[Federal Register Volume 64, Number 179 (Thursday, September 16, 1999)]
[Rules and Regulations]
[Pages 50390-50392]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-22350]



[[Page 50389]]

_______________________________________________________________________

Part III





Department of Education





_______________________________________________________________________



34 CFR Parts 74, 75, 76, 77, and 80



Administration of Grants and Agreements With Institutions of Higher 
Education, Hospitals, and Other Non-Profit Organizations et al; Final 
Rule

  Federal Register / Vol. 64, No. 179 / Thursday, September 16, 1999 / 
Rules and Regulations  

[[Page 50390]]



DEPARTMENT OF EDUCATION

34 CFR Parts 74, 75, 76, 77, and 80


Administration of Grants and Agreements With Institutions of 
Higher Education, Hospitals, and Other Non-Profit Organizations; Direct 
Grant Programs; State-Administered Programs; Definitions That Apply to 
Department Regulations; Uniform Administrative Requirements for Grants 
and Cooperative Agreements to State and Local Governments

AGENCY: Office of the Chief Financial Officer, Department of Education.

ACTION: Final regulations.

-----------------------------------------------------------------------

SUMMARY: The Secretary announces the applicability of revised Office of 
Management and Budget (OMB) Circular A-21, ``Cost Principles for 
Educational Institutions,'' and Circular A-122, ``Cost Principles for 
Non-Profit Organizations.'' The Secretary also announces that the 
interim final regulations the Department issued for 34 CFR 74.26 and 
80.26 on August 29, 1997 (62 FR 45937) are adopted without changes. 
Finally, the Secretary amends the definition of the Education 
Department General Administrative Regulations (EDGAR) in 34 CFR 77.1 to 
include the existing 34 CFR Parts 97, 98, and 99 within the scope of 
EDGAR and make technical changes and update citations in EDGAR.

DATES: These regulations are effective September 16, 1999.
    Applicability Date: The revised circulars and other changes made by 
this document apply to new and continuation grants and subgrants 
awarded on or after September 16, 1999.

FOR FURTHER INFORMATION CONTACT: Ronelle Holloman, U.S. Department of 
Education, 400 Maryland Avenue, SW., Room 3652, ROB-3, Washington, D.C. 
20202-4248. Telephone: (202) 205-3501. Fax: (202) 205-0667. E-mail 
Address: [email protected]. If you use a telecommunications device 
for the deaf (TDD) you may call the Federal Information Relay Service 
(FIRS) at 1-800-877-8339.
    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:

I. Introduction

    In fiscal year 1998 OMB made final revisions to Circular A-21, 
``Cost Principles for Educational Institutions,'' and Circular A-122, 
``Cost Principles for Non-Profit Organizations.'' You may request a 
recompilation of OMB Circulars A-21 and A-122 with all their amendments 
by calling OMB Publication's Office at (202) 395-7332 or you can obtain 
the circulars in electronic form on the OMB Home Page at http://
www.whitehouse.gov/WH/EOP/omb.

II. Revisions to 34 CFR Parts 74 and 80

A. Revision That Affects Educational Institutions

    On June 1, 1998, (63 FR 29786) OMB published in the Federal 
Register interim final revisions to OMB Circular A-21 to allow 
trustees' travel expenses. On October 27, 1998, (63 FR 57332) OMB 
adopted the interim final revisions without change. The Secretary 
adopts the changes made by OMB on those dates in the Department's 
regulations at 34 CFR Parts 74 and 80. The changes adopted in these 
final regulations bind all recipients of Department grants and 
cooperative agreements to the requirements of Circular A-21 as amended 
through October 27, 1998. These cost principles apply to educational 
institutions, except to the extent program regulations or the EDGAR 
require a different outcome.

B. Revision That Affects Non-Profit Organizations

    On June 1, 1998, (63 FR 29794) OMB published in the Federal 
Register a full revision of OMB Circular A-122. OMB amended OMB 
Circular A-122 by: revising the definition for equipment; requiring the 
breakout of indirect costs into two categories (facilities and 
administration) for certain non-profit organizations; modifying the 
multiple allocation basis; and clarifying the treatment of certain cost 
items. The Secretary adopts the changes made by OMB on June 1, 1998 in 
the Department's regulations at 34 CFR Parts 74 and 80. The changes 
adopted in these final regulations bind all recipients of Department 
grants and cooperative agreements to the requirements of Circular A-122 
as amended through June 1, 1998. These cost principles apply to non-
profit organizations, except to the extent program regulations or the 
EDGAR require a different outcome.

