[Federal Register Volume 79, Number 244 (Friday, December 19, 2014)]
[Rules and Regulations]
[Pages 75867-76106]
[FR Doc No: 2014-28697]

Vol. 79

Friday,

No. 244

December 19, 2014

Part II

EXECUTIVE OFFICE OF THE PRESIDENT

Office of Management and Budget

2 CFR Parts 1, 25, 170, et al.

DEPARTMENT OF HEALTH AND HUMAN SERVICES

2 CFR Part 300

45 CFR Parts 74, 75, and 92

DEPARTMENT OF AGRICULTURE

2 CFR Parts 400, 415, 416, et al.

Office of the Chief Financial Officer

7 CFR Parts 3015, 3016, 3018, et al.

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, et al.

Rural Utilities Service

7 CFR Parts 1703, 1709, 1710, et al.

Rural Business-Cooperative Service

Rural Housing Service

Rural Utilities Service

Farm Service Agency

7 CFR Parts 1942, 1944, 1951, et al.

Rural Housing Service

7 CFR Parts 3570 and 3575

Rural Business-Cooperative Service

Rural Utilities Service

7 CFR Parts 4274, 4279, 4280, et al.

DEPARTMENT OF STATE

2 CFR Part 600

22 CFR Parts 135 and 145

AGENCY FOR INTERNATIONAL DEVELOPMENT

2 CFR Part 700

22 CFR Part 226

DEPARTMENT OF VETERANS AFFAIRS

2 CFR Part 802

38 CFR Parts 41 and 43

DEPARTMENT OF ENERGY

2 CFR Part 910

10 CFR Parts 602, 605, and 733

DEPARTMENT OF TREASURY

2 CFR Part 1000

DEPARTMENT OF DEFENSE

2 CFR Part 1103

DEPARTMENT OF TRANSPORTATION

2 CFR Part 1201

49 CFR Parts 18 and 19

DEPARTMENT OF COMMERCE

2 CFR Part 1327

15 CFR Parts 14 and 24

DEPARTMENT OF THE INTERIOR

2 CFR Part 1402

43 CFR Part 12

ENVIRONMENTAL PROTECTION AGENCY

2 CFR Part 1500

40 CFR Parts 30, 31, 33, et al.

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

2 CFR Part 1800

14 CFR Parts 1260 and 1273

CORPORATION FOR NATIONAL AND COMMUNITY SERVICE

2 CFR Part 2205

45 CFR Parts 1235, 2510, 2520, et al.

SOCIAL SECURITY ADMINISTRATION

2 CFR Part 2300

20 CFR Parts 435 and 437

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

2 CFR Part 2400

24 CFR Parts 84 and 85

NATIONAL SCIENCE FOUNDATION

2 CFR Part 2500

45 CFR Part 602

NATIONAL ARCHIVES AND RECORDS ADMINISTRATION

2 CFR Part 2600

36 CFR Parts 1206, 1207, and 1210

SMALL BUSINESS ADMINISTRATION

2 CFR Part 2701

13 CFR Part 143

DEPARTMENT OF JUSTICE

2 CFR Part 2800

28 CFR Parts 66 and 70

DEPARTMENT OF LABOR

2 CFR Part 2900

DEPARTMENT OF HOMELAND SECURITY

2 CFR Part 3002

Federal Emergency Management Agency

44 CFR Parts 13, 78, 79, et al.

INSTITUTE OF MUSEUM AND LIBRARY SERVICES

2 CFR Part 3187

45 CFR Parts 1180 and 1183

NATIONAL ENDOWMENT FOR THE ARTS

2 CFR Part 3255

45 CFR Part 1157

NATIONAL ENDOWMENT FOR THE HUMANITIES

2 CFR Part 3374

45 CFR Part 1174

DEPARTMENT OF EDUCATION

2 CFR Part 3474

34 CFR Parts 74, 75, 76, et al.

EXECUTIVE OFFICE OF THE PRESIDENT

Office of National Drug Control Policy

2 CFR Part 3603

21 CFR Parts 1403, 1404, and 1405

GULF COAST ECOSYSTEM RESTORATION COUNCIL

2 CFR Part 5900

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

Federal Register / Vol. 79 , No. 244 / Friday, December 19, 2014 /
Rules and Regulations

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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.

