[Federal Register Volume 75, Number 177 (Tuesday, September 14, 2010)]
[Rules and Regulations]
[Pages 55663-55671]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-22705]



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  Federal Register / Vol. 75, No. 177 / Tuesday, September 14, 2010 / 
Rules and Regulations  

[[Page 55663]]



OFFICE OF MANAGEMENT AND BUDGET

2 CFR Part 170

RIN 0348-AB61


Requirements for Federal Funding Accountability and Transparency 
Act Implementation

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

ACTION: Interim final guidance to agencies with opportunity for 
comment.

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

SUMMARY: OMB is issuing interim final guidance to agencies to establish 
requirements for Federal financial assistance applicants, recipients, 
and subrecipients that are necessary for the implementation of the 
Federal Funding Accountability and Transparency Act of 2006, hereafter 
referred to as ``the Transparency Act'' or ``the Act''. This interim 
final guidance provides standard wording for an award term that each 
agency must include in grant and cooperative agreement awards it makes 
on or after October 1, 2010, to require recipients to report 
information about first-tier subawards and executive compensation under 
only those awards. This implementation of the requirement for reporting 
of subawards and executive compensation under Federal assistance awards 
parallels the implementation for subcontracts and executive 
compensation under Federal procurement contracts, which is in the 
Federal Acquisition Regulation.

DATES: The effective date for this interim final guidance is September 
14, 2010. Comments on the interim final guidance must be received by no 
later than October 14, 2010.

ADDRESSES: Comments may be sent to regulations.gov, a Federal E-
Government Web site that allows the public to find, review, and submit 
comments on documents that agencies have published in the Federal 
Register and that are open for comment. Simply type ``FFATA subaward 
reporting'' (in quotes) in the Comment or Submission search box, click 
Go, and follow the instructions for submitting comments. Comments 
received by the date specified above will be included as part of the 
official record and considered in preparing the final guidance.
    Marguerite Pridgen, Office of Federal Financial Management, Office 
of Management and Budget, 725 17th Street, NW., Washington, DC 20503; 
telephone 202-395-7844; fax 202-395-3952; e-mail [email protected].

FOR FURTHER INFORMATION CONTACT: Marguerite Pridgen, Office of Federal 
Financial Management, Office of Management and Budget, telephone (202) 
395-7844 (direct) or (202) 395-3993 (main office) and e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    On June 6, 2008 [73 FR 32417], the Office of Management and Budget 
(OMB) published proposed guidance to Federal agencies with an award 
term needed to implement requirements related to subaward reporting 
under the Federal Funding Accountability and Transparency Act of 2006 
(Pub. L. 109-282, as amended by section 6202 of Public Law 110-252, 
hereafter referred to as ``the Transparency Act'' or ``the Act''). The 
guidance was proposed for adoption in a new part 33 within title 2 of 
the Code of Federal Regulations (CFR).
    We are adopting the interim final guidance in 2 CFR part 170, a 
different 2 CFR part than part 33 in which we originally proposed to 
adopt it in June 2008. The reason is that part 33 now is within a newly 
created subchapter in 2 CFR that is for OMB guidance related to pre-
award responsibilities (for more information on the new 2 CFR 
subchapters, see the notice in today's Federal Register that adopts 2 
CFR part 25). The content of the guidance following this preamble is 
better suited to another new subchapter for guidance on national policy 
requirements, a subchapter that includes part 170.
    We received comments from 75 entities in response to the 2008 
Federal Register notice, including: 29 State agencies and two 
associations of State officials; 16 institutions of higher education 
and an association of research universities; six nonprofit 
organizations and an association of nonprofits; two local governmental 
organizations and an association of local government officials; two 
commercial firms; one individual; and 14 Federal agencies. Some of the 
comments concerned subaward reporting under the Transparency Act but 
were not directly related to the content of the guidance. For example, 
we received comments that suggested:
     Specific data elements that either should be included in, 
or excluded from, the information that will be required for each 
subaward.
     A need for better definitions of some data elements or 
clarification of the information desired in some data fields.
     Using the same information technology systems for 
submission of data on both: (1) Subawards under Federal assistance 
awards subject to the Transparency Act's requirements; and (2) 
subcontracts that entities receiving Federal procurement contracts must 
submit under the Act.
     Other specific features that it would be important to 
include in those information technology systems.
    When we received them in 2008, we referred comments that do not 
directly relate to the policy guidance to the appropriate Federal 
agency groups, including the groups that were working on the design of 
systems to which entities will submit data to fulfill their reporting 
responsibilities under the Act. As stated in the 2008 Federal Register 
notice, the data elements and other aspects of subaward reporting are 
separate from the policy guidance. The General Services Administration 
has recently published the information collections with an opportunity 
for public comment that provide the specific data elements required for 
Transparency Act reporting of subawards and executive compensation [75 
FR 43165]. The Federal acquisition councils have simultaneously 
published for public comment their proposed information collection for 
subcontract reporting pursuant to the Transparency Act.
    As it was proposed in 2008, the new part 33 would have required 
direct recipients of Federal agency awards and, with some exceptions, 
subrecipients at all lower tiers (if their

[[Page 55664]]

subawards were subject to Transparency Act reporting requirements) to 
have DUNS numbers and register in the CCR. Since the publication of the 
June 2008 proposal, OMB proposed a new part 25 to 2 CFR on February 18, 
2010 [75 FR 7316]. The proposed part 25 superseded the DUNS number and 
CCR elements of the June 2008 notice and limited the DUNS number 
requirement to applicants, recipients, and first-tier subrecipients 
only. The preamble of the February 2010 Federal Register document also 
contained responses to the public comments on the DUNS and CCR 
requirements proposed in June 2008. Part 25 is being finalized in 
another document in this section of today's Federal Register. 
Therefore, the DUNS and CCR requirements will not be addressed further 
in this document. The remainder of this document addresses the portions 
of the 2008 proposal related to reporting of subawards, as well as the 
additional reporting on executive compensation that is required by the 
subsequent amendment to the Transparency Act. In developing the interim 
final policy guidance on subaward reporting, we considered:
     All comments relevant to that subject in the 2008 
proposal;
     The experience gained under the guidance for, and 
practical implementation of, recipient reporting required by section 
1512 of the American Recovery and Reinvestment Act of 2009 (Pub. L. 
111-5, hereafter referred to as ``the Recovery Act''), which we 
consider to be the pilot program for subaward reporting envisioned by 
paragraph (d)(1) of section 2 of the Transparency Act; and
     New transparency and Open Government policies put in 
effect since the publication of the 2008 proposal, including the 
amendment of the Transparency Act by section 6202 of Public Law 110-252 
to require the reporting of the names and total compensation of a 
recipient's or subrecipient's five most highly compensated executives.
    Because most aspects of this guidance were proposed in 2008, with 
opportunity for comment, and given the public benefits to be gained by 
expediting the implementation of subaward reporting under the 
Transparency Act, we are publishing this guidance as interim final.
    The following section provides detailed responses to comments that 
we received on the portions of the guidance proposed in 2008 that are 
relevant to subaward reporting. Each response describes any revisions 
that we included in the interim final guidance as a result of the 
comment.

