[Federal Register Volume 69, Number 91 (Tuesday, May 11, 2004)]
[Rules and Regulations]
[Pages 26275-26281]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-10351]



[[Page 26275]]

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Part V





Office of Management and Budget





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2 CFR Subtitles A and B



Governmentwide Guidance for Grants and Agreements; Federal Agency 
Regulations for Grants and Agreements; Final Rule

2 CFR Part 215 Uniform Administrative Requirements for Grants and 
Agreements With Institutions of Higher Education, Hospitals, and Other 
Non-Profit Organizations (OMB Circular A-110); Final Rule

Federal Register / Vol. 69, No. 91 / Tuesday, May 11, 2004 / Rules 
and Regulations

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OFFICE OF MANAGEMENT AND BUDGET

2 CFR Subtitles A and B


Governmentwide Guidance for Grants and Agreements; Federal Agency 
Regulations for Grants and Agreements

AGENCY: Office of Management and Budget.

ACTION: Establishment of CFR title for policy guidance for grants and 
agreements.

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SUMMARY: The Office of Management and Budget (OMB) is establishing 
title 2 in the Code of Federal Regulations (CFR) for grants and other 
financial assistance and nonprocurement agreements. Title 2 consists of 
two subtitles, subtitles A and B. In subtitle A, OMB is publishing 
government-wide guidance to Federal agencies for grants and 
agreements--guidance that currently is in seven separate OMB Circulars 
and other OMB policy documents. (The document in today's Federal 
Register immediately following this document publishes one of those 
circulars in subtitle A.) In subtitle B, Federal agencies that 
implement the OMB guidance through regulation will publish their 
agency-wide implementing regulations. Consolidating the OMB guidance 
and co-locating the agency regulations provides a good foundation for 
streamlining and simplifying the policy framework for grants and 
agreements as part of the efforts to implement the Federal Financial 
Assistance Management Improvement Act of 1999 (Pub. L. 106-107).

DATES: Effective May 11, 2004.

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:

I. Background

    In a Federal Register document [68 FR 33883] published on June 6, 
2003, OMB proposed to establish title 2 of the CFR as a central 
location for Federal government policies on grants and other financial 
assistance and nonprocurement agreements. The proposal included the 
establishment of two subtitles within title 2--subtitle A for OMB's 
government-wide guidance to Federal agencies on the award and 
administration of grants and agreements and subtitle B for Federal 
agency regulations implementing that OMB guidance.
    In addition to the proposal to establish title 2 and its subtitles 
A and B, the June 6 document proposed to establish two chapters in 
subtitle A--chapters I and II--to enable OMB to publish its government-
wide guidance in title 2 in two phases. In the first phase, OMB 
proposed to move circulars and other guidance, in their current form, 
into chapter II and to reserve chapter I. In the second phase, as OMB 
finalizes any changes to its guidance based on recommendations of 
interagency work groups implementing Public Law 106-107, the June 6 
document proposed that OMB would publish the new, changed guidance in 
chapter I and remove the original guidance from chapter II. If OMB is 
to make a substantive change in the guidance when publishing it in 
either chapter I or II of subtitle A, the change will be proposed in 
the Federal Register with an opportunity for public comment.
    Finally, the June 6 document proposed that OMB would publish in 
title 2, subtitle A, an introductory part 1 providing general 
information about the title. Specifically, part 1 would 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 OMB and the Federal agencies with respect to the 
guidance.
    We received comments on these proposals from: Three State 
governments; two non-profit organizations; an association representing 
non-profit entities; one institution of higher education; an 
association representing academic institutions; a group of universities 
that participate with Federal agencies in a demonstration program on 
research administration; and five Federal agencies. We considered all 
comments in developing this final Federal Register document. The 
following paragraphs summarize the major comments and our responses, 
organized by the subjects the comments addressed.

