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Federal Policies on Grants

Federal Policies on Grants

The following Office of Management and Budget (OMB) Circulars include issues common to all Federal grants.
  • OMB Circular A-21 External Link Cost Principles for Educational Institutions (05/10/2004)
    These are the official guidelines for establishing an indirect cost rate with the Federal government. This circular establishes principles for determining costs applicable to grants, contracts, and other agreements with educational institutions. Small institutions should use Section H.

  • OMB Circular A-87 External Link Cost Principles for State, Local and Indian Tribal Governments (05/10/2004)
    This Circular accomplished the same purpose as A-21, but for State and local governments and federally-recognized Indian tribal governments (governmental units). It establishes principles and standards for determining costs for Federal awards carried out through grants, cost reimbursement contracts, and other agreements.

  • OMB Circular A-110 External Link Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations (11/19/1993) (further amended 09/30/1999)
    This Circular sets forth standards for obtaining consistency and uniformity among Federal agencies in the administration of grants to and agreements with institutions of higher education, hospitals, and other non-profit organizations. It establishes Uniform Administrative Requirements.

  • OMB Circular A-133 PDF Audits of States, Local Governments, and Non-Profit Organizations (06/24/1997) (includes revisions published in Federal Register 06/27/2003 and 06/26/2007).
    This Circular is issued pursuant to the Single Audit Act of 1984, P.L. 98-502, and the Single Audit Act Amendments of 1996, P.L. 104-156. It sets forth standards for obtaining consistency and uniformity among Federal agencies for the audit of States, local governments, and non-profit organizations expending Federal awards. Most recent amendment increased the audit threshold from $300,000 to $500,000.

OMB Ruling

Required Use of DUNS Number on all Federal Grants- Federal Register, June 27, 2003

As required by the Office of Management and Budget (OMB), all applicants must provide a Dun and Bradstreet Data Universal Numbering System (DUNS) number when applying for Federal grants or cooperative agreements on or after October 1, 2003. This requirement applies to renewals of awards as well as to prospective new awards.

The DUNS number is a unique nine-digit identification number provided by Dun & Bradstreet. Each entity, or each distinct physical location of an entity, must be assigned a DUNS number.

In addition to the DUNS requirement described above, agencies may also require applicants to register at the federal vendor database called the Central Contractor Registry (CCR) prior to submitting a proposal.


Faculty Salary under Grants

No one may be compensated for more than 100% of their time.

"In no event will charges to sponsored agreements, irrespective of the basis of computation, exceed the proportionate share of the base salary for that period. This principle applies to all members of the faculty at an institution. Since intra-university consulting is assumed to be undertaken as a university obligation requiring no compensation in addition to full-time base salary, the principle also applies to faculty members who function as consultants or otherwise contribute to a sponsored agreement conducted by another faculty member of the same institution." OMB Circular A-21, Section J, subpart 3 (d) (1)

Exception:Grant activities performed during the summer months. "Sponsored agreements during the summer months or other period not included in the base salary period will be determined for each faculty member at a rate not in excess of the base salary divided by the period to which the base salary relates." OMB Circular A-21, Section J, subpart 3 (d)(2)(a)


Time & Effort Reporting

For grantees subject to OMB Circular A-21, documentation for salary charges shall be based on either a system of monitored workload or a system of personnel activity reports for professional or professorial staff. Nonprofessional employees must keep personnel activity reports.

Personnel activity reports shall account on an after-the-fact basis for one hundred percent of the employee's actual time, separately indicating the time spent on the grant, other grants or projects, vacation or sick leave, and administrative time, if applicable. The reports must be signed by the employee, approved by the appropriate official, and coincide with a pay period. These time records should be used to record the distribution of salary costs to the appropriate accounts no less frequently than quarterly.


Record Retention

Financial records, supporting documentation, statistical records, and all other records pertinent to the grant shall be retained by the grantee for three years (State grants) or seven years (federal grants) from the date of submission of the final Financial Status Report (unless stated otherwise). When the conditions of a grant award require the grantee to report program income, records relating to program income shall be retained for three years from the date of submission of the last required income report.

If the three-year retention period is extended because of audits, appeals, litigation, or the settlement of claims arising out of the performance of the project, the records shall be retained until such audits, appeals, litigation, or claims are resolved. Unless court action or audit proceedings have been initiated, the grantee may substitute microfilm copies of original records.