II. Comments, Responses, and Changes to the Guidance

A. Comments on the 2008 Federal Register Preamble

    Comment: Two commenters noted that the preamble of the 2008 Federal 
Register notice missed one data element--an award title descriptive of 
the purpose of the funding action--when it listed the data elements 
that the Transparency Act specifies for Federal agencies' awards.
    Response: The commenters are correct that the Act specifies the 
additional data element. The inadvertent omission did not affect the 
proposed guidance, however. The data elements were listed solely as 
background explanatory information in the preamble of the 2008 Federal 
Register notice.
    Comment: With respect to that same list of data elements in the 
preamble, one commenter asked whether the inclusion of the country of 
the recipient and its parent entity was a typographical error. The 
commenter suggested that the data element likely was meant to be the 
county, rather than the country.
    Response: Although the specifics of the data elements do not affect 
the guidance, the data element specified in the Transparency Act is the 
country, rather than the county.

B. General Comments Related to the Act and Guidance

    Comment: Thirty nine commenters expressed concern that recipients 
and subrecipients must allocate additional resources in order to comply 
with the new requirements for subaward reporting. They cited the need 
to change business processes and systems to begin to collect data that 
they are not collecting now and do it electronically. They also noted 
the continuing need for resources to compile and report data after that 
initial transition period. Most of the commenters noted the fiscal 
impact of subaward reporting and the provision in the Transparency Act 
that provides for recovering the additional costs. Some State agencies 
expressed concern that the increased administration costs would deplete 
resources available for program purposes and some suggested that the 
new requirement is an unfunded mandate. Some institutions of higher 
education noted that the limitation in OMB Circular A-21 on recovery of 
indirect costs could prevent them from recovering those costs from 
their Federal awards. Some State agencies suggested that the costs 
should be allocable as direct program costs. A number of commenters 
were concerned that the added burdens of reporting could discourage 
some entities, especially smaller subrecipient entities, from applying 
for Federal grants.
    Response: This guidance requires only prime grant recipients to 
report to the Federal Government on subawards and executive 
compensation. Nevertheless, we understand the administrative changes 
and effort that are associated with reporting on subawards. As section 
(d)(2)(A) of the Transparency Act provides, recipients and 
subrecipients are allowed ``to allocate reasonable costs for the 
collection and reporting of subaward data as indirect costs.'' We will 
assess the overall cost impact of the new requirements on recipients 
and subrecipients, as well as their ability to recover the indirect 
costs under current limitations in statute, policy, program 
regulations, or practice.
    Comment: Nine commenters suggested that it was premature to propose 
the policy guidance. Among reasons given were that we did not yet 
provide details about all data elements that will be required in each 
report of an obligating action, the definitions of the data elements, 
and the reporting format and procedures that will be used. A few 
commenters noted that the award term in the proposed guidance referred 
to a Web site at which entities would submit subaward data but observed 
that the site was not ready to receive data and had no further details 
on what or how to report. One commenter asked if there was an exception 
process when there are systems issues to be resolved.
    Response: We revised the wording of the award term to further 
clarify that the Web site will be the source of the detailed 
information on what to report (i.e., the specific data elements and 
their definitions) and how to report (i.e., the formats and information 
technology system features). That information will be posted at the Web 
site before non-Federal entities are required to report data on 
subaward obligations. In addition, the General Services 
Administration's Paperwork Reduction Act information collection also 
provides the specific data elements required for Transparency Act 
reporting.
    There is an important distinction to be made between the policy 
guidance contained in this Federal Register notice and the operational 
details on what and how to report. Under the current statute, non-
Federal entities will be required to report subaward data, a basic 
requirement that does not depend on the specific data elements and

[[Page 55665]]

