Policies & Procedures Applicable To Federal Awards As Required By 2 C.F.R. 200

POLICIES & PROCEDURES APPLICABLE TO FEDERAL AWARDS AS REQUIRED BY 2 C.F.R. 200

Date Adopted: Minute Book:

I. CASH MANAGEMENT FOR FEDERAL FUNDS — 2 II. DETERMINATION OF ALLOWABLE COSTS — 2 III. TRAVEL POLICY — 3 IV. PROCUREMENT POLICY — 4 A. CONFLICT OF INTEREST POLICY — 4 B. GENERAL PROCUREMENT STANDARDS — 6 C. COMPETITION — 7 D. PROCUREMENT METHODS — 9 E. CONTRACTING WITH SMALL AND MINORITY BUSINESSES, WOMEN’S BUSINESS ENTITIES, AND LABOR SURPLUS AREA FIRMS — 12 F. CONTRACT COST AND PRICE — 12 G. BONDING REQUIREMENTS — 13 H. COMPENSATION – PERSONAL SERVICES — 13

COMPENSATION – FRINGE BENEFITS — 14 J. CONTRACT PROVISIONS — 14 V. EQUIPMENT AND SUPPLIES — 15 VI. RELATION TO OTHER COUNTY POLICIES — 17

I. CASH MANAGEMENT FOR FEDERAL FUNDS

The Houston County Commission (“County”) shall follow the cash management procedures provided herein that are generally applicable to the management of federal funds; except as otherwise provided in the federal Assistance Listing for a particular federal award.

The County will minimize the time between the receipt of federal funds or other pass‑through entity, and the disbursement of those federal funds. Federal funds will only be requested to meet immediate cash needs for reimbursement not covered by prior receipts and anticipated disbursements that are generally fixed, such as monthly program salaries and benefits. Disbursements will be made within 30 calendar days after receipt of funds.

The County will maintain financial records that account for the receipt, obligation, and expenditure of each federal program fund. Cash balances for each federal program fund and for the aggregate of all federal program funds will be monitored.

Except as exempted by the federal award, County procedures to minimize cash balances are expected to prevent aggregate balances from earning $500 or more in interest annually. Federal funds will not be maintained in interest‑bearing accounts if banking requirements make such accounts infeasible. Funds will be maintained in insured checking accounts subject to SAFE program requirements.

Reference: 2 C.F.R. § 200.305; § 200.302(b)(6)

II. DETERMINATION OF ALLOWABLE COSTS

Before initiating any financial transaction requiring federal funds, the County will ensure the proposed expenditure meets federal allowability requirements.

Actions include confirming:

A. The expenditure is included in the federal program budget. B. The expenditure is reasonable and necessary. C. The expenditure complies with County financial procedures, including:

Purchase order approval
Contract review and approval
Competitive purchasing procedures
Documentation supporting allowability

Before payment, the federal program director and County must ensure the expenditure:

Complies with the federal award
Follows GAAP
Complies with all applicable laws and regulations
Protects Personally Identifiable Information (PII), where applicable

Reference: 2 C.F.R. §§ 200.302(b)(7), 200.303, 200.403, 200.302

III. TRAVEL POLICY

Travel costs include transportation, lodging, subsistence, and related expenses incurred by County employees on official business. Travel costs charged to federal funds must be consistent with County travel policy.

The County shall pay rates and amounts stated under Policy #49 – Travel Reimbursement, including:

Mileage reimbursement at the State of Alabama rate
Hotel expense
Meal expense (tips ≤ 20%)
Gasoline for County vehicles
Parking
Transportation other than mileage
Miscellaneous non‑personal expenses

Employees must submit:

A County Expense Report Form
Department Head authorization
Itemized receipts for all expenses

Alcohol is not reimbursable.

Travel expenses must not exceed the department’s approved annual travel budget.

Travel advances must be reconciled within 14 days with full documentation; excess funds must be returned.

Reference: 2 C.F.R. § 200.474

IV. PROCUREMENT POLICY

“Procurement” includes purchase or lease of goods and services using federal or state grant funds.

This policy applies to all contracts, purchase orders, and expenditures of federal awards.

Applicable law includes:

2 C.F.R. §§ 200.318–200.326
ALA. CODE § 41‑16‑50 et seq. (goods/services)
ALA. CODE § 39‑2‑1 et seq. (public works)
Alabama Ethics Law (conflicts of interest)

Where conflicts exist, the stricter requirement applies.