II. Comments and Responses

Comments on Publication of OMB Guidance in Title 2 of the CFR

    Comment: Commenters had different views on whether we should 
establish title 2 as a single location for publishing OMB guidance on 
grants and agreements. Comments from State governments, non-profit 
organizations, and Federal agencies strongly supported the proposal as 
a way to help recipients more easily find and use the policy documents. 
Comments from the academic community recommended that we not publish 
the guidance in title 2 at this time because doing so: (1) Would serve 
little purpose, since the OMB guidance can be found easily now at the 
OMB Web site; (2) could blur the important distinction between guidance 
and regulations; and (3) might be the first step toward merging OMB 
circulars applicable to universities with circulars for other types of 
recipients, a merger that the academic community historically has not 
supported.
    Response: After careful consideration of the two points of view 
represented in the comments, we are proceeding with our proposal and 
are establishing title 2 with a subtitle in which we will publish OMB 
guidance. We understand that many recipients access OMB circulars at 
the OMB Web site, and we plan to continue posting the documents at this 
site 
(www.whitehouse.gov[bs]omb[bs]circular
s). However, the fact that several commenters stated that publishing 
the guidance in the CFR would make it easier to find and use confirms 
that there is value in having it in the CFR.
    With respect to the difference between guidance and regulation, we 
note that the academic community comments made a further suggestion 
that we preface any OMB guidance published in the CFR with statements 
that clearly make that distinction. We agree. We have included language 
to make the distinction in Sec.  1.105 of the introductory part 1 of 
title 2 (see the text of part 1 in this Federal Register document, 
following this preamble).
    Finally, we note the academic community's concern about the 
establishment of title 2 being a possible precursor to a merger of 
guidance that currently is in separate OMB circulars. However, adoption 
of the June 6 proposal alone will not cause the organization or 
substance of the guidance to change. CFR publication does not require 
the guidance to be organized in any particular way and, as indicated 
above, our initial activity will be relocating the guidance to title 2 
in its current form. Should a recommendation to reorganize the guidance 
subsequently emerge from the interagency work groups' ongoing efforts 
to implement Public Law 106-107, that recommendation would be entirely 
independent of the publication of the guidance in title 2 and the 
public would have an opportunity to comment on any such substantive 
change.
    Comment: Four commenters raised questions related to combining OMB 
circulars or applying their policies uniformly to different types of

[[Page 26277]]

