U.S. Department of Transportation Federal Highway Administration

Memorandum

We are pleased to provide the attached guidance to assist Federal Highway Administration (FHWA) division offices implement key funds management principles. The attached guide summarizes current statutes, regulations, and policies for project funds management.

This guide applies specifically to projects authorized in the Fiscal Management Information System (FMIS), including discretionary funded and congressionally designated (earmarked) projects. This guidance applies to FHWA's division offices' oversight of recipients of Federal funding (e.g., State departments of transportation) and associated subrecipients (e.g. local governments or other eligible subrecipients).

We do not intend for this guidance to fully cover all types of projects or situations, such as innovative financing or contracting methods or projects with other unique or experimental features. In addition, we plan to provide additional guidance on applying these principles to projects authorized through processes other than FMIS, such as Federal lands projects. In the meantime, this guidance can be used as a reference for these projects also.

The primary points of this guidance include:

• The project authorization must reflect the Federal funds needed based on an accurate cost estimate for the phase of work that is ready to proceed for an allowed purpose.
• An obligation is proper when supported by a documented binding agreement supporting the amount of Federal funds recorded to reflect the Federal Government's potential liability.
• Projects must be monitored to ensure Federal funds and project agreement estimates reasonably align with current cost estimates and the performance schedule.
• Projects should be closed within a reasonable timeframe after all required work and applicable administrative actions (e.g., reporting and final billings) have been completed.

Supplemental funds management guidance memorandums are planned to include topics such as Federal Assistance Guidelines (2 CFR 200) and Preconstruction Procedures (23 CFR 630) after implementation of final rules on these topics. The implementation of 2 CFR 200 also will include additional guidance on project closeout requirements.

Please direct questions to:

• Tony DeSimone in the Office of Financial and Management Programs (HCFB-31) on funds management and monitoring (317-226-5307 or anthony.desimone@dot.gov);
• David Bartz in the Office of Program Administration (HIPA-10) on properly authorizing and obligating projects (512-536-5906 or david.bartz@dot.gov); and
• Gerald Yakowenko in the Office of Program Administration (HIPA-30) on project closure requirements (202-366-1562 or gerald.yakowenko@dot.gov).

Attachments

• Project Funds Management Guide
• Recommended Final Project Records Retention