A. CONFLICT OF INTEREST POLICY

A conflict exists when a County official or employee participates in a matter affecting their financial interests.

Federal rules prohibit participation in contract selection or administration where the employee, family member, partner, or associated organization has a financial interest.

County officials and employees must not solicit or accept gratuities or favors from contractors.

Alabama Ethics Law defines conflict of interest as actions affecting personal or family financial interests differently than others in the same class.

Conflicts do not include:

a. Ordinary‑course loans b. Occasional non‑monetary public awards c. Reimbursement for necessary travel for official duties d. Campaign contributions used for political purposes

Officials must avoid:

Preferential treatment
Loss of impartiality
Decisions outside proper channels
Harm to public confidence

Conflicts must be reported to the Chairman. Resolution may include recusal, waiver, or reporting to appropriate authorities.

Reference: 2 C.F.R. § 200.112; ALA. CODE § 36‑25‑1 et seq.

B. GENERAL PROCUREMENT STANDARDS

County must follow the most restrictive applicable procurement procedures.
Oversight must ensure contractor performance.
Avoid unnecessary or duplicative purchases; consider lease vs. purchase.
Intergovernmental agreements encouraged.
Use of federal surplus property encouraged.
Contracts awarded only to responsible contractors (integrity, performance, resources, debarment status).
Maintain detailed procurement records (method, selection, price basis).
Time‑and‑materials contracts discouraged; require ceiling price and oversight.
County is responsible for resolving procurement disputes.

Reference: 2 C.F.R. §§ 200.206, 200.318

C. COMPETITION

Procurement must allow full and open competition.

Restrictive practices include:

Unreasonable qualification requirements
Excessive bonding
Noncompetitive pricing
Retainer‑based consultant contracts
Organizational conflicts
Brand‑name‑only specifications
Arbitrary actions

Geographic preferences are prohibited except where federally mandated.

Solicitations must:

Clearly describe technical requirements
Identify all evaluation factors

Prequalified lists must be current and open.

Sole source procurement allowed only when:

i. Cost ≤ $10,000 (micro‑purchase threshold) ii. Only one source available iii. Emergency does not permit delay iv. Federal agency authorizes v. Competition inadequate after solicitation

Reference: 2 C.F.R. §§ 200.319, 200.320

D. PROCUREMENT METHODS

County must follow the most restrictive applicable procedures.

1. Micro‑purchases (≤ $10,000)

No competitive quotes required if price reasonable; distribute equitably among suppliers.

2. Small Purchases (> $10,000)

Requires price/rate quotations from at least three vendors when possible.

Applies to:

Goods/services > $10,000 but < $15,000
Exempt purchases > $10,000 but ≤ $250,000
Public works purchases > $10,000 up to $50,000
Public works exempt purchases > $10,000 but ≤ $250,000

3. Formal Procurement – Sealed Bids

Required for:

Goods/services ≥ $15,000
Public works ≥ $50,000

Requirements include:

Public advertisement
Clear specifications
Public bid opening
Award to lowest responsive, responsible bidder

4. Proposals (RFPs)

Used when sealed bids are not appropriate.

Requirements include:

Publicized RFP
Written evaluation method
Award to most advantageous offeror
Qualifications‑based selection allowed only for A/E services

Reference: 2 C.F.R. § 200.320

E. CONTRACTING WITH SMALL & MINORITY BUSINESSES, WOMEN’S BUSINESS ENTERPRISES, AND LABOR SURPLUS AREA FIRMS

Affirmative steps include:

a. Including such firms on solicitation lists b. Soliciting them when potential sources c. Dividing requirements to encourage participation d. Adjusting delivery schedules e. Using SBA and MBDA resources f. Requiring prime contractors to do the same

Reference: 2 C.F.R. § 200.321

F. CONTRACT COST AND PRICE

Cost/price analysis required for procurements > $250,000.
Profit must be negotiated separately when no price competition exists.
Costs must be allowable, allocable, and reasonable.

G. BONDING REQUIREMENTS

The County requires bonds as set out in ALA. CODE § 41‑16‑50, et seq., and ALA. CODE § 39‑2‑1, et seq., as amended. At a minimum, the County shall require the following:

Bid Guarantee A bid guarantee from each bidder equivalent to five percent (5%) of the bid price. The “bid guarantee” must consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder will, upon acceptance of the bid, execute such contractual documents as may be required within the time specified.
Performance Bond A performance bond on the part of the contractor for one hundred percent (100%) of the contract price. A “performance bond” secures fulfillment of all the contractor’s obligations under the contract.
Payment Bond A payment bond on the part of the contractor for one hundred percent (100%) of the contract price. A “payment bond” assures payment, as required by law, to all persons supplying labor and materials in execution of the work.

