Federal Awarding Agency Regulatory Implementation of Office of Management and Budget's Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards

EXECUTIVE OFFICE OF THE PRESIDENT

Office of Management and Budget

2 CFR Parts 1, 25, 170, 180, and 200

DEPARTMENT OF HEALTH AND HUMAN SERVICES

2 CFR Part 300

45 CFR Parts 74, 75, and 92

RIN 0991-ZA46

DEPARTMENT OF AGRICULTURE

2 CFR Parts 400, 415, 416, 418, and 422

Office of the Chief Financial Officer

7 CFR Parts 3015, 3016, 3018, 3019, 3022, and 3052

Farm Service Agency

7 CFR Parts 761 and 785

Commodity Credit Corporation

7 CFR Parts 1407 and 1485

National Institute of Food and Agriculture

7 CFR Parts 3400, 3401, 3402, 3403, 3405, 3406, 3407, 3415, 3430, and 3431

Rural Utilities Service

7 CFR Parts 1703, 1709, 1710, 1717, 1724, 1726, 1737, 1738, 1739, 1740, 1773, 1774, 1775, 1776, 1778, 1779, 1780, 1782, and 1783

Rural Business-Cooperative Service

Rural Housing Service

Rural Utilities Service

Farm Service Agency

7 CFR Parts 1942, 1944, 1951, and 1980

Rural Housing Service

7 CFR Parts 3570 and 3575

Rural Business-Cooperative Service

Rural Utilities Service

7 CFR Parts 4274, 4279, 4280, 4284, 4285, and 4290

RIN 0505-AA15

DEPARTMENT OF STATE

2 CFR Part 600

22 CFR Parts 135 and 145

RIN 1400-AD57

AGENCY FOR INTERNATIONAL DEVELOPMENT

2 CFR Part 700

22 CFR Part 226

RIN 0412-AA73

DEPARTMENT OF VETERANS AFFAIRS

2 CFR Part 802

38 CFR Parts 41 and 43

RIN 2900-AP03

DEPARTMENT OF ENERGY

2 CFR Part 910

10 CFR Parts 602, 605, and 733

RIN 1991-AB94

DEPARTMENT OF TREASURY

2 CFR Part 1000

RIN 1505-AC48

DEPARTMENT OF DEFENSE

2 CFR Part 1103

RIN 0790-AJ25

DEPARTMENT OF TRANSPORTATION

2 CFR Part 1201

49 CFR Parts 18 and 19

RIN 2105-AE33

DEPARTMENT OF COMMERCE

2 CFR Part 1327

15 CFR Parts 14 and 24

RIN 0605-AA34

DEPARTMENT OF THE INTERIOR

2 CFR Part 1402

43 CFR Part 12

RIN 1090-AB08

ENVIRONMENTAL PROTECTION AGENCY

2 CFR Part 1500

40 CFR Parts 30, 31, 33, 35, 40, 45, 46, and 47

RIN 2030-AA99

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

2 CFR Part 1800

14 CFR Parts 1260 and 1273

RIN 2700-AE94

CORPORATION FOR NATIONAL AND COMMUNITY SERVICE

2 CFR Part 2205

45 CFR Parts 1235, 2510, 2520, 2541, 2543, 2551, 2552, and 2553

RIN 3045-AA61

SOCIAL SECURITY ADMINISTRATION

2 CFR Part 2300

20 CFR Parts 435 and 437

RIN 0960-0960-AH73

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

2 CFR Part 2400

24 CFR Parts 84 and 85

RIN 2501-AD54

NATIONAL SCIENCE FOUNDATION

2 CFR Part 2500

45 CFR Part 602

RIN 3145-AA57

NATIONAL ARCHIVES AND RECORDS ADMINISTRATION

2 CFR Part 2600

36 CFR Parts 1206, 1207, and 1210

RIN 3095-AB83

SMALL BUSINESS ADMINISTRATION

2 CFR Part 2701

13 CFR Part 143

RIN 3245-AG62

DEPARTMENT OF JUSTICE

2 CFR Part 2800

28 CFR Parts 66 and 70

RIN 1121-AA81

DEPARTMENT OF LABOR

2 CFR Part 2900

RIN 1205-AB71

DEPARTMENT OF HOMELAND SECURITY

2 CFR Part 3002

Federal Emergency Management Agency

44 CFR Parts 13, 78, 79, 152, 201, 204, 206, 207, 208, 304, 360, and 361

RIN 1601-AA70

INSTITUTE OF MUSEUM AND LIBRARY SERVICES

2 CFR Part 3187

45 CFR Parts 1180 and 1183

RIN 3137-AA24

NATIONAL ENDOWMENT FOR THE ARTS

2 CFR Part 3255

45 CFR Part 1157

RIN 3135-AA32

NATIONAL ENDOWMENT FOR THE HUMANITIES

2 CFR Part 3374

45 CFR Part 1174

RIN 3136-AA35

DEPARTMENT OF EDUCATION

2 CFR Part 3474

34 CFR Parts 74, 75, 76, 77, 80, 101, 206, 222, 225, 226, 270, 280, 299, 300, 303, 350, 361, 363, 364, 365, 367, 369, 370, 373, 377, 380, 381, 385, 396, 400, 426, 460, 464, 491, 535, 606, 607, 608, 609, 611, 614, 628, 636, 637, 642, 643, 644, 645, 646, 647, 648, 650, 654, 655, 661, 662, 663, 664, 682, 692, 694, and 1100

RIN 1890-AA19

EXECUTIVE OFFICE OF THE PRESIDENT

Office of National Drug Control Policy

2 CFR Part 3603

21 CFR Parts 1403, 1404, and 1405

RIN 3201-AA00

GULF COAST ECOSYSTEM RESTORATION COUNCIL

2 CFR Part 5900

RIN 3600-AA03

Federal Awarding Agency Regulatory Implementation of Office of Management and Budget's Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards

AGENCY:

Office of Management and Budget, Executive Office of the President; Department of Health And Human Services; Farm Service Agency, Commodity Credit Corporation, National Institute of Food and Agriculture, Rural Utilities Service, Rural Business-Cooperative Service, Rural Housing Service, Rural Utilities Service, Farm Service Agency, Department of Agriculture; Department of State; Agency for International Development; Department of Veterans Affairs; Department of Energy; Department of Treasury; Department of Defense; Department of Transportation; Department of Commerce; Department of the Interior; Environmental Protection Agency; National Aeronautics and Space Administration; Corporation for National and Community Service; Social Security Administration; Department of Housing And Urban Development; National Science Foundation; National Archives and Records Administration; Small Business Administration; Department of Justice; Department of Labor; Federal Emergency Management Agency, Department of Homeland Security; Institute of Museum and Library Services; National Endowment for the Arts; National Endowment for the Humanities; Department of Education;, Office of National Drug Control Policy, Executive Office of the President; Gulf Coast Ecosystem Restoration Council.

ACTION:

Interim final rule.

SUMMARY:

This joint interim final rule implements for all Federal award-making agencies the final guidance Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) published by the Office of Management and Budget (OMB) on December 26, 2013. This rule is necessary in order to incorporate into regulation and thus bring into effect the Uniform Guidance as required by OMB. Implementation of this guidance will reduce administrative burden and risk of waste, fraud, and abuse for the approximately $600 billion per year awarded in Federal financial assistance. The result will be more Federal dollars reprogrammed to support the mission, new entities able to compete and win awards, and ultimately a stronger framework to provide key services to American citizens and support the basic research that underpins the United States economy.

DATES:

Effective date:

This interim final rule is effective on December 26, 2014. The incorporation by reference of certain publications listed in the rule is approved by the Director of the Federal Register as of December 26, 2014.

Implementation dates:

For grants authorized under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, this rule is applicable for emergency or major disaster declarations issued on or after December 26, 2014. For non-Federal entities that are nonprofit organizations or institutions of higher education (IHEs), there is a one-year grace period for implementation of the procurement standards in 2 CFR 200.317 through 200.326. As will be detailed in the 2015 OMB Compliance Supplement, non-Federal entities choosing to delay implementation for the procurement standards will need to specify in their documented policies and procedures that they continue to comply with OMB circular A-110 for one additional fiscal year which begins after December 26, 2014.

Comment date:

To be assured of consideration, comments must be received by OMB electronically through

www.regulations.gov

no later than midnight Eastern Standard Time (E.S.T.) on February 17, 2015.

ADDRESSES:

Comments should be submitted to

www.regulations.gov

.

FOR FURTHER INFORMATION CONTACT:

For general information, please contact Victoria Collin or Gil Tran at the OMB Office of Federal Financial Management, 175 17th St. NW., Washington, DC 20500, or via telephone at (202) 395-3993. You may submit comments via the Federal eRulemaking Portal at

www.regulations.gov

, Docket Number OMB-2014-0006. Follow the instructions for submitting comments.

SUPPLEMENTARY INFORMATION:

Background

This joint interim final rule implements for all Federal award-making agencies the final guidance

Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards

published by the Office of Management and Budget (OMB) on December 26, 2013 in 2 CFR part 200 (Uniform Guidance—available at 78 FR 78589). The Uniform Guidance followed on a Notice of Proposed Guidance issued February 1, 2013 (available at 78 FR 7282), and an Advanced Notice of Proposed Guidance issued February 28, 2012 (available at 77 FR 11778). The final guidance incorporated feedback received from the public in response to those earlier issuances. Additional supporting resources are available from the Council on Financial Assistance Reform at

www.cfo.gov/COFAR

.

The Uniform Guidance delivered on two presidential directives; Executive Order 13520 on Reducing Improper Payments (74 FR 62201; November 15, 20019), and February 28, 2011 Presidential Memorandum on Administrative Flexibility, Lower Costs, and Better Results for State, Local, and Tribal Governments, (Daily Comp. Pres. Docs.;

http://www.gpo.gov/fdsys/pkg/DCPD-201100123/pdf/DCPD-201100123.pdf

). It reflected more than two years of work by the Council on Financial Assistance Reform to improve the efficiency and effectiveness of Federal financial assistance. For a detailed discussion of the reform and its impacts, please see the

Federal Register

notice for the issuance of the final guidance (78 FR 78589).

With this interim final rule, OMB is amending the uniform guidance to make technical corrections where needed, and Federal awarding agencies are joining together to implement the Uniform Guidance in their respective chapters of title 2 of the CFR. With respect to the technical corrections that OMB is issuing, these corrections are included only where it has come to the attention of the COFAR that particular language in the final guidance did not match with the COFAR's intent and would result in an erroneous implementation of the guidance. These technical corrections will go into effect at the time of the effective date of this interim final rule.

Among these technical corrections, please note in particular, parts 25, 170, and 180 are amended to reflect that the Central Contractor Registration (CCR) and Excluded Parties List System (EPLS) no longer exist as stand-alone systems; their functionalities are now available in the System of Award Management (SAM).

2 CFR parts 25, 180 and, 200 are revised to remove references to the Dun and Bradstreet (D&B) Data Universal Numbering System (DUNS) and replace them with the term `unique entity identifier'. This change is consistent with Administration priorities to technically refine existing regulations. The specific standard for this unique entity identifier will be in accordance with the requirements of SAM. This revision does not indicate a change in current policy.

References to the Federal Awardee Performance and Integrity Information System (FAPIIS) remain in 2 CFR part 200 reflecting that final guidance for Federal grants and cooperative agreements will be published following the issuance of this interim final rule.

2 CFR 200.110 Effective/applicability date is revised to allow a grace period of one fiscal year for non-Federal entities to implement changes to their procurement policies and procedures in accordance with sections 200.317 through 200.336 Procurement Standards.

Finally, 2 CFR 200.320 Methods of Procurement paragraph (c), the requirement for sealed bids to be advertised and opened “publicly” is limited as was originally intended to state, local and tribal entities. Other requirements in the section remain as originally published.

In addition, throughout the guidance, the COFAR changed the word “should” to “must” to reflect longstanding policies that have been requirements in practice, but which may have been misinterpreted as optional with the usage of the word “should”. Other technical corrections are made to eliminate conflicting or unclear language and grammatical inconsistencies or citation errors throughout.

With respect to the implementing regulations that Federal awarding agencies are issuing, any agencies that have received OMB approval for an exception to the Uniform Guidance have included the resulting language in their regulations. OMB has only approved exceptions to the Uniform Guidance where they are consistent with existing policy. Further, agencies are providing additional language beyond that included in 2 CFR part 200, consistent with their existing policy, to provide more detail with respect to how they intend to implement the policy, where appropriate. Agencies are not making new policy with this interim final rule; all regulatory language included here should be consistent with either the policies in the Uniform Guidance or the agencies' existing policies and practices. Three agencies have requested special accommodation with respect to the format of their implementing language. The National Science Foundation, the Department of Education, and the Department of Health and Human Services have included agency-specific preamble language as follows:

National Science Foundation

The National Science Foundation (NSF) has received approval from OMB to implement 2 CFR part 200 via use of a policy, rather than a regulation. In the interest of establishing a single location for each of the Departments' and Agencies' implementation of the Uniform Guidance, per OMB's request, NSF has provided a link to its policy implementation of OMB's Uniform Guidance in 2 CFR part 2500 for inclusion in this issuance.

Department of Education

The Secretary of the Department of Education takes one exception from the Uniform Guidance and makes one clarification regarding another section of the Uniform Guidance (discussed more fully later in this section of the preamble). The Secretary also describes the technical amendments needed to conform to the guidance in 2 CFR part 200. The Secretary publishes this special section of the joint preamble to provide the basis and purpose for the exception and clarification.

The Secretary also seeks comments on whether any of the requirements imposed under our adoption of the Uniform Guidance conflict with any of the requirements in the Department's statutes and regulations.

Exception and Clarification

An exception to the Uniform Guidance is required because the Secretary lacks authority to delegate functions to the Office of Management and Budget (OMB), as contemplated by

the Uniform Guidance. In particular, 2 CFR 200.102(a) would effectively delegate one of the Secretary's functions—granting exceptions to the regulations as promulgated by the Department—to employees of OMB. Section 412 of the Department of Education Organization Act (20 U.S.C. 3472) permits the Secretary to delegate functions of the Department to officers and employees of the Department, but neither that section or any other statute permits the Secretary to delegate to OMB the authority to grant exceptions to the Department's regulations. The Secretary is therefore modifying the regulation in 2 CFR 200.102(a) to authorize the Secretary to grant exceptions to the regulations after consultation with appropriate officials at OMB. This exception is stated in 2 CFR 3474.5.

The Secretary also clarifies that the Department's authority under 2 CFR 200.207, Specific conditions, also permits the Department to designate grants and grantees as high risk. The Department has long used the authority under 34 CFR 74.14, Special award conditions, and 80.12, Special grant or subgrant conditions for “high-risk” grantees, to impose high-risk conditions on both individual grants and individual grantees. While these two sections did not both use the term “high-risk,” they established identical standards for imposing special conditions on grantees. Under these regulations, the Department has imposed high-risk conditions on specific grants and grantees in appropriate circumstances regardless of whether the grantee was subject to part 74 or part 80. The guidance in 2 CFR 200.205 and 200.207 replaces the requirements in 34 CFR 74.14 and 80.12 and authorizes specific conditions under virtually identical standards to those formerly in parts 74 and 80. Because the standards in 2 CFR 200.207 are virtually identical to those in former 34 CFR parts 74 and 80, the Secretary clarifies that the Department will now use the standards in 2 CFR 200.205 and the procedures in 2 CFR 200.207 to impose specific or high risk conditions on grants and grantees, depending on the circumstances in each case.

The current regulations in parts 74 and 80 contain provisions that authorize the Department to impose conditions on grants or grantees if an applicant or grantee (1) Has a history of poor performance; (2) Is not financially stable; (3) Has a management system that does not meet the standards prescribed in this part; (4) Has not conformed to the terms and conditions of a previous award; or (5) Is not otherwise responsible.

The guidance in 2 CFR 200.205 requires agencies to conduct a risk evaluation whenever making new awards, authorizing agencies to use a risk-based approach, and may consider any items such as the following: (1) Financial stability; (2) Quality of management systems and ability to meet the management standards prescribed in Part 200; (3) History of performance. The applicant's record in managing Federal awards, if it is a prior recipient of Federal awards, including timeliness of compliance with applicable reporting requirements, conformance to the terms and conditions of previous Federal awards and, if applicable, the extent to which any previously awarded amounts will be expended prior to future awards; (4) Reports and findings from audits performed under Subpart F—Audit Requirements of Part 200 or the reports and findings of any other available audits; and (5) The applicant's ability to effectively implement statutory, regulatory, or other requirements imposed on non-Federal entities.

