a. Rental cost. The rental cost of space in a privately owned building is allowable.

b. Maintenance and operation. The cost of utilities, insurance, security, janitorial services, elevator service, upkeep of grounds, normal repairs and alterations and the like, are allowable to the extent they are not otherwise included in rental or other charges for space.

c. Rearrangements and alterations. Cost incurred for rearrangement and alteration of facilities required specifically for the grant program or those that materially increase the value or useful life of the facilities (Section C.3.) are allowable when specifically approved by the Bureau.

d. Depreciation and use allowances on publicly owned buildings. These costs are allowable as provided in Section B.11.

e. Occupancy of space under rental-purchase Or a lease with option-to-purchase agreement. The cost of space procured under such arrangements is allowable when specifically approved by the Bureau.

3. Capital expenditures. The cost of facilities, equipment, other capital assets, and repairs which materially increase the value or useful life of capital assets is allowable when such procurement is specifically approved by the Bureau. When assets acquired with Bureau grant funds are (a) sold, (b) no longer available for use in a Federally sponsored program or (c) used for purposes not authorized by the Bureau, the Bureau's equity in the asset will be refunded in the same proportion as Bureau participation in its cost. In case any assets are traded on new items, only the net cost of the newly acquired assets is allowable.

4. Insurance and indemnification. a. Costs of insurance required, or approved and maintained pursuant to the grant agreement, is allowable.

b. Costs of other insurance in connection with the general conduct of activities is allowable subject to the following limitations:

(1) Types and extent and cost of coverage will be in accordance with sound business practice.

(2) Costs of insurance or of contributions to any reserve covering the risk of loss of, or damage to, Federal Government property is unallowable except to the extent that the Bureau has specifically required or approved such costs.

c. Contributions to a reserve for a self-insurance program approved by the Bureau are allowable to the extent that the type of coverage, extent of coverage, and the rates and premiums would have been allowed had insurance been purchased to cover the risks.

d. Actual losses which could have been covered by permissible insurance (through an approved self-insurance program or otherwise) are unallowable unless expressly provided for in the grant agreement. However, costs incurred because of losses not covered

under nominal deductible insurance coverage provided in keeping with sound management practice, and minor losses not covered by insurance, such as spoilage, breakage and disappearance of small hand tools which occur in the ordinary course of operations, are available.

e. Indemnification includes securing the grantee against liabilities to third persons and other losses not compensated by insurance or otherwise. The Bureau is obligated to indemnify the grantee only to the extent expressly provided for in the grant agreement, except as provided in d. above.

5. Management studies. The cost of management studies to improve the effectiveness and efficiency of grant management for ongoing programs is allowable except that the cost of studies performed by agencies other than the grantee or outside consultants is allowable only when authorized by the Bureau.

6. Preagreement costs. Costs incurred prior to the effective date of the grant, whether or not they would have been allowable thereunder if incurred after such date, are allowable when specifically provided for in the grant agreement.

7. Professional services. Cost of professional services rendered by individuals or organizations not a part of the grantee is allowable subject to such prior authorization as may be required by the Bureau.

8. Proposal costs. Costs of preparing proposals on potential Federal Government grant agreements are allowable when specifically provided for in the grant agreement.

9. Tribal government officer salaries and expenses. Identifiable salary and expense costs incurred as a direct result of a tribal government officer's service to a grant program provided under this chapter are allowable subject to advance agreement with an approval by the Bureau. A general limitation in this regard is prescribed in section D.6.

D. Unallowable costs. 1. Bad debts. Any losses arising from uncollectible accounts and other claims, and related costs, are unallowable.

2. Contingencies. Contributions to a contingency reserve or any similar provision for unforeseen events are unallowable.

3. Contributions and donations. Unallowable. 4. Entertainments. Costs of amusements, social activities, and incidental costs relating thereto, such as meals, beverages, lodgings, rentals, transportation, and gratuities, are unallowable.

5. Fines and penalties. Costs resulting from violations of, or failure to comply with Federal, State and local laws and regulations are unallowable.

6. Tribal officer salaries and expenses. The salaries and expenses of tribal government officers are considered a cost of general tribal government and are unallowable except as prescribed in Section C.9.

