In Reply Refer To:
Mail Stop 440

October 10, 2012

WATER MISSION AREA MEMORANDUM NO. 12.06

Subject: Matching State, Tribal, or Local Funds Derived from Federal Sources in the Cooperative Water Program

The attached memorandum provides Water Mission Area (WMA) guidance to Water Science Centers (WSCs) and Regions on matching State, Tribal, or local funds derived from federal sources in the Cooperative Water Program (CWP).  It supersedes Water Resource Memorandum 2001.05.

It is the policy of the USGS that State, Tribal, or local funds matched by USGS are funds under the control of the State, Tribal, or local cooperating agency that signs a Joint Funding Agreement (JFA).  The USGS has no duty to audit or question the source of the funds offered by the cooperating agency (such as, for example, to determine if from federal sources) other than to ascertain that these offerings do not include other USGS funds. Guidance is provided below if the cooperating agency implies or states that funds are directly from another federal agency.

The WMA remains committed to meeting the needs of its funding partners while maintaining significant technical leadership, innovation, and hydrologic expertise to foster an improved understanding of the Nation's water resources.

 

 

William H. Werkheiser //s// William H. Werkheiser
Associate Director for Water

Attachment
Distribution:  A, B, WSCs

This memorandum supersedes Water Resource Memorandum 2001.05.

 

Matching State, Tribal, or Local Funds Derived from Federal Sources in the Cooperative Water Program

It is the policy of the USGS Cooperative Water Program (CWP) that State, Tribal, or local funds matched by USGS are funds under the control of the State, Tribal, or local cooperating agency that signs a Joint Funding Agreement (JFA). 

Survey Manual Chapter 500.1 (Policy of USGS in Cooperative Work with States, Counties, Municipalities, and Other Political Subdivision, http://www.usgs.gov/usgs-manual/500/500-1.html) defines the Cooperators eligible for inclusion in the CWP and criteria for such agreements. There are no stipulations as to where Cooperators obtain their funds or to question sources of funds used by Cooperators other than to ascertain that these offerings do not include other USGS funds. 

The USGS has no duty to audit or question the source of the funds offered by the cooperating agency other than to ascertain that these offerings do not include other USGS funds unless the cooperating agency implies or states that their funds are directly from another federal agency. 

In the event that a Cooperator advises USGS that provided funds are of federal origin that is acceptable, however, USGS may not match federal funds in a JFA. 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 CWP, and require an agreement with the other federal agency using instruments other than a JFA (as specified in Survey Manual Chapter 500.3, Policy on Work for Other Federal Agencies, http://www.usgs.gov/usgs-manual/500/500-3.html)

If the cooperating agency includes a requirement in the JFA that the funds are subject to federal audit, USGS is required to question the source of the funds and adjust the matching share from the CWP accordingly.

Investigations conducted through the CWP are considered to be the result of a full partnership with the cooperating agency.  Two key issues emphasized when negotiating JFAs are (1) in execution of the 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; and, (2) data collection and scientific investigations are of mutual benefit to the USGS and State, Tribal, and local agencies, and that the USGS is the impartial, non-regulatory party that performs the work and openly reports the findings.

References that can be used to respond to concerns related to source of funding include the following Statutory Authorities and Opinion of the Office of the Solicitor.

Statutory Authority for Cooperative Agreements:  

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, (http://www.whitehouse.gov/omb/circulars_a110) 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 of 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 Title 43 authority, and provides reasons why OMB Circular A-110 does not apply to the Cooperative Water Program. 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