The standards identified in 2 CFR 200.205 may be used both at the time of the award or after an award is made if the Department discovers new risks posed under a particular grant or by a particular grantee. While the standards in 2 CFR 200.205 provide more detail and are stated in neutral terms, the same underlying reasons apply to the standards used by the Department to impose high-risk conditions under 34 CFR 74.14 and 80.12. Therefore, the Secretary clarifies that the standards in 2 CFR 200.205, which do not mention “high-risk” conditions, can be used in appropriate cases by Department officials to impose high-risk conditions on individual grants or on specific grantees.

Technical Amendments and Removal of Obsolete Parts

These interim final regulations also make technical changes: (1) To the Department's regulations in the Education Department General Administrative Regulations (EDGAR), 34 CFR parts 75, 76, and 77, to conform to the Uniform Guidance in part 2 CFR part 200; and (2) to update program regulations that currently reference 34 CFR parts 74 and 80 or specific sections in those parts. In addition, the Department is removing, rather than updating, the following parts of title 34 of the CFR that reference parts 74 and 80 but that are no longer authorized by statute:

Part 380, Special Projects and Demonstrations for Providing Supported Employment Services to Individuals with the Most Severe Disabilities and Technical Assistance Projects:

previously authorized by section 311(c) of the Rehabilitation Act of 1973 (former 29 U.S.C. 777a(c)); the authority for this program was not retained when Congress reauthorized the Act in 1998 (P.L. 105-220).

Part 426, Cooperative Demonstration Program:

previously authorized by section 420A of the Carl D. Perkins Vocational and Applied Technology Act (former 20 U.S.C. 2420a); the authority for this program was not retained when Congress reauthorized the Perkins Act in 1998 (Pub. L. 105-332).

Part 460, Adult Education—General Provisions:

previously authorized by the Adult Education Act (former 20 U.S.C. 1201

et seq.

), which was repealed by section 251(a)(1) of Pub. L. 105-220 (1998).

Part 464, State Literacy Resource Centers Program:

previously authorized by section 356 of the Adult Education Act (former 20 U.S.C. 1208aa), which was repealed by section 251(a)(1) of Pub. L. 105-220 (1998).

Part 491, Adult Education for the Homeless Program:

previously authorized by section 701 of the McKinney-Vento Homeless Assistance Act (former 42 U.S.C. 11421), which was repealed by section 199(b)(1) of P.L. 105-220 (1998).

Part 535, Bilingual Education:

Graduate Fellowship Program: previously authorized by section 7145 of the Elementary and Secondary Education Act of 1965 (ESEA) (former 20 U.S.C. 7475), which was not retained in the 2002 reauthorization of the ESEA (P.L. 107-110).

Part 636, Urban Community Service Program:

previously authorized by title XI, part A of the Higher Education Act of 1965 (HEA) (former 20 U.S.C. 1136-1136h), which was repealed by section 202 of P.L. 105-244 (1998).

Part 1100, National Institute for Literacy:

Literacy Leader Fellowship Program: previously authorized by section 384(e) of the Adult Education Act (former 20 U.S.C. 1213c(e)), which was repealed by section 251(a)(1) of Pub. L. 105-220 (1998).

Definition of “Grant”

Two of the technical amendments relate to the definitions of “grant” and “award.” These terms are defined in 34 CFR parts 74 and 80, as equivalent terms for financial assistance awarded by the Department. The guidance in 2 CFR 200.24 and 200.51 defines “cooperative agreement” and “grant agreement”, respectively, and these definitions follow the Federal Grant and

Cooperative Agreement Act (31 U.S.C. 6303-6305) language closely for the treatment of grants and cooperative agreements. However, because Department regulations use the terms “grant” and “award” to refer generally to both grants and cooperative agreements, the Department cannot rely on the definition of “grant agreement” in part 200. Instead, we establish definitions of “grant” and “award” in 34 CFR 77.1(c) to include within their scope cooperative agreements as well as grants. Because part 77 defines terms applicable to all programs of the Department, program regulations can continue to use these terms to refer to both types of awards.

General Education Provisions Act Requirements

Section 437(b) of the General Education Provisions Act (GEPA), 20 U.S.C. 1232(b), provides that, immediately following each substantive provision of the Department's regulations, the Department must provide the citations to the particular section or sections of statutory law or other legal authority on which that provision is based. The substantive provision in these interim final regulations that adopts the guidance in 2 CFR part 200 is 2 CFR 3474.1. Because the authority citations for all of the sections adopted by the Department are the same (unless noted otherwise), the Department provides the authority citation for all of the adopted guidance in paragraph (b) of 3474.1. For other sections in Part 3474, the authority citations are provided at the end of each of those sections.

Rulemaking Considerations

The Department is generally required, under the General Education Provisions Act (GEPA), section 437 (20 U.S.C. 1232) and the APA to take comment on proposed rules before they become effective. Also, under the Higher Education Act of 1965 (HEA), section 492, (20 U.S.C. 1098a), all Department regulations for programs authorized under title IV of the HEA are subject to negotiated rulemaking requirements and, under section 482 of the HEA, any title IV regulations that have not been published in final form by November 1 prior to the start of an award year cannot become effective until the beginning of the second award year following the November 1 date. The joint preamble includes waivers of proposed rulemaking and delayed effective date with respect to the APA.

For the same reasons included in the joint preamble, the Secretary has determined that there is good cause to waive proposed rulemaking and delayed effective date under both GEPA and the HEA.

Assessment of Educational Impact

In accordance with section 411 of the General Education Provisions Act, 20 U.S.C. 1221e-4, the Secretary particularly requests comments on whether these interim final regulations would require transmission of information that any other agency or authority of the United States gathers or makes available.

Department of Health and Human Services

The Department of Health and Human Services (HHS) is adapting OMB's final guidance with certain amendments, based on existing HHS regulations, to supplement the guidance as needed for the Department. HHS' amendments are described below, and incorporated into HHS' implementing regulations at 45 CFR part 75. As with NSF, HHS has, in the interest of establishing a single location for each Department's implementation of the uniform guidance, provided a link to its policy implementation of OMB's uniform guidance in 2 CFR part 300. The changes described below are categorized as regulation-wide formatting changes, additions, or revisions. The items described as formatting changes have been made throughout the text of the HHS regulation to accommodate the structure and content of the HHS guidance. All other changes are listed in order by section.

As indicated in the common preamble, OMB has afforded ample opportunity for notice and an opportunity for comment on the provisions contained therein. In addition, HHS finds that there is good cause under 5 U.S.C. 553(b)(B) and (d)(3) to dispense with the opportunity for advance notice and opportunity for public comment and good cause to publish this rule with an effective date of December 26, 2014. All of the additions and modifications listed below already exist in codified regulations (45 CFR part 74 or part 92), and thus are currently applicable to HHS grantees. As such, all HHS grantees should already be in compliance with these provisions. Consequently, no changes on the part of grantees are expected. In order to comport with OMB's timeframe for Federal agency adoption of these regulations, it is impracticable and contrary to the public interest to delay this rule for the purpose of soliciting advance public comment or to have a delayed effective date for these minor changes that reflect current HHS rules and practice.

HHS is making the rule effective on December 26, 2014, in order to comport with all other Federal agency adoption, and to ensure consistency in all grant-making procedures. Failure to do so could have unpredictable negative effects on grants implementation.

For the above reasons, the Secretary issues this rule as an interim final rule. However, HHS will consider and address comments that are received within 60 days of the date this interim final rule is published in the

Federal Register

.

In 45 CFR part 75, HHS incorporates the guidance in 2 CFR part 200 with the following adjustments:

1. Changes “Federal Awarding Agency” to “HHS Awarding Agency” where applicable.

2. Removes titles of sections within the regulatory text to improve readability.

3. Revises the numbering schema to facilitate the inclusion of additional definitions and to facilitate the inclusion of material specific to HHS awards. All such numbering changes are updated throughout the document, including internal references.

4. Includes Appendix IX, “Principles for Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals,” with appropriate numbering schema.

5. Renumber sections, especially Subpart D, to facilitate the inclusion of material specific to HHS awards.

6. Changes citations to reflect location in 45 CFR part 75.

7. Inserts reserved sections throughout the regulation to accommodate future changes.

(a) HHS adopts 2 CFR 200.0 in 45 CFR 75.1, with the following additional acronyms, added to existing list in appropriate alphabetical order:

(1) HHS U.S. Department of Health and Human Services

(2) SF 424 Standard Form 424 series and Form Families Application for Federal Assistance

(b) HHS adopts the definitions found in 2 CFR 200.2-200.99 in 45 CFR 75.2 with the following changes.

(1) Adds the following new definitions:

(i) “Awardee.”

(ii) “Commercial organization.”

(iii) “Departmental Appeals Board.”

(iv) “Excess property.”

(v) “Expenditure report.”

(vi) “Grantee.”

(vii) “HHS awarding agency.”

(viii) “Principal Investigator/Program Director/(PI/PD).”

(ix) “Prior approval.”

(x) “Project period.”

(xi) “Surplus property.”

(xii) “Suspension of award activities.”

(xiii) “Total Costs.”

(2) Revises the following specific definitions as described below:

(i) Cost sharing or matching to add “This may include the value of allowable third party in-kind contributions, as well as expenditures by the recipient.” after the first sentence.

(ii) Indirect cost rate proposal to add “and Appendix IX” after “Appendix VII”.

(iii) Personal property to add “such as copyrights, patents, or securities” at the end of the definition.

(iv) Recipient to add “usually but not limited to non-Federal entities,” in the first sentence, after “entity,”.

(v) Research and Development to replace “non-Federal entities” with “HHS award recipients”.

(3) All definitions, including the HHS additions, are in alphabetical order.

(c) HHS adopts 2 CFR 200.104 in 45 CFR 75.104 by adding a new subsection to note the supersession of 45 CFR parts 74 and 92 and renumbers accordingly.

(d) HHS adopts 2 CFR 200.106 in 45 CFR 75.106 and articulates HHS implementation of 2 CFR part 200.

(e) HHS adopts 2 CFR 200.108 in 45 CFR 75.108 and articulates to whom changes for HHS regulations should be addressed.

(f) HHS adopts 2 CFR 200.109 in 45 CFR 75.109 to articulate HHS' review period for its regulations.

(h) HHS adopts 2 CFR 200.112 in 45 CFR 75.112 and articulates HHS' establishment of conflict of interest policies and disclosure criteria.

(i) HHS adopts 2 CFR 200.205 in 45 CFR 75.205 and adds text at the end of subsection (a) to reference suspension and debarment regulations.

(j) HHS adopts 2 CFR 200.206 in 45 CFR 75.206 and amends the section heading and adds new subsections (c) and (d) to specify the forms required.

(k) HHS adopts 2 CFR 200.208 in 45 CFR 75.208 and adds after the introductory language new subsections (a) and (b) to reference 45 CFR part 87 and § 75.206(d)(2).

(l) HHS adopts 2 CFR 200.212 in 45 CFR 75.212 and changes “2 CFR part 180” to read “2 CFR parts 180 and 376”.

(m) HHS adds new 45 CFR 75.213 to reference The Metric Conversion Act and HHS' use of Executive Order 12770.

(n) HHS adds new 45 CFR 75.214 to reference lobbying restrictions in 45 CFR part 93.

(o) HHS adds new 45 CFR 75.215 to reference provisions for awards to Commercial Organizations.

(p) HHS adds new 45 CFR 75.216 to reference provisions for awards to Federal Agencies.

(q) HHS adds new 45 CFR 75.217 to reference standards for faith-based organizations in 45 CFR part 87.

(r) HHS adopts 2 CFR 200.305 in 45 CFR 75.305 and adds at the end of subsection (b)(5)(ii) “(See 45 CFR part 30).”.

(s) HHS adopts 2 CFR 200.307 in 45 CFR 75.307 with the following changes:

(1) revise subsection (c) to include details concerning the Patent and Trademark Laws Amendments, 34 U.S.C. 200-212, and conditions described under § 75.207 or § 75.215.”.

(t) HHS adopts 2 CFR 200.308 in 45 CFR 75.308 with the following changes:

(1) Add subsections (c)(9) through (11) to include research patient care costs, subaward relations to Simplified Acquisition Threshold, and the disposition of property and equipment.

(2) add at the end, new subsection (j) to detail the appropriate authorizing personnel for revisions.

(u) HHS adopts 2 CFR 200.309 in 45 CFR 75.309 to articulate the use of funds within the period of performance.

(v) HHS adds 45 CFR 75.316 to articulate HHS' policy on property management standards and procedures.

(w) HHS adopts 2 CFR 200.310 in 45 CFR 75.317 with the insertion of “other” preceding “property owned” in the first sentence.

(x) HHS adopts 2 CFR 200.311 in 45 CFR 75.318 by revising subsection (b):

(1) in subparagraph (b), by inserting subparagraph (1) following “Use.”;

(2) by adding subparagraph (b)(2) to articulate the use of real property in other federally-sponsored projects.

(3) in subparagraph (c), after “is no longer needed”, adding the phrase “as provided in subsection (b).”.

(y) HHS adopts 2 CFR 200.313 in 45 CFR 75.320, by adding, at the end of subsection (c)(4), “subject to the approval of the HHS awarding agency.”.

(z) HHS adopts 2 CFR 200.315 in 45 CFR 75.322 with the following changes:

(1) The title is amended to read “Intangible property and copyrights.”;

(2) Add new subsection (f) to exclude commercial organizations from paragraph (e)(1).

(aa) HHS adopts 2 CFR 200.318 in 45 CFR 75.327, with the following changes:

(1) Add, “In certain circumstances, contracts with certain parties are restricted by agencies' implementation of Executive Orders 12549 and 12689. (See 2 CFR part 376.)” at the end of subparagraph (h).

(2) Add, new subparagraph (l) to articulate the appropriateness of the procurement instrument.

(bb) HHS adopts 2 CFR 200.320 in 45 CFR 75.329 and changes the title.

(cc) HHS adopts 2 CFR 200.325 in 45 CFR 75.334, and adds new subparagraph (d) to reference certificates of authority pursuant to 31 CFR part 223.

(dd) HHS adopts 2 CFR 200.338 in 45 CFR 75.371, with the following changes:

(1) in subparagraph (c), add “(suspension of award activities)” after “suspend”.

(2) in subparagraph (d) add “at 2 CFR part 376” after “regulations”.

(ee) HHS adopts 2 CFR 200.341 in 45 CFR 75.374, with an additional subparagraph (b) to reference additional appeals procedures.

(ff) HHS adopts 2 CFR 200.343 in 45 CFR 75.381, and, in subparagraph (g), changes “one year” to “180 calendar days”.

(gg) HHS adopts 2 CFR 200.345 in 45 CFR 75.391, and adds, at the end of subparagraph (b), “(See also HHS Claims Collection regulations at 45 CFR part 30.)”.

(hh) HHS adopts 2 CFR 200.407 in 45 CFR 75.407, with the additional subparagraphs (b) and (c) to articulate additional prior approval conditions.

(ii) HHS adopts 2 CFR200.439 in 45 CFR 75.439, and amend subsection (a) to remove definition numbers.

(jj) HHS adds new 45 CFR 75.476 to articulate independent research and development costs.

(kk) HHS adopts 2 CFR 200.501 in 45 CFR 75.501, by adding new subparagraphs (i) and (j) to articulate the audit options and exemptions for commercial organizations.

Additional Outreach and Training

Since the issuance of the Uniform Guidance on December 26, 2013, the COFAR has developed and provided numerous additional resources to assist stakeholders in learning about the guidance. For a complete list and access to these resources, please visit the COFAR Web site at

cfo.gov/COFAR

. Resources available include a Frequently Asked Questions document, as well as several training webcasts. Please note that the Frequently Asked Questions document will be referenced as additional guidance in the 2015 issuance of Appendix XI to Part 200—Compliance Supplement.

Regulatory Analysis

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Ch. 3506; 5 CFR 1320 Appendix A.1) (PRA), each agency reviewed its final rule and determined that there are no new

collections of information contained therein. However, the OMB uniform guidance in 2 CFR 200 may have a negligible effect on burden estimates for existing information collections, including recordkeeping requirements for non-Federal entities that receive Federal awards.

Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) requires an agency that is issuing a final rule to provide a final regulatory flexibility analysis or to certify that the rule will not have a significant economic impact on a substantial number of small entities. This common interim final rule implements OMB final guidance issued on December 26, 2013, and will not have a significant economic impact beyond the impact of the December 2013 guidance.

Executive Order 12866 Determination

Pursuant to Executive Order 12866, OMB's Office of Information and Regulatory Affairs (OIRA) has designated this joint interim final rule to be not significant.

Administrative Procedure Act (5 U.S.C. 553)

Waiver of Proposed Rulemaking

In General

Under the Administrative Procedure Act (APA), some of the agencies joining in this issuance are generally required to publish a notice of proposed rulemaking and provide the public with an opportunity to comment on proposed regulations prior to establishing a final rule. However, as noted earlier in the joint preamble, OMB offered the public two opportunities to comment on the Uniform Guidance, first through an advanced notice of proposed guidance and, second, through a notice of proposed guidance. OMB considered over 300 comments submitted in response to each of these notices. OMB has directed agencies to adopt the uniform guidance in part 200 without change, except to the extent that an agency can demonstrate that any conflicting agency requirements are required by statute or regulations, or consistent with longstanding practice and approved by OMB. Finally, OMB made clear that the requirements in 2 CFR part 200, including the audit requirements in subpart F, will apply, starting on December 26, 2014, giving recipients of all types of financial assistance advance notice of when the regulations would become effective. Therefore, under 5 U.S.C. 553(b)(B), there is good cause for waiving proposed rulemaking as unnecessary.

Department of Justice

The rule issued by the Department of Justice concerns matters relating to “grants, benefits, or contracts,” 5 U.S.C. 553(a)(2), and is therefore exempt from the requirement of prior notice and comment.

Waiver of Delayed Effective Date

In General

Generally, those agencies that are subject to the APA are required to delay the effective date of their final regulations by 30 days after publication, as required under 5 U.S.C. 553(d), unless an exception under subsection (d) applies.

Under 5 U.S.C. 553(d), these agencies may waive the delayed effective date requirement if the they find good cause and explain the basis for the waiver in the final rulemaking document or if the regulations grant or recognize an exemption or relieve a restriction. In the present case, there is good cause to waive the delayed effective date for two reasons.

First, OMB informed the public on December 26, 2013, that agencies would be required to adopt the Uniform Guidance and make it effective by December 26, 2014. The public has had significant time to prepare for the promulgation of these interim final regulations.

Second, while these interim final regulations are based on a new, more effective method for establishing government-wide requirements, the substance of the regulations are, in most cases, virtually identical to the requirements that exist in current agency regulations. In virtually all cases where the new regulations depart from prior OMB guidance to agencies, the new regulations reduce burdens on the public, for example, by increasing the threshold for single audits from $500,000 to $750,000.

Based on these considerations, those agencies subject to the APA have determined that there is good cause to waive the delayed effective date for these interim final regulations.

Department of Justice

The rule issued by the Department of Justice concerns matters relating to “grants, benefits, or contracts,” 5 U.S.C. 553(a)(2), and is therefore exempt from the requirement of a 30-day delay in the effective date of this rule.

Unfunded Mandates Reform Act of 1995 Determination

Section 202 of the Unfunded Mandates Reform Act of 1995 (Unfunded Mandates Act) (2 U.S.C. 1532) requires that covered agencies prepare a budgetary impact statement before promulgating a rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. If a budgetary impact statement is required, section 205 of the Unfunded Mandates Act also requires covered agencies to identify and consider a reasonable number of regulatory alternatives before promulgating a rule. OMB has determined that this joint interim final rule will not result in expenditures by State, local, and tribal governments, or by the private sector, of $100 million or more in any one year. Accordingly, the Federal agencies participating in this joint interim final rule have not prepared a budgetary impact statement or specifically addressed the regulatory alternatives considered.

Executive Order 13132 Determination

OMB has determined that this joint interim final rule does not have any Federalism implications, as required by Executive Order 13132.

List of Subjects

2 CFR Parts 1, 25, 170, 180, 200, 300, 400, 415, 416, 418, 422, 600, 700, 802, 910, 1000, 1103, 1201, 1327, 1402, 1800, 2205, 2300, 2400, 2500, 2600, 2701, 2800, 2900, 3002, 3187, 3255, 3374, 3474, 3603, and 5900; CFR Parts 761, 785, 1407, 1485, 1703, 1709, 1710, 1717, 1724, 1726, 1737, 1738, 1739, 1740, 1773, 1774, 1775, 1776, 1778, 1779, 1780, 1782, 1783, 1942, 1944, 1951, 1980, 3015, 3016, 3018, 3019, 3022, 3052, 3400, 3401, 3402, 3403, 3405, 3406, 3407, 3415, 3430, 3431, 3570, 3575, 4274, 4279, 4280, 4284, 4285, and 4290; 10 CFR Parts 600, 602, 605, and 733; 13 CFR Part 143; 14 CFR Parts 1260 and 1273; 15 CFR Parts 14 and 24; 20 CFR Parts 435 and 437; 21 CFR Parts 1403-1405; 22 CFR Parts 135, 145, and 226; 24 CFR Parts 84 and 85; 28 CFR Parts 66 and 70; 34 CFR Parts 74, 75, 76, 77, 80, 101, 206, 222, 225, 226, 270, 280, 299, 300, 303, 350, 361, 363, 364, 365, 367, 369, 370, 373, 377, 380, 381, 385, 396, 400, 426, 460, 464, 491, 535, 606, 607, 608, 609, 611, 614, 628, 636, 637, 642, 643, 644, 645, 646, 647, 648, 650, 654, 655, 661, 662, 663, 664, 682, 692, 694, and 1100; 36 CFR Parts 1206, 1207, and 1210; 38 CFR Parts 41 and 43; 40 CFR Parts 30, 31, 33, 35, 40, 45, 46, and 47; 43 CFR Part 12; 44 CFR Parts 13, 78, 79, 152, 201, 204, 206, 207, 208, 304, 360, and 361; 45 CFR Parts 74, 75, 92, 1235, 2510, 2520, 2541, 2543, 2551, 2552, and 2553; 45 CFR Parts 75, 602, 1157, 1174, 1180, and 1183; 49 CFR Parts 18 and 19

Accounting, Administrative practice and procedure, Adult education, Aged, Agriculture, Appeal procedures, American Samoa, Auditing, Audit requirements, Bilingual education, Blind, Business and Industry, Broadband, Charter schools, Civil rights, Colleges and universities, Community development, Community facilities, Communications, Copyright, Cost principles, Cooperative agreements, Credit, Credit enhancement, Cultural exchange programs, Direct loan programs, Economic development, Education, Education of disadvantaged, Education of individuals with disabilities, Educational facilities, Educational research, Educational study programs, Elementary and secondary education, Employment, Equal educational opportunity, Electric power, Electric power rates, Electric utilities, Energy efficiency improvements, Federally affected areas, Farmers, Federal aid programs, Government contracts, Guam, Home improvement, Homeless, Human research subjects, Hospitals, Indians, Industrial park, Indians—education, Infants and children, Insurance, Intergovernmental relations, International organizations, Manpower training programs, Nonprofit organizations, State and local governments, Grant programs, Grant programs—digital televisions, Grant programs—education, Grant programs—health, Grant programs housing and community development, Grant programs—social programs, Grants administration, Guaranteed loans, Homeless, Intergovernmental relations, Inventions and patents, Loan programs, Loan programs—agriculture, Loan program—business and industry, Loan programs—communications, Loan programs—energy, Loan programs—housing and community development, Loan security, Migrant labor, Mortgage insurance, Mortgages, Nonprofit organizations, Northern Mariana Islands, Pacific Islands Trust Territory, Privacy, Private schools, Renewable energy systems, Reporting and recordkeeping requirements, Research misconduct, Rural areas, Rural housing, Scholarships and fellowships, School construction, Schools, Science and technology, Securities, Small business, State and local governments, Student aid, Subsidies, Telecommunications, Teachers, Urban areas, Veterans, Virgin Islands, Vocational education, Vocational rehabilitation, Telephone, Waste treatment and disposal, Waste treatment and disposal—domestic, Water pollution control, Water resources, Water supply, Water supply—domestic, Watersheds, Women.

2 CFR Part 1500

Accounting, Administrative practice and procedure, Adult education, Aged, Agriculture, Appeal procedures, American Samoa, Auditing, Audit requirements, Bilingual education, Blind, Business and Industry, Broadband, Charter schools, Civil rights, Colleges and universities, Community development, Community facilities, Communications, Copyright, Cost principles, Cooperative agreements, Credit, Credit enhancement, Cultural exchange programs, Direct loan programs, Economic development, Education, Education of disadvantaged, Education of individuals with disabilities, Educational facilities, Educational research, Educational study programs, Elementary and secondary education, Employment, Equal educational opportunity, Electric power, Electric power rates, Electric utilities, Energy efficiency improvements, Federally affected areas, Farmers, Federal aid programs, Government contracts, Guam, Home improvement, Homeless, Human research subjects, Hospitals, Indians, Industrial park, Indians—education, Infants and children, Insurance, Intergovernmental relations, International organizations, Manpower training programs, Nonprofit organizations, State and local governments, Grant programs, Grant programs-—digital televisions, Grant programs—education, Grant programs—health, Grant programs housing and community development, Grant programs—social programs, Grants administration, Guaranteed loans, Homeless, Incorporation by reference, Intergovernmental relations, Inventions and patents, Loan programs, Loan programs—agriculture, Loan programs—business and industry, Loan programs—communications, Loan programs—energy, Loan programs—housing and community development, Loan security, Migrant labor, Mortgage insurance, Mortgages, Nonprofit organizations, Northern Mariana Islands, Pacific Islands Trust Territory, Privacy, Private schools, Renewable energy systems, Reporting and recordkeeping requirements, Research misconduct, Rural areas, Rural housing, Scholarships and fellowships, School construction, Schools, Science and technology, Securities, Small business, State and local governments, Student aid, Subsidies, Telecommunications, Teachers, Urban areas, Veterans, Virgin Islands, Vocational education, Vocational rehabilitation, Telephone, Waste treatment and disposal, Waste treatment and disposal—domestic, Water pollution control, Water resources, Water supply, Water supply—domestic, Watersheds, Women.

Executive Office of the President, Office of Management and Budget

Under the authority of the Chief Financial Officer Act of 1990 (31 U.S.C. 503), the Office of Management and Budget amends 2 CFR parts 1, 25, 170, 180, and 200 by making the following correcting amendments:

TITLE 2 —GRANTS AND AGREEMENTS

CHAPTER I —OFFICE OF MANAGEMENT AND BUDGET GOVERNMENTWIDE GUIDANCE FOR GRANTS AND AGREEMENTS

PART 1—ABOUT TITLE 2 OF THE CODE OF FEDERAL REGULATIONS AND SUBTITLE A

1. The authority citation for part 1 continues to read as follows:

Authority:

31 U.S.C. 503; 31 U.S.C. 1111; 41 U.S.C. 405; Reorganization Plan No. 2 of 1970; E.O. 11541, 35 FR 10737, 3 CFR, 1966-1970, p. 939.

2. Revise § 1.215 to read as follows:

§ 1.215

Relationship to previous issuances.

Although some of the guidance was organized differently within OMB circulars or other documents, much of the guidance in this subtitle existed prior to the establishment of title 2 of the CFR. Specifically:

Guidance

in * * *

On

* * *

Previously

was in * * *

(a) Chapter I, part 180

Nonprocurement debarment and suspension

OMB guidance that conforms with the government-wide common rule (see 60 FR 33036, June 26, 1995).

(b) Chapter I, part 182

Drug-free workplace requirements

OMB guidance (54 FR 4946, January 31, 1989) and a government-wide common rule (as amended at 68 FR 66534, November 26, 2003).

(c) Chapter II, part 200

Uniform administrative requirements, cost principles, and audit requirements for federal awards

OMB Circulars A-21, “Cost Principles for Educational Institutions” (Chapter II, part 225); A-87, “Cost Principles for State, Local and Indian Tribal Governments” (Chapter II, part 225); A-89, “Federal Domestic Assistance Program Information”; ”; A-102 and a government-wide common rule (53 FR 8034, March 11, 1988); A-110, “Uniform Administrative Requirements for Awards and Other Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations” (Chapter II, part 215); A-122, “Cost Principles for Non-Profit Organizations” (Chapter II, part 230); and A-133 “Audits of States, Local Governments and Non-Profit Organizations”.

PART 25—UNIVERSAL IDENTIFIER AND SYSTEM OF AWARD MANAGEMENT

3. The authority citation for part 25 continues to read as follows:

Authority:

Pub. L. 109-282; 31 U.S.C. 6102.

4. Revise the heading of 2 CFR part 25 to read as set forth above.

§§ 25.100 and 25.310

[Amended]

5. Amend §§ 25.100 and 25.310 and Appendix A to Part 25 by removing references to “Central Contractor Registration” wherever they appear, and adding, in their place, “System of Award Management”.

§§ 25.100, 25.110, 25.200, 25.205, 25.310, and Appendix A to Part 25

[Amended]

6. Amend §§ 25.100, 25.110, 25.200, 25.205, 25.310, and Appendix A to Part 25 by removing references to “CCR” wherever they appear, and adding, in their place, “SAM”.

§§ 25.100, 25.110, 25.200, 25.205, 25.210, 25.215, 25.315, and Appendix A to Part 25

[Amended]

7. Amend §§ 25.100, 25.110, 25.200, 25.205, 25.210, 25.215, 25.315, and Appendix A to Part 25 by removing references to “Dun and Bradstreet (D&B) Data Universal Numbering System (DUNS) number”, “Data Universal Numbering System (DUNS) Number”, “DUNS” or “DUNS number” wherever they appear, and adding, in their place, “unique entity identifier”.

Appendix A to Part 25 [Amended]

8. Revise Appendix A to Part 25, section I, paragraph c.2. and c.4.b. as follows:

Appendix A to Part 25—Award Term

I. * * *

C. * * *

2.

Unique entity identifier

means the identifier required for SAM registration to uniquely identify business entities.

4. * * *

4.b. The term does not include your procurement of property and services needed to carry out the project or program (for further explanation, see 2 CFR 200.330).

PART 170—REPORTING SUBAWARD AND EXECUTIVE COMPENSATION INFORMATION

9. The authority citation for part 170 continues to read as follows:

Authority:

Pub. L. 109-282; 31 U.S.C. 6102.

Appendix A to Part 170—[Amended]

10. Amend Appendix A to Part 170—Award Term, section I, paragraph b.2.i. by removing “

http://www.ccr.gov

” and add, in its place, “

https://www.sam.gov

”.

PART 180—OMB GUIDELINES TO AGENCIES ON GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)

11. The authority citation for part 180 continues to read as follows:

Authority:

Sec. 2455, Pub. L. 103-355, 108 Stat. 3327; E.O. 12549, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p. 235.

§ 180.25

[Amended]

12. Amend § 180.25 paragraph (a), second sentence by removing “has” and adding, in its place “have”.

§§ 180.45, 180.100, 180.155, 180.300, 180.320, 180.430, 180.500, 180.505, 180.510, 180.515, 180.520, 180.525, and 180.645

[Amended]

13. Amend §§ 180.45, 180.100, 180.155, 180.300, 180.320, 180.430, 180.500, 180.505, 180.510, 180.515, 180.520, 180.525, and 180.645 by removing references to “the EPLS”, wherever they appear, and adding, in their place “SAM Exclusions”.

§ 180.155 and 180.500

[Amended]

14. Amend §§ 180.155 and 180.500 by removing, wherever they appear “EPLS” and adding, in their place “SAM Exclusions”.

15. Amend §§ 180.155 and 180.500 by removing, wherever they appear “Excluded Parties List System” and adding, in their place, “System for Award Management Exclusions”.

16. Revise the heading of Subpart E to read as follows:

Subpart E—System for Award Management Exclusions

§ 180.505

[Amended]

17. Amend § 180.505 paragraph (c) by removing “is” and adding, in its place “are”.

§ 180.515

[Amended]

18. Amend § 180.515 paragraph (a)(7) by removing “Dun and Bradstreet Number (DUNS), or other similar code” and adding, in its place, “unique entity identifier”.

19. Revise § 180.530 to read as follows:

§ 180.530

Where can I find SAM Exclusions?

You may access SAM Exclusions through the Internet, currently at

https://www.sam.gov

.

