Montana Department of Military AffairsDisaster and Emergency Services

Grants Program1956 Mt. Majo Street

P.O. Box 4789Fort Harrison, MT 59636-4789

406-324-4777

Policies and Procedures Agreement

This document needs to be signed by the appropriate parties and returned to Disaster and Emergency Services Grants Program (DESGP). This agreement applies to all DESGP grants.

Funds will not be disbursed to sub-recipients until this agreement has been signed and received by DESGP.

I hereby agree to adhere to all federal codes and regulations, grant guidance, state policies and procedures, and all assurances and guarantees. Failure to abide by the Policies and Procedures can result in the following disciplinary actions: disapproval and/or refusal of reimbursement requests, de-obligation of awarded funds, and grant cancellation. DESGP has been given the authority to

enforce the aforementioned Policies and Procedures accordingly and decide upon the appropriate disciplinary measures, as necessary.

I have read and fully understand my responsibilities and the disciplinary actions that will be taken if I fail to observe my responsibilities as a sub-recipient. I understand that this agreement pertains

to all decisions concerning DESGP administered grants.

Official Authorized to Sign (Print Name) Title

Signature Date

Project Manager and/or DES Coordinator (Print Name) Title

Signature Date

Mont ana Disa ste r & Emerg ency Ser vice s

Grant s Progr am

Grants Management ManualPolicies & Procedures

MONTANA DISASTER & EMERGENCY SERVICES

GRANTS PROGRAM1956 Mt. Majo Street

Fort Harrison, MT 59636-4789406-324-4777

July 1, 2012

July 1, 2012 2

TABL E OF CONTE NTS

INTRODUCTION Page 6

FEDERAL GRANT INFORMATION Page 9

CHAPTER 1: APPLICATION PROCESS Page 111.1 Application Submittal Page 121.2 Application Reviews Page 12

CHAPTER 2: AWARD AND COMPLIANCE INFORMATION Page 142.1 Bilateral Agreements Page 142.2 Award Page 142.3 Performance Period Page 142.4 Special Conditions and Assurances Page 152.5 Debarment, Suspension and Other Responsibility Matters Page 152.6 Drug Free Workplace Page 182.7 Environmental Planning and Historical Preservation Compliance Page 182.8 Sub-granting of Funds Page 192.9 Scope of Work Page 192.10 Timelines for Projects Page 192.11 Grant Revisions Page 202.12 Grant Extensions Page 212.13 Supplanting Page 212.14 Remedies for Non-compliance Page 212.15 Grant Award Termination for Cause Page 222.16 Reporting Irregularities and Illegal Acts Page 222.17 Copyrights, Patents, and Inventions Page 232.18 Publications Page 232.19 Match Requirements Page 232.20 Sub-recipient Match Page 242.21 Hard Match Page 242.22 In-kind or Soft Match Page 242.23 Training Page 252.24 Exercises Page 26

CHAPTER 3: PROCUREMENT AND STANDARDS Page 273.1 Conflicts of Interest Page 273.2 Sole Source Procurement Page 273.3 Contracts for Services Page 283.4 Equipment and/or Accountable Supplies Page 283.5 Maintenance and Warranties of Equipment Page 29

CHAPTER 4: PROPERTY/EQUIPMENT MANAGEMENT AND CONTROL Page 314.1 Property/Equipment and Accountable Supplies Page 314.2 Equipment Exchange and Return Page 314.3 Sub-recipient Inspection of Equipment Page 314.4 Equipment Transfer Page 324.5 Inventory Control System Page 324.6 Management Requirements from 44 CFR § 13.32 Page 32

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4.7 Physical Equipment and Accountable Supplies Inventory Page 324.8 Prevention of Loss, Damage or Theft of Equipment Page 334.9 Equipment Maintenance Procedures Page 334.10 Disposition of Equipment and Accountable Supplies Page 334.11 Change in Ownership of Equipment Page 344.12 Insurance of Equipment and Property Page 34

CHAPTER 5: ALLOWABLE AND UNALLOWABLE COSTS Page 355.1 Allowable Costs Page 355.2 Management and Administration (M&A) Page 355.3 Personnel Costs Page 355.4 Documentation Page 365.5 Contractual Services Page 365.6 Accountable Supplies Page 365.7 Equipment Page 375.8 Maintenance and Warranties Page 375.9 Food and Beverages Page 375.10 Consultant Rates Page 385.11 Training Page 385.12 Travel Page 385.13 Expendable Supplies Page 395.14 Unallowable Costs Page 395.15 Indirect Costs Without Prior Approval Page 405.16 Land acquisition Page 405.17 Compensation of Federal Employees Page 405.18 Travel of Federal Employees Page 415.19 Bonuses or Commissions Page 415.20 Pre-Award Costs Page 415.21 Lobbing Page 415.22 Fund Raising Page 415.23 Conferences and Workshops Page 415.24 Costs Requiring Prior Approval Page 425.25 Audit Costs Page 425.26 Foreign Travel Page 42

CHAPTER 6: FISCAL RESPONSIBILITY Page 436.1 Quarterly Balances Page 436.2 Reimbursement Request Page 436.3 Required Documentation for Reimbursement Page 43

CHAPTER 7: SUPPLEMENTAL DOCUMENTATION Page 457.1 Travel Support Documentation Page 457.2 Training Records Page 457.3 Accounting for Sub-recipient In-house Staff Page 457.4 Records Management Page 467.5 Records Retention Page 46

CHAPTER 8: QUARTERLY PROGRESS/PROGRAMMATIC PROGRESS REPORT Page 47

CHAPTER 9: OVERSIGHT AND MONITORING Page 489.1 Audits Page 489.2 Federal Audits Page 48

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9.3 State Audits Page 489.4 Common Audit Findings Page 489.5 Monitoring Page 499.6 Common Audit Findings Page 499.7 Corrective-Action and Resolution of Findings Page 50

CHAPTER 10: GRANT CLOSEOUT Page 5110.1 Requirements for Grant Closeout Page 5110.2 Sub-mission of Final Reimbursement and Programmatic Reporting Forms Page 5110.3 Post-Grant Closeout Requirements Page 5110.4 Re-allocation of Unspent Funds Page 52

REFERENCES Page 53

ACRONYMS Page 54

GLOSSARY Page 55

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Disaster and Emergency Services Grant ProgramsMission

Statement:

It is the mission of the Disaster and Emergency Services Grants Team to constantly strive to improve and

implement critical initiatives and programs to increase public safety in Montana.

The Grants Team is committed to providing quality services to our Sub-recipients, to enhance the health,

safety and general well-being of the citizens of Montana.Our Guiding Principles

are:Conduct grants operations in a legal, ethical, and fair manner. Conduct the public's business in a manner

that is responsive,accessible and open to

all.Provide professional leadership and operational

excellence.Recognize that our Sub-recipients and citizen

volunteers are the foundation upon which these services are

provided.

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*Note: The Grants Team is not responsible nor can they be held to incorrect information given out without consultation.

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INT RODUCTI ON

This manual provides procedures for the administration of all federal grants administered by the Montana Disaster and Emergency Services Grants Program (DESGP), the designated State Administrative Agency (SAA) or the grantee. The information in this manual is a compilation of Federal and State regulations. This manual is not intended to replace any federal regulations or guidance. When revisions and corrections to this manual are deemed necessary, revised copies will be issued.

The staff of the Grants Program (DESGP) at DES will be pleased to discuss any questions/issues which are not adequately covered in this manual and will be receptive to recommendations that might make the administration of grant funds easier and more efficient. Questions that arise during the grant cycle that have not been previously addressed should be discussed with DESGP before any action is taken. For further information, clarification, materials, or submission of ideas, please contact DES Grants Program personnel.

All programmatic elements concerning Homeland Security or Emergency ManagementPerformance Grants must be routed through the DES District R e pr e s e n ta t iv e s . Elements include:

o Amendmentso Change requestso Questionso Issueso Concernso Quarterly Reportso Exercise AARs & IPs

All financial documentation must be sent directly to d e so h sg@ m t.gov with a CC to the county’s or tribe’s District Representatives. DES Grants Program staff will work directly with the state and federal agencies.

Montana Disaster and Emergency ServicesGrants Program1956 Mt. Majo St.Fort Harrison, MT 59636-4789Phone (406) 324-4777Fax (406) 324-4790 d e sohs g @mt. g ov

D isas ter a nd E m er g ency Serv i ces Grants P r og r a m Te a m : Angie Mullikin, Grants Bureau Chief, 406-324-4769, a mu l l i kin@mt. g ov

Jessica Davies, Grants Coordinator, 406-324-4771, jessic a d a vies@mt. g ov

Tricia Tomaszewski, Grants Accountant, 406-324-4788, t t omas z e wski@m t . g ov

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D isas ter a nd E m er g ency Serv i ces F i e l d S er vi ces Bureau s t a ff: Vacant, Field Services Bureau Chief,

Martha Jo Smith, Dist. 1 Representative, 406-250-0231, mon t a n a d e s1@ g mail.com

Ed Gierke, Dist. 2 Representative, 406-450-4110, m t d e sd2@3 r ivers.n e t

Bob Fry, Dist. 3 Representative, 406-431-0102, bobf r y @m c n.n e t

Alan Stempel, Dist. 4 Representative, 406-853-6736, stemp e lal a n@ g mail.com

Charlie Hanson, Dist. 5 Representative, 406-670-8155, d e sdi s t5@br e sn a n.n e t

Mark Gruener, Dist. 6 Representative, 406-366-1835, m g ru e n e r @ mcn.n e t

SCOPE

1. The procedures outlined in this manual shall be used by all stakeholders and sub-recipients receiving any part of or all of the federal grant funding administered by MT DES Grants Program except where specifically noted.

2. For the purposes of this manual, the following grant programs are included within DESGP’sauthority as the SAA:

• BIDP – Border Interoperable Demonstration Project• BZPP – Buffer Zone Protection Program• CCP – Citizen Corps Program• EMPG – Emergency Management Performance Grant Program• EOC – Emergency Operations Center Grant Program• IECGP – Interoperable Emergency Communications Grant Program• LETPP – Law Enforcement Terrorism Prevention Program• OPSG – Operation Stonegarden• SHSP – State Homeland Security Program• Current open grants as awarded by MT DES Grants Program (This excludes Hazard

Mitigation and Response and Recovery Grants)

Note: Each grant follows 2 CFR, 6 CFR, 44 CFR, OMB Circulars, and the Financial Management Guide. In addition, each grant has a separate Grant Guidance that is specific to the individual grant.

ASSERTATI ONS

1. The State of Montana formally adopted and follows the principles of the National IncidentManagement System (NIMS) as specified by the U.S. Department of Homeland Security (DHS).

2. NIMS provides a template that ensure the standardization of incident management for all Montana responders.

3. All grantees and sub-recipients will ensure that purchased equipment conforms to the Authorized Equipment List (AEL), NIMS, and/or is identified in the NIMS Resource Typing Definitions, and is defined by FEMA’s National Integration Center (NIC).

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4. Equipment, communications and data systems acquired through state, tribal and local acquisition programs are interoperable as defined by the State Interoperable Governing Board (SIGB) and approved by the State-Wide Interoperable Coordinator (SWIC).

5. Sub-recipients are NIMS compliant and have provided appropriate documentation.

6. Training received will conform to the NIMS. FEMA National Incident Management SystemsIntegration Division publishes a NIMS five-year training plan.

7. Recipients of federal grants and their fiscal agents shall ensure compliance with all federal and state requirements, including but not limited to the following:

Department of Homeland Security Grant Program Guidance and Application Kit (as appropriated by grant year)

FEMA Emergency Management Performance Grants Program (EMPG) Guidance andApplication Kit (as appropriated by grant year)

Financial Management Guide, US Department of Homeland Security PreparednessDirectorate (January 2006)

Code of Federal Regulations (CFR) 2, 6, and 44 Office of Management and Budgeting (OMB) Circulars Grant Program Directorate Information Bulletins Montana Annotated Code (MCA), Titles 7, 10, & 17 Montana Disaster & Emergency Services Grants Program - Grants Management Policies &

Procedures Local administrative rules and policies

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Federal Gra nt Info rma tion

DescriptionFederal government grant programs assist state, tribal and local emergency prevention, preparedness, and response personnel in enhancing their capacity to prevent and respond to all incidents. This is accomplished through coordinated planning, exercises, training, and equipment acquisition activities. It is the intent of the federal government that these grant funds help support but not replacetraditional public safety activities that are funded by local, tribal and state agencies.

The U.S. Department of Homeland Security (DHS), Federal Emergency Management Agency (FEMA), other federal departments, and the Disaster and Emergency Services Grants Program, as the SAA, are committed to working with Montana’s communities in the national effort to combat terrorism and prepare for all-hazards for a whole community approach. This is accomplished using federal funds to prepare for, protect against, respond to, recover from and mitigate all hazards.

Administration of Federal FundsFederal departments award funds, appropriated by Congress, to an SAA or grantee. Grant management ensures that the grant program is operating efficiently, its internal control program is operating successfully, and any deficiencies detected in the grant program are corrected in a timely manner. The SAA is tasked with monitoring the progress of sub-recipient projects in accordance with the State Homeland Security Strategy (SHSS) to measure statewide progress toward strategy implementation required for electronic reporting to DHS. Sub-recipient monitoring is also critical in determining progress towards achieving project goals and objectives, ensuring compliance with all terms, conditions, and purposes of the grant, identifying technical assistance needs, and providing guidance for future design and/or funding of similar projects.