7. Interest and other financial costs. Interest on borrowing (however requested), bond discounts, cost of financing and refinancing operations, and legal and professional fees paid in connection therewith, are unallowable except when authorized by Federal legislation.

8. Underrecovery of costs under grant agreements. Any excess of cost over the Federal contribution under one grant agreement is unallowable under other grant agreements.

APPENDIX B-FINANCIAL REPORTING REQUIREMENTS

A. Purpose and scope. This appendix prescribes requirements for grantee to report financial information to the Bureau and to request advances and reimbursement when a letter-of-credit method is not used.

B. Definitions. 1. Accrued expenditures. Accrued expenditures are the charges incurred by the grantee during a given period requiring the provision of funds for: (1) Goods and other tangible property received; (2) services performed by employes, contractors, subgrantees, and other payees; and (3) amounts becoming owed under programs for which no current services or performed are required.

2. Accrued income. Accrued income is the earnings during a given period which is a source of funds resulting from: (1) Services performed by the grantee; (2) goods and other tangible property delivered to purchasers; and (3) amounts becoming owed to the grantee for which no current services or performance are required by the grantee.

3. Disbursements. Disbursements are payments in cash or by check.

4. Bureau funds authorized. Funds authorized represent the total amount of the Bureau funds authorized for obligations and establish the ceilings for obligation of Bureau funds. This amount may include any authorized carryover of unobligated funds from prior fiscal years.

5. Obligations. Obligations are the amounts of orders placed, contracts and grants awarded, services received, and similar transactions during a given period, which will require payment during the same or a future period.

6. Outlays. Outlays represent charges made to the grant project or program. Outlays can be reported on a cash or accrued expenditure basis.

7. Program income. Program income represents earnings by the grantee realized from the grant-supported activities. Such earnings exclude interest income and may include, but will not be limited to, income from service fees, sale of commodities, usage or rental fees, sale of assets purchased with grant funds, and royalties on patents and copy-rights. Program income can be reported on a cash or accrued income basis.

8. Unobligated balance. The unobligated balance is the portion of the funds authorized by the Bureau which has not been obligated by the grantee and is determined by deducting the cumulative obligations from the funds authorized.

9. Unpaid obligations. Unpaid obligations represent the amout of obligations incurred by the grantee which have not been paid.

C. Standard forms. 1. Only the following forms will be authorized for obtaining financial information from grantees for grant programs:

a. Financial Status Report. (1) The Bureau shall require grantees to use a standard Financial Status Report to report the status of funds for all nonconstruction grant programs. The Bureau may, however, have the option of not requiring a Federal Status Report when a request for advance or reimbursement (paragraph 2a) is determined to provide adequate information to meet their needs, except that a final Financial Status Report shall be required at the completion of the grant when the Request for Advance or Reimbursement form is used only for ad

vances.

(2) The Bureau shall prescribe whether the report shall be on a cash or accrual basis. If the Bureau requires accrual information and the grantee's accouting records are not normally kept on the accrual basis, the grantee should develop such information through an analysis of the documentation on hand or on the basis of best estimates.

(3) The grant agreement shall determine the frequency of the Financial Status Report for each grant program considering the size and complexity of the particular program. However, the report shall not be required more frequently than quarterly or less frequently than annually. Also, a final report shall be required at the completion of the grant.

(4) The original and two copies of the Financial Status Report shall be submitted 30 days after the end of each specified reporting period. In addition, final reports shall be submitted 90 days after the end of the grant period or the completion of the project or program. Extensions to reporting due dates may be approved when requested by the grantee. b. Report of federal cash transactions. (1) When funds are advanced to grantees through letters of credit or with Treasury checks, each grantee shall submit a report of Federal Cash Transactions. The Bureau shall use this report to monitor cash advanced to grantees and to obtain disbursement or outlay information for each grant or project from the grantees.

(2) The grant agreement may require forecasts of Federal cash requirement in the Remarks section of the report.

(3) When practical and deemed necessary. the Bureau may require grantees to report in the Remarks section the amount of cash in

excess of three days' requirements in the hands of subgrantees or other secondary recipients and to provide short narrative explanations of actions taken by the grantees to reduce the excess balances.

(4) The Bureau shall accept the identical information from the grantees in a machineusable format in lieu of the Report of Federal Cash Transactions.

