Illinois General Assembly - Full Text of HB5325
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Full Text of HB5325  102nd General Assembly




State of Illinois
2021 and 2022


Introduced 1/31/2022, by Rep. Maurice A. West, II


30 ILCS 708/15
30 ILCS 708/135 new

    Amends the Grant Accountability and Transparency Act. Provides that grants shall not restrict the amount of money used to pay for fringe benefits. Provides that grants shall not restrict administrative costs to less than 20% of the grant award. Defines "fringe benefits".

LRB102 24543 RJF 33777 b





HB5325LRB102 24543 RJF 33777 b

1    AN ACT concerning finance.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Grant Accountability and Transparency Act
5is amended by changing Section 15 and by adding Section 135 as
7    (30 ILCS 708/15)
8    Sec. 15. Definitions. As used in this Act:
9    "Allowable cost" means a cost allowable to a project if:
10        (1) the costs are reasonable and necessary for the
11    performance of the award;
12        (2) the costs are allocable to the specific project;
13        (3) the costs are treated consistently in like
14    circumstances to both federally-financed and other
15    activities of the non-federal entity;
16        (4) the costs conform to any limitations of the cost
17    principles or the sponsored agreement;
18        (5) the costs are accorded consistent treatment; a
19    cost may not be assigned to a State or federal award as a
20    direct cost if any other cost incurred for the same
21    purpose in like circumstances has been allocated to the
22    award as an indirect cost;
23        (6) the costs are determined to be in accordance with



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1    generally accepted accounting principles;
2        (7) the costs are not included as a cost or used to
3    meet federal cost-sharing or matching requirements of any
4    other program in either the current or prior period;
5        (8) the costs of one State or federal grant are not
6    used to meet the match requirements of another State or
7    federal grant; and
8        (9) the costs are adequately documented.
9    "Auditee" means any non-federal entity that expends State
10or federal awards that must be audited.
11    "Auditor" means an auditor who is a public accountant or a
12federal, State, or local government audit organization that
13meets the general standards specified in generally-accepted
14government auditing standards. "Auditor" does not include
15internal auditors of nonprofit organizations.
16    "Auditor General" means the Auditor General of the State
17of Illinois.
18    "Award" means financial assistance that provides support
19or stimulation to accomplish a public purpose. "Awards"
20include grants and other agreements in the form of money, or
21property in lieu of money, by the State or federal government
22to an eligible recipient. "Award" does not include: technical
23assistance that provides services instead of money; other
24assistance in the form of loans, loan guarantees, interest
25subsidies, or insurance; direct payments of any kind to
26individuals; or contracts that must be entered into and



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1administered under State or federal procurement laws and
3    "Budget" means the financial plan for the project or
4program that the awarding agency or pass-through entity
5approves during the award process or in subsequent amendments
6to the award. It may include the State or federal and
7non-federal share or only the State or federal share, as
8determined by the awarding agency or pass-through entity.
9    "Catalog of Federal Domestic Assistance" or "CFDA" means a
10database that helps the federal government track all programs
11it has domestically funded.
12    "Catalog of Federal Domestic Assistance number" or "CFDA
13number" means the number assigned to a federal program in the
15    "Catalog of State Financial Assistance" means the single,
16authoritative, statewide, comprehensive source document of
17State financial assistance program information maintained by
18the Governor's Office of Management and Budget.
19    "Catalog of State Financial Assistance Number" means the
20number assigned to a State program in the Catalog of State
21Financial Assistance. The first 3 digits represent the State
22agency number and the last 4 digits represent the program.
23    "Cluster of programs" means a grouping of closely related
24programs that share common compliance requirements. The types
25of clusters of programs are research and development, student
26financial aid, and other clusters. A "cluster of programs"



