Transit Research And Technology Programs: Application Instructions And Program Management Guidelines
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Table of Contents
Attachment: Dear Colleague Letter
Many positive changes have occurred in the Federal Transit Administration (FTA) over the past several years, and consequently, FTA Guidance Circulars have become outdated and in need of revision. I am happy to provide you with a comprehensive revision of FTA Circular 6100.1C, Transit Research and Technology Programs: Application Instructions and Program Management Guidelines.
The revised circular is intended to clarify application procedures, project administration and management guidelines that apply to individual projects and activities within FTA's National Research Program and other affiliated Federal research programs in which FTA takes a lead role. Among these affiliated Federal research programs are the Intelligent Transportation Systems (ITA) program, the new technology capital program, and others specifically authorized by law. To the extent appropriate, projects undertaken through the International Mass Transportation Program and the Joint Partnership Program for the Deployment of Innovation will also be administered in accordance with these guidelines.
The FTA has established an electronic system for application, award and management of FTA projects called the Transportation Electronic Award and Management (TEAM) system, commonly referred to as TEAM-Web. This system is accessible via ftateamweb.fta.dot.gov and enables project recipients to submit their project applications directly via the Internet. Real time access to detailed disbursements by project, balances in project budget accounts, the status of applications in the award projects are also available on-line. Additionally, TEAM-Web has a feature that allows you to submit supporting documentation by allowing the attachment of files to an application or quarterly report. The new system also has an email notification process that will increase the productivity of staff by forcing accountability when processing applications through the FTA and the Department of Labor.
FTA's Office of Research, Demonstration, and Innovation (TRI) is assigned responsibility for administering most projects covered by this circular. However, other FTA offices will also take a role in administering certain projects as may be necessary or desirable. Please direct any questions and comments regarding this circular to email@example.com for a prompt response.
Jennifer L. Dorn
Chapter II: Application Procedures
1. OVERVIEW OF APPLICATION PROCESS. FTA research and technology funds for the current year are typically fully programmed, with none available for unsolicited applications; potential applicants are encouraged to communicate with FTA before submitting a formal application.
In order to obtain funding for National Planning and Research Program projects and related Federal research and technology programs, FTA requires two submissions: a pre-application proposal, and a formal application. FTA reviews the pre-application proposal, and:
a. Determines the relative merit of the proposed project according to the criteria established by FTA; and
b. Then reviews the proposed work statement.
Applicants proposing projects that merit further consideration will be requested to submit a formal application; other applicants will be advised that their proposed projects are not being considered for funding. FTA generally responds to pre-application proposals within 120 days after receipt of the pre-application proposal.
FTA prefers that recipients submit formal applications electronically using FTA's Transportation Electronic Award and Management system (TEAM).
2. FTA'S TRANSPORTATION ELECTRONIC AWARD AND MANAGEMENT SYSTEM. FTA's transportation electronic award and management system is an automated system designed by FTA to improve customer service and efficiency of program delivery, allow recipients to apply for Federal funds from their personal computers, seamlessly receive information about their requests and provide overall project management. FTA provides a streamlined electronic interface between recipients and FTA that allows complete electronic grant application submission, review, approval, and management of all projects. Recipients may inquire about the status of projects, file their required quarterly financial status and narrative progress reports, and make annual certifications and assurances through the system. FTA's transportation electronic award and management system is fully developed, the Department of Labor (DOL) also participates in the program by receiving requests (electronically) for projects requiring Transit Employee Protective Certification, and DOL will be able to issue electronically the Transit Employee Protective Certifications.
3. APPLICATION PACKAGE. In order to submit an application electronically, an applicant must provide the information requested by the FTA transportation electronic award and management system and follow the instructions therein. FTA Headquarters staff will provide assistance as needed. Applicants not using FTA's transportation electronic award and management system must submit an original and one copy of the application to the appropriate FTA Headquarters Office accompanied by an electronic version on a floppy disk (or zip disk) or submitted concurrently by e-mail. NOTE: Headquarters staff will forward the application to the Department of Labor for certification of transit employee protective arrangements, if the scope of the work involves transit operations.
4. PREPARING A PROJECT BUDGET. This paragraph provides information about the items that appear on an Approved Project Budget and instructions for preparing a project budget. FTA has developed a single coded line item structure that can be used for any FTA project budget. The project budget is submitted as an integral part of a project application. The total recipient activity line item costs and the amount eligible as the Federal share must equal the total project cost. The total project budget must be allocated between one or more of a series of scope codes and Activity Line Items (ALI). The budget includes only those funds being requested from FTA with any recipient match for a single, defined project. Any potential future funds should not be included in the budget.
In preparing a budget, first you select the appropriate scope code for the project to group the ALI codes that are related in purpose and objective. Secondly, you list the ALI codes pertinent to the project. FTA's transportation electronic award and management system ALI codes are six digit numerical codes in project budgets that are associated with the implementation of specific project activities. Projects using Federal research funds must use the appropriate research scope code and the activity line item codes for each distinct portion of the project.
FTA uses, at the most general level, a scope code to establish the purpose of a project. Under the scope, a set of related activities are brought together to help achieve the project's purpose/scope. Every grant or cooperative agreement consists of: (1) one or more scopes (major code/subject area), and (2) subdivisions called activity line items. Collectively, the scope and its group of activities make-up a project tasks to be undertaken. Use accurate activity line items for the project budget. The activity line items in this circular for research and planning projects are suggested activity line items. Consequently, all FTA funded research projects must use the appropriate
a. Research scope code; and
b. Activity line item code.
An example of a scope code is "55.00.00-Develop Prototype." An example of an activity line item code is "55.14.00-Managerial, Technical, & Professional." The activity line items used for research and planning projects are suggested classifications. You must give accurate budget activity information; therefore, you should modify and/or add activity line items appropriately.
5. FTA ASSISTANCE. One of FTA's major responsibilities is to provide assistance to applicants in preparing their applications. Also, FTA staff can advise how specific laws, regulations, Federal Register notices, and Executive Orders may be obtained and how they may apply to a proposed project. The FTA website, www.fta.dot.gov, contains much of the information and guidance needed by applicants.
6. REVIEW TIME. FTA staff and/or management will review a draft application expeditiously, and provide comments, if appropriate, to applicants to ensure the completeness of the information provided.
7. COMPLETE APPLICATION. For a recipient application to be complete, all planning, programming, and ancillary activities must be completed. All requisite certifications, assurances, and other documentation must be completed, and the application must be in approvable form with all required information and documentation, except for the labor protection certification, which is issued by Department of Labor (DOL). All intergovernmental review and all applicable civil rights, alcohol misuse, and prohibited drug use program requirements must have been met.
8. HEADQUARTERS PROGRAM OFFICES. All correspondence and technology information regarding the National Planning and Research Programs (including research, development, demonstration and training projects [49 U.S.C. Sections 5312; 5314; 5309(a)(1)(D)]; planning studies [49 U.S.C. Section 5303(g)]; and human resource program [49 U.S.C. Section 5322], and other miscellaneous projects should be submitted to the appropriate Headquarters office listed below.
a. The Office of Research, Demonstration and Innovation [49 U.S.C. Sections 5312, 5314, 5309(a)(1)(D), Intelligent Transportation System research, and other miscellaneous research, joint partnership, international program, and technology programs]:
Associate Administrator for Research, Demonstration and Innovation
b. The Office of Planning [Section 5303] and [Section 5314]:
c. The Office of Budget and Policy [Sections 5312 and 5314]:
d. The Office of Civil Rights, Human Resources Program, [Section 5322 and 5314]:
9. PRE-APPLICATION PROCEDURES. Although FTA will consider a pre-application at any time of the year, all potential applicants are encouraged to communicate with FTA before submitting a formal application.
In the case of projects directed by Congress, the sponsor of the project should initiate contact with the FTA to avoid substantial delay in FTA's ascertaining the identity of the sponsor.
a. Preliminary Contact. This initial contact should be made by e-mail to [firstname.lastname@example.org] or by mail or fax to the relevant FTA office. Preliminary contact is used to:
(1) Determine the applicant's eligibility.
(2) Determine how well the project can compete with similar projects;
(3) Discourage any proposals that have little or no chance for Federal funding before applicants incur the expenditures involved in preparing a detailed application; and
(4) Determine conformance to FTA's policy and program objectives and funding availability.
b. Submission Guidance. The applicant should submit a project narrative statement describing the objective, proposed work tasks, output, and benefits of the proposed project for which Federal assistance is being requested. The narrative should also indicate whether matching funds would be provided, the expected duration of the project, and other information that would assist FTA to understand and evaluate the project.
The standard submission for a project narrative statement is 2-5 pages and must include the information listed in the outline below:
(1) Project Objective. A concise statement of the intended project goal.
(2) Statement of the Problem(s). A description of the problem to be addressed by the proposed project.
(3) Project Description. A description of the proposed project activities to be undertaken in detail by major task with principal output, identification of the person or organization to be responsible for the development, coordination and management of specific activities. The relationship of the proposed project to the problem(s) identified in the previous statement should be stated.
(4) Identify Major Technology Transfer/Dissemination/Outputs. For example, reports (interim, final or other), products, brochures, outreach meetings, etc.
(5) Project Schedule. A project schedule must be presented, including schedule of major tasks, and an overall project schedule. The schedule should be realistic.
(6) Benefits and Beneficiaries. The anticipated benefits and the targeted beneficiaries must be described, including quantification or measure of the potential impact. Be as specific as possible.
(7) Strategic Goals. List which goals of the latest FTA Strategic Business Plan and which elements of the FTA Research and Technology Business Plan will be furthered by the project's results.
(8) Project Budget Justification. If appropriate, discuss specifics about the proposed project budget or breakdown by the given categories, and supplemental information to justify the need for such expenditures. If the budget line items are self-evident, no justification will be necessary. For guidance on allowable costs, refer to the appropriate administrative circular issued by OMB that applies.
(9) Project Timing. If appropriate, discuss other pending projects or program activities that may relate to and affect the timing of the proposed project. If there are no special considerations affecting the timing of the proposed project, indicate "N/A."
10. FORMAL APPLICATION PROCEDURES. An applicant whose pre-application has received a favorable review by FTA will be asked to submit a formal application.
In many cases, the requirements of a current research program will lead FTA to solicit proposals from one or more prospective recipients. This may be done formally or informally, and may be competitive or noncompetitive, depending on the research program requirements.