(5) Grantees shall submit the original and two copies of the Report of Federal Cash Transactions no later than 15 working days following the end of each quarter. For those grantees receiving annual grants totalling one million dollars or more, the Bureau shall require a monthly report.

(6) The Bureau shall waive the requirement for submission of a Report of Federal Cash Transactions when monthly advances do not exceed $10,000 per grantee provided that such advances are monitored through other forms contained in this Appendix or the grantee's accounting controls are adequate to minimize excessive Federal advances.

2. Except as noted below, only the following forms will be authorized for the grantees in requesting advances and reimbursements.

a. Request for advance or reimbursement. (1) The "Request for Advance or Reimbursement" form is the standard form for all nonconstruction grant programs when letters of credit or predetermined automatic advance methods are not used. The Bureau, however, has the option of using this form for construction programs in lieu of an "Outlay Report and Request for Reimbursement for Construction Programs" (paragraph 2b) and shall specify in the grant agreement.

(2) Grantees shall be authorized to submit requests for advances or reimbursement at least monthly when letters of credit are not used. Grantees shall submit the original and two copies of a Request for Advance or Reimbursement.

b. Outlay Report and Request for Reimbursement for Construction Program. (1) The “Outlay Report and Request for Reimbursement for Construction Programs" form is the standard format to be used for requesting reimbursement for construction programs. The Bureau may, however, have the option of substituting a "Request for Advance or Reimbursement" form (paragraph 2a) in lieu of this form when the Bureau determines that the former provides adequate information to meet its needs as stated in the grant agreement.

(2) Grantees shall be authorized to submit requests for reimbursement at least monthly when letters of credit are not used. Grantees shall submit the original and two copies of an "Outlay Report and Request for Reimbursement for Construction Programs" form. 3. When the Bureau needs additional information in using these forms, the following shall be observed:

a. When necessary to comply with future legislative requirements, the Bureau shall issue instructions to require grantees to submit such information under the Remarks section of the reports.

b. When necessary to meet specific program needs, the Bureau shall submit the proposed reporting requirements to the General Services Administration for approval under the exception provision of this Appendix.

c. The Bureau, in obtaining information as in paragraphs a and b above, must also comply with report clearance requirements of the Office of Management and Budget Circular No. A-40, as revised.

[40 FR 51316, Nov. 4, 1975, as amended at 41 FR 5099, Feb. 4, 1976; 43 FR 37447, Aug. 23, 1978]

AUTHORITY: Sec. 207, Pub. L. 93-638; 88 Stat. 2216 (25 U.S.C. 458c(b)).

SOURCE: 40 FR 51327, Nov. 4, 1975, unless otherwise noted.

Subpart A-General Provisions $277.1 Purpose.

The purpose of the regulations in this part is to give the application and approval process for a School District to obtain school construction contracts from the Bureau under Section 204 of Title II of the Indian Self-Determination and Education Assistance Act (Pub. L. 93-638, 88 Stat. 2203), to assist in the education of Indians.

[40 FR 51327, Nov. 4, 1975, as amended at 43 FR 37447, Aug. 23, 1978]

§ 277.2 Scope.

(a) The application process for public school construction contracts under section 204 of Pub. L. 93-638 is given in 20 U.S.C. 631-645 and 45 CFR 114. The application process is administered by and is the responsibility of the Commissioner of Education. Upon receipt of an application, the Commissioner of Education notifies the Commissioner of Indian Affairs. The Commissioner of Education prepares and furnishes the national priority index to the Bureau at the start of each fiscal year or when the Bureau so requests.

(b) The Bureau requests and receives funding for acquisition of sites and for planning, architectural-engineering design, facilities construction and equipment for the program. Funds are allocated to projects by the Bureau on the basis of funding priorities as established by the Commissioner of Education. For each project for which funds are allocated, the Bureau and the Office of Education shall jointly de

velop an individual project management plan and shall provide guidance to the applicant in developing educational and facilities specifications. A Bureau contracting officer, designated by the Commissioner of Indian Affairs, shall negotiate one or more contracts with the applicant, in accordance with the approved management program, for the acquisition of sites and for the planning, design, construction, and purchase of equipment to provide educational facilities. Construction standards and space requirements shall be based on need as described in prepared educational and facilities specification documents.

