[Federal Register Volume 90, Number 26 (Monday, February 10, 2025)]
[Notices]
[Pages 9240-9241]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-02396]
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DEPARTMENT OF EDUCATION
Retroactive Application of the Revised Version of the Guidance
for Federal Financial Assistance
AGENCY: Office of Planning, Evaluation and Policy Development,
Department of Education.
ACTION: Notice.
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SUMMARY: The Secretary announces updates to awardees' Grant Award
Notices (GANs) to conform the retroactive application of the 2024
revision of the Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards (the Uniform Guidance) to
cross-agency understandings and established interpretive principles.
This update applies to all Department grants that are subject to the
Uniform Guidance and withdraws and supersedes prior Department policies
and actions, including the notice titled Application of the Revised
Version of the Uniform Guidance to Department Grants published on Jan.
16, 2025.
DATES: This change is effective February 10, 2025.
SUPPLEMENTARY INFORMATION: On April 22, 2024, the Office of Management
and Budget (OMB) published a final rule in the Federal Register,
``Guidance for Federal Financial Assistance'' that revised the Uniform
Guidance. See 89 FR 30046 (the April 22 revised Guidance). This final
rule, effective as of October 1, 2024, made certain revisions to the
process and requirements for grant administration.
On January 16, 2025, the Department of Education issued a notice
updating the terms and conditions of Department grants to incorporate
certain parts of the revised Uniform Guidance. See 90 FR 4727 (the Jan.
16 Notice). In particular, the Department added the following condition
to Box 10 of its GANs:
By the drawdown of funds under this GAN, the grantee accepts
that this award is subject to the requirements of the Uniform
Administrative Requirements, Cost Principles and Audit Requirements
for Federal Awards; Title 2 CFR part 200 as
[[Page 9241]]
revised at 89 FR 30136-30208 (April 22, 2024).
The Department is now withdrawing this notice of January 16, 2025,
and the condition it sets forth in Box 10 of the Department's GANs. The
revised Box 10 is below.
OMB set the effective date for the April 22 revised Guidance as
October 1, 2024. See 89 FR 30208. Agencies had the option to ``elect to
apply the financial guidance to Federal awards issued prior to October
1, 2024,'' but no ``earlier than June 21, 2024.'' Id. The Department's
Jan. 16 Notice purported to retroactively apply the revised Uniform
Guidance to grants issued before June 21, 2024, creating uncertainty
among grant recipients and generating non-conformity with the policies
and interpretive understandings of other federal agencies which follow
the Uniform Guidance.
For federal grant programs, courts consistently apply the legal
requirements that were in effect at the time the grants were made.
Bennett v. New Jersey, 470 U.S. 632, 638 (1984). The Supreme Court has
held that ``changes in substantive requirements for federal grants
should not be presumed to operate retroactively.'' Id. General
background principles and ``practical considerations related to the
administration of federal grant programs'' support the principle ``that
obligations generally should be determined by reference to the law in
effect when the grants were made.'' Id.
After consulting with OMB, the Department understands that nothing
in the April 22 revised Guidance departed from this basic interpretive
principle. While OMB provided agencies with some discretion to specify
an application date prior to the rule's effective date of October 1,
2024, the earliest date OMB's revisions permitted an agency to elect
for the guidance to apply was June 21, 2024, two months after the final
rule was issued. This period offered agencies and grantees sufficient
time to adjust and ensured that federal grants would not be
retroactively changed. As noted, federal grants sound in contract, and
retroactive changes to the terms are unfair to the granting agency and
the grantee. See Bennett, 470 U.S. at 638.
To remove any uncertainty or ambiguity, the Department now makes
clear that the April 22 revised Guidance for Federal Financial
Assistance only applies to grants awarded after the OMB effective date
of October 1, 2024. The Department is withdrawing its Jan. 16 Notice,
removing its language from Box 10, and instead adding the following new
language to Box 10:
By the drawdown of funds under this GAN, the grantee accepts
Department regulations that this award is subject to the
requirements of the Uniform Administrative Requirements, Cost
Principles and Audit Requirements for Federal Awards; Title 2 CFR
part 200. The specific version applicable depends on the date of the
award: (i) grants issued on or after October 1, 2024, are subject to
Title 2 CFR part 200 as revised at 89