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Subpart D: Post-Federal Award Requirements

Summary: Subpart D is the "operational core" of the regulations, governing the management, monitoring, and reporting of federal awards once they are active. It covers critical areas such as "Internal Controls," "Procurement Standards," and "Property Management," providing the strict guardrails for daily execution. This subpart requires that financial management systems be able to track every dollar to a specific source and application, ensuring total transparency. It also introduces the "Finsweet" of grant logic: the requirement for written procedures for every major administrative function. For disaster projects, this is where the "Project Worksheet" (PW) is managed and where "Scope of Work" changes must be documented. It emphasizes the "Retention of Records," requiring that documentation be held for three years after the final expenditure report. Subpart D is essentially the "SOP" for grant managers, ensuring that every action taken is audit-ready and compliant with federal law.

As the operational heart of the regulation, Subpart D sets the standards for financial management, procurement, and property monitoring. It contains the strict procurement rules (§200.317-327) that are the primary source of FEMA funding de-obligations. CFOs must act as the ultimate gatekeeper for these sections to ensure that "full and open competition" is maintained even in emergency settings.

  • Key Takeaways & Call to Action:
  • Internal Control Framework: Implement a control system (aligned with COSO) that provides reasonable assurance of compliance with federal statutes (§200.303).
  • Procurement Documentation: Maintain a "History of Procurement" file for every contract, including rationale for the method of procurement and the selection of contract type.
  • Socioeconomic Outreach: Document the "Six Affirmative Steps" taken to utilize small, minority-owned, and women-owned businesses for all disaster-related contracts.
  • CTA: Audit your procurement files against §200.318–327 today; if a "cost-plus-percentage-of-cost" contract exists, terminate it immediately to prevent 100% funding loss.

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    • §200.318 General Procurement Standards

    • Call to Action: You must use your own documented procurement procedures, provided they conform to the "Full and Open Competition" standards of the federal government. This section is essential because "Procurement under Grant" is the area where most FEMA funding is lost during OIG audits. You must maintain oversight to ensure contractors perform according to the terms, conditions, and specifications of their contracts. In the rush of a disaster, skipping these steps to "get work done" is the fastest way to lose federal reimbursement. Proper procurement ensures that the prices paid are reasonable and that the taxpayer is getting value for money.
    • §200.319 Competition
    • Call to Action: You must conduct all procurement transactions in a manner that provides "full and open competition" and avoid restrictive practices like "local preferences." This section is essential because it prevents "favoritism" and ensures the federal government is not overpaying due to a lack of market competition. Even in an emergency, you must demonstrate "maximum competition practicable" under the circumstances. Failure to follow this section results in "unreasonable costs," which are ineligible for federal reimbursement. It is the legal firewall that protects the municipality from lawsuits by disgruntled vendors and audit findings by federal monitors.

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2 CFR 200 UNIFORM GUIDANCE

Subpart D: Post-Federal Award Requirements

200.300 Statutory and national policy requirements

Manage and administer Federal awards to ensure spending complies with the U.S. Constitution and Federal law.

Establishes the broad legal framework for compliance, including nondiscrimination and environmental protections, which are prerequisites for maintaining eligibility.

200.302 Financial management

Maintain a financial management system that provides accurate, current, and complete disclosure of financial results.

Ensures every dollar can be tracked to source documentation, which is the primary mechanical necessity for surviving a federal audit.

200.303 Internal controls

Establish and maintain effective internal controls to provide reasonable assurance of compliance with Federal statutes.

Acts as the organizational defense against waste, fraud, and abuse; effective controls reduce the risk of cost disallowances.

200.305 Federal payment

Minimize the time elapsing between the transfer of Federal funds and their disbursement by the recipient.

Strict cash management prevents interest liabilities and ensures funds are only drawn for immediate, actual project needs.

200.306 Cost sharing

Accept only verifiable, necessary, and allowable contributions as part of the recipient's cost share.

Prevents 'double counting' of contributions across multiple awards and ensures the recipient meets their legally mandated financial stake.

200.307 Program income

Use income earned during the award period for the original purpose of the Federal award.

Maintains fiscal integrity by requiring program income to be expended before requesting additional Federal cash payments.

200.308 Revision of budget and program plans

Request prior written approval for changes in scope, objectives, or key personnel.

Prevents unauthorized project pivots that could lead to the total deobligation of funds if the new scope is deemed ineligible.

200.313 Equipment

Manage equipment through accurate records, biennial physical inventories, and proper maintenance.

Protects the Federal interest in high-value assets ($10,000+); failure to track equipment can result in repayment of the Federal share.

200.314 Supplies

Compensate the Federal agency for residual inventory of unused supplies exceeding $10,000 in aggregate value.

Ensures the government recovers its investment in materials that remain unused at the end of the project performance period.

200.318 General procurement standards

Maintain documented procurement procedures and written standards of employee conduct regarding conflicts of interest.

Crucial for preventing corruption; procurement violations are the most frequent cause of audit findings and cost clawbacks.

200.319 Competition

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Conduct all procurement transactions in a manner providing full and open competition.

Eliminates unfair advantages; contractors who draft specifications are strictly excluded from bidding to ensure market-rate pricing.

200.320 Procurement methods

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Use informal (micro-purchase), formal (sealed bids/proposals), or noncompetitive methods appropriately.

Provides the legal thresholds for spending; using the wrong method (e.g., sole-sourcing without exigency) invalidates the entire contract cost.

200.321 Socioeconomic contracting

Take affirmative steps to ensure small, minority, and women's business enterprises are used when possible.

Statutory mandate to support diverse economic participation; failure to document these 'affirmative steps' is a major compliance gap.

200.324 Contract cost and price

Perform a cost or price analysis for every procurement exceeding the simplified acquisition threshold.

Prevents overpayment and prohibits 'cost plus a percentage of cost' contracts, which are fundamentally unallowable.

200.334 Record retention requirements

Retain financial records and supporting documents for three years from the date of the final financial report.

Provides the 'defense evidence' for later reviews; if records are missing during an audit, FEMA will presume the costs are ineligible.

200.337 Access to records

Grant Federal agencies and the Comptroller General the right of access to any pertinent records and personnel.

Ensures transparency; denying access to records or personnel is a material breach of the award terms.

200.339 Remedies for noncompliance

Impose specific conditions, withhold payments, or disallow costs when a recipient fails to comply.

Outlines the severe financial consequences of mismanagement, including potential award termination or debarment.

200.344 Closeout

Submit all final reports and liquidate all financial obligations within 120 days of the end of the performance period.

Triggers the final reconciliation of funds; failure to meet closeout deadlines results in a 'material failure' report in SAM.gov.

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https://www.ecfr.gov/current/title-2/part-200/subpart-D