[Federal Register Volume 67, Number 155 (Monday, August 12, 2002)]
[Notices]
[Pages 52544-52545]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-20257]



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Part IV





Office of Management and Budget





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Federal Financial Assistance Management Improvement Act of 1999; 
Implementation; Notices

  Federal Register / Vol. 67, No. 155 / Monday, August 12, 2002 / 
Notices  

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OFFICE OF MANAGEMENT AND BUDGET


Grants Streamlining Activities Under Public Law 106-107, Federal 
Financial Assistance Management Improvement Act of 1999

AGENCY: Office of Management and Budget.

ACTION: Notice.

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SUMMARY: This Notice precedes five additional notices that relate to 
the interagency grants streamlining effort, prepared jointly by the 
Office of Management and Budget (OMB) staff and the interagency groups 
dedicated to implementing Public Law (Pub. L.) 106-107, the Federal 
Financial Assistance Management Improvement Act of 1999. This first 
Notice provides background and contextual information for the next five 
notices, which:
     Propose revisions to Office of Management and Budget (OMB) 
Circular A-133, ``Audits of States, Local Governments, and Non-Profit 
Organizations,''
     Provide information about the OMB decision to not revise 
OMB Circular A-110, ``Uniform Administrative Requirements for Grants 
and Agreements with Institutions of Higher Education, Hospitals, and 
Other Non-Profit Organizations,'' based on comments relating to the May 
1, 2000, Advanced Notice of Proposed Revision;
     Propose a standard format for Federal agency use in 
announcing discretionary grant and cooperative agreement funding 
opportunities;
     Propose standard data elements for Federal agency use in 
creating grant funding opportunity announcement summaries, to be used 
under the E-Grants initiative for its ``E-FIND'' option; and
     Propose revisions to three OMB circulars (A-21, ``Cost 
Principles for Educational Institutions;'' A-87, ``Cost Principles for 
State, Local and Indian Tribal Governments;'' and A-122, ``Cost 
Principles for Non-Profit Organizations)'' to clarify ambiguous 
language, thereby preventing inconsistent interpretations of similar 
cost items across the three circulars.

FOR FURTHER INFORMATION CONTACT: Elizabeth C. Phillips, Office of 
Federal Financial Management, Office of Management and Budget, 
telephone 202-395-3053 (direct) or 202-395-3993 (main office) and e-
mail: [email protected].

SUPPLEMENTARY INFORMATION: The purposes of Pub. L. 106-107 are to (1) 
improve the effectiveness and performance of Federal financial 
assistance programs, (2) simplify Federal financial assistance 
application and reporting requirements, (3) improve the delivery of 
services to the public, and (4) facilitate greater coordination among 
those responsible for delivering the services. Pub. L. 106-107 requires 
the Director of the Office of Management and Budget (OMB) to direct, 
coordinate, and assist Federal agencies in establishing a common 
application and reporting system, including electronic processes, and 
uniform administrative rules for Federal financial assistance programs 
across different Federal agencies.
    Under joint leadership from OMB and a lead agency (the Department 
of Health and Human Services) agencies are working together to make it 
easier for States, local, and Tribal governments; universities; and 
non-profit organizations to administer Federal grant programs. The work 
is done under interagency work groups created in June 2000 to develop 
and recommend streamlining and simplification proposals to the Grants 
Management Committee of the Chief Financial Officers Council, and 
include the Pre-Award, Post-Award, and Audit Oversight Work Groups. A 
fourth group, the Electronic Processing Work Group, operational in 2000 
and 2001, was integrated this year into the organizational structure 
that supports an electronic grants (E-Grants) initiative. [E-Grants is 
part of the electronic government (E-Gov) priority under the 
President's Management Agenda.]
    Streamlining improvements to the grant process were proposed in 
hundreds of comments sent by 77 different sources responding to the 
January 17, 2001, Federal Register notice. Many of those comments 
directly relate to the proposals which follow this background Notice. 
Future notices will propose government-wide standards for grant 
applications and reports. OMB expects to issue these proposals in Fall 
2002. E-Grants plans to deploy an electronic application process (E-
APPLY) using the government-wide standards in Fall 2003.
    A. The next Notice proposes to revise OMB Circular A-133, ``Audits 
of States, Local Governments, and Non-Profit Organizations,'' by (1) 
increasing the threshold for audit from $300,000 to $500,000; (2) 
increasing the threshold for cognizant agency for audit from $25 
million to $50 million; and (3) making related technical changes to 
facilitate the determination of cognizant agency for audit and provide 
for Federal agency reassignment of oversight agency for audit.
    This Notice was endorsed by the Audit Oversight Work Group, whose 
goal under grants streamlining is to ensure that audits provide useful 
and reliable information to Federal agencies and pass-through entities, 
and that recipient audits are in compliance with Federal audit 
requirements. An audit threshold increase, as proposed from $300,000 to 
$500,000, would relieve almost 6,000 entities from the audit 
requirements of Circular A-133 while retaining audit coverage for 99.5 
percent of Federal awards currently audited (in dollars).
    B. The third Notice explains the conclusions reached by OMB and the 
Grants Management Committee of the Chief Financial Officers (CFO) 
Council regarding a previous request for comment from Federal agencies 
and grant recipients, in May 2000, on the merits of pooled payment 
systems and grant-by-grant payment systems. The proposal to amend OMB 
Circular A-110, Uniform Administrative Requirements for Grants and 
Agreements with Institutions of Higher Education, Hospitals and Other 
Non-Profit Organizations, that would have required Federal agencies to 
offer recipients the option to request cash advances on a pooled basis, 
resulted in 65 comment letters from universities, State and local 
government agencies, Federal agencies, and other sources. There were 
differing perspectives on the issue, leading OMB and the CFO Council to 
believe that a revision to Circular A-110 is not needed. This Notice 
was prepared by the Post-Award Work Group after analysis of the 
comments received in response to the May 1, 2000, Advanced Notice of 
Proposed Revision.
    C. The fourth Notice proposes a government-wide standard format for 
Federal agency use in announcing discretionary grant and cooperative 
agreement funding opportunities. Each year the agencies publish 
hundreds of funding opportunity announcements for discretionary grants 
under programs with a broad range of purposes, to give potential 
applicants the information they need, such as the types of activity the 
agency will support, who is eligible to apply, and when/how to apply. 
Comments from the applicant and recipient communities noted vast 
differences in Federal agencies' announcement formats, making it hard 
for potential applicants to quickly locate key information, such as who 
is eligible to apply or whether cost sharing is required. Commentors 
asked for clear language in announcements and consistency in the 
placement of information.