recipients. Two of the commenters, as discussed in the previous 
paragraph, recommended that we not establish title 2 at this time 
because doing so was a possible first step toward a merger of 
circulars. The other two commenters who addressed this issue supported 
the publication of the OMB guidance in title 2; one of these, a 
recipient organization, recommended that any future changes to the OMB 
circulars continue to distinguish between types of recipients. In 
another comment, a Federal agency suggested that we simplify the OMB 
guidance, which is nearly the same for different types of recipients, 
by consolidating OMB Circulars A-102 and A-110 into a single set of 
administrative requirements and Circulars A-21, A-87, and A-122 into 
one set of cost principles. The agency suggested that we maintain 
separate requirements in each case only when necessary to respect 
differences between types of recipients.
    Response: The comments reflect a diversity of points of view on one 
issue--the question of combining guidance that currently is located in 
separate circulars--yet indicate agreement on a second issue--the need 
to recognize important differences among types of recipients. We infer 
that the concern about combining circulars stems primarily from a 
desire to maintain distinctions between types of recipients and is 
based on an assumption that combining guidance documents will lead to 
applying the same set of requirements to all recipients. Although we 
can not anticipate what recommendations the interagency work groups may 
make for improving the OMB guidance, it should be noted that combining 
guidance does not require that the guidance be identical for all types 
of recipients. For example, OMB Circular A-102 currently includes 
guidance for both awards to States and awards to other governmental 
organizations; however, the guidance for awards to States differs in 
some areas from the guidance for awards to other governmental 
organizations. Both OMB and the interagency work groups work with all 
types of recipients and appreciate their important distinctions.
    Comment: One comment from a group of recipient organizations 
suggested that an OMB review of the guidance in the current OMB 
circulars affecting each type of recipient, to ensure internal 
consistency across the circulars for that type of recipient, would do 
more for recipients than publishing the OMB guidance in title 2.
    Response: We strongly agree that consistency is important. However, 
the issue of consistency, like the question of merging circulars, is 
entirely separate from publication in title 2. As previously noted, the 
interagency work groups involved in the implementation of Public Law 
106-107 may recommend improvements to the OMB guidance--internal 
consistency, which is an OMB objective, is one element of the work 
groups' review.
    Comment: One commenter recommended that the OMB guidance in title 2 
include the compliance supplement to OMB Circular A-133 and the Federal 
Register document [68 FR 38401] amending Circular A-133 to raise the 
Federal expenditure threshold above which recipients are required to 
have single audits performed. The commenter also suggested including 
links to the Federal Acquisition Regulation (FAR) cost principles [48 
CFR part 31] for for-profit organizations and to the Generally Accepted 
Government Auditing Standards (GAGAS).
    Response: Agree in part. When we publish OMB Circular A-133 in 
title 2, we will publish the current version (now available at the OMB 
Web site), which includes the recent change to the audit threshold. We 
do not currently anticipate publishing the OMB Circular A-133 
compliance supplement in title 2 because the supplement is updated 
annually and the CFR is more suited to issuances that change less 
frequently. The suggested links to the FAR cost principles and GAGAS 
are more appropriate for a Web site than the text of the CFR (no 
portion of the CFR currently maintains electronic links to the many 
publications it references and it would be impractical at this time to 
do so). We will add those links at the OMB Web site, where the OMB 
guidance in title 2 also will be posted.
    Comment: Two commenters suggested that we publish in title 2 the 
suspension and debarment and lobbying requirements in a way that 
replaces the Federal agencies' current multiple codifications of common 
rules implementing the requirements in their own titles of the CFR. The 
first commenter, a recipient organization, stated that the same 
requirements also would have to be published in title 48 of the CFR, 
since they also apply to procurement contracts, but noted that there 
could be a consolidated publication in title 2 for nonprocurement. The 
second commenter, a Federal agency, also suggested that the same 
approach could be used to replace Federal agencies' separate 
codifications of common rules implementing drug-free workplace 
requirements and the requirements of Executive Order (E.O.) 12372 on 
intergovernmental coordination.
    Response: We agree with the suggested approach for nonprocurement 
debarment and suspension and drug-free workplace requirements and will 
also consider the same approach for other government-wide guidance, 
such as the common rule implementing restrictions on lobbying and the 
common rule implementing E.O. 12372 (although the Executive order 
applies to more Federal activities than just those resulting in grants 
and agreements). On November 26, 2003, the Federal agencies published 
the final common rule on debarment and suspension and on drug-free 
workplace requirements in the Federal Register [68 FR 66533]. We plan 
to publish the corresponding OMB guidance in subtitle A, chapter I of 
title 2 in the near future. Once the guidance is published in subtitle 
A, each agency will publish in subtitle B of title 2 regulatory 
language that adopts the guidance and will remove that common rule from 
its own title of the CFR. Thus, the full text of the government-wide 
policies will appear only once, in the OMB guidelines, and each 
agency's regulations will adopt those guidance documents (identifying 
any agency-specific additions, exceptions, or clarifications) without 
repeating the full text. This approach parallels the way that agencies 
currently implement the cost principles in OMB Circulars A-21, A-87, 
and A-122 and the single audit requirements in OMB Circular A-133, 
where it is the agency regulations that require recipients to comply 
with these OMB documents.
    This approach has at least three benefits for the public and 
Federal agencies. One benefit is that an applicant or recipient could 
quickly and easily identify any variations from the common language in 
an agency's implementation because the agency's regulation would 
consist of brief language adopting the OMB guidance, rather than the 
full text of a common rule, followed by statements of any additions, 
clarifications, or exceptions to the common language. Currently, 
identifying any agency-to-agency variations from the government-wide 
language requires locating the original Federal Register document in 
which the Federal agencies adopted the common rule or carefully reading 
and comparing agencies' separate codifications of the rule. A second 
benefit of this approach is that it would reduce the volume of 
regulations since each agency would not duplicate the full text of the 
OMB guidance in its own regulations.
    A third benefit of the approach is that Federal agencies could more 
quickly