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1shall be considered as one program for determining major
2programs and, with the exception of research and development,
3whether a program-specific audit may be elected.
4    "Cognizant agency for audit" means the federal agency
5designated to carry out the responsibilities described in 2
6CFR 200.513(a).
7    "Contract" means a legal instrument by which a non-federal
8entity purchases property or services needed to carry out the
9project or program under an award. "Contract" does not include
10a legal instrument, even if the non-federal entity considers
11it a contract, when the substance of the transaction meets the
12definition of an award or subaward.
13    "Contractor" means an entity that receives a contract.
14    "Cooperative agreement" means a legal instrument of
15financial assistance between an awarding agency or
16pass-through entity and a non-federal entity that:
17        (1) is used to enter into a relationship with the
18    principal purpose of transferring anything of value from
19    the awarding agency or pass-through entity to the
20    non-federal entity to carry out a public purpose
21    authorized by law, but is not used to acquire property or
22    services for the awarding agency's or pass-through
23    entity's direct benefit or use; and
24        (2) is distinguished from a grant in that it provides
25    for substantial involvement between the awarding agency or
26    pass-through entity and the non-federal entity in carrying



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1    out the activity contemplated by the award.
2    "Cooperative agreement" does not include a cooperative
3research and development agreement, nor an agreement that
4provides only direct cash assistance to an individual, a
5subsidy, a loan, a loan guarantee, or insurance.
6    "Corrective action" means action taken by the auditee that
7(i) corrects identified deficiencies, (ii) produces
8recommended improvements, or (iii) demonstrates that audit
9findings are either invalid or do not warrant auditee action.
10    "Cost objective" means a program, function, activity,
11award, organizational subdivision, contract, or work unit for
12which cost data is desired and for which provision is made to
13accumulate and measure the cost of processes, products, jobs,
14and capital projects. A "cost objective" may be a major
15function of the non-federal entity, a particular service or
16project, an award, or an indirect cost activity.
17    "Cost sharing" means the portion of project costs not paid
18by State or federal funds, unless otherwise authorized by
20    "Development" is the systematic use of knowledge and
21understanding gained from research directed toward the
22production of useful materials, devices, systems, or methods,
23including design and development of prototypes and processes.
24    "Data Universal Numbering System number" means the 9-digit
25number established and assigned by Dun and Bradstreet, Inc. to
26uniquely identify entities and, under federal law, is required



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1for non-federal entities to apply for, receive, and report on
2a federal award.
3    "Direct costs" means costs that can be identified
4specifically with a particular final cost objective, such as a
5State or federal or federal pass-through award or a particular
6sponsored project, an instructional activity, or any other
7institutional activity, or that can be directly assigned to
8such activities relatively easily with a high degree of
10    "Equipment" means tangible personal property (including
11information technology systems) having a useful life of more
12than one year and a per-unit acquisition cost that equals or
13exceeds the lesser of the capitalization level established by
14the non-federal entity for financial statement purposes, or
16    "Executive branch" means that branch of State government
17that is under the jurisdiction of the Governor.
18    "Federal agency" has the meaning provided for "agency"
19under 5 U.S.C. 551(1) together with the meaning provided for
20"agency" by 5 U.S.C. 552(f).
21    "Federal award" means:
22        (1) the federal financial assistance that a
23    non-federal entity receives directly from a federal
24    awarding agency or indirectly from a pass-through entity;
25        (2) the cost-reimbursement contract under the Federal
26    Acquisition Regulations that a non-federal entity receives



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1    directly from a federal awarding agency or indirectly from
2    a pass-through entity; or
3        (3) the instrument setting forth the terms and
4    conditions when the instrument is the grant agreement,
5    cooperative agreement, other agreement for assistance
6    covered in paragraph (b) of 20 CFR 200.40, or the
7    cost-reimbursement contract awarded under the Federal
8    Acquisition Regulations.
9    "Federal award" does not include other contracts that a
10federal agency uses to buy goods or services from a contractor
11or a contract to operate federal government owned,
12contractor-operated facilities.
13    "Federal awarding agency" means the federal agency that
14provides a federal award directly to a non-federal entity.
15    "Federal interest" means, for purposes of 2 CFR 200.329 or
16when used in connection with the acquisition or improvement of
17real property, equipment, or supplies under a federal award,
18the dollar amount that is the product of the federal share of
19total project costs and current fair market value of the
20property, improvements, or both, to the extent the costs of
21acquiring or improving the property were included as project
23    "Federal program" means any of the following:
24        (1) All federal awards which are assigned a single
25    number in the CFDA.
26        (2) When no CFDA number is assigned, all federal