C. Other Revisions to OMB Circulars and the Common Rule

    On August 10, 1998, (63 FR 42645) OMB announced the final revision 
of OMB Circular A-110, ``Uniform Administrative Requirements for Grants 
and Agreements with Institutions of Higher Education, Hospitals, and 
Other Non-Profit Organizations.'' The August 10, 1998, OMB notice 
adopted for OMB Circular A-110 the final amendments that had been 
published as interim final revisions on August 29, 1997 (62 FR 45934). 
The August 29, 1997 interim final rulemaking document published by the 
Secretary and other participants in the Common Rule (62 FR 45937, 
45943) amended both 34 CFR 74.26 and 80.26 to give effect to OMB's 
rescission of Circular A-128, ``Audits of State and Local 
Governments,'' and OMB's consolidation into A-133 of the requirements 
for State and local governments that had formerly been in Circular A-
128. The Secretary adopts these changes to 34 CFR parts 74 and 80 as 
final regulations of the Department.

III. Other Technical Changes

    The Secretary makes technical changes to various sections in 34 CFR 
Parts 75, 76, 77 and 80 to remove obsolete references and make other, 
nonsubstantive clarifying changes. Included in these changes is an 
amendment to 34 CFR Part 77 amending the definition of EDGAR to include 
34 CFR Part 97, Protection of Human Subjects; 34 CFR Part 98, Student 
Rights in Research, Experimental Programs and Testing; and 34 CFR Part 
99, Family Educational Rights and Privacy. The effect of this amendment 
is to include these three parts in future publications of EDGAR.
    The Department's discretionary and formula grant program 
regulations currently refer to EDGAR under sections that carry headings 
such as ``What regulations apply to this program?'' These program 
regulations are not amended by this document to include references to 
34 CFR parts 97-99 of EDGAR as amended by this final rulemaking 
document. The Secretary will amend these program regulations in the 
future to add the appropriate references. However, parts 97 through 99 
apply to the grant programs of the Department as a matter of law as 
specified in parts 97-99. Thus, the amendment in these final 
regulations to the definition of ``EDGAR'' does not affect the 
applicability of parts 97-99 to those programs.

Waiver of Proposed Rulemaking and Delayed Effective Date

    It is the practice of the Secretary to offer interested parties the 
opportunity to comment on proposed regulations in accordance with the 
Administrative Procedure Act (5 U.S.C. 553) and to delay the effective 
date of final regulations under that Act. However, since OMB has 
previously provided the public an opportunity for comment on

[[Page 50391]]

the revision of Circulars A-21 and A-122, and the technical amendments 
made in this document are not substantive, the Secretary finds that 
soliciting further public comment with respect to adopting the 
amendments made by this document is unnecessary and contrary to the 
public interest under 5 U.S.C. 553(b)(B). Since changes to the relevant 
circulars has already been made final by OMB and the other changes made 
by this document are only technical in nature, the Secretary also 
waives the delayed effective date for these amendments under 5 U.S.C. 
553(d).

Regulatory Flexibility Act Certification

    The Secretary certifies that these regulations would not have a 
significant economic impact on a substantial number of small entities. 
These regulations would not have a significant economical impact on any 
entities affected because they do not make any substantive changes.

Paperwork Reduction Act of 1995

    These regulations do not contain any information collection 
requirements.

Assessment of Educational Impact

    Based on our own review, we have determined that these final 
regulations do not require transmission of information that any other 
agency or authority of the United States gathers or makes available.

Electronic Access to This Document

    You may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or Adobe 
Portable Document Format (PDF) on the Internet 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 about using the PDF, call the U.S. Government Printing 
Office (GPO), toll free, at 1-888-293-6498; or in the Washington, D.C. 
area, at (202) 512-1530.

    Note: The official version of this document is the document 
published in the Federal Register. Free Internet access to the 
official edition of the Federal Register and the Code of Federal 
Regulations is available on GPO Access at: http://
www.access.gpo.gov/nara/index.html

(Catalog of Federal Domestic Assistance Number does not apply)

List of Subjects

34 CFR Part 74

    Accounting, Colleges and universities, Grant programs, Hospitals, 
Non-profit organizations, Reporting and recordkeeping requirements.

34 CFR Part 75

    Accounting, Administrative practice and procedure, Copyright, 
Education, Grant programs-education, Inventions and patents, Private 
schools, Reporting and recordkeeping requirements.

34 CFR Part 76

    Accounting, Administrative practice and procedure, American Samoa, 
Education, Grant programs-education, Guam, Northern Mariana Islands, 
Pacific Islands Trust Territory, Private Schools, Reporting and 
recordkeeping requirements, Virgin Islands.