procedural details. The policy guidance and the award term it contains 
are the means for having agencies formally communicate that basic 
statutory requirement to recipients and subrecipients. Neither the 
guidance nor the award term needs to contain the operational details 
about the specific data elements to be reported or how to submit the 
data. Both need to be in place now so that agencies can use the award 
term to provide timely notification to recipients and subrecipients 
about their responsibilities.
    Nonetheless, we fully recognize that the operational details also 
are very important. To ensure adequate opportunity for public comment, 
we have published the data elements and other details that affect the 
public. Further, we have made every effort to minimize the burden 
associated with Transparency Act reporting, through both pre-population 
of data and use of an electronic system that facilitates streamlined 
reporting [75 FR 43165-43166]. With respect to the question concerning 
the exception process, the Transparency Act does not provide for 
exceptions due to unresolved systems issues.
    Comment: Twenty two commenters recommended delaying the January 1, 
2009, date on which the Transparency Act provided that subaward 
reporting would begin. They stated that the implementation timeframe 
was not reasonable, especially since the procedures for compiling and 
submitting the data would not be set until after completion of a pilot 
that had not yet begun. Seven of the commenters also recommended that 
OMB grant the 18-month extension to the deadline that the Act allowed 
for subrecipients under awards to State, local, and tribal governments, 
if the Director of OMB determined that compliance would impose an undue 
burden for those subrecipients.
    Response: A subaward reporting pilot was conducted in the Fall of 
2008 to assess the burden of subaward reporting on recipients and 
subrecipients. The results of the pilot were mixed and showed that 
there were various unresolved policy and procedural issues surrounding 
subaward reporting. In 2009, the Recovery Act was enacted and required 
reporting of funds awarded to prime recipients, subrecipients and 
vendors. The Recovery Act reporting effort, which commenced in October 
2009, served as a demonstration of subaward reporting on a 
governmentwide scale which is why we consider it to be the pilot 
program for subaward reporting envisioned by paragraph (d)(1) of 
section 2 of the Transparency Act. Various audits and reviews have been 
conducted on Recovery Act implementation. Some of the reports from 
those reviews are available on the Recovery.gov Web site under the 
``Accountability'' section and include information on recipient 
challenges with implementing reporting requirements under the Recovery 
Act.
    In a memorandum dated April 6, 2010 with the subject line ``Open 
Government Directive--Federal Spending Transparency,'' OMB established 
an October 1, 2010 deadline for Federal agencies to initiate subaward 
reporting pursuant to the Transparency Act and provide a timeline for 
additional guidance to assist in meeting the goals established in the 
memorandum.
    Comment: Three commenters pointed out that the proposed guidance 
did not include a detailed implementation of a Transparency Act 
provision that provides an exemption from the subaward reporting 
requirement for an entity that demonstrates to the Director of OMB that 
its gross income, from all sources, did not exceed $300,000 in the 
previous tax year. The Act provides for the exemption until the 
Director determines that the imposition of the reporting requirement 
will not place an undue burden on such entities. The commenters noted 
that the guidance did not disclose how to request a reporting 
exemption, what proofs would be required, and what evaluation factors 
OMB would use in granting exemptions.
    Response: The award term in Appendix A to part 170 of the guidance 
properly includes that exception to the subaward reporting requirement. 
Section 2(e) of the Transparency Act allows the Director, OMB, to 
exempt any entity that demonstrates its gross income, from all sources, 
did not exceed $300,000 in the entity's previous tax year, from 
reporting the first-tier subaward information, until the Director 
determines that the imposition of the reporting requirement will not 
cause undue burden on the entity. The Director has exempted entities 
that fall under this category at this time.
    Comment: Two commenters raised questions concerning the 
applicability of the Paperwork Reduction Act (PRA). One stated that the 
Transparency Act and guidance did not comply with the PRA. The other 
suggested that OMB could not yet provide the PRA clearance for the 
information collection associated with subaward reporting, because the 
data elements and format were not specified in the guidance proposed on 
2008.
    Response: As stated in the response to a previous comment, the 
nature of the guidance is distinct from that of the operational 
details. What requires PRA clearance, as correctly noted by the second 
commenter, are the data elements and similar details for which 
reporting burdens can be estimated. The General Services Administration 
has recently published the information collections for public comment 
that provide the specific data elements required for Transparency Act 
reporting of subawards and executive compensation [75 FR 43165]. It is 
not pertinent to the issuance of the guidance in this Federal Register 
notice on the basic statutory requirement to report.
    Comment: With respect to the requirement to report each action 
under a subaward that obligates $25,000 or more in Federal funding, ten 
commenters recommended raising the $25,000 threshold due to the 
potential magnitude of the burdens, especially on small entities. The 
commenters suggested setting the threshold at $100,000 or more, to be 
parallel with their State's reporting requirement, the simplified 
acquisition threshold for Federal procurement contracts, or the 
threshold in OMB Circular A-133 at which an entity must have a single 
audit. One State agency asked if it could request a waiver to increase 
that threshold.
    Response: We made no change to the threshold in the guidance. The 
$25,000 threshold is set by the Transparency Act and there is no 
provision in the statute that authorizes a waiver to increase the 
threshold.
    Comment: Four commenters stated that the new subaward reporting 
requirement overlapped with at least some Federal agencies' existing 
requirements for reporting on subawards. As an example, one commenter 
cited information about subawards that applications to agencies either 
contain or could be amended to contain. Two non-Federal entities and 
one Federal agency were concerned that the existing and new 
requirements could be redundant, thereby unnecessarily increasing the 
burdens of subaward reporting. One Federal agency stated that it 
currently obtained information about all subawards, and not just those 
above the $25,000 threshold, and did not want to lose insight into the 
subawards below $25,000 due to the Transparency Act threshold.
    Response: Relatively few Federal agency awarding offices currently 
obtain the details about each subaward obligation that they would need 
to do the reporting under the Transparency Act. Many agencies receive 
individual applications that identify the applicant's

[[Page 55666]]

intent to make a subaward of a specified amount if its application is 
successful. However, the actual subaward recipient may not be known at 
that time or, if known, the amount that a successful applicant 
obligates may not be the same as it originally planned and proposed, 
for various reasons (e.g., the Federal award it receives may be for a 
lesser amount than it proposed or it may rebudget after receiving the 
award, as pertinent Federal rules allow it to do without the Federal 
agency's prior approval). Given that what the application describes is 
only a plan, it cannot serve as a definitive source of information for 
Transparency Act purposes. At this time, we are not asking for 
reporting of subaward information below the first-tier.
    With respect to the relatively few Federal awarding offices that do 
obtain post-award data on actual subaward obligations, we are directing 
those agencies to take the necessary steps to ensure that their 
recipients are not required, due to the combination of agency-specific 
and Transparency Act reporting requirements, to submit the same or 
similar data multiple times during a given reporting period.
    Comment: Five commenters asked about the consequences of a 
subrecipient's noncompliance with requirements related to the 
Transparency Act. Two commenters expressed concern that delivery of 
essential services could be interrupted if awards could not be made or 
payments had to be suspended.
    Response: After a subaward is made, the range of consequences that 
may result from the subrecipient's material failure to comply with a 
requirement related to the Transparency Act should be no different than 
it is for a material failure to comply with other Federal requirements. 
The same remedies are available to the recipient and--should the matter 
of a subrecipient entity's noncompliance become an issue for the 
Federal Government--to a Federal agency.

