[Federal Register Volume 68, Number 109 (Friday, June 6, 2003)]
[Proposed Rules]
[Pages 33883-33885]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-14335]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 68, No. 109 / Friday, June 6, 2003 / Proposed 
Rules  

[[Page 33883]]



OFFICE OF MANAGEMENT AND BUDGET

2 CFR Subtitles A and B


Office of Federal Financial Management; Government-wide Guidance 
for Grants and Agreements

AGENCY: Office of Federal Financial Management, Office of Management 
and Budget (OMB), Executive Office of the President.

ACTION: Notice of proposed relocation of policy guidance for grants and 
other agreements.

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SUMMARY: OMB proposes two changes to the framework of Federal 
government policies for grants and other financial assistance and 
nonprocurement agreements that will make it easier for applicants and 
recipients to use the policies.
    First, OMB proposes to publish in a single title in the Code of 
Federal Regulations (CFR) its guidance to Federal agencies for grants 
and agreements that is currently located in seven separate OMB 
circulars and other policy documents.
    Second, OMB proposes to create in the same new title of the CFR a 
subtitle in which Federal agencies will co-locate their regulations for 
the award and administration of grants and agreements.

DATES: All comments on this proposal should be in writing, and must be 
received by July 7, 2003.

ADDRESSES: Due to potential delays in OMB's receipt and processing of 
mail sent through the U.S. Postal Service, we encourage respondents to 
submit comments electronically to ensure timely receipt. We cannot 
guarantee that comments mailed will be received before the comment 
closing date. Electronic mail comments may be submitted to: 
[email protected]. Please include ``Relocating Grant Policy'' in the 
subject line and the full body of your comments in the text of the 
electronic message and as an attachment. Please include your name, 
title, organization, postal address, telephone number, and E-mail 
address in the text of the message. Comments may also be submitted via 
facsimile to 202-395-3952. Comments may be mailed to Elizabeth 
Phillips, Office of Federal Financial Management, Office of Management 
and Budget, Room 6025, New Executive Office Building, 725 17th Street, 
NW., Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Elizabeth 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: This Federal Register document seeks public 
comment on two proposed changes to the Federal government's policy 
framework for grants and agreements. As discussed in the following 
sections, the proposed changes provide a good foundation for future 
streamlining and simplification of the policy framework that may be 
accomplished through the implementation of the Federal Financial 
Assistance Management Improvement Act of 1999 (Pub. L. 106-107).

I. First Proposal: Publish OMB's Guidance in the Code of Federal 
Regulations

    OMB's government-wide guidance for grants and other financial 
assistance and nonprocurement agreements currently resides in seven OMB 
circulars that are accessible at OMB's Internet site and two separate 
OMB guidance documents that are less easily found. To help make all of 
the guidance easier to use and more accessible for both Federal 
agencies and recipients of grants and agreements, OMB proposes to 
publish the separate documents in a single location in the CFR. 
Although located in the CFR, the nature and status of the OMB guidance 
will remain the same. The OMB guidance is directed to Federal agencies, 
which adopt and implement it through regulations or policy documents 
and require recipients to comply with the agency implementation. The 
OMB guidance documents are:

For administrative requirements:

    [sbull] OMB Circular A-102, ``Grants and Cooperative Agreements 
with State and Local Governments,'' and
    [sbull] OMB Circular A-110, ``Uniform Administrative Requirements 
for Grants and Agreements with Institutions of Higher Education, 
Hospitals and Other Non-Profit Organizations.''
    These two circulars provide to Federal agencies OMB's guidance 
related to administrative requirements for grants and agreements with 
different types of recipients, including States, local governments, 
Indian Tribal governments, institutions of higher education, hospitals, 
and other non-profit organizations.

For guidance related to costs:

    [sbull] OMB Circular A-21, ``Principles for Determining Costs 
Applicable to Grants, Contracts, and Other Agreements with Educational 
Institutions;''
    [sbull] OMB Circular A-87, ``Cost Principles for State, Local, and 
Indian Tribal Governments;'' and
    [sbull] OMB Circular A-122, ``Cost Principles for Non-Profit 
Organizations.''
    These three circulars provide guidance related to the costs that 
may be charged to Federal awards.