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implement OMB guidance than is possible through common rules. Issuing a 
common rule is a complex and lengthy process, with 30 or more Federal 
agencies processing the same rulemaking document before it can be sent 
to OMB and published. Under the new approach, OMB would update its 
guidance through publication in the Federal Register with an 
opportunity for public comment--the same process used to revise OMB 
circulars. An agency regulation adopting the OMB guidance would be 
automatically updated when OMB makes final revisions to its guidance, 
without a need for further agency rulemaking, just as it works 
currently with agency regulations adopting the OMB circulars containing 
the cost principles and single audit requirements. Use of this approach 
will promote more timely updates to the Federal policy framework.
    In response to the first commenter, it also should be noted that 
the agency adoption of OMB guidelines in title 2 would apply only to 
assistance and other nonprocurement transactions. There currently is 
separate coverage in the FAR (title 48 of the CFR) for debarment and 
suspension, lobbying, and drug-free workplace requirements for 
procurement contracts. That coverage would not be affected by 
publication in title 2 of the OMB guidelines or agency regulations 
adopting them.
    Comment: One recipient organization recommended that OMB publish in 
title 2 a listing of class deviations it granted to Federal agencies 
from requirements in the OMB guidance. The commenter suggested that 
doing so would make information about them more readily available on a 
continuing basis than is the case currently, thereby giving the Federal 
agency and recipients more opportunity to later revisit the conditions 
that originally gave rise to the deviation.
    Response: We referred this suggestion for consideration by the 
interagency work groups developing recommendations for future 
improvements to the OMB guidance.