[43 FR 37447, Aug. 23, 1978]

$277.3 Definitions.

As used in this part: (a) “Bureau" mean the Bureau of Indian Affairs.

(b) "Commissioner of Education" means the United States Commissioner of Education, Department of Health, Education, and Welfare.

(c) "Commissioner" means the Commissioner of Indian Affairs, under the direction and supervision of the Assistant Secretary-Indian Affairs, who is responsible for the direction of day-today operations of the Bureau of Indian Affairs, Department of the Interior.

(d) "Contractor" means an applicant who has been awarded a contract under this part.

(e) "Days" means calendar days.

(f) "Economic enterprise" means any commercial, industrial, agricultural, or business activity that is at least 51 percent Indian owned, established or organized for the purpose of profit.

(g) "Indian tribe" means any Indian Tribe, Band, Nation, Rancheria, Pueblo, Colony, or Community, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act (85 Stat. 688) which is federally recognized as eligible by the U.S. Government through the Secretary for the special programs and services provided by the Secretary to Indians because of their status as Indians.

(h) "Indian" means a person who is a member of an Indian tribe.

(i) "Pub. L. 81-815" means the Act of September 23, 1950 (Pub. L. 81-815, 72 Stat. 548), as amended.

(j) "Pub. L. 93-638" means the Indian Self-Determination and Education Assistance Act (Pub. L. 93-638, 88 Stat. 2203).

(k) "School district" or "local education agency" means that subdivision of the State which contains the public elementary and secondary educational institutions providing educational

services and is controlled by a duly elected board, commission or similarly constituted assembly.

(1) "Secretary" means the Secretary of the Interior.

(m) "State" means a State of the United States of America or any political subdivision of a State.

(n) "State education agency" means the State Board of Education or other agency or office primarily responsible for supervision by the State of public elementary and secondary schools or, if there is no such office or agency, an office or agency designated by the Governor or by State law.

(0) "Tribal government", "tribal governing body" and "tribal council" means the recognized governing body of an Indian tribe.

(p) “Assistant Secretary-Indian Affairs" means the Assistant SecretaryIndian Affairs who discharges the authority and responsibility of the Secretary for activities pertaining to Indians and Indian affairs.

[40 FR 51327, Nov. 4, 1975, as amended at 45 FR 13452, Feb. 29, 1980]

$277.4 Revision or amendment of reg

ulations.

In order to make any substantive revisions or amendments to regulations in this part, the Secretary shall take the following actions:

(a) Consult with Indian tribes and national and regional Indian organizations to the extent practicable about the need for revision or amendment and consider their views in preparing the proposed revision or amendment.

(b) Publish any proposed revisions or amendments in the FEDERAL REGISTER as proposed rulemaking to provide adequate notice to, and receive comments from, all interested parties.

(c) After consideration of all comments received, publish the regulations in the FEDERAL REGISTER in final form not less than 30 days before the date they are made effective.

(d) Annually consult with Indian tribes and national and regional Indian organizations about the need for revision or amendment, and consider their views in preparing the revision or amendment.

(e) Nothing in this section shall preclude Indian tribes or national or regional Indian organizations from initiating request for revisions or amendments subject to paragraphs (a), (b) and (c) of this section.

$277.5 Information collection.

The information collection requirements contained in §§ 277.30 and 277.33 are those necessary to comply with the application requirements of the Office of Management and Budget (OMB) Circular No. A-102. The Standard Form 424 and attachments prescribed by such circular are approved by OMB under 44 U.S.C. 3501 et seq. and assigned approval number 0348-0006. Sections 277.30 and 277.33 describe the types of information that would satisfy the application requirements of Circular A-102 for this school construction program. Information necessary for an application for Federal assistance will be submitted on Standard Form 424 which may be obtained with application materials in accordance with §§ 277.30 and 277.33. This information is being collected for the purpose of applying for Federal assistance and will be used in determining eligibility. The obligation to respond is a requirement to obtain a benefit.

[51 FR 39524, Oct. 29, 1986]

Subpart B-Application Process $277.11 Eligible applicants.

(a) Any school district may apply for a contract with the Bureau to assist

the agency or district in acquiring sites for, or in constructing, acquiring, or renovating, facilities (including all necessary equipment) in school districts on or adjacent to or in close proximity to any Indian reservation or