20. Revise § 180.945 to read as follows:

§ 180.945

System for Award Management Exclusions (SAM Exclusions).

System for Award Management Exclusions (SAM Exclusions)

means the list maintained and disseminated by the General Services Administration (GSA) containing the names and other information about persons who are ineligible.

CHAPTER II—OFFICE OF MANAGEMENT AND BUDGET GUIDANCE

PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS

21. The authority citation for part 200 continues to read as follows:

Authority:

31 U.S.C. 503.

§ 200.0

[Amended]

22. Amend § 200.0 as follows:

(a) Remove the acronyms, “D&B Dun and Bradstreet” and “DUNS Data Universal Numbering System”.

(b) Correct the text “Generally Accepted Government Accounting Standards” to read “Generally Accepted Government Auditing Standards”.

(c) Correct the text “General Accounting Office” to read “Government Accountability Office”.

(d) Add the acronym, “PMS Payment Management System” after the acronym “PII Personally Identifiable Information”.

23. Revise § 200.7 to read as follows:

§ 200.7

Auditor.

Auditor

means an auditor who is a public accountant or a Federal, state, local government, or Indian tribe audit organization, which meets the general standards specified for external auditors in generally accepted government auditing standards (GAGAS). The term auditor does not include internal auditors of nonprofit organizations.

24. Revise § 200.19 paragraphs (a), (b), (c) and add a new paragraph (d) to read as follows:

§ 200.19

Cognizant agency for indirect costs.

(a) For IHEs: Appendix III to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Institutions of Higher Education (IHEs), paragraph C.11.

(b) For nonprofit organizations: Appendix IV to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Nonprofit Organizations, paragraph C.12.

(c) For state and local governments: Appendix V to Part 200—State/Local Governmentwide Central Service Cost Allocation Plans, paragraph F.1.

(d) For Indian tribes: Appendix VII to Part 200—States and Local Government and Indian Tribe Indirect Cost Proposal, paragraph D.1.

§ 200.32

[Removed and Reserved]

25. Remove and reserve § 200.32.

§ 200.42

[Amended]

26. In § 200.42, paragraph (b), remove “should” and add, in its place, “must”.

§ 200.47

[Amended]

27. In § 200.47, paragraph (a), remove “are” and add, in its place, “is”.

§ 200.50

[Amended]

28. In § 200.50, add “, also known as the Yellow Book,” after “GAGAS”.

§ 200.56

[Amended]

29. In § 200.56, third sentence, remove “should” and add, in its place, “must”.

§ 200.57

[Amended]

30. Amend § 200.57 by adding “, and Appendix IX to Part 200—Hospital Cost Principles” after “this part” at the end of the paragraph.

31. Revise § 200.68 to read as follows:

§ 200.68

Modified Total Direct Cost (MTDC).

MTDC

means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs, and with the approval of the cognizant agency for indirect costs.

32. In § 200.80, revise the first sentence to read as follows:

§ 200.80

Program income.

Program income

means gross income earned by the non-Federal entity that is directly generated by a supported activity or earned as a result of the Federal award during the period of performance except as provided in § 200.307 paragraph (f).***

§ 200.90

[Amended]

33. In § 200.90, correct the text “Virgin Islands” to read “U.S. Virgin Islands”.

34. In § 200.101, revise the table in paragraph (b)(1), paragraph (c), the first sentence of paragraph (d)(1), and paragraphs (e)(1)(iv) through (v); and add paragraph (e)(1)(vi) to read as follows:

§ 200.101

Applicability.

(b) ***

(1) ***

ER19DE14.000

(c) Federal awarding agencies may apply subparts A through E of this part to for-profit entities, foreign public entities, or foreign organizations, except where the Federal awarding agency determines that the application of these subparts would be inconsistent with the international obligations of the United States or the statutes or regulations of a foreign government.

(d) * * *

(1) The block grant awards authorized by the Omnibus Budget Reconciliation Act of 1981 (including Community Services, except to the extent that the cost and accounting standards of OMB apply to subrecipients of Community Services Block Grant funds pursuant to 42 U.S.C. 9916(a)(1)(B); * * *

(e) * * *

(1) * * *

(iv) Aid to the Aged, Blind, and Disabled (titles I, X, XIV, and XVI-AABD of the Act, as amended);

(v) Medical Assistance (Medicaid) (title XIX of the Act, 42 U.S.C. 1396-1396w-5) not including the State Medicaid Fraud Control program authorized by section 1903(a)(6)(B) of the Social Security Act (42 U.S.C. 1396b(a)(6)(B)); and

(vi) Children's Health Insurance Program (title XXI of the Act, 42 U.S.C. 1397aa-1397mm).

35. In § 200.102, revise paragraph (b) and the first sentence of paragraph (c) to read as follows:

§ 200.102

Exceptions.

(b) Exceptions on a case-by-case basis for individual non-Federal entities may be authorized by the Federal awarding agency or cognizant agency for indirect costs, except where otherwise required by law or where OMB or other approval is expressly required by this part.

(c) The Federal awarding agency may apply more restrictive requirements to a class of Federal awards or non-Federal entities when approved by OMB, or when, required by Federal statutes or regulations, except for the requirements in Subpart F—Audit Requirements of this part. * * *

§ 200.104

[Amended]

36. Amend § 200.104 paragraph (g) by removing “,” after “Organizations”.

37. In § 200.110, revise paragraph (a) to read as follows:

§ 200.110

Effective/applicability date.

(a) The standards set forth in this part which affect administration of Federal awards issued by Federal awarding agencies become effective once implemented by Federal awarding agencies or when any future amendment to this part becomes final. Federal awarding agencies must implement the policies and procedures applicable to Federal awards by promulgating a regulation to be effective by December 26, 2014 unless different provisions are required by statute or approved by OMB. For the procurement standards in §§ 200.317-200.326, non-Federal entities may continue to comply with the procurement standards in previous OMB guidance (superseded by this part as described in § 200.104) for one additional fiscal year after this part goes into effect. If a non-Federal entity chooses to use the previous procurement standards for an additional fiscal year before adopting the procurement standards in this part, the non-Federal entity must document this decision in their internal procurement policies.

38. In § 200.200, revise paragraph (a) to read as follows:

§ 200.200

Purpose.

(a) Sections 200.201 Use of grant agreements (including fixed amount awards), cooperative agreements, and contracts through 200.208 Certifications and representations prescribe instructions and other pre-award matters to be used in the announcement and application process.

39. In § 200.201, revise paragraph (b)(1) to read as follows:

§ 200.201

Use of grant agreements (including fixed amount awards), cooperative agreements, and contracts.

(b) * * *

(1) The Federal award amount is negotiated using the cost principles (or other pricing information) as a guide. The Federal awarding agency or pass-through entity may use fixed amount awards if the project scope is specific and if adequate cost, historical, or unit pricing data is available to establish a fixed amount award based on a reasonable estimate of actual cost. Payments are based on meeting specific requirements of the Federal award. Accountability is based on performance and results. Except in the case of termination before completion of the Federal award, there is no governmental review of the actual costs incurred by the non-Federal entity in performance of the award. Some of the ways in which the Federal award may be paid include, but are not limited to:

40. In § 200.203, amend paragraph (c)(2) by removing the reference to “paragraph (b)” and adding in its place “paragraph (c)(4)”, and revise paragraph (c)(5) to read as follows:

§ 200.203

Notices of funding opportunities.

(c) * * *

(5) Application Review Information including the criteria and process to be used to evaluate applications. See also §§ 200.204 Federal awarding agency review of merit proposals and 200.205 Federal awarding agency review of risk posed by applicants. See also 2 CFR part 27 (forthcoming at time of publication).

41. In § 200.205, revise paragraph (a) to read as follows:

§ 200.205

Federal awarding agency review of risk posed by applicants.

(a) Prior to making a Federal award, the Federal awarding agency is required by 31 U.S.C. 3321 and 41 U.S.C. 2313 note to review information available through any OMB-designated repositories of governmentwide eligibility qualification or financial integrity information, such as SAM Exclusions and “Do Not Pay”. See also suspension and debarment requirements at 2 CFR part 180 as well as individual Federal agency suspension and debarment regulations in title 2 of the Code of Federal Regulations.

42. Revise § 200.207 to read as follows:

§ 200.207

Specific conditions.

(a) The Federal awarding agency or pass-through entity may impose additional specific award conditions as needed, in accordance with paragraphs (b) and (c) of this section, under the following circumstances:

(1) Based on the criteria set forth in § 200.205 Federal awarding agency review of risk posed by applicants;

(2) When an applicant or recipient has a history of failure to comply with the general or specific terms and conditions of a Federal award;

(3) When an applicant or recipient fails to meet expected performance goals as described in § 200.210 Information contained in a Federal award; or

(4) When an applicant or recipient is not otherwise responsible.

(b) These additional Federal award conditions may include items such as the following:

(1) Requiring payments as reimbursements rather than advance payments;

(2) Withholding authority to proceed to the next phase until receipt of evidence of acceptable performance within a given period of performance;

(3) Requiring additional, more detailed financial reports;

(4) Requiring additional project monitoring;

(5) Requiring the non-Federal entity to obtain technical or management assistance; or

(6) Establishing additional prior approvals.

(c) The Federal awarding agency or pass-through entity must notify the applicant or non-Federal entity as to:

(1) The nature of the additional requirements;

(2) The reason why the additional requirements are being imposed;

(3) The nature of the action needed to remove the additional requirement, if applicable;

(4) The time allowed for completing the actions if applicable, and

(5) The method for requesting reconsideration of the additional requirements imposed.

(d) Any specific conditions must be promptly removed once the conditions that prompted them have been corrected.

43. In § 200.210. revise paragraphs (a)(1) and (a)(2) to read as follows:

§ 200.210

Information contained in a federal award.

(a) * * *

(1) Recipient name (which must match the name associated with its unique entity identifier as defined at 2 CFR 25.315);

(2) Recipient's unique entity identifier;

44. Add § 200.212 to subpart C to read as follows:

§ 200.212

Suspension and debarment.

Non-federal entities and contractors are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.

45. Amend § 200.301, the first and third sentence, by removing “governmentwide”.

46. In § 200.303, revise the second sentence of paragraph (a) and revise paragraphs (c) and (e) to read as follows:

§ 200.303

Internal controls.

(a) * * * These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

(c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards.

(e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, state, local, and tribal laws regarding privacy and obligations of confidentiality.

47. In § 200.305, revise paragraphs (b) introductory text, (b)(2)(i), (b)(2)(ii), (b)(6), and (b)(9) to read as follows:

§ 200.305

Payment.

(b) For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. See also § 200.302 Financial management paragraph (b)(6). Except as noted elsewhere in this part, Federal agencies must require recipients to use only OMB-approved standard governmentwide information collection requests to request payment.

(2) * * *

(i) Advance payment mechanisms include, but are not limited to, Treasury check and electronic funds transfer and must comply with applicable guidance in 31 CFR part 208.

(ii) Non-Federal entities must be authorized to submit requests for advance payments and reimbursements at least monthly when electronic fund transfers are not used, and as often as they like when electronic transfers are used, in accordance with the provisions of the Electronic Fund Transfer Act (15 U.S.C. 1693-1693r).

(6) Unless otherwise required by Federal statutes, payments for allowable costs by non-Federal entities must not be withheld at any time during the period of performance unless the conditions of §§ 200.207 Specific conditions, Subpart D—Post Federal Award Requirements of this part, 200.338 Remedies for Noncompliance, or one or more of the following applies:

(9) Interest earned amounts up to $500 per year may be retained by the non-Federal entity for administrative expense. Any additional interest earned on Federal advance payments deposited in interest-bearing accounts must be remitted annually to the Department of Health and Human Services Payment Management System (PMS) through an electronic medium using either Automated Clearing House (ACH) network or a Fedwire Funds Service payment. Remittances must include pertinent information of the payee and nature of payment in the memo area (often referred to as “addenda records” by Financial Institutions) as that will assist in the timely posting of interested earned on federal funds. Pertinent details include the Payee Account Number (PAN) if the payment originated from PMS, or Agency information if the payment originated from ASAP, NSF or another federal agency payment system. The remittance must be submitted as follows:

(i) For ACH Returns:

Routing Number: 051036706

Account number: 303000

Bank Name and Location: Credit Gateway—ACH Receiver St. Paul, MN

(ii) For Fedwire Returns*:

Routing Number: 021030004

Account number: 75010501

Bank Name and Location: Federal Reserve Bank Treas NYC/Funds Transfer Division New York, NY

(* Please note organization initiating payment is likely to incur a charge from your Financial Institution for this type of payment)

(iii) For International ACH Returns:

Beneficiary Account: Federal Reserve Bank of New York/ITS (FRBNY/ITS)

Bank: Citibank N.A. (New York)

Swift Code: CITIUS33

Account Number: 36838868

Bank Address: 388 Greenwich Street, New York, NY 10013 USA

Payment Details (Line 70): Agency

Name (abbreviated when possible) and ALC Agency POC: Michelle Haney, (301) 492-5065

(iv) For recipients that do not have electronic remittance capability, please make check** payable to: “The Department of Health and Human Services.”

Mail Check to Treasury approved lockbox:

HHS Program Support Center, P.O. Box 530231, Atlanta, GA 30353-0231

(** Please allow 4-6 weeks for processing of a payment by check to be applied to the appropriate PMS account)

(v) Any additional information/instructions may be found on the PMS Web site at

http://www.dpm.psc.gov/

.

48. In § 200.306, revise paragraphs (a), (c), and (d) and add paragraph (k) to read as follows:

§ 200.306

Cost sharing or matching.

(a) Under Federal research proposals, voluntary committed cost sharing is not expected. It cannot be used as a factor during the merit review of applications or proposals, but may be considered if it is both in accordance with Federal awarding agency regulations and specified in a notice of funding opportunity. Criteria for considering voluntary committed cost sharing and any other program policy factors that may be used to determine who may receive a Federal award must be explicitly described in the notice of funding opportunity. See also §§ 200.414 Indirect (F&A) costs, 200.203 Notices of funding opportunities, and Appendix I to Part 200—Full Text of Notice of Funding Opportunity.

(c) Unrecovered indirect costs, including indirect costs on cost sharing or matching may be included as part of cost sharing or matching only with the prior approval of the Federal awarding agency. Unrecovered indirect cost means the difference between the amount charged to the Federal award and the amount which could have been

charged to the Federal award under the non-Federal entity's approved negotiated indirect cost rate.

(d) Values for non-Federal entity contributions of services and property must be established in accordance with the cost principles in Subpart E—Cost Principles. If a Federal awarding agency authorizes the non-Federal entity to donate buildings or land for construction/facilities acquisition projects or long-term use, the value of the donated property for cost sharing or matching must be the lesser of paragraphs (d)(1) or (2) of this section.

(k) For IHEs, see also OMB memorandum M-01-06, dated January 5, 2001, Clarification of OMB A-21 Treatment of Voluntary Uncommitted Cost Sharing and Tuition Remission Costs.

49. In § 200.307, revise paragraphs (d) and (e)(2) and add paragraph (g) to read as follows:

§ 200.307

Program income.

(d)

Property.

Proceeds from the sale of real property, equipment, or supplies are not program income; such proceeds will be handled in accordance with the requirements of Subpart D—Post Federal Award Requirements of this part, Property Standards §§ 200.311 Real property, 200.313 Equipment, and 200.314 Supplies, or as specifically identified in Federal statutes, regulations, or the terms and conditions of the Federal award.

(e) * * *

(2)

Addition.

With prior approval of the Federal awarding agency (except for IHEs and nonprofit research institutions, as described in paragraph (e) of this section) program income may be added to the Federal award by the Federal agency and the non-Federal entity. The program income must be used for the purposes and under the conditions of the Federal award.

(g) Unless the Federal statute, regulations, or terms and conditions for the Federal award provide otherwise, the non-Federal entity has no obligation to the Federal awarding agency with respect to program income earned from license fees and royalties for copyrighted material, patents, patent applications, trademarks, and inventions made under a Federal award to which 37 CFR part 401,”Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Awards, Contracts and Cooperative Agreements” is applicable.

50. In § 200.308, revise paragraphs (c)(4), (c)(6), and (c)(7); add paragraph (c)(8); and revise paragraphs (d) and (g)(4) to read as follows:

§ 200.308

Revision of budget and program plans.

