Such facilities are contracted to provide housing, sustenance, supervision, counseling, and other correctional programs for selected parole violators. This document discusses requirements concerning contract amendment or cancellation, fire clearance, personnel policies, nondiscrimination, conflict of interest, internal control, accounting principles, and cost reporting. Cost allowability is discussed with respect to personnel, staff benefits, contract services and consultants, transportation, and nonexpendable equipment. Other costs considered include those for facility lease/use, general operating expenses, food, administrative overhead, and contingency reserve. Two methods of payment -- actual cost or perdiem rate plus facility lease/use cost -- are described, as are special arrangements used when monthly occupancy is below 70 percent. Fiscal audit forms/reports are appended.