AuthorityThe United States Department of Homeland Security is the federal agency charged with oversight and administration of these grants programs and the State Administrative Agency (SAA). Copies of all applicable federal legislation and regulations are maintained in Homeland Security Grants Administration files. The authority for the Homeland Security Grant program, the Buffer Zone Protection Program and the Emergency Management Performance Grant stem from Homeland Security Act of 2002, Public Law 107-296.

Office of Grant Operations (OGO) GuidelinesThe OGO guidelines were provided in January 2006 and are used for the administration of federal award programs administered by the Office of Grants and Training (G&T) in conjunction with the provisions of the Office of Management and Budget (OMB) circulars and government-wide common rules applicable to grants and cooperative agreements, program guidelines, application kits, special conditions, terms and conditions, G&T information bulletins, and DHS policy, regulations, and statutes.

*Note: Department of Justice guidelines were used prior to January 2006. This document is titled: Grants Financial Management Guide, and can be found at www.dhs.gov .

Audit Guidelines (OMB Circular A-133):OMB Circular A-133 governs audits of states, local governments, tribal governments, and non-profit organizations. This Circular provides requirements regarding audits of local, tribal and state

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governments and non-profit organizations (the Single Audit Act), in addition to the circulars for cost principles. This Circular requires that non-Federal entities that expend $500,000 (effective January 1,2004) or more of federal funds in their fiscal year shall have a single or program-specific audit conducted for that year. Guidance on determining federal awards expended is provided in Section205 of this Circular. (htt p:/ /www.whitehouse.gov/om b/circulars/i ndex .htm l. )

Unless prohibited by law, the audit costs made in accordance with the provisions of this requirement are allowable charges to Federal awards. The charges may be considered a direct cost or an allocated indirect cost, as determined in accordance with the provisions of applicable OMB cost principles circulars, the Federal Acquisition Regulation (FAR) (48CFR parts 30 and 31), or other applicable cost principles or regulations. The cost of auditing a non-Federal entity utilizing federal awards less than $500,000 per year is thereby exempted under the A-133 requirement and may not charge such costs to their federal award(s).For those organizations not subject to the A-133 requirements, records must still be made available and complete for review or audit by appropriate officials or representatives of the federal agency, pass-through entity, and Government Accountability Office (GAO). These organizations shall be subject to financial and a compliance audit conducted by qualified individuals who areorganizationally, personally, and externally independent from those who authorize the expenditure of federal funds to ensure that there is no conflict of interest.

Order of PrecedenceIn determining the relevant standards for the conduct of grant operations, grantees should consider the following, in precedential order:

• Public Laws• Regulations• Executive Orders• OMB Circulars• Departmental Policy• Award Terms and Conditions

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CHAPTER 1: Applica tion Process

GeneralThe SAA - Disaster and Emergency Services Grants Program will provide a grant application package to the sub-recipient. There is a Two Step application process; Step One: the planning document and, Step Two, the Final Application. The applications must be completed and submitted by the deadlines set by the SAA. The SAA will notify the sub-recipient of their estimated preliminary allocations.

Emergency Management Performance Grants (EMPG) applicants shall submit a Funding Commitment Letter along with the application. The funding commitment letter ensures the applicants commitment to the grant cost share as requested in the application. The Funding Commitment Letter template will be provided to the applicant as a part of the application packet. The Funding Commitment Letter shall be signed by the Official(s) Authorized to sign, the project manager (county/tribal emergency coordinator) and submitted along with the application.

A standard application will be used for each of the programs. Copies of these applications are made available by the SAA after DHS releases the guidance and amount of funding available. The signatory form must be completed and returned with the final application.

The requirements for eligibility are unique to the specific grant program guidance and procedures. Sub-recipients’ application due dates for grant applications are determined by the SAA each year and are dependent upon the release of guidance and the federal application deadline date. Sub-recipients are required to complete and submit all required application forms and supporting documents inorder to be considered for funding. The SAA will not accept ineligible grant applications for review.

Timelines for Department of Homeland S ecurity Grants :

1. Planning document will be released by DESGP, September 1 and due to DES DistrictRepresentatives by the applicant on or before November 30.

2. Technical Committee (interoperable communications grants only) and Subject Matter Expert reviews will be completed between January 1 and February 28.

3. Application packets will be released by DESGP upon release of grant Funding OpportunityAnnouncement (grant guidance) from DHS.

4. Senior Advisory Committee and Governor’s approval signature approximately March 15.5. Final Scopes of Work are due to District Representatives April 1.6. Awards to sub-recipients, within 45 days of Federal award to the State.

*Note: Dates are subject to change, based on timelines provided by the Federal Government.

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Timelines for Emergency Management P erformance Grants :

1. Planning document will be released September 1 and due to DES District RepresentativesNovember 30.

2. Subject Matter Expert reviews will be completed between January 1 and January 31, and recommendations will be sent to sub-recipients.

3. Application packets will be released by DESGP upon release of grant Funding OpportunityAnnouncement (grant guidance) from DHS.

4. Final Scopes of Works are due to District Representatives March 5.5. Awards to sub-recipients, within 45 days of Federal award to the State.

*Note: Dates are subject to change, based on timelines provided by the Federal Government.

1.1 Application SubmittalApplications shall be acknowledged upon receipt and reviewed for completeness, adherence to both federal and state requirements, and whether the request is consistent with and supportive of the overall implementation of the State Homeland Security Strategy, the federal Funding Opportunity Announcement, and the National Preparedness Goal. The SAA will return incomplete applications.

1.2 Application ReviewsThe SAA shall review the sub-recipients applications. The SAA may call on individuals with Subject Matter Expertise (SME) to review applications. Final funding allocations will not be determined until each application is fully processed and approved.

The DES Grants Program, Field Services, Planning, Training and Exercise staff will evaluate each specific project to ensure that it will satisfy the goals and objectives of the state and national priorities. The merits of the application will include, but not necessarily be limited to:

• Compliance of the proposed project application with all applicable federal guidelines.• Whether or not the project is consistent with and supportive of the overall implementation of

the state priorities, national priorities and the Core Capability List (CCL).• The eventual assumption of costs (e.g., maintenance, repair, service costs, etc) by the

applicant agency, if any.• Probability that the funded project will achieve its goal(s), objective(s), and increase the

capabilities of the sub-recipient.• Fiscal and programmatic capabilities.• Certification that federal funds will not be used to supplant or replace state, tribal or local

funds.• Coordination of efforts with state, tribal and local jurisdictions and federal grant programs.• Application is complete and all required information provided.

After a preliminary review of State Homeland Security applications by DES staff, the DESGP staff will draft summaries and recommendations to the Senior Advisory Committee (SAC) for their review and recommendations. The SAC, is made up of multi-disciplinary local, tribal and state level field experts, and will provide advisory support to the SAA in assessment, planning and the policydevelopment process for Homeland Security. SAA staff will submit final application proposals to the Governor’s Office for review and approval. Upon final approval from the Governor, the SAA will incorporate the approved applications into the state application to the federal government.

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Emergency Management Performance Grant (EMPG) applications will be reviewed at the local level for approval by DES District Representatives. Applications will be sent into DESGP by District Representatives. Upon DESGP approval, applications will have a funding allocation assigned.

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CHAPTER 2 : Aw a rd a nd Complia nce Informa tion

2.1 Bilateral AgreementsThe State of Montana, through the Disaster and Emergency Services Division as the SAA, enters into agreements, through the Grant Award Agreement, with local, tribal and state entities governing the distribution, expenditure, and administration of federal funds. Sub-recipients shall confirm that they have signed the Grant Award Agreement. Upon signing the Grant Award Agreement, the sub- recipient ensures that they will adhere to the terms and conditions, the federal grant guidance’s and the Federal Code of Regulations.

2.2 AwardThe fully executed Grant Award Agreement is the official notification to the sub-recipient that federal funds have been awarded. The Grant Award Agreement details the amount of federal funds for the sub-recipients approved project(s). It identifies the federal grantor agency, the federal award number, the Catalog of Federal Domestic Assistance (CFDA) title and number, the sub-recipient name, the award performance/effective period, the approved budget, and the Special and Standard Conditions that must be met once the award is accepted.

Sub-recipients shall administer awards in accordance with the fully executed Grant AwardAgreement.Unallowable expenses that have been inadvertently approved within a fully executed Grant Award Agreement shall still be considered unallowable. It is the responsibility of the sub-recipient to ensure that all expenditures are made in compliance with federal guidance and regulations. Allowable expenses that may have been inadvertently disapproved may still be considered for reimbursements on a case by case basis, depending on funding.

DHS will notify the SAA of the grant award to the State. The SAA will inform the sub-recipient of their final award in an obligation letter (Grant Award Agreement). Applicants should note that the authority to disseminate grant awards is vested to DESGP, as the SAA, by the Governor of Montana.

Expediting the return of the signed Grant Award Agreement and the Release of Funds letter is particularly important. The award and award amendments are not fully executed until the document has all of the required signatures. A sub-recipient cannot encumber funds with an unsigned Grant Award Agreement. A sub-recipient may not request reimbursement if special conditions are not adhered to and are fully responsible for any funds spent prior to fulfilling the Grant Award Agreement special conditions.

Upon the sub-recipient meeting the special conditions of the grant award and are adhered to, the SAA will send the sub-recipient a Release of Funds letter. The Release of Funds letter allows the sub-recipient to execute expenditures and request reimbursement. The Release of Funds letter is not fully executed until the document has all of the required signatures and is returned to the SAA.

2.3 Performance PeriodThe SAA shall determine the performance period of Homeland Security sub-recipients based on individual projects, needs and performance time given to the state by DHS/FEMA. The SAA shall determine the performance period of EMPG sub-recipients based on the State Fiscal Year and FEMA’s performance period.

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2.4 Special Conditions and AssurancesSub-recipients shall be aware of and adhere to all special conditions and assurances that are included in the Grant Award Agreement letter.

At the state level, sub-recipients of federal grants should pay particular attention to the State ofMontana Fiscal Rules and the State Procurement Code.

For procurement, inventory and other accounting-related procedures, sub-recipients shall ensure that internal controls are in place and that there is compliance with local, tribal, state and federal law. Where laws at local, tribal, state and/or federal levels are in conflict, or differ in a material regard, sub-recipients shall follow the most conservative requirements. Sub-recipients are encouraged to seek the advice of their assigned District Representative for any areas of concern.

*Note: Sub-recipients that have not initiated grant activity shall submit a justification to the SAA for the delay in project initiation. The SAA reserves the right to de-obligate grant funds that are not being utilized.

2.5 Debarment, Suspension, and Other Responsibility Matters1. As required by Executive Order 12549, Debarment and Suspension, and implemented at 28

CFR Part 67, for prospective participants in primary covered transactions, as defined at 28 CFR Part 67, Section 67.510. The recipient certifies that it and its principals:

a) Are not presently debarred, suspended, proposed for debarment, declared ineligible, sentenced to a denial of Federal benefits by a State or Federal court, or voluntarily excluded from covered transactions by any Federal department or agency;

b) Have not within a three-year period preceding this application been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State, or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property;

c) Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State, or local) with commission of any of the offenses enumerated in paragraph (1)(b) of this certification; and

d) Have not within a three-year period preceding this application had one or more public transactions (Federal, State, or local) terminated for cause or default; and

2. Where the recipient is unable to certify to any of the statements in this certification, he or she shall attach an explanation to this application.

3. The sub-recipient understands and agrees that they cannot use any federal funds, either directly or indirectly, in support of the enactment, repeal, modifications, or adoption of any law, regulation or policy, at any level of government.

4. The sub-recipient will comply with provisions of Federal law which limit certain political activities of employees of a State or local unit of government whose principal employment is in connection with an activity financed in whole or in part by Federal grants. (5 USC 1501, etseq.) None of the funds, materials, property or services provided directly or indirectly under this contract shall be used for any partisan political activity, or to further the election or defeat

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of any candidate for public office, or otherwise in violation of the provisions of the "HatchAct."

5. Personnel and other officials connected with this grant shall adhere to the requirements given below:

a) Advice: No official or employee of a state or unit of local government or of non- government grantees/sub-grantees shall participate personally through decision, approval, disapproval, recommendation, the rendering of advice, investigation, or otherwise in any proceeding, application, request for a ruling or other determination, contract, grant, cooperative agreement, claim, controversy, or other particular matter in which these funds are used, where to his knowledge he or his immediate family, partners, organization other than a public agency in which he is serving as officer, director, trustee, partner, or employee or any person or organization with whom he is negotiating or has any arrangement concerning prospective employment, has a financial interest.

b) Appearance: In the use of these grant funds, officials or employees of state or localunits of government and non-governmental grantees/sub-grantees shall avoid any action which might result in, or create the appearance of the following:

1) Using his or her official position for private gain;2) Giving preferential treatment to any person;3) Losing complete independence or impartiality;4) Making an official decision outside official channels; and/or5) Adversely affecting the confidence of the public in the integrity of the

government or the program.

6. The sub-recipient will comply with requirements of the provisions of the Uniform Relocation Assistance and Real Property Acquisitions Act of 1970 (P.L. 91-646) which provides for fair and equitable treatment of persons displaced as a result of Federal and federally-assisted programs.

7. The sub-recipient will insure that the facilities under its ownership, lease or supervision which shall be utilized in the accomplishment of the project are not listed on the Environmental Protection Agency's (EPA) list of Violating Facilities and that it will notify the State and Federal grantor agency of the receipt of any communication from the Director of the EPA Office of Federal Activities indicating that a facility to be used in the project is under consideration for listing by the EPA.