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1    awards to non-federal entities from the same agency made
2    for the same purpose should be combined and considered one
3    program.
4        (3) Notwithstanding paragraphs (1) and (2) of this
5    definition, a cluster of programs. The types of clusters
6    of programs are:
7            (A) research and development;
8            (B) student financial aid; and
9            (C) "other clusters", as described in the
10        definition of "cluster of programs".
11    "Federal share" means the portion of the total project
12costs that are paid by federal funds.
13    "Final cost objective" means a cost objective which has
14allocated to it both direct and indirect costs and, in the
15non-federal entity's accumulation system, is one of the final
16accumulation points, such as a particular award, internal
17project, or other direct activity of a non-federal entity.
18    "Financial assistance" means the following:
19        (1) For grants and cooperative agreements, "financial
20    assistance" means assistance that non-federal entities
21    receive or administer in the form of:
22            (A) grants;
23            (B) cooperative agreements;
24            (C) non-cash contributions or donations of
25        property, including donated surplus property;
26            (D) direct appropriations;



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1            (E) food commodities; and
2            (F) other financial assistance, except assistance
3        listed in paragraph (2) of this definition.
4        (2) "Financial assistance" includes assistance that
5    non-federal entities receive or administer in the form of
6    loans, loan guarantees, interest subsidies, and insurance.
7        (3) "Financial assistance" does not include amounts
8    received as reimbursement for services rendered to
9    individuals.
10    "Fixed amount awards" means a type of grant agreement
11under which the awarding agency or pass-through entity
12provides a specific level of support without regard to actual
13costs incurred under the award. "Fixed amount awards" reduce
14some of the administrative burden and record-keeping
15requirements for both the non-federal entity and awarding
16agency or pass-through entity. Accountability is based
17primarily on performance and results.
18    "Foreign public entity" means:
19        (1) a foreign government or foreign governmental
20    entity;
21        (2) a public international organization that is
22    entitled to enjoy privileges, exemptions, and immunities
23    as an international organization under the International
24    Organizations Immunities Act (22 U.S.C. 288-288f);
25        (3) an entity owned, in whole or in part, or
26    controlled by a foreign government; or



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1        (4) any other entity consisting wholly or partially of
2    one or more foreign governments or foreign governmental
3    entities.
4    "Foreign organization" means an entity that is:
5        (1) a public or private organization located in a
6    country other than the United States and its territories
7    that are subject to the laws of the country in which it is
8    located, irrespective of the citizenship of project staff
9    or place of performance;
10        (2) a private nongovernmental organization located in
11    a country other than the United States that solicits and
12    receives cash contributions from the general public;
13        (3) a charitable organization located in a country
14    other than the United States that is nonprofit and tax
15    exempt under the laws of its country of domicile and
16    operation, but is not a university, college, accredited
17    degree-granting institution of education, private
18    foundation, hospital, organization engaged exclusively in
19    research or scientific activities, church, synagogue,
20    mosque, or other similar entity organized primarily for
21    religious purposes; or
22        (4) an organization located in a country other than
23    the United States not recognized as a Foreign Public
24    Entity.
25    "Fringe benefits" means allowances and services provided
26by employers to their employees as compensation in addition to



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1regular salaries and wages. "Fringe benefits" include, but are
2not limited to, the costs of leave (vacation, family-related,
3sick, or military), employee insurance, pensions, and
4unemployment benefit plans.
5    "Generally Accepted Accounting Principles" has the meaning
6provided in accounting standards issued by the Government
7Accounting Standards Board and the Financial Accounting
8Standards Board.
9    "Generally Accepted Government Auditing Standards" means
10generally accepted government auditing standards issued by the
11Comptroller General of the United States that are applicable
12to financial audits.
13    "Grant agreement" means a legal instrument of financial
14assistance between an awarding agency or pass-through entity
15and a non-federal entity that:
16        (1) is used to enter into a relationship, the
17    principal purpose of which is to transfer anything of
18    value from the awarding agency or pass-through entity to
19    the non-federal entity to carry out a public purpose
20    authorized by law and not to acquire property or services
21    for the awarding agency or pass-through entity's direct
22    benefit or use; and
23        (2) is distinguished from a cooperative agreement in
24    that it does not provide for substantial involvement
25    between the awarding agency or pass-through entity and the
26    non-federal entity in carrying out the activity



