[Federal Register Volume 63, Number 126 (Wednesday, July 1, 1998)]
[Rules and Regulations]
[Pages 36144-36145]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-17256]



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Part VII

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Department of Education





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34 CFR Parts 74 and 80



Administration of Grants and Agreements With Institutions of Higher 
Education, Hospitals, and Other Non-Profit Organizations; and Uniform 
Administrative Requirements for Grants and Cooperative Agreements to 
State and Local Governments; Final Rule

  Federal Register / Vol. 63, No. 126 / Wednesday July 1, 1998 / Rules 
and Regulations  

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DEPARTMENT OF EDUCATION

34 CFR Parts 74 and 80


Administration of Grants and Agreements With Institutions of 
Higher Education, Hospitals, and Other Non-Profit Organizations; and 
Uniform Administrative Requirements for Grants and Cooperative 
Agreements to State and Local Governments

AGENCY: Department of Education.

ACTION: Applicability of revised Office of Management and Budget 
circulars A-21, A-87, A-102, A-110, and A-122.

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SUMMARY: The Secretary announces the applicability of five revised 
Office of Management and Budget (OMB) circulars. These revised 
circulars provide conditional exceptions from certain regulatory 
requirements for the Department of Education (ED) grant programs. The 
Secretary takes this action to promote efficiency in the State and 
local program administration of these programs.

DATES: The revised circulars are applicable as of July 1, 1998.

FOR FURTHER INFORMATION CONTACT: Ronelle Holloman, U.S. Department of 
Education, 600 Independence Avenue, SW, Room 3652, ROB-3, Washington, 
DC 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.
    Individuals with disabilities may obtain this document in an 
alternate format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed in the preceding 
paragraph.

SUPPLEMENTARY INFORMATION: On August 29, 1997, OMB published in the 
Federal Register (62 FR 45934) final revisions to five OMB circulars. 
The five circulars are A-21, ``Cost Principles for Educational 
Institutions''; A-87, ``Cost Principles for State, Local, and Indian 
Tribal Governments''; A-102, ``Grants and Cooperative Agreements with 
State and Local Governments''; A-110, ``Uniform Administrative 
Requirements for Grants and Agreements with Institutions of Higher 
Education, Hospitals and Other Non-Profit Organizations''; and A-122, 
``Cost Principles for Non-Profit Organizations.'' Now the Secretary of 
ED announces the applicability of the five revised circulars to the 
Department's grant programs.
    These revisions to the circulars provide a conditional exception 
from the requirements of 34 CFR Part 74 and a conditional class 
exception from the requirements of 34 CFR Part 80 for certain ED grant 
programs. The programs to which these revisions can apply are those 
formula grant programs with statutorily-authorized consolidated 
planning and consolidated administrative funding that are identified by 
ED and approved by the Secretary.
    The Secretary can apply the exception to formula grant programs 
that are administered by State and local governments, and have the 
following characteristics: the related programs (1) serve a common 
program purpose, (2) have specific statutorily-authorized consolidated 
planning and consolidated administrative funding, and (3) are 
administered by State agencies that are funded mostly by non-Federal 
sources. To promote efficiency in the State and local program 
administration of such related programs, ED can exempt these covered, 
State-administered programs from Federal grants management requirements 
in OMB Circulars A-21, A-87, A-110 (34 CFR Part 74), and A-122 and the 
Grants Management Common Rule (34 CFR Part 80). The exemptions are from 
all but the allocability-of-costs provisions of Circulars A-21 (Section 
C, subpart 4), A-87 (Attachment A, subsection C.3), A-122 (Attachment 
A, subsection A.4) and from all of the administrative requirements 
provisions of 34 CFR parts 74 and 80.
    Thus, ED has discretion to exempt a Federal formula grant program 
from the Federal grants management requirements. ED will consult with 
OMB during its consideration of whether to grant such an exemption.
    If ED exempts a Federal formula grant program from these 
requirements, a State would be permitted to use only State procedures, 
provided that the State adopts its own written fiscal and 
administrative requirements for expending and accounting for all funds. 
These requirements must be consistent with the provisions of OMB 
Circular A-87 and extend to all sub-recipients. These fiscal and 
administrative requirements must be sufficiently specific to ensure 
that: funds are used in compliance with all applicable Federal 
statutory and regulatory provisions; costs are reasonable and necessary 
for operating these programs; and funds are not used for general 
expenses required to carry out other responsibilities of a State or its 
sub-recipients. If a State does not adopt such fiscal and 
administrative requirements it will continue to be subject to the 
Federal grants management requirements.
    The Department of Education implements OMB Circulars A-102 and A-
110 through regulations codified in 34 CFR Parts 80 and 74 
respectively. Because these regulations contain sufficient discretion 
for ED to implement OMB's guidance, ED does not need to amend these 
regulations.
    In addition, ED adopts the changes to OMB Circulars A-21, A-87 and 
A-122 that contain cost principles for educational institutions, State 
and local governments, and non-profit organizations, respectively. 
These circulars have been amended several times over the years by OMB, 
and ED has adopted these changes by publishing notices in the Federal 
Register. For a complete list of prior amendments to these circulars 
adopted by ED, please consult the following Federal Register 
publications: for OMB Circular A-21, May 8, 1996 (61 FR 20880); for 
Circular A-87, May 17, 1995 (60 FR 26484); and for Circular A-122, May 
14, 1997 (62 FR 26577).
    The five circulars are available by calling OMB's Publication 
Office at (202) 395-7332, or they can be obtained in electronic form 
from the OMB Home Page at (http://www.whitehouse.gov/WH/EOP/omb).

Waiver of Notice and Comment

    It is the practice of the Secretary to offer interested parties the 
opportunity to comment on proposed actions in accordance with the 
Administrative Procedure Act (5 U.S.C. 553). However, since OMB 
previously provided the public an opportunity for comment on the 
revision of Circulars A-21, A-87, A-102, A-110 and A-122, the Secretary 
finds that soliciting further public comment with respect to adopting 
the revised circulars is unnecessary and contrary to the public 
interest under 5 U.S.C. 553(b)(B). For the same reasons, the Secretary 
waives the delayed effective date for this action under 5 U.S.C. 
553(d).

Electronic Access to This Document

    Anyone may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or 
portable document format (pdf) on the World Wide Web at either of the 
following sites:

http://ocfo.ed.gov/fedreg.htm
http://www.ed.gov/news.html

To use the pdf you must have the Adobe Acrobat Reader Program with 
Search, which is available free at either of the previous sites. If you 
have questions

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about using the pdf, call the U.S. Government Printing Office toll free 
at 1-888-293-6498.
    Anyone may also view these documents in text copy only on an 
electronic bulletin board of the Department. Telephone: (202) 219-1511 
or, toll free, 1-800-222-4922. The documents are located under Option 
G--Files/Announcements, Bulletins and Press Releases.

    Note: The official version of this document is the document 
published in the Federal Register.

    Dated: June 23, 1998.

(Catalog of Federal Domestic Assistance Number does not apply.)
Donald Rappaport,
Chief Financial and Chief Information Officer.
[FR Doc. 98-17256 Filed 6-30-98; 8:45 am]
BILLING CODE 4000-01-P