8. Sub-recipients are expected to act in accordance with the Montana State Ethics and Public Employee standards of conduct. ht t p: / /hr.mt. g ov/cont e nt / hrpp/do c s/Guid e s/ s tand a rdso fc ondu c t g uide.doc Sub-recipients who are not compliant with the above standards of conduct and ethics, and/or refuse repeatedly to comply with quarterly reporting requirements will be considered High-Risk grantees and may not receive future funding from DES.

9. The sub-recipient will comply with the flood insurance purchase requirements of Section102(a) of the Flood Disaster Protection Act of 1973, Public Law 93-234, 87 Stat. 975, approved December 31, 1976, Section 102(a) requires, on and after March 2, 1975, the purchase of flood insurance in communities where such insurance is available as a condition for the receipt of any Federal financial assistance for construction or acquisition purposes for use in any area that has been identified by the Secretary of the Department of Housing and

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Urban Development as an area having special flood hazards. The phrase "Federal financial assistance" includes any form of loan, grant, guaranty, insurance payment, rebate, subsidy, disaster assistance loan or grant, or any other form of direct or indirect Federal assistance.

10. The sub-recipient will assist the Federal grantor agency in its compliance with Section 106 of the National Historic Preservation Act of 1966 as amended (16 USC 470), Executive Order11593, and the Archeological and Historical Preservation Act of 1966 (16 USC 569a-1 et seq.) by (a) consulting with the State Historic Preservation Officer on the conduct of Investigations, as necessary, to identify properties listed in or eligible for inclusion in the National Register of Historic Places that are subject to adverse effects (see 36 CFR Part 800.8) by the activity, and notifying the Federal grantor agency of the existence of any such properties and by (b) complying with all requirements established by the Federal grantor agency to avoid or mitigate adverse effects upon such properties.

11. The sub-recipient will comply, and assure the compliance of all its sub-grantees and contractors, with the applicable provisions of Title I of the Omnibus Crime Control and Safe Streets Act of 1968, as amended, the Juvenile Justice and Delinquency Prevention Act, or the Victims of Crime Act, as appropriate; the provisions of the current edition of the Office of Justice Programs Financial and Administrative Guide for Grants, M7100.1; and all other applicable Federal laws, orders, circulars, or regulations.

12. The sub-recipient will comply with the provisions of 28 CFR applicable to grants and cooperative agreements including Part 18, Administrative Review Procedure; Part 20, Criminal Justice Information Systems; Part 22, Confidentiality of Identifiable Research and Statistical Information; Part 23, Criminal Intelligence Systems Operating Policies; Part 30, Intergovernmental Review of Department of Justice Programs and Activities; Part 42, Nondiscrimination/Equal Employment Opportunity Policies and Procedures; Part 61, Procedures for Implementing the National Environmental Policy Act; Part 63, Floodplain Management and Wetland Protection Procedures; and Federal laws or regulations applicable to Federal Assistance Programs.

13. The sub-recipient will comply, and all its contractors will comply, with the non-discrimination requirements of the Omnibus Crime Control and Safe Streets Act of 1968, as amended, 42USC 3789(d), or Victims of Crime Act (as appropriate); Title VI of the Civil Rights Act of1964, as amended; Section 504 of the Rehabilitation Act of 1973, as amended; Subtitle A, TitleII of the Americans with Disabilities Act (ADA) (1990); Title IX of the Education Amendments of 1972; the Age Discrimination Act of 1975; Department of Justice Non- Discrimination Regulations, 28 CFR Part 42, Subparts C,D,E, and G; and Department of Justice regulations on disability discrimination, 28 CFR Part 35 and Part 39.

14. No person shall on the grounds of race, creed, color or national origin, be excluded from participation in, be refused the benefits of, or be otherwise subjected to discrimination under subgrants awarded pursuant to the Act governing these funds or any project, program, activity or subgrant supported by such requirements of Title VI of the Civil Rights Act of 1964, and all applicable requirements pursuant to the regulations of the Department of Commerce (Title 15, code of Federal Regulations, Part 8, which have been adopted by the Federal Funding Agency); Title IX of the Education Amendments of 1972; the Age Discrimination Act of 1975; Department of Labor Regulation 41 CFR Part 60; and the Department of Justice Non- discrimination Regulations 28 CFR Part 42, Subparts C, D, E and G. The sub-grantee must therefore ensure it has a current Equal Employment Opportunity Program (EEOP) which meets

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the requirements of 28 CFR 42.301. The Sub-grantee further agrees to post in a conspicuous place, available to all employees and recipients for employment, notices setting forth the provisions of the EEOP, as supplemented in Department of Labor Regulations 41 CFR Part 60. The Sub-grantee assures that in the event a federal or state court or federal or state administrative agency makes a finding of discrimination after a due process hearing on the grounds of race, color, religion, national origin or sex against a recipient of funds, the recipient will immediately forward a copy of the findings to OHSG who shall, in turn, will forward a copy of the finding to the Office for Civil Rights, Office of Justice Programs and Departmentof Homeland Security.

15. The sub-recipient will comply with the provisions of the Coastal Barrier Resources Act (P.L.97-348) dated October 19, 1982 (16 USC 3501 et seq.), which prohibits the expenditure of most new Federal funds within the units of the Coastal Barrier Resources System.

16. The sub-recipient must comply with all requirements of the Americans with Disabilities Act of1990 (ADA), as applicable.

17. To the extent that recipients of a grant use contractors or subcontractors, such recipients shall use small, minority, women-owned or disadvantaged business concerns and contractors or subcontractors to the extent possible.

18. All recipients of federal funds must comply with Section 504 of the Rehabilitation Act of 1973 (Handicapped). Therefore, the federal funds recipient pursuant to the requirements of the Rehabilitation Act of 1973 hereby gives assurance that no otherwise qualified handicapped person shall, solely by reason of handicap, be excluded from the participation in, be denied the benefits of or be subject to discrimination, including discrimination in employment, in any program or activity that receives or benefits from federal financial assistance. The recipient agrees it will ensure that requirements of the Rehabilitation Act of 1973 shall be included in the agreements with and be binding on all of its sub-grantees, contractors, subcontractors,assignees or successors.

19. When implementing GPD-funded activities, the recipient must comply with all federal civil rights laws, to include Title VI of the Civil Rights Act, as amended. The recipient is required to take reasonable steps to ensure persons of limited English proficiency have meaningfulaccess to language assistance services regarding the development of proposals and budgets and conducting GPD-funded activities.

2.6 Drug-Free WorkplaceAs required by the Drug-Free Workplace Act of 1988, and implemented at 28 CFR Part 67, Subpart F, for grantees, as defined at 28 CFR Part 67 Sections 67.615 and 67.620 A. The recipient certifies that it will continue to provide a drug-free workplace.

2.7 Environmental Planning and Historic Preservation ComplianceAll grant funded projects are required to adhere to Environmental Historic Preservation (EHP Grant Programs Directorate (GPD) Information Bulletin No. 271. December 5, 2007, a copy of which is available at w w w.ojp.usdoj. g ov/odp / do c s/bu l letins.htm and in Appendix 1 of this manual. All approved projects fitting with-in the EHP criteria will receive a conditional award until EHP requirements are fulfilled. Sub-recipients must follow the instructions in the FEMA guidance titled, “Environmental Planning and Historic Preservation Compliance Requirements for Preparedness

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Grant Projects.” An Environmental and Historical Preservation Screening Form must be completed and submitted to the SAA, and approved before any grant funds are allocated to the sub-recipient. Project work cannot be started until written approval is received from DHS. DHS has sole approval rights. The sub-recipient is liable and responsible for funds spent and activities conducted without prior written approval. Upon the SAA receiving written approval from DHS, DESGP will send the sub-recipient written confirmation to proceed with the project.

These projects are also subject to the laws and regulations of the State of Montana with regard to environmental and historic preservation. Specific Montana guidance on historical preservation is located on the Montana Historical Society website at ht t p: / / m hs.mt. g ov/shpo/de fa ul t . a sp or by phone at 406-444-7715. The federal government requires a letter of approval of the project from the State Historic Preservation Officer (SHPO).

DESGP will work with the applicants to determine what projects need an approved EHP. Please contact the DES grants program if you have questions regarding EHP questions, at 406-324-4771

2.8 Sub-granting of FundsSub-recipients are not authorized to sub-grant funds, in accordance with 2 CFR Part 225 (OMB Circular A-87). Contributions or donations, including cash, property, and services, made by the sub- recipient are unallowable.

2.9 Scope of WorkSub-recipients are required to submit their final project Scope of Work after the obligation letters (Grant Award Agreements) have been sent by the SAA. The Scope of Work will detail all funded projects. The timeframe for the submission of these worksheets will be determined by that year’s federal guidance and the SAA.

The final revised project budget worksheets must detail all of the expenditures for each project as a line item budget as well as the following documents including, but not limited to:

Equipment list

• Training plan should identify the functional area of need, estimated number of attendees,

estimated time frame for training (first, second, third or fourth* quarter), proposed location

and estimated costs.

• Position descriptions for each grant funded employee

• Funding Commitment Letter

• Organizational chart identifying grant funded positions

• Organizational costs: Accountable supplies

• Training: Accountable supplies

• Exercise: Accountable supplies

*Note: Fourth quarter should not contain all training and exercise activities. Planning and coordination is expected to occur throughout the year.

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2.10 Timelines for ProjectsSub-recipients shall provide a timeline for all projects. When a project has not been initiated within90 days of the proposed start date of the project, the sub-recipient shall submit a statement to the SAA explaining the delay. The SAA, working through the District Representatives, shall consult with the sub-recipient to discuss the issues causing the delay. If the issues causing the delay of thestart of a project cannot be resolved in a time frame consistent with the grant performance period, theSAA may request that funding be reallocated to other projects. An extension of the grant performance period may be requested of the SAA if the delay is beyond the control of the sub- recipient or if the delay would cause the project to surpass the grant period. If remediation is unsuccessful, the SAA may cancel the project by de-obligation of funds and re-allocate funds to another sub-recipient.

*Note: For non-compliant projects please see section 2.14 – 2.15

2.11 Grant RevisionsAny proposed change to a Grant Award Agreement must be submitted through the District Representative via e-mail or in writing and approved in advance by the SAA. A formal budget revision may be required depending on the scope of the revision. New projects that alter the scope of the application may require federal approval.

Project Budget Revisions - A sub-recipient may request a revision of the project budget. Circumstances must exist that require the specified project to be revised or cancelled by the sub- recipient due to a re-evaluation of priorities, updated risk assessment, needs assessment or identification of a new target capability in order for the sub-recipient to alter their original project budget. The sub-recipient may request a formal revision through the district Representatives via e- mail or in writing, accompanied by the appropriate application worksheets.

*Note: Change requests may not be submitted within the f i rst three months of the performance period of the grant (except in extenuating circumstances), or within the last three months of the performance period of the grant. Additionally, quarterly reports will be referred to when making decisions for change requests. Problems or issues regarding project implementation should be included in quarterly reports and not only noted when a request for change is being made. Every attempt should be made by sub-recipients to fully expend funds on the original approved budget.

2.12 Grant ExtensionsA change in the performance period of a grant will require a formal amendment to the Grant Award Agreement. The SAA will prepare an amendment document for signature by the legally authorized official on behalf of the sub-recipient and by the SAA. The amendment will not be considered effective until it has been signed and received by the SAA. Extensions of performance periods must be requested 2 mon t hs prior to the grants end date.

Sub-recipients shall submit to the District Representatives a formal request on the agency’s letterhead signed by the legally authorized official of the sub-recipient to request an extension from the SAA. The SAA is the only entity that may request an extension of the grant performance period from the federal awarding agency.

2.13 SupplantingFunds are to supplement and not to supplant the sub-recipient’s own funds. Federal grant fundsshould not be used to purchase items or services that would otherwise be purchased with the sub-

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recipient’s own funds. Expenditure of funds for the acquisition of new equipment or services, when equipment and/or personnel required for the successful execution of projects are already available, or budgeted for within the sub-recipient organization, will be considered supplanting and will be disallowed.

Funds are intended to provide sub-recipients with tools to increase capabilities response to address all incidents. Federal funds cannot be used to replace the source of funding for aged, sub-recipient equipment. These funds are not to be used to replace items that are worn out, broken or in need of replacing (supplanting). For example but is not limited to:

A sub-recipient’s budget contains $10,000 in general funds for the purchase of radios. Theagency applies for, and receives, Homeland Security grant funding for radios andsubsequently redirects the $10,000 in general funds to a different purpose. That is supplanting and is not allowable. Using the grant funds to purchase radios in addition to the radios purchased with general funds would be supplementing and would be allowable.

An officer within a police department is reassigned from his/her existing position and duties to perform intelligence analysis activities. No one is hired to backfill the officer’s former position and it is left vacant. Charging that officer’s salary to the federal grant would be supplanting and is not allowed.

An emergency manager does other duties that have a separate funding source other than a federal grant. Charging this portion of an emergency manager’s salary to the federal grant would be supplanting and is not allowed. Such examples may include: 911 coordinator, rural addressing, fire warden, sub division planner, and any time for voluntary or paid response for fire, law, search and rescue, and EMS.

*Note: Questions regarding supplanting should be addressed to DESGP, through the local DistrictRepresentative.

