1.2 Applicability and Scope. This guidance is applicable to the grant programs referenced in Part 521. Specific guidance related to functions/activities are included in the following chapters. Administrative requirements are contained in regulations published by the Department of Interior (43 CFR Part 12). A copy of this document can be obtained from the Division of Federal Aid in the Regional Offices or the Washington Office Division of Federal Aid. The material contained in this chapter is intended as guidance for meeting requirements of law or regulation, and is not intended to supersede any of those requirements.

1.3 Grant Proposals. Proposals are submitted to the appropriate Regional Director requesting approval for work to be supported under a Federal Aid program. Information contained in the proposal is the basis on which the Regional Director determines whether the proposed work meets eligibility requirements and the standards for approval. Once approved, the proposal becomes the basis for subsequent grant agreements. However, no Federal funds are obligated until a Grant Agreement is approved by both the grantee and the Service. A proposal consists of an Application for Federal Assistance, Form SF-424, a statement of Assurances, and one or more project statements and supporting documents. (Appendix 1 shows the parts of the Grant Proposal package.)

A. An Application for Federal Assistance may be for a single project or for several projects. A signed original and two copies must be sent to the Regional Director. Copies of the Application for Federal Assistance, Form SF-424 and instructions can be obtained from the Regional Offices.

B. State fish and wildlife agencies may provide a single set of Assurances annually in lieu of providing an Assurance with each Grant Proposal. If the State elects to provide an annual statement of Assurances, a signed Assurance form should be sent to the Regional Director by January 1 of each year to cover the succeeding calendar year. Recipients other than State agencies must provide the appropriate Assurances with each Grant Proposal. Copies of the standard Assurances can be obtained from the Regional Offices.

C. A project statement is required for each project to be funded, even though several projects may be covered under a single Grant Proposal. Projects may include work described in more than one chapter of this part. States or other grantees may use their own format for the project statement; however, each statement must contain the information in paragraphs (1) - (6). More specific guidance on the preparation of project statements is provided in subsequent chapters. (See Exhibit 1 for an example of a grant with several related projects.)

(1) Need. Why is the project being undertaken?

(2) Objective. What is to be accomplished during the period of the project pursuant to the stated need? A project statement objective must:

(a) Specify fully what is to be accomplished within the time, money, and staffing allocated;

(b) Specify a recognizable end point; and

(c) Be quantifiable or verifiable.

(3) Expected Results or Benefits. What will be the results or benefits of accomplishing the project? For example, how will the project impact fish and wildlife resources or benefit the public? To the extent feasible, provide quantified resource or public use benefits.

(4) Approach. How will the objective be attained? Include specific procedures, schedules, and, when required, key project personnel and cooperators.

(5) Location. Where will the work be done?

(6) Estimated Cost. What will it cost, by year, to attain the objective? If costs are to be allocated between purposes or programs, provide a description of the method used to allocate the costs.

A. An Environmental Assessment or an Environmental Impact Statement is required for each activity not categorically excluded. (See Part 523, Federal Aid Compliance Requirements, for information on compliance with the National Environmental Policy Act.)

B. Any State Process Recommendation or comments received as a result of the State Process Review under Executive Order 12372, Intergovernmental Review of Federal Programs.

C. If planned project activities will generate program income, identify the source of the income and estimate the amount anticipated during the grant agreement period. The deductive alternative will be used to dispose of the program income, unless the Regional Director approves the use of the additive alternative. The grantee may request approval for use of the additive alternative by including a statement of how the program income will be used to add to the Federal Aid program. (See 1.14 for additional information on program income.)

D. Other documentation needed, dependent on the type of project. (See specific chapters for guidance.)

1.5 Amendment to the Grant Proposal. An amendment to the Grant Proposal must be submitted to the Regional Director if there is:

A. An addition, deletion or modification of a project objective;

B. A change in key personnel (when the identification of key personnel was required for the Grant Proposal); or

C. An extension of the period covered by the proposal.

A signed original and two copies of the revised SF-424, together with project statement(s) and an explanation of the reason for the revision, must be provided. However, only the revised portions of the project statement(s) need to be provided. A letter to the Regional Director may be used for a change in key personnel.

1.6 Grant Agreement. The Grant Agreement, Form 3-1552, is used to obligate Federal Aid funds for carrying out work covered by an approved Grant Proposal during a specified period of time (generally one year). The signature by an authorized official of the State commits the State to carry out the work described in the project statement(s) in accordance with the terms and conditions of the Grant Agreement. Provide an original and two copies to the Regional Director. Copies of the form can be obtained from the Regional Offices. Appendix 2 summarizes the documents included with a Grant Agreement. Illustration 1 provides instructions for completion of the Grant Agreement form.