(c) * * *

(4) The inclusion, unless waived by the Federal awarding agency, of costs that require prior approval in accordance with Subpart E—Cost Principles of this part or 45 CFR part 75 Appendix IX, “Principles for Determining Costs Applicable to Research and Development under Awards and Contracts with Hospitals,” or 48 CFR part 31, “Contract Cost Principles and Procedures,” as applicable.

(6) Unless described in the application and funded in the approved Federal awards, the subawarding, transferring or contracting out of any work under a Federal award, including fixed amount subawards as described in § 200.332 Fixed amount subawards. This provision does not apply to the acquisition of supplies, material, equipment or general support services.

(7) Changes in the approved cost-sharing or matching provided by the non-Federal entity. No other prior approval requirements for specific items may be imposed unless an exception has been approved by OMB. See also §§ 200.102 Exceptions and 200.407 Prior written approval (prior approval).

(8) The need arises for additional Federal funds to complete the project.

(d) Except for requirements listed in paragraph (c)(1) of this section, the Federal awarding agency is authorized, at its option, to waive prior written approvals required by paragraph (c) this section. Such waivers may include authorizing recipients to do any one or more of the following:

(g) * * *

(4) No other prior approval requirements for budget revisions may be imposed unless an exception has been approved by OMB.

§ 200.309

[Amended]

51. Amend § 200.309, by adding “(except as described in § 200.461 Publication and printing costs)” after “performance”.

§ 200.311

[Amended]

52. Amend § 200.311, paragraphs (c)(1) and (c)(2) by adding “the” before “non-Federal entity”.

53. In § 200.312, revise the first sentence of paragraph (c) to read as follows:

§ 200.312

Federally-owned and exempt property.

(c) Exempt federally-owned property means property acquired under a Federal award where the Federal awarding agency has chosen to vest title to the property to the non-Federal entity without further obligation to the Federal Government, based upon the explicit terms and conditions of the Federal award.* * *

§ 200.313

[Amended]

54. Amend § 200.313, paragraph (a)(1) by removing “until funding for the project ceases” and adding, in its place, “during the period of performance”.

§ 200.315

[Amended]

55. Amend § 200.315, paragraph (e)(1), first sentence by removing “addition, in”.

56. Revise § 200.318, paragraphs (a), (c)(1), (h), and (j)(1) to read as follows:

§ 200.318

General procurement standards.

(a) The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part.

(c) * * *

(1) The non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. No employee, officer, or agent may participate in the selection, award, or administration of a contract supported by a Federal award if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract. The officers, employees, and agents of the non-Federal entity may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts. However, non-Federal entities may set standards for situations in which the financial interest

is not substantial or the gift is an unsolicited item of nominal value. The standards of conduct must provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the non-Federal entity.

(h) The non-Federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. See also § 200.212 Suspension and debarment.

(j) * * *

(1) The non-Federal entity may use a time and materials type contract only after a determination that no other contract is suitable and if the contract includes a ceiling price that the contractor exceeds at its own risk. Time and materials type contract means a contract whose cost to a non-Federal entity is the sum of:

§ 200.319

[Amended]

57. Amend § 200.319, paragraph (a) by removing “and invitations” and adding, in its place “or invitations”; and paragraph (b) by removing “state or local” and adding, in its place “state, local, or tribal”.

58. Revise § 200.320, paragraphs (a), (c)(2)(i), and (c)(2)(iii) to read as follows:

§ 200.320

Methods of procurement to be followed.

(a) Procurement by micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (§ 200.67 Micro-purchase). To the extent practicable, the non-Federal entity must distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable.

(c) * * *

(2) * * *

(i) Bids must be solicited from an adequate number of known suppliers, providing them sufficient response time prior to the date set for opening the bids, for state, local, and tribal governments, the invitation for bids must be publically advertised;

(iii) All bids will be opened at the time and place prescribed in the invitation for bids, and for local and tribal governments, the bids must be opened publicly;

§ 200.322

[Amended]

59. Amend § 200.322, by removing “acquired by” and adding, in its place “acquired during”.

60. In § 200.331, revise paragraphs (a)(1)(i), (a)(1)(ii), (a)(4), (a)(5), (b), and (d)(1) to read as follows:

§ 200.331

Requirements for pass-through entities.

(a) * * *

(1) * * *

(i) Subrecipient name (which must match the name associated with its unique entity identifier);

(ii) Subrecipient's unique entity identifier;

(4) An approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal government or, if no such rate exists, either a rate negotiated between the pass-through entity and the subrecipient (in compliance with this part), or a de minimis indirect cost rate as defined in § 200.414 Indirect (F&A) costs, paragraph (f) of this part.

(5) A requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient's records and financial statements as necessary for the pass-through entity to meet the requirements of this part; and

(b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as:

(d) * * *

(1) Reviewing financial and performance reports required by the pass-through entity.

§ 200.337

[Amended]

61. Amend § 200.337 by removing “state or local” and adding, in its place “state, local, and tribal”.

§ 200.340

[Amended]

62. Amend § 200.340(c) by adding ” (forthcoming at time of publication)” after “2 CFR part 77”.

§ 200.341

[Amended]

63. Amend § 200.341 by removing “proceedings which” and adding, in its place “proceedings to which”.

§ 200.343

[Amended]

64. Amend § 200.343 by removing “Federal agency” from the introductory text and adding, in its place “Federal awarding agency”; in paragraph (a) by removing “by or the” and adding, in its place “by the”; and paragraph (d) by removing “that is” and adding, in its place “that are”, and adding “,” after due.

§ 200.344

[Amended]

65. Amend § 200.344, paragraph (a) introductory text by removing “.” and adding, in its place “;” and paragraph (b) by adding “,” after section.

§ 200.400

[Amended]

66. Amend § 200.400, paragraph (f) by adding “(including pre- and post-doctoral staff)” after “employees” and paragraph (g) by removing “expressly” and adding, in its place “explicitly”.

§ 200.404

[Amended]

67. Amend § 200.404, paragraph (b) by adding “, local, tribal,” after “state”.

§ 200.405

[Amended]

68. Amend § 200.405, paragraph (d) by removing “should” and adding, in its place “must”.

§ 200.406

[Amended]

69. Amend § 200.406, paragraph (b) second sentence by removing “should” and adding, in its place “must”.

70. In § 200.407, revise paragraphs (e) through (v) and add paragraphs (w), (x) and (y) to read as follows:

§ 200.407

Prior written approval (prior approval).

(e) § 200.311 Real property;

(f) § 200.313 Equipment;

(g) § 200.332 Fixed amount subawards;

(h) § 200.413 Direct costs, paragraph (c);

(i) § 200.430 Compensation—personal services, paragraph (h);

(j) § 200.431 Compensation—fringe benefits;

(k) § 200.438 Entertainment costs;

(l) § 200.439 Equipment and other capital expenditures;

(m) § 200.440 Exchange rates;

(n) § 200.441 Fines, penalties, damages and other settlements;

(o) § 200.442 Fund raising and investment management costs;

(p) § 200.445 Goods or services for personal use;

(q) § 200.447 Insurance and indemnification;

(r) § 200.454 Memberships, subscriptions, and professional activity costs, paragraph (c);

(s) § 200.455 Organization costs;

(t) § 200.456 Participant support costs;

(u) § 200.458 Pre-award costs;

(v) § 200.462 Rearrangement and reconversion costs;

(w) § 200.467 Selling and marketing costs;

(x) § 200.470 Taxes (including Value Added Tax); and

(y) § 200.474 Travel costs.

§ 200.413

[Amended]

71. Amend § 200.413, paragraph (f)(5) by adding “See also § 200.442 Fund raising and investment management costs.” after the first sentence.

72. In § 200.414, revise paragraphs (e) introductory text, (e)(1), (e)(3), (e)(4), (e)(5); add new paragraph (e)(6); revise the first sentence of paragraph (f); and revise paragraph (g) to read as follows:

§ 200.414

Indirect (F&A) costs.

(e) Requirements for development and submission of indirect (F&A) cost rate proposals and cost allocation plans are contained in Appendices III-VII and Appendix IX as follows:

(1) Appendix III to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Institutions of Higher Education (IHEs);

(3) Appendix V to Part 200—State/Local Governmentwide Central Service Cost Allocation Plans;

(4) Appendix VI to Part 200—Public Assistance Cost Allocation Plans;

(5) Appendix VII to Part 200—States and Local Government and Indian Tribe Indirect Cost Proposals; and

(6) Appendix IX to Part 200—Hospital Cost Principles.

(f) In addition to the procedures outlined in the appendices in paragraph (e) of this section, any non-Federal entity that has never received a negotiated indirect cost rate, except for those non-Federal entities described in Appendix VII to Part 200—States and Local Government and Indian Tribe Indirect Cost Proposals, paragraph D.1.b, may elect to charge a de minimis rate of 10% of modified total direct costs (MTDC) which may be used indefinitely.***

(g) Any non-Federal entity that has a current federally negotiated indirect cost rate may apply for a one-time extension of the rates in that agreement for a period of up to four years. This extension will be subject to the review and approval of the cognizant agency for indirect costs. If an extension is granted the non-Federal entity may not request a rate review until the extension period ends. At the end of the 4-year extension, the non-Federal entity must re-apply to negotiate a rate. Subsequent one-time extensions (up to four years) are permitted if a renegotiation is completed between each extension request.

§ 200.415

[Amended]

73. Amend § 200.415, paragraph (b)(1) by adding “, and Appendix IX” after “Appendices III through VII”; and paragraph (c) by removing “corporation” and adding, in its place “nonprofit organization”.

74. In § 200.419, revise the second sentence of paragraph (b)(2) to read as follows:

§ 200.419

Cost accounting standards and disclosure statement.

(b) * * *

(2) * * * An IHE must file amendments to the DS-2 to the cognizant agency for indirect costs six months in advance of a disclosed practice being changed to comply with a new or modified standard, or when a practice is changed for other reasons.* * *

§ 200.430

[Amended]

75. Amend § 200.430, paragraph (g) by removing “should” and adding, in its place “must”; and paragraph (h)(1)(ii) by removing “(h)(9)” and adding, in its place “(i)”.

§ 200.431

[Amended]

76. Amend § 200.431, paragraph (b)(3)(i) by removing “as indirect costs”; paragraph (e)(3) by removing “and they are allocated as indirect costs”; and paragraph (h)(6) by adding “non-Federal” before “entity”.

§ 200.433

[Amended]

77. Amend § 200.433, paragraph (b) by removing “(b)(1)” and adding, in its place “(a)”.

§ 200.434

[Amended]

78. Amend § 200.434, paragraph (c) by removing “is no allowable” and adding, in its place “may not be charged to the Federal award”; and paragraph (g)(1) by removing “is not reimbursable” and adding, in its place “may not be charged to the Federal award”.

§ 200.435

[Amended]

79. Amend § 200.435, paragraph (b)(1)(ii)(D) by removing “for default”.

§ 200.436

[Amended]

80. Amend § 200.436, paragraph (b) by removing “Appendices IV through VIII” and adding, in its place “Appendices III through IX”; paragraph (c) introductory text by removing “For this purpose” and adding, in its place “For the purpose of computing depreciation”; and paragraph (c)(3) by removing “entity, or where” and adding, in its place “entity where”.

81. In § 200.439, add a new paragraph (b)(7) to read as follows:

§ 200.439

Equipment and other capital expenditures.

(b) * * *

(7) Equipment and other capital expenditures are unallowable as indirect costs. See § 200.436 Depreciation.

82. In § 200.440, revise paragraph (a) to read as follows:

§ 200.440

Exchange rates.

(a) Cost increases for fluctuations in exchange rates are allowable costs subject to the availability of funding. Prior approval of exchange rate fluctuations is required only when the change results in the need for additional Federal funding, or the increased costs result in the need to significantly reduce the scope of the project. The Federal awarding agency must however ensure that adequate funds are available to cover currency fluctuations in order to avoid a violation of the Anti-Deficiency Act.

§ 200.443

[Amended]

83. Amend § 200.443, paragraph (b)(3) by removing “46*”.

84. In § 200.444, revise paragraph (b) to read as follows:

§ 200.444

General costs of government.

(b) For Indian tribes and Councils of Governments (COGs) (see § 200.64 Local government), up to 50% of salaries and expenses directly attributable to managing and operating Federal programs by the chief executive and his or her staff can be included in the indirect cost calculation without documentation.

§ 200.448

[Amended]

85. In § 200.448, amend paragraph (b)(3) by removing the word “should” and adding in its place “must”.

§ 200.453

[Amended]

86. In § 200.453, amend paragraph (b) by removing the word “should” and adding in its place “must”.

§ 200.457

[Amended]

87. Amend the first sentence of § 200.457 by removing the text “routine and security to protect” and adding, in its place “protection and security of”.

§ 200.463

[Amended]

88. Amend § 200.463, paragraph (c), the first sentence by removing “as a direct cost”.

§ 200.464

[Amended]

89. Amend § 200.464, paragraph (c), the second sentence by removing “allowed either as a direct or indirect cost” and adding, in its place “charged to a Federal award”.

90. In § 200.474, remove paragraph (c)(3), revise paragraphs (d) and (e), and add paragraph (f) to read as follows:

§ 200.474

Travel costs.

(d) In the absence of an acceptable, written non-Federal entity policy regarding travel costs, the rates and amounts established under 5 U.S.C. 5701-11, (“Travel and Subsistence Expenses; Mileage Allowances”), or by the Administrator of General Services, or by the President (or his or her designee) pursuant to any provisions of such subchapter must apply to travel under Federal awards (48 CFR 31.205-46(a)).

(e)

Commercial air travel.

(1) Airfare costs in excess of the basic least expensive unrestricted accommodations class offered by commercial airlines are unallowable except when such accommodations would:

(i) Require circuitous routing;

(ii) Require travel during unreasonable hours;

(iii) Excessively prolong travel;

(iv) Result in additional costs that would offset the transportation savings; or

(v) Offer accommodations not reasonably adequate for the traveler's medical needs. The non-Federal entity must justify and document these conditions on a case-by-case basis in order for the use of first-class or business-class airfare to be allowable in such cases.

(2) Unless a pattern of avoidance is detected, the Federal government will generally not question a non-Federal entity's determinations that customary standard airfare or other discount airfare is unavailable for specific trips if the non-Federal entity can demonstrate that such airfare was not available in the specific case.

(f)

Air travel by other than commercial carrier.

Costs of travel by non-Federal entity-owned, -leased, or -chartered aircraft include the cost of lease, charter, operation (including personnel costs), maintenance, depreciation, insurance, and other related costs. The portion of such costs that exceeds the cost of airfare as provided for in paragraph (d) of this section, is unallowable.

§ 200.501

[Amended]

91. Amend § 200.501, paragraph (f), by removing “should be considered” and adding, in its place “sets forth the considerations”; and paragraph (h), by removing “should describe” with “must describe”.

§ 200.502

[Amended]

92. Amend § 200.502, paragraph (a), by removing “should be based” and adding, in its place “must be based.”

§ 200.507

[Amended]

93. Amend § 200.507, paragraph (b)(1), by adding “current ” before “program-specific audit guide”.

§ 200.510

[Amended]

94. Amend § 200.510, paragraph (b)(6), by removing “non-Federal entity” and adding, in its place “auditee.”

95. In § 200.512, revise the heading and first sentence of paragraph (b)(2) to read as follows:

§ 200.512

Report submission.

(b) * * *

(2)

Exception for Indian Tribes and Tribal Organizations.

An auditee that is an Indian tribe or a tribal organization (as defined in the Indian Self-Determination, Education and Assistance Act (ISDEAA), 25 U.S.C. 450b(l)) may opt not to authorize the FAC to make the reporting package publicly available on a Web site, by excluding the authorization for the FAC publication in the statement described in paragraph (b)(1) of this section.***

§ 200.513

[Amended]

96. Amend § 200.513, paragraph (c)(5)(i), by removing “requirement of § 200.513 Responsibilities” and adding, in its place “requirements of paragraph (c) of this section”.

§ 200.514

[Amended]

97. Amend § 200.514, paragraph (d)(3), by removing “the auditor should” and adding, in its place “the auditor must”.

§ 200.515

[Amended]

98. Amend § 200.515 as follows:

(a) In paragraph (b), remove “Federal statutes, regulations, and the terms and conditions of the Federal award” and add, in its place “provisions of laws, regulations, contracts, and award agreements”.

(b) In paragraph (c), remove “report and internal control” and add, in its place “a report on internal control” in the first sentence; and remove “modified opinion” and add, in its place “disclaimer of opinion” in the second sentence.

(c) In paragraph (d) (3) (i), remove “should be presented” and add, in its place “must be presented”.

(d) In paragraph (d) (3) (ii), remove “should be reported” and add, in its place “must be reported”.

§ 200.518

[Amended]

99. Amend § 200.518 as follows:

(a) In paragraph (a), remove “paragraphs (b) through (i)” and add, in its place “paragraphs (b) through (h)”.

(b) In paragraph (b)(1), in the table, remove “Equal to $750,000” and add, in its place “Equal to or exceed $750,000”.

(c) In paragraph (b)(3), remove “loan guarantees (loans) should not result” with “loan guarantees (loans) must not result”.

Appendix I to Part 200 [Amended]

100. Amend Appendix I to Part 200—Full Text of Notice of Funding Opportunity as follows:

(a) In the general discussion section, amend the second sentence of the third paragraph by removing “to include in Section I information” and adding, in its place “to include Section A information”.

(b) In the general discussion section, amend the last sentence of third paragraph by removing “The format specifies a standard location for that information in Section III.1 but that does not preclude repeating the information in Section I or creating a cross reference between Sections I and III.1” and adding, in its place “The format specifies a standard location for that information in Section C.1 but does not preclude repeating the information in Section A or creating a cross reference between Section A and C.1”.

(c) In Section B, second paragraph, remove “section D” and add, in its place “Section D”.

(d) In Section C.1, fifth sentence, remove “Section IV” and add, in its place “Section D”.

(e) In Section C.1, last sentence, remove references, wherever they appear to “Section IV.5” and add, in their place “Section D.6”.

(f) In Section D.2.i, remove “Section IV.3” and add, in its place “Section D.4”.

(g) In the heading of Section D.3, remove “Dun and Bradstreet Universal Numbering System (DUNS) number” and add, in its place “Unique entity identifier”.

(h) In Section D.3, item (ii), remove “a valid DUNS number” and add, in its place “a valid unique entity identifier”.

(i) In Section D.3, item (iii), remove “all applicable DUNS” and add, in its place “all applicable unique entity identifier”.

(j) In Section E.1, second paragraph, remove “Section III.2” and add, in its place “Section C.2”.

101. In Appendix II to Part 200—Contract Provisions for Non-Federal Entity Contracts Under Federal Awards, revise paragraphs (H), (I) and (J); and remove paragraph (K) to read as follows:

Appendix II to Part 200—Contract Provisions for Non-Federal Entity Contracts Under Federal Awards

(H) Debarment and Suspension (Executive Orders 12549 and 12689)—A contract award (see 2 CFR 180.220) must not be made to parties listed on the governmentwide exclusions in the System for Award Management (SAM), in accordance with the OMB guidelines at 2 CFR 180 that implement Executive Orders 12549 (3 CFR part 1986 Comp., p. 189) and 12689 (3 CFR part 1989 Comp., p. 235), “Debarment and Suspension.” SAM Exclusions contains the names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549.

(I) Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)—Contractors that apply or bid for an award exceeding $100,000 must file the required certification. Each tier certifies to the tier above that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant or any other award covered by 31 U.S.C. 1352. Each tier must also disclose any lobbying with non-Federal funds that takes place in connection with obtaining any Federal award. Such disclosures are forwarded from tier to tier up to the non-Federal award.

(J) See § 200.322 Procurement of recovered materials.

102. Amend Appendix III to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Institutions of Higher Education (IHEs) as follows:

(a) In Section A.1.a, add paragraph (3) as set forth below.

(b) In Section B.1., remove “this indirect cost requirements” and add, in its place “these indirect cost requirements”.

(c) In Section C.2., remove “subgrants and subcontracts”.

(d) In Section C.7.a, first sentence, remove “Federal agencies must use the negotiated rates except as provided in paragraph (e) of § 200.414 Indirect (F&A) costs, must paragraph (b) (1) for indirect (F&A) costs” and add, in its place “Except as provided in paragraph (c)(1) of § 200.414 Indirect (F&A) costs, Federal agencies must use the negotiated rates”

(e) In Section C.9.a, remove “subsection 1.a” and add, in its place “subsection C.1.a”

(f) In Section C.10, remove “shall include” and add, in its place “must include”.

(g) In Section C.11.a.(1), add “Where a non-Federal entity only receives funds as a subrecipient, § 200.331 Requirements for pass-through entities.” after the last sentence.

(h) In Section C.11.f(1), second sentence, remove “Non-cognizant Federal agencies for indirect costs, which make Federal awards to an educational institution,” and add, in its place “Federal awarding agencies that do not have cognizance for indirect costs”.

(i) In Section C.12, second paragraph, remove “In order to provide mutually agreed upon information for management purposes” and add, in its place “As provided in section C.10 of this appendix”.

(j) In Section F.2.a, remove “must” after “a proposed indirect cost rate”.

(k) Revise F.2.b as set forth below.

Appendix III to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Institutions of Higher Education (IHEs)

A. * * *

1. * * *

a. * * *

(3) Only mandatory cost sharing or cost sharing specifically committed in the project budget must be included in the organized research base for computing the indirect (F&A) cost rate or reflected in any allocation of indirect costs. Salary costs above statutory limits are not considered cost sharing.

F. * * *

2. * * *

b. The certificate must be signed on behalf of the institution by the chief financial officer or an individual designated by an individual at a level no lower than vice president or chief financial officer.

An indirect (F&A) cost rate is not binding upon the Federal Government if the most recent required proposal from the institution has not been certified. Where it is necessary to establish indirect (F&A) cost rates, and the institution has not submitted a certified proposal for establishing such rates in accordance with the requirements of this section, the Federal Government must unilaterally establish such rates. Such rates may be based upon audited historical data or such other data that have been furnished to the cognizant agency for indirect costs and for which it can be demonstrated that all unallowable costs have been excluded. When indirect (F&A) cost rates are unilaterally established by the Federal Government because of failure of the institution to submit a certified proposal for establishing such rates in accordance with this section, the rates established will be set at a level low enough to ensure that potentially unallowable costs will not be reimbursed.

Appendix IV to Part 200 [Amended]

103. Amend Appendix IV to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Nonprofit Organizations as follows:

(a) In Section B.2.c, remove “such contracts or subawards” and add, in its place “such as subawards”.

(b) In Section B.3.b.(4), sentence prior to last sentence, remove ” where a major project or activity explicitly requires and budgets for administrative or clerical services and other individuals involved can be identified with the program or activity” and add, in its place “as described in § 200.413 Direct Costs”.

(c) In Section C.2.a., add “Where a non-Federal entity only receives funds as a subrecipient, see the requirements of § 200.331 Requirements for pass-through entities.” after the last sentence.

(d) In Section D, add section number “1.” before “Required Certification.” and remove “j” in front of “Each indirect cost rate” and add, in its place “2.”.

104. In Appendix V to Part 200—State/Local Government and Indian Tribe-Wide Central Service Cost Allocation Plans, revise the heading to read as follows:

Appendix V to Part 200—State/Local Governmentwide Central Service Cost Allocation Plans

105. Amend Appendix V to Part 200—State/Local Governmentwide Central Service Cost Allocation Plans as follows:

(a) In Section A.2, the last sentence remove “the Superintendent of Documents, U.S. Government Printing Office” and add, in its place “HHS Cost Allocation Services or at their Web site at

https://rates.psc.gov

”.

(b) In Section E.2, the first sentence, remove “allocated central service” and add, in its place “allocation central service*”.

106. Amend Appendix VI to Part 200—Public Assistance Cost Allocation Plans as follows:

(a) In Section A, third sentence, remove “Federal agencies” and add, in its place “Federal awarding agencies”.

(b) In Section E.1, remove “the funding agencies” and add, in its place “Federal awarding agencies”; and remove “the cognizant audit agency” and add, in its place “the cognizant agency for indirect costs”.

(c) In Section E.2, remove “one funding agency” and add, in its place “one Federal awarding agency”.

(d) In Section E.3, remove “two or more funding agencies” and add, in its place “two or more Federal awarding agencies”; and remove “one funding agency” and add, in its place “one Federal awarding agency”.

(e) In Section E.4, remove “the Federal agencies” and add, in its place “the Federal awarding agencies”.

Appendix VII to Part 200 [Amended]

107. Amend Appendix VII to Part 200—States and Local Government and Indian Tribe Indirect Cost Proposals as follows:

(a) In Section A.3, remove “the Superintendent of Documents, U.S. Government Printing Office” and add, in its place “HHS Cost Allocation Services or at their Web site at

https://rates.psc.gov

”.

(b) In Section A.5, remove “Appendix VII to Part 200—States and Local Government and Indian Tribe Indirect Cost Proposals” and add, in its place “Appendix VI to Part 200—Public Assistance Cost Allocation Plans”.

(c) In Section B.3, second sentence, remove “Appendix VI” add, in its place “Appendix V.”

(d) In Section C.3.e, remove “subcontracts” and add, in its place “subawards”.

(e) In Section D.1.a, last sentence, remove “the Common Rule” and add, in its place “§ 200.333 Retention Requirements for Records”.

(f) In Section F.2, second sentence, remove “Appendix VI” and add, in its place “Appendix V”.

Appendix IX to Part 200 [Amended]

108. Amend Appendix IX to Part 200—Hospital Cost Principles by removing “Part 74” and adding, in its place “Part 75”.

David Mader,

Controller.

Department of Health and Human Services

For the reasons set forth in the common preamble, under the authority of 5 U.S.C. 301 and the authorities listed below, Part 200 of Title 2, Chapter III is added and 45 CFR subtitle A is amended as follows:

TITLE 2—GRANTS AND AGREEMENTS

CHAPTER III—DEPARTMENT OF HEALTH AND HUMAN SERVICES

1. Add part 300 to read as follows:

PART 300—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS

Authority:

5 U.S.C. 301, 2 CFR part 200.

§ 300.1

Adoption of 2 CFR Part 200.

Under the authority listed above, the Department of Health and Human Services adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, and has codified the text, with HHS-specific amendments in 45 CFR part 75. Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the Department.

TITLE 45—PUBLIC WELFARE

Subtitle A—Department of Health and Human Services

PART 74 [REMOVED AND RESERVED]

2. Remove and reserve 45 CFR part 74.

3. Part 75 is added to title 45 to read as follows:

PART 75—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR HHS AWARDS

Subpart A—Acronyms and Definitions

Sec.

75.1

Acronyms.

75.2

Definitions.

Subpart B—General Provisions

75.100

Purpose.

75.101

Applicability.

75.102

Exceptions.

75.103

Authorities.

75.104

Supersession.

75.105

Effects on other issuances.

75.106

Agency implementation.

75.107

OMB responsibilities.

75.108

Inquiries.

75.109

Review date.

75.110

Effective/Applicability date.

75.111

English language.

75.112

Conflict of interest.

75.113

Mandatory disclosures.

Subpart C—Pre-Federal Award Requirements and Contents of Federal Awards.

75.200

Purpose.

75.201

Use of grant agreements (including fixed amount awards), cooperative agreements, and contracts.

75.202

Requirement to provide public notice of Federal financial assistance programs.

75.203

Notices of funding opportunities.

75.204

HHS funding agency review of merit of proposals.

75.205

HHS awarding agency review of risk posed by applicants.

75.206

Standard application requirements, including forms for applying for HHS financial assistance, and state plans.

75.207

Specific award conditions.

75.208

Certifications and Representations.

75.209

Pre-award costs.

75.210

Information contained in a Federal award.

75.211

Public access to Federal award information.

75.212

Suspension and Debarment.

75.213

Metric system of measurement.

75.214

Disclosure of Lobbying Activities.

75.215

Special Provisions for Awards to Commercial Organizations.

75.216

Special Provisions for Awards to Federal Agencies.

75.217

Participation by faith-based organizations.

Subpart D—Post Federal Award Requirements

Standards for Financial and Program Management

75.300

Statutory and national policy requirements.

75.301

Performance measurement.

75.302

Financial management and standards for financial management systems.

75.303

Internal controls.

75.304

Bonds.

75.305

Payment.

75.306

Cost sharing or matching.

75.307

Program income.

75.308

Revision of budget and program plans.

75.309

Period of performance and availability of funds.

75.310-75.315

[Reserved]

Property Standards

75.316

Purpose of property standards.

75.317

Insurance coverage.

75.318

Real property.

75.319

Federally-owned and exempt property.

75.320

Equipment.

75.321

Supplies.

75.322

Intangible property and copyrights.

75.323

Property trust relationship.

75.324-75.325

[Reserved]

Procurement Standards

75.326

Procurements by states.

75.327

General procurement standards.

75.328

Competition.

75.329

Procurement procedures.

75.330

Contracting with small and minority businesses, women's business enterprises, and labor surplus area firms.

75.331

Procurement of recovered materials.

75.332

Contract cost and price.

75.333

HHS awarding agency or pass-through entity review.

75.334

Bonding requirements.

75.335

Contract provisions.

75.336-75.340

[Reserved]

Performance and Financial Monitoring and Reporting

75.341

Financial reporting.

75.342

Monitoring and reporting program performance.

75.343

Reporting on real property.

75.344-75.350

[Reserved]

Subrecipient Monitoring and Management

75.351

Subrecipient and contractor determinations.

75.352

Requirements for pass-through entities.

75.353

Fixed amount subawards.

75.354-75.360

[Reserved]

Record Retention and Access

75.361

Retention requirements for records.

75.362

Requests for transfer or records.

75.363

Methods for collection, transmission and storage of information.

75.364

Access to records.

75.365

Restrictions on public access to records.

75.366-75.370

[Reserved]

Remedies for Noncompliance

75.371

Remedies for noncompliance.

75.372

Termination.

75.373

Notification of termination requirement.

75.374

Opportunities to object, hearings, and appeals.

75.375

Effects of suspension and termination.

75.376-75.380

[Reserved]

Closeout

75.381

Closeout.

75.382-75.385

[Reserved]

Post-Closeout Adjustments and Continuing Responsibilities

75.386

Post-Closeout Adjustments and Continuing Responsibilities.

75.387-75.390

[Reserved]

Collection of Amounts Due

75.391

Collection of amounts due.

Subpart E—Cost Principles

General Provisions

75.400

Policy guide

75.401

Application

Basic Considerations

75.402

Composition of Costs.

75.403

Factors affecting allowability of costs.

75.404

Reasonable costs.

75.405

Allocable costs.

75.406

Applicable credits.

75.407

Prior written approval (prior approval).

75.408

Limitation on allowance of costs.

75.409

Special considerations.

75.410

Collection of unallowable costs.

75.411

Adjustment of previously negotiated indirect (F&A) cost rates containing unallowable costs.

Direct and Indirect (F&A) Costs

75.412

Classification of costs.

75.413

Direct costs.

75.414

Indirect (F&A) costs.

75.415

Required certifications.

Special Considerations for States, Local Governments and Indian Tribes

75.416

Cost allocation plans and indirect cost proposals.

75.417

Interagency service.

Special Considerations for Institutions of Higher Education

75.418

Costs incurred by states and local governments.

75.419

Cost accounting standards and disclosure statement.

General Provisions for Selected Items of Cost

75.420

Considerations for selected items of cost.

75.421

Advertising and public relations.

75.422

Advisory councils.

75.423

Alcoholic beverages.

75.424

Alumni/ae activities.

75.425

Audit services.

75.426

Bad debts.

75.427

Bonding costs.

75.428

Collections of improper payments.

75.429

Commencement and convocation costs.

75.430

Compensation—personal services.

75.431

Compensation—fringe benefits.

75.432

Conferences.

75.433

Contingency provisions.

75.434

Contributions and donations.

75.435

Defense and prosecution of criminal and civil proceedings, claims, appeals, and patent infringements.

75.436

Depreciation.

75.437

Employee health and welfare costs.

75.438

Entertainment costs.

75.439

Equipment and other capital expenditures.

75.440

Exchange rates.

75.441

Fines, penalties, damages and other settlements.

75.442

Fund raising and investment management costs.

75.443

Gains and losses on disposition of depreciable assets.

75.444

General costs of government.

75.445

Goods or services for personal use.

75.446

Idle facilities and idle capacity.

75.447

Insurance and indemnification.

75.448

Intellectual Property.

75.449

Interest.

75.450

Lobbying.

75.451

Losses on other awards or contracts.

75.452

Maintenance and repair costs.

75.453

Materials and supplies costs, including costs of computing devices.

75.454

Memberships, subscriptions, and professional activity costs.