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    This Notice was developed by the Pre-Award Work Group after a 
review of agency announcements and related business processes. The 
group developed the standard format for government-wide use, which will 
make it easier for potential applicants to quickly find the information 
they need.
    D. The fifth Notice proposes standard data elements for Federal 
agency use in creating grant funding opportunity announcement 
summaries, to be used under the E-Grants initiative for its E-FIND 
option. The E-Grants initiative plans to provide a single Internet site 
for Federal agencies to post electronic summaries, or synopses, of the 
funding opportunity announcements on the General Services 
Administration's FedBizOpps Internet site (http://www.FedBizOps.gov). 
E-FIND will greatly facilitate a potential applicant's search for 
funding opportunities.
    This Notice was prepared by the Pre-Award Work Group, which made 
use of previous work on a set of FedBizOpps data elements completed by 
the Inter-Agency Electronic Grants Committee. The earlier work proposed 
a limited set of synopsis data elements (nine) to be used in a pilot on 
the use of FedBizOpps for grant opportunities. The result of that pilot 
demonstrated that agencies could, indeed, use the FedBizOpps Internet 
site to post electronic synopses of funding opportunities leading to 
the award of grants, cooperative agreements, and other financial 
assistance instruments. The Pre-Award Work Group expanded the synopsis 
to become a standard data set of twenty data elements. These data 
elements and the posting of information at the FedBizOpps site respond 
to many comments received during the Public Law 106-107 consultation 
process. Commentors requested a single searchable Internet site for 
information about Federal agencies' funding opportunities, to reduce 
potential their frustration with having to search multiple sites that 
individual Federal agencies configure in different ways.
    E. The sixth and final Notice relating to grants streamlining 
proposes revisions to three OMB circulars (A-21, ``Cost Principles for 
Educational Institutions;'' A-87, Cost Principles for State, Local and 
Indian Tribal Governments;'' and A-122, ``Cost Principles for Non-
Profit Organizations'') to clarify ambiguous language, thereby 
addressing many grantee concerns expressed in the comments relating to 
the Public Law 106-107 initial plan published in the Federal Register 
on January 16, 2001. Commentors noted inconsistent allocation methods 
and different interpretations about indirect cost recovery. The three 
circulars apply to different types of recipient organizations and were 
developed separately. Consequently, different language is used in the 
three circulars to describe similar cost items, sometimes causing 
inconsistent interpretations by Federal staff, recipients, and 
auditors.
    This Notice was prepared by the Cost Principles Subgroup of the 
Post-Award Work Group, after reviewing 74 cost items in the three 
circulars for consistency. The Subgroup determined that 11 cost items 
can be deleted, 22 cost items do not need changes, and 41 cost items 
need common language in the three circulars. The Notice proposes 
revisions to incorporate consistent descriptions of similar cost items 
and, where possible, clarify existing policies in the three circulars. 
Information about the proposed revisions is also available on the OMB 
Internet site (http://www.whitehouse.gov/omb/grants).

    Dated: July 31, 2002.
Mark W. Everson,
Controller.
[FR Doc. 02-20257 Filed 8-9-02; 8:45 am]
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