U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration PHMSA - Hazardous Materials Emergency Preparedness (HMEP) Grants NASTTPO Mid-year Conference October 2011

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration HMEP Grants Management Requirements Understanding the Terms and Conditions of Your HMEP Award

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Agenda Overview of terms and conditions Recipient responsibilities Section-by-section analysis - Principle(s) involved - Source of requirement - HMEP-specific implementation (where applicable)

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Overview of Terms and Conditions Terms and conditions are the means by which the awarding agency communicates the rights and obligations of the parties to the grant agreement They are legally binding on the recipient once the award is accepted -Acceptance can occur in a variety of ways; PHMSA grantee requires signature first Relevant regs and other legal authorities can be included in full text or incorporated by reference

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Recipient Responsibilities Responsibility begins in pre-award phase -Awareness, signature on grant application Upon award, read award terms and conditions - If necessary, have counsel review -Raise any questions with PHMSA before award acceptance Note specific compliance requirements, including reporting due dates For requirements incorporated by reference, obtain current language Ensure that all personnel with grant-related responsibilities are familiar with the terms and conditions

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Recipient Responsibilities (continued) Understand what must be flowed down to sub recipients Section 4, Governing Statutes and Regulations, explains the relationship between the federal terms and conditions and state or territorial law, and includes requirements for recipients to notify PHMSA if federal requirements are challenged COMPLY AND SEEK GUIDANCE AS NECESSARY

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 1: Effect of Award The Recipient, which is the organization named in block 1 of the Notice of Grant Award (NGA), is legally responsible for and accountable to PHMSA for the funds provided. By acceptance of this award, which is accomplished by the signature of the authorized Recipient official shown in blocks 17 and 18 of the NGA, the Recipient agrees to comply with the terms and conditions detailed or referenced below. The award may be modified only by the PHMSA Agreement Officer, either at PHMSA’s initiation, with Recipient acceptance, as appropriate, or upon the request of, and subsequent approval by, the Agreement Officer. This includes any request by a Request to deviate from non-statutory provisions of 49 CFR 110. If the Recipient materially fails to comply with the terms and conditions of this award, whether stated in full text herein or incorporated by reference, the Agreement Officer may suspend, terminate, or take other remedies as may be legally available and appropriate in the circumstances as provided in 49 CFR Addresses three key principles: –Legal responsibility and accountability –Authority to obligate federal government to expenditure of funds –Potential remedies for non-compliance 7

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 2: Award Information Includes several key elements –Matching requirement –Federal obligation only for amount awarded—as a ceiling –Need for separate accounting for planning and training –Establishment of performance period –Pre-award costs not permitted under HMEP Principles –Federal award amount equals a ceiling; total, actual allowable costs determine final funding amount (i.e., amount reduced if project costs less than projected; however remains 80/20 shares) –Planning and training handled together for administrative purposes, but two separate budgets and awards for accountability purposes 8

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 2: Award Information (continued) Principles (continued) –Recipients cannot incur costs before or after the stated period of performance without federal approval –PHMSA is not obligated to provide any funding in addition to what is shown in the grant award HMEP-specific implementation –On a class basis, PHMSA/HMEP does not allow pre-award costs –Extensions, although technically permitted, would be problematic given the annual funding cycle, e.g., awards would overlap Source: 49 USC 5116; 49 CFR 110; 49 CFR 18 9

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 3: Incorporation of Approved Application by Reference The Recipient's application, including the narrative and budget as approved by PHMSA prior to award, is incorporated by reference in this award. Changes to the approved application are governed by 49 CFR and paragraph 15 of these terms and conditions. Principles –Activities and costs provided with sufficient specificity in the application are considered “approved” unless PHMSA takes exception; if not specifically included and prior approval is required, post-award request must be made (e.g., equipment) –Approved budget is baseline against which rebudgeting is judged Source: 49 CFR 18 10

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 4: Governing Statutes and Regulations Includes a variety of requirements—authorizing statute (49 USC 5116); implementing program regulations (49 CFR 110); socio-economic regulatory requirements, and administrative regulatory requirements –Socioeconomic requirements Examples: 49 CFR 21, "Nondiscrimination in Federally-Assisted Programs of the Department of Transportation-Effectuation of Title VI of the Civil Rights 49 CFR 32, "Government wide Requirements for Drug Free Workplace (Financial Assistance)," –Administrative requirements have a direct bearing on the allowability of costs and activities under an award Examples: 49 CFR 18, Uniform Administrative Requirements for Grants and Cooperative Agreements to State, and Local, and Tribal Governments. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations (implemented in 49 CFR 18) 11