Comments on Publication of Federal Agency Regulations in Title 2 of the 
CFR

    Comment: Commenters views' on whether Federal agency regulations 
should be published in title 2 largely paralleled their views on the 
publication of OMB's guidance in title 2. Comments from State 
governments and non-profit organizations were supportive of the 
proposal, as were most comments from Federal agencies, as a way to make 
the regulations easier to find and use. The academic community 
recommended that we reconsider the proposal to publish in title 2, 
deferring it until a more robust and uniform means of agency 
implementation of the OMB guidance is developed.
    Response: After considering the comments, we are proceeding with 
our proposal and are establishing a second subtitle in title 2 in which 
Federal agencies that issue regulations to implement OMB guidance will 
publish those regulations. We agree that improving Federal agencies' 
implementation of the OMB guidance is an important objective, as 
discussed further in the response to the next comment. However, that 
objective should not affect the decision on whether to publish agency 
regulations in title 2 because the organization and content of agency 
regulations is independent of where they are published--whether in 
title 2 or in the agency's own title of the CFR.
    Comment: Five commenters made recommendations for greater 
uniformity in the format and content of agency regulations on grants 
and agreements. Three of those commenters, including two Federal 
agencies, suggested that OMB issue a standard format or organization 
for agency implementing regulations. Two other commenters, a recipient 
organization and an association representing recipients, suggested 
developing uniform government-wide regulations to eliminate the need 
for applicants and recipients to understand and comply with the 
implementing regulations of more than two dozen different agencies.
    Response: Agree in part. Although the organization of the OMB 
guidance and agency regulations in subtitles A and B of title 2, 
respectively, are beyond the scope of this Federal Register document, 
we agree that a standard format would be helpful. Therefore, OMB is 
working with an interagency work group to consider ways to improve the 
OMB guidance and to develop an outline, to the extent possible, for 
agency regulations implementing the guidance.
    Regarding the development of uniform government-wide regulations, 
there is great variety in Federal program purposes, in the needs and 
preferences of the different types of recipients (e.g., State or local 
government agencies, institutions of higher education, or other 
nonprofit organizations) that receive awards under those programs, and 
in Federal agencies' organizational approaches to carrying out 
assistance award and administration functions. Developing uniform, 
government-wide regulations for some parts of the OMB guidance (e.g., 
parts where differences in program purposes and recipients are most 
important) could have an unintended effect of broadening to all 
agencies, programs, and their recipients more requirements than needed.
    While uniform government-wide regulations may not be the best way 
to implement all aspects of the OMB guidance, a similar approach may 
work for some of the guidance. As stated in response to an earlier 
comment, more uniform government-wide implementation of the 
nonprocurement debarment and suspension and drug-free workplace 
requirements will be achieved by publishing OMB guidance that agencies 
can adopt in their regulations (identifying any agency-specific 
additions, exceptions, or clarifications), in lieu of agencies' 
separately codifying a common rule. We will continue to look for other 
opportunities, such as the government-wide guidance on lobbying 
restrictions, where we can achieve greater uniformity without the 
unintended effect of imposing unnecessary additional requirements.
    Comment: Following on the previous comment, one commenter further 
suggested that the standard format should organize agency regulations 
in an order running from pre-award through post-award requirements, 
much as we do in the current common rule implementing OMB Circular A-
102 and the attachment to OMB Circular A-110.
    Response: An interagency work group already is considering that 
order of presentation as it develops recommendations for improving the 
OMB guidance and an outline for agency implementation of the guidance.
    Comment: One recipient organization recommended that OMB require 
Federal agencies to publish in title 2 listings of the deviations from 
OMB's government-wide guidance that are required of them by virtue of 
statutes. The commenter suggested that doing so would provide valuable 
information to the affected public about the basis for the deviations.
    Response: We referred this suggestion for consideration by the 
interagency work group that will develop an outline for agency 
implementation of the guidance.
    Comment: One commenter said that the proposal in the June 6 Federal 
Register document was correct in limiting agency regulations in title 2 
to those for grants and agreements and excluding those for procurement 
contracts.
    Response: We agree. For parts of the OMB guidance in title 2 that 
apply to procurement contracts as well as to grants and agreements, 
such as the single audit requirements in OMB