2.14 Remedies for NoncomplianceIn accordance with the Code of Federal Regulations, if a grantee or sub-recipient fails to comply with the terms and conditions of any local, state or federal law, regulation, contract/award, and/or grant policy and procedures the State may withhold cash payments pending correction of the deficiency, disallow any or all costs incurred, or reduce or terminate the grant. A sub-recipient who is the subject of an enforcement action may appeal as follows:

The State will afford the sub-recipient a reasonable time to offer a remedy or terminate project operations.

Remedy request must be routed through District Representatives in order to be considered by the SAA.

If a remedy is offered, it must be in writing and signed by the sub-recipients legally authorized official and the SAA. The SAA will make the final determination in writing within 30 days of the date of the appeal. Final determination will be routed through the District Representatives.

*Note: Sub-recipients whom refuse repeatedly to comply with DESGP policies and procedures, and/or requirements will be considered High-Risk grantees and may not receive future funding from DES.

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2.15 Grant Award Termination for CauseThe SAA may terminate or reduce the total grant award for cause, without reimbursement of any costs incurred. If the SAA terminates or reduces the grant amount for cause, DESGP will give 30 days’ written notice to the sub-recipient, stating the reasons for reduction, steps needed to correct the problems, and the date the award amount will be reduced in the event that problems have not been corrected to the satisfaction of the SAA.

In the event the grant is terminated or reduced for cause, the SAA will reimburse the sub-recipient only for acceptable work or deliverables received to the date of reduction or termination.

In the event the grant is reduced for cause, final payment to the sub-recipient may be withheld at the discretion of the SAA until completion of final SAA review.

*Note: Sub-recipients are expected to act upon their awards in an expedient manner that complies with their applications and awards. Sub-recipients who fail to adhere to the grant requirements will be notified in a four stage approach to gain compliance. The Grants Team will make every effort to work with the District Representatives to give sub-recipients every opportunity to create and maintain a program that works for their jurisdiction.

1. Notification to District RepresentativeThis notification will outline why the sub-recipient is non-compliant and measures that can be taken to correct the issue. The District Representative is responsible for working with the subrecipient to gain compliance.

2. Letter of non-compliance – Signed by District RepresentativeThis letter will follow the notification within 30 days if no action has been taken on reaching compliance by the sub-recipient.

3. Letter of non-compliance and notice of de-obligation – Signed by GrantsManager

This letter will follow the non-compliance letter within 30 days if no action has been made on reaching compliance by the sub-recipient. This letter will also include a notice that will inform the sub-recipient that the funds will be de-obligated and the grant will be void within 30 days if the sub-recipient does not rectify the situation.

4. Letter of de-obligation – Signed by DES AdministratorThis letter will be sent within 30 days should the sub-recipient choose to take no action after receiving the letter of non-compliance and notice of de-obligation. After this letter is issued the grant funds will no longer be available for the sub-recipient and the grant will be void.

We understand that extraneous circumstances may happen to arise. Should something occur that would affect the compliance of the grant requirements the Grants Team will make every effort to consider the circumstances before proceeding with de-obligation of funds. Please be sure to keep the District Representatives and the Grants Team updated on unplanned events or circumstances that may arise to avoid any of the above actions.

2.16 Reporting Irregularities and Illegal ActsSub-recipients who become aware of any misuse, misappropriation, conflict of interest, falsification of records and reports, or any other potentially irregular or illegal acts should follow their

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organization’s procedures for reporting these activities, and shall also report their concerns immediately to the District Representatives.

2.17 Copyrights, Patents, and InventionsWhen activities supported by the award produce any discovery or invention, original computer programs, writing, sound recordings, pictorial reproductions, drawing or other graphical representation and works of any similar nature, the following requirement applies but is not limited to:

If any program produces patentable items, patent rights, processes, or inventions in the course of work sponsored by the federal award or sub-award funds, such facts must be promptly and fully reported to the State. The State shall then report such facts to the Department of Homeland Security (DHS). Unless there is a prior agreement between the sub-grantee, the State and the Department of Homeland Security on disposition of such items, DHS must determine whether protection on the invention or discovery must be sought. The Department of Homeland Security will also determine how rights in the invention or discovery (including rights under any patents issued thereon) must be allocated and administered in order toprotect the public interest consistent with "Government Patent Policy" (President's Memorandum for Heads of Executive Departments and Agencies, dated August 23, 1971, and statement of Government Patent Policy, as printed in 36 FR 16839). Government-wide regulations have been issued at 37 CFR Part 401 by the Department of Commerce.

2.18 PublicationsSub-recipients must submit a plan for publication and distribution of new self-authored commercial publications to the SAA before materials developed under an award are commercially published, distributed, and/or paid for with federal funds. The publication and distribution plan must include a description of the materials, the rationale for commercial publication and distribution.

All materials containing publicized or results from activities funded by federal funding shall contain an acknowledgement of the federal and state awarding agency funding assistance. If the federal awarding agency is the DHS, all materials shall prominently contain the following statements:

“This document was prepared under a grant from the U.S. Department of Homeland Security and the Montana Disaster and Emergency Services. Points of view or opinions expressed in this document are those of the authors and do not necessarily represent the official position or policies of the U.S. Department of Homeland Security or the State of Montana.”

“x,xxx copies of this public document were published at an estimated cost of $0.xx per copy for a total cost of $x,xxx.xx, which includes $x,xxx.xx for printing and $x,xxx.xx for distribution.”

2.19 Match RequirementsMatch requirements for Emergency Management Performance Grant (EMPG) and other grants with match requirements shall adhere to the following: from DESGP:

a) Match is restricted to the same use of funds and compliance requirements as are expenditures reimbursed by federal funds.

b) Cash match and in–kind contributions/match must be used for allowable costs in compliance with federal regulations and grant program guidance.

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c) Federal funds cannot be used to match other federal funds. State, Tribal, and County funds can match federal funds.

d) Matching funds and contributions must be in addition to and supplement funds that would otherwise be available for the grant project activity.

e) Documentation for matching funds is the same as for reimbursable expenditures.

The sub-recipient is responsible for the proper documentation and record retention for both cash match and in-kind contributions/match. Match documentation is subject to monitoring by the sub- recipients District Representative.

2.20 Sub-recipient MatchWhen a sub-recipient has to come up with a portion of the project costs, that amount is often referred to as the sub-recipient match. Depending on the funding program, a sub-recipient may be required to contribute anywhere from 0% - 50% of the total project cost.

This sub-recipient contribution may be in the form of: Cash (usually from reserves), Funds from another grant or loan program that are part of the project’s financing package, or “In-kind” labor, such as staff time contributed by the city/organization to cover

administration and other project costs (see below). Non-federal participation by volunteers and paid staff for eligible trainings and exercises.

There are often restrictions on the source of the match. For example, federal funds generally cannotbe used to match other federal funds. (e.g., A grant from Rural Development cannot be used to match grant money from the Forest Service for the same project, because both are federal programs. The Public Works Trust Fund program does not accept grant funds from other programs as sub-recipient match.)

A funder may also restrict a community from counting any money spent before the grant contract was signed as match.

Before agreeing to take a grant or loan, check what the sub-recipient match requirements are and determine whether the community can raise the appropriate type and amount of match.

It is recommended that sub-recipients request prior approval of the Grant Program Manager through the District Representative for in-kind contributions/match projects for eligibility.

2.21 Hard Match

Hard match is actual costs. An easy way to remember this is cold hard cash = hard match. For example if your agency pays for your office supplies and counts that as match, it is a hard match.

2.22 In-Kind or Soft Match“In-Kind” usually means services or products that are donated to the project (not to other efforts of the organization). The rule of thumb is that you value the time at what it would be if you purchased it. For example:

Doing a community survey: what would it cost to hire someone to do that? (probably close to minimum wage)

Writing a city council ordinance: might take an attorney. If the attorney did pro bono work you could use a full attorney’s fee as an in-kind donation.

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Administration costs: the staff person’s salary and benefits, on an hourly basis

It’s tricky when you have a committee where people come from different backgrounds. The rules of thumb are (1) value everyone at the same cost (unless someone is acting in an official capacity – like an attorney or engineer), and (2) you usually value the time at the hourly wage of the staff person who is assigned to manage the committee (if there is someone). This is usually done at the federal volunteer rate. For example:

Steering Committee: 12 people X $21.79/hour X 4 hours/month X 12 months = $5,760

The actual value of an in-kind donation would be the same as if you purchased the service or item. For example:

Backhoe and operator: $75/hour X 6 hours = $450 Property/real estate: worth the assessed value of the property

*Note: EMPG sub-recipients are required to contribute 50% match of their award amounts. Sub- recipients may only report up to 25% of their match in soft or in-kind match. The remainder must be hard match.

2.23 TrainingTraining conducted with federal funds must link to a capability and apply to SHSS goals and objectives. Refer to applicable federal grant guidelines for allowable training costs, approved courses, and reporting requirements. Any training not listed on the approved DHS course list requires prior approval from the MT DES’s Training Coordinator, as submitted through the District Representatives.

Allowable training costs for applicable federal grants include the following: 1) costs related to administering the training - planning, scheduling, facilities, materials and supplies, reproduction of materials, and equipment; and, 2) overtime and backfill costs associated with attendance at federally funded and approved CBRNE and cyber security training courses (unless otherwise indicated by applicable grant guidance.) Sub-recipients who budget grant funds (including overtime and backfill) to support attendance at and/or development of non-DHS approved training must receive written approval from the DES Planning Bureau prior to using funds for this purpose; and, 3) travel costs by employees who are on travel status for official business related to approved training (e.g., airfare, mileage, per diem, hotel); and, 4) hiring of Contractors/Consultants; and, 5) certification/recertification of instructors.

Law Enforcement Terrorism Prevention Program (LETPP), for Homeland Security, funds may be used for a range of law enforcement terrorism prevention related training activities to enhance the capabilities of state and sub-recipient personnel, including the following: building information sharing capacities, target hardening, facility security, CBRNE threats, NIMS, surveillance and counter- surveillance techniques, CIP, intelligence analysis, cyber security, multi-cultural undercover operations, language training, joint training with other homeland security entities, interoperable communications, Geospatial Information Systems, agricultural/food security, and citizen/volunteer awareness and participation in support of law enforcement activities. Sub-recipients who wish to use grant funds (including overtime and backfill) to support attendance at and/or development of non- DHS approved training must be routed through District Representatives and receive approval fromthe DES Planning Bureau (DES Planning Bureau is responsible for coordinating approval with theSAA and DHS) prior to using funds for this purpose. Training conducted with DHS funding must

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demonstrate linkage to a capability and be applicable to the state or urban area homeland security strategies.

2.24 ExercisesExercise funds may be used in accordance with the appropriate grant year guidance for allowable exercise costs. Exercises are encouraged to be capabilities-based, in accordance with HSEEP manuals, and be executed in accordance with HSEEP guidance ht t ps: / /hse e p.dhs. g ov/pa g e s/1001_HSEE P 7. a s px . Sub-recipients are encouraged to post documentation of their exercises to the National Exercise Schedule System (NEXS) found on the HSEEP website and are encouraged to use the HSEEP Tool Kit.

A copy of the exercise After-Action Report/Improvement Plan from the Corrective Action Program(CAP) must be provided to the District Representatives.

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CHAPTER 3 : Procurement a nd Standa rds

A sub-recipient shall ensure its procurement processes meet or exceed local, tribal, state, and federal requirements. Sub-recipient written procurement policies should be followed for all procurements, providing that the policies are at least as restrictive as state and federal requirements. If there are no sub-recipient procurement policies then state laws, regulations and policies must be followed, provided they are more conservative than federal policy.

Sub-recipient shall ensure that:

All procurement transactions, whether negotiated or competitively bid upon and without regard to dollar value, are conducted in a manner that provides the maximum amount of open and free competition.

The sub-recipient is alert to organizational conflicts of interest and/or non-competitive practices among contractors that may restrict or eliminate competition or otherwise restrain trade.

Contractors who develop or draft specifications, requirements, statements of work, and/or Requests for Proposals (RFPs) for a proposed procurement must be excluded from bidding or submitting a proposal to compete for the award of such procurement. This applies to contracts related to services; for example, Homeland Security Coordinator Contracts.

When issuing requests for proposals, bid solicitations, and other published documents describing projects or programs funded in whole or in part with these grant funds, the phrase - “This project was supported in whole or in part by grant # , issued by the Montana Disaster and Emergency Services Grants program” is used.

All purchases are listed in the approved application.

3.1 Conflicts of InterestFederal, state and local statutes and regulations require individuals involved in procuring goods and services to be free of any conflicts of interest. Sub-recipients shall ensure that individuals involved in the procurement process and the administration of federal grants meet all applicable ethics requirements.

No employee, officer or agent of the grantee or sub-recipient shall participate in selection or in the award or administration of a contract supported by Federal Funds if a conflict of interest would be involved. Such conflict would arise when: the employee, officer or agent, any member of his/her immediate family, his or her partner, or organization that employs, or is about to employ, any of the above, has a financial or other interest in the firm selected for award.

3.2 Sole Source ProcurementUse of sole source procurement is discouraged. If, after completion of the competitive bidding process, only one responsive bid is received (less than two complete competitive bids received), then this is a sole source procurement (based on 44 CFR § 13.36).

All sole source procurements require prior written approval from the SAA. This approval can be requested by completing and submitting a request for sole-source to the SAA. All sole-source procurements in excess of $100,000 must receive prior written approval from the SAA.