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1    contemplated by the award.
2    "Grant agreement" does not include an agreement that
3provides only direct cash assistance to an individual, a
4subsidy, a loan, a loan guarantee, or insurance.
5    "Grant application" means a specified form that is
6completed by a non-federal entity in connection with a request
7for a specific funding opportunity or a request for financial
8support of a project or activity.
9    "Hospital" means a facility licensed as a hospital under
10the law of any state or a facility operated as a hospital by
11the United States, a state, or a subdivision of a state.
12    "Illinois Debarred and Suspended List" means the list
13maintained by the Governor's Office of Management and Budget
14that contains the names of those individuals and entities that
15are ineligible, either temporarily or permanently, from
16receiving an award of grant funds from the State.
17    "Indirect cost" means those costs incurred for a common or
18joint purpose benefitting more than one cost objective and not
19readily assignable to the cost objectives specifically
20benefitted without effort disproportionate to the results
22    "Inspector General" means the Office of the Executive
23Inspector General for Executive branch agencies.
24    "Loan" means a State or federal loan or loan guarantee
25received or administered by a non-federal entity. "Loan" does
26not include a "program income" as defined in 2 CFR 200.80.



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1    "Loan guarantee" means any State or federal government
2guarantee, insurance, or other pledge with respect to the
3payment of all or a part of the principal or interest on any
4debt obligation of a non-federal borrower to a non-federal
5lender, but does not include the insurance of deposits,
6shares, or other withdrawable accounts in financial
8    "Local government" has the meaning provided for the term
9"units of local government" under Section 1 of Article VII of
10the Illinois Constitution and includes school districts.
11    "Major program" means a federal program determined by the
12auditor to be a major program in accordance with 2 CFR 200.518
13or a program identified as a major program by a federal
14awarding agency or pass-through entity in accordance with 2
15CFR 200.503(e).
16    "Non-federal entity" means a state, local government,
17Indian tribe, institution of higher education, or
18organization, whether nonprofit or for-profit, that carries
19out a State or federal award as a recipient or subrecipient.
20    "Nonprofit organization" means any corporation, trust,
21association, cooperative, or other organization, not including
22institutions of higher education, that:
23        (1) is operated primarily for scientific, educational,
24    service, charitable, or similar purposes in the public
25    interest;
26        (2) is not organized primarily for profit; and



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1        (3) uses net proceeds to maintain, improve, or expand
2    the operations of the organization.
3    "Obligations", when used in connection with a non-federal
4entity's utilization of funds under an award, means orders
5placed for property and services, contracts and subawards
6made, and similar transactions during a given period that
7require payment by the non-federal entity during the same or a
8future period.
9    "Office of Management and Budget" means the Office of
10Management and Budget of the Executive Office of the
12    "Other clusters" has the meaning provided by the federal
13Office of Management and Budget in the compliance supplement
14or has the meaning as it is designated by a state for federal
15awards the state provides to its subrecipients that meet the
16definition of a cluster of programs. When designating an
17"other cluster", a state must identify the federal awards
18included in the cluster and advise the subrecipients of
19compliance requirements applicable to the cluster.
20    "Oversight agency for audit" means the federal awarding
21agency that provides the predominant amount of funding
22directly to a non-federal entity not assigned a cognizant
23agency for audit. When there is no direct funding, the
24awarding agency that is the predominant source of pass-through
25funding must assume the oversight responsibilities. The duties
26of the oversight agency for audit and the process for any



