5. What are our legal authorities for purchasing small, minimal cost items (e.g., pens, rulers, etc.) to hand out at our outreach activities such as Indian Pow Wows, education conferences, industry symposiums, etc.?
1. Is the use of a Memorandum of Understanding (MOU) or other partnership agreement to formalize a partnership advisable or legally required? If so, what provisions should it contain? (top)
It is advisable to use written agreements to formalize the vast majority of partnership arrangements, even if not legally required, in order to avoid misunderstanding between the parties. Depending on the nature of the proposed partnership, statutes, regulations, or agency policies may require execution of agreements with partners. For example, providing assistance to a partner through a grant or cooperative agreement requires a written agreement.
The provisions of a partnership agreement also depend on the nature of the partnership and the purpose of the agreement. For example, the MOU is the basic partnership agreement, but may not be used to transfer funds. As a result, the MOU is best suited for describing in broad terms the basis for cooperation among the bureau and its partner(s). It should identify the purpose of the partnership, the roles and responsibilities of the parties, and contain administrative provisions regarding resolution of disputes, termination of the partnership, etc. As another example, agreements that transfer funds would be narrowly focused and contain provisions relating to financial matters, such as accounting for the funds and audits.
The Solicitor's Office should evaluate draft agency agreements to ensure inclusion of any provisions appropriate or necessary to fulfill the intent of the parties, as well as the legal sufficiency of the agreement. The Solicitor's Office recommends that agencies get their attorneys involved early in partnership discussions. As an additional resource, bureaus often have their own policies on partnership agreements and sometimes have handbooks that contain sample agreements and standard provisions.
2. What is the Department's definition of in-kind services? Can we accept in-kind services as a match for our partnership grant programs? (top)
In-kind contributions are donated time and effort, real and personal property, and goods and services. Agency regulations and legislation often stipulate that grant recipients must contribute non-federal cost-sharing or matching funds expressed as a percentage of the total grant. Unless otherwise provided by legislation or regulations, in-kind contributions may be used as a match, but the value of in-kind contributions must be evaluated and documented. The most basic tenet of valuation is that the item or service donated cannot exceed its fair market value. OMB Circulars A-102 and A-110 are the primary tools for valuation. Circulars A-21, A-87, and A-122 also discuss valuation and are consistent with Circulars A-102 and A-110.
3. What are the important items to consider when drafting or entering into a partnership agreement? (top)
A partnership agreement memorializes a meeting of minds between parties. For example, it can memorialize the parties' agreement to take particular actions such as consultation or the sharing of technical data. Partnership agreements can also memorialize the parties' common understanding of facts, set common goals, and establish responsibilities for attaining goals. Some partnership agreements, such as an MOU, do not transfer "things of value," e.g., funds, from the Government to another party. Only a grant or cooperative agreement may be used for such transfers.
When drafting a partnership agreement, clearly and concisely state at a minimum: 1) the authority the bureau has for entering into the agreement; 2) background information and understandings necessitating the agreement; 3) the goals the parties intend to accomplish through the agreement; 4) what actions each party will take to attain those goals and when the actions will be taken; 6) obligations to consult on particular actions; 7) report generation and accounting requirements; and 8) the term of the agreement. There will be many more provisions including legally-required provisions particular to each agreement. The Solicitor's Office is responsible for helping agencies determine what provisions should or must be included in each agreement.
4. How do you develop accountability in partnerships, where there is no single responsible party? (top)
Oversight of partnerships is the joint responsibility of partners. The necessary degree of accountability will vary according to the nature of the partnership. Generally, the agreement establishing the partnership should contain provisions addressing accountability of the parties. Such provisions, depending on the nature of the partnership, may include: 1) clearly defined responsibilities of each partner; 2) clearly defined objectives for the partnership; 3) a list of expected deliverables and a delivery schedule; 4) consultation provisions; 5) reporting provisions; 6) accounting provisions; 7) identification of key contacts; 8) dispute resolution provisions; 9) benchmarks; 10) contingencies to address possible difficulties; 12) suspension or termination conditions; and 13) audit provisions. Close contact and communication among the partners will facilitate any necessary accountability.
5. What are our legal authorities for purchasing small, minimal cost items (e.g., pens, rulers, etc.) to hand out at our outreach activities such as Indian Pow Wows, education conferences, industry symposiums, etc.? (top)
Generally, a bureau may only spend appropriated funds for a "necessary expense" of the program it is operating. In other words, appropriations, "shall be applied only to the objects for which the appropriations were made except as otherwise provided by law." The necessary expense doctrine does not require that a given expenditure be "necessary" in the strict sense that the expenditure would be the only way to accomplish a given goal, rather that the expenditure will contribute to accomplishing the purposes of the appropriation to be charged.
The Comptroller General has issued numerous opinions indicating that expenditures of appropriations for personal items, such as pens or pins, generally do not qualify as a necessary expense. Thus, if the small, minimal cost items are classified as personal gifts, they are not necessary expenses and may not be purchased with appropriated funds, unless there is specific statutory authority to do so.
Nonetheless, under the necessary expense doctrine, a bureau has discretion to determine that a given item is reasonably necessary to accomplish the authorized purpose of the relevant statute. The agency's administrative determination of necessity is given considerable deference. Items that can be justified under one program or appropriation might be entirely inappropriate under another, depending on the circumstances and statutory authorities involved. See Comptroller General Decision at B-223319 (1986).
An example in which the Comptroller General approved an expenditure resembling personal gifts is in the January 24, 1979 opinion (B-193769), which it held that the purchase and distribution of pieces of lava rocks to visitors of the Capulin Mountain National Monument was a necessary and proper use of the Department of the Interior's appropriated funds. It reasoned that the distribution of the rocks furthered the objectives of the appropriation because it preserved the Monument by discouraging visitors from removing lava rock elsewhere in the Monument. Note that this use had a close connection to the bureau's mission that made the expenditure something other than a personal gift. In other limited circumstances, it may be possible to extend the necessary expense rule to the provision of items that have contact information printed on them, e.g., a pen with a program director's name and phone number.
Whether a proposed expenditure for small personal items is a necessary expense should be determined on a case-by-case basis with the assistance of the Solicitor's Office. TheGeneral Accounting Office's Principles of Federal Appropriations Law, 2d ed. contains an excellent discussion of availability of appropriations under Chapter 4 (specifically, section B, The "Necessary Expense" Doctrine and section C, subsection 8., Gifts and Awards).
6. Are States, local governments, and Indian tribes eligible for grant funding? (top)
Yes. The general financial assistance statute at 31 U.S.C. § 6304 specifically provides that grants may be given to States, local governments, or "other recipients." The term "local governments" is considered to include Indian tribes. Some statutes authorizing grants limit grant recipients to certain groups, in which case the authorizing statute will define the groups allowed to receive the grant.