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3.3 Contracts for ServicesContracts for services require:

1. Compliance with the OMB Circular A–102 Grants and Cooperative Agreements to State, Tribal and Local Governments, including:

Remedies, sanctions and penalties for non–performance Phased payment for deliverables Termination clause for cause and convenience for contracts in excess of $10,000 Equal Employment Opportunity compliance; assurance that affirmative action

steps have been taken for opportunities to contract with small and minority firms, women’s business enterprise, and labor surplus area firms

Patents, copyrights, etc. Contractor compliance with Non-Procurement Debarment and Suspension,

Executive Order 12549 for contracts under grants that equal or exceed $25,000 Reporting requirements and milestones and/or supporting documentation required

for contract payment Certification that federal funds supporting this contract will not be used in

lobbying activities Assurance that contractor shall comply with all applicable State and federal

statues and regulations Access to the contractor’s books, documents, papers, and records specific to the

contract; and Retention of records by the contractor for three years after final payment.

2. Fiduciary entities that are not local, tribal or state will follow the procurement thresholds in accordance with applicable federal law (Procurement Standards sections of 28 CFR Part 66;44 CFR Part 13, and 2 CFR Part 215, 2 CFR Part 225 or 2 CFR Part 230 (as applicable) andOMB Circular A–102).

3. Monitoring the contractor for compliance and performance is the responsibility of the sub- recipient.

4. Contracts must also comply with Montana Code Annotated Title 18. Public Contracts. If sub- recipient is unsure of what requirements they may fall under for their particular grant they are encouraged to contact their District Representative for more guidance.

3.4 Equipment and/or Accountable SuppliesEquipment and/or accountable supplies are defined as tangible, nonexpendable, personal property regardless of current market price or resale value.

1. A sub-recipient must include the equipment inventory form with their reimbursement request if they have purchased equipment during that quarter. Reimbursement will not be made until the form is submitted to DESGP. The items on the equipment list must fall within the grant amount, allowable under the grant program, supportive of the project andlisted as a line item within the approved grant application and grant award. The detailed list of equipment must be submitted to the SAA as specified within the terms of the grant agreement.

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2. Requested equipment that is not listed as allowable on the AEL may only be purchased after receiving a written waiver from DHS. A formal written investment justification for the equipment must be submitted to the SAA, who will forward the investment justification to DHS. This investment justification must include: reasonable need for the equipment, the equipment’s support of the project, the price of the equipment, the grant year and grant number. The grant number is available from the SAA. The SAA will notify the sub-recipient of DHS’s decision.

Send all required procurement documentation to the following address:

Montana Disaster and Emergency ServicesGrants Program1956 Mt. Majo St.Fort Harrison, MT 59636-4789Phone (406) 324-4777Fax (406) 324-4790 d e sohs g @mt. g ov

3.5 Maintenance and Warranties of EquipmentAll service contracts are subject to the same aforementioned procurement procedures as equipment.

1. Vehicles Sub-recipients who accept a vehicle procured with grant funds must assume the

financial responsibility for title, license, registration, insurance, oil changes, inspection fees, tires, maintenance, wear and tear, repair costs and service costs of said vehicle.

3. Maintenance Contracts and Warranty fees for equipment Maintenance and warranties may only be purchased for equipment that has been

purchased using FEMA preparedness grant funds. To avoid supplanting congressional appropriations for specific programs,

maintenance contracts and warranties must be purchased using funds from the same grant program used to purchase the original equipment

The term of the maintenance contract or warranty shall not exceed the period of performance of the grant to which the contract is being charged

Equipment provided to States and local jurisdictions by the Commercial Equipment Direct Assistance Program (CEDAP) is also eligible for support through maintenance contracts and warranties since CEDAP is a one-time equipment grant program andnot a recurring grant (SHSP and UASI programs only)

Equipment and support provided directly to states and local jurisdictions by any DHS component is also eligible for support through maintenance contracts or warranties once funding for those programs has ended. This includes the Domestic Nuclear Detection Office‘s (DNDO) limited duration programs such as the Southeast Transportation Pilot (SETCP) and the West Coast Maritime Pilot (WCMP) (SHSP and UASI programs only)

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4. Repair and Replacement Costs Repair and replacement parts may only be purchased for equipment that has been

purchased using FEMA preparedness grant funding To avoid supplanting congressional appropriations for specific programs, repair and

replacement parts must be purchased using the same grant program used to purchase the original equipment

Repair and replacement parts for equipment provided to states and local jurisdictions by CEDAP are also eligible for support since CEDAP is a one-time equipment grant program and not a recurring grant (SHSP and UASI programs only)

5. User Fees - User fees are viewed as costs for specific services required for the maintenance and operation of equipment or systems. An example would be the recurring service fees associated with handheld radios or mobile data computers but is not limited to equipment.

User fees may only be paid for equipment that has been purchased using FEMApreparedness grant funding

To avoid supplanting congressional appropriations for specific programs, user fees must be paid for using the same grant program used to purchase the original equipment.

User fees for equipment provided to states and local jurisdictions by CEDAP are also eligible for support since CEDAP is a one-time equipment grant program and not a recurring grant (SHSP and UASI programs only)

User fees for equipment provided directly to states and local jurisdictions by any DHS component are also eligible for support once funding for those programs has ended. This includes the DNDO limited duration programs such as the SETCP and WCMP (SHSP and UASI programs only)

Requests for maintenance, repair or replacement costs, upgrades or user fees for equipment purchased with funds from FEMA preparedness grants that no longer exist (e.g., Law Enforcement Terrorism Prevention Activities [LETPA]) are allowable.Sufficient documentation should be maintained to identify the original grant used to purchase the equipment (SHSP and UASI programs only)

6. Grant Period Limitations. The term of the maintenance contract or warranty shall not exceed the performance period of the grant to which the contract is being charged. Any portion of the contract that extends beyond the grant performance period may not be charged to the grant award. For example, if the grant performance period is one year and the maintenance agreement is for three years, only the cost associated with the first year of the agreement is allowable. The grantee has to prorate the cost of the agreement to cover only the grant project period.

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CHAPTER 4 : Property /Equ ipment Ma nag ement a nd Contro l

4.1 Property/Equipment and Accountable Supplies RecordsFederal guidelines and regulations require sub-recipients to be prudent in the acquisition and management of property/equipment and accountable supplies acquired with federal funds. Sub- recipients shall ensure that an effective property management system exists regardless of the dollar value of the asset.

Equipment is defined as; tangible, nonexpendable, personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit.

Refer to 5.7 for examples.

Accountable Supplies is defined as; non-expendable, personal property and an acquisition cost of less than $5,000 per unit.

Refer to 5.6 for examples.

Upon receipt of equipment from a vendor, the sub-recipient must immediately inspect the equipment for damage, completeness, and functionality. The sub-recipient must complete and submit an Equipment Inventory Form and/or an Accountable Supplies Form to the SAA with their reimbursement request. This form and other grant related forms may be found at ht t p: / / m ontan a dma.o r g / g r a nt s - pro g r a m . This form verifies that the equipment received was undamaged, complete, and functional. Sub-recipients shall not list equipment on the Equipment Inventory Form, which at the time of inspection is found to be damaged, incomplete, non-functional and/or incorrect.

The Equipment Inventory Form must also be used to identify the final location of the equipment, (e.g. My town Fire Department) as well as the other required information on the form. Upon receipt of the Equipment Inventory Form, the SAA will authorize reimbursement. This form must also be included prior to or with the final Reimbursement Request Form for the grant. The final reimbursement request will not be processed without this form.

4.2 Equipment Exchange or ReturnEquipment must be inspected at time of delivery for damage, incompleteness or non-functionality as well as correctness. Correctness means that the item(s) received are those that are listed on the ori g inal pu rc h a se ord e r . It is the responsibility of the sub-recipient to reconcile any equipment that is damaged, incomplete, non-functional, or incorrect with the vendor. The SAA will not authorize payment of the reimbursement for equipment that is in the process of exchange or return.

4.3 Sub-recipient Inspection of EquipmentIt is the responsibility of the sub-recipient to inspect the equipment upon receipt. The sub-recipient is permitted to delegate the responsibility of inspecting the equipment to the end-user. When the Equipment Inventory Form is submitted without proper inspection of equipment and, at a later date, the equipment is found to be faulty or the order incomplete, the sub-recipient will assume responsibility for all costs (including original invoiced amount, shipping, handling, re-stocking and/or applicable taxes) related to replacing or repairing the damaged, incomplete, or incorrect equipment. When such equipment cannot be replaced or repaired, the SAA will take steps to

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recover these costs from the sub-recipient since they are unallowable under the federal grant guidelines.

4.4 Equipment TransferA sub-recipient must inform the SAA within 30 days when transferring equipment from its original documented location to another location. Sub-recipients must submit all such changes on the Equipment Inventory Form. The sub-recipient must retain a copy of the form in the applicable federal grant file.

Sub-recipients must maintain mileage logs for vehicles procured with federal funds. The SAA may request mileage records at any time for a vehicle procured with federal funds to verify allowable vehicle use, e.g. official response to CBRNE incidents.

4.5 Inventory Control SystemA sub-recipient shall maintain an Equipment and Accountable Supplies Inventory System. Sub- recipients are required to properly identify equipment and property that is purchased with federalgrant funds. Any single item of equipment valued at or above $5,000 and having a useful life of morethan one year will be marked with appropriate stickers indicating the funding source. If the sub- recipients internal policy for inventory control designates an amount lower than $5,000, that amount must be used instead of the identified level of $5,000.

4.6 Management Requirements from 44 CFR § 13.32Sub-recipients are required to maintain accurate property and equipment records. These property and equipment records shall include but are not limited to:

a) Description of the property (including make and model)b) Manufacturer’s serial number or other identification number c) Vendor (source of the property)d) Acquisition datee) Cost of the propertyf) Percentage of federal participation in the cost of the property g) Location of the equipmenth) Condition of the equipment as of the date the information is reported i) Disposition data: Date of disposal and sale price

4.7 Physical Equipment and Accountable Supplies InventoryFederal and SAA policies require that sub-recipients conduct full equipment and accountable supplies inventories every two years and random sample inventories annually. Any discrepancies must be investigated. The Disaster and Emergency Services Grants Program Grants Accountant will perform an equipment recertification every two years. In this the SAA will request documentation of equipment and accountable supplies held by the sub-recipient purchased through federal funds. The SAA will require certifications that assert the equipment or accountable supplies are in workingorder and are still being used within the guidelines set forth under the funding the equipment or accountable supplies were originally purchased from. Any discrepancies will be remedied according to federal and state requirements.

Thus, Physical Equipment Inventory Reports are required beyond the performance period of the grant agreement, continuing on to the end of the equipment life cycle. Sub-recipients who have an inventory system in place may submit an electronic copy of the inventory report to the SAA in lieu of

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the Equipment Recertification Form. The information on the sub-recipients inventory reports must correspond with the information required by the SAA on the Equipment Inventory Form.

4.8 Prevention of Loss, Damage or Theft of EquipmentA control system shall be in effect to ensure adequate safeguards to prevent loss, damage, or theft of the property. A sub-recipient must submit a description of its control system when requested by the SAA. Sub-recipients are responsible for replacing or repairing the property which is willfully or negligently lost, stolen, damaged or destroyed. Any loss, damage or theft of the property must be investigated and fully documented, and made part of the official grant record. The investigation report and additional documentation shall be submitted to the SAA.

4.9 Equipment Maintenance ProceduresSub-recipients are required to keep equipment purchased with federal funds in good operational condition. Storage, use, maintenance, and repairs of equipment purchased with federal funds must be accomplished in accordance with the manufacturer’s recommendation. This includes, but is not limited to, regular documentation of all maintenance and repair activities.

The end user of equipment must implement maintenance procedures to keep the property in good condition. Evidence of this requirement will be reviewed as part of the monitoring process.

4.10 Disposition of Equipment and Accountable SuppliesThe sub-recipient must obtain written prior approval from the SAA for the use of equipment and/or accountable supplies, as defined in section 5.1, in other projects when the sub-recipient determines that the equipment is no longer needed for the original grant purposes. Usage in other projects must be limited to other federally sponsored projects or programs that have purposes consistent with those authorized for support by the State. When the equipment is no longer needed as prescribed above, disposition of the equipment and/or accountable supplies will be made as follows:

The SAA will either:Direct the equipment/accountable supplies to be transferred to another sub-recipient project or prioritization needing the equipment, provided that use of such equipment is approved by the State;

Or

Return all equipment/accountable supplies purchased with federal funds to the control of the SAA. In the case of equipment purchased in part with federal funds, the sub-recipient may be permittedto retain title upon compensating the State for its fair share of the equipment. The federal share of the equipment must be computed by applying the percentage of the federal participation in the total cost of the project for which the equipment was acquired to the current fair market value of the equipment. In all other instances, instructions for disposition of equipment must be obtained from the State.

All sub-recipients shall dispose of equipment with prior approval from the SAA as follows: Items 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 the SAA.

Items with a current per unit fair market value equal or greater than $5,000 may be retained or sold and the State shall have a right to an amount calculated by multiplying the current market

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value or proceeds from sale by the State's share of the equipment. Seller is also eligible for sale costs.

In cases where the sub-recipient fails to take appropriate disposition action, the State may suggest a corrective action that the sub-recipient must follow.

If, upon termination or completion of the award, there is a residual inventory of $5,000 or more in total aggregate fair market value, and if the supplies are not needed for any other federally sponsored programs or projects, the sub-recipient shall compensate the awarding agency for its share.

4.11 Change in Ownership of EquipmentWhen ownership of equipment is transferred from the sub-recipient to another fiscal agent/agency, an equipment transfer request letter shall be sent to the SAA requesting permission to transfer the property to the prospective fiscal agent/agency. If the sub-recipient requires a memorandum of understanding or other document, that requirement shall be followed, provided the document includes the information outlined below. At a minimum, the release or transfer document should include:

The grant number Transferring and receiving agency information Contact information for a primary point of contact within receiving agency Specific equipment involved Requirements associated with ownership of equipment purchased with Homeland Security

funds Justification for the transfer of property

When a sub-recipient is acquiring replacement equipment, the sub-recipient may use the equipment to be replaced as a trade-in or sell it and use the proceeds to offset the cost of the replacement equipment, subject to the prior approval by DESGP.

4.12 Insurance of Equipment and Real PropertyThe sub-recipient shall at a minimum provide the equivalent insurance coverage for property and equipment acquired with federal funds as provided to property and equipment owned by the recipient, as set forth in 2 CFR §215. Sub-recipients are fully responsible for the replacement or repair of property and equipment.

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CHAPTER 5 : Allo w a ble /Una llo w a ble Cos ts

GeneralWhen completing a grant application, applicants must utilize the program guidance to determine allowable or unallowable costs. If specific questions should arise, the applicants must contact their DES District Representative. When making subgrant awards, the SAA will only approveexpenditures in an application that are allowable per the federal guidelines, are listed in the AEL, and are directly related to the project.

5.1 Allowable CostsGrant funds must be used to enhance all-hazards emergency preparedness and all expenditures must be in accordance with the sub-recipient’s approved Grant Award Agreement. Funds can be used to conduct multi-disciplinary planning, training, exercises, organization, and equipment purchases. Allowable cost information can be found within the DHS Financial Management Guide, CFR 44, CFR 2, and the appropriate grant guidance. The following is a list of allowable costs:

5.2 Management and Administrative (M&A)M & A costs are direct costs that are incurred to administer a specific program/award. M&A costs are identifiable and unique to each program/award. All costs charged to M&A must be directly linked to program or grant administration, not the project itself.

M&A costs may include: Salaries of full-time or part-time staff or contractors/consultants to assist with the

management of the program Hiring of full-time or part-time staff or contractors/consultants to assist with

the implementation and administration of the program Overtime and backfill costs Costs associated with achieving Emergency Management that is inclusive

of the access and functional needs of workers and citizens with disabilities. Travel expenses of full-time or part-time staff or contractors/consultants

to assist with the management of the program Meeting expenses relating to the management of the program Office supplies and equipment needed to manage the program Shipping/Postage expenses relating to the management of the program Leasing or renting of space for newly hired personnel during the period

of performance of the grant program

*Note: allowable direct costs are only for the performance period of the grant.

5.3 Personnel CostsDirect costs related to management and administration of the grant program including the salaries and fringe benefits of the program manager, equipment manager, financial manager, and administrative staff is allowable.

Direct costs related to planning, training and exercises of the grant program including the salaries and fringe benefits for personnel including planners, trainers and exercise officers are allowable.

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5.4 DocumentationSub-recipients are required to maintain proper supporting documentation for all grant fund expenditures. Sub-recipients shall submit supporting documentation with reimbursement requests on the Reimbursement Request Form. Documentation must include, but is not limited to:

Invoice and proof of payment made by the sub-recipient. The preferred proof of payment is a copy of the cancelled check. Expenditure summary sheets suffice as documentation for a cancelled check.

Mileage log Travel support documentation (Refer to 5.12 and 7.1) Contracts Memorandum of Understanding

Documentation related to personnel costs is required (this includes personnel contracted to perform grant related duties). Acceptable documentation includes but is not limited to:

Employee Monthly Time Record. Copies of the agency's payroll records that reflect the requested reimbursement amount. Quarterly programmatic progress reports.

*Note: If the sub-recipient uses an electronic time system that will provide all elements, the SAA will accept the submission from the sub-recipient’s electronic time system.

5.5 Contractual ServicesSub-recipients purchasing contractual services shall ensure that:

The contractor is not debarred from participation in state and federal programs. Sub-recipients should review contractor debarment information on ht t p: / /ww w . e pls. g ov .

A description of the procurement process used to select the contractor is maintained in the grant file and a copy sent to the SAA.

All services are supported by a valid, signed contract between the project manager and the service provider. The contract is time limited to 5 years or less.

Contractor time and activity records are maintained in the project file and a copy shall be sent to the SAA. (This is a requirement for any contractor.) The contractor is not receiving payment from more than one source for the same work for this project.

The contractor is not a federal employee.

*Note: If a sub-recipient’s or state fiscal rule are more conservative, those rules must be followed.

5.6 Accountable SuppliesAccountable supplies/property may include, but are not limited to:

Office electronics: copier, fax machine, printers Computers: desk top, laptop and tablets (iPad), related equipment: external hard drives and

software, projector, wireless routers Digital cameras, video, media equipment, televisions, smart boards, GPS units Communication radios

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Satellite phones, smart phones Office furniture

5.7 EquipmentSub-recipients are required to review the Interagency Board’s Authorized Equipment List (AEL) on the Responder Knowledge Base (RKB) website at ht t p: / /ww w .rkb. u s and ensure that all requested items are listed on the web site. This website also identifies additional requirements related to equipment purchases.

*Note: Not all categories listed in the AEL are allowable expenditures under all grant programs. Refer to specific grant program guidelines and the Grant Allowability link for the equipment item on the AEL., www.r k b. u s .

5.8 Maintenance contracts and warrantiesThe use of FEMA preparedness grant funds for maintenance contracts, warranties, repair or replacement costs, upgrades, and user fees are allowable under all active and future grant awards, unless otherwise noted.

The term of the maintenance contract or warranty shall not exceed the period of performance of the grant to which the contract is being charged. Any portion of the contract that extends beyond the grant performance period may not be charged to the grant award. For example, if the grant performance period is one year and the maintenance agreement is for three years, only the cost associated with the first year of the agreement is allowable. The sub-recipient has to prorate the cost of the agreement to cover only the grant project period. Maintenance contracts and warranties may only be purchased for equipment that has been purchased using FEMA preparedness grant funding.

Maintenance contracts and warranties must be purchased using funds from the same grant program used to purchase the original equipment.

*Note: Sub - r ec ip i e nts are r e mind e d to be s e nsi t ive to supplan t ing is s u e s. M ain t e nan c e c ontra c ts, warran t ies, r e pair or repla ce m e nt costs, upgrades, and us e r fe e s pre v ious l y pur c has e d wi t h Sta t e and or lo c al f un d s c annot be r e plac e d wi t h F e d e ral g r ant f unding.

5.9 Food and BeveragesFood and/or beverage expenses are allowable costs if:

(1) The food and/or beverages are provided to participants at training sessions, meetings, or conferences that are allowable activities under the particular DHS program guidelines, are included in the sub-recipients approved grant award agreement; and

(2) Expenses incurred for food and/or beverages and provided at training sessions, meetings, or conferences satisfy the following tests:

(a) The cost of the food and/or beverages provided is considered

reasonable; (b) The food and/or beverages provided are subject of a work-

related event; (c) Participation is mandatory (i.e. working lunch);

(d) The time of the meeting requires two hours of work activity before and after the

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meal. No stand–alone working meals are allowed. Work activity for this purpose is defined as on-site activity supporting the purpose of the meeting; and

(e) The food and/or beverages provided are not related directly to amusement and/or social events. (Any event where alcohol is being served is considered a social event; therefore, costs associated with that event are not allowable). In the event food/meal(s) are being provided, the amount charged for per diem must be reduced accordingly.

A list of attendees for all meetings/events where food is purchased must be submitted to the SAA. In order to be reimbursed for a meal expense (breakfast and/or lunch and/or dinner), a legible copy of the Agenda, clearly stating a working meal, and the legible sign-in sheet must be attached to the Reimbursement Request.

5.10 Consultant RatesCompensation for individual consultant services is to be reasonable and consistent with the amount paid for similar services in the marketplace and in accordance with the approved application/grant award. Consideration can be given to compensation, including fringe benefits, for those individuals whose employers do not provide them. Time and effort reports are required for consultants. Competitive bidding for consultant services is encouraged, and may be required, depending on the contract amount.

5.11 TrainingTraining courses must be DHS approved in order to be paid for with federal funds. Three training catalogues from the US Department of Homeland Security - Office of Grants and Training - can be accessed online at ht t p: / /ww w .fi r str e spond e rt ra in i n g . g ov

A sub-recipient who wants to use grant funds for training that is not DHS approved must request an exemption by formally requesting approval through the Training Coordinator as submitted through your District Representatives.

*Note: For more specific training information and allowable costs, please refer to the most current version of the Federal Grant Guidance.

5.12 TravelThe sub-recipient is responsible for all travel submitted for reimbursement that is eligible for compensation under the appropriate years grant guidance and listed in the approved application/grant award. Supporting documentation for travel expenses must be submitted along with the Reimbursement Request Form and shown as a line item. Reimbursement allowances are determined by the current Montana travel and subsistence allowances which can be found on the Montana Department of Administration website at ht t p: / /doa.mt. g ov/doat ra v e l / d e f a ul t .mcp x . Travelers must submit justification for lodging and meal costs that are above the Montana travel and subsistence allowances.

Documentation must include but is not limited to:

Basis of computation by unit cost (Individual Airfare + $Lodging + $Meal Allowance + $ Other X (multiplied by) Number of people traveling).

Summary spreadsheet of group travel, listed by name of traveler, dates, and expenses (e.g. airfare, lodging, per diem, etc.)

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Copy of relevant section of the Collective Bargaining Agreement, if applicable (mileage, shift differential, meal allowance, etc.)

Purpose of travel as it relates to program activities, and location. Include but are not limited to:

a) Copy of conference or training registration form and event brochure b) If attending a meeting, submit copy of agenda and meeting minutes

Copy of local, sub-recipient, or the SAA’s Travel Authorization and receipts for all expenses except meals. Meals will be reimbursed at the applicable per diem costs.

Follow State travel guidelines for lodging and per diem costs for in–state travel.

Follow GSA Domestic Per Diem Rate travel guidelines for lodging and per diem costs for out-of-state travel.

*Note: Unallowable Travel Costs: entertainment charges, tobacco, alcohol or bar charges, laundry charges, visa or passport charges, tips, phone calls, personal hygiene items, in-room movies, magazines, personal transportation, travel insurance, credit card fees, lodging costs in excess of federal or State per diem as applicable.

5.13 Expendable SuppliesMost Homeland Security grants do not allow expendable supplies such as office paper, pens, pencils, etc. However, these costs may be allowed under certain investment applications. Please contact your local District Representative to find out if your application is can include such supplies.

EMPG allows supplies and materials to be purchased under organizational, planning, training, and exercise deliverables.

5.14 Unallowable CostsIn addition to the applicable cost principles for federal grants, sub-recipients shall refer to theprogram guidelines to determine what program costs are unallowable for that specific program. Costs that are unallowable under one federal program may be allowable under another.

Costs that are generally unallowable under these grants are as follows:

• “Thank you” Gifts/Souvenirs/Awards/Dinners(All Grants)• General use software, computers and related equipment (Homeland Security)• General use vehicles, licensing fees, and operational costs(all Grants)• Vehicle registration fees(all Grants)• Weapons and ammunition(all Grants)• Overtime for public safety personnel for traditional duties(all Grants)• Salary payments, consulting fees, travel costs, or other compensation for full-time federal

employees(all Grants)• All equipment and related expenses not on the AEL(all Grants)• Insurance policies(all Grants)• Program income, i.e., generating income as a result of the grant funded activities(all Grants)• Reoccurring costs (not pre-approved)(Homeland Security)• Bar charges and alcoholic beverages(all Grants)• Laundry charges(all Grants)

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• Sporting Events(all Grants)• Tips/Gratuity(all Grants)• Lodging charges in excess of the federal per diem without justification(all Grants)• Costs incurred in order to comply with local or state requirements (e.g. “MT Public Records

Request”) (all Grants)• Land acquisition costs(all Grants)• Costs associated with foreign travel (not pre-approved) (all Grants)• Costs associated with organized fund raising(all Grants)• Clothing that is not certified Personal Protective Equipment as compliant with the National

Fire Protection Association (NFPA) (all Grants)

*Note: “General Use” is referred to as items that are not specific to only grant funded projects, but rather support the agency (local, tribal and state) as a whole.

5.15 Indirect Costs without Prior ApprovalThese are defined as costs that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular award/project, but contribute to the ability of the recipient to support a variety of projects and programs while sustaining the daily operations of the organization. Indirect costs are not incurred from the actual performance of the activities under a particular award. Indirect costs are charged based on an approved rate and applicable base, which encompasses the total organizational activity.

Indirect costs may include, but are not limited to: Depreciation (that is not directly tied to Homeland Security Functions) Rent (that is not directly tied to Homeland Security Functions) Telephone (that is not directly tied to Homeland Security Functions) Postage (that is not directly tied to Homeland Security Functions) Printing (that is not directly tied to Homeland Security Functions) Other expenses that benefit all programs and functions of an organization, (that is not directly

tied to Homeland Security Functions)

5.16 Land AcquisitionLand acquisition costs are unallowable unless specifically noted otherwise in grant guidance.

5.17 Compensation of Federal EmployeesSalary payments, consulting fees, or other compensation of full-time federal employees are unallowable costs.

5.18 Travel of Federal EmployeesCosts of transportation, lodging, subsistence, and related travel expenses of DHS employees are unallowable charges. Travel expenses of other federal employees for advisory committees or other program project duties or assistance are allowable if they have been:

a) Approved by the federal employee’s department or agency; andb) Included as an identifiable item in the funds budgeted for the project or subsequently

submitted for approval.

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5.19 Bonuses or CommissionsThe recipient or sub-grantee is prohibited from paying any bonuses or commissions to any individual or organization that obtained approval of an application for award assistance. Bonuses to officers or board members of for-profit or non-profit organizations which are determined to be a profit or fee are unallowable.

5.20 Pre-Award CostsUnless otherwise noted in the contract, any costs incurred prior to the commencement date of the award are unallowable.

5.21 LobbyingAll recipients and sub-grantees must comply with the provisions of the government-wide CommonRule on Restrictions on Lobbying, as appropriate.

5.22 Fund RaisingCosts of organized fundraising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expenses incurred solely to raise capital or obtain contributions, may not be charged either as direct or indirect costs against the award. Neither the salary of persons engaged in such activities nor indirect costs associated with those salaries may be charged to the award, except insofar as such persons perform other program-related activities.

An organization may accept donations (i.e., goods, space, services) as long as the value of the donations is not charged as a direct or indirect cost to the award. The donation must be supported with source documentation.

A recipient may also expend funds, in accordance with the approved award terms, to seek future funding sources to expand the project, but not for raising funds to finance-related or complementary project activities.

*Note: Nothing in this section should be read to prohibit a recipient from engaging in fund-raising activities as long as such activities are not financed by the federal or non-federal portion of award funds.

5.23 Conferences and WorkshopsUnallowable costs include but are not limited to:

Entertainment Sporting events Visa fees Passport charges Bar charges/Alcoholic beverages Laundry charges Lodging costs in excess of federal per diem

5.24 Costs Requiring Prior ApprovalCosts that require prior written approval is as follows but is not limited to:

ConstructionThe use of HS funds for construction is generally prohibited except as outlined below:

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Construction and renovation of guard facilities Renovation of and modifications, including the installation of security and communications

equipment, to buildings and structures to improve perimeter security Physical security enhancements

Communication towers that are included in a jurisdiction’s interoperable communications plan are allowed. Written approval must be provided by the SAA prior to the use of any grant funds for construction or renovation.

5.25 Audit CostsCosts for optional audits or performed in accordance with OMB Circular A-133 are unallowable. If the sub-recipient did not expend $500,000 or more in federal funds during the fiscal year, but contracted with a certified public accountant to perform an audit, these costs may not be charged to the grant and requires prior approval.

Unless prohibited by law, the costs of audits made in accordance with A-133 requirements are allowable charges to federal awards.

The costs of auditing a non-federal entity, which has federal awards expended of less than$500,000 per year is thereby exempted under the A-133 requirement and may not be charged to a federal award(s).

5.26 Foreign TravelDirect charges for foreign travel costs are allowable only when the travel has prior approval from the DHS through the state. Foreign travel is defined as any travel outside of Canada, the United States and its U.S. Territories and possessions. However, for organizations located in foreign countries, the term “foreign travel” means travel outside that country.

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CHAPTER 6 : Fisca l Respo nsibi lity

6.1 Quarterly BalancesSub-recipients are required to maintain their own internal controls to monitor their grant accounting. Sub-recipients are required to report their grant financial status on quarterlybasis using the Quarterly Reimbursement Form. No financial discrepancies will be reconciled45 days after the close of the grant period. The SAA reserves the right to withhold grant funds for non-compliance with these reporting requirements.

6.2 Reimbursement RequestReimbursements will be quarterly, which has changed from previous years. Quarterly reimbursements will be requested using the Reimbursement Form. Supporting documentation must accompany the reimbursement request. Reimbursement requests that are not eligible to pay (i.e., incomplete, insufficient supporting documentation, in-eligible expenditures, out of compliance) will be returned to the sub-recipient along with a letter of in-eligibility. The sub-recipient may resubmit the reimbursement request along with the required supporting documentation to satisfy the requirements of the return letter.

Quarterly reimbursements must be accompanied by the corresponding quarterly report to be eligible for payment. Quarterly Programmatic Reports must be submitted in accordance with the “Quarterly Reporting Schedule” shown in Chapter 8. The purpose of these two documents is to provide information on the financial and project activity progress towards meeting the goals and objectives of the grant award. The reports must include a description of any delays or problems with individual projects. If activity did not occur on a grant during a quarter, reports must include an explanation for the lack of grant activity. Quarterly reports are required on all open grant awards. Any reimbursements submitted in which the sub-recipient is not current on Quarterly Reports will be returned until Quarterly Reports are up to date.

At the close of the grant a Final Financial Report/Reimbursement Form shall include the final financial report and be submitted no later than 45 days after the end of the grant period.

*Note: If no grant funds have been spent within a quarter, the sub-recipient will need to submit a justification to the SAA.

6.3 Required Documentation for ReimbursementThe following items must be included with all quarterly reimbursement request submissions, but are not limited to:

a) Copies of invoices for each item listed on the reimbursement form. Expenditures will be cross referenced with the grant application. Any expenditure that was not approved on the application will be disallowed.

b) Proof of payment for each item listed on the request. The preferred proof of payment is acopy of the cancelled check. When a copy of the cancelled check is unobtainable, a computer generated report from the sub-recipient's accounting system listing all pertinent information will be accepted.

c) Documentation for personnel – The employee’s Monthly Time and Effort Record along with the copies of the agency's payroll records that reflect the amount requested. Federal regulations prohibit the practice of charging the grant according to the amount derived from dividing the personnel costs reflected in the grant by the number of months in the grant.

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d) Documentation for food and beverages. A list of attendees for all meetings/events where food is purchased must be submitted to the SAA. In order to be reimbursed for a meal expense (breakfast and/or lunch and/or dinner), a legible copy of the Agenda, clearly stating a working meal, and the legible sign-in sheet must be attached to the Reimbursement Request.

e) Documentation for travel. Reimbursement for travel expenses are restricted to the number of individuals included in the current approved project budget worksheet of the application. A sub - r e c ip i e nt m ust have a tr a v e l and re i m burs e ment pol i c y that me e ts or e x cee ds the g uidan c e in OMB C i r c ular A - 102 a nd 2 C F R 225 ( F orm e rly OMB Cir c ular A - 87). The sub- r e c ip i e nt m ust s ubm i t a c opy of th e ir tr a v e l and re i m burs e ment pol i c y to t he S AA with t h e ir si g n e d g r a nt a g r e e ment.

f) Und e r the c ir c ums t a n c e wh e n the r e is not a D ES Coordin a tor e mp l o y e d with i n the County or Tribe the Quarterly Report may be submit ted by the Dist rict R epresentative.

*Note: The SAA requires that all expenditures be fully documented and must be on the approved project budget worksheet. The total reimbursement of expenditures cannot exceed the total federal amount awarded.

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CHAPTER 7 : Supplemental Do cumentatio n

7.1 Travel Support DocumentationThe SAA will reimburse expenses for project related travel providing appropriate supporting documentation is attached to the quarter reimbursement request. Sub-recipients must provide documentation for lodging, airfare, meals, agenda, and sign-in roster for meetings in order for reimbursement requests to be processed and paid. A copy of a credit card statement is not considered a receipt for reimbursement purposes. The current Montana travel policy and meal allowances canbe found on the Montana Department of Administration website at ht t p: / /doa.mt. g ov/doat ra v e l / d e f a ul t .mcp x .

The following documentation for travel expenses is required:1) Exact mileage may be documented or you may use the mileage calculator available at

ht t p: / /ww w .md t .m t . g ov/ t r a vinfo/sc r ip t s/cit y dis t .pl and must be submitted with the signature of the traveler and supervisor or signatory authority. The information entered as the Travel Purpose must be specific and directly related to the approved project activity specified in the detailed project budget worksheet of the application.

2) Meals: the traveler will only be reimbursed up to the applicable per diem rate for meals.3) Lodging: Submit a copy of the hotel/motel receipt. In the event that a recipient is not

provided the sub-recipient will be reimbursed at the non-recipe table rate of $12.4) Domestic Airfare: Submit a copy of the paid airline receipt/itinerary indicating price paid.5) Miscellaneous Travel Expenses (e.g. airport parking, hotel parking, car rental, etc.) - Submit

a copy of the appropriate receipt(s).

7.2 Training and Exercise RecordsThe sub-recipient that hosts a training and/or Exercise event must provide the course coordinator’s contact information, a copy of the course description, course syllabus, or the DHS course number, an agenda for the training delivery, a legible class roster, the DHS course number, and a copy of the course evaluations with their quarterly reimbursement request. When a contractor conducts a training or exercise the sub-recipient should require the course attendees to complete a course evaluation form. Individuals who attend training or exercise events must provide a copy of the coursedescription, course syllabus, agenda, and/or the DHS course number as an attachment to the quarterly reimbursement request.

7.3 Accounting for Sub-recipient In-house StaffSub-recipients who are using in-house services, full or part-time employees, must maintain adequate records to justify expenditure of federal funds for management and administrative purposes. Records include, but are not limited to:

Position or job descriptions: Position or job descriptions help ensure that charges can be made appropriately to planning, personnel, training, exercise or management &administration (M&A).

Timekeeping Records: Accurate time records must be maintained that detail hours charged to grant activities. It is important to remember that activities and not just titles should be considered when determining where time and operating expenses should be charged in cash reimbursement requests. Activities performed by administrative or accounting personnel should be charged to the M&A category. In addition, any accounting or administrative activities, even if performed by planners, need to be charged to M&A. Please refer to 2 CFR Part 225 (220, 230) for more specific requirements.

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The following are activities commonly performed by planners that should be charged to theM&A category:

a) Managing staff issuesb) Preparing reports/audit responses c) Performing accounting activitiesd) Performing administrative support activities

7.4 Records ManagementSub-recipients are required to maintain a records management system and retain grant documentation.The following are required documents that the sub-recipient shall maintain in their official master grant file, but is not limited to:

Complete application Grant Agreement/Grant Award/Memorandum of Agreement, special conditions certifications

and assurances, project narrative and budget detail Grant Adjustment Notice (s) Financial & Programmatic Quarterly Report/Reimbursement Forms with supporting

documentation Procurement and Contracting authorizations (e.g. Sole-Source Procurements, Requests for

Proposals, Signed Contracts, purchase orders, etc.) Equipment Inventory Forms Transfer of inventory reports and supporting documentation Accountable Property/Supplies Form Request for Award Amendments and approvals Paper and/or electronic copies of any substantial deliverables (e.g. Photos, Power Point

presentation, training course, program plans, brochures, outreach materials, etc.) Correspondence and all previous monitoring documentation Job descriptions of staff Environmental and Historical Preservation analysis, requests, and approvals Audit and monitoring reports Mileage logs and travel support documentation Copy of Time & Effort worksheets Copy of all grant related correspondence and documentation Consultant/volunteer time and activity reports Grant close out letters from the SAA

7.5 Records RetentionAll sub-recipient’s financial and program records must be retained for four (4) years from the grant agreement termination/grant close-out date. If any litigation, claim, negotiation, audit, or other action involving the records has been started before the expiration of the four-year period, the records must be retained until resolution and completion of all actions concerning the grant.

Records must be maintained separately from any previous or future grants that had been or will be providing funding for the project. Grant records include all financial records, supporting documents, statistical records, and all other records pertinent to the grant.

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CHAPTER 8 : Qua rterly Prog ress /Prog ra mma tic Rep o rts

Sub-recipients are required to constantly monitor fiscal and program performance of grant-supported projects to assure that time schedules are being met, projected work units being accomplished within established timelines, and other performance goals are being pursed.

Quarterly Reimbursement requests and Programmatic reports must be submitted on DESGP required forms, which may be found at ht t p: / / m ontan a dma.o r g / g r a nt s - pro g r a m , in accordance with the “Quarterly Reporting Schedule” presented below. The purpose of these two reports is to provide information on the financial and project activity progress towards meeting the goals and objectives of the grant award. The reports must include a description of any delays or problems with individual projects. If activity did not occur on a grant during a quarter, reports must include an explanation for the lack of grant activity. Quarterly reports are required on all open grant awards.

The Quarterly Report should not include accruals. It should include only actual expenditures made during the quarter, whether or not the related reimbursement has been received. Reimbursement requests will be returned unpaid if a sub-recipient is not current on submitting quarterly reports.

Calendar Quarter Due Date

10/01/YY - 12/30/YY 01/5/YY01/01/YY - 03/30/YY 04/5/YY04/01/YY - 06/30/YY 07/5/YY07/01/YY - 09/30/YY 10/5/YY

The first quarterly report for any grant is due for the quarter that the Agreement was issued. For example, if a grant starts on October 25, 20XX, the first report is due for the quarter ending December 30, 20XX, and should be received by DESGP no later than January 5, 20XX. No reimbursements will be made prior to District Representatives’ review and signing off on the quarterly report, and on file with DESGP.

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CHAPTER 9 : Ov ersig ht a nd Mo nitoring

9.1 AuditsSub-recipients may be audited and their performance reviewed by state and federal agencies. DESGP, the Montana State Auditor, DHS Office of the Inspector General, or any of their authorized representatives have the right to access any pertinent books, documents, papers, or other records of recipients that are pertinent to the award in order to complete audits, examinations, excerpts, and transcripts.