75.455

Organization costs.

75.456

Participant support costs.

75.457

Plant and security costs.

75.458

Pre-award costs.

75.459

Professional services costs.

75.460

Proposal costs.

75.461

Publication and printing costs.

75.462

Rearrangement and reconversion costs.

75.463

Recruiting costs.

75.464

Relocation costs of employees.

75.465

Rental costs of real property and equipment.

75.466

Scholarships and student aid costs.

75.467

Selling and marketing costs.

75.468

Specialized service facilities.

75.469

Student activity costs.

75.470

Taxes (including Value Added Tax).

75.471

Termination costs.

75.472

Training and education costs.

75.473

Transportation costs.

75.474

Travel costs.

75.475

Trustees.

HHS Specific Selected Items of Cost

75.476

Independent research and development costs.

Subpart F—Audit Requirements

General

75.500

Purpose.

Audits

75.501

Audit requirements.

75.502

Basis for determining Federal awards expended.

75.503

Relation to other audit requirements.

75.504

Frequency of audits.

75.505

Sanctions.

75.506

Audit costs.

75.507

Program-specific audits.

Auditees

75.508

Auditee responsibilities.

75.509

Auditor selection.

75.510

Financial statements.

75.511

Audit findings follow-up.

75.512

Report submission.

Federal Agencies

75.513

Responsibilities.

Auditors

75.514

Scope of audit.

75.515

Audit reporting.

75.516

Audit findings.

75.517

Audit documentation.

75.518

Major program determination.

75.519

Criteria for Federal program risk.

75.520

Criteria for a low-risk auditee.

Management Decisions

75.521

Management Decision.

Appendix I to Part 75—Full Text of Notice of Funding Opportunity

Appendix II to Part 75—Contract Provisions for Non-Federal Entity Contracts Under Federal Awards

Appendix III to Part 75—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Institutions of Higher Education

Appendix IV to Part 75—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Nonprofit Organizations

Appendix V to Part 75—State/Local Governments-Wide Central Service Cost Allocation Plans

Appendix VI to Part 75—Public Assistance Cost Allocation Plans

Appendix VII to Part 75—States and Local Government and Indian Tribe Indirect Cost Proposals

Appendix VIII to Part 75—Nonprofit Organizations Exempted from Subpart E of Part 75

Appendix IX to Part 75—Principles for Determining Costs Applicable to

Research and Development Under Grants and Contracts with Hospitals

Appendix X to Part 75—Data Collection Form (SF-SAC)

Appendix XI to Part 75—Compliance Supplement

Authority:

5 U.S.C. 301.

Subpart A—Acronyms and Definitions

§ 75.1

Acronyms.

The following acronyms apply to this part:

CAS Cost Accounting Standards

CFDA Catalog of Federal Domestic Assistance

CFR Code of Federal Regulations

CMIA Cash Management Improvement Act

COG Councils of Governments

COSO Committee of Sponsoring Organizations of the Treadway Commission

EPA Environmental Protection Agency

ERISA Employee Retirement Income Security Act of 1974 (29 U.S.C. 1301-1461)

EUI Energy Usage Index

F&A Facilities and Administration

FAC Federal Audit Clearinghouse

FAIN Federal Award Identification Number

FAR Federal Acquisition Regulation

FFATA Federal Funding Accountability and Transparency Act of 2006 or Transparency Act—Public Law 109-282, as amended by § 6202(a) of Public Law 110-252 (31 U.S.C. 6101)

FICA Federal Insurance Contributions Act

FOIA Freedom of Information Act

FR Federal Register

FTE Full-time equivalent

GAAP Generally Accepted Accounting Principles

GAGAS Generally Accepted Government Auditing Standards

GAO Government Accountability Office

GOCO Government owned, contractor operated

GSA General Services Administration

HHS U.S. Department of Health and Human Services

IBS Institutional Base Salary

IHE Institutions of Higher Education

IRC Internal Revenue Code

ISDEAA Indian Self-Determination and Education and Assistance Act

MTC Modified Total Cost

MTDC Modified Total Direct Cost

OMB Office of Management and Budget

PII Personally Identifiable Information

PMS Payment Management System

PRHP Post-retirement Health Plans

PTE Pass-through Entity

REUI Relative Energy Usage Index

SAM System for Award Management

SF 424 Standard Form 424 series and Form Families Application for Federal Assistance

SFA Student Financial Aid

SNAP Supplemental Nutrition Assistance Program

SPOC Single Point of Contact

TANF Temporary Assistance for Needy Families

TFM Treasury Financial Manual

U.S.C. United States Code

VAT Value Added Tax

§ 75.2

Definitions.

These are the definitions for terms used in this part. Different definitions may be found in Federal statutes or regulations that apply more specifically to particular program or activities. These definitions could be supplemented by additional instructional information provided in in governmentwide standard information collections.

Acquisition cost

means the cost of the asset including the cost to ready the asset for its intended use. Acquisition cost for equipment, for example, means the net invoice price of the equipment, including the cost of any modifications, attachments, accessories, or auxiliary apparatus necessary to make it usable for the purpose for which it is acquired. Acquisition costs for software includes those development costs capitalized in accordance with generally accepted accounting principles (GAAP). Ancillary charges, such as taxes, duty, protective in transit insurance, freight, and installation may be included in or excluded from the acquisition cost in accordance with the non-Federal entity's regular accounting practices.

Advance payment

means a payment that a Federal awarding agency or pass-through entity makes by any appropriate payment mechanism, including a predetermined payment schedule, before the non-Federal entity disburses the funds for program purposes.

Allocation

means the process of assigning a cost, or a group of costs, to one or more cost objective(s), in reasonable proportion to the benefit provided or other equitable relationship. The process may entail assigning a cost(s) directly to a final cost objective or through one or more intermediate cost objectives.

Audit finding

means deficiencies which the auditor is required by § 75.516(a) to report in the schedule of findings and questioned costs.

Auditee

means any non-Federal entity that expends Federal awards which must be audited under Subpart F-of this part.

Auditor

means an auditor who is a public accountant, or a Federal, state, local government, or Indian Tribe audit organization, which meets the general standards specified for external auditors in generally accepted government auditing standards (GAGAS). The term auditor does not include internal auditors of nonprofit organizations.

Awardee

(see

Non-Federal entity

).

Budget

means the financial plan for the project or program that the Federal awarding agency or pass-through entity approves during the Federal award process or in subsequent amendments to the Federal award. It may include the Federal and non-Federal share or only the Federal share, as determined by the Federal awarding agency or pass-through entity.

Capital assets

means tangible or intangible assets used in operations having a useful life of more than one year which are capitalized in accordance with GAAP. Capital assets include:

(1) Land, buildings (facilities), equipment, and intellectual property (including software) whether acquired by purchase, construction, manufacture, lease-purchase, exchange, or through capital leases; and

(2) Additions, improvements, modifications, replacements, rearrangements, reinstallations, renovations or alterations to capital assets that materially increase their value or useful life (not ordinary repairs and maintenance).

Capital expenditures

means expenditures to acquire capital assets or expenditures to make additions, improvements, modifications, replacements, rearrangements, reinstallations, renovations, or alterations to capital assets that materially increase their value or useful life.

Catalog of Federal Domestic Assistance (CFDA) number

means the number assigned to a Federal program in the CFDA.

CFDA program title

means the title of the program under which the Federal award was funded in the CFDA.

Central service cost allocation plan

means the documentation identifying, accumulating, and allocating or developing billing rates based on the allowable costs of services provided by a state, local government, or Indian tribe on a centralized basis to its departments and agencies. The costs of these services may be allocated or billed to users.

Claim

means, depending on the context, either:

(1) A written demand or written assertion by one of the parties to a Federal award seeking as a matter of right:

(i) The payment of money in a sum certain;

(ii) The adjustment or interpretation of the terms and conditions of the Federal award; or

(iii) Other relief arising under or relating to a Federal award.

(2) A request for payment that is not in dispute when submitted.

Class of Federal awards

means a group of Federal awards either awarded under a specific program or group of programs or to a specific type of non-Federal entity or group of non-Federal

entities to which specific provisions or exceptions may apply.

Closeout

means the process by which the Federal awarding agency or pass-through entity determines that all applicable administrative actions and all required work of the Federal award have been completed and takes actions as described in § 75.381.

Cluster of programs

means a grouping of closely related programs that share common compliance requirements. The types of clusters of programs are research and development (R&D), student financial aid (SFA), and other clusters. “Other clusters” are as defined by OMB in the compliance supplement or as designated by a state for Federal awards the state provides to its subrecipients that meet the definition of a cluster of programs. When designating an “other cluster,” a state must identify the Federal awards included in the cluster and advise the subrecipients of compliance requirements applicable to the cluster, consistent with § 75.352(a). A cluster of programs must be considered as one program for determining major programs, as described in § 75.518, and, with the exception of R&D as described in § 75.501(c), whether a program-specific audit may be elected.

Cognizant agency for audit

means the Federal agency designated to carry out the responsibilities described in § 75.513(a). The cognizant agency for audit is not necessarily the same as the cognizant agency for indirect costs. A list of cognizant agencies for audit may be found at the FAC Web site.

Cognizant agency for indirect costs

means the Federal agency responsible for reviewing, negotiating, and approving cost allocation plans or indirect cost proposals developed under this part on behalf of all Federal agencies. The cognizant agency for indirect cost is not necessarily the same as the cognizant agency for audit. For assignments of cognizant agencies see the following:

(1) For IHEs: Appendix III to Part 75 C.11.

(2) For nonprofit organizations: Appendix IV to Part 75 C.1.

(3) For state and local governments: Appendix V to Part 75 F.1.

(4) For Indian tribes: Appendix VII to Part 75 D.1.

Commercial organization

means an organization, institution, corporation, or other legal entity, including, but not limited to, partnerships, sole proprietorships, and limited liability companies, that is organized or operated for the profit or benefit of its shareholders or other owners. The term includes small and large businesses and is used interchangeably with “for-profit organization.”

Compliance supplement

means Appendix XI to Part 75 (previously known as the Circular A-133 Compliance Supplement).

Computing devices

means machines used to acquire, store, analyze, process, and publish data and other information electronically, including accessories (or “peripherals”) for printing, transmitting and receiving, or storing electronic information. See also

Supplies

and

Information technology systems.

Contract

means a legal instrument by which a non-Federal entity purchases property or services needed to carry out the project or program under a Federal award. The term as used in this part does not include a legal instrument, even if the non-Federal entity considers it a contract, when the substance of the transaction meets the definition of a Federal award or subaward (see

Subaward

).

Contractor

means an entity that receives a contract as defined in

Contract.

Cooperative agreement

means a legal instrument of financial assistance between a Federal awarding agency or pass-through entity and a non-Federal entity that, consistent with 31 U.S.C. 6302-6305:

(1) Is used to enter into a relationship the principal purpose of which is to transfer anything of value from the Federal awarding agency or pass-through entity to the non-Federal entity to carry out a public purpose authorized by a law of the United States (see 31 U.S.C. 6101(3)); and not to acquire property or services for the Federal Government or pass-through entity's direct benefit or use;

(2) Is distinguished from a grant in that it provides for substantial involvement between the Federal awarding agency or pass-through entity and the non-Federal entity in carrying out the activity contemplated by the Federal award.

(3) The term does not include:

(i) A cooperative research and development agreement as defined in 15 U.S.C. 3710a; or

(ii) An agreement that provides only:

(a) Direct United States Government cash assistance to an individual;

(B) A subsidy;

(C) A loan;

(D) A loan guarantee; or

(E) Insurance

Cooperative audit resolution

means the use of audit follow-up techniques which promote prompt corrective action by improving communication, fostering collaboration, promoting trust, and developing an understanding between the Federal agency and the non-Federal entity. This approach is based upon:

(1) A strong commitment by Federal agency and non-Federal entity leadership to program integrity;

(2) Federal agencies strengthening partnerships and working cooperatively with non-Federal entities and their auditors; and non-Federal entities and their auditors working cooperatively with Federal agencies;

(3) A focus on current conditions and corrective action going forward;

(4) Federal agencies offering appropriate relief for past noncompliance when audits show prompt corrective action has occurred; and

(5) Federal agency leadership sending a clear message that continued failure to correct conditions identified by audits which are likely to cause improper payments, fraud, waste, or abuse is unacceptable and will result in sanctions.

Corrective action

means action taken by the auditee that:

(1) Corrects identified deficiencies;

(2) Produces recommended improvements; or

(3) Demonstrates that audit findings are either invalid or do not warrant auditee action.

Cost allocation plan

means central service cost allocation plan or public assistance cost allocation plan.

Cost objective

means a program, function, activity, award, organizational subdivision, contract, or work unit for which cost data are desired and for which provision is made to accumulate and measure the cost of processes, products, jobs, capital projects, etc. A cost objective may be a major function of the non-Federal entity, a particular service or project, a Federal award, or an indirect (Facilities & Administrative (F&A)) cost activity, as described in Subpart E of this part. See also

Final cost objective

and

Intermediate cost objective.

Cost sharing or matching

means the portion of project costs not paid by Federal funds (unless otherwise authorized by Federal statute). This may include the value of allowable third party in-kind contributions, as well as expenditures by the recipient. See also § 75.306.

Cross-cutting audit finding

means an audit finding where the same underlying condition or issue affects Federal awards of more than one Federal awarding agency or pass-through entity.

Departmental Appeals Board

means the independent office established in the Office of the Secretary with delegated authority from the Secretary

to review and decide certain disputes between recipients of HHS funds and HHS awarding agencies under 45 CFR part 16 and to perform other review, adjudication and mediation services as assigned.

Disallowed costs

means those charges to a Federal award that the Federal awarding agency or pass-through entity determines to be unallowable, in accordance with the applicable Federal statutes, regulations, or the terms and conditions of the Federal award.

Equipment

means tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-Federal entity for financial statement purposes, or $5,000. See also

Capital assets, Computing devices, General purpose equipment, Information technology systems, Special purpose equipment,

and

Supplies.

Excess property

means property acquired in whole or in part under the control of any Federal awarding agency that, as determined by the head of the awarding agency or his/her delegate, is no longer required for the agency's needs or the discharge of its responsibilities.

Expenditure report

means:

(1) For non-construction awards, the SF-425 Federal Financial Report (FFR) (or other OMB-approved equivalent report);

(2) For construction awards, the SF-271 “Outlay Report and Request for Reimbursement” (or other OMB-approved equivalent report).

Expenditures

means charges made by a non-Federal entity to a project or program for which a Federal award was received.

(1) The charges may be reported on a cash or accrual basis, as long as the methodology is disclosed and is consistently applied.

(2) For reports prepared on a cash basis, expenditures are the sum of:

(i) Cash disbursements for direct charges for property and services;

(ii) The amount of indirect expense charged;

(iii) The value of third-party in-kind contributions applied; and

(iv) The amount of cash advance payments and payments made to subrecipients.

(3) For reports prepared on an accrual basis, expenditures are the sum of:

(i) Cash disbursements for direct charges for property and services;

(ii) The amount of indirect expense incurred;

(iii) The value of third-party in-kind contributions applied; and

(iv) The net increase or decrease in the amounts owed by the non-Federal entity for:

(A) Goods and other property received;

(B) Services performed by employees, contractors, subrecipients, and other payees;

(C) Programs for which no current services or performance are required such as annuities, insurance claims, or other benefit payments.

Federal agency

means an “agency” as defined at 5 U.S.C. 551(1) and further clarified by 5 U.S.C. 552(f).

Federal Audit Clearinghouse FAC

means the clearinghouse designated by OMB as the repository of record where non-Federal entities are required to transmit the reporting packages required by Subpart F of this part. The mailing address of the FAC is Federal Audit Clearinghouse, Bureau of the Census, 1201 E. 10th Street, Jeffersonville, IN 47132 and the web address is:

http://harvester.census.gov/sac/

. Any future updates to the location of the FAC may be found at the OMB Web site.

Federal award

has the meaning, depending on the context, in either paragraph (1) or (2) of this definition:

(1)(i) The Federal financial assistance that a non-Federal entity receives directly from a Federal awarding agency or indirectly from a pass-through entity, as described in § 75.101; or

(ii) The cost-reimbursement contract under the Federal Acquisition Regulations that a non-Federal entity receives directly from a Federal awarding agency or indirectly from a pass-through entity, as described in § 75.101.

