CFDA 12.401 NATIONAL
GUARD MILITARY OPERATIONS AND MAINTENANCE (O&M) PROJECTS
I. PROGRAM OBJECTIVE
The Department of
Defense (DoD) enters into cooperative agreements (CA) with States to provide
Federal support for services provided by the State Military Departments
for authorized facilities, real property services, real property maintenance
and repair, operations and maintenance (O&M), and minor construction
II. PROGRAM PROCEDURES
The DoD National
Guard Bureau (NGB) enters into a CA with a State when NGB transfers value,
through funding or otherwise, to the State to support the State Army National
Guard (ARNG) and Air National Guard (ANG) instead of acquiring (by purchase,
lease, or barter) property or services for the direct benefit or use of
the ARNG or ANG and substantial involvement is expected between the NGB
and the State when carrying out the activity contemplated in the agreement
(CA chapter 1-1).
Generally, a CA consists
of two parts, the agreement and appendices (Master Cooperative Agreement
(MCA) and as many Appendices as apply to that State). The CA for this
program is titled as "Grants and Cooperative Agreements NGR 5-1/ANGI 63-101"
and the appendices are listed as separate chapters in this standard CA.
Additionally, single purpose CAs may be created. The MCA includes standard
terms and conditions applicable to all Appendices under the MCA and the
required signatures of the parties. There will be a separate Appendix
for each CA functional area applicable to the State. Each Appendix shall
contain terms and conditions, allowable costs, reports, approved budget,
management controls, and administrative information applicable only to
that functional area (CA chapter 2-1).
The Adjutant General
(TAG) and the United States Property & Fiscal Officer (USPFO) are
responsible for the execution of the MCA and Appendices. A CA is the means
of providing all financial assistance and other support to States for
the operation of the National Guard except for financial assistance and
support provided under separate authority (e.g., military and technician
pay and the military supply system). Single purpose CAs will specify the
responsible parties (CA chapter 2-1).
The sum of Federal
reimbursements and program income may not exceed the requirements listed
for each program in the approved budget. The State Military Department
must have prior written USPFO approval of an amended budget before it
may request a reimbursement or receive program income that would bring
its receipts above the maximum program funding level. Funding may be transferred
from the O&M program without the prior written approval of the appropriate
NGB program manager. However, transfers of funds within the Real Property
Operations and Maintenance Activities (RPOMA) program which remain part
of the RPOMA program do not require approval (CA chapter 13-1).
In developing the
audit procedures to test compliance with the requirements for a Federal
program, the auditor should first look to Part 2, Matrix of Compliance
Requirements, to identify which of the 14 types of compliance requirements
described in Part 3 are applicable and then look to Parts 3 and 4 for
the details of the requirements.
A. Activities Allowed
1. Federal funding
under the CA shall be on a requirements basis within Federal budget limitations
and funding availability. Funding shall be provided to support those items
designated in the CA or facilities authorized support in the Facilities
Inventory Stationing Plan (FISP). Facilities used in excess of those authorized
shall be supported with other than Federal funds (CA chapter 13-5).
2. RPOMA and Facilities
Operations and Maintenance Activities (FOMA) (CA chapter 33) Appendix
support shall be provided within available funding limitations for authorized
facilities and supporting elements such as sidewalks, fire hydrants, gasoline
and diesel fuel dispensing systems, flammable materials buildings, roads,
utilities systems, fencing and hard stand. Maintenance and repair, real
property services, and minor construction support is provided for space
or facilities as detailed in the CA chapter 13-5.
3. Unallowable activities
are those activities that are described as unauthorized charges and detailed
in the CA chapter 13-6.
B. Allowable Costs/Cost
- Costs must be in accordance with any restrictions, limitations, or instructions
contained in the CA budget (CA chapter 13-4 and 33-4).
2. Indirect costs
are unallowable - Indirect costs, except fringe benefits, are unallowable
(CA chapter 5-3).