C. Comments Related to the Applicability of the Guidance

    Comment: One commenter stated that the guidance should not apply to 
loan guarantees because the definition of ``federal award'' in the 
Transparency Act does not explicitly mention them. The commenter 
expressed concern that the requirement in the guidance for lenders, 
small businesses, and rural businesses to obtain DUNS numbers could be 
an added barrier to their participation in U.S. Department of 
Agriculture (USDA) rural development and Small Business Administration 
(SBA) programs that stimulate financing for small and rural businesses. 
The commenter recommended not applying the guidance to loan guarantees 
under those programs until a Federal Register notice was published, 
with an opportunity to comment, that proposed applying Transparency Act 
requirements to those programs specifically.
    Response: Although the 2008 Federal Register notice proposed 
applicability of the guidance broadly to all of the types of financial 
assistance subject to the Transparency Act, we revised the interim 
final guidance to implement at this time only the reporting 
requirements specifically for first-tier subawards under grants and 
cooperative agreements in light of these public comments and concerns. 
We are deferring to a later date the implementation of subaward 
reporting under other financial assistance subject to the Act, which 
includes loans and loan guarantees, as well as lower-tier subawards.
    We understand the legitimate concern that additional administrative 
requirements can have an impact on financial assistance applicants and 
recipients under any Federal program. However, to publish a notice that 
lists the hundreds of programs individually would be unnecessary and 
impractical.
    Comment: One Federal agency suggested we make it clearer that 
financial assistance provided through assessed and voluntary 
contributions is subject to the guidance, by explicitly listing that 
type of assistance in the proposed definition of ``Federal financial 
assistance subject to the Transparency Act.'' The definition in section 
33.325 of the proposed guidance included them only implicitly, through 
the inclusion of a category of ``other financial assistance 
transactions that authorize the non-Federal entities' expenditure of 
Federal funds.''
    Response: We agree and made the change to the guidance (in what now 
is section 170.320).
    Comment: A Federal agency recommended that the guidance not apply 
to loans, loan guarantees, interest subsidies, and insurance that 
recipients provide as subawards to subrecipients. The agency stated 
that the Transparency Act did not explicitly identify them as subawards 
and their inclusion would be inconsistent with coverage of the 
administrative requirements for grants to and agreements with 
educational and other nonprofit organizations that are in 2 CFR part 
215 (OMB Circular A-110).
    Response: We did not revise the guidance. The Act requires OMB to 
``ensure that data regarding subawards are disclosed in the same manner 
as data regarding other Federal awards.'' The Transparency Act's 
definition of ``federal award'' includes types of financial assistance 
awards that are not subject to the administrative requirements in 2 CFR 
part 215, and therefore includes them both at the prime tier between 
Federal agencies and recipients and at lower tiers between recipients 
and subrecipients. While only subawards under grants and cooperative 
agreements need to be reported at this time, subawards under all types 
of Federal financial assistance subject to the Transparency Act will 
need to be reported at a later date.
    Comment: One Federal agency expressed concern that it would be 
difficult to provide an actual dollar amount associated with a transfer 
of title to Federally owned property.
    Response: We revised the definition of ``Federal financial 
assistance subject to the Transparency Act'' in that section (which now 
is section 170.320) to clarify that the guidance does not apply to 
transfers of title to Federally owned property.
    Comment: One Federal agency suggested amending the proposed 
guidance to explicitly exclude Cooperative Research and Development 
Agreements (CRDAs) under 15 U.S.C. 3710a from coverage under the 
Transparency Act. CRDAs are instruments authorized for use between 
Federal laboratories and non-Federal entities for technology transfer 
purposes. The commenter noted that the statute permits a Federal 
laboratory to receive funds from a non-Federal entity under a CRDA and 
expressed concern that a funds transfer might be perceived as a 
subaward to the Federal laboratory.
    Response: We agree and made a change to the definition of ``Federal 
financial assistance subject to the Transparency Act'' in that section 
(which now is section 170.320) of the guidance. The definition of 
``cooperative research and development agreement'' in 15 U.S.C. 3710a 
excludes transactions under which Federal funds are provided to non-
Federal entities. It also distinguishes CRDAs, which are not Federal 
financial assistance awards, from cooperative agreements under the 
Federal Grant and Cooperative Agreement Act in 31 U.S.C., chapter 63.
    Comment: One commenter noted that the proposed guidance did not 
apply to a Federal agency that receives an award from another agency 
and asked whether it would apply to an award that a Federal agency 
receives from a non-Federal entity.
    Response: Yes, the guidance applies. The non-Federal entity would 
have to report the subaward. At this time, the

[[Page 55667]]

non-Federal entity would not have to report lower-tier subawards. To 
clarify this, we revised the definition of ``entity'' in the award term 
that now is in Appendix A to part 170.
    Comment: One commenter stated that it acts as a fund manager 
overseeing accounts for Federal agencies into which voluntary payments, 
court-ordered settlements, fines, and other sources of funds are 
deposited. It noted that the Federal agency specifies the entities to 
whom funds from those accounts are obligated. The commenter asked if it 
is the recipient in that case and the other entities are the 
subrecipients, or if the entities to whom it awards the funds are the 
prime recipients because the Federal agency makes the funding 
decisions.
    Response: If the funds cited in the comment are available for 
obligation or reobligation for Federal program purposes, this situation 
is somewhat similar to that of a grant under which the recipient is 
authorized to: (1) Make loans for program purposes to subrecipients; 
(2) merge the funds received from those subrecipients' loan payments 
back into the corpus of grant funding; and (3) use those repaid funds 
to make new loans. In both that case and the case raised by the 
commenter, the non-Federal entity that manages Federal agency funds 
that are available for program purposes is the recipient. The entities 
that receive the funds that the recipient obligates or reobligates are 
subrecipients.
    Comment: One commenter suggested not applying the reporting 
requirement below the first-tier of subawards under mandatory programs 
such as block and formula grants and other types of assistance to 
State, local, and tribal governments.
    Response: The Transparency Act does not authorize a limitation on 
the reporting requirement to the first-tier of subawards. At this time, 
however, we are deferring to a later date the implementation of the 
reporting requirement below the first-tier.
    Comment: Six commenters asked whether the requirements in the 
guidance applied to prior program announcements, awards, and subawards. 
One of the commenters pointed out that an applicant who already had 
applied in response to a previously issued announcement might have 
decided not to apply if it had been informed about the Transparency Act 
requirements prior to doing so. Others noted they would need to amend 
previously issued awards if the requirements applied to them.
    Response: New Federal, non-Recovery Act funded grant awards and 
cooperative agreements with an award date on or after October 1, 2010, 
and resulting first-tier subawards, are subject to the reporting 
requirements in this guidance. New Federal grants and cooperative 
agreements are grants and cooperative agreements with a new Federal 
Award Identification Number (FAIN) as of October 1, 2010. They do not 
include obligating actions on or after October 1, 2010, that provide 
additional funding under continuing grants and cooperative agreements 
awarded in prior fiscal years.

D. Other Comments

    Comment: Two commenters raised questions about the dates in the 
proposed paragraph 33.200(a)(2). One commenter asked what was meant by 
the effective date of the part cited in paragraph (a)(2)(i). The other 
commenter recommended changing the date in paragraph (a)(2)(ii). That 
paragraph required a Federal agency to incorporate Transparency Act 
requirements into a program announcement or other application 
instructions if awards would be made after October 1, 2008, in response 
to applications using those instructions. The commenter recommended 
changing the date to December 31, 2008.
    Response: The guidance in 2 CFR part 170 is effective today, with 
its publication in the Federal Register. We revised the date in 
paragraph 170.200(a)(2)(ii) to October 1, 2010.
    Comment: Three commenters noted that some entities may want to take 
advantage of the flexibility that the award term in the proposed 
guidance gave a recipient to either: (1) Pass the responsibility for 
reporting on lower-tier subawards to the subrecipients who made those 
subawards; or (2) do that reporting itself, which would require the 
recipient to collect the information from lower-tier subrecipients. 
One, a State agency, stated that it maintains a complete data base that 
should be sufficient to meet the Transparency Act requirements.
    Response: We recognize the burdens associated with subaward 
reporting and understand that programs and organizations differ. 
However, prime recipients will not have the option to delegate 
reporting of subgrant information to their subrecipients. We believe 
that this may help reduce reporting burden on subaward recipients.
    Comment: Six commenters asked for clarification on the meaning of 
the phrases ``date of obligation'' and ``obligating action'' used in 
the award term in the proposed section 33.220 with respect to 
subawards. Two commenters asked how the date of obligation would be 
defined for a subaward that allowed reimbursement of pre-award costs a 
subrecipient incurred on or after a ``start date'' that was prior to 
the date on which the subaward was signed.
    Response: With respect to a subaward, an obligating action is a 
transaction that makes available to the subrecipient a known amount of 
funding for program purposes. Examples include a new subaward, an 
incremental funding amendment that increases the total amount of a 
subaward, or a quarterly allotment under a formula grant program.
    We made no change to the guidance, since ``obligations'' is a well 
established term in OMB's guidance on administrative requirements for 
grants and agreements (2 CFR part 215 and the common rule that Federal 
agencies adopted to implement OMB Circular A-102). Under most Federal 
grants and cooperative agreements, recipients regularly report amounts 
of ``unobligated balances'' to Federal agencies on the standard 
financial reporting forms.
    The date of obligation for a subaward is the date on which the 
recipient authorizes the subrecipient to incur costs against the known 
amount it obligates, and does so in a way that legally obliges the 
recipient to provide funds to cover costs that are incurred in 
accordance with the subaward's terms and conditions. That date usually 
is associated with the signature of a formal document, either the 
initial subaward or an amendment to it. That is distinct from the 
``start date'' cited in the example of pre-award costs, since we assume 
that the subrecipient incurs those costs at its own risk, in 
anticipation of the subaward, and that the recipient has no legal 
obligation--until it signs the subaward--to provide award funds to 
cover those costs.
    Comment: Eight commenters questioned whether the guidance required 
reporting of obligations or disbursements as the award amounts. One 
commenter recommended that recipients and subrecipients report 
``expenditures,'' the term used in the Transparency Act. Four State 
agencies asked how ``obligations'' would be determined in some programs 
that adjust the amount a subrecipient receives at some time after the 
initial obligation. One of the agencies cited the example of the school 
lunch program, under which the amount obligated is not known until 
after the subrecipient expends the funds.
    Response: The guidance requires reporting of each obligation, 
rather than each disbursement against the amount

[[Page 55668]]

obligated. If a recipient obligates a specific known amount for a 
subaward, even if it may be adjusted later, it must report the 
obligation when it is made. For a program like the school lunch 
program, however, where the initial subaward provides the subrecipient 
with an open-ended authorization of unspecified amount, the obligation 
date corresponds to the date on which the amount of the obligation is 
specified. Reporting is required by the end of the month following the 
month in which the subaward obligation was made.
    Comment: One commenter recommended revising the requirement to 
report each obligating action within 30 days of the date of obligation. 
The commenter suggested allowing reporting quarterly, semiannually, or 
annually.
    Response: We changed the guidance and award term to require 
obligations to be reported no later than the end of the month following 
the month of the obligation. For example, if a subaward is made on 
October 2, 2010, the subaward information must be reported by no later 
than November 30, 2010.
    Comment: Ten commenters requested additional clarification about 
the difference between a subaward, which must be reported under the 
Transparency Act, and procurement under an award, which is not subject 
to the reporting requirement.
    Response: It is worth noting that recipients for many years have 
had to judge whether a transaction under their Federal award was a 
subaward or a procurement action. That is because a recipient must 
include different requirements in a subaward than it does in a 
procurement under an award, in accordance with the administrative 
requirements in 2 CFR part 215 (OMB Circular A 110) or the common rule 
implementing OMB Circular A 102. Also, when the transaction provides 
funds to a for-profit entity, the recipient must properly take into 
account whether the transaction would be more characteristic of a 
vendor relationship than a subrecipient under ------.210 of OMB 
Circular A-133. The judgments a recipient must make to decide whether a 
lower tier agreement is a subaward or procurement for Transparency Act 
reporting purposes are the same as the judgments it makes to establish 
which terms and conditions to include in the agreement. Prime 
recipients should refer to awarding agency supplemental guidance, if 
any, in making such a determination.
    Two examples may help clarify the distinction, which is based on 
the purpose of the transaction between the recipient or subrecipient 
and the entity at the next lower tier. If the purpose of the lower-tier 
transaction is the same as the purpose of the substantive program 
supported by the Federal award at the prime tier, so that the recipient 
through that lower tier transaction is in effect handing a portion of 
the substantive program over to the lower-tier entity for performance, 
the lower-tier transaction is a subaward. The two examples follow:
     Example 1: Provision of health services. A Federal program 
provides funding to State agencies to deliver a variety of services for 
older citizens. If the State provides funds to a third party to carry 
out a type of service (e.g., mental health services) that is authorized 
under the program and the State otherwise might deliver itself, the 
agreement is a subaward because the third party is carrying out 
substantive programmatic activity that is the purpose of the Federal 
award. If a recipient or subrecipient obtains the services of a third 
party to help in designing public service announcements or developing 
educational materials about the program--goods or services that the 
State or subrecipient needs to carry out the program that is the 
purpose of the award--that would be a procurement under the award or 
subaward.
     Example 2: Research. An agency makes an award to a 
university to investigate basic physics to understand why certain 
materials have the properties they do. To do some of the experiments, 
the university researchers need an instrument that does not yet exist. 
The university provides funding under the Federal award to a small firm 
to carry out a research and development project and develop an 
instrument. The award to the firm has the purpose of instrument 
development, and does not have the same purpose as the Federal award. 
The award to the firm is a procurement action. If the university 
instead made an award to the firm to perform some of the basic research 
on physics of materials that is the substantive program purpose of the 
Federal award, and the recipient determines it does not have a vendor 
relationship with the firm under this award as described in Sec. --
--.210 of the attachment to OMB Circular A-133, the award to the firm 
would be a subaward.
    Comment: One commenter from a State agency said that it is unclear 
whether Medicaid is considered Federal financial assistance for the 
purposes of the subaward reporting requirement.
    Response: There are no program exemptions under this guidance even 
though there are other types of exemptions which are described in the 
guidance. If a state makes a subaward under a grant or cooperative 
agreement to an entity other than an individual who is a natural 
person, the subaward is $25,000 or more, and no exemptions apply, the 
state would need to report the subaward.
    Comment: Three commenters raised issues with wording in the award 
term in the proposed section 33.220 that related to the $25,000 
reporting threshold for subawards. Two commenters asked for 
clarification on the meaning of ``life of the subaward,'' as that 
phrase was used, both in the award term and the associated guidance to 
Federal agencies on use of the award term. Another commenter suggested 
that readers might perceive ``$25,000 over the life of the subaward'' 
to be inconsistent with ``each action that obligates $25,000 or more in 
Federal funding.'' One of the commenters also suggested consistent 
wording to replace ``a total value of $25,000'' in one paragraph and 
``in that range'' in another paragraph.
    Response: With respect to the comment concerning the apparent 
inconsistency between ``a total value of 25,000'' and ``each action 
that obligates $25,000 or more in Federal funding,'' it should be noted 
that the two phrases refer to related but different requirements 
addressing lower-tier subaward reporting. We have revised the interim 
final guidance to show that only recipient reporting of first-tier 
subawards will be required at this time, and therefore, the comment is 
no longer relevant. We have replaced the phrase ``life of the 
subaward'' with alternative wording that more clearly specifies when a 
recipient must include the Transparency Act reporting requirement in a 
subaward it makes to a subrecipient. For new Federal grants or 
cooperative agreements as of October 1, 2010, if the initial award is 
$25,000 or more, reporting of subaward information is required. If the 
initial award is below $25,000 but subsequent award modifications 
result in a total award of $25,000 or more, the award is subject to the 
reporting requirements, as of the date the award exceeds $25,000. If 
the initial award is $25,000 or more, but funding is subsequently de-
obligated such that the total award amount falls below $25,000, the 
award continues to be subject to the reporting requirements of the 
Transparency Act.
    Comment: One commenter asked for clarification concerning reporting 
requirements for incrementally funded subawards. The commenter gave as 
an example a subaward that a recipient expected to exceed $25,000 over 
the duration of the subaward, but for which

[[Page 55669]]

the initial obligation was less than $25,000.
    Response: Each action that obligates $25,000 or more in Federal 
funds must be reported.
    Comment: Three commenters asked whether a recipient or subrecipient 
would be required to report a downward adjustment in the amount of a 
subaward it had made previously.
    Response: We made no change to the guidance. The award term that 
now is in section Appendix A to part 170 of the guidance refers 
recipients and subrecipients to the web site at which data submission 
instructions will be posted. Those instructions will include the 
specific data elements and their definitions that, as discussed in 
Section I of this Federal Register notice, have been established 
through a separate process under the Paperwork Reduction Act [75 FR 
43165]. The instructions will address whether reporting of reductions 
in subaward amounts, sometimes called ``deobligations,'' are a 
subcategory of obligations to be reported.
    Comment: One commenter asked about the requirement to submit 
changed information other than subaward amounts, such as a change in 
subrecipient information.
    Response: If the information that was reported was correct at the 
time it was reported and changed at a later date, there would be no 
need to subsequently revise the information in previously submitted 
reports. The updated information would be included in reports of 
subsequent obligations under the same subaward, however.
    That is distinct from a case in which a recipient later discovers 
that information it reported was erroneous at the time it was reported. 
Questions concerning error corrections in that case are being 
considered by the interagency group developing the data elements and 
information technology systems for subaward reporting. As discussed in 
the response to the previous comment, the process for resolving those 
issues will include an opportunity for public input.
    Comment: Four commenters asked how one would report subawards to 
recipients with multiple Federal funding sources. One commenter asked 
if the amount of funding from each program listed in the Catalog of 
Federal Domestic Assistance (CFDA) would need to be reported.
    Response: Each action that obligates $25,000 or more in Federal 
funding would need to be separately reported. For new Federal grants or 
cooperative agreements as of October 1, 2010, if the initial award is 
$25,000 or more, reporting of subaward information is required. If the 
initial award is below $25,000 but subsequent award modifications 
result in a total award of $25,000 or more, the award is subject to the 
reporting requirements, as of the date the award exceeds $25,000. If 
the initial award exceeds $25,000 but funding is subsequently de-
obligated such that the total award amount falls below $25,000, the 
award continues to be subject to the reporting requirements of the 
Transparency Act. If a single action obligates funding from multiple 
programs, the data submitted for that action would include the CFDA 
number for the program that is the predominant source of the Federal 
funding. If a program's funding is obligated by a separate amendment to 
the same subaward agreement that provides other programs' funding, 
however, then the data reported for each amendment to the agreement 
would include the CFDA number of the program that provided the funding 
for that amendment.
    Comment: One commenter asked whether, in light of the new reporting 
requirements, a subrecipient would be subject to Federal audit 
requirements if it received $500,000 or more either from a single 
program or a combination of programs.
    Response: The new reporting requirements under the Transparency Act 
do not change the audit requirements in OMB Circular A-133, section --
--.200, that apply to a non-Federal entity that expends $500,000 or 
more in ``federal awards'' (which the Circular defines to include 
Federal financial assistance received indirectly through pass-through 
entities).

III. Next Steps

    Federal agencies that award Federal financial assistance subject to 
the Transparency Act will implement the interim final guidance in 2 CFR 
part 170 through their regulations, internal policy guidance to 
awarding offices, program announcements and application instructions, 
and the award term that now is in section Appendix A to part 170. The 
General Services Administration has recently published in the Federal 
Register with an opportunity for public comment the information 
collections that provide the specific data elements required for 
Transparency Act reporting of subawards and executive compensation [75 
FR 43165]. The information collections will be modified as appropriate 
in response to public comments and published with any other operational 
guidelines before recipients begin reporting data on subawards.

List of Subjects in 2 CFR Part 170

    Business and industry, Colleges and universities, Cooperative 
agreements, Farmers, Federal aid programs, Grant programs, Grants 
administration, Hospitals, Indians, Insurance, International 
organizations, Loan programs, Nonprofit organizations, Reporting and 
recordkeeping requirements, State and local governments, Subsidies.

Danny Werfel,
Controller.

Authority and Issuance

0
For the reasons set forth above, the Office of Management and Budget 
amends 2 CFR chapter I by adding part 170 to read as follows:

PART 170--REPORTING SUBAWARD AND EXECUTIVE COMPENSATION INFORMATION

Sec.
Subpart A--General
170.100 Purposes of this part.
170.105 Types of awards to which this part applies.
170.110 Types of entities to which this part applies.
170.115 Deviations.
Subpart B--Policy
170.200 Requirements for program announcements, regulations, and 
application instructions.
170.220 Award term
Subpart C--Definitions
170.300 Agency.
170.305 Award.
170.310 Entity.
170.315 Executive
170.320 Federal financial assistance subject to the Transparency 
Act.
170.325 Subaward.
170.330 Total compensation.
Appendix A to Part 170--Award Term


    Authority:  Pub. L. 109-282; 31 U.S.C. 6102.

Subpart A--General


Sec.  170.100  Purposes of this part.

    This part provides guidance to agencies to establish requirements 
for recipients' reporting of information on subawards and executive 
total compensation, as required by the Federal Funding Accountability 
and Transparency Act of 2006 (Pub. L. 109-282), as amended by section 
6202 of Public Law 110-252, hereafter referred to as ``the Transparency 
Act''.


Sec.  170.105  Types of awards to which this part applies.

    This part applies to an agency's grants, cooperative agreements, 
loans,

[[Page 55670]]

and other forms of Federal financial assistance subject to the 
Transparency Act, as defined in Sec.  170.320.


Sec.  170.110  Types of entities to which this part applies.

    (a) General. Through an agency's implementation of the guidance in 
this part, this part applies to all entities, other than those excepted 
in paragraph (b) of this section, that--
    (1) Apply for or receive agency awards; or
    (2) Receive subawards under those awards.
    (b) Exceptions. (1) None of the requirements in this part apply to 
an individual who applies for or receives an award as a natural person 
(i.e., unrelated to any business or non-profit organization he or she 
may own or operate in his or her name).
    (2) None of the requirements regarding reporting names and total 
compensation of an entity's five most highly compensated executives 
apply unless in the entity's preceding fiscal year, it received--
    (i) 80 percent or more of its annual gross revenue in Federal 
procurement contracts (and subcontracts) and Federal financial 
assistance awards subject to the Transparency Act, as defined at Sec.  
170.320 (and subawards); and
    (ii) $25,000,000 or more in annual gross revenue from Federal 
procurement contracts (and subcontracts) and Federal financial 
assistance awards subject to the Transparency Act, as defined at Sec.  
170.320; and
    (3) The public does not have access to information about the 
compensation of the senior executives through periodic reports filed 
under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 
U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 
1986.


Sec.  170.115  Deviations.

    Deviations from this part require the prior approval of the Office 
of Management and Budget (OMB).

Subpart B--Policy


Sec.  170.200  Requirements for program announcements, regulations, and 
application instructions.

    (a) Each agency that makes awards of Federal financial assistance 
subject to the Transparency Act must include the requirements described 
in paragraph (b) of this section in each program announcement, 
regulation, or other issuance containing instructions for applicants:
    (1) Under which awards may be made that are subject to Transparency 
Act reporting requirements; and
    (2) That either:
    (i) Is issued on or after the effective date of this part; or
    (ii) Has application or plan due dates after October 1, 2010.
    (b) The program announcement, regulation, or other issuance must 
require each entity that applies and does not have an exception under 
Sec.  170.110(b) to ensure they have the necessary processes and 
systems in place to comply with the reporting requirements should they 
receive funding.
    (c) Federal agencies that obtain post-award data on subaward 
obligations outside of this policy should take the necessary steps to 
ensure that their recipients are not required, due to the combination 
of agency-specific and Transparency Act reporting requirements, to 
submit the same or similar data multiple times during a given reporting 
period.


Sec.  170.220  Award term.

    (a) To accomplish the purposes described in Sec.  170.100, an 
agency must include the award term in Appendix A to this part in each 
award to a non-Federal entity under which the total funding will 
include $25,000 or more in Federal funding at any time during the 
project or program period.
    (b) An agency--
    (1) Consistent with paragraph (a) of this section, is not required 
to include the award term in Appendix A to this part if it determines 
that there is no possibility that the total amount of Federal funding 
under the award will equal or exceed $25,000. However, the agency must 
subsequently amend the award to add the award term if changes in 
circumstances increase the total Federal funding under the award to 
$25,000 or more during the project or program period.

Subpart C--Definitions


Sec.  170.300  Agency.

    Agency means a Federal agency as defined at 5 U.S.C. 551(1) and 
further clarified by 5 U.S.C. 552(f).


Sec.  170.305  Award.

    Award, for the purposes of this part, effective October 1, 2010, 
means a grant or cooperative agreement. On future dates to be specified 
by OMB in policy memoranda available at the OMB Web site, award also 
will include other types of awards of Federal financial assistance 
subject to the Transparency Act, as defined in Sec.  170.320.


Sec.  170.310  Entity.

    Entity has the meaning given in 2 CFR part 25.


Sec.  170.315  Executive.

    Executive means officers, managing partners, or any other employees 
in management positions.


Sec.  170.320  Federal financial assistance subject to the Transparency 
Act.

    Federal financial assistance subject to the Transparency Act means 
assistance that non-Federal entities described in Sec.  170.105 receive 
or administer in the form of--
    (a) Grants;
    (b) Cooperative agreements (which does not include cooperative 
research and development agreements pursuant to the Federal Technology 
Transfer Act of 1986, as amended (15 U.S.C. 3710a));
    (c) Loans;
    (d) Loan guarantees;
    (e) Subsidies;
    (f) Insurance;
    (g) Food commodities;
    (h) Direct appropriations;
    (i) Assessed and voluntary contributions; and
    (j) Other financial assistance transactions that authorize the non-
Federal entities' expenditure of Federal funds.
    (b) Does not include--
    (1) Technical assistance, which provides services in lieu of money;
    (2) A transfer of title to Federally owned property provided in 
lieu of money, even if the award is called a grant;
    (3) Any classified award; or
    (4) Any award funded in whole or in part with Recovery funds, as 
defined in section 1512 of the American Recovery and Reinvestment Act 
of 2009 (Pub. L. 111-5).


Sec.  170.325  Subaward.

    Subaward has the meaning given in paragraph e.3 of the award term 
in Appendix A to this part.


170.330   Total compensation.

    Total Compensation has the meaning given in paragraph e.5 of the 
award term in Appendix A to this part.

Appendix A to Part 170--Award Term

    I. Reporting Subawards and Executive Compensation.
    a. Reporting of first-tier subawards.
    1. Applicability. Unless you are exempt as provided in paragraph 
d. of this award term, you must report each action that obligates 
$25,000 or more in Federal funds that does not include Recovery 
funds (as defined in section 1512(a)(2) of the American Recovery and 
Reinvestment Act of 2009, Pub. L. 111-5) for a subaward to an entity 
(see definitions in paragraph e. of this award term).
    2. Where and when to report.
    i. You must report each obligating action described in paragraph 
a.1. of this award term to http://www.fsrs.gov.

[[Page 55671]]

    ii. For subaward information, report no later than the end of 
the month following the month in which the obligation was made. (For 
example, if the obligation was made on November 7, 2010, the 
obligation must be reported by no later than December 31, 2010.)
    3. What to report. You must report the information about each 
obligating action that the submission instructions posted at http://www.fsrs.gov specify.
    b. Reporting Total Compensation of Recipient Executives.
    1. Applicability and what to report. You must report total 
compensation for each of your five most highly compensated 
executives for the preceding completed fiscal year, if--
    i. the total Federal funding authorized to date under this award 
is $25,000 or more;
    ii. in the preceding fiscal year, you received--
    (A) 80 percent or more of your annual gross revenues from 
Federal procurement contracts (and subcontracts) and Federal 
financial assistance subject to the Transparency Act, as defined at 
2 CFR 170.320 (and subawards); and
    (B) $25,000,000 or more in annual gross revenues from Federal 
procurement contracts (and subcontracts) and Federal financial 
assistance subject to the Transparency Act, as defined at 2 CFR 
170.320 (and subawards); and
    iii. The public does not have access to information about the 
compensation of the executives through periodic reports filed under 
section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 
U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code 
of 1986. (To determine if the public has access to the compensation 
information, see the U.S. Security and Exchange Commission total 
compensation filings at http://www.sec.gov/answers/execomp.htm.)
    2. Where and when to report. You must report executive total 
compensation described in paragraph b.1. of this award term:
    i. As part of your registration profile at http://www.ccr.gov.
    ii. By the end of the month following the month in which this 
award is made, and annually thereafter.
    c. Reporting of Total Compensation of Subrecipient Executives.
    1. Applicability and what to report. Unless you are exempt as 
provided in paragraph d. of this award term, for each first-tier 
subrecipient under this award, you shall report the names and total 
compensation of each of the subrecipient's five most highly 
compensated executives for the subrecipient's preceding completed 
fiscal year, if--
    i. in the subrecipient's preceding fiscal year, the subrecipient 
received--
    (A) 80 percent or more of its annual gross revenues from Federal 
procurement contracts (and subcontracts) and Federal financial 
assistance subject to the Transparency Act, as defined at 2 CFR 
170.320 (and subawards); and
    (B) $25,000,000 or more in annual gross revenues from Federal 
procurement contracts (and subcontracts), and Federal financial 
assistance subject to the Transparency Act (and subawards); and
    ii. The public does not have access to information about the 
compensation of the executives through periodic reports filed under 
section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 
U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code 
of 1986. (To determine if the public has access to the compensation 
information, see the U.S. Security and Exchange Commission total 
compensation filings at http://www.sec.gov/answers/execomp.htm.)
    2. Where and when to report. You must report subrecipient 
executive total compensation described in paragraph c.1. of this 
award term:
    i. To the recipient.
    ii. By the end of the month following the month during which you 
make the subaward. For example, if a subaward is obligated on any 
date during the month of October of a given year (i.e., between 
October 1 and 31), you must report any required compensation 
information of the subrecipient by November 30 of that year.
    d. Exemptions
    If, in the previous tax year, you had gross income, from all 
sources, under $300,000, you are exempt from the requirements to 
report:
    i. Subawards,
    and
    ii. The total compensation of the five most highly compensated 
executives of any subrecipient.
    e. Definitions. For purposes of this award term:
    1. Entity means all of the following, as defined in 2 CFR part 
25:
    i. A Governmental organization, which is a State, local 
government, or Indian tribe;
    ii. A foreign public entity;
    iii. A domestic or foreign nonprofit organization;
    iv. A domestic or foreign for-profit organization;
    v. A Federal agency, but only as a subrecipient under an award 
or subaward to a non-Federal entity.
    2. Executive means officers, managing partners, or any other 
employees in management positions.
    3. Subaward:
    i. This term means a legal instrument to provide support for the 
performance of any portion of the substantive project or program for 
which you received this award and that you as the recipient award to 
an eligible subrecipient.
    ii. The term does not include your procurement of property and 
services needed to carry out the project or program (for further 
explanation, see Sec. ---- .210 of the attachment to OMB Circular A-
133, ``Audits of States, Local Governments, and Non-Profit 
Organizations'').
    iii. A subaward may be provided through any legal agreement, 
including an agreement that you or a subrecipient considers a 
contract.
    4. Subrecipient means an entity that:
    i. Receives a subaward from you (the recipient) under this 
award; and
    ii. Is accountable to you for the use of the Federal funds 
provided by the subaward.
    5. Total compensation means the cash and noncash dollar value 
earned by the executive during the recipient's or subrecipient's 
preceding fiscal year and includes the following (for more 
information see 17 CFR 229.402(c)(2)):
    i. Salary and bonus.
    ii. Awards of stock, stock options, and stock appreciation 
rights. Use the dollar amount recognized for financial statement 
reporting purposes with respect to the fiscal year in accordance 
with the Statement of Financial Accounting Standards No. 123 
(Revised 2004) (FAS 123R), Shared Based Payments.
    iii. Earnings for services under non-equity incentive plans. 
This does not include group life, health, hospitalization or medical 
reimbursement plans that do not discriminate in favor of executives, 
and are available generally to all salaried employees.
    iv. Change in pension value. This is the change in present value 
of defined benefit and actuarial pension plans.
    v. Above-market earnings on deferred compensation which is not 
tax-qualified.
    vi. Other compensation, if the aggregate value of all such other 
compensation (e.g. severance, termination payments, value of life 
insurance paid on behalf of the employee, perquisites or property) 
for the executive exceeds $10,000.

[FR Doc. 2010-22705 Filed 9-13-10; 8:45 am]
BILLING CODE 3110-01-P