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Circular A-133 and the cost principles in OMB Circulars A-21, A-87, and 
A-122, the implementation of that guidance for procurement contracts 
properly belongs in the FAR.
    Comment: Two commenters suggested that OMB review Federal agencies' 
regulations implementing the OMB guidance when the agencies publish 
them in title 2. One of the commenters further recommended that OMB let 
an agency include requirements that were not in the OMB guidance only 
when OMB deemed the additional provisions as necessary to carry out the 
agency's program.
    Response: We agree. After we make final changes to the OMB guidance 
based on recommendations from interagency work groups implementing 
Public Law 106-107, we will review each Federal agency's regulations 
for conformity with the guidance when they are published in title 2, 
subtitle B. While we are not requiring Federal agencies to relocate 
their regulations in title 2 until we finalize revisions to the OMB 
guidance, we are not prohibiting agencies from electing to publish 
their existing regulations in title 2 sooner. However, we think it is 
likely that we will be able to develop an outline for regulations 
implementing the guidance, as discussed in response to a previous 
comment, and therefore agencies may wish to defer publication of their 
regulations in subtitle B of title 2 until the outline is available. If 
any agency relocates its current regulations before we finalize the OMB 
guidance in chapter I of subtitle A, we would not do a complete review 
of the substance of the regulations (which OMB reviewed when the agency 
published the regulations in its own CFR title), unless the agency is 
making substantive changes. We will review the substance of the 
regulations when the agency subsequently revises them to reflect the 
final OMB guidance.
    With respect to the comment about limiting the content of agencies' 
regulations, Federal programs that use grants and agreements have a 
wide variety of purposes. As such, some agencies' regulations for 
awarding and administering assistance instruments must vary in some 
ways from those of other agencies. The OMB guidance provides 
government-wide uniformity for requirements that broadly apply to most 
Federal programs, but the diversity of programs makes it inappropriate 
for the OMB guidance to prescribe all of the agency-specific and 
program-specific requirements that may be needed. We believe that the 
commenter's intent is served, however, because agencies are required to 
justify alternative or additional provisions they include in their 
regulations when submitted to OMB for review.
    Comment: Some components of one Federal department expressed 
concern that the June 6 Federal Register document did not state clearly 
whether the intent was for agencies to publish in title 2 their program 
regulations for programs that use grants and agreements, as well as 
department-wide regulations that address award and administration of 
grants and agreements in general.
    Response: While we would not preclude an agency from moving program 
regulations that might be appropriate for inclusion in title 2, the 
intent is to require agencies to publish in title 2 only those 
regulations that implement the requirements in the OMB guidance and 
apply to the award and administration of grants and agreements in 
general (as opposed to those of a specific program). That would include 
agency-wide regulations and any regulations of agency subcomponents 
that broadly apply to grants and agreements but would not include 
program regulations.
    Comment: One commenter suggested that OMB set a date ``by'' which 
all Federal agencies must publish their regulations in title 2, while 
another commenter recommended that OMB set a date ``on'' which they 
should do so.
    Response: It is important to note, as previously discussed, that we 
plan to publish the OMB guidance in title 2 in two phases. In the first 
phase, we will publish the circulars in their current form in chapter 
II of subtitle A. Agencies may publish their regulations in subtitle B 
during this first phase but they are not required to do so (and, as 
noted previously, they may wish to wait until an outline for agency 
implementing regulations is available). During the second phase, we 
will publish the OMB guidance in chapter I of subtitle A after we: (1) 
Propose, for public comment, any changes to streamline and simplify the 
guidance based on recommendations from the interagency working groups 
implementing Public Law 106-107; and (2) resolve the comments and 
finalize the guidance with the help of the working groups.
    Various parts of the guidance will become final and be published at 
different times, so the publication in chapter I will take place over a 
period of time rather than on a single date. As each part of the 
guidance is published in final form in chapter I, we will set a 
deadline for agency implementation of that part.

Comments on Internet Presentation of OMB Guidance and Agency 
Regulations

    Comment: Two commenters expressed views on the advantages and 
disadvantages of the CFR presentation on the Internet. One Federal 
agency said that, with the publication of the OMB guidance in the CFR, 
the Office of the Federal Register would update title 2 quickly each 
time that OMB made a final change to the guidance and thereby make 
available on the Internet a fully conformed version of the updated 
guidance. One recipient organization suggested that OMB organize the 
Internet presentation in a better way than it currently is organized at 
the CFR site, where one can retrieve only one CFR section at a time, 
rather than the entire document, and often retrieves duplicate pages 
when the pages are common to more than one section.
    Response: We appreciate that having the OMB guidance available at 
the CFR Internet site will be of value to many applicants, recipients, 
and Federal agencies. We also are committed to continuing to maintain 
our updated guidance in a timely manner at the OMB Internet site 
(http://www.whitehouse.gov/omb/grants/grants_circulars.html), where we 
will maintain a fully conformed version of each document that can be 
retrieved in its entirety as a single electronic file. Therefore, OMB 
will not ask the Office of the Federal Register to deviate from its 
current practice for the CFR when it provides documents for title 2 on 
the Internet.
    Comment: One subcomponent of a Federal agency suggested that 
electronic links to program regulations should be provided from agency-
wide regulations implementing the OMB guidance as it applies to grants 
and agreements generally.
    Response: We encourage any Federal agency with multiple program 
regulations to help the affected public find the pertinent provisions 
of those regulations in any way possible, such as providing direct 
electronic links from a central site at which it posts its agency-wide 
regulations implementing our guidance.