Reference: 2 C.F.R. § 200.326.

H. COMPENSATION – PERSONAL SERVICES

The County requires documentation accurately reflecting the work performed by any employee whose personnel costs are charged to federal awards.

Each such employee must submit a timesheet signed by both the employee and their supervisor.
Both must certify that the time charged to the federal award is accurate, allowable, and properly allocated.
The timesheet must reflect the employee’s total activity for the pay period, including non‑federally funded work.
Federally funded activity may be recorded as time or percentage of the workday.
Timesheets must comply with the County’s established accounting practices.

Reference: 2 C.F.R. § 200.430.

I. COMPENSATION – FRINGE BENEFITS

Where appropriate, the County may charge fringe benefit costs to federal awards, provided such benefits are offered under an established County policy.

The County will not charge federal awards for automobile costs for County‑furnished vehicles.
Leave may be charged only if:
1. Provided under the County’s written leave policy (Rule 6 – Attendance and Leave of Absence),
2. Costs are equitably allocated to all related activities, and
3. The accounting basis for each type of leave is consistently followed.

Reference: 2 C.F.R. § 200.431.

J. CONTRACT PROVISIONS

Contracts must contain all applicable provisions required by the federal award and 2 C.F.R. Part 200, Appendix II. At a minimum, the following provisions must be included where applicable:

Contracts > $250,000 Must address administrative, contractual, or legal remedies for contractor violations or breaches, including sanctions and penalties.
Contracts > $10,000 Must address termination for cause and for convenience by the County, including procedures and settlement basis.
Equal Employment Opportunity Clause All contracts must require nondiscrimination based on race, color, religion, sex, or national origin. Contractors must take affirmative action in employment practices and post required notices.
Construction Contracts > $2,000 Must comply with the Davis‑Bacon Act, requiring prevailing wage payments unless exempted.
Contracts > $100,000 involving laborers/mechanics Must comply with the Contract Work Hours and Safety Standards Act, including overtime pay and safe working conditions.
Contracts > $150,000 Must comply with the Clean Air Act (42 U.S.C. § 7401 et seq.) and the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.).
Debarment/Suspension Certification Contracts must include certification that the contractor is not debarred, suspended, or excluded by any federal agency or the State of Alabama.

Reference: 2 C.F.R. § 200.327 and Appendix II.

V. EQUIPMENT AND SUPPLIES

Equipment and supplies procured with federal funds must be used, managed, and disposed of properly.

A. Equipment

Equipment is personal property with:

A useful life of over one (1) year, and
A per‑unit cost exceeding $5,000.

1. Use

Equipment must be used for the federally funded project as long as needed.

2. Secondary Use

Equipment may be used on other federally funded or County projects if it does not interfere with the original project.

3. Fees

During the performance period, the County must not charge less than private‑sector equivalent rates for use of federally funded equipment.

4. Inventory

County must maintain an inventory including:

Description
County ID number
Associated federal project
Acquisition date
Cost
Disposition data (if applicable)

5. Safeguards

County must ensure safeguards against loss, damage, or theft. Annual physical inventory is required.

6. Maintenance

Equipment must be maintained per established procedures (e.g., manufacturer guidelines). Replacement equipment may be purchased with federal funds; proceeds from sale/trade must offset replacement cost.

7. Disposition

i. FMV ≤ $5,000 Equipment may be retained or sold for the highest return.

ii. FMV > $5,000 Federal agency will provide disposition instructions.

iii. If no guidance within 120 days, County may: a. Retain the equipment b. Transfer it to the federal government or designated entity c. Sell it for highest return

If sold, County must remit proceeds to the federal agency using:

[Proceeds of sale] × [Percentage of federal participation] – $500

B. Supplies

Supplies are personal property with a per‑unit cost less than $5,000.

Supplies must be used for the federally funded project as long as needed.
County must not charge less than private‑sector equivalent rates for use.
If residual inventory exceeds $5,000 at program end, County may: a. Retain for other activities, or b. Sell for highest return

If sold, proceeds must be remitted to the federal agency using: