Indirect Cost Appeals

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Parts 16, 74, 75, and 95

Indirect Cost Appeals

AGENCY: Department of Health and Human Services (HHS).

ACTION: Notice of Proposed Rulemaking (NPRM).

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SUMMARY: This NPRM would remove the informal grant appeals procedure

for indirect cost rates and other cost issues. The regional HHS

Divisions of Cost Allocation have been reorganized into a new Program

Support Center and no longer report to the Regional Directors, making

the process obsolete. The Department also sees little value in this

formal appeals process because it frequently lengthens the time

required for appeals. Deletion of this rule will reduce internal

management regulations as required by Executive Order 12861.

DATES: Comments must be submitted by May 5, 1997.

ADDRESSES: Comments must be in writing and should be mailed or faxed

to Charles Gale, Director, Office of Grants Management, HHS, Room 517-

D, 200 Independence Ave. SW., Washington DC 20201; FAX (202) 690-8772.

Written comments may be inspected at the identified address during

agency business hours from 9:30 a.m. to 5:30 p.m.

FOR FURTHER INFORMATION CONTACT:

Ronald Speck, (202) 401-2751. For the hearing impaired only: TDD (202)

690-6415.

SUPPLEMENTARY INFORMATION: We propose to remove 45 CFR part 75,

``Informal grant appeals procedures,'' together with all references to

it. Part 75 provides for an informal appeals process to the Regional

Directors (prior to formal appeals under 45 CFR part 16) for disputes

arising from determinations made by a Director, Division of Cost

Allocation (DCA) in the Department's regional offices, concerning

indirect cost rates and certain other cost allocation plans. The

Department's Divisions of Cost Allocation have been reorganized into a

new Program Support Center and no longer report to the Regional

Directors. Consequently the procedures in part 75 are obsolete.

In addition, experience has shown that this informal appeals

process actually resolves very few of the covered disputes, because

most of these informal appeals are subsequently appealed to the

Departmental Appeals Board established by 45 CFR part 16. Therefore,

this informal appeals process has the effect of lengthening the total

time required to finally resolve the subject appeals.

Since the department sees little value in this informal appeals

process, and this process is obsolete, we propose to eliminate part 75

and thereby reduce internal management regulations as required by

Executive Order 12861.

Regulatory Impact Analyses

Executive Order 12866

In accordance with the provisions of Executive Order 12866, this

proposed rule was not reviewed by the Office of Management and Budget.

Regulatory Flexibility Act

The Secretary, in accordance with the Regulatory Flexibility Act (5

U.S.C. 605(b)), has reviewed this proposed rule before publication and,

by approving it, certifies that it does not have a significant impact

on a substantial number of small entities.

Paperwork Reduction Act

This proposed rule does not contain information collection

requirements requiring clearance under the Paperwork Reduction Act.

List of Subjects in 45 CFR Parts 16, 74, 75, and 95

Accounting, Administrative practice and procedure, Grant programs--

health, Grant programs--social programs, Grants administration,

Reporting and recordkeeping requirements.

(Catalog of Federal Domestic Assistance Number does not apply)

Dated: February 25, 1997.

Donna E. Shalala,

Secretary.

Accordingly, for the reasons set forth above, it is proposed that

title 45 of the Code of Federal Regulations be amended as follows:

PART 16--PROCEDURES OF THE DEPARTMENTAL GRANT APPEALS BOARD

1. The authority citation for part 16 would continue to read as

follows:

Authority: 5 U.S.C. 301 and secs. 1, 5, 6, and 7 of

Reorganization Plan No. 1 of 1953, 18 FR 2053, 67 Stat. 631 and

authorities cited in the Appendix.

Sec. 16.3 [Amended]

2. Section 16.3 would be amended in paragraph (c) by removing the

words ``and part 75 of this title for rate determinations and cost

allocation plans''.

Appendix A to Part 16--[Amended]

3. Section D. of appendix A would be amended by removing the last

sentence.

PART 74--UNIFORM ADMINISTRATIVE REQUIREMENTS FOR AWARDS AND

SUBAWARDS TO INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, OTHER

NONPROFIT ORGANIZATIONS, AND COMMERCIAL ORGANIZATIONS; AND CERTAIN

GRANTS AND AGREEMENTS WITH STATES, LOCAL GOVERNMENTS AND INDIAN

TRIBAL GOVERNMENTS

4. The authority citation for part 74 would continue to read as

follows:

Authority: 5 U.S.C. 301; OMB Circular A-110 (November 29, 1993,

58 FR 62992).

Sec. 74.62 [Amended]

5. Section 74.62 would be amended in paragraph (b) by removing the

numbers ``16, 75,'' and adding, in their place, the number ``16''.

Sec. 74.90 [Amended]

6. Section 74.90 would be amended in paragraph (b) by removing the

words ``parts 16 and 75'' and adding, in their place, the words ``part

16''.

PART 75--[REMOVED]

7. Part 75-- would be removed.

PART 95--GENERAL ADMINISTRATION--GRANT PROGRAMS (PUBLIC ASSISTANCE

AND MEDICAL ASSISTANCE)

8. The authority citation for part 95 would continue to read as

follows:

Authority: Sec. 452(a), 83 Stat. 2351, 42 U.S.C. 652(a); sec.

1102, 49 Stat. 647, 42 U.S.C. 1302; sec. 7(b), 68 Stat. 658, 29

U.S.C. 37(b); sec. 139, 84 Stat. 1323, 42 U.S.C. 2577b; sec. 144, 81

Stat. 529, 42 U.S.C. 2678; sec. 1132, 94 Stat. 530, 42 U.S.C. 1320b-

2; 306(b), 94 Stat. 530, 42 U.S.C. 1320b-2 note, unless otherwise

noted.

Sec. 95.513 [Removed]

9. Section 95.513 would be removed.

Sec. 95.519 [Amended]

10. Section 95.519 would be amended by redesignating paragraph

(b)(1) as paragraph (b), by removing the words ``reconsideration of the

determination under 45 CFR part 75'' and adding, in their place, the

words `'appeal of the determination under 45 CFR part 16'', and by

removing paragraph (b)(2).

[FR Doc. 97-5276 Filed 3-4-97; 8:45 am]

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