III. Summary of Actions

    In summary, OMB in this Federal Register document is establishing a 
new title 2 of the CFR, ``Grants and Agreements,'' with subtitles A and 
B. In subtitle A, ``Office of Management and Budget Guidance for Grants 
and Agreements,'' OMB is publishing its guidance to Federal agencies on 
the award and administration of grants and agreements. In subtitle B, 
each Federal

[[Page 26280]]

agency with regulations implementing the OMB guidance will have a 
chapter in which those regulations eventually will be published.
    To begin the process of moving OMB circulars to the new title 2, 
the Federal Register document immediately following this one publishes 
OMB Circular A-110, ``Uniform Administrative Requirements for Grants 
and Agreements With Institutions of Higher Education, Hospitals, and 
Other Non-Profit Organizations,'' in subtitle A of the new title. OMB 
will move additional circulars and other policy documents to title 2, 
subtitle A, in the near future. Meanwhile, the OMB circulars continue 
to be available on the OMB Web site (http://www.whitehouse.gov/omb/circulars).

List of Subjects in 2 CFR Part 1

    Cooperative agreements, Grant programs, Grants administration.

    Dated: April 29, 2004.
Joshua B. Bolten,
Director.

Authority and Issuance

0
For the reasons set forth above, the Office of Management and Budget 
establishes 2 CFR consisting of subtitle A--Government-wide Grants and 
Agreements (part 1 and reserved chapters I and II), and subtitle B--
Federal Agency Regulations for Grants and Agreements, as set forth 
below.

TITLE 2--GRANTS AND AGREEMENTS

SUBTITLE A--OFFICE OF MANAGEMENT AND BUDGET GUIDANCE FOR GRANTS AND 
AGREEMENTS

PART 1--ABOUT TITLE 2 OF THE CODE OF FEDERAL REGULATIONS AND 
SUBTITLE A

Subpart A--Introduction to Title 2 of the CFR
Sec.
1.100 Content of this title.
1.105 Organization and subtitle content.
1.110 Issuing authorities.
Subpart B--Introduction to Subtitle A
1.200 Purpose of chapters I and II.
1.205 Applicability to grants and other funding instruments.
1.210 Applicability to Federal agencies and others.
1.215 Relationship to previous issuances.
1.220 Federal agency implementation of this subtitle.
1.230 Maintenance of this subtitle.
Subpart C--Responsibilities of OMB and Federal Agencies
1.300 OMB responsibilities.
1.305 Federal agency responsibilities.

    Authority: 31 U.S.C. 503; 31 U.S.C. 1111; 41 U.S.C. 405; 
Reorganization Plan No. 2 of 1970; E.O. 11541, 35 FR 10737, 3 CFR, 
1966-1970, p. 939.

Subpart A--Introduction to Title 2 of the CFR


Sec.  1.100  Content of this title.

    This title contains--
    (a) Office of Management and Budget (OMB) guidance to Federal 
agencies on government-wide policies and procedures for the award and 
administration of grants and agreements; and
    (b) Federal agency regulations implementing that OMB guidance.


Sec.  1.105  Organization and subtitle content.

    (a) This title is organized into two subtitles.
    (b) The OMB guidance described in Sec.  1.100(a) is published in 
subtitle A. Publication of the OMB guidance in the CFR does not change 
its nature--it is guidance and not regulation.
    (c) Each Federal agency that publishes regulations implementing the 
OMB guidance has a chapter in subtitle B in which it issues those 
regulations. The Federal agency regulations in subtitle B differ in 
nature from the OMB guidance in subtitle A because the OMB guidance is 
not regulatory (Federal agency regulations in subtitle B may give 
regulatory effect to the OMB guidance, to the extent that the agency 
regulations require compliance with all or portions of the guidance).


Sec.  1.110  Issuing authorities.

    OMB issues this subtitle. Each Federal agency that has a chapter in 
subtitle B of this title issues that chapter.

Subpart B--Introduction to Subtitle A


Sec.  1.200  Purpose of chapters I and II.