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1reassignments are described in 2 CFR 200.513(b).
2    "Pass-through entity" means a non-federal entity that
3provides a subaward to a subrecipient to carry out part of a
5    "Private award" means an award from a person or entity
6other than a State or federal entity. Private awards are not
7subject to the provisions of this Act.
8    "Property" means real property or personal property.
9    "Project cost" means total allowable costs incurred under
10an award and all required cost sharing and voluntary committed
11cost sharing, including third-party contributions.
12    "Public institutions of higher education" has the meaning
13provided in Section 1 of the Board of Higher Education Act.
14    "Recipient" means a non-federal entity that receives an
15award directly from an awarding agency to carry out an
16activity under a program. "Recipient" does not include
18    "Research and Development" means all research activities,
19both basic and applied, and all development activities that
20are performed by non-federal entities.
21    "Single Audit Act" means the federal Single Audit Act
22Amendments of 1996 (31 U.S.C. 7501-7507).
23    "State agency" means an Executive branch agency. For
24purposes of this Act, "State agency" does not include public
25institutions of higher education.
26    "State award" means the financial assistance that a



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1non-federal entity receives from the State and that is funded
2with either State funds or federal funds; in the latter case,
3the State is acting as a pass-through entity.
4    "State awarding agency" means a State agency that provides
5an award to a non-federal entity.
6    "State grant-making agency" has the same meaning as "State
7awarding agency".
8    "State interest" means the acquisition or improvement of
9real property, equipment, or supplies under a State award, the
10dollar amount that is the product of the State share of the
11total project costs and current fair market value of the
12property, improvements, or both, to the extent the costs of
13acquiring or improving the property were included as project
15    "State program" means any of the following:
16        (1) All State awards which are assigned a single
17    number in the Catalog of State Financial Assistance.
18        (2) When no Catalog of State Financial Assistance
19    number is assigned, all State awards to non-federal
20    entities from the same agency made for the same purpose
21    are considered one program.
22        (3) A cluster of programs as defined in this Section.
23    "State share" means the portion of the total project costs
24that are paid by State funds.
25    "Stop payment order" means a communication from a State
26grant-making agency to the Office of the Comptroller,



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1following procedures set out by the Office of the Comptroller,
2causing the cessation of payments to a recipient or
3subrecipient as a result of the recipient's or subrecipient's
4failure to comply with one or more terms of the grant or
6    "Stop payment procedure" means the procedure created by
7the Office of the Comptroller which effects a stop payment
8order and the lifting of a stop payment order upon the request
9of the State grant-making agency.
10    "Student Financial Aid" means federal awards under those
11programs of general student assistance, such as those
12authorized by Title IV of the Higher Education Act of 1965, as
13amended (20 U.S.C. 1070-1099d), that are administered by the
14United States Department of Education and similar programs
15provided by other federal agencies. "Student Financial Aid"
16does not include federal awards under programs that provide
17fellowships or similar federal awards to students on a
18competitive basis or for specified studies or research.
19    "Subaward" means a State or federal award provided by a
20pass-through entity to a subrecipient for the subrecipient to
21carry out part of a federal award received by the pass-through
22entity. "Subaward" does not include payments to a contractor
23or payments to an individual that is a beneficiary of a federal
24program. A "subaward" may be provided through any form of
25legal agreement, including an agreement that the pass-through
26entity considers a contract.



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1    "Subrecipient" means a non-federal entity that receives a
2State or federal subaward from a pass-through entity to carry
3out part of a federal program. "Subrecipient" does not include
4an individual that is a beneficiary of such program. A
5"subrecipient" may also be a recipient of other State or
6federal awards directly from a State or federal awarding
8    "Suspension" means a post-award action by the State or
9federal agency or pass-through entity that temporarily
10withdraws the State or federal agency's or pass-through
11entity's financial assistance sponsorship under an award,
12pending corrective action by the recipient or subrecipient or
13pending a decision to terminate the award.
14    "Uniform Administrative Requirements, Costs Principles,
15and Audit Requirements for Federal Awards" means those rules
16applicable to grants contained in 2 CFR 200.
17    "Voluntary committed cost sharing" means cost sharing
18specifically pledged on a voluntary basis in the proposal's
19budget or the award on the part of the non-federal entity and
20that becomes a binding requirement of the award.
21(Source: P.A. 100-997, eff. 8-20-18.)
22    (30 ILCS 708/135 new)
23    Sec. 135. Contract limitations.
24    (a) Grants shall not restrict the amount of money used to
25pay for fringe benefits.



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1    (b) Grants shall not restrict administrative costs to less
2than 20% of the grant award.