[Federal Register Volume 68, Number 162 (Thursday, August 21, 2003)]
[Rules and Regulations]
[Pages 50468-50470]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-21437]


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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

14 CFR Part 1260

RIN 2700-AC77


NASA Grant and Cooperative Agreement Handbook--Financial 
Reporting

AGENCY: National Aeronautics and Space Administration

ACTION: Final rule.

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SUMMARY: This final rule amends the NASA Grant and Cooperative 
Agreement Handbook by updating the requirement for submission of 
quarterly Federal Cash Transactions Reports (Standard Form (SF) 272s) 
to reflect the existing practice of submitting these reports 
electronically, and clarifying the circumstances under which NASA may 
suspend or terminate grantee advance payments. The intended effect of 
this change is to formalize a process change (electronic submission of 
quarterly financial reports) and to ensure that NASA takes corrective 
action in a timely and coordinated fashion when grantee financial 
reports are late.

EFFECTIVE DATE: August 21, 2003.

FOR FURTHER INFORMATION CONTACT: Rita Svarcas, NASA Headquarters, Code 
HK, Washington DC, (202) 358-0464, e-mail: [email protected].

SUPPLEMENTARY INFORMATION: 

A. Background

    This change amends the NASA Grant and Cooperative Agreement 
Handbook to reflect NASA's implementation of the Department of Health 
and Human Services' Payment Management System (DHHS/PMS), including 
electronic submission of grantees' quarterly Federal Cash Transactions 
Reports (SF 272s). The changes also clarify NASA's

[[Page 50469]]

policies and internal practices with regard to suspension or 
termination of advance payments. This change delegates responsibility 
for suspension and termination of advance payments to the NASA 
Financial Management Office in certain cases involving financial 
reporting. In all other cases, the Grant Officer retains responsibility 
for suspension and termination of advance payments. Additionally, this 
change amends the withholding provision. The change removes a phrase in 
that provision addressing withholding of future awards, as the phrase 
duplicates another provision and is not directly relevant to 
withholding of advance payments. The withholding provision is also 
amended to more specifically state the conditions under which NASA may 
withhold advance payments consistent with existing guidance and 
procedures contained in the Grant and Cooperative Agreement Handbook.

B. Regulatory Flexibility Act

    NASA certifies that this final rule will not have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., 
because the change updates and clarifies existing operational 
practices.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because this final rule 
does not impose any new recordkeeping or information collection 
requirements, or collection of information from offerors, contractors, 
or members of the public that require the approval of the Office of 
Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in CFR Part 1260

    Grant Programs--Science and Technology.

Tom Luedtke,
Assistant Administrator for Procurement.


0
Accordingly, 14 CFR Part 1260 is amended as follows:
0
1. The authority citation for 14 CFR 1260 continues to read as follows:

    Authority: 42 U.S.C. 2473(c)(1) and Pub. L. 97-258, 96 Stat. 
1003 (31 U.S.C. 6301, et seq.)

PART 1260--GRANTS AND COOPERATIVE AGREEMENT

0
2. Section 1260.26 is revised to read as follows:


Sec.  1260.26  Financial management.

Financial Management
August 2003
    (a) Advance payments through a Letter of Credit will be made by the 
Financial Management Office of the NASA Center assigned financial 
cognizance of the grant, using the Department of Health and Human 
Services' Payment Management System (DHHS/PMS), in accordance with 
procedures provided to the Recipient. The Recipient shall submit a 
Federal Cash Transactions Report (SF 272), and, when applicable, a 
Continuation Sheet (SF 272A) electronically to DHHS/PMS within 15 
working days following the end of each Federal Fiscal quarter (i.e., 
December 31, March 31, June 30, and September 30). One Federal Cash 
Transactions Report shall be submitted for all grants financed under a 
letter of credit arrangement with each NASA Center.
    (b) In addition, the Recipient shall submit a final SF 272 in paper 
form to NASA within 90 calendar days after the expiration date of the 
grant. The final SF 272 shall pertain only to the completed grant and 
shall include total disbursements from inception through completion. 
The report shall be marked ``Final''. The final SF 272 shall be 
submitted to the Financial Management Office, with a copy sent to the 
NASA Grant Officer.
    (c) Unless otherwise directed by the Grant Officer, any unexpended 
balance of funds which remains at the end of any funding period, except 
the final funding period of the grant, shall be carried over to the 
next funding period, and may be used to defray costs of any funding 
period of the grant. This includes allowing the carry over of funds to 
the second and subsequent years of a multiple year grant. This 
provision also applies to subcontractors performing substantive work 
under the grant. For grant renewals, the estimated amount of unexpended 
funds shall be identified in the grant budget section of the 
Recipient's renewal proposal. NASA reserves the right to remove 
unexpended balances from grants when insufficient efforts have been 
made by the grantee to liquidate funding balances in a timely fashion.
[End of provision]

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3. Section 1260.56 is revised to read as follows:


Sec.  1260.56  Withholding.