    (a) Chapters I and II of subtitle A provide OMB guidance to Federal 
agencies that helps ensure consistent and uniform government-wide 
policies and procedures for management of the agencies' grants and 
agreements.
    (b) There are two chapters for publication of the guidance because 
portions of it may be revised as a result of ongoing efforts to 
streamline and simplify requirements for the award and administration 
of grants and other financial assistance (and thereby implement the 
Federal Financial Assistance Management Improvement Act of 1999, Pub. 
L. 106-107).
    (c) The OMB guidance in its initial form--before completion of 
revisions described in paragraph (b) of this section--is published in 
chapter II of this subtitle. When revisions to a part of the guidance 
are finalized, that part is published in chapter I and removed from 
chapter II.


Sec.  1.205  Applicability to grants and other funding instruments.

    The types of instruments that are subject to the guidance in this 
subtitle vary from one part of the guidance to another (note that each 
part identifies the types of instruments to which it applies).


Sec.  1.210  Applicability to Federal agencies and others.

    (a) This subtitle contains guidance that directly applies only to 
Federal agencies.
    (b) The guidance in this subtitle may affect others through each 
Federal agency's implementation of the guidance, portions of which may 
apply to--
    (1) The agency's awarding or administering officials;
    (2) Non-Federal entities that receive or apply for the agency's 
grants or agreements or receive subawards under those grants or 
agreements; or
    (3) Any other entities involved in agency transactions subject to 
the guidance in this chapter.


Sec.  1.215  Relationship to previous issuances.

    Although some the guidance was organized differently within OMB 
circulars or other documents, much of the guidance in this subtitle 
existed prior to the establishment of title 2 of the CFR. Specifically:

----------------------------------------------------------------------------------------------------------------
           Guidance in * * *                     On * * *                      Previously was in* * *
----------------------------------------------------------------------------------------------------------------
(a) [Reserved.].......................
(b) Subchapter B of Chapter II, part    Administrative             OMB Circular A-110.
 215.                                    requirements for grants
                                         and agreements.
---------------------------------------
(c) [Reserved.].......................
----------------------------------------------------------------------------------------------------------------


[[Page 26281]]

Sec.  1.220  Federal agency implementation of this subtitle.

    A Federal agency that awards grants and agreements subject to the 
guidance in this subtitle implements the guidance in agency regulations 
in subtitle B of this title and/or in policy and procedural issuances, 
such as internal instructions to the agency's awarding and 
administering officials. An applicant or recipient would see the effect 
of that implementation in the organization and content of the agency's 
announcements of funding opportunities and in its award terms and 
conditions.


Sec.  1.230  Maintenance of this subtitle.

    OMB issues guidance in this subtitle after publication in the 
Federal Register. Any portion of the guidance that has a potential 
impact on the public is published with an opportunity for public 
comment.

Subpart C--Responsibilities of OMB and Federal Agencies


Sec.  1.300  OMB responsibilities.

    OMB is responsible for:
    (a) Issuing and maintaining the guidance in this subtitle, as 
described in Sec.  1.230.
    (b) Interpreting the policy requirements in this subtitle.
    (c) Reviewing Federal agency regulations implementing the 
requirements of this subtitle, as required by Executive Order 12866.
    (d) Conducting broad oversight of government-wide compliance with 
the guidance in this subtitle.
    (e) Performing other OMB functions specified in this subtitle.


Sec.  1.305  Federal agency responsibilities.

    The head of each Federal agency that awards and administers grants 
and agreements subject to the guidance in this subtitle is responsible 
for:
    (a) Implementing the guidance in this subtitle.
    (b) Ensuring that the agency's components and subcomponents comply 
with the agency's implementation of the guidance.
    (c) Performing other functions specified in this subtitle.

Chapter I--[Reserved]

PARTS 100-199 [RESERVED]

Chapter II--Office of Management and Budget Circulars and Guidance 
[Reserved]

PARTS 200-299 [RESERVED]

SUBTITLE B--FEDERAL AGENCY REGULATIONS FOR GRANTS AND AGREEMENTS 
[RESERVED]

[FR Doc. 04-10351 Filed 5-10-04; 8:45 am]
BILLING CODE 3110-01-P