(2) The instrument setting forth the terms and conditions. The instrument is the grant agreement, cooperative agreement, other agreement for assistance covered in paragraph (2) of

Federal financial assistance,

or the cost-reimbursement contract awarded under the Federal Acquisition Regulations.

(3) Federal award does not include other contracts that a Federal agency uses to buy goods or services from a contractor or a contract to operate Federal Government owned, contractor operated facilities (GOCOs).

(4) See also definitions of

Federal financial assistance, grant agreement,

and

cooperative agreement.

Federal award date

means the date when the Federal award is signed by the authorized official of the Federal awarding agency.

Federal awarding agency

means the Federal agency that provides a Federal award directly to a non-Federal entity.

Federal financial assistance:

(1) For grants and cooperative agreements,

Federal financial assistance

means assistance that non-Federal entities receive or administer in the form of:

(1) Grants;

(ii) Cooperative agreements;

(iii) Non-cash contributions or donations of property (including donated surplus property);

(iv) Direct appropriations;

(v) Food commodities; and

(vi) Other financial assistance (except assistance listed in paragraph (b) of this section).

(2) For Subpart F of this part,

Federal financial assistance

also includes assistance that non-Federal entities receive or administer in the form of:

(i) Loans;

(ii) Loan Guarantees;

(iii) Interest subsidies; and

(iv) Insurance.

(c)

Federal financial assistance

does not include amounts received as reimbursement for services rendered to individuals as described in § 75.502(h) and (i).

Federal interest

means, for purposes of § 75.343 or when used in connection with the acquisition or improvement of real property, equipment, or supplies under a Federal award, the dollar amount that is the product of the:

(1) Federal share of total project costs; and

(2) Current fair market value of the property, improvements, or both, to the extent the costs of acquiring or improving the property were included as project costs.

Federal program

means:

(1) All Federal awards which are assigned a single number in the CFDA.

(2) When no CFDA number is assigned, all Federal awards to non-Federal entities from the same agency made for the same purpose must be combined and considered one program.

(3) Notwithstanding paragraphs (1) and (2) of this definition, a cluster of programs. The types of clusters of programs are:

(i) Research and development (R&D);

(ii) Student financial aid (SFA); and

(iii) “Other clusters,” as described in the definition of Cluster of Programs

Federal share

means the portion of total project costs that are paid by Federal funds.

Final cost objective

means a cost objective which has allocated to it both direct and indirect costs and, in the non-Federal entity's accumulation system, is one of the final accumulation points, such as a particular award, internal project, or other direct activity of a non-Federal entity. See also

Cost objective

and

Intermediate cost objective.

Fixed amount awards

means a type of grant agreement under which the Federal awarding agency or pass-through entity provides a specific level of support without regard to actual costs incurred under the Federal award. This type of Federal award reduces some of the administrative burden and record-keeping requirements for both the non-Federal entity and Federal awarding agency or pass-through entity. Accountability is based primarily on performance and results. See §§ 75.201(b) and 75.353.

Foreign organization

means an entity that is:

(1) A public or private organization located in a country other than the United States and its territories that is subject to the laws of the country in which it is located, irrespective of the citizenship of project staff or place of performance;

(2) A private nongovernmental organization located in a country other than the United States that solicits and receives cash contributions from the general public;

(3) A charitable organization located in a country other than the United States that is nonprofit and tax exempt under the laws of its country of domicile and operation, and is not a university, college, accredited degree-granting institution of education, private foundation, hospital, organization engaged exclusively in research or scientific activities, church, synagogue, mosque or other similar entities organized primarily for religious purposes; or

(4) An organization located in a country other than the United States not recognized as a

Foreign Public Entity.

Foreign public entity

means:

(1) A foreign government or foreign governmental entity;

(2) A public international organization, which is an organization entitled to enjoy privileges, exemptions, and immunities as an international organization under the International Organizations Immunities Act (22 U.S.C. 288-288f);

(3) An entity owned (in whole or in part) or controlled by a foreign government; or

(4) Any other entity consisting wholly or partially of one or more foreign governments or foreign governmental entities.

General purpose equipment

means equipment which is not limited to research, medical, scientific or other technical activities. Examples include office equipment and furnishings, modular offices, telephone networks, information technology equipment and systems, air conditioning equipment, reproduction and printing equipment, and motor vehicles. See also

Equipment

and

Special Purpose Equipment.

GAAP

has the meaning specified in accounting standards issued by the Government Accounting Standards Board (GASB) and the Financial Accounting Standards Board (FASB).

GAGAS,

also known as the Yellow Book, means generally accepted government auditing standards issued by the Comptroller General of the United States, which are applicable to financial audits.

Grant agreement

means a legal instrument of financial assistance between a Federal awarding agency or pass-through entity and a non-Federal entity that, consistent with 31 U.S.C. 6302, 6304:

(1) Is used to enter into a relationship the principal purpose of which is to transfer anything of value from the Federal awarding agency or pass-through entity to the non-Federal entity to carry out a public purpose authorized by a law of the United States (see 31 U.S.C. 6101(3)); and not to acquire property or services for the Federal awarding agency or pass-through entity's direct benefit or use;

(2) Is distinguished from a cooperative agreement in that it does not provide for substantial involvement between the Federal awarding agency or pass-through entity and the non-Federal entity in carrying out the activity contemplated by the Federal award.

(3) Does not include an agreement that provides only:

(i) Direct United States Government cash assistance to an individual;

(ii) A subsidy;

(iii) A loan;

(iv) A loan guarantee; or

(v) Insurance.

Grantee

(see

Recipient

)

HHS awarding agency

means any organization component of HHS that is authorized to make and administer awards.

Hospital

means a facility licensed as a hospital under the law of any state or a facility operated as a hospital by the United States, a state, or a subdivision of a state.

Improper payment:

(1) Means any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements; and

(b) Includes any payment to an ineligible party, any payment for an ineligible good or service, any duplicate payment, any payment for a good or service not received (except for such payments where authorized by law), any payment that does not account for credit for applicable discounts, and any payment where insufficient or lack of documentation prevents a reviewer from discerning whether a payment was proper.

Indian tribe

means any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act (43 U.S.C. Chapter 33), which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians (25 U.S.C. 450b(e)). See annually published Bureau of Indian Affairs list of Indian Entities Recognized and Eligible to Receive Services.

Indirect (Facilities and Administration or F&A) costs

means costs incurred for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved. To facilitate equitable distribution of indirect expenses to the cost objectives served, it may be necessary to establish a number of pools of indirect (F&A) costs. Indirect (F&A) cost pools must be distributed to benefitted cost objectives on bases that will produce an equitable result in consideration of relative benefits derived.

Indirect cost rate proposal

means the documentation prepared by a non-Federal entity to substantiate its request for the establishment of an indirect cost rate as described in Appendix III through Appendix VII, and Appendix IX of this part.

Information technology systems

means computing devices, ancillary equipment, software, firmware, and similar procedures, services (including support services), and related resources. See also

Computing devices

and

Equipment.

Institution of Higher Education (IHE)

is defined at 20 U.S.C. 1001.

Intangible property

means property having no physical existence, such as trademarks, copyrights, patents and patent applications and property, such as loans, notes and other debt instruments, lease agreements, stock and other instruments of property ownership (whether the property is tangible or intangible).

Intermediate cost objective

means a cost objective that is used to accumulate indirect costs or service center costs that are subsequently allocated to one or more indirect cost pools or final cost

objectives. See also

Cost objective

and

Final cost objective.

Internal controls

means a process, implemented by a non-Federal entity, designed to provide reasonable assurance regarding the achievement of objectives in the following categories:

(1) Effectiveness and efficiency of operations;

(2) Reliability of reporting for internal and external use; and

(3) Compliance with applicable laws and regulations.

Internal control over compliance requirements for Federal awards

means a process implemented by a non-Federal entity designed to provide reasonable assurance regarding the achievement of the following objectives for Federal awards:

(1) Transactions are properly recorded and accounted for, in order to:

(i) Permit the preparation of reliable financial statements and Federal reports;

(ii) Maintain accountability over assets; and

(iii) Demonstrate compliance with Federal statutes, regulations, and the terms and conditions of the Federal award;

(2) Transactions are executed in compliance with:

(i) Federal statutes, regulations, and the terms and conditions of the Federal award that could have a direct and material effect on a Federal program; and

(ii) Any other Federal statutes and regulations that are identified in the Compliance Supplement; and

(3) Funds, property, and other assets are safeguarded against loss from unauthorized use or disposition.

Loan

means a Federal loan or loan guarantee received or administered by a non-Federal entity, except as used in the definition of

Program income.

(1) The term “direct loan” means a disbursement of funds by the Federal Government to a non-Federal borrower under a contract that requires the repayment of such funds with or without interest. The term includes the purchase of, or participation in, a loan made by another lender and financing arrangements that defer payment for more than 90 days, including the sale of a Federal Government asset on credit terms. The term does not include the acquisition of a federally guaranteed loan in satisfaction of default claims or the price support loans of the Commodity Credit Corporation.

(2) The term “direct loan obligation” means a binding agreement by a Federal awarding agency to make a direct loan when specified conditions are fulfilled by the borrower.

(3) The term “loan guarantee” means any Federal Government guarantee, insurance, or other pledge with respect to the payment of all or a part of the principal or interest on any debt obligation of a non-Federal borrower to a non-Federal lender, but does not include the insurance of deposits, shares, or other withdrawable accounts in financial institutions.

(4) The term “loan guarantee commitment” means a binding agreement by a Federal awarding agency to make a loan guarantee when specified conditions are fulfilled by the borrower, the lender, or any other party to the guarantee agreement.

Local government

means any unit of government within a state, including a:

(1) County;

(2) Borough;

(3) Municipality;

(4) City;

(5) Town;

(6) Township;

(7) Parish;

(8) Local public authority, including any public housing agency under the United States Housing Act of 1937;

(9) Special district;

(10) School district;

(11) Intrastate district;

(12) Council of governments, whether or not incorporated as a nonprofit corporation under state law; and

(13) Any other agency or instrumentality of a multi-, regional, or intra-state or local government.

Major program

means a Federal program determined by the auditor to be a major program in accordance with § 75.518 or a program identified as a major program by a Federal awarding agency or pass-through entity in accordance with § 75.503(e).

Management decision

means the evaluation by the Federal awarding agency or pass-through entity of the audit findings and corrective action plan and the issuance of a written decision to the auditee as to what corrective action is necessary.

Micro-purchase

means a purchase of supplies or services using simplified acquisition procedures, the aggregate amount of which does not exceed the micro-purchase threshold. Micro-purchase procedures comprise a subset of a non-Federal entity's small purchase procedures. The non-Federal entity uses such procedures in order to expedite the completion of its lowest-dollar small purchase transactions and minimize the associated administrative burden and cost. The micro-purchase threshold is set by the Federal Acquisition Regulation at 48 CFR Subpart 2.1 (Definitions). It is $3,000 except as otherwise discussed in Subpart 2.1 of that regulation, but this threshold is periodically adjusted for inflation.

Modified Total Direct Cost

(MTDC) means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs, and with the approval of the cognizant agency for indirect costs.

Non-Federal entity

means a state, local government, Indian tribe, institution of higher education (IHE), or nonprofit organization that carries out a Federal award as a recipient or subrecipient.

Nonprofit organization

means any corporation, trust, association, cooperative, or other organization, not including IHEs, that:

(1) Is operated primarily for scientific, educational, service, charitable, or similar purposes in the public interest;

(2) Is not organized primarily for profit; and

(3) Uses net proceeds to maintain, improve, or expand the operations of the organization.

Obligations

means orders placed for property and services, contracts and subawards made, and similar transactions during a given period that require payment by the non-Federal entity during the same or a future period.

Office of Management and Budget

(OMB) means the Executive Office of the President, Office of Management and Budget.

Oversight agency for audit

means the Federal awarding agency that provides the predominant amount of funding directly to a non-Federal entity not assigned a cognizant agency for audit. When there is no direct funding, the Federal awarding agency which is the predominant source of pass-through funding must assume the oversight responsibilities. The duties of the oversight agency for audit and the process for any reassignments are described in § 75.513(b).

Participant support costs

means direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences, or training projects.

Pass-through entity

means a non-Federal entity that provides a subaward to a subrecipient to carry out part of a Federal program.

Performance goal

means a target level of performance expressed as a tangible, measurable objective, against which actual achievement can be compared, including a goal expressed as a quantitative standard, value, or rate. In some instances (

e.g.,

discretionary research awards), this may be limited to the requirement to submit technical performance reports (to be evaluated in accordance with agency policy).

Period of performance

means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award. The Federal awarding agency or pass-through entity must include start and end dates of the period of performance in the Federal award (see §§ 75.210(a)(5) and 75.352(a)(1)(v)).

Personal property

means property of any kind except real property. It may be tangible, having physical existence, or intangible, such as copyrights, patents, or securities.

Personally Identifiable Information (PII)

means information that can be used to distinguish or trace an individual's identity, either alone or when combined with other personal or identifying information that is linked or linkable to a specific individual. Some information that is considered to be PII is available in public sources such as telephone books, public Web sites, and university listings. This type of information is considered to be Public PII and includes, for example, first and last name, address, work telephone number, email address, home telephone number, and general educational credentials. The definition of PII is not anchored to any single category of information or technology. Rather, it requires a case-by-case assessment of the specific risk that an individual can be identified. Non-PII can become PII whenever additional information is made publicly available, in any medium and from any source, that, when combined with other available information, could be used to identify an individual.

Principal Investigator/Program Director (PI/PD)

means the individual (s) designated by the recipient to direct the project or program being supported by the grant. The PI/PD is responsible and accountable to officials of the recipient organization for the proper conduct of the project, program, or activity.

Prior approval

means written approval by an authorized HHS official evidencing prior consent before a recipient undertakes certain activities or incurs specific costs.

Program income

means gross income earned by the non-Federal entity that is directly generated by a supported activity or earned as a result of the Federal award during the period of performance except as provided in § 75.307(f). (See

Period of performance.

) Program income includes but is not limited to income from fees for services performed, the use or rental or real or personal property acquired under Federal awards, the sale of commodities or items fabricated under a Federal award, license fees and royalties on patents and copyrights, and principal and interest on loans made with Federal award funds. Interest earned on advances of Federal funds is not program income. Except as otherwise provided in Federal statutes, regulations, or the terms and conditions of the Federal award, program income does not include rebates, credits, discounts, and interest earned on any of them. See also § 75.307, § 75.407 and 35 U.S.C. 200-212 (applies to inventions made under Federal awards).

Project costs

means total allowable costs incurred under a Federal award and all required cost sharing and voluntary committed cost sharing, including third-party contributions.

Project period

(see

Period of performance

).

Property

means real property or personal property.

Protected Personally Identifiable Information (Protected PII) Protected PII

means an individual's first name or first initial and last name in combination with any one or more of types of information, including, but not limited to, social security number, passport number, credit card numbers, clearances, bank numbers, biometrics, date and place of birth, mother's maiden name, criminal, medical and financial records, educational transcripts. This does not include PII that is required by law to be disclosed. (See also Personally Identifiable Information (PII)).

Questioned cost

means a cost that is questioned by the auditor because of an audit finding:

(1) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds;

(2) Where the costs, at the time of the audit, are not supported by adequate documentation; or

(3) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances.

Real property

means land, including land improvements, structures and appurtenances thereto, but excludes moveable machinery and equipment.

Recipient

means an entity, usually but not limited to non-Federal entities, that receives a Federal award directly from a Federal awarding agency to carry out an activity under a Federal program. The term recipient does not include subrecipients. See also

Non-Federal entity.

Research

is defined as a systematic study directed toward fuller scientific knowledge or understanding of the subject studied. “Development” is the systematic use of knowledge and understanding gained from research directed toward the production of useful materials, devices, systems, or methods, including design and development of prototypes and processes.

Research and Development (R&D)

means all research activities, both basic and applied, and all development activities that are performed by HHS award recipients. The term research also includes activities involving the training of individuals in research techniques where such activities utilize the same facilities as other research and development activities and where such activities are not included in the instruction function.

Simplified acquisition threshold

means the dollar amount below which a non-Federal entity may purchase property or services using small purchase methods. Non-Federal entities adopt small purchase procedures in order to expedite the purchase of items costing less than the simplified acquisition threshold. The simplified acquisition threshold is set by the Federal Acquisition Regulation at 48 CFR Subpart 2.1 and in accordance with 41 U.S.C. 1908. See also

Mic

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