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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<PHONE_NUMBER>. 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 Sec.  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 Sec.  75.207 or Sec.  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

0
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.

0
2. Revise Sec.  1.215 to read as follows:

Sec.  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:

------------------------------------------------------------------------
                                                      Previously  was in
       Guidance  in * * *              On  * * *             * * *
------------------------------------------------------------------------
(a) Chapter I, part 180.........  Nonprocurement      OMB guidance that
                                   debarment and       conforms with the
                                   suspension.         government-wide
                                                       common rule (see
                                                       60 FR 33036, June
                                                       26, 1995).
(b) Chapter I, part 182.........  Drug-free           OMB guidance (54
                                   workplace           FR 4946, January
                                   requirements.       31, 1989) and a
                                                       government-wide
                                                       common rule (as
                                                       amended at 68 FR
                                                       66534, November
                                                       26, 2003).
(c) Chapter II, part 200........  Uniform             OMB Circulars A-
                                   administrative      21, ``Cost
                                   requirements,       Principles for
                                   cost principles,    Educational
                                   and audit           Institutions''
                                   requirements for    (Chapter II, part
                                   federal awards.     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

0
3. The authority citation for part 25 continues to read as follows:

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

0
4. Revise the heading of 2 CFR part 25 to read as set forth above.

Sec. Sec.  25.100 and 25.310  [Amended]

0
5. Amend Sec. Sec.  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''.

Sec. Sec.  25.100, 25.110, 25.200, 25.205, 25.310, and Appendix A to
Part 25  [Amended]

0
6. Amend Sec. Sec.  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''.

Sec. Sec.  25.100, 25.110, 25.200, 25.205, 25.210, 25.215, 25.315, and
Appendix A to Part 25  [Amended]

0
7. Amend Sec. Sec.  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]

0
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

0
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]

0
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)

0
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.

Sec.  180.25  [Amended]

0
12. Amend Sec.  180.25 paragraph (a), second sentence by removing
``has'' and adding, in its place ``have''.

Sec. Sec.  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]

0
13. Amend Sec. Sec.  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''.

Sec.  180.155 and 180.500  [Amended]

0
14. Amend Sec. Sec.  180.155 and 180.500 by removing, wherever they
appear ``EPLS'' and adding, in their place ``SAM Exclusions''.
0
15. Amend Sec. Sec.  180.155 and 180.500 by removing, wherever they
appear ``Excluded Parties List System'' and adding, in their place,
``System for Award Management Exclusions''.
0
16. Revise the heading of Subpart E to read as follows:

Subpart E--System for Award Management Exclusions

Sec.  180.505  [Amended]

0
17. Amend Sec.  180.505 paragraph (c) by removing ``is'' and adding, in
its place ``are''.

Sec.  180.515  [Amended]

0
18. Amend Sec.  180.515 paragraph (a)(7) by removing ``Dun and
Bradstreet Number (DUNS), or other similar code'' and adding, in its
place, ``unique entity identifier''.
0
19. Revise Sec.  180.530 to read as follows:

Sec.  180.530  Where can I find SAM Exclusions?

    You may access SAM Exclusions through the Internet, currently at
https://www.sam.gov.

0
20. Revise Sec.  180.945 to read as follows:

Sec.  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

0
21. The authority citation for part 200 continues to read as follows:

    Authority: 31 U.S.C. 503.

Sec.  200.0  [Amended]

0
22. Amend Sec.  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''.

0
23. Revise Sec.  200.7 to read as follows:

Sec.  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.
0
24. Revise Sec.  200.19 paragraphs (a), (b), (c) and add a new
paragraph (d) to read as follows:

Sec.  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.

Sec.  200.32  [Removed and Reserved]

0
25. Remove and reserve Sec.  200.32.

Sec.  200.42  [Amended]

0
26. In Sec.  200.42, paragraph (b), remove ``should'' and add, in its
place, ``must''.

Sec.  200.47  [Amended]

0
27. In Sec.  200.47, paragraph (a), remove ``are'' and add, in its
place, ``is''.