For audit guidance:

    [sbull] OMB Circular A-133, ``Audits of States, Local Governments, 
and Non-Profit Organizations.''
    A-133 provides guidance implementing the requirements of the Single 
Audit Act of 1984, as amended (31 U.S.C., Chapter 75).

For other guidance:

    [sbull] OMB Circular A-89, ``Federal Domestic Assistance Program 
Information,'' which provides guidance to agencies for implementing the 
Federal Program Information Act, as amended (31 U.S.C., Chapter 61);
    [sbull] OMB guidance on nonprocurement suspension and debarment, 
issued under Section 6 of Executive Order 12549, and last amended on 
June 26, 1995, at 60 FR 33036, which includes OMB guidance on drug-free 
workplace that is issued under the Drug-Free Work Place Act of 1988, as 
amended (41 U.S.C. 701 et seq.); and
    [sbull] OMB guidance on lobbying restrictions (last amended on 
January 19, 1996, at 61 FR 1412), for Federal agencies' implementation 
of the requirements of 31 U.S.C. 1352.

[[Page 33884]]

A. Relationship of First Proposal to Grants Streamlining Under Pub. L. 
106-107

    In parallel with this proposal to relocate in the CFR the OMB 
circulars and guidance documents in their current form, which will make 
those documents available to the public in a single location, 
interagency work groups are developing proposals under Public Law 106-
107 to streamline the award and administration of Federal grants and 
agreements. Public comments that OMB and Federal agencies received 
under Public Law 106-107 noted that the public finds the current policy 
framework for grants and agreements to be very confusing. The 
commenters cited a need to better align the various OMB circulars and 
guidance documents with each other to provide greater commonality in 
cross-cutting areas like definitions. They also identified a need to 
make Federal agency regulations that implement the OMB guidance more 
consistent with that guidance, to make it easier for applicants and 
recipients to understand their obligations and those of their 
subrecipients. Therefore, some interagency work group proposals may 
involve significant revision of current OMB circulars and guidance 
documents; for example, one group's effort to develop standard award 
terms and conditions may lead to future proposals to revise the OMB 
circular guidance on post-award administrative requirements. The 
proposal in this notice to provide a single CFR location for OMB 
guidance is a good first step that provides a foundation for any future 
streamlining of the policy framework. Any revision to an OMB circular 
or guidance document would be proposed in a Federal Register notice 
separate from this notice, with an opportunity for public comment.

B. Structure of 2 CFR To Implement the First Proposal

    OMB proposes to establish a subtitle A for its guidance in Title 2 
of the CFR, a title that currently is reserved and that would be 
redesignated ``Government-wide Grants and Agreements.'' OMB proposes to 
locate its current circulars and guidance documents within Chapter II 
of subtitle A. Chapter I would be reserved at this time, as the future 
location of the OMB guidance after any revisions due to the Public Law 
106-107 streamlining efforts.
    Subtitle A, Chapter II also will include a part with general 
information about 2 CFR. That part will address the purpose and scope 
of the title, the applicability of the various portions of the OMB 
guidance to different types of agreements, and the responsibilities of 
the OMB and Federal agencies with respect to the guidance.