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 5: Order of Precedence A variety of different types of requirements are included in the award –Some are fairly general because designed to be applied across agencies and programs –Some are specific to DOT –Some are specific to the HMEP program Authorizing Official/Agreement Officer (AO) –Specific name that relates to the authority addressed in Section 1 Agreement Administrator/Grants Management Specialist –Point of contact for day-to-day matters; questions; interpretations 12 Section 6: General PHMSA Responsibilities

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 7: General Recipient Responsibilities Principles –The Recipient is responsible for the day-to-day management of the award and is given the award based on the capability to carry out the award and the adequacy of its systems to account for grant funds –PHMSA advice can be sought but, unless formal PHMSA approval is required, decision- making authority resides in the Recipient –PHMSA has no direct relationship with a Recipient’s subrecipients or contractors The Recipient is responsible for all aspects of that relationship, including ensuring compliance with applicable federal requirements Failure of Recipients to have legally sufficient subawards or contracts or to actively monitor performance and expenditures may result in a federal enforcement action If subrecipient costs are disallowed, PHMSA will look to the Recipient for repayment Source: 49 CFR 18 13

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 8: Central Contractor Registration and Universal Identifier Requirements Formalizes and broadens several requirements previously in place for applicants –DUNS number required prior to award –CCR registration (includes DUNS number) required to submit through Grants.gov 14 Section 9: Government-wide Non-Procurement Suspension and Debarment

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 10: Allowable Costs Principles –Allowability of costs under the grant is determined by general cost principles and program-specific requirements –Some costs may be allowable only with PHMSA approval (whether provided at time of award or post-award) –Cost principles/program requirements apply to both federal funds and matching –See Section 11 for requirements to be flowed down to lower tiers Source: 49 CFR 18; 49 CFR

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 11: Flowdown of Requirements under Subawards In general, the requirements of this award that apply to the Recipient also apply to subrecipients, i.e., entities that are carrying out part of the substantive programmatic activity, unless an exception is specified. In making subawards under the award, the Recipient shall apply the federal cost principles applicable to the particular type of organization concerned. Therefore, if a subaward is to a governmental unit (other than a college, university or hospital), 2 CFR 225 shall apply; if a subaward is to a college or university, 2 CFR 220 (OMB Circular A–21) shall apply; if a subaward is to another type of non-profit organization, 2 CFR 230, Cost Principles for Non-Profit Organizations (OMB Circular A–122), shall apply. The administrative requirements that must be flowed down to subrecipients are those that apply to the type of organization concerned. Therefore, if a subaward is made to a university, the requirements of 49 CFR 19 rather than 49 CFR 18 apply. 16

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 11: Flowdown of Requirements under Subawards (continued) Principles –Entities (LEPCs, others) that carry out a part of the programmatic activity (whether the award is called a subgrant or a contract) are subject to the same or similar requirements as those that apply to the Recipient –Recipients are responsible for ensuring that agreements include terms and conditions that allow for compliance with the PHMSA award Source: 49 CFR 18 17

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 12: Matching The recipient must provide 20 percent of the allowable direct and indirect costs of all activities covered under this award from non-federal sources. Recipients may either use cash (hard match), in-kind (soft-match) contributions, or a combination of both to meet this requirement. The types of contributions allowed are listed in 49 CFR Matching costs and contributions also must meet the requirements of 49 CFR 18.24, including that the costs must meet the same requirements of allowability as apply to HMEP funds. Federal funds may be expended before non-federal matching funds, provided that total program costs at completion of the program year reflect the 80 percent federal/20 percent non-federal allocation of costs. The matching requirement is in addition to the maintenance of effort required of Recipients of HMEP awards under 49 U.S.C. 5116(a)(2)(A) and (b)(2)(A) and 49 CFR (b)(2) and (c)(2). 18

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 12: Matching (continued) Principles –Matching must be in the form of allowable costs/third-party in-kind contributions –Matching costs/contributions must be fully documented –Third-party-in-kind contributions (e.g. time of trainees) supported by a methodology showing how value was derived –Matching amount is based on actual, allowable costs Source: 49 USC 5116; 49 CFR 18 19

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 13: Performance and Financial Reporting Requirements (continued) Federal Financial Reports (SF 425) & Progress/Performance Reports –Interim reports required QUARTERLY –Due 30 days after end of the quarter—January 31, April 30, July 31 –SF 425 is cumulative –Final report required 90 days after end of funding period (December 31) –Only the “Expenditures” portion required unless advance payments are made—lines 10d through 10k and 11 (if indirect costs claimed) –Requests to extend the due date for a report must be in writing, be submitted before the report is due, and include an appropriate justification 20

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 14: Reporting Subawards and Executive Compensation Recipients required to report first-tier each subaward action that obligates $25,000 or more in federal funds –For subaward information, report no later than the end of the month following the month in which the obligation was made. (For example, if the obligation was made on November 7, 2010, the obligation must be reported by no later than December 31, 2010.) Requirements for reporting executive compensation generally inapplicable to HMEP Recipients/subrecipients as would not meet threshold criteria 21

