04 NCAC 20B .0304          PROCUREMENT AND PROPERTY STANDARDS

(a)  In order to insure that the maximum benefit is derived from subgrant and contract funds, subrecipients must adhere to all federal, state, local and internal procurement guidelines.  Non‑governmental subrecipients must adopt and adhere to procurement procedures that reflect compliance with the intent of laws and regulations applicable to governmental subrecipients, specifically prohibitions on solicitation or acceptance of anything of monetary value from suppliers or potential conflict of interest for a member of the board of the subrecipient, an officer of the subrecipient, an employee or agency of the subrecipient, or a member of the immediate family of a board member, officer or employee.

(b)  Cost plus a percentage of cost contracts are prohibited.

(c)  Real property may not be procured or received without prior written authorization from the Division.  Nonexpendable property may not be affixed to real property without the prior written authorization of the Division.  The Division may condition the procurement or receipt of real property or the affixation of nonexpendable property to real property, as the Division considers is necessary to comply with federal law and to effectuate JTPA policies.  Except where specific written authorization has been procured, the affixation of nonexpendable property to real property is a conversion of that property.

(d)  Nonexpendable property shall be subject to the following regulations:

(1)           Title to property.  Title to all nonexpendable property, except nonexpendable property to which the federal government claims title, that is purchased with federal employment and training funds received directly or indirectly through the Division, shall be in the name of the Department.  To the extent possible, nonexpendable property should be procured with funds from a single grant source, to facilitate identification of nonexpendable property.  Where nonexpendable property is purchased in part with JTPA funds and in part with other funds, the Department has a proportionate interest in the property and it is covered by this Paragraph.

(2)           Use.  Nonexpendable property may be used by the subgrantee or contractor as long as there is a need for such property to accomplish the subgrant or contract objectives, or the objectives of subsequent contracts or subgrants from the Division, supported by JTPA funds.

(3)           Transfer.  When the subgrantee or contractor no longer needs the nonexpendable property, it is the responsibility of the subgrantee or contractor to return the property to the physical control of the Division.  The Division may provide transportation for the property.  This Section shall not apply if the depreciated value of the property is less than one hundred dollars ($100.00), in which case the subgrantee or contractor, after completion of any required forms, may retain the nonexpendable property, unless the federal government has a claim to the title of the property.

(4)           Constructive Transfer.  The use of property for non‑JTPA purposes will be deemed a constructive transfer to the subgrantee or contractor, which will be liable for the fair market value of the nonexpendable property at the time of the constructive transfer.  The fair market value will be payable to the Division, or in the Division's discretion, to the subgrant or contract funds, where it will be treated in all respects as program income, except that the exemption for on‑the‑job training and tryout employment programs will not apply to program income generated in this manner.

(5)           Non‑expendable property must be subjected to a physical inventory not less than once a year.  Subgrantees must identify property officers responsible for the maintenance of an inventory.  The Division will conduct the inventory of its contractors' nonexpendable property and will conduct periodic reviews of the inventory of subgrantees' nonexpendable property.  Physical inventories made other than at the close of the fiscal year must be updated effective the last day of the fiscal year.

(6)           All nonexpendable property must have property labels, as required by the state and federal regulations, affixed.  The property officer for the subgrantee shall be responsible, in concert with the Division, for assuring that all subgrantee nonexpendable property bears the appropriate label(s).

(7)           Property records shall be maintained accurately and shall provide:

(A)          A description of the property;

(B)          Manufacturer's serial number or other identification number;

(C)          Acquisition date and unit acquisition cost;

(D)          Source of the property;

(E)           Percentage of JTPA funds used in the acquisition;

(F)           Location, use and condition of the property;

(G)          State and/or federal government control number from label; and

(H)          Ultimate disposition data.

(8)           Adequate maintenance procedures shall be implemented to insure maximum use of the property.

(9)           Nonexpendable intangible property shall become the property of the Division when developed by or in a funded activity, as a work for hire by the Division.  The intangible property shall be available, for the costs of reproduction to any subgrantee or contractor for JTPA purposes, and shall be available as otherwise required by the federal regulations.  Income generated from intangible property will be payable to the Division, to the subgrant or contract funds where the intangible property was developed, where it will be treated as program income.

(e)  Nothing in Rule .0304 is meant or should be interpreted to contravene applicable federal law governing the procurement, use or disposition of property acquired by a subrecipient with federal funds.

(f)  Property donated to a subrecipient shall not be construed as donated to the grant or contract itself unless it is specifically so designated.  The value of donated property may be used for matching funds purposes without donation to the grant or contract.  In the event that property is donated to the grant or contract, it shall be treated as acquired property subject to applicable regulations.  The unit acquisition cost upon which the property should be categorized is the fair market value at the time of donation.

(g)  Property purchased by a subrecipient with funds generated by or in a performance‑based contract is not subject to Rule .0304.

 

History Note:        Authority G.S. 143‑277; 143B‑430(b); Ex. O. 93, June 8, 1983; 20 C.F.R. 629.41;

41 C.F.R. 29‑70;

Eff. February 1, 1976;

Transferred from T01: 18 Eff. September 15, 1981;

Amended Eff. June 1, 1985; October 1, 1984; August 1, 1982.