II. Second Proposal: Co-Locate OMB Guidance and Related Agency 
Regulations

    Most Federal agencies issue regulations related to some or all of 
OMB's government-wide guidance for grants and agreements. Because each 
agency's regulations currently are in its own title in the CFR, an 
entity that may receive awards from more than one Federal agency must 
read regulations in multiple locations in the CFR. To reduce this 
burden, an interagency working group under the Public Law 106-107 
grants streamlining effort recommended that agencies co-locate their 
implementing regulations with the OMB guidance in Title 2 of the CFR. 
An applicant or recipient then could more easily find the agencies' 
implementing regulations, as well as the OMB guidance, in one location.
    Note that this proposal entails only Federal agency regulations for 
nonprocurement instruments. Some portions of the OMB guidance 
(specifically, the cost principles in OMB Circulars A-21, A-87, and A-
122, and the guidance on single audits in OMB Circular A-133) apply to 
both procurement and nonprocurement instruments. The Federal 
Acquisition Regulation (FAR) implements those portions for procurement 
contracts. The current proposal is to co-locate the OMB guidance with 
agency implementing regulations only for grants and agreements; the 
proposal would not relocate the implementation of the OMB guidance for 
procurement contracts, which will continue to be in the FAR.
    To accomplish the co-location, OMB proposes to establish a second 
subtitle in Title 2 of the CFR. Subtitle B would be ``Federal Agency 
Regulations for Grants and Agreements.'' Ultimately, each Federal 
agency that has regulations implementing OMB's guidance will establish 
a chapter in Subtitle B where its regulations will appear. Each agency 
will be responsible for organizing the subject matter in its chapter.

III. Relative Timing of Changes Resulting From First and Second 
Proposals

    As explained above, OMB is proposing to establish its guidance in 2 
CFR in two phases. In the first phase, the circulars and guidance 
documents would be moved into Chapter II of the new CFR title in their 
current form (adapted to CFR codification). In the second phase, after 
any revisions due to the Public Law 106-107 streamlining effort, they 
would be moved into Chapter I of the new title.
    The timeframe for agencies to complete their move of regulations 
would correspond to the second of the two phases. Once OMB establishes 
the guidance documents in Chapter I, with any revisions, the revised 
guidance would require agencies to locate their implementing 
regulations in 2 CFR. Agencies could elect to move existing regulations 
during the first phase, in parallel with OMB's relocation of current 
circulars and guidance, but they would not be required to do so.

IV. Summary of Proposals

    In summary, OMB proposes to establish in the near term, after 
considering public comments received in response to this notice:
    [sbull] Title 2 of the CFR, which would be entitled ``Government-
wide Grants and Agreements;''
    [sbull] Subtitle A of Title 2, which would be ``Government-wide 
Guidance for Grants and Agreements;''
    [sbull] Chapter I of Subtitle A, which would be reserved;
    [sbull] Chapter II of Subtitle A, which would contain all existing 
OMB Circulars and other guidance;
    [sbull] Subchapter A of Chapter II, which would be ``General 
Matters'' related to Chapter II.
    [sbull] Subtitle B of Title 2, which would be ``Federal Agency 
Regulations for Grants and Agreements,'' where Federal agencies may now 
choose to locate, and eventually will be required to locate, agency 
regulations implementing the OMB guidance on the award and 
administration of grants and agreements.
    OMB in the longer term plans to move its guidance, with any 
revisions resulting from the streamlining under Pub. L. 106-107, to 
Chapter I of Subtitle A. During that transition, Federal agencies will 
establish their chapters in Subtitle B and add content to that 
subtitle.

V. Invitation To Comment

    OMB welcomes your input on any aspect of the two proposals 
described in this notice. You may wish to comment on the merits of 
either proposal individually or the two in combination.

Joseph L. Kull,
Deputy Controller.

[[Page 33885]]



               Table 1.--Proposed Organization of Title 2
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             Title 2, Government-wide Grants and Agreements
Subtitle A--Government-wide Guidance for Grants and Agreements
    Chapter I--[Reserved.]
    Chapter II--Office of Management and Budget Circulars and Guidance
        Subchapter A--General matters
            Part 1--General
        Subchapter B--Circulars
        Subchapter C--Other guidance documents
Subtitle B--Federal Agency Regulations for Grants and Agreements
    Chapters III and following--Each Federal agency will establish a
     chapter under Subtitle B for its regulations on grants and
     agreements
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[FR Doc. 03-14335 Filed 6-5-03; 8:45 am]
BILLING CODE 3110-01-P