(a) Cost share. We may contribute up to 75 percent of the total eligible costs. The State must ensure that non-Federal sources contribute not less than 25 percent of the total eligible costs for the grant. The State or any subgrantee cannot use funds that we provide under this Act as the non-Federal match for other Federal funds nor can the State or any subgrantee use other Federal funds as the required non-Federal match for these funds, except as provided by statute.

(b) Allowable costs. A State may find guidance on allowable costs for States and subgrantees in Office of Management and Budget (OMB) Circulars A-87 and A-122 on Cost Principles. States may use up to 7 percent of the grant funds for management costs of the grant. The State should include management costs in its application. Subgrantees must include reasonable costs to administer the grant as a direct project cost in their budget.

(c) Progress reports. The State must provide a quarterly progress report to us under 44 CFR 13.40, indicating the status and completion date for each project funded. The report will include any problems or circumstances affecting completion dates, scope of work, or project costs that may result in noncompliance with the approved grant conditions.

(d) Financial reports. The State must provide a quarterly financial report to us under 44 CFR 13.41.

(e) SMARTLINK Drawdowns. The State will make SMARTLINK drawdowns to reimburse or advance allowable costs to subgrantees for approved projects.

(f) Audit requirements. Uniform audit requirements as set forth in 44 CFR part 13 apply to all grant assistance provided under this subpart. We may elect to conduct a Federal audit on the disaster assistance grant or on any of the subgrants.

(g) If a mitigation measure is not completed, and there is not adequate justification for non-completion, no Federal funding will be provided for that project.

[66 FR 32669, June 15, 2001, as amended at 74 FR 15353, Apr. 3, 2009]