Sec.  200.50  [Amended]

0
28. In Sec.  200.50, add ``, also known as the Yellow Book,'' after
``GAGAS''.

Sec.  200.56  [Amended]

0
29. In Sec.  200.56, third sentence, remove ``should'' and add, in its
place, ``must''.

Sec.  200.57  [Amended]

0
30. Amend Sec.  200.57 by adding ``, and Appendix IX to Part 200--
Hospital Cost Principles'' after ``this part'' at the end of the
paragraph.

0
31. Revise Sec.  200.68 to read as follows:

Sec.  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.

0
32. In Sec.  200.80, revise the first sentence to read as follows:

Sec.  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 Sec.  200.307 paragraph (f).***

Sec.  200.90  [Amended]

0
33. In Sec.  200.90, correct the text ``Virgin Islands'' to read ``U.S.
Virgin Islands''.

0
34. In Sec.  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:

Sec.  200.101  Applicability.

* * * * *
    (b) ***
    (1) ***

[GRAPHIC] [TIFF OMITTED] TR19DE14.000

    (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).
* * * * *

0
35. In Sec.  200.102, revise paragraph (b) and the first sentence of
paragraph (c) to read as follows:

Sec.  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. * * *
* * * * *

Sec.  200.104  [Amended]

0
36. Amend Sec.  200.104 paragraph (g) by removing ``,'' after
``Organizations''.

0
37. In Sec.  200.110, revise paragraph (a) to read as follows:

Sec.  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 Sec. Sec.  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 Sec.  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.
* * * * *

0
38. In Sec.  200.200, revise paragraph (a) to read as follows:

Sec.  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.
* * * * *

0
39. In Sec.  200.201, revise paragraph (b)(1) to read as follows:

Sec.  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:
* * * * *

0
40. In Sec.  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:

Sec.  200.203  Notices of funding opportunities.

* * * * *
    (c) * * *
    (5) Application Review Information including the criteria and
process to be used to evaluate applications. See also Sec. Sec.
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).

0
41. In Sec.  200.205, revise paragraph (a) to read as follows:

Sec.  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.
* * * * *

0
42. Revise Sec.  200.207 to read as follows:

Sec.  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 Sec.  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 Sec.  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.

0
43. In Sec.  200.210. revise paragraphs (a)(1) and (a)(2) to read as
follows:

Sec.  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;
* * * * *

0
44. Add Sec.  200.212 to subpart C to read as follows:

Sec.  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.

0
45. Amend Sec.  200.301, the first and third sentence, by removing
``governmentwide''.

0
46. In Sec.  200.303, revise the second sentence of paragraph (a) and
revise paragraphs (c) and (e) to read as follows:

Sec.  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.

0
47. In Sec.  200.305, revise paragraphs (b) introductory text,
(b)(2)(i), (b)(2)(ii), (b)(6), and (b)(9) to read as follows:

Sec.  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 Sec.  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
Sec. Sec.  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/.

0
48. In Sec.  200.306, revise paragraphs (a), (c), and (d) and add
paragraph (k) to read as follows:

Sec.  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
Sec. Sec.  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.

0
49. In Sec.  200.307, revise paragraphs (d) and (e)(2) and add
paragraph (g) to read as follows:

Sec.  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 Sec. Sec.  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.

0
50. In Sec.  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:

Sec.  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 Sec.  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 Sec. Sec.  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.

Sec.  200.309  [Amended]

0
51. Amend Sec.  200.309, by adding ``(except as described in Sec.
200.461 Publication and printing costs)'' after ``performance''.

Sec.  200.311   [Amended]

0
52. Amend Sec.  200.311, paragraphs (c)(1) and (c)(2) by adding ``the''
before ``non-Federal entity''.

0
53. In Sec.  200.312, revise the first sentence of paragraph (c) to
read as follows:

Sec.  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.* * *

Sec.  200.313  [Amended]

0
54. Amend Sec.  200.313, paragraph (a)(1) by removing ``until funding
for the project ceases'' and adding, in its place, ``during the period
of performance''.

Sec.  200.315  [Amended]

0
55. Amend Sec.  200.315, paragraph (e)(1), first sentence by removing
``addition, in''.

