained. This description should cover the state's procedures for assuring equity of distribution of benefits among eligible groups within the state, as required by Title VI of the Civil Rights Act.
- Annual Program of Projects Development and Approval Process. The state's process and timetable for soliciting, reviewing, and approving applications for local projects to be included in the state's annual program of projects should be described. Instructions to potential subrecipients on how to prepare local project applications may be included. In addition, describe any policy the state has for transfer of Section 5310 funds to Section 5311 or 5307 programs, and for transfer of flexible funds.
- Coordination. Describe how the state coordinates with other agencies at the state level and encourages and enhances coordination at the project level. This could include a description of any state level coordinating mechanisms, legislation, review boards, and state policies that encourage or mandate coordination at the local level.
- Private Sector Participation. Describe the state's procedures for providing for maximum feasible participation by private mass transportation providers.
- Civil Rights. Describe how the state meets Federal civil rights requirements and monitors subrecipients to ensure compliance with the requirements of Title VI, EEO, and DBE. The state management plan must include the program-specific Title VI requirements detailed in Chapter VI, paragraphs 1b(3)(a)-(d), including the state's efforts to assist minority applicants and to include subrecipients serving significant minority populations. (Inclusion in the state management plan may satisfy certain requirements for one-time submissions in the civil rights areas.)
- Section 504 and ADA Reporting. Describe the state's method for monitoring subrecipients' compliance with Section 504 and ADA regulations and for processing the plans, reports and certifications submitted to it under the provisions of those regulations.
- Other Provisions. Describe the process by which the state complies with other Federal requirements such as environmental protection, Buy America provisions, pre-award and post-delivery reviews, restrictions on lobbying, prohibition on exclusive school transportation, and Drug and Alcohol Testing.
- State Program Management. Describe how the state administers its program management responsibilities in such areas as procurement, financial management, property management, vehicle use, maintenance and disposition, accounting systems, audit and close-out. In addition, include any state procedures for management or financial reviews and project monitoring or on-site reviews. Describe any standards set by the state for matters such as productivity, cost-effectiveness, or service standards. Detail any state reporting requirements.
- STATE MANAGEMENT PLAN REVISIONS. All states must have an SMP approved by FTA on file with the FTA regional office. An approved SMP remains valid until FTA approves a later plan submitted by the state, or an FTA state management review results in a specific request for a revised SMP, or when significant new program documentation requirements are announced by FTA. The state is strongly encouraged to issue timely revisions to the SMP, particularly when information helpful to minority applicants, subrecipients, and third party contractors is involved. When major changes to the SMP are proposed, the state should give an opportunity to comment at the minimum to potential subrecipients of assistance, potential service providers, other state agencies and representatives of other funding sources, and any relevant state associations and professional organizations.
If revisions are substantive but not pervasive, the state may submit changes and additions in the form of page changes which can be approved by FTA and incorporated into the SMP on file. If the SMP is changed significantly, however, the state should submit the entire revised plan to FTA for approval. The state is responsible for ensuring that FTA has a complete copy of the current SMP. Minor changes and technical corrections may be submitted to FTA to update the approved plan, without the need for additional FTA approval. The state should ensure that its SMP reflects current requirements of this circular, and revise the SMP if necessary.
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