[Federal Register Volume 62, Number 19 (Wednesday, January 29, 1997)] [Rules and Regulations] [Pages 4165-4167] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 97-2196] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF EDUCATION 34 CFR Part 75 RIN 1880-AA61 Direct Grant Programs AGENCY: Department of Education. ACTION: Final regulations. ----------------------------------------------------------------------- SUMMARY: The Secretary amends the Department's regulations on direct grant programs to expand the basis for selecting applications for new grants to include a recipient's previous [[Page 4166]] performance under any Department grant program as well as its failure to submit a final performance report or submission of a report of unacceptable quality. The Secretary has decided not to amend the regulations to change the date by which applications are considered received by the Department of Education. These amendments to the final regulations are part of the Department's continuing effort to improve the discretionary grantmaking process. EFFECTIVE DATE: These regulations take effect February 28, 1997. FOR FURTHER INFORMATION CONTACT: Ronelle Holloman, U.S. Department of Education, 600 Independence Avenue, S.W., Room 3636, ROB-3, Washington, D.C. 20202-4248. Telephone: (202) 205-3501. Individuals who use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339 between 8 a.m. and 8 p.m., Eastern time, Monday through Friday. SUPPLEMENTARY INFORMATION: On September 20, 1995, the Secretary published in the Federal Register (60 FR 48844) a notice of proposed rulemaking (NPRM) proposing to revise sections in the Education Department General Administrative Regulations (EDGAR) regarding the deadline date for applications and how the Secretary selects applications for new grants. These proposed amendments were expected to reduce the processing time for discretionary grants, improve the quality of the final performance report and increase the ability of the Department to ensure that qualified applicants receive grants. The significant difference between the NPRM and this final regulation is the deletion of the amendment that would have changed the requirement for meeting the deadline date for a competition from the postmarked date to the date the application is actually received. Most commenters opposed this change for one or both of the following reasons: (1) those applicants closest in proximity to the Washington, D.C. metropolitan area would have an unfair advantage; and (2) the change would cause additional cost burdens to recipients. Although the Department did receive several responses in support of the change, from commenters who felt that the change would not cause additional hardship and would be fair if ED allowed for reasonable exceptions to the rule, the Secretary decided not to implement this proposed change at this time. The final regulation changes how the Secretary selects applications for new grants (34 CFR 75.217). The regulation expands the basis for selection to include a recipient's prior performance under any Department program, including use of funds and the applicant's failure to submit a final performance report or the submission of a report of unacceptable quality. The Department's motivation for this change is to promote accountability and good stewardship. The change will require a stronger commitment from a recipient to submit a final performance report and allow ED the opportunity to inform the general public and the educational community of successful project outcomes. The majority of commenters who responded agreed with the change and felt that this change would set a precedent for sound performance and accountability. Further details of the comments received are discussed below. Analysis of Comments and Changes In response to the Secretary's invitation in the NPRM, 44 parties submitted comments on the proposed regulations. An analysis of the comments and of the resulting changes in the regulations since the publication of the NPRM follows. Substantive issues are discussed under the section of the regulations to which they pertain. Technical and other minor changes--and suggested changes the Secretary is not legally authorized to make under the applicable statutory authority--are not addressed. Section 75.217 How the Secretary selects applications for new grants. Comments: The Department received a total of 11 comments on this section. The majority of commenters agreed with this change and felt that an institution that received grant funds should be held accountable for meeting the objectives of the grant. Discussion: The Secretary agrees. Accountability is important to ensure progress and success. The submission of a final report provides opportunity for the general public to know that their tax dollars were spent wisely and provides the educational community with the opportunity to replicate a successful project. The failure to meet all of the obligations in a previous grant would alert the Department that something could be seriously wrong and ED would conduct a further review before funds could be granted in the future. Changes: None Comments: One commenter disagreed with the proposed change because the commenter thought it was unfair to penalize an entity for the acts of one individual and that ED does not have standards for report quality. Discussion: This amendment broadened the range of information the Secretary could consider in selecting new grants. The criteria for selection of new grants are established in regulations of the Department. The Secretary does not agree that there need to be separate criteria for reports. In fact, the Secretary has avoided any effort to narrowly circumscribe final reports. This is consistent with the Department's new reengineered grants process that encourages a partnership with its recipients and supports flexibility in the administration of their projects. In filing an interim or final report the grantee must demonstrate that it is making substantial progress toward meeting the objectives of the grant or that it has met the objectives of the grant. A report will be considered substandard if it fails to address how the recipient met the objectives of a grant or, if it failed to meet any objectives, how it will take steps to improve the project and meet the objectives. Changes: None Comments: Several commenters agreed with the proposed change but expressed two similar concerns: (1) How long will a recipient's past poor performance be considered by the Department? (2) What mechanism will be used to allow applicants to receive further funding? Discussion: Generally, in most cases where poor performance has been an issue, the Department relied on the high-risk procedures authorized under Secs. 74.14 and 80.12 of the Education Department General Administrative Regulations (EDGAR). Under the high-risk regulations, ED may impose additional conditions on a recipient to help ensure proper performance. However, there are rare cases where an applicant poses such a risk of misuse of Federal funds that no award should be made. This regulation is intended to be used in those rare cases. ED is aware that recipients face unexpected challenges, some of which can cause a recipient to perform poorly on a grant; therefore, when making future funding decisions, ED will consider any extenuating circumstances on a case-by-case basis. Paperwork Reduction Act of 1995 These regulations have been examined under the Paperwork Reduction Act of 1995 and have been found to contain no information collection requirements. Assessment of Educational Impact In the notice of proposed rulemaking, the Secretary requested comments on whether the proposed regulations would [[Page 4167]] require transmission of information that is being gathered by or is available from any other agency or authority of the United States. Based on the response to the proposed rules and on its own review, the Department has determined that the regulations in this document do not require transmission of information that is being gathered by or is available from any other agency or authority of the United States. List of Subjects in 34 CFR Part 75 Education Department, Discretionary grant programs--education, Continuation funding, Grant administration, Incorporation by reference, Reporting and recordkeeping requirements, Performance reports, Unobligated funds. Dated: January 23, 1997. Richard W. Riley, Secretary of Education. (Catalog of Federal Domestic Assistance Number does not apply) The Secretary amends Part 75 of Title 34 of the Code of Federal Regulations as follows: PART 75--DIRECT GRANT PROGRAMS 1. The authority citation for Part 75 continues to read as follows: Authority: 20 U.S.C. 1221e-3 and 3474, unless otherwise noted. 2. Section 75.217 is amended by revising paragraph (d)(3) to read as follows: Sec. 75.217 How the Secretary selects applications for new grants. * * * * * (d) * * * (3) Any other information-- (i) Relevant to a criterion, priority, or other requirement that applies to the selection of applications for new grants; (ii) Concerning the applicant's performance and use of funds under a previous award under any Department program; and (iii) Concerning the applicant's failure under any Department program to submit a performance report or its submission of a performance report of unacceptable quality. * * * * * [FR Doc. 97-2196 Filed 1-28-97; 8:45 am] BILLING CODE 4000-01-P