0
56. Revise Sec.  200.318, paragraphs (a), (c)(1), (h), and (j)(1) to
read as follows:

Sec.  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 Sec.  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:
* * * * *

Sec.  200.319  [Amended]

0
57. Amend Sec.  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''.

0
58. Revise Sec.  200.320, paragraphs (a), (c)(2)(i), and (c)(2)(iii) to
read as follows:

Sec.  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 (Sec.  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;
* * * * *

Sec.  200.322  [Amended]

0
59. Amend Sec.  200.322, by removing ``acquired by'' and adding, in its
place ``acquired during''.

0
60. In Sec.  200.331, revise paragraphs (a)(1)(i), (a)(1)(ii), (a)(4),
(a)(5), (b), and (d)(1) to read as follows:

Sec.  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 Sec.  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.
* * * * *

Sec.  200.337  [Amended]

0
61. Amend Sec.  200.337 by removing ``state or local'' and adding, in
its place ``state, local, and tribal''.

Sec.  200.340  [Amended]

0
62. Amend Sec.  200.340(c) by adding '' (forthcoming at time of
publication)'' after ``2 CFR part 77''.

Sec.  200.341  [Amended]

0
63. Amend Sec.  200.341 by removing ``proceedings which'' and adding,
in its place ``proceedings to which''.

Sec.  200.343  [Amended]

0
64. Amend Sec.  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.

Sec.  200.344  [Amended]

0
65. Amend Sec.  200.344, paragraph (a) introductory text by removing
``.'' and adding, in its place ``;'' and paragraph (b) by adding ``,''
after section.

Sec.  200.400  [Amended]

0
66. Amend Sec.  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''.

Sec.  200.404  [Amended]

0
67. Amend Sec.  200.404, paragraph (b) by adding ``, local, tribal,''
after ``state''.

Sec.  200.405  [Amended]

0
68. Amend Sec.  200.405, paragraph (d) by removing ``should'' and
adding, in its place ``must''.

Sec.  200.406  [Amended]

0
69. Amend Sec.  200.406, paragraph (b) second sentence by removing
``should'' and adding, in its place ``must''.

0
70. In Sec.  200.407, revise paragraphs (e) through (v) and add
paragraphs (w), (x) and (y) to read as follows:

Sec.  200.407  Prior written approval (prior approval).

* * * * *
    (e) Sec.  200.311 Real property;
    (f) Sec.  200.313 Equipment;
    (g) Sec.  200.332 Fixed amount subawards;
    (h) Sec.  200.413 Direct costs, paragraph (c);
    (i) Sec.  200.430 Compensation--personal services, paragraph (h);
    (j) Sec.  200.431 Compensation--fringe benefits;
    (k) Sec.  200.438 Entertainment costs;
    (l) Sec.  200.439 Equipment and other capital expenditures;
    (m) Sec.  200.440 Exchange rates;
    (n) Sec.  200.441 Fines, penalties, damages and other settlements;

    (o) Sec.  200.442 Fund raising and investment management costs;
    (p) Sec.  200.445 Goods or services for personal use;
    (q) Sec.  200.447 Insurance and indemnification;
    (r) Sec.  200.454 Memberships, subscriptions, and professional
activity costs, paragraph (c);
    (s) Sec.  200.455 Organization costs;
    (t) Sec.  200.456 Participant support costs;
    (u) Sec.  200.458 Pre-award costs;
    (v) Sec.  200.462 Rearrangement and reconversion costs;
    (w) Sec.  200.467 Selling and marketing costs;
    (x) Sec.  200.470 Taxes (including Value Added Tax); and
    (y) Sec.  200.474 Travel costs.

Sec.  200.413  [Amended]

0
71. Amend Sec.  200.413, paragraph (f)(5) by adding ``See also Sec.
200.442 Fund raising and investment management costs.'' after the first
sentence.

0
72. In Sec.  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:

Sec.  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.

Sec.  200.415  [Amended]

0
73. Amend Sec.  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''.

0
74. In Sec.  200.419, revise the second sentence of paragraph (b)(2) to
read as follows:

Sec.  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.* * *
* * * * *

Sec.  200.430  [Amended]

0
75. Amend Sec.  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)''.

