Matching State Or Local Funds Derived From Federal Sources In The Cooperative Water Program 


THIS WRD INFORMATIONAL MEMORANDUM IS BEING DISTRIBUTED ELECTRONICALLY WITH 
ATTACHMENTS 2 AND 3 ONLY.  THE ENTIRE MEMORANDUM WILL ALSO BE DISTRIBUTED 
BY HARD COPY TO INCLUDE ATTACHMENTS 1, 2, AND 3. 



In Reply Refer To: 
Technical Operations Program 
Mail Stop 405 
Sunset Date:  May 2002                               

May 29, 2001



WATER RESOURCES DISCIPLINE INFORMATIONAL MEMORANDUM NO. 2001.05 

Subject:  Matching State Or Local Funds Derived From Federal Sources 
In The Cooperative Water Program 

State or local cooperators occasionally express concerns regarding the use 
of funds derived from other Federal sources to match U.S. Geological 
Survey (USGS) funds in the Cooperative Water Program.  It is the position 
of the USGS that State or local funds matched by USGS in this program are 
funds under the control of the State or local cooperating agency that 
signs the Joint Funding Agreement (JFA) with the USGS.  The USGS must 
ensure that the total USGS investment does not exceed 50 percent of the 
total costs covered by the JFA.  However, the USGS does not question the 
source of the funds offered by the cooperating agency. 

References that can be used to respond to such concerns include the 
following. 

Statutory Authority for Cooperative Agreements:   

Title 43 of the United States Code (U.S.C.), Section 36c authorizes 
acceptance by the USGS of contributions from public and private sources. 

43 USC Sec. 36c                                       01/23/00 
TITLE 43 - PUBLIC LANDS 
CHAPTER 2 - UNITED STATES GEOLOGICAL SURVEY 

Sec. 36c. Acceptance of contributions from public and private 
sources; cooperation with other agencies in prosecution of 
projects 

In fiscal year 1987 and thereafter the United States Geological 
Survey is authorized to accept lands, buildings, equipment, and 
other contributions from public and private sources and to 
prosecute projects in cooperation with other agencies, Federal, 
State, or private. 

(Pub. L. 99-500, Sec. 101(h) (title I), Oct. 18, 1986, 100 Stat. 
1783-242, 1783-252, and Pub. L. 99-591, Sec. 101(h) (title I), 
Oct. 30, 1986, 100 Stat. 3341-242, 3341-252; Pub. L. 102-154, 
title I, Nov. 13, 1991, 105 Stat. 1000.) 

Title 43 U.S.C., Section 50 provides that in carrying out water resources 
investigations with any State or municipality, the share of the USGS 
"shall not exceed 50 per centum of the cost thereof."   The USGS has no 
authority to question sources of funds used by State and local cooperators 
in the Cooperative Water Program other than to ascertain that these 
offerings do not include other USGS funds. 

43 USC Sec. 50                                        01/23/00 
TITLE 43 - PUBLIC LANDS 
CHAPTER 2 - UNITED STATES GEOLOGICAL SURVEY 

Sec. 50. Survey's share of cost of topographic mapping or water 
resources investigations carried on with States 

The share of the United States Geological Survey in any 
topographic mapping or water resources data collection and 
investigations carried on in cooperation with any State or 
municipality shall not exceed 50 per centum of the cost thereof. 

(Pub. L. 106-113, div.  B, Sec. 1000(a)(3) (title I), 
Nov. 29, 1999, 113 Stat. 1535, 1501A-145.) 

Sections 36c and 50 of Title 43 can also be found at URL: 

http://uscode.house.gov/usc.htm


Opinion of the Office of the Solicitor, Department of the Interior 
            
In some instances, OMB Circular A-110 (Cost Principals for State and Local 
Governments) has been erroneously referenced by cooperators as prohibiting 
the USGS from matching State or local funds derived from other Federal 
agencies.  A 1992 response from the DOI Solicitor to the Environmental 
Protection Agency (EPA) may be used to convey his opinion concerning this 
issue.  The EPA questioned the authority for the USGS to accept 
cooperative funds from a State agency that originated as an EPA grant to 
the State.  The Solicitor's opinion cites the authorities above, and 
provides reasons why OMB Circular 
A-110 does not apply to the Cooperative Water Program. 

The 1992 response from the DOI Solicitor begins on the following page. 

OMB Circular A-110 is available at URL: 

http://www.whitehouse.gov/OMB/circulars/a110/a110.html 

Response from the Office of the Solicitor, DOI


The original response is Attachment 1 to the paper copy distribution of 
this memorandum (WRD Informational Memorandum No. 2001.05).  The following 
is typed, verbatim, from the original. 
  