3. Fringe benefits
- Fringe benefits for which the State does not bill the State Military
Department directly, such as workmen's compensation, unemployment compensation,
State sponsored life and health insurance, and retirement benefits are
allowable if they are part of the State's Central Service Cost Allocation
Plan approved by the Department of Health and Human Services (HHS). However,
for these costs to be reimbursable, all of the following conditions have
to be met (CA chapter 5):
a. The individual
cost items have to be reimbursable under the terms of individual appendices.
b. Fringe benefit
costs for which the State does not bill the State Military Department
directly shall be reimbursable by applying a fringe benefit rate to the
costs of actual salaries paid to employees.
c. Fringe benefits
which are neither direct costs nor included in the billed central services
section of the State's Central Service Cost Allocation Plan approved by
HHS are not reimbursable.
G. Matching, Level
of Effort, Earmarking
The rate of reimbursement
to the State for all authorized charges, unless expressly stated otherwise,
shall be based on the FISP support code for the facility generating the
expenditure. For example, employee, repair, supplies, equipment, utility,
etc. costs directly and exclusively associated with a facility authorized
75 percent support shall be reimbursed to the State Military Department
75 percent. Costs that are generated for facilities that are authorized
at several different support levels shall be reimbursed at a rate that
reflects the actual level of effort. However, nothing shall preclude the
State Military Department from requesting reimbursement at a rate less
than what is authorized (CA chapter 13-5).
H. Period Of Availability
Of Federal Funds
1. National Guard
Operations and Maintenance agreements are funded with one year appropriations
and, as such, obligations may not be incurred against Federal funds for
a specified year before or after the Federal fiscal year in which the
funds were appropriated (CA chapters 12-1, 12-6, 32-1, and 32-6).
2. A CA shall be
executed by the USPFO and the TAG prior to any request for reimbursement
or advance payment. The State shall also have an approved Appendix covering
each functional area for which the reimbursement or an advance is requested.
The State shall not request reimbursement for any expenditures it made
before the date that all required parties execute the MCA and the covering
Appendices unless the MCA or appropriate Appendix expressly authorize
expenditures made during the funding period, but prior to the date of
final signature (CA chapter 2-1).
3. Work or task performance
must serve a bona fide need that exists in the fiscal year in which the
work or tasking is issued; otherwise, a valid obligation is not accomplished.
It is not intended that the rule of bona fide need of the fiscal year
rule be construed to preclude lead time. Thus, where materials, for example,
cannot be obtained in the same fiscal year in which they are needed, a
provision for delivery in the subsequent fiscal year does not violate
the bona fide need rule so long as the time intervening between placing
of the order and delivery is not excessive and the work order is not for
standard commercial items readily available from other sources. Bona fide
need generally is a determination of the NGB activity and not that of
the State performing the activity. The USPFO shall prepare a bona fide
determination and finding to reflect this need. A State performing the
activity should, however, refuse to accept a work order if it is obvious
that the work order does not serve a need existing in the fiscal year
in which issued (CA chapter 2-2).
J. Program Income
Program income in
NGB CA shall mean the gross income, received by a recipient from fees
for services performed and from the use, rental, or sale of real or personal
property, the operation and maintenance of which is supported under the
CA. The following exceptions are applicable (CA chapter 7):
1. Income received
from the use or rental of State-owned, Federally-supported armories is
not program income. However, the State must fulfill its obligations under
Title 10 USC 18236(c) on the use of these funds. Title 10 USC 18236(c)
permits States to rent out armories if the State uses the rental income
to maintain the armory. In addition, as a condition for continued Federal
support, the State must increase its contribution to the agreement by
at least the amount of all Identifiable Incremental Costs (IIC), as defined
in CA chapter 7-3c(4), for which it receives Federal support (e.g., utilities).
made to NGB by another Federal agency for the use of an NGB supported
National Guard facility are not program income but are considered to be
direct reimbursement of costs incurred. However, they may increase the
maximum funding limitations of the appropriate appendices to the CA.
3. Amounts paid directly
to a State Military Department by a Federal agency, a State agency, or
any other user for the use of a State Military Department owned, leased,
or licensed real property (exclusive of armories) or equipment acquired
or supported under an NGB CA pursuant to a direct relationship between
the Federal or State agency, or other user and the State Military Department
are program income.
1. Financial Reporting
a. SF-269, Financial
Status Report - Not Applicable
b. SF-270, Request
for Advance or Reimbursement - Applicable
c. SF-271, Outlay
Report and Request for Reimbursement for Construction Program - Not
d. SF-272, Federal
Cash Transactions Report - Applicable
Reporting - Not Applicable
3. Special Reporting
- Not Applicable