9.2 Federal AuditsAll recipients and sub-recipients of federal funds are subject to the accounting and audit requirements found in 44 CFR, CFR, and OMB Circular A-133.

Sub-recipients that expend $500,000 or more of federal funds from all funding sources during their fiscal year are required to hire an independent auditing firm to conduct an audit of their financial statements, compliance with laws and regulations, and internal controls. The audit must be performed in accordance with the U.S. General Accounting Office’s Government Auditing Standards, located at http: w w w. g a o. g ov/ g ov a ud/ y bk01.htm and OMB Circular A-133, Audits of States, Local Government and Non-Profit Organizations located at ht t p: / /ww w .whitehous e . g ov / omb / c ir c ula r s/ i nd e x .ht m l.

Sub-recipients whose total annual expenditures of federal funds are less than $500,000 are encouraged to provide audit coverage. However, per federal regulations, the costs of an independent audit cannot be charged to federal grants in this circumstance. Sub-recipients that do not expend an aggregate amount of $500,000 or more in federal funds in any given fiscal year must still maintain adequate financial and programmatic records to justify expenditures made in accordance with specific grant requirements.

All sub-recipient audit reports shall be reviewed by the Disaster and Emergency Services Grants Program Manager. Known or suspected violations of any law encountered during audits, including fraud, theft, embezzlement, forgery, or other serious irregularities will be investigated by the Disaster and Emergency Services Grants Program Manager and subsequent Corrective Action Plans will be required..

9.3 State AuditsThe Montana Legislative Audit Division conducts financial and compliance audits of Homeland Security grants annually. In addition, the Legislative Audit Division may conduct a performance audit to determine the efficiency and effectiveness of the Homeland Security program, as well as grantees’ and sub-recipients’ compliance with laws, regulations, and policies.

9.4 Common Audit Findings Unallowable activities Unallowable costs/cost principles Cash recognition Asset and real property management Period of availability of funds Procurement

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Real property acquisition and relocation assistance Reporting

9.5 MonitoringThe SAA has the responsibility to monitor all federal grants it administers, the programs and activities supported by such funds, and the results achieved. The SAA is required to monitor the performance of the projects to ensure adherence to performance goals, time schedules, or other requirements as applicable to the projects or to the terms of agreements and sub-agreements. To fulfill its monitoring responsibilities, the SAA conducts the following activities:

1. Award Package review, including sub-recipient acknowledgement of federal and state certifications and assurances.

2. Quarterly desk review of all submitted documentation.3. On-site monitoring as performed by District Representatives.4. Equipment recertification and asset management monitoring.5. Final grant closeout review.

Quarterly Desk Review Monitoring - Desk reviews evaluate the quality and accuracy of financial and narrative reports, audit reports, reimbursement requests, expenditures, correspondence, and other documentation provided by the sub-recipient. These are conducted by the Grants Coordinator and the Grants Accountant.

On-site monitoring - Visits to the project site involve reviewing one or more aspects of the sub- recipient project. Visits may include examining expenditure documentation, reviewing internal controls, and evaluating progress on projects, among others. These are conducted by the District Representatives.

Award Closing Review- Upon DESGP receiving the sub-recipients final progress report and final reimbursement request, DESGP will reconcile all open issues with the sub-recipient and close the grant.

9.6 Common Monitoring Findings Recipient has no written procedures Lack of documentation Inadequate/untimely submission of reports Inventory management deficiencies Inadequate sub-grantee monitoring Period of performance expired without a prior approval for an extension Inadequate time and effort records Lack of competition during procurement Conflicts of interest Failure to manage audit results Inadequate accounting procedures Inaccurate Federal Financial Reports (FFR) Financial systems review Fail To Agree With Accounting Records Questioned expenditures

• Excess cash on hand• Commingling of funds• Supplanting

9.7 Corrective-Action and Resolution of FindingsSub-recipients must have procedures in place to remedy problems identified in audits and monitoring activities. Timely resolution of findings and recommendations is critical to the success of theprogram.

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CHAPTE R 10 : Gra nt Clo seo ut

10.1 Requirements for Grant CloseoutAll sub-recipients must follow the grant closeout procedures as described within this chapter.G ra nts m ust be c losed w i t hin 45 da y s of the e nd d a te of the g r a nt pe r fo r man c e p e rio d . Any additional requested reimbursement expenses after the end of this period will not be considered eligible.

Notification of the grant closure will be sent to all sub-recipients three months before the end of the grant. The Equipment Inventory Form, the Final Reimbursement and the Final Quarterly Programmatic Forms and, the supporting documentation for final reimbursement are due within 45 days after the end of the grant performance period. Non-compliance with this 45 day requirement may affect future grant awards. Upon receipt of all final reports, the SAA will conduct an internal review and analysis of the sub-recipient’s grant file for compliance with state, federal, and specific grant program guidelines and regulations. Final reimbursement will be processed when all reports and documentation is received. District Representatives may be able to help subrecipients obtain copies of documentation, such as agendas or training materials, however, this is strongly discouraged as it is the responsibility of the sub-recipient to maintain all grant related documentation.

If the sub-recipient or DESGP determines that funds in excess of expenditures were reimbursed, those funds should be returned as soon as identified, but no later than 45 days after the close of the grant period. Federal regulations regarding repayment of interest earned may apply as appropriate.

10.2 Submission of the Final Reimbursement and Programmatic Report Forms Sub-recipients are required to submit a Final Quarterly (financial/programmatic) Report providing project completion details, reported outcomes of the project, problems encountered during the performance period that may have hindered or affected the completion of grant performance measurements, and any other pertinent information. Sub-recipients should also include information regarding the continued efforts of the projects including any information on subsequent grant funding or supplemental funding sources.

A Quarterly Progress Report is required for each quarter during the grant period even if no activity or expenditures occur. Any deviation from this reporting requirement will be considered non-compliant with the award and no final reimbursement will be processed. Sub-recipients must use the Quarterly Progress Report Form to submit the final financial report and indicate “final” in the appropriate field.

10.3 Post-Grant Closeout RequirementsThe closeout of a grant does not affect the SAA’s right to disallow costs and recover funds on the basis of a future audit.

Sub-recipients are required to retain grant records and documentation for a minimum of four years, unless superseded by federal or state statute, after the final reports are submitted to the SAA. The SAA, the federal awarding agency, and the Comptroller General of the United States, or any of their authorized representatives, shall have the right to access any pertinent books, documents, papers, or other records of grantees and sub-recipients that are pertinent to the grant in order to complete audits, examinations, excerpts, and transcripts.

Equipment Inventory Reports require annual submission, from the time of acquisition until all property/equipment purchased with federal grant funds has been disposed of. Property and

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equipment records must be retained for a minimum of seven years, unless superseded by federal or state statute, from the date of final disposition.

Sub-recipients who expend $500,000 or more in federal funds during a fiscal year are required to comply with the Single Audit Compliance regulation in OMB Circular A-133.

10.4 Re-allocation of Unspent FundsIdeally, a sub-recipient will expend all of their awarded funds. If a sub-recipient cannot expend all of its funds, DESGP staff will review the grant file for completeness and ensure that the sub- recipient has provided a final Programmatic Report and a final Financial Report. If the file is complete and the remaining balance amount shown on the sub-recipient final Financial Report matches the state’s records, the SAA will send a letter to the sub-recipient project manager and fiscal officer documenting the de-obligation of the specific amount left in the grant award.

Federal law mandates that unspent federal funds be returned to the federal government at the end of the grant period. Consequently, the SAA shall de-obligate and re-allocate unspent funds when sufficient time remains in the grant period for the expenditure of funds to complete other projects.

Unfunded projects that were documented in the original grant application shall be given first consideration for funding with re-allocated funds.

Subsequent consideration will also be given to projects that are deemed worthy of consideration that were not submitted by the sub-recipient in the original grant application. The SAA staff shall draft recommendations for approval by the SAA.

DESGP, as the State Administrative Agency (SAA), has the final authority to determine how to allocate, and de-obligated, and reallocate funds.

Submit closeout documentation to:

Montana Disaster and Emergency ServicesGrants Program1956 Mt. Majo St.Fort Harrison, MT 59636-4789Phone (406) 324-4777Fax (406) 324-4790 d e sohs g @mt. g ov

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REFERE NCES

• OMB Circular A-102 Grants and Cooperative Agreements With State and Local Governments(10/07/1994) (further amended 08/29/1997)

• OMB Circular A-133 Audits of States, Local Governments, and Non-Profit Organizations(06/24/1997, includes revisions published in Federal Register 06/27/03)

• 2 CFR PART 215, Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals and Other Nonprofit Organizations (OMB Circular A-110)

• 2 CFR PART 225, Cost Principles for State, Local and Indian Tribal Governments (OMB Circular A-87)

• 2 CFR PART 230, Cost Principles for Non-Profits (OMB Circular A-122 )

• 28 CFR Judicial Administration, Part 66 – Uniform Administrative Requirements for Grants andCooperative Agreements to State and Local Governments

• 44 CFR Emergency Management and Assistance, Part 13—Uniform AdministrativeRequirements for Grants and Cooperative Agreements to State and Local Governments

Information Bulletin 271, Environmental and Historical Preservation

Current OMB Circulars may be viewed on the Office of Management and Budget website at ht t p: / /ww w .whitehous e . g ov/o m b/ci rc ula r s_d e f a ul t /

The current 2 CFR, 28 CFR and 44 CFR may be viewed on the Electronic Code of Federal Regulations website at ht t p: / /ww w . g po acce ss. g ov/c f r/

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ACRONYMS

AEL Authorized Equipment ListCAP Corrective Action ProgramCAPR Categorical Assistance Progress ReportCBRNE Chemical, Biological, Radiological, Nuclear, and ExplosiveCFR Code of Federal RegulationsCIP Critical Infrastructure ProtectionCSD Centralized Services divisionCT Counter TerrorismDESGP Disaster and Emergency Services Grants ProgramDHS Department of Homeland Security EHP

Environmental Historical Preservation FEMA Federal Emergency Management Agency FFY Federal Fiscal YearGAN Grant Adjustment NoticeGPD Grant Programs DirectorateGSA General Services AdministrationHSEEP Homeland Security Exercise and Evaluation ProgramHSGP Homeland Security Grant ProgramLETPP Law Enforcement Terrorism Prevention ProgramM & A Management and Administration MOU Memorandum of Understanding NEXS National Exercise Schedule SystemNIMS National Incident Management SystemOMB Office of Management and Budget PIM Policy Information Memorandum PTE Planning, Training, ExerciseSAA State Administrative Agency, Montana SHPO State Historical Preservation Officer SHSGP State Homeland Security Grant Program SHSS State Homeland Security StrategyTCL Target Capability ListUASI Urban Area Security InitiativeWMD Weapons of Mass Destruction

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G LOSSARY All Hazards - The appropriations language that funds the grant programs indicates the funds are to be used for WMD preparedness and response activities – it has been broadened to “all hazards” to allow for building of the universally applicable capabilities, regardless of the type of hazard. When you look at the Target Capabilities list, there are only a handful of capabilities that are WMD/terrorism specific, with the rest having applicability in the “all hazards” realm. But when using the term “all hazards”, it is inclusive of WMD/CT scenarios and capabilities, not focusing on one hazard vs. another. So when grant funding requests are reviewed, it’s with an eye as to whether or not there is a nexus with WMD/CT. The grant funds were never intended for supporting inherent functions of the various disciplines.

Backfill-related Overtime – Also called “Overtime as Backfill,” these expenses are limited to overtime costs which result from personnel who are working overtime (as identified above) to perform the duties of other personnel who are temporarily assigned to FEMA-approved activities outside their core responsibilities. Backfill-related overtime only includes the difference between the overtime rate paid and what would have otherwise been paid to the backfilling employee for regular time. Under no circumstances should the entire amount of backfill overtime expense be charged toan award. Neither overtime nor backfill expenses are the result of an increase of Full-TimeEquivalent (FTE) employees.

Grantee – means the government to which a grant is awarded and which is accountable for the use of the funds provided. DESGP, as the SAA, is considered the grantee for purposes of the Homeland Security Grant Program.

Interoperable Communications – the ability of emergency response agencies to talk across disciplines and jurisdictions via radio communications systems, to exchange voice and data with one another on demand, in real time, when needed and as authorized. (Source - SAFECOM, a program within the Department of Homeland Security)

Local government - A county, municipality, city, town, township, local public authority (including any public and Indian housing agency under the United States Housing Act of 1937) school district, special district, intrastate district, council of governments (whether or not incorporated as a nonprofit corporation under state law), any other regional or interstate government entity, or any agency or instrumentality of a local government.

Overtime – These expenses are limited to the additional costs which result from personnel working over and above 40 hours of weekly work time as a direct result of their performance of FEMA- approved activities specified in this guidance. Overtime associated with any other activity is not eligible.

Program income - means gross income received by the grantee or sub-recipient directly generated by a grant supported activity, or earned only as a result of the grant agreement during the grant period.

Sub-recipient– means the government or other authorized entity to which a subgrant is awarded and which is accountable to the grantee for the use of the funds provided.

Supplanting Replacing a currently State and/or locally budgeted position with one or more full-time employees or contracted staff supported in whole or in part with federal funds.

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This document was prepared under a grant from the U.S. Department of Homeland Security and theMontana Disaster and Emergency Services.

0 copies of this public document were published at an estimated cost of $0 per copy for a total cost of $0, which includes $0 for printing and $0 for distribution.