Sec.  200.431  [Amended]

0
76. Amend Sec.  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''.

Sec.  200.433  [Amended]

0
77. Amend Sec.  200.433, paragraph (b) by removing ``(b)(1)'' and
adding, in its place ``(a)''.

Sec.  200.434  [Amended]

0
78. Amend Sec.  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''.

Sec.  200.435  [Amended]

0
79. Amend Sec.  200.435, paragraph (b)(1)(ii)(D) by removing ``for
default''.

Sec.  200.436  [Amended]

0
80. Amend Sec.  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''.

0
81. In Sec.  200.439, add a new paragraph (b)(7) to read as follows:

Sec.  200.439  Equipment and other capital expenditures.

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

0
82. In Sec.  200.440, revise paragraph (a) to read as follows:

Sec.  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.
* * * * *

Sec.  200.443  [Amended]

0
83. Amend Sec.  200.443, paragraph (b)(3) by removing ``46*''.

0
84. In Sec.  200.444, revise paragraph (b) to read as follows:

Sec.  200.444  General costs of government.

* * * * *
    (b) For Indian tribes and Councils of Governments (COGs) (see Sec.
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.

Sec.  200.448  [Amended]

0
85. In Sec.  200.448, amend paragraph (b)(3) by removing the word
``should'' and adding in its place ``must''.

Sec.  200.453  [Amended]

0
86. In Sec.  200.453, amend paragraph (b) by removing the word
``should'' and adding in its place ``must''.

Sec.  200.457  [Amended]

0
87. Amend the first sentence of Sec.  200.457 by removing the text
``routine and security to protect'' and adding, in its place
``protection and security of''.

Sec.  200.463  [Amended]

0
88. Amend Sec.  200.463, paragraph (c), the first sentence by removing
``as a direct cost''.

Sec.  200.464  [Amended]

0
89. Amend Sec.  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''.

0
90. In Sec.  200.474, remove paragraph (c)(3), revise paragraphs (d)
and (e), and add paragraph (f) to read as follows:

Sec.  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.

Sec.  200.501  [Amended]

0
91. Amend Sec.  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''.

Sec.  200.502  [Amended]

0
92. Amend Sec.  200.502, paragraph (a), by removing ``should be based''
and adding, in its place ``must be based.''

Sec.  200.507  [Amended]

0
93. Amend Sec.  200.507, paragraph (b)(1), by adding ``current ''
before ``program-specific audit guide''.

Sec.  200.510  [Amended]

0
94. Amend Sec.  200.510, paragraph (b)(6), by removing ``non-Federal
entity'' and adding, in its place ``auditee.''

0
95. In Sec.  200.512, revise the heading and first sentence of
paragraph (b)(2) to read as follows:

Sec.  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.***
* * * * *

Sec.  200.513  [Amended]

0
96. Amend Sec.  200.513, paragraph (c)(5)(i), by removing ``requirement
of Sec.  200.513 Responsibilities'' and adding, in its place
``requirements of paragraph (c) of this section''.

Sec.  200.514  [Amended]

0
97. Amend Sec.  200.514, paragraph (d)(3), by removing ``the auditor
should'' and adding, in its place ``the auditor must''.

Sec.  200.515  [Amended]

0
98. Amend Sec.  200.515 as follows:
0
(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''.
0
(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.
0
(c) In paragraph (d) (3) (i), remove ``should be presented'' and add,
in its place ``must be presented''.
0
(d) In paragraph (d) (3) (ii), remove ``should be reported'' and add,
in its place ``must be reported''.

Sec.  200.518  [Amended]

0
99. Amend Sec.  200.518 as follows:
0
(a) In paragraph (a), remove ``paragraphs (b) through (i)'' and add, in
its place ``paragraphs (b) through (h)''.
0
(b) In paragraph (b)(1), in the table, remove ``Equal to $750,000'' and
add, in its place ``Equal to or exceed $750,000''.
0
(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]

0
100. Amend Appendix I to Part 200--Full Text of Notice of Funding
Opportunity as follows:
0
(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''.
0
(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''.
0
(c) In Section B, second paragraph, remove ``section D'' and add, in
its place ``Section D''.
0
(d) In Section C.1, fifth sentence, remove ``Section IV'' and add, in
its place ``Section D''.
0
(e) In Section C.1, last sentence, remove references, wherever they
appear to ``Section IV.5'' and add, in their place ``Section D.6''.
0
(f) In Section D.2.i, remove ``Section IV.3'' and add, in its place
``Section D.4''.