34 CFR Part 77

    Education, Grant programs-education.

34 CFR Part 80

    Accounting, Grant programs, Indians, Intergovernmental relations, 
Loan programs, Reporting and recordkeeping requirements.

    Dated: August 18, 1999.
Richard W. Riley,
Secretary of Education.

    For the reasons discussed in the preamble, the Secretary adopts as 
final without change the interim rule amending 34 CFR 74.26 and 80.26 
published on August 29, 1997, and amends parts 75, 76, 77, and 80 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.


Sec. 75.118  [Amended]

    2. Section 75.118 paragraph (a) is amended by removing ``74.82'' 
and adding, in its place, ``74.51'' and amending the cross-reference 
that follows the section by removing ``74.82 Performance Reports under 
non-construction grants'' and adding in its place ``74.51 Monitoring 
and reporting program performance''


Sec. 75.215  [Amended]

    3. The cross-reference following Sec. 75.215 is amended by removing 
``(e)'' and adding, in its place, ``(c)''.
    4. Section 75.220 is amended by revising paragraph (b)(2) to read 
as follows:


Sec. 75.220  Procedures the Department uses under Sec. 75.219(a).

* * * * *
    (b) * * *
    (2) An employee from the Office of the Chief Financial Officer 
(OCFO) with responsibility for grant policy; and
* * * * *
    5. Section 75.511 is amended by revising the cross-reference that 
follows the section to read as follows:


Sec. 75.511  Waiver of requirement for a full-time project director.

* * * * *
    CROSS REFERENCE: See 34 CFR 74.25, Revision of budget and 
program plans; and 34 CFR 80.30, Changes.


Sec. 75.517  [Amended]

    6. Section 75.517 is amended by removing ``34 CFR 74.103(c)(2)'' 
and adding, in its place, ``34 CFR 74.25(c)(2)''.


Sec. 75.524  [Amended]

    7. Section 75.524(b) is amended by removing ``34 CFR 74.3'' and 
adding, in its place, ``34 CFR 80.3'' and removing the note that 
follows paragraph (b).
    8. Section 75.530 is revised to read as follows:


Sec. 75.530  General cost principles.

    The general principles to be used in determining costs applicable 
to grants and cost-type contracts under grants are specified at 34 CFR 
74.27 (for administration of grants to institutions of higher 
education, and other non-profit organizations) and 34 CFR 80.22 (for 
uniform administrative requirements for grants and cooperative 
agreements to State and local governments).

(Authority: 20 U.S.C. 1221e-3 and 3474)

    CROSS REFERENCE: See 34 CFR part 74, Subpart D--After-the-Award 
Requirements and 34 CFR part 80, Subpart C--Post-Award Requirements.

(Authority: 20 U.S.C. 1221e-3 and 3474)

    9. The cross-reference preceding Sec. 75.618 and following the 
center heading ``EQUIPMENT AND SUPPLIES'' is revised to read as 
follows:

    CROSS REFERENCE: See 34 CFR 74.32 Real property; 34 CFR 74.35 
Supplies and other expendable property; 34 CFR 74.36 Intangible 
property; 34 CFR 74.2 Definitions; 34 CFR 80.31 Real property; 34 
CFR 80.32 Equipment; 34 CFR 80.33 Supplies; and 34 CFR 80.34 
Copyrights.

    10. Section 75.621 is amended by revising the cross-reference 
following the section to read as follows:


Sec. 75.621  Copyright policy for grantees.

* * * * *
    CROSS REFERENCE: See 34 CFR 74.22 Payment; 34 CFR 74.24 Program 
income; and

[[Page 50392]]

34 CFR 74.36 Intangible property; 34 CFR 80.25 Program income; and 
34 CFR 80.34 Copyrights.

    11. The cross-reference preceding Sec. 75.626 and following the 
center heading ``INVENTIONS AND PATENTS'' is revised to read as 
follows:

    CROSS REFERENCE: See 34 CFR 74.25, Program income and 34 CFR 
80.25, Program income.

    12. The cross-reference preceding Sec. 75.650 and following the 
center heading ``OTHER REQUIREMENTS FOR CERTAIN PROJECTS'' is revised 
to read as follows:

    CROSS REFERENCE: See 34 CFR 74.21, Standards for financial 
management systems; 34 CFR 74.48, Contract provisions; 34 CFR 80.20, 
Standards for financial management and 34 CFR 80.36, Procurement.

    13. Section 75.702 is amended by revising the cross-reference 
following the section to read as follows:


Sec. 75.702  Fiscal control and fund accounting procedures.