Withholding
August 2003
    If a Recipient fails to comply with the project objectives, the 
terms and conditions of this award, or reporting requirements under 
this or previous NASA awards, NASA may withhold advance payments under 
this award including its augmentations, and may also withhold advance 
payments under future awards to the Recipient, pending correction of 
the deficiency by the Recipient. Upon determination that the deficiency 
has been corrected, the cognizant NASA Financial Management Office 
shall resume advance payments and release of previously withheld 
amounts after coordination with the Grant Officer.

0
4. Section 1260.75 is amended by revising paragraphs (b)(1) and (c)(2) 
to read as follows:


Sec.  1260.75  Summary of report requirements.

* * * * *
    (b) * * *
    (1) The Federal Cash Transactions Report (SF 272) shall be 
submitted by the recipient, in accordance with Sec.  1260.26, as a 
condition of receiving advance payments. Instructions and answers to 
payment questions will be provided by the NASA Financial Management 
Office of the Center that has been assigned financial cognizance of the 
grant. (See Sec.  1260.152.)
* * * * *
    (c) * * *
    (2) A Final Federal Cash Transactions Report, SF 272, is required 
from the recipient for each grant, in accordance with Sec. Sec.  
1260.26 and 1260.152. The report is due within 90 calendar days after 
the expiration date of the grant or cooperative agreement.
* * * * *

0
5. Section 1260.76 is amended by revising paragraphs (d) and (e) and 
adding new paragraphs (f), (g), and (h) to read as follows:


Sec.  1260.76  Termination and enforcement.

* * * * *
    (d) Failure of the recipient to provide a required report can 
result in the Agency and the public being denied information about 
grant activities, NASA officials having less information for making 
decisions, grant closeout being delayed, and confidence being 
undermined as to whether the recipient will meet the requirements under 
other grants. Because NASA grants provide for advance payments, a 
recipient could be fully paid before final reports are

[[Page 50470]]

due. At this point, it is too late to withhold payment on the existing 
grant. Consistent with Sec. Sec.  1260.122(h) and 1260.162(a), NASA may 
suspend or terminate advance payments from recipients that fail to 
comply with reporting requirements.
    (e) To remedy failure to furnish timely reports, special condition 
at Sec.  1260.56, Withholding, should be used when awarding a new grant 
or modifying an existing grant with non-responsive organizations. 
Special condition at Sec.  1260.56 allows NASA to suspend or terminate 
advance payments under an institution's letter of credit pending 
receipt of the satisfactorily completed reports required in Sec.  
1260.75.
    (f) The NASA Financial Management Office, notifying the Grant 
Officer, shall take action to either suspend or terminate a recipient's 
advance payments when--
    (1) A recipient organization is unwilling or unable to establish a 
financial management system that meets the requirements of advance 
payments as evidenced by an audit report or failure to comply with the 
NASA requirements;
    (2) A recipient organization is unwilling or unable to report, on 
an accurate and timely basis, cash disbursements or cash balances as 
required by NASA. Advance payments shall be temporarily suspended when 
two (2) successive quarterly reports are late or when two (2) reports 
are late in a fiscal year; or
    (3) A recipient organization has demonstrated an unwillingness or 
inability to establish procedures that will minimize time elapsing 
between drawdowns and related disbursements.
    (g) In addition to the situations delineated in paragraph (f) of 
this section, the NASA Grant Officer may direct the NASA Financial 
Management Office to either suspend or terminate a recipient's advance 
payments under circumstances where a recipient has otherwise failed to 
comply with the project objectives, the terms and conditions of the 
award, or NASA reporting requirements.
    (h) The Financial Management Office (for the cases set forth in 
paragraph (f) of this section) or the Grant Officer (for all other 
cases) may resume advance payments and may release any previously 
withheld amounts when the recipient has taken corrective action that 
makes suspension or withholding no longer necessary. To release for 
payment amounts they have previously withheld, grant officers shall 
send a memorandum to the Financial Management Office. The Financial 
Management Office shall likewise coordinate any release of withheld 
payments with the grant officer.

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6. Section 1260.152 is amended by revising paragraph (b) and adding 
paragraph (c) to read as follows:


Sec.  1260.152  Financial reporting.

* * * * *
    (b) Recipients are required to submit the report electronically to 
the Department of Health and Human Services' Payment Management System 
(DHHS/PMS) within 15 working days following the end of each Federal 
fiscal quarter. Reports are required for each quarter whether or not 
advances have been made during that quarter.
    (c) Additionally, recipients shall submit a final SF 272 in paper 
form to the NASA Financial Management Office, and shall furnish a copy 
of the final SF 272 to the appropriate grant officer.

[FR Doc. 03-21437 Filed 8-20-03; 8:45 am]
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