0
(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''.
0
(h) In Section D.3, item (ii), remove ``a valid DUNS number'' and add,
in its place ``a valid unique entity identifier''.
0
(i) In Section D.3, item (iii), remove ``all applicable DUNS'' and add,
in its place ``all applicable unique entity identifier''.
0
(j) In Section E.1, second paragraph, remove ``Section III.2'' and add,
in its place ``Section C.2''.

0
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 Sec.  200.322 Procurement of recovered materials.

0
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:
0
(a) In Section A.1.a, add paragraph (3) as set forth below.
0
(b) In Section B.1., remove ``this indirect cost requirements'' and
add, in its place ``these indirect cost requirements''.
0
(c) In Section C.2., remove ``subgrants and subcontracts''.
0
(d) In Section C.7.a, first sentence, remove ``Federal agencies must
use the negotiated rates except as provided in paragraph (e) of Sec.
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 Sec.  200.414 Indirect (F&A) costs, Federal agencies must use the
negotiated rates''
0
(e) In Section C.9.a, remove ``subsection 1.a'' and add, in its place
``subsection C.1.a''
0
(f) In Section C.10, remove ``shall include'' and add, in its place
``must include''.
0
(g) In Section C.11.a.(1), add ``Where a non-Federal entity only
receives funds as a subrecipient, Sec.  200.331 Requirements for pass-
through entities.'' after the last sentence.
0
(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''.
0
(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''.
0
(j) In Section F.2.a, remove ``must'' after ``a proposed indirect cost
rate''.
0
(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]

0
103. Amend Appendix IV to Part 200--Indirect (F&A) Costs Identification
and Assignment, and Rate Determination for Nonprofit Organizations as
follows:
0
(a) In Section B.2.c, remove ``such contracts or subawards'' and add,
in its place ``such as subawards''.
0
(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 Sec.  200.413 Direct Costs''.
0
(c) In Section C.2.a., add ``Where a non-Federal entity only receives
funds as a subrecipient, see the requirements of Sec.  200.331
Requirements for pass-through entities.'' after the last sentence.
0
(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.''.

0
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

* * * * *

0
105. Amend Appendix V to Part 200--State/Local Governmentwide Central
Service Cost Allocation Plans as follows:
0
(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''.
0
(b) In Section E.2, the first sentence, remove ``allocated central
service'' and add, in its place ``allocation central service*''.

0
106. Amend Appendix VI to Part 200--Public Assistance Cost Allocation
Plans as follows:
0
(a) In Section A, third sentence, remove ``Federal agencies'' and add,
in its place ``Federal awarding agencies''.
0
(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''.
0
(c) In Section E.2, remove ``one funding agency'' and add, in its place
``one Federal awarding agency''.
0
(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''.
0
(e) In Section E.4, remove ``the Federal agencies'' and add, in its
place ``the Federal awarding agencies''.

Appendix VII to Part 200 [Amended]

0
107. Amend Appendix VII to Part 200--States and Local Government and
Indian Tribe Indirect Cost Proposals as follows:
0
(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''.
0
(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''.
0
(c) In Section B.3, second sentence, remove ``Appendix VI'' add, in its
place ``Appendix V.''
0
(d) In Section C.3.e, remove ``subcontracts'' and add, in its place
``subawards''.
0
(e) In Section D.1.a, last sentence, remove ``the Common Rule'' and
add, in its place ``Sec.  200.333 Retention Requirements for Records''.
0
(f) In Section F.2, second sentence, remove ``Appendix VI'' and add, in
its place ``Appendix V''.

Appendix IX to Part 200 [Amended]

0
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

0
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.

Sec.  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

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Subtitle A--Department of Health and Human Services

PART 74 [REMOVED AND RESERVED]

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2. Remove and reserve 45 CFR part 74.

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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

Sec.  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