11. FORMAL APPLICATION CHECKLIST. This paragraph contains a brief synopsis of items that must appear in an application for Research and Technology funds. The section also contains a list of items that must be submitted periodically to FTA, but not necessarily at the time of the application. See Exhibit V for a detailed list of Application Contents and Prerequisites arrayed by FTA statutory funding area. References are made, where appropriate, to paragraphs elsewhere in this document that contain detailed information for use in preparing an application. In addition to the information listed, FTA reserves the right to request additional information or documents specific to the application.
a. Application Contents is a list of items of information that FTA expects to receive with each application, with additional text as necessary included within the "extended text field." Applicants often use the extended text field to describe briefly the scope of work and to include information concerning significant or unusual aspects of the application. Additional text may be attached to the electronic application via the attachment feature.
b. Approval Prerequisites contains information items FTA requires before FTA may award a grant or cooperative agreement. Current information is required and may be submitted in the application if not reflected in FTA record. When applying for a Federal project through the Federal E-grant portal a Dunn and Bradstreet (DUNS) number will be required. Therefore, FTA now requires that each FTA applicant have a DUNS number that will be maintained as part of the applicant's profile. This number can be obtained free through Dunn and Bradstreet.
(1) Contents for a Formal Application. Each application must contain the following:
(2) Possible Project Requirements. The following requirements may or may not apply to the proposed project. Relevance is determined by various factors involved in the project. Applicants should communicate with the FTA project manager in order to develop an understanding of these requirements. If steps are not taken to meet applicable requirements, delays may occur in project approval:
12. APPLICATION CONTENTS. The following information should be submitted or be in FTA's records for each application for Research and Technology Funds. Some information need only be included if the information's purpose fits the nature of the application.
a. Fields in FTA's transportation electronic award and management system. The electronic application requires submission of the same information as in a paper application. Within FTA's transportation electronic award and management system are fields in which the requisite information must be entered. Some fields permit only limited data, while extended text fields permit the recipient applicant to enter as much information as is deemed necessary to complete the application. For example, information formerly included in a transmittal letter may be entered in the extended text field of the project information window, and may be used to provide information about the status of any outstanding actions required, and/or to enter other qualifying information deemed appropriate. If a transmittal letter is submitted, an authorized official must sign the transmittal letter.
b. Standard Form 424. All information required by Office of Management and Budget Standard Form 424, "Application for Federal Assistance," must be entered in the appropriate fields of the FTA's transportation electronic award and management system. This information must be completed in its entirety. The authorized official identified in the Authorizing Resolution, relative to the annual certifications and assurances, must attest to information pertaining to any delinquent indebtedness to the
U.S. Government. An Applicant must retain in its official file the original/signature Authorizing Resolution (to the extent the Applicant is required to obtain a resolution before it may act) or other indicia of its authority to act, and opinion of counsel, unless requested in writing by FTA. See Exhibit VI to locate form.
c. Budget Information. FTA uses the same budget format for all project programs it administers. For electronic applications, the project budget windows must be completed. The budget submitted must enumerate a list of tasks, project phases, stages or deliverables and the estimated amounts of Federal and total funds for each. Applicants are asked to provide details of proposed projects according to the Activity Line Item (ALI) Code Chart.
(1) Project Level Description and Justification. This information must be in sufficient detail for FTA to obtain a general understanding of the nature and purpose of the planned activities. In FTA's transportation electronic award and management system, there is a specific text field for this information associated with each activity line item. The applicant must briefly summarize the task, project phases, stages or deliverables.
(2) Project Milestone Schedule. In FTA's transportation electronic award and management system, there is a specific window for estimated milestones in the grant or cooperative agreement application menu. This schedule consists of estimated milestone dates for major activities and products and an overall project completion date. Estimated milestone dates should be included for such events as bid advertisement, bid award, contract completion, prototype fabrication, completion of field operational testing, technical report completion, etc. The overall project completion date should allow for audit and closeout of all third-party contracts. For each milestone, any detail information should be placed in the remarks or comment area. Milestones can be attached to the scope of the project or activity line items.
13. PROJECT DESCRIPTION. The following should be included as part of the formal application:
a. Project Narrative. The Project Narrative consists of a detailed explanation of the proposed Project and justification in support of Federal assistance. The scope of the proposed project should be described in detail, and it's funding justified in terms of the need and benefits consistent with the purposes identified in the appropriate program in the current legislation. The proposed project narrative should also indicate the recipient's justification for using Sections 5303, 5309, 5312, or 5314 funding rather than other sources of funding, as well as the impact on and applicability of the proposed project to the entire transit industry. 49 C.F.R. Parts 18 and 19 promulgate the basic project narrative requirements. The FTA program office may request other information to properly evaluate the proposed project.
b. Other Information. In addition, the applicant should complete the actions listed below and submit documentation to support its formal application.
c. Objective(s) and Need for Assistance. State the principal and subordinate objectives of the project. Identify any relevant physical, economic, social, technological, financial, institutional, or other problems requiring a solution. Demonstrate the need for the assistance. Supporting documentation or other information from concerned interests other than the applicant may be used. Any relevant data based on planning studies should be included or footnoted.
d. Results or Benefits Expected. Identify costs and benefits to be derived from the proposed project. Describe specifically how the work to be performed will benefit the transit industry (riders, management, employees, etc.), e.g., increase ridership; reduce initial or operating costs; improve vehicle or system performance; improve passenger information systems; improve safety; improve the environment, etc.
(1) Outline a plan of action organized by work task pertaining to the scope and detail of how the proposed work will be accomplished for the assistance program, function or activity provided in the budget. Cite factors that might accelerate or impede the work and the reason for taking the approach described as opposed to others. Describe any unusual features of the project, such as design or technological innovations, reductions in cost or time, benefits to riders, or extraordinary social and community involvement.
(2) Describe the anticipated accomplishments to be achieved in qualitative or quantitative terms. Quantitative measures could include the number of riders; equipment reliability, data to be gathered or other measure of goal achievement. When accomplishments cannot be quantified by activity or function, list them in chronological order to show the schedule of accomplishments and their target dates. Performance measures could include interim report submissions.
(3) Identify the kinds of data to be collected and maintained, and discuss the criteria to be used to evaluate the results and successes of the project. Explain the methodology that will be used to determine if the needs identified and discussed are being met and if the results and benefits identified in item 2 are being achieved. List each organization, operator, consultant, or other key individuals who will work on the project, along with a short description of their effort or contribution.
f. Geographic Location. Give a precise location of the project and identify the area(s), and target group(s) to be served by the proposed effort. Maps or other graphic aids may be attached.
g. If Applicable, Provide the Following Information.
(1) For research and demonstration assistance requests, present a brief biographical sketch of the program director with the following information: name, address, telephone number, background, and other qualifying experience. Also, list the name and background for other key personnel engaged in the project.
(2) For supplemental assistance requests, explain the reason for the request and justify the need for additional funding. Discuss accomplishments to date and list in chronological order a schedule of accomplishments, progress or milestones anticipated with the funding request. If there have been significant changes in the project objectives, location, approach, or time delays, explain and justify. For other requests for changes or amendments, explain the reason for the change(s). If the scope or objectives have changed or an extension of time is necessary, explain the circumstances and justify. If the total budget has been exceeded, or if the individual budget items have changed more than the prescribed limits contained in 49 C.F.R. Part 18 or 19, explain and justify the need for additional funding.
14. EXECUTIVE ORDER NO. 12372 - STATE REVIEW PROCESS. Executive Order No. 12372, 31 U.S.C. Section 6506 note, establishes a system of intergovernmental consultation between State and local officials that involves a State process for reviewing Federal programs and activities. The requirement is to ensure that the appropriate State authorities are informed about and provided an opportunity to comment on projects for which Federal assistance is being provided within the State. Many States have their own review procedures, which describe what recipient applicants need to do to satisfy intergovernmental review requirements. Each applicant is required to submit with each application a certification of compliance with this intergovernmental review requirement. See Exhibit VI for Executive Order No. 12372 Provisions. If there is no intergovernmental review process in the recipient applicant's State, then programming of a project in the metropolitan transportation improvement program (TIP) and statewide transportation improvement program (STIP), or Unified Planning Work Program (UPWP), as appropriate, will be considered by FTA as meeting the need for intergovernmental review. The U.S. DOT has issued implementing regulations, "Intergovernmental Review of Department of Transportation Programs and Activities," 49 C.F.R. Part 17.
Any comments on the proposed activities received through the State process prior to filing the application should be included. The official list of Single Point of Contact (SPOC) entities can be found at the web address: http://www.whitehouse.gov/omb/grants/spoc.html.
15. ENVIRONMENTAL CONSIDERATION. The National Environmental Policy Act (NEPA) is the primary statute governing FTA's environmental protection process. Objectives of NEPA are implemented mainly through two regulations: The Council on Environmental Quality regulation implementing the procedural provisions of NEPA (40 C.F.R. Part 1500), and the joint FHWA/FTA environmental impact and related procedures (23 C.F.R. Part 771).
FTA's environmental regulation identifies three classes of actions requiring different levels of environmental documentation and gives examples of typical projects in each class.
a. Class I actions are projects that have significant environmental effects and, therefore, require preparation of an Environmental Impact Statement.
b. Class II actions are those that normally do not involve significant environmental effects and, therefore, do not require any environmental document. The regulation contains examples of such projects, known as "categorical exclusions."
c. Class III actions are projects for which FTA is uncertain as to the significance of environmental effects. A brief Environmental Assessment is required in order to determine the significance of the effects. The FTA environmental regulations describe environmental processing for all three classes of actions.
Section 5314 and 5309(a)(1)(D) projects usually involve research into a defined problem, technology development or demonstration, transit service development or demonstration, changes in administrative or institutional procedures or services, etc., that rarely would have significant environmental effects. Section 5309(a)(1)(D) projects may involve new technologies that likewise infrequently have significant environmental effects. So it is unlikely that applicants for Sections 5309, 5312, 5314 or other research or technology grant or cooperative agreements would be required to prepare an Environmental Impact Statement. However, the applicant and the responsible FTA official reviewing the project should determine what Class (I, II or III) environmental action is being considered and proceed accordingly. FTA's policy is to comply with all related environmental laws and regulations, to the fullest extent possible, within any environmental document submitted to comply with NEPA.
Applicants should refer to Part 77.117(c) and (d) for a listing of the Class II projects that normally meet the criteria for a categorical exclusion, and must submit proposed classifications for each project, if appropriate, supporting information or documentation. The specific electronic window designed for this information is part of the application menu.
16. MASTER AGREEMENT. FTA uses an abbreviated grant or cooperative agreement that incorporates by reference in a Master Agreement most terms and conditions applicable to the FTA project for which a grant or cooperative agreement is proposed for award. The Master Agreement incorporates statutory and other standard conditions that must be agreed to in writing by recipient. Recipients can review master agreements on FTA's Internet web address [http://www.fta.dot.gov/] site, or may request a copy from Headquarters. Each recipient is expected to retain the applicable Master Agreement on file. Certain types of FTA grants, e.g., Joint Partnership Projects, may use agreements with revised terms and conditions.
17. PUBLIC HEARING REQUIREMENTS. Under 49 U.S.C. Section 5323(b), any application for Section 5312, 5309 or 5314 grant or cooperative agreement for projects involving acquisition, construction, reconstruction or improvement of facilities or equipment that will substantially affect a community or its mass transportation service shall include a certification to the effect that the applicant has:
a. Provided an adequate opportunity for a public hearing with adequate prior notice;
b. Held that hearing unless no one with a significant economic, social, or environmental interest requested one;
c. Considered the economic, social, and environmental effects of the project; and
d. found that the project is consistent with official plans for developing the urban area.
18. LABOR PROTECTIONS.
a. Davis-Bacon Act. For FTA programs, 49 U.S.C. Section 5333(a) imposes Davis-Bacon Act prevailing wage requirements. This provision applies only to construction projects. In the event that a project involves construction, Section 5333(b) of the Act requires the Secretary to take such action as may be necessary to ensure that all laborers and mechanics employed by contractors or subcontractors in the performance of construction work financed with the assistance of loans or grants under this Act be paid wages at rates not less than those prevailing on similar construction in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon Act, as amended. The Secretary may not approve any such loan or grant without first obtaining "adequate assurance" that required labor standards would be maintained upon the construction work.
b. Transit Employee Protection. For FTA projects involving transit operations, 49 U.S.C. Section 5333(b) requires certification by the U.S. Department of Labor (DOL). Applicants whose projects affect transit operations will need to furnish specific information as to involvement of non-management employees in the project. If applicable, this exhibit should describe the labor unions (a list of names of the local affiliates) representing employees of the transit system(s) affected by the project. Applicants whose projects do not affect transit operations, or which are not unionized, and which, therefore, are not affected by this requirement, should make a statement to that effect.
Ordinarily, Section 5333(b) certification may not be required, if the project does not involve or affect transit operations. FTA will make a determination on the need for DOL clearance. Consult the FTA project manager for further information regarding the need for DOL clearance.
19. CIVIL RIGHTS COMPLIANCE. Refer to the Civil Rights Requirements in Chapter III.
20. DISADVANTAGED BUSINESS ENTERPRISE REQUIREMENTS. The Department of Transportation (DOT) Disadvantaged Business Enterprise program seeks to ensure nondiscrimination in the award and administration of DOT-assisted contracts in the Department's highway, transit, and airport financial assistance programs, and to create a level playing field on which DBEs can compete fairly for DOT-assisted contracts, consistent with constitutional legal principles. Regulatory requirements applicable to the program are contained in Title 49 Code of Federal Regulations (CFR) Part 26. All recipients of transit financial assistance identified in 49 CFR Section 26.3 must comply with the requirements of 49 CFR Part 26, Subpart A, except as discussed in the following paragraph.
Recipients of financial assistance under programs covered by this Circular are not required to have a DBE program or set DBE participation goals required under Subpart B, Section 26.21, unless the recipient also receives financial assistance under other highway, transit, or airport programs that require a DBE Program under Subpart B section 26.21.
Recipients not required to have a DBE program do not have to comply with the recordkeeping and reporting requirements of Subpart A, Section 26.11(b) or (c)(1) or Subparts B, C, D, E, or F.
Recipients of financial assistance programs covered by this Circular required to have a DBE program and set DBE participation goals must comply with all of Part 26 and must include contracting opportunities arising out of financial assistance provided and covered by this Circular in the base for calculating overall DBE goals in accordance with Subpart C section 26.45.
21. LOBBYING. A certification and, when appropriate, a completed disclosure form must be submitted by the recipient applicant in accordance with 31 U.S.C. Section 1352, "Limitation on use of appropriated funds to influence certain Federal contracting and financial transactions," and U.S. DOT implementing regulations, "New Restrictions on Lobbying" (49 C.F.R Part 20). Section 1352 requires that all persons (meaning organizations as well as individuals) that request or receive Federal contracts, grant or cooperative agreements exceeding $100,000, submit a certification that Federal appropriated funds were not used to influence or attempt to influence the transactions. Recipients and contractors are required to disclose certain lobbying activities conducted with funds derived from other than Federal sources. If anyone is hired to lobby on behalf of the potential recipient requesting the Federal funds, Section 1352 requires that a disclosure statement, Standard Form LLL (rev. 7-97), be completed naming the lobbyists and the amounts paid to them. These requirements also apply to sub-recipients and subcontractors.
22. CERTIFICATIONS AND ASSURANCES.
a. Introduction. Before FTA may award a project, the applicant must provide to FTA all certifications and assurances required of the applicant by Federal laws and regulations. The certifications and assurances are consolidated by FTA each Federal fiscal year into a single document that provides the text of the certifications and assurances to be used in connection with all Federal assistance programs administered by FTA during that fiscal year. The certifications and assurances are normally published in the Federal Register notice on the same date that FTA announces the formula apportionments. By statute, FTA must announce the formula apportionments on October 1, or within 10 days of enactment of the DOT Appropriations Act, whichever is later.
An applicant need only submit the certifications and assurances once annually. The FTA is required to obtain specific assurances pertaining to the National Planning and Research Program. The certification required by DOT regulation (49 C.F.R. Part 17), "Intergovernmental Review of Department of Transportation Programs and Activities," is submitted with each application. [Annual List of Certifications and Assurances]. The certifications and assurances the recipient applicant attests to will remain valid for one year or until FTA publishes the next version.
b. Electronic Submittal. FTA expects recipient applications and certifications and assurances to be submitted electronically by means of the FTA's transportation electronic award and management system. If an applicant is not able to submit the certifications electronically, the applicant should obtain a copy of the Federal Register Notice containing the current fiscal year's certifications and use the form contained in that Federal Register to submit the actual certifications. The Signature Page shown in the current Federal fiscal year's compilation in the Federal Register must be used.
c. Compliance. The certifications and assurances, when properly attested to and submitted to FTA, either through FTA's transportation electronic award and management system, or in hard copy on the Signature Page, assures FTA that the applicant intends to comply with the requirements for the specific program involved.
d. Timing. The certifications and assurances must be submitted and attested to annually by a recipient applicant or with the recipient applicant's first grant or cooperative agreement application in the Federal fiscal year, whichever is first.
e. Action Required. The authorized representative of the applicant and the recipient's attorney must make the requisite certifications by:
(1) Attesting to the certifications and assurances electronically with a personal identification number (PIN) or a handwritten signature on the Signature Page; and
(2) Selecting each assurance or certification category that will apply to the applicant's project for the fiscal year; or
(3) For a Signature Page accompanying a hard copy submission, selecting the first item at the top of that page, signifying that the applicant will comply with all categories of certifications and assurances.
23. REQUIREMENT FOR CURRENT AFFIRMATION. FTA requires a current attorney's affirmation of the recipient applicant's legal authority to certify compliance with that fiscal year's FTA funding assistance. The attorney's affirmation from previous years is not acceptable.
24. SUPPLEMENTARY INFORMATION. These Certifications and Assurances are used for all FTA assistance programs. FTA also uses these Certifications and Assurances for Federal assistance programs authorized by Title 23, United States Code, administered by FTA.
25. COMMONLY OVERLOOKED ITEMS. The following is a list of the most commonly overlooked application submissions. A review of these items may prevent delays.
a. Sufficient project level description/associated cost information;
b. Submit anticipated layout of financial expenditures of the project or program budget. Identify these expenditures by activity line items for the completion of the project;
c. Prior to project or program drawdowns, submit a report identifying the tasks and the phases, or stages of the activities of each task that have incurred expenditures. Also, identify the appropriate activity line items from the project budget that cost has occurred. Upon the FTA project manager's request, when you submit a type of status report, it must coincide with the expenditures to date by the activity line items that will occur to complete the project;
d. Correct certification and assurance submissions.
26. PROJECT APPROVAL.
a. Notification. After FTA has awarded funds for a project, the applicant will be notified through FTA's transportation electronic award and management system and by e-mail or a telephone call. However, if a project has been awarded on paper, then an "award letter" will notify the recipient. This letter will indicate the date of the award, and set forth any special conditions under which the project is approved. The date of award is the date that authorizes the recipient to incur project costs. Copies of agreements for execution and an approved project budget will accompany the award letter. NOTE: FTA can begin to participate in a project under which work has already begun, but cannot pay for costs incurred prior to the award letter. Absent special circumstances, costs incurred prior to FTA award are not eligible as project expenses. Absent highly unusual circumstances, FTA cannot retroactively approve a project.
b. Execution of the FTA Agreement. The authorizing official and the attorney should execute the project by entering their personal identification number (PIN) in the appropriate places and forward or resubmit the project agreement to FTA. The recipient should e-mail or call the project manager to alert him or her that the project has been executed. For paper awards, the relevant FTA office (or its designee) will send four copies of the FTA agreement to the recipient after project approval. The recipient should execute and date the copies in accordance with the instructions provided and return two copies of the FTA agreement to the FTA Office of Chief Counsel per the instructions. FTA should be advised promptly if the recipient is unable to execute the FTA agreement within 90 days after the obligation date, (i.e., the date on which FTA officially approved a project).
c. Cost Eligibility and Payment Method. Absent any type of pre-award authority, the recipient may begin to incur project costs as of the date the authorized FTA official signs (or pins) the award. Requests for reimbursements will not be honored until the grant or cooperative agreement has been awarded by FTA, executed by the recipient and returned to FTA. The Automated Clearing House Method (ACH) makes electronic payments based on costs incurred by the recipient. For further information on reimbursement methods, see Chapter V.
Chapter III: Project Administration And Management
1. GENERAL. This circular describes the process and provides guidelines and procedures for management of FTA projects.
2. RECIPIENT RESPONSIBILITIES FOR PROJECT MANAGEMENT. The recipient is responsible for the administration and management of the approved project, including compliance with the terms and conditions of the agreement with FTA, i.e., the requirements stated in this Circular, other applicable government circulars and regulations, and the work program as outlined in the application. The relevant FTA program office provides project management oversight and guidance.
FTA expects its recipients to exercise strong management and closely monitor their projects. In order to achieve completion of a project within the original budget and schedule, it is necessary for the applicant to develop a detailed and thorough work plan, usually described in a series of tasks. This "Statement of Work" will be the roadmap to achieving the project objectives.
Management is the key to successful completion of a project. FTA expects its applicants to have a project manager who is able to carry out the work as described in the application, including managing project funds and any subcontractors. The project manager must be knowledgeable on the day-to-day status of the project, and be able to respond fully to any requests for information from FTA's project manager. Recipients must select project managers who possess technical knowledge of the project, and have demonstrable management skills. Project managers also must have working knowledge of governmental processes in order to work cooperatively with the FTA project manager.
The recipient is also responsible for funds that "pass through" to a sub-recipient or third party contractors. Procedures for changes to an approved project are discussed later in this Chapter. FTA monitors projects to confirm that recipients establish and follow procedures that are reasonable and comply with FTA requirements. The recipient's responsibilities include actions that:
a. Provide continuous administrative and management direction of a project;
b. Provide, directly or by contract, adequate supervision by qualified professionals of all work in progress;
c. Assure conformity to the FTA agreements, applicable statutes, codes, ordinances, and/or industry safety standards;
d. Develop the project work schedule within the first month and maintain the schedule agreed to by FTA and the recipient, and constantly monitor grant activities to assure that schedules are met and other performance goals are being achieved;
e. Keep expenditures within the latest approved project budget;
f. Assure compliance with FTA requirements on the part of agencies, consultants, contractors, and subcontractors working under approved third party contracts or inter-agency agreements;
g. Request and withdraw Federal cash only in amounts and at times as needed to make payments that are immediately due and payable. Payments in advance of costs incurred are not allowed;
h. Account for project property (if funded under the approved project) and maintain property inventory records;
i. Arrange for an annual independent organization-wide audit in accordance with OMB Circular A-133, "Audits of States, Local Governments, and Non-Profit Organizations;"
j. Prepare and submit force account and cost allocation plans prior to incurring costs, if seeking reimbursement for these costs. Update and retain these approved documents for FTA upon request; and
k. Submit required progress, financial, and final reports to FTA in a timely manner in the prescribed format. (See Section 5 below, for requirements on technical and final reports.)
l. Submit a schedule of projected draw down for the duration of the project.
m. Submit to FTA detailed information regarding costs incurred. The submittal should clearly identify with each voucher the task/subtask (phase, stage, or other), as well as the specific line items associated.
3. PROJECT MANAGEMENT PLAN. At the request of FTA, all recipients of 49 U.S.C. Sections 5309(a)(1)(D), 5312, 5314, ITS, or other research funding for projects will, prior to starting work, prepare a comprehensive management plan to implement each task of the statement of activities, indicating subtasks and all activities necessary to accomplish each task and subtask. The management plan shall include a schedule of milestones and indicate labor hours and staff assignments for each subtask and activity to be undertaken. The outcome or final product must be indicated on the schedule of milestones. In addition, include a schedule or projected expenditure of the project or program draw down, whether quarterly, semi-annually or other, of the duration of the total project funds. The recipient must indicate the activity line items associated with each task and subtask. The activity line items are the activities that make up the approved project budget. Use accurate activity line items for your project. The management plan shall be submitted to FTA for approval. Resumes of each key staff member to be assigned to this project shall also be submitted to FTA. The recipient may incur minimal expenses, such as those directly related to the preparation of the management plan, until FTA approves the overall project plan.
4. CIVIL RIGHTS REQUIREMENTS. It is the responsibility of FTA to ensure that recipients are in compliance with all civil rights program requirements that apply to FTA-assisted projects and activities. Accordingly, all required civil rights program submissions must be approved by FTA and periodically updated in accordance with program guidelines. Civil rights requirements cover the following areas:
a. Service Delivery and Program Benefits;
b. Equal Employment Opportunity;
c. Disadvantaged Business Enterprise;
e. Age; and
f. The Elderly and Persons with Disabilities, and Access for Persons with Limited English Proficiency.
g. These program areas are detailed in the Annual List of Certifications and Assurances and in the Master Agreement. The discussion below addresses some, but not all, civil rights requirements.
(1) Nondiscrimination in Federal Transit Programs. The Surface Transportation Assistance Act of 1978 added a special nondiscrimination requirement to the Federal transit program by providing at 49 U.S.C. Section 5332, that no person on the basis of race, color, creed, national origin, sex, or age, shall be excluded from participation in, be denied the benefits of, or be subject to discrimination under any project, program or activity funded in whole or in part through Federal financial assistance under 49 U.S.C. Chapter 53.
These nondiscrimination provisions and associated affirmative action obligations apply to employment and business opportunities and are in addition to the provisions of Title VI of the Civil Rights Act of 1964.
(2) Title VI (Service Delivery/Benefits). Each recipient receiving Federal financial assistance pursuant to any section of 49 U.S.C. Chapter 53 or Title 23 U.S.C., covered by this circular, must have its Title VI submission approved by FTA, as specified in FTA Circular 4702.1, "Title VI Program Guidelines for Urban Mass Transportation Administration Recipients," and must annually certify compliance regarding the level and quality of transit service through the Annual Certifications and Assurances process. Once the initial Title VI submissions have been approved, updates are required every 3 years, unless otherwise requested by FTA.
(3) Equal Employment Opportunity (EEO) Program. Recipients with 50 or more employees that have received in the previous Federal fiscal year FTA grants, cooperative agreements, or contracts totaling over $250,000, must develop and submit for approval to FTA an EEO program. This requirement also applies to contractors (with more than 50 employees) that are engaged in providing transit services and receive some funds under Federal grant assistance. Areas covered by the EEO program are specified in FTA Circular 4704.1, "Equal Employment Opportunity Program Guidelines for FTA Recipients."
(4) Disadvantaged Business Enterprise (DBE) Program. Recipients of funding awarded by FTA must comply with the DBE requirements of Section 1101(b) of TEA-21 and the DOT Disadvantaged Business Enterprise Regulation (49 C.F.R. Part 26), which supports participation of socially and economically disadvantaged individuals including women. However, a Section 5314 recipient not otherwise required to submit a DBE program, as described in the regulations, is not required to do so simply because it receives research and development funding.
(5) Access Requirements for the Elderly and People with Disabilities. Consistent with the provisions of 49 U.S.C. Section 5301(d), construction of all grant-funded facilities must incorporate special efforts in the planning and design of mass transportation facilities to assure that they are available to be effectively utilized by the elderly and people with disabilities.
Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. Section 794, prohibits discrimination on the basis of handicap by recipients of Federal financial assistance. To assure compliance with this provision, all recipients must meet the requirements of the DOT regulation implementing Section 504 of the Rehabilitation Act of 1973, as amended (49 C.F.R. Part 27, Subpart E). The regulation requires recipients to establish a program meeting the requirements of this subpart. The recipient must ensure provision of service to persons with disabilities at the full performance level within the period specified in its program submission. The program must include milestones describing the progress the recipient will make each year until it achieves the full performance level. All recipients must submit a Section 504 program to FTA for review and approval describing the service provisions that are presently in place and those that will be in place when the program is fully implemented.
In addition, the Americans with Disabilities Act of 1990, as amended, requires that accessible facilities and services be made available, and the Architectural Barriers Act of 1968, as amended, requires that buildings, public accommodations, and reports and other information submitted in electronic format be accessible to persons with disabilities.
(6) Sex, and Age. Discrimination on the basis of age and sex is prohibited.
(7) Access for Persons with Limited English Proficiency. As required by Executive Order and published DOT guidance, the Recipient must provide access to persons whose English proficiency is limited.
5. PROJECT REPORTING REQUIREMENTS. The purpose of Research and Technology projects is to develop new knowledge. Accordingly, thorough documentation and clear communication of that knowledge is an essential aspect of each project. In accordance with 49 C.F.R. Parts 18 and 19, FTA requires several types of reports in order to adequately monitor project progress. These procedures are designed to place responsibility on recipients for the management of day-to-day operations of FTA-supported projects and for providing comprehensive, current, and objective information on project status and results.
FTA monitors project activities to ensure proper recipient stewardship of Federal funds and compliance with the laws and regulations that govern its programs. FTA must be able to report on program results, industry trends and its own oversight responsibilities. The information FTA needs for program performance measurement, management and reporting is furnished through narrative milestone/progress reports submitted by recipients about significant project results, events, activities, and any changes to or variances in the project schedule or budget. This information is used in a variety of ways and materially assists FTA staff in managing and coordinating programs. Unless articulated otherwise by the FTA project manager, the recipient must submit all reporting documents electronically in TEAM if an electronic application was submitted.
a. Milestone/Reports. The requirement for milestone/progress reports applies to all FTA recipients covered by this circular. This report should be provided electronically through FTA's transportation electronic award and management system, by e-mail, or in hard copy. Any detail explanations for achieving milestones should be input the remarks or comments section of TEAM. Depending on the project complexity, FTA may also request other special reports or periodic project management meetings. Each milestone/progress report should include the following information:
(1) Summary of progress toward completing project objectives prepared by scope code of task.
(2) Technology transfer activities and products, if appropriate.
(3) Since the project payments may depend upon successful milestone attainment, the recipient must be prepared to demonstrate that each milestone was achieved.
b. Quarterly Progress Reports. FTA requires quarterly progress (performance) reports to be submitted on all projects.
FTA may request monthly progress reports or other special reports on an as-needed basis. Final reports and technology transfer information are also required upon completion of the project.
The information provided in these reports should be as complete as possible, highlighting progress toward project objectives and any potential problem areas. Published technical papers, conference presentations or similar documentation of progress may be substituted for a periodic progress report if the FTA Project Manager approves. Events may occur between required quarterly progress reporting dates that might either delay completion of the project or otherwise impede the attainment of the project objectives or schedule. In such cases, the recipient should inform the FTA project manager as soon as possible after such conditions develop. The recipient should convey any actions taken or proposed to resolve the delay and identify assistance (Federal or otherwise) that may be needed to resolve the situation.
At a minimum, each quarterly progress report should address the following, unless otherwise advised by the responsible FTA project manager:
(1) A summary narrative on task elements and milestone status of project activities during the reporting period, including a comparison of actual accomplishments to the objectives established for the period. Accomplishments should include items such as: significant results and major work tasks started, completed, or documented. The percent of the budget expended by task should be included, if appropriate. Where possible, accomplishments should be related to expenditures for the same period. Recipients should submit an activity schedule (bar chart or critical path exhibit) in each quarterly report. Recipients should also indicate expenditures incurred by each task by activity line items so that it matches with any financial report submitted to the FTA project manager;
(2) Reasons why any project objectives are not being met, identifying problem areas and the planned approach to resolve the problems;
(3) Significant events affecting the progress of the project, both positively and negatively;
(4) Whether the project is within the approved budget. If a cost overrun appears likely, explain the reason for the overrun, and the measures taken to complete the project within budget, such as modifying or curtailing the scope of the project, or securing additional financing from sources other than FTA. NOTE: Since the recipient agreed to carry out the project within a specific budget, reducing the scope of a project may require renegotiating downward the project budget and Federal share;
(5) Whether the project is on schedule. If the project completion date will be delayed, indicate the steps taken to:
(6) Projected activities for the next quarter, and steps anticipated in carrying them out; and
(7) Estimated completion dates, percent completed, and funds required for completion.
c. Financial Status Reports. FTA recipients are required to submit financial information either electronically through FTA's transportation electronic award and management system, by e-mail, or in hard copy. These reports should be provided concurrently with milestone/progress reports on a quarterly basis at minimum or less frequently than annually. A final report is required at the completion of the agreement. The Financial Status Report, SF-269A, is designed to provide FTA data on costs incurred by the recipient. These data are also needed for FTA to determine the amount of accrued project expenditures and the total unliquidated obligations of FTA funds. A Request for Reimbursement or Advance, SF-270, is used to claim payment for project expenditures. The SF-270 may be submitted on a quarterly basis or as determined by the FTA project manager and specified in the executed agreement. Another alternative method of payment is the ECHO system, see page V-67, No. 2, for further details. FTA recipients are required to submit financial information using the forms prescribed by 49 C.F.R. Parts 18 and 19. The SF-269A should accompany the quarterly progress report when submitted to FTA. When funds are advanced to recipients (a rare occurrence in research and technology projects), each recipient is required to submit SF-272, Federal Cash Transactions Report. FTA shall use this report in monitoring payments to recipients and to obtain disbursement information (cash management) for each agreement with the recipient. These forms are located on the website: http://www.whitehouse/gov/omb/grants/#form.
d. Report Due Dates. Quarterly progress and financial reports are to be submitted to the relevant FTA office within 30 days after the end of the calendar quarter unless other stipulated by the FTA project manager. Annual reports shall be due 90 calendar days after the project year. The FTA project manager may require annual reports before the anniversary dates of multiple year awards in lieu of these requirements. When projects are completed, recipients must submit a final report no more than 90 calendar days after the end of the project. An original of each report should be submitted.
e. Reports of Significant Events. Unforeseen events that impact the schedule, cost, capacity, usefulness or purpose of the project should be reported to FTA immediately after detection, and then should be included in the next quarterly progress report. Special reports should be submitted when:
(1) Problems, delays, or adverse conditions will affect the recipient's ability to achieve project objectives within the scheduled time period or within the approved project budget. The report should discuss actions taken and/or contemplated and any Federal assistance needed to resolve the situation; or
(2) Favorable developments will enable the recipient to achieve project goals/complete project activities ahead of schedule or at lower cost.
f. Final Report/Documentation. A final technical report documenting project performance and the final results of research, development and demonstration projects, including an Executive Summary, must be submitted by the contractor/recipient to the FTA project manager at the conclusion of the project. All reports and supporting documentation must be provided to the FTA project manager in both a reproducible hardcopy and an electronic/web-ready format, as specified by FTA. The contractor must fill out the General Printing Office (GPO) form 952, Exhibit XI, including all fonts, graphics or other files necessary to the production of the final product. Additionally, all formats that the contractor works in should be acceptable by GPO standards.
g. Hardcopy of Final Report. Documents provided for hardcopy reproduction must be in Encapsulated Postscript (EPS), and the provider must provide all necessary fonts. All FTA sponsored research, development and demonstration documents must be entered into the National Technical Information Service system. A reproducible hardcopy of the final project report, plus 10 additional hardcopies, must be submitted to the FTA project manager for entry into the National Technical Information Service. All FTA sponsored publications are available to the public from the National Technical Information Service, 5285 Port Royal Road, Springfield, Virginia 22161.
h. Electronic Copy of Final Report/Section 508 Compliant. Text supplied electronically may be provided by one or more of the following formats to facilitate posting on the FTA Website: Hypertext Mark-Up Language (HTML), or searchable Portable Document File (PDF/Adobe Acrobat). All accompanying graphics must be provided in Graphic Interchange Format (GIF) or Joint Photographic Experts Group (JPEG) format, or a format acceptable to FTA, in addition to their native format (e.g., Tag Image File Format (TIFF).
i. Electronic Published Documents (Internet). All published documents (including graphics) must comply and be accessible in accordance with current requirements/interpretation of Section 508 of the Rehabilitation Act of 1973, as Amended. All documentation must be approved by FTA before distribution to the public and prepared in a format specified by FTA. The Federal Transit Administration (FTA) is required by law to develop its website and documentation therein to meet the requirements of Section 508 of the Rehabilitation Act, as Amended (29 U.S.C. 794d).
Recipients of federal funds are responsible for consulting sources such as the Access Board [http://www.access-board.gov/508.htm], and Section 508 Website [http://www.section508.gov/].
j. Section 508 of the Rehabilitation Act of 1973, as Amended, 29 U.S.C. § 794 (d) - Electronic and Information Technology Requirements - requires Federal agencies to make their electronic and information technology accessible to people with disabilities. "Section 508 law applies to all Federal agencies when they develop, procure, maintain, or use electronic and information technology. Federal agencies must ensure that this technology is accessible to employees and members of the public with disabilities to the extent it does not pose an 'undue burden." - U.S. Access Board
k. Final Report Organization, Elements and Style. A final technical report documenting project performance and results must be submitted to the project manager at the conclusion of the project. FTA requires all documentation be Section 508 compliant and meets a high standard of organization and clarity of writing. The final report must be organized as listed and described below.
(1) FRONT COVER
Contractor name appears inside report on Title Page, and Report Documentation Page. NO contractor logo/trademark, no copyrighted material in document unless authorized by FTA.
(2) ORGANIZATION OF A REPORT'S CONTENT
(3) FOREWORD INCLUDES:
(4) INTRODUCTION INCLUDES:
(5) MAIN TEXT/DISCUSSION:
(6) BACK MATTER:
All FTA-sponsored reports must contain the following disclaimers on the inside front cover if published in hard copy or in a comparable prominent location if published electronically:
Also, a report documentation page must be in the front of all published research and technology reports. See Exhibit IX for standard form 298, "Report Documentation Page."
FTA requires that all final and certain interim, significant technical reports meet a high standard of organization and clarity of writing. In addition, reports must be approved by FTA before distribution to the public, and must be prepared in a format as specified by FTA. Final reports must be submitted in both electronic and hard copy. Contact the FTA project manager for further information.
6. PROJECT EVALUATION.
a. Why is a Project Evaluation Needed? Evaluation of project activities and results is a vital part of each FTA-funded project in order to document and analyze the impacts, results, or findings of the project. The evaluation process provides a link between the implementation of a project at a particular site, the understanding of its actual performance at that site, and its potential effectiveness site, the understanding of its actual performance at that site, and its potential effectiveness if replicated in other locales. The evaluation provides a means to:
(1) Document what happened and why;
(2) Measure project results, impacts and costs;
(3) Identify successful and unsuccessful aspects of the project as implemented and how they were influenced by site-specific characteristics;
(4) Determine if the project accomplished the results expected by FTA and the local sponsor; and
(5) Determine if the lessons learned can be applied to other projects or transit systems.
FTA, therefore, usually requires the recipient of a cooperative agreement for a research and technology project to provide an independent and objective evaluation of the project results as part of the final project report.
b. How is the Evaluation Performed? To maximize the effectiveness of a project, a consistent, carefully structured approach to evaluation is necessary. Project evaluations require close coordination among the parties involved in an FTA-funded project, including the recipient (and its partners or co-sponsors, if any), the FTA, and any independent evaluator selected by the FTA or the recipient. The applicant and its partners must give careful attention to the evaluation process while the project is in the development stage.
Central to this process is development of an evaluation plan. The evaluation plan is a detailed blueprint for conducting an evaluation. It sets forth specific data (or other) requirements needed to conduct the evaluation, and develops the performance measures and the data collection techniques, procedures and analytic methodology that will be used. An effective evaluation plan will insure that appropriate data will be collected to provide objective information for the comparison with evaluation criteria, and to determine how well the project has accomplished its intended results.
This planning should be completed at the earliest stage of the project to allow for adequate time to collect baseline data for appropriate measurement and analysis. An evaluation plan should include:
(1) A hypothesis (or hypotheses) about project results to be tested in the evaluation;
(2) The evaluation frame of reference;
(3) Definition of project issues;
(4) Performance measures;
(5) Identification of data needed to test hypotheses;
(6) A data collection plan and schedule;
(7) Selection of control cases, if needed;
(8) Method for statistical analysis; and
(9) Documentation process (e.g., reports, presentations, etc.).
The implementation phase of the evaluation plan includes the collection and analysis of data relative to the project objectives and issues, the collection and analysis of data on site characteristics, the compilation of a chronology describing the project implementation, the recording of institutional and external factors, as well as problems and changes that might influence project findings, and writing of the final evaluation report.
Independent project evaluations are usually conducted by one of two generalized methods:
(1) A contractor retained by FTA performs the evaluation. The contractor could be an FTA task order contractor, another governmental agency, the Department of Transportation's Volpe National Transportation Systems Center (VNTSC), or some other qualified entity; or
(2) An independent evaluation contractor hired by the recipient performs the evaluation. Under this method, recipients must take special precautions to ensure the total objectivity of the contractor, so that there is no real or apparent conflict of interest in the relationship between the contractor and the outcome of the project.
c. What are the Roles of Participants? Each participant in an FTA-funded project evaluation has an important role to play.
(1) FTA will direct the activities of the evaluation contractor, review all reports, provide overall guidance for the project, and work with the recipient to disseminate project results.
(2) The evaluation contractor is responsible for developing a comprehensive evaluation plan, including the data collection plan, in cooperation with the recipient. As a partner in the project effort, the evaluator will work with the recipient in monitoring the collection of data. The evaluator will prepare interim reports as needed, and a final evaluation report.
(3) The recipient and its partners or co-sponsors are responsible for implementing the project as planned, and cooperating with the evaluator in the development of an appropriate evaluation plan. The recipient will make available any data and information needed by the evaluator for assessing the effectiveness of the project activities and results, as well as providing and supervising data collectors.
d. How are Project Evaluations Documented? The results of project evaluation could be very useful to, and could have major impact on, the transit industry. Only by carefully documenting and analyzing the project's effects and features, through a scientific evaluation, will it be possible to determine which aspects of a project are most effective in which contexts. For example, the relative importance of the type of service and facility offered, the level of transit demand, the size of the region, and other factors must be fully documented and analyzed to draw conclusions about their significance in the project results achieved and whether they are likely to apply in other sites or contexts.
Project evaluation reports are intended for a variety of audiences including: transportation planners; transit operators; Federal, state, and local officials; non-profit organizations; and private industry. Accordingly, the final evaluation report should include a concise executive summary of what was learned, narrative, tables and graphic exposition, with detailed quantitative data and documentation of procedures provided in technical appendices.
e. Who Pays for the Evaluation? Costs of project evaluation, unless contracted for directly by FTA, must be included in the project budget.
7. BUDGET REVISIONS.
a. General. A budget revision cannot be used to materially change the purpose or intent, i.e., scope, or Federal dollar amount of the grant. The approved project budget is sent to the recipient in hard copy and is also accessible in FTA's transportation electronic award and management system following FTA approval of the revision. The recipient is responsible for controlling and monitoring all project activities to ensure that they are carried out in accordance with the approved budget.
b. Revisions. Budgets may be revised during the course of a project, depending on whether funds are expended on a particular activity line item as anticipated. If expenses on an activity line item increase beyond the approved amount, recipients must request approval from the FTA project manager with an appropriate explanation. In no case can the total cost FTA approved be exceeded, unless a project amendment application is submitted and approved by the FTA Administrator. At the conclusion of a project, when all costs have been incurred, if activity line items need adjustment because of overspending on a line item, the recipient must submit a final project budget revision to the FTA project manager for approval.
(1) Activity Substitution. If a project is amended to replace some activities by other activities within the original intent of the project, activity line items must be adjusted to reflect the change.
(2) Amount Substitution. Beyond assuring that the recipient's budget revisions will not change the amount or scope of a grant or cooperative agreement, the recipient may change the dollar amount of particular items under an individual activity line item.
c. Prior Approval. Recipients must obtain prior FTA approval electronically or in writing for the following proposed budget revisions:
(1) An increase in any amount for an activity line item.
(2) Proposed budget revisions for planning grants that exceed thirty percent require prior FTA approval.
8. GRANT OR COOPERATIVE AGREEMENT REVISIONS/AMENDMENTS.
a. General. The grant or cooperative agreement obligates the recipient to undertake and complete the project activities defined by the work statement and budget as incorporated in the grant or cooperative agreement. It may be necessary to modify the grant or cooperative agreement by amendment. For example, modifications may be required because of changes in the purpose, activities, terms and conditions, or an increase in the cost of a project. The primary purposes of project modifications are to:
(1) Materially change the original approved work scope, or
(2) Change the ratio of the Federal/recipient cost share.
b. When Required. An amendment must be used for changes to the project that cannot be made by a budget revision or administrative amendment. Amendments require the FTA approval of a revised grant or cooperative agreement and budget, and may require a change in the amount of funds obligated for the project. A de-obligation and re-obligation of funds to accompany a change in project scope can occur only if the previously obligated funds have not lapsed, or if new funds are available
c. Requirements. Amendments to grants or cooperative agreements are subject to the same application requirements as a new request, except that the recipient need not resubmit portions of the original grant or cooperative agreement application that are unaffected by the change. The recipient must submit a detailed description of the changes, a revised project budget, and if applicable, an SF-424 Form. If it becomes necessary to amend the cooperative agreement or grant, FTA will advise the recipient concerning what information is required. Changes limited to an extension of the project completion date will be accomplished by means of a letter from FTA to the recipient in response to a written request by the recipient. Where the scope of the project is to be changed, or FTA funding is to be added to the project, an amendment application, with the same material and forms as the original application, must be submitted to FTA. The two parties must execute an amended grant or cooperative agreement to finalize an amendment. NOTE: The existing approved project budget, including any previously approved amendments, cannot be exceeded until FTA has approved the amendatory application in writing.
d. Project Amendment Budgets. When a budget is prepared for a project amendment, the activity line items should show the new total amounts, original amounts, plus additional amounts being added in the amendment. The amount of FTA share being requested and the recipient match must be separately calculated.
9. ADMINISTRATIVE AMENDMENT. This activity is discussed between the FTA project manager and the recipient. FTA is responsible for this action item.
An administrative amendment cannot be used to change the scope of a project. An administrative amendment may be used to change or clarify the terms, conditions or provisions of a grant or cooperative agreement, and may be used only when no change will result in the scope, amount or purpose of the project. An administrative amendment is used to modify a grant or cooperative agreement for such purposes as to comply with changes required by FTA, to change the year or type of funds obligated for a grant or cooperative agreement, to transfer equipment from one recipient to another, to reflect a change in the recipient's name (novation) or the project completion date, or to deobligate Federal funds that are not needed to complete an approved project scope of work.
10. FTA OVERSIGHT. FTA may conduct on-site inspections of projects to evaluate the recipient's effectiveness in implementing the project in conformance with the grant or cooperative agreement. Inspection visits may be made, for example, to follow up on information received from the recipient about an event with significant impact on the project, to observe tests, to review progress toward meeting milestones, or to determine whether the recipient has adequately complied with civil rights laws, regulations, and agreements. Concurrence by FTA in project work does not relieve the recipient of its responsibilities and liabilities as the party responsible for carrying out the project, as described in the recipient's application.
a. Periodic Project Management Meetings. Periodic project management meetings may be instituted with recipients. These meetings will provide a forum for management briefings, status/progress reports, discussion of accomplishments and problems and, as appropriate, an opportunity for site inspection. These meetings do not replace quarterly written reports, unless FTA permits a specific exemption.
b. Procurement Reviews. Conduct of procurement system reviews of FTA recipients may involve a site visit to ensure compliance with the requirements and standards of the common rule on administrative requirements, 49 C.F.R. Section 18.36, as it specifically applies to procurements.
11. PROGRAM INCOME. The following provisions regarding program income apply to all FTA transit research and technology program projects governed by this circular except for projects that contain specific terms and conditions with different provisions.
a. Definition. Program income is revenue generated directly or indirectly from federally- supported activities, i.e., income generated by the federally assisted project. Program income is a form of revenue, but excludes sales proceeds, interest earned on advances of Federal funds and revenues generated by activities that are not supported by Federal assistance. Examples of program income include fare box revenues, advertising, concessions, etc.
b. Reference. FTA's program income policies are governed by 49 C.F.R., Parts 18 and 19, and differ from standard Federal requirements promulgated by the Office of Management and Budget.
c. General. Program income includes income from fees for services performed, from the use or rental of real or personal property acquired with project funds, from the sale of commodities or items fabricated under a project agreement and from payments of principal and interest on loans made with Federal funds. Except as otherwise provided in regulations, program income does not include interest on project funds, rebates, credits, discounts, refunds, etc., and interest earned on any of them.
d. Use. In general, recipients may retain project income so long as it is used for project or transportation purposes.
12. CLOSEOUT PROCEDURES.
a. Closeout. Closeout is the process by which FTA determines that all responsibilities and work by the recipient are completed and the associated financial records are closed. Closeout begins immediately after all work activities under the project are completed. All closeout documentation must be submitted to FTA within 90 days following completion of all project work.
b. Final Financial Settlement. The recipient must initiate closeout of a project when all approved activities are completed (all deliverables have been submitted and approved by FTA) and applicable Federal funds expended. In order to expedite project closeout, the following should be submitted electronically or in paper format (an original and no more than two copies):
(1) A final Financial Status Report (SF-269A). All project costs must have been incurred before the SF-269A is submitted to FTA;\
(2) A final budget, which may be a revision of the previously approved budget, reflecting actual project costs by activity line items;
(3) An inventory list of any federally owned equipment used in the project and an inventory of equipment acquired with project funds. When the project ends, it is FTA's view that the project property is no longer needed for research, development, or demonstration purposes. In accordance with 49 U.S.C. 5334(g), FTA may authorize the transfer of that property in accordance with 49 CFR 19.34(g) or 49 U.S.C. 5534(g). The FTA project manager will issue disposition instructions within 120 calendar days after receipt of the final inventory list;
(4) If project property is sold at the conclusion of a project, the proceeds reduce the total project cost on a pro-rata basis, i.e., based on the Federal - recipient matching ratio; and
(5) Any other reports required as part of the terms and conditions of the project.
c. Adjustments to Federal Share of Costs. Necessary adjustments to the Federal share of cost are made after FTA receives and reviews the required closeout information. Adjustments may also be necessary after the audit required by OMB Circular A-133 is performed. FTA funds are not available for audit or other project activities after a grant or cooperative agreement has been closed-out. Any Federal project funds received by the recipient but not expended must be returned in the form of a check payable to the Federal Transit Administration and mailed to the address in Chapter VI, or by wire transfer if the amount is $10,000 or more. See Chapter V (2.h.) for the Pittsburgh lockbox facility mailing address and wire transfer ABA number.
d. Deobligation. When the FTA project manager receives the information required for closeout, FTA will acknowledge in writing receipt of the material, and declare the project closed. FTA will deobligate any remaining funds. The three-year project record retention period begins as of the date of the FTA closeout letter.
13. SUSPENSION OF PROJECT ACTIVITIES. The suspension of a grant or cooperative agreement is an action by FTA, which temporarily suspends Federal assistance for a project pending corrective action by the recipient or pending a decision to terminate the project by FTA. If FTA determines that the recipient has failed to comply with the terms and conditions of the grant or cooperative agreement, including the civil rights requirements, FTA notifies the recipient in writing of its intent to suspend the grant or cooperative agreement or other project contractual agreements. FTA may withhold further payments and/or prohibit the recipient from incurring additional obligations pending corrective action by the recipient or a decision to terminate the project for cause. This includes work being performed by third party contractors or consultants. Unless FTA notifies the recipient otherwise, suspension will not invalidate obligations properly incurred by the recipient prior to the date of suspension to the extent that they cannot be canceled. Upon making a determination of non-compliance, FTA will notify the recipient through written communication.
14. TERMINATION OF A PROJECT. A project may be terminated for cause, for statutory purposes, or for convenience.
a. Termination for Cause. FTA may terminate a project, in whole or in part, at any time before project completion, whenever it determines that the recipient failed to comply with the terms or conditions of the grant or cooperative agreement (e.g., failure to make reasonable progress). FTA will promptly notify the recipient in writing of its intent to terminate and the reasons therefore and the effective date. Payments made to the recipients or recoveries by FTA shall be in accordance with the terms of the cooperative agreement and the legal rights and liabilities of both parties as defined in the agreement. Among the circumstances that could cause FTA to terminate a project in whole or in part before project completion include, but are not limited, to the following:
(1) Recipient's failure to comply with the terms or conditions of the grant or cooperative agreement or other Federal requirement;
(2) Continuation of the project would not produce results commensurate with further expenditure of funds;
(3) Funds are no longer needed to accomplish the project purpose;
(4) Failure by the recipient to make reasonable progress to complete approved project activities;
(5) Determination that the project has been essentially completed and approved funds have been substantially drawn down; or
(6) Other such factors.
b. Termination for Statutory Purposes. FTA may terminate a project in whole or in part, when FTA determines that the purposes of the statute authorizing the project would not be adequately served by the continuation of Federal financial assistance for the project. By signing the grant or cooperative agreement, the recipient agrees at the outset to a termination for these purposes in the event FTA makes such a finding. The recipient may not incur new obligations for the terminated portion after the effective date and must cancel as many outstanding obligations as possible. FTA evaluates each obligation that cannot be canceled to determine its eligibility for inclusion in project costs. Settlement is made in accordance with terms and conditions of the grant or cooperative agreement. FTA allows full credit to the recipient for the Federal share of the obligations that cannot be canceled that are properly incurred by the recipient prior to termination.
c. Termination for Convenience. FTA or the recipient may terminate a project in whole or in part, when both parties agree that continuation of the project would not produce results commensurate with the further expenditure of funds. Both parties must agree upon the termination conditions, including the effective date and, in case of partial termination, the portions to be terminated. The recipient may not incur new obligations for the terminated portion after the effective date and must cancel as many outstanding obligations as possible. FTA evaluates each obligation that cannot be canceled to determine its eligibility for inclusion in project costs. Settlement is made in accordance with terms and conditions of the grant or cooperative agreement. FTA allows full credit to the recipient for the Federal share of the obligations that cannot be canceled properly incurred by the recipient prior to termination.
d. Partial Termination. In some cases, FTA may deobligate funds in an approved project before closeout because the funds are no longer needed to accomplish the project purpose.
15. PROCUREMENT, USE AND DISPOSITION OF PROJECT PROPERTY. Due to the nature of FTA research programs, project implementation generally does not require major acquisitions of property. However, in the case of projects in which property is acquired, any procurement and disposition action should be made in accordance with the procurement and property management standards as set forth in 49 C.F.R. Part 18 or Part 19, as applicable. Part 18 applies to governmental recipients, while Part 19 applies to educational institutions and private nonprofit organizations.
As of the beginning of Fiscal Year 2002, the "small purchase" procurement threshold is $100,000. Generally, items of equipment with a current per unit fair market value of less than $5,000 may be retained, sold, or otherwise disposed of with no further obligation to FTA. Items of equipment with a current per unit fair market value in excess of $5,000 may be retained or sold, but FTA shall have a right to an amount calculated by multiplying the current market value or proceeds from sale by the Federal cost share of the equipment. In the case of capital rolling stock, FTA has established special useful life requirements that must be followed.
The appropriate FTA office must approve the leasing of project equipment in advance. Sample leases are also available from the FTA Regional Offices or the relevant headquarters office.
16. RETENTION AND ACCESS REQUIREMENTS FOR RECORDS.
a. Applicability. This section applies to all financial and programmatic records, statistical records, supporting documents, and other records of recipients that are:
(1) Records required to be maintained by this Circular or the terms of the agreement, or otherwise reasonably considered as pertinent to FTA program requirements or the agreement.
(2) Records submitted electronically may be retained in that manner, but files must be accessible for possible review, audit or downloading to hard copy when required.
(3) This section does not apply to records maintained by contractors or subcontractors.
b. Length of Retention Period.
(1) Except as otherwise specified, records must be retained for three years from the starting date specified in paragraph 15c, below.
(2) If any litigation, claim, negotiation, audit or other action involving the records has been started before the expiration of the 3-year period, the records must be retained for three years after completion of the action and resolution of all issues that arise from it.
(3) To avoid duplicate record keeping, FTA may make special arrangements with recipients (including sub-recipients as appropriate) to retain any records that are continuously needed for joint use. FTA will request transfer of records to its custody when it determines that the records possess long-term retention value. When the records are transferred to or maintained by FTA, the 3-year retention requirement is not applicable to the recipient.
c. Starting Date of Retention Period.
(1) General. The starting date for retention of records related to multi-year projects is the date of submission of the Final Financial Status Report, which is submitted within 90 days of project completion.
(2) Equipment records. The retention period for the equipment records starts from the date of the equipment's disposition or replacement or transfer at FTA's direction.
(3) Records for income transactions after project closeout. In some cases recipients must report income after a grant or cooperative agreement is closed out. Where there is such a requirement, the retention period for the records pertaining to the earning of the income starts from the end of the recipient fiscal year in which the income is earned.
(4) Direct cost rate proposals, cost allocation plans and similar rate and rate allocation methods. This paragraph applies to the following types of documents, and their supporting records: indirect cost rate computations or proposals, cost allocation plans, and any similar accounting computations or the rate at which a particular group of costs is chargeable, such as computer usage charge back rates or composite fringe benefit rates.
(5) Contract Records. The retention period for all required contract records begin after the recipients or subrecipients make final payments and all other pending matters is closed. [Reference 49 C.F.R. Section 18.36(i)(11)]
(6) Substitution of Photocopies. Copies made by microfilming, photocopying, or similar facsimile methods may be substituted for originals.
(7) Access to Records.
(8) Restrictions on Public Access. Except as provided by 49 CFR Section 19.36(d), the Freedom of Information Act (5 U.S.C. 552) does not apply to project records owned and possessed by the recipient. Unless required by State or local law, recipients and subrecipients are not required to provide periodic public access to their records. However, FTA may require a recipient to provide access to those records the recipient maintains on behalf of FTA (i.e., records required by Federal statute or regulation, such as Davis-Bacon wage records).
FTA will request transfer of certain records to its custody from the recipient when it determines that the records possess long-term retention value. However, in order to avoid duplicate record keeping, FTA may make arrangements with the recipient to retain any records that are continually needed for joint use.
The Federal Transit Administrator, the DOT Office of Inspector General and the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to any pertinent books, documents, papers, and records of the recipient and its sub-recipients or third-party contractors to make audits, examinations, excerpts, and transcripts.
17. SPECIAL REQUIREMENTS.
a. Political Activities. Chapter 15 of Title 5 of the United States Code (Hatch Act) provides that all State or local agency employees who are engaged in an activity financed by Federal government grants or loans may not be candidates for elective office or use their positions to influence public elections. Furthermore, those State and local agencies receiving Federal assistance are prohibited from coercing their employees into making political contributions. Exceptions to the general Hatch Act prohibition do exist, such as certain non-supervisory transit employees and persons holding elective office. State and local agencies should contact the appropriate FTA Regional Counsel or the FTA Office of Chief Counsel to discuss any questions they may have about the specific applicability of these provisions to their situation.
b. Copyrights and Rights in Data. When FTA provides financial assistance for research, demonstration or innovation projects, it is with the general intention of increasing public transit knowledge, rather than limiting the benefits of the project to the participants of the project. Except as otherwise provided in the grant or cooperative agreement, the recipient is free to copyright any material developed under or during the course of a project.
c. Patent Rights. All recipients must notify FTA of any inventions, improvements, or discoveries conceived of or actually reduced to practice by the recipient or its employees in the course of, or under the terms of, the grant or cooperative agreement. FTA determines whether or not and where a patent application will be filed, as well as the disposition of all rights in such inventions, improvements and/or discoveries, including title to and rights under any patent application or patent that may be issued. The recipient is responsible for executing all documents to effect the determination.
Chapter IV: Financial Management Requirements
1. INTERNAL CONTROLS.
a. Definition. Internal controls are the organizational plan, methods and procedures adopted by the ecipient to ensure that resources are properly used and safeguarded, and that necessary information is provided to recipients and FTA managers.
b. General. FTA payments to a recipient are made electronically to meet the Federal share of eligible expenses under a project.
Execution of an FTA award for a project obligates the recipient to use funds it receives as specified in the grant or cooperative agreement. This creates a vested interest by the United States in unused grant or cooperative agreement balances, any improperly applied funds, and property or facilities purchased or otherwise acquired under the grant or cooperative agreement whether funds are received by the recipient as an advancement or by reimbursement.
Recipients and their subcontractors or partners are responsible for establishing and maintaining adequate internal control over all their functions affecting implementation of a project.
For proper management of projects, each recipient must use these controls in all of its operating, accounting, financial and administrative systems. To assure proper accountability for grant or cooperative agreement funds, internal controls must be integrated with the management systems used by the recipient to regulate and guide its operations.
c. Objectives. Resources must be used in accordance with applicable state, local, and Federal laws, regulations and policies, and the grant or cooperative agreement. Resources must be safeguarded against waste, loss, and misuse. Reliable data on resource use and safeguards must be accumulated, maintained and fairly disclosed in reports to the recipient's management and FTA. A proper system of internal controls will help the recipient to:
(1) Operate efficiently and economically;
(2) Keep obligations and costs within the limits of authorizations and legal requirements, consistent with accomplishing the purpose of the project;
(3) Safeguard assets against waste, loss and misuse;
(4) Ensure timely collection and proper accounting of the recipient's operating and other revenues; and
(5) Assure accuracy and reliability in financial, statistical and other reports.
d. Necessary Elements. Certain conditions are necessary to achieve these objectives and meet the standards discussed in this chapter. Each facilitates the recipient's use of internal controls. These are:
(1) Reasonable assurance that internal controls are an integral part of the recipient's management systems;
(2) Existence of a positive and supportive attitude among recipient's managers and employees;
(3) Assignment of internal control functions to competent and experienced employees;
(4) Identification of specific internal control objectives to assure that needs is identified and that valid controls are planned and implemented;
(5) Adoption of internal control policies, plans and procedures that reasonably assure their effectiveness, such as organizational separation of duties and physical arrangements such as locks and fire alarms; and
(6) The recipient should conduct a regular program of testing to identify vulnerabilities in the internal control system.
e. Standards of Internal Control and Audit Resolutions.
(2) Financial Management Systems. Minimum requirements of a recipient's financial management system are contained in 49 C.F.R. Section 18.20 and Section 19.21. Minimum requirements of a recipient's financial management systems are contained in the Common Grant Management Rule, at 49 C.F.R. Section 18.20 and Section 19.21. NOTE: States may follow their own state laws and procedures for expending and accounting for grant or cooperative agreement funds.
For other than state recipients and sub-recipients, each recipient and sub-recipient must establish and maintain an adequate financial management system that provides for:
2. COST ALLOCATION PLAN/INDIRECT COST PROPOSAL.
a. General. Under federally funded grant or cooperative agreement programs, recipients may incur costs of both a direct and indirect nature. A cost allocation plan is required if a recipient desires to charge indirect program-related costs to an FTA project.
(1) Direct costs are those that can be identified specifically with a particular project. These costs may be charged directly to a grant or cooperative agreement project.
(2) Indirect costs are those that are incurred for a common or joint purpose benefiting more than one cost objective;
Examples of indirect costs are operation and maintenance of buildings and expenses of other non-project related management and their immediate staff. Principles and standards for determining costs applicable to grants, cooperative agreements, and contracts with recipients that are state or local agencies are presented in OMB Circular A-87, and the appropriate Department of Health and Human Services (DHHS) publications. (Cost principles for educational institutions are presented in OMB Circular A-21, while cost principles for private nonprofit organizations are presented in OMB Circular A-122.)
c. Types of Plans. There are two types of cost allocation plans presented in OMB Circular A-87.
(1) The first plan covers the distribution of costs of support services provided by a state/local government to its operating agencies and is referred to as a state or local government-wide central service cost allocation plan.
(2) The second plan covers distribution of costs within an individual recipient or contractor (i.e., operative) agency, including costs of services allocated to it under the state or local government-wide central service cost allocation plan, for all work performed by that agency. This second type of plan is commonly referred to as an indirect cost plan.
d. Preparation of Plan. Recipients who intend to seek FTA reimbursement for indirect costs must prepare a cost allocation plan and/or indirect cost rate plan.
(1) Purpose. The purpose of the plan is to guide the recipient's allocation of costs, assuring that:
(2) Steps in Plan Development. Four steps are basic in preparing a cost allocation plan:
Once FTA or another cognizant Federal agency has accepted a recipient's cost allocation plan or indirect cost rate proposal, the recipient must update it annually. The update should be retained and made available for review at the time of the grantee's organization-wide audit.
e. Cognizant Federal Agency. Cognizance is generally assigned to the Federal agency that provides the predominant amount of dollar involvement with a recipient organization within a given state or locality. (OMB has assigned cognizant audit agencies for state and local Governments -- Federal Register, 1-6-86.). The cost allocation plan/indirect cost rate proposal should be submitted to the "cognizant" or "lead" Federal agency when:
(1) The recipient is working on its first assistance project or has not previously had a cost allocation plan/indirect cost rate proposal reviewed and accepted;
(2) The recipient has made a change in its accounting system, thereby affecting the previously approved cost allocation plan/indirect cost rate and its basis of application; or
(3) The recipient's proposed cost allocation plan/indirect cost rate exceeds the amounts and rates approved for the previous year(s) by more than ten percent.
In other instances, the recipient should forego submission of its annual cost allocation plan/indirect cost rate proposal directly to the cognizant agency, retaining the documents for future review. In accordance with OMB Circular A-133, this review will be accomplished at the time of the organization-wide audit of the recipient.
If DOT is the cognizant agency, cost allocation plans should be sent to FTA for DOT review unless the Federal Highway Administration (FHWA) is the primary awarding agency. In that case, the plans should be sent to FHWA with a copy to FTA.
f. Costs Supported. Formal accounting records to substantiate the propriety of eventual charges must support all costs in the plan. The allocation plan of the recipient should cover all applicable costs. It should also cover costs allocated under plans of other agencies or organizational units that are to be included in the costs of other federally sponsored programs. To the extent feasible, cost allocation plans of all agencies rendering assistance to the recipient should be presented in a single document.
g. Plan Content. The cost allocation plan should contain, but not necessarily be limited to, the following:
(1) The nature and extent of services provided and their relevance to federally sponsored programs;
(2) Items of expense to be included; and
(3) Methods to be used in distributing cost.
(4) Individual position or group classifications for direct staff services;
(5) The annual salary rate or salary range for each position classification, with estimated average salary charged to the project for each rate;
(6) The estimated period of service as provided by each position classification, estimates of percentage of time each position will devote to the project, and the estimated cost of each;
(7) The nature and extent of services provided by each position classification;
(8) Details of other direct charges including the nature of charges and estimated costs; and
(9) All categories of indirect costs, proposed methods, and the basis for allocating them to the project, total indirect costs, and the estimated amount to be charged to the project.
It is important to note that although personnel services should be estimated on a percentage-of-time basis for planning purposes, only actual time charged to the project as supported by adequate time sheets will be eligible for reimbursement.
h. Plan Approval. Most transit agencies are under the cognizance of the U.S. Department of Transportation. Whenever the cognizant agency gives prior approval to a government-wide cost allocation plan or indirect cost proposal, such approval is formalized, distributed to all interested Federal agencies, and applicable to all Federal grant and cooperative agreements in accordance with OMB Circular A-87.
3. COST STANDARDS.
a. General. Recipients must follow the guidelines contained in OMB Circular A-87 (state and local governments), in determining whether project costs are allowable or unallowable. Project costs must specifically relate to the purpose of the grant contract and the latest approved project budget. Care must be exercised when incurring costs to ensure that all expenditures meet the criteria of eligible costs. Failure to exercise proper discretion may result in expenditures for which use of project funds cannot be authorized and, therefore, disallowed by audit.
b. Allowable Costs. General. The criteria that govern the eligibility of project costs are discussed below. These criteria are drawn from OMB Circular A-87. To be allowable under a recipient program, costs must:
(1) Be necessary and reasonable for proper and efficient administration of the Federal assistance program, be allowable under the principles contained in the OMB circulars and except as specifically provided in this circular, not be general expenses required to carry out the overall responsibilities of state or local governments; authorized or not prohibited under state or local laws or regulations;
(2) Be authorized or not prohibited under state or local laws or regulations;
(3) Conform to any limitation or exclusions set forth in the principles, Federal laws, or other governing limitations as to types or amounts of cost items;
(4) Be consistent with policies, regulations, and procedures that apply uniformly to both federally assisted and other activities of the unit of government of which recipient is a part;
(5) Be treated consistently through application of generally accepted accounting principles appropriate to the circumstances;
(6) Not be allowable or included as a cost of any other federally financed program in either current or prior periods;
(7) Be net of all applicable credits.
4. PROJECT INCOME.
a. General. FTA's project income polices are governed by 49 C.F.R. Part 18, the Common Rule, and apply to all FTA planning and projects governed by this circular, except for approved projects that contain specific terms and conditions to the contrary.
b. Accountability. Recipients must account for project income in their accounting system, which is subject to audit. The accounting system must be capable of identifying project income and the purpose for which it was used.
5. FINANCIAL REPORTING REQUIREMENTS.
a. General. FTA uses the Milestone/Progress Report to monitor project funds through FTA's transportation electronic award and management system. Note that payment can be withheld for failure to submit either financial or narrative reports in a timely manner.
b. Disclosure Criteria. The following criteria are basic to full disclosure in financial reports by recipients:
(1) All essential financial facts relating to the scope and purpose of each financial report and applicable reporting period should be completely and clearly displayed in the reports.
(2) Reported financial data should be accurate and timely. The requirement for accuracy does not rule out inclusion of reasonable estimates when precise measurement is impractical, uneconomical, unnecessary, or conducive to delay.
(3) Financial reports should be based on the required supporting documentation maintained under an adequate accounting system that produces information that objectively discloses financial aspects of events or transactions.
(4) Financial data reported should be derived from accounts that are maintained on a consistent, periodic basis; material changes in accounting policies or methods and their effect must be clearly explained.
(5) Reporting terminology used in financial reports to FTA should be consistent with receipt and expense classifications included in the latest approved project budget.
c. Milestone/Progress Reports. Electronic financial status reporting is required for all research and technology projects covered under this circular, unless otherwise specified by the project manager. These quarterly reports can be submitted electronically or in paper format, also. These reports are to be submitted for all non-construction and construction projects on an accrual basis.
6. ANNUAL AUDIT.
a. General. OMB Circular A-133, "Audits of States, Local Governments, and Non-Profit Organizations" and provisional OMB Circular A-133 Compliance Supplement of May 1998 provides the requirements for annual audits of grant or cooperative agreement recipients. Both documents are available on the OMB web site at www.whitehouse.gov/WH/EOP/OMB/Grants/.
b. Requirement. FTA recipients are required to obtain the services of an independent auditor to conduct a single audit each year in conformance with OMB Circular A133, except where a State statute or regulation provides for a single biennial audit.
c. Purpose. The purpose of the single annual audit report is to determine whether the recipient:
(1) Has prepared financial statements that fairly present its financial position and the results of its financial position and the results of its financial operations in accordance with generally accepted accounting principles;
(2) Has in place internal accounting and other control systems to provide reasonable assurance that it is managing Federal financial assistance programs in compliance with applicable laws and regulations; and
(3) Has complied with laws and regulations that may have a material effect on its financial statements and on each of its major Federal assistance programs (as defined according to the sliding scale discussed in A-133).
The annual single audit is to be performed by an independent auditor who is required to determine and report on whether the recipient has internal control systems that reasonably assure it is managing Federal assistance programs in compliance with applicable laws and regulations. Review of a proposed contract for the services of an independent auditor can be arranged through FTA with the recipient's cognizant Federal auditor.
Recipients are required to determine whether certain sub-recipients spend Federal assistance funds they receive in accordance with applicable laws and regulations. Audit judgment concerning the recipient's determination is left to the independent auditor.
Sufficient copies of the single audit reports (one for file and one for each Federal agency with findings) should be sent to the Audit Clearing House, 1201 E. 10th Street, Jeffersonville, IN 47132.
d. Resolution of Audit Findings. Recipients and sub-recipients are responsible for prompt resolution of all audit findings and recommendations. This responsibility requires that the recipient:
(1) Promptly evaluate the report;
(2) Determine the appropriate follow-up actions and establish a date for their completion; and
(3) Complete all required actions within the established period of time.
The recipient must resolve deficiencies or opportunities for improvement identified in an audit. The resolution of audits begins with FTA's Financial Management Oversight (FMO) report to the recipient and continues until the recipient corrects identified deficiencies, implements needed improvements or demonstrates that the findings or recommendations are not valid or do not warrant management action.
The audit is not resolved until FTA concurs in the documentation of steps taken to implement any needed corrective actions. The status of outstanding audit findings and recommendations should be monitored and reported by the recipient in quarterly progress reports and, where appropriate, significant events reported.
7. THIRD PARTY CONTRACT AUDITS.
a. Responsibility for Audit. Recipients must ensure that project-assisted activities are carried out effectively and efficiently. Audit of third party contracts is an important tool available to recipients in meeting this obligation. The recipient as part of its own management process may initiate a third party audit. For example, consultant, engineering or service contracts commonly include provisional overhead (burden) and General & Administrative (G & A) rates that need to be verified by audit for the applicable contract periods. Contract audits may also be requested by FTA to ascertain that payments were made in conformance with the terms of the contract, or for other purposes. Finally, the firm conducting the recipient's single annual audit may recommend audit of a third party contract.
Auditors who are independent from the third-party contractor must conduct third party contract audits.
b. Outside Audit Services. Many FTA recipients assign proposal evaluation and contract monitoring duties to their own auditors or financial management personnel. However, some do not have qualified personnel within their organization to conduct this kind of audit review. They must obtain these services elsewhere. Two available sources for audit services are qualified independent accounting firms and contract auditors from agencies and departments of the Federal Government. Private firms usually are able to initiate the audit sooner after the recipient's request than a Federal agency can, but in some cases, a continuing Federal audit function is maintained at contractor locations and can be used for audit of FTA recipients' third party contracts. In other cases, an audit by a Federal agency may best serve the overall government interest.
c. Costs. Costs of third party contract audit and proposal evaluation are eligible for reimbursement by FTA as a direct or indirect charge in accordance with OMB Circular A-87. FTA recommends that recipients seek guidance from the cognizant Federal auditor before negotiating audit contract agreements. (Cognizant Federal audit is earlier described under Annual Audit in this chapter).
d. Contracting for Audit Services. In contracting with a private firm for an independent audit, recipients should follow standard procedures for third party contracts. Recipients should direct requests for Federal audit assistance to FTA.