EPA Cost Principles and Financial Requirements for Sub-Recipients
This document outlines the cost principles and financial requirements that must be followed by
sub-recipients of EPA Brownfields grants. Adherence to these guidelines ensures that grant
funds are used appropriately and that financial management practices meet EPA and federal
standards.
1. General Principles
1.1 Allowable Costs: Costs must be necessary, reasonable, and allocable to the project. They
should comply with the terms and conditions of the grant agreement and be consistent with
policies and procedures that apply uniformly to both federally financed and other activities of
the organization.
1.2 Unallowable Costs: Costs that are not eligible for reimbursement under the grant. These
include but are not limited to entertainment, lobbying, fines and penalties, and costs of goods
or services for personal use.
1.3 Allocable Costs: Costs that are directly related to the project and can be assigned to the
grant in proportion to the benefits received.
1.4 Reasonable Costs: Costs that a prudent person would incur under similar circumstances.
These costs must reflect the action that is consistent with sound business practices and
compliant with federal and state regulations.
2. Budget Management
2.1 Approved Budget: The sub-recipient must adhere to the budget approved by the EPA. Any
changes to the budget that exceed 10% of the total grant amount must be approved in writing
by the County of Humboldt and the EPA.
2.2 Cost Categories: Budgeted costs should be categorized as follows:
Personnel
Fringe Benefits
Travel
Equipment
Supplies
Contractual
Other Direct Costs
Indirect Costs (if applicable)
3. Financial Documentation
3.1 Record Keeping: The sub-recipient must maintain accurate and complete financial records,
including receipts, invoices, and other documentation supporting all expenditures of grant
funds. These records must be kept for a minimum of three years after the final financial report
is submitted and approved.
3.2 Financial Reporting: The sub-recipient must submit quarterly financial reports detailing all
grant-related expenditures. These reports must be submitted within 30 days of the end of each
quarter and include:
Itemized list of expenses
Copies of receipts and invoices
Budget vs. actual expenditure comparisons
3.3 Audit Requirements: The sub-recipient must comply with federal audit requirements,
including the Single Audit Act Amendments of 1996 and the provisions of 2 CFR Part 200,
Subpart F—Audit Requirements.
4. Allowable Costs
4.1 Personnel Costs: Salaries and wages of employees directly involved in the project. These
costs must be documented with timesheets or other records that accurately reflect the work
performed.
4.2 Fringe Benefits: Costs of employee benefits such as health insurance, retirement, and paid
leave, provided they are reasonable and allocated on a consistent basis.
4.3 Travel Costs: Expenses for travel related to project activities, including transportation,
lodging, subsistence, and other related costs. Travel must be necessary for the project and
follow federal travel regulations.
4.4 Equipment: Purchases of tangible personal property with a useful life of more than one year
and an acquisition cost of $5,000 or more per unit. Equipment purchases must be approved in
the project budget.
4.5 Supplies: Costs of materials and supplies necessary to carry out the project. Supplies must
be itemized and justified as essential for the project.
4.6 Contractual Costs: Costs of services provided by contractors. Contracts must be awarded
following procurement standards in 2 CFR Part 200, including competitive bidding where
required.
4.7 Other Direct Costs: Costs directly attributable to the project that do not fall into the above
categories. These might include rent, utilities, and minor equipment repairs.
4.8 Indirect Costs: If applicable, indirect costs must be calculated using a federally approved
indirect cost rate agreement (ICRA). Indirect costs are those incurred for common or joint
objectives and cannot be readily identified with a specific project or activity.
5. Unallowable Costs
5.1 Entertainment Costs: Costs of entertainment, including amusement, diversion, and social
activities, and any associated costs are unallowable.
5.2 Lobbying Costs: Costs incurred to influence the outcome of elections, legislation,
regulations, or other governmental actions are unallowable.
5.3 Fines and Penalties: Costs resulting from violations of, or failure to comply with, federal,
state, or local laws and regulations are unallowable.
5.4 Personal Use Costs: Costs of goods or services for personal use of employees, regardless of
whether the cost is reported as taxable income to the employees, are unallowable.
6. Disbursement of Funds
6.1 Request for Funds: The sub-recipient must submit requests for fund disbursement in
accordance with the grant agreement. Funds will be disbursed based on the completion of
project milestones and submission of required documentation.
6.2 Advance Payments: Advance payments may be provided based on estimated project
expenses for the upcoming period. The sub-recipient must minimize the time between
receiving advance payments and disbursing funds for project activities.
6.3 Reimbursement: Costs incurred by the sub-recipient will be reimbursed upon submission
and approval of the required financial reports and documentation.
7. Compliance and Monitoring
7.1 Compliance with Regulations: The sub-recipient must comply with all applicable federal,
state, and local regulations, including the Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards (2 CFR Part 200).
7.2 Monitoring: The County of Humboldt and the EPA reserve the right to monitor and audit the
sub-recipient’s financial management and project performance. The sub-recipient must provide
access to all records and documentation upon request.
8. Termination
8.1 Termination for Cause: The County of Humboldt may terminate the grant if the sub-
recipient fails to comply with the terms and conditions outlined in this document. In such cases,
the sub-recipient must return any unspent funds.
8.2 Termination for Convenience: Either party may terminate the grant for convenience with 30
days’ written notice. The sub-recipient will be reimbursed for allowable costs incurred up to the
termination date.
Conclusion
Adherence to these cost principles and financial requirements is essential for the successful
management and implementation of EPA Brownfields grants. Sub-recipients are responsible for
ensuring that grant funds are used appropriately and that financial practices comply with all
applicable guidelines and regulations.
For further assistance or clarification, please contact the
County of Humboldt
Planning & Building Department
Housing and Grants
3015 H Street
Eureka, CA. 95503
(707) 445-2497
This Cost Principles and Financial Requirements document is designed to help sub-recipients
manage their EPA Brownfields grant funds effectively and in compliance with federal and EPA
guidelines.