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 15: Changes to the Approved Application and Budget Some prior-approval requirements to note –Cumulative transfers among direct cost categories, or, if applicable, among separately budgeted programs, projects, functions, or activities which exceed or are expected to exceed ten percent of the current total approved budget, whenever the awarding agency's share exceeds $100,000. –Changes in the scope or objectives in the approved application –Rebudgeting of HMEP funds from training to planning 22

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 15: Changes to the Approved Application and Budget Principles –A “change” is a change from the approved application and application budget –Prior-approval requirements may originate in 49 CFR, the cost principles, or other terms and conditions of award –When PHMSA approval is required for a change, the request must be submitted in advance of the proposed expenditure/activity Source: 49 CFR 18, 2 CFR 225 (incorporated by reference in 2 CFR 18), other applicable cost principles HMEP-specific implementation: PHMSA will be working with you to define what is meant by a “change in scope” for the HMEP program 23

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 16: Title to Equipment Principles –Equipment and supplies are distinguished by acquisition cost/useful life –Federal definition of equipment applies budgeting, approval, and accountability requirements, i.e. acquisition cost of $5,000 or greater and useful life of more than 1 year (which may be more liberal than Recipient’s own requirements) Source: 49 CFR 18; 2 CFR 225 Principles –Author/developer may wish to assert rights to copyright, e.g., for a computer program that could assist States in hazmat response –If federal funding used to develop or purchase the copyrightable material, federal government has a right to use the materials or authorize others to use them, which does not amount to infringement Source: 49 CFR Section 17: Copyrights

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 18: Payment Subject to the requirements in 49 CFR 18.21, payments will be made after receipt of a "Request for Advance or Reimbursement" (SF 270). Each request must be submitted electronically via the HMEP Grant Portal: PHMSA will promptly review the request and, upon approval, forward it to the Payment Office for disbursement. PHMSA reserves the right to request supporting documentation upon receipt of payment requests. Failure to comply can result in a denial of payment. Principles –Reimbursement means that costs can be claimed only after a payment is made (e.g., payment of a hotel bill versus making hotel reservations) –Requests for reimbursement must be supported by paid invoices or other documentation, which must be available upon request –Requests can be made as frequently as every 2 weeks and should be made consistent with expenditure patterns Source: 49 CFR 110; 49 CFR 18 25

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 19: Audit Requirements Principles –Applies to federal awards non-profit domestic organizations –Single audit tests the adequacy of systems that support the expenditure of federal funds –Assumed that the same system is used to administer grants from FEMA, EPA, DOT, or other federal agency –DOT can consider designating a program as high-risk –Payment for goods or services is not considered a “federal award” for audit purpose (§___.210 Subrecipient and vendor determinations) Can use as guidance in making this distinction for other purposes as well Source: OMB Circular A

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 20: Record Retention and Access to Records Grant-related financial and programmatic records, supporting documents, statistical records, and other records of Recipients or subrecipients shall be maintained as provided in 49 CFR 18.42(a) through (d) (or 49 CFR 19.53, if applicable) PHMSA, through its staff or authorized representatives, may make site visits, at reasonable times; to review project accomplishments, management control systems and provide guidance as may be requested or required. If a site visit is made on the premises of the Recipient, the Recipient must provide reasonable facilities and assistance to PHMSA representatives in the performance of their duties. PHMSA, through its authorized representatives, may request a desk audit, at reasonable times; to review project accomplishments, management control systems and provide guidance as may be requested or required. If a desk audit is conducted, the Recipient is required to provide; electronically or via postal service all records requested by PHMSA representatives. All desk audits and reviews will be performed in a manner to not unduly delay work activity under the award. If PHMSA requires access to the records of a subrecipient or contractor under the grant, whether as part of a site visit or for another type of review, PHMSA will coordinate the request with the Recipient.. All site visits and evaluations will be performed in a manner to not unduly delay work activity under the award or other activities of the Recipient, subrecipient, or contractor. 27

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 20: Record Retention and Access to Records (continued) Principles –Recipients are required to maintain documentation supporting their reported grant activities and expenditures make such information available upon request (whether at the Recipient’s site or by providing information directly to PHMSA) –Lack of documentation or inadequate documentation can result in questioning/disallowance of costs or delays in payment Source: 49 CFR 18 HMEP-specific implementation: PHMSA has requested/will be requesting certain information in support of site visits, desk reviews, and payment requests 28

U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Section 21: Contracting with Small and Minority Firms, Women's Business Enterprises, Veteran Owned, and HubZone Area Firms Section 22: Seat Belt Use Policies and Programs Section 23: Texting While Driving Section 24: Information Collection Section 25: Fraud, Waste, and Abuse (continued) 29 Other Sections