UGS.GL.9862 

Laurie Ford                                        MAR 10 1992 
Attorney-Advisor 
Office of the General Counsel 
Environmental Protection Agency 
401 M Street SW, LE 132G 
Washington, D.C.  20460 

    Re:      Authority for the United States Geological Survey 
           to Act as a Subcontractor or Cooperator for the 
           State of California, Grantee under Grant from EPA 

Dear Ms. Ford: 

You have inquired by phone whether the United States 
Geological Survey has the authority to perform work for 
the State of California under a grant from EPA to the State. 

The work would consist of using data already collected, and 
collecting and analyzing additional data with regard to the 
water drainage system of the upper Klamath River.  This 
information is essential to the proposed study of 
California water resources under the EPA grant. 

We find two statutes which are applicable to this matter, 
and which furnish authority for USGS to enter into the 
proposed agreement.  Under 43 U.S.C. 36c, the USGS is 
authorized to accept contributions from public and private 
sources, and to prosecute projects in cooperation with 
other agencies, Federal, State, or private. In our 
opinion, this statue authorizes the State of California 
to contribute funds to the USGS for the work it performs. 

OMB Circular A-110, Cost Principles for State and Local 
Governments, could not furnish flow down cost principles 
to another Government agency, and would not apply to the 
agreement between the State and USGS.  Rather, the State 
and USGS would be free to draft whatever provisions they 
desire in the agreement they enter into.  The United States 
has authority to adopt any contract provisions it may 
consider to be in its best interests, which is not 
prohibited by law.  See, Arizona v. California, 373 U.S.C. 
546 (1963), and cases cited in Nash and Cibinic, Federal 
Procurement Law, 1977 ed.; p. 11. 

The fact that no OMB guidance or OMB Circular is applicable 
to this transaction does not cancel or diminish the authority 
of the USGS to make agreements to perform work under the 
authority of 43 U.S.C. 36c.  The proposed agreement with the 
State would be no different than any agreement which has been 
performed over a period of years under the same provision, 
when it was included in the annual appropriation acts. 

The seconds {second} statute which may be used as authority 
is 43 U.S.C. 50 provides that in carrying out water resources 
investigations with any State of {or} municipality, the share 
of the Geological Survey shall not exceed 50 per centum of 
the cost thereof.  This statute is also applicable as 
authority for the proposed agreement, because the work to be 
performed will be part of an investigation of water resources.   
OMB Circular A-110 would not apply. 

                               Sincerely yours, 

                                 (signed) 

                                 E. Edward Wiles 
                                 Attorney-Advisor 
                                 Branch of Procurement 
                                  and Patents 
                                 Division of General Law 

cc:  Assistant Director, Intergovernmental Programs, 
     U.S. Geological Survey 

Geological Survey Manual (SM) policies: 

SM 500.1 (Policy of USGS in Cooperative Work with States, Counties, 
Municipalities, and Other Political Subdivisions) defines the cooperators 
eligible for inclusion in the Cooperative Program and 
criteria for such agreements.  There is no stipulation as to where the 
Cooperators obtain their funds.  This SM Chapter is provided as Attachment 
2, and is also available at URL: 

http://www.usgs.gov/usgs-manual/500/500-1.html


Water Resources Discipline Policies: 

WRD Policy Memorandum No. 2000.08 provides guidance on preparation of 
JFA's for work performed in the Cooperative Water Program.  It states, 
"When signing an agreement with a State or local agency, we consider the 
source of the matching funds to be that of the cooperating agency.  
Therefore, [Joint Funding] agreements cannot state that the cooperator's 
matching funds have been provided by another Federal agency."  The 
prohibition of referencing other Federal funds in a JFA is based on the 
fact that agreements between the USGS and other Federal agencies are 
conducted under a different authority than the Cooperative Water Program, 
and require an agreement with the other Federal agency using instruments 
other than the Cooperative JFA.  Attachment 3, Survey Manual Chapter 
500.3, provides information on the "Policy on Work for Other Federal 
Agencies." 

This SM Chapter is also available at URL: 

http://www.usgs.gov/usgs-manual/500/500-3.html


General Principals of the Cooperative Water Program: 

Investigations conducted by the USGS in this program are considered to be 
the result of a full partnership with the cooperating agency.  The JFA's 
are not "contracts" binding either party to specific contractual 
procedures.  The USGS has no authority to audit or question the 
cooperating agency's source of funds.  A fundamental assumption of the JFA 
is that, in execution of this agreement between equal partners, the USGS 
is conforming to all applicable Federal regulations and the cooperating 
agency is conforming to all applicable State and local regulations. 


                                    /signed/ 

Stephen F. Blanchard 
Acting Chief, Office of Information 

2 Attachments (email) 
3 Attachments (paper copy)  

Attach2
Attach3

Distribution: A, B, DC, AO 

This memorandum supersedes no other WRD Memorandum. 

This memorandum is distributed via email and paper copy. 





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Steve Blanchard                                        
Acting Chief,  Office of Information        
U.S. Geological Survey                          Phone:  703-648-5629
440 National Center                               Fax:  703-648-5644
Reston, VA  20192

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