1.7 Documents Supporting the Grant Agreement. The following information should be submitted along with the Grant Agreement.

A. For Grant Agreements to execute more than one project, a schedule of projects to be funded must be included that shows the list of projects, the title or objective of each project, and the estimated cost of each project during the current grant agreement period. This information will be used to support the obligation of Federal funds on the Grant Agreement form.

B. If costs for a project are allocated between purposes or programs, identify the estimated costs by purpose or program. The amounts allocated should be consistent with the method described in the Grant Proposal.

C. If a project includes activities chargeable to Boating Access, Hunter Education, or Aquatic Education, identify the subprogram and estimated cost for each subprogram.

D. Coastal States should provide an allocation of costs for projects that have both marine and freshwater fisheries benefits.

E. Other supporting documents may be needed to identify the specific activities planned for accomplishment during the period of the Grant Agreement. Refer to the pertinent chapter for supporting documents needed.

F. Depending on the type of project, documentation required for compliance with other Federal laws and regulations may be submitted at the time the Grant Agreement is sent to the Regional Director.

1.8 Amendment to Grant Agreement. An Amendment to Grant Agreement, Form 3-1591, is used to document changes in the Grant Agreement. An amendment must be submitted to the Regional Director for approval prior to the close of the agreement period. If the amendment involves changes in any of the documents supporting the Grant Agreement, attach a copy of the applicable revised document. Provide an original and two copies to the Regional Director. Copies of the form can be obtained from the Regional Offices. Illustration 2 provides instructions on completion of the Amendment to Grant Agreement form. An amendment must be submitted to obtain the Regional Director's approval for:

A. Adding or deleting a project from the list;

B. Increasing or decreasing the Federal funds obligated on the Grant Agreement;

C. Revising the rate of Federal participation shown on the Grant Agreement; or

D. Modifying the Grant Agreement period.

1.9 Financial Management Systems. States will use their own laws and procedures to expend and account for Federal Aid funds, including funds subgranted to others. States, as well as their subgrantees and cost-type contractors, must have sufficient control and accounting procedures to permit preparation of required reports and to show that Federal Aid funds have been used only for authorized purposes. (See 43 CFR 12.60.).

1.10 Reimbursement. The State may request reimbursement for the Federal share of allowable costs by either of the following methods.

A. Treasury Check. As actual costs are incurred, the State may request reimbursement by sending to the Regional Office an original and one copy of a completed Request for Advance or Reimbursement, Form SF-270.

B. Electronic Funds Transfer. The State may obtain the Federal share of allowable costs by electronic transfer of funds from the U.S. Treasury to the State's commercial bank by SMARTLINK. Detailed instructions are contained in the instructions for use of the SMARTLINK payment management system, which may be obtained from the Regional Offices.

1.11 Allowable Costs. Allowable costs are determined in accordance with the Federal cost principles applicable to the organization incurring the cost. For example, State incurred costs are subject to OMB Circular A-87. If the State subgrants, or has a cost type contract with a university, the cost principles of OMB Circular A-21 will apply. Copies of the OMB Circulars are available from the Regional Offices. (See 43 CFR 12.62).

A. Costs must meet the following criteria to be allowable. They must be:

(1) Necessary, reasonable and allocable to the work covered by the Grant Agreement;

(2) Authorized or not prohibited under State or local laws or regulations;

(3) In compliance with limitations of Federal laws, regulations, or the Grant Agreement;

(4) Consistent with policies, regulations, and procedures that apply to both Federal Aid funded activities and other activities of the State;

(5) Treated in conformance with generally accepted accounting principles;

(6) Not included in the cost of any other federally funded activity;

(7) The net of all applicable credits; and

(8) Adequately documented.

(1) Equipment and other Capital Expenditures.

(a) Approval is not required for the acquisition of personal property, regardless of cost or whether capitalized, when it is expected that the property will be needed for Federal Aid program purposes throughout the useful life of the property.

(b) Approval is required for the acquisition of real property by purchase (including lease) or construction.

(2) Pre-agreement costs or preliminary costs. Costs incurred prior to the approval of a Grant Agreement are allowable when specifically provided for as a special condition of the agreement. Allowable pre-agreement costs are for those activities required for project planning and development. Examples are:

(a) Feasibility surveys;

(b) Engineering and biological reconnaissance;

(c) Preliminary negotiations for land acquisition, including appraisals; and

(d) Preparation of project documents.

(3) Insurance. Costs for insurance are allowable to the extent that the insurance is necessary for carrying out Federal Aid project activities, is in accordance with State policy, and is consistent with sound business practices. (See OMB Circular A-87, Attachment B, Section C.4).

(a) Approval is not required for insurance premiums or payments to a reserve for self insurance, which is mandated by law or regulation and is generally applied to all programs or activities.

(b) Payments for actual losses, which could have been covered by insurance, are not allowable. For example, workers' compensation costs, which could have been covered by workers' compensation insurance, may not be charged to Federal Aid projects. However, actual losses incurred under nominal deductible insurance coverage and minor losses which occur in the normal course of operations are allowable with the approval of the Regional Director.

1.12 Availability of Funds.

A. Federal Aid funds obligated by the State must be liquidated no later than 90 days after the end of the grant agreement period. (See 1.23 for requirements for submission of the final financial report.)

B. If the final financial report cannot be furnished within the 90-day period, the grantee must send a written request for extension to the Regional Director before the end of the 90-day period. The request must provide the reason for the delay and an estimated date for submission of the required report.

1.13 Matching or Cost Sharing. In addition to allowable costs incurred, the State share of project costs may be satisfied by the value of third party in-kind contributions. As a general rule, in-kind refers to non-cash contributions made by parties other than the grantee, since goods or services furnished by the grantee would be for costs incurred. Additional information is included in the Guidelines for In-Kind Contributions on Federal Aid Programs which can be obtained from the Regional Offices.

A. In-kind contributions must meet the same standards for allowability as any other cost item. A basic standard is that in-kind contributions must be necessary and reasonable for carrying out the project.

C. If the grantee donates real property for a construction or facilities acquisition project, the value of the real property is the current market value at the time of donation.

1.14 Program Income. Revenue realized by the State, or its subgrantee, is program income if the revenue is a direct result of Federal Aid supported activities during the grant agreement period. However, if real property, equipment, or supplies are sold, the proceeds are to be treated as program income and returned to the Federal Aid program under which the property was acquired regardless of the grant period. Additional information is included in Guidelines for Program Income which can be obtained from the Regional Offices.

A. If planned activities are anticipated to generate program income, the project statement should identify the source of the income and the annual amount of income anticipated.

B. Program income received during the grant agreement period must be accounted for as receipts and deducted from current costs, unless other prior arrangements have been made with the Regional Director.

1.15 Real Property. The State fish and wildlife agency, as the grantee, is responsible for exercising sufficient control over real property to ensure that the property is used for the purpose(s) for which it was acquired.

A. Control may be exercised through agreement or other means consistent with State procedures, but must contain the requirements for use of the property and a prohibition against the disposition or encumbrance of its title or other interest.

B. If the property is no longer needed or can no longer serve the purpose for which acquired, the State must notify the Regional Director and arrange for disposition.

C. If the use of property is diverted to other non-approved purposes, either the use must be returned to the approved purposes or the property must be replaced. The replacement property must be at least equal in value and benefits to the program under which the diverted property was acquired.

1.16 Equipment.

A. The State, and its subgrantees, will use, manage, and dispose of equipment acquired with Federal Aid funds in accordance with State laws and procedures.

B. States and other grantees are expected to use equipment on the project under which it was acquired until no longer needed for that purpose. When the equipment is no longer needed for that project, the equipment may be used for other purposes which are eligible under Service grant programs. If equipment with a current market value over $5,000 is sold, the proceeds must be treated as program income. Costs related to the sale of the equipment may be deducted in the determination of program income.

C. The use of equipment may be shared with other Federal Aid projects as long as the use does not interfere with the accomplishment of the project for which the equipment was acquired.

1.17 Supplies. Supplies purchased with Federal Aid funds are to be used only on the project for which acquired. If the project is completed, grantees may use the supplies on other Federal Aid projects. If the supplies are not needed for other Federal Aid projects, and there is a residual fair market value exceeding $5,000, the supplies may be retained and an amount equal to the fair market value returned to the Federal Aid program as program income.

1.18 Copyrights and Patents.

A. The States may use their own policies regarding copyright of any material developed or purchased under a Federal Aid project. However, the U.S. Fish and Wildlife Service reserves a royalty-free, nonexclusive, and irrevocable license to reproduce, publish or otherwise use, and to authorize others to use, the material for Federal Government purposes.

B. The State should promptly report to the Regional Director any invention or discovery resulting from Federal Aid funded projects. The disposition of title and rights to any invention or process are subject to the Government-wide regulations issued by the Department of Commerce in 37 CFR Part 401.

1.19 Debarred and Suspended Parties. Executive Order 12549, Debarment and Suspension, was issued by the President on February 18, 1986. The Executive order directs that persons suspended or debarred by one Federal agency from receiving grants may not receive grants from any other Federal agency. Department of Interior rules to implement this order are contained in 43 CFR Part 12. Section 12.510 of these rules contains requirements for the submission of certifications.

A. States and other grantees must submit the certification for Primary Covered Transactions, Form DI-1953. Copies of the form are available in the Regional Offices. States certify as to their principals, not the State agency. State principals are commissioners, directors, project leaders, or other persons with primary management or supervisory responsibilities, or a person who has a critical influence on or substantial control over Federal Aid projects. States may provide the certification annually. Other grantees must provide the certification with each Application for Federal Assistance.

B. States and other grantees must obtain from their subgrantees and contractors a certification for Lower Tier Covered Transactions, Form DI-1954. Copies of the form are available in the Regional Offices. A certification is not required for small purchase procurements, currently defined as less than $25,000. These certifications are normally provided with an application or proposal from a subgrantee or contractor.

C. The General Services Administration publishes a list of parties debarred, suspended, ineligible, or excluded from participation in Federal grants under the provisions of Executive Order 12549.

1.20 Procurement.

A. The State will use its own policies and procedures for procurement of property and services under Federal Aid grants. Subgrantees of the State will comply with the procurement requirements imposed upon them by the State. However, the State must ensure that purchase orders and contracts incorporate provisions required by Federal laws and regulations. These clauses are contained in 43 CFR 12.76(i).

B. Other grantees must meet the procurement requirements contained in 43 CFR 12.76.

1.21 Subgrants. The State may execute all or part of a Federal Aid project by providing financial assistance; i.e., subgrants, to another party such as a local unit of government. The State will use its own laws and procedures for awarding and administering these subgrants. However, the State must ensure that all Federal requirements imposed upon them are passed through to the subgrantee, to include the following. (See 43 CFR 12.77).

A. The requirements related to the use and disposition of real property acquired with Federal Aid funds,

B. The retention and access requirements for records, and

C. The requirement for periodic audits in accordance with 43 CFR Part 12.

1.22 Monitoring and Reporting Performance.

A. States are responsible for monitoring their Federal Aid projects to ensure compliance with Federal requirements and to ensure that project objectives are being met.

(1) A performance report is required for each project to compare actual performance to planned accomplishments, and to report costs incurred. An original and two copies must be submitted to the Regional Director within 90 days after the end of the grant agreement period. (See 43 CFR 12.80).

(2) If the annual performance report cannot be submitted within the 90-day period, the State must send a written request for extension to the Regional Director before the end of the 90-day period. The request must contain a justification for the delay and an estimated date for submission of the required report.

(3) Guidance on the content of performance reports is contained in following chapters. (For example, see 522 FW 6 for guidance on projects to acquire land.)

(4) The States are responsible for obtaining information on performance from subgrantees and contractors necessary for the State to meet its performance reporting requirements.

B. The Service compiles data on accomplishments under the Federal Aid programs. These data are used to prepare annual and special reports. A system has been developed to collect information on project segments approved and on the accomplishments of these projects during the grant agreement period. A list of activity codes and reporting units may be obtained from the Regional Offices. The Regional Office will compile data from performance reports or other available documentation.

1.23 Financial Reporting. States must submit an annual Financial Status Report, Form SF-269, not later than the 90 days after the expiration date of the Grant Agreement. Copies of the form can be obtained from the Regional Offices. If the report cannot be provided within the 90-day period, the State must submit a request for extension to the Regional Director. The request must contain a justification for the delay and an estimated date for submission of the required report.

1.24 Retention and Access of Records. Grantees and subgrantees must maintain all pertinent records related to Federal Aid projects. These records are subject to review by the Director of the Fish and Wildlife Service, the Secretary of the Interior, the Comptroller General of the United States, or any of their authorized representatives. The States are responsible for ensuring that any subgrantees or cost reimbursement contractors are advised of the records requirements. Requirements for records retention are contained in 43 CFR 12.82. In general, records must be retained for 3 years.

1.25 Appeals to Enforcement Actions. The Regional Director may take action to enforce compliance with terms of a grant award. Grantees may appeal to the Director of the Fish and Wildlife Service any enforcement action taken or proposed by the Regional Director. To be considered by the Director, appeals should be submitted as soon as possible after receiving notice of an enforcement action. (Refer to 43 CFR 12.83 and 50 CFR 80.7).

1.26 Metric Transition. Grantees are encouraged to use metric units of measurement in their grant proposals, performance reports, or other documents. The Service will use metric units in Federal Aid Annual Reports to report on program accomplishments.