* * * * *
    CROSS REFERENCE: See 34 CFR part 74, Subpart C--Post-Award 
Requirements and Subpart D--After-the-Award Requirements and 34 CFR 
part 80, Subpart C--Post-Award Requirements and Subpart D--After-
the-Grant Requirements.

    14. Section 75.708 is amended by revising paragraph (b) to read as 
follows:


Sec. 75.708  Prohibition of subgrants.

* * * * *
    (b) A grantee may contract for supplies, equipment, construction, 
and other services, in accordance with 34 CFR part 74, Subpart C--Post-
Award Requirements (Procurement Standards Secs. 74.40-74.48) and 34 CFR 
part 80, Subpart C--Post-Award Requirements (Sec. 80.36 Procurement).
    15. The cross-reference following the center heading ``REPORTS'' 
and preceding Sec. 75.720 is revised to read as follows:

    CROSS REFERENCE: See 34 CFR 74.51, Monitoring and reporting 
program performance; 34 CFR 74.52, Financial reporting; 34 CFR 
80.40, Monitoring and reporting program performance; and 34 CFR 
80.41 Financial reporting.

    16. Section 75.720 is amended by revising paragraphs (a)(1) and (c) 
to read as follows:


Sec. 75.720  Financial and performance reports.

    (a) * * *
    (1) 34 CFR 74.51 (Monitoring and reporting program performance) and 
34 CFR 74.52 (Financial reporting); and
* * * * *
    (c) The Secretary may require a grantee to report more frequently 
than annually under 34 CFR 74.14 (Special award conditions), 34 CFR 
74.21 (Standards for financial management systems), 34 CFR 80.12 
(Special grant or subgrant conditions for ``high-risk'' grantees) or 34 
CFR 80.20 (Standards for financial management systems).
    17. The cross-reference preceding Sec. 75.730 and following the 
center heading ``RECORDS'' is revised to read as follows:

    CROSS REFERENCE: See 34 CFR 74.53, Retention and access 
requirements for records and 34 CFR 80.42, Retention and access 
requirements for records.

    18. Section 75.732 is amended, by revising the cross-reference 
following the section to read as follows:


Sec. 75.732  Records related to performance.

* * * * *
    CROSS REFERENCE: See 34 CFR 74.25, Revision of budget and 
program plans.

PART 76--STATE-ADMINISTERED PROGRAMS

    19. The authority citation for part 76 continues to read as 
follows:

    Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a), unless 
otherwise noted.

    20. Section 76.132 is amended, by revising paragraph (a)(5) to read 
as follows:


Sec. 76.132  What assurances must be in a consolidated grant 
application?

    (a) * * *
    (5) Submit an annual report to the Secretary containing information 
covering the program or programs for which the grant is used and 
administered, including the financial and program performance 
information required under 34 CFR 74.51-74.52 and 34 CFR 80.40-80.41.
* * * * *
    21. Section 76.530 is revised to read as follows:


Sec. 76.530  General cost principles.

    Both 34 CFR 74.27 and 34 CFR 80.22 reference the general cost 
principles that apply to grants, subgrants and cost type contracts 
under grants and subgrants.

(Authority: 20 U.S.C. 1221e-3, 3474 and 6511(a))

    22. The cross-reference preceding Sec. 76.681 and following the 
center heading ``OTHER REQUIREMENTS FOR CERTAIN PROGRAMS'' is removed.

PART 77--DEFINITIONS THAT APPLY TO DEPARTMENT REGULATIONS

    23. The authority citation for part 77 continues to read as 
follows:

    Authority: 20 U.S.C. 1221e-3(a)(1), 2831(a), 2974(b), and 3474, 
unless otherwise noted.

    24. The definition of ``EDGAR'' in Sec. 77.1 is revised to read as 
follows:


Sec. 77.1  Definitions that apply to all Department programs.

* * * * *
    EDGAR means the Education Department General Administrative 
Regulations (34 CFR parts 74, 75, 76, 77, 79, 80, 81, 82, 85, 86, 97, 
98, and 99.)
* * * * *

PART 80--UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND 
COOPERATIVE AGREEMENTS TO STATE AND LOCAL GOVERNMENTS

    25. The authority citation for part 80 continues to read as 
follows:

    Authority: 20 U.S.C. 1221e-3 and 3474; OMB Circular A-102, 
unless otherwise noted.


Sec. 80.42  [Amended]

    26. Section 80.42(b)(4) is amended, by removing ``five'' and 
adding, in its place, ``three''.

[FR Doc. 99-22350 Filed 9-15-99; 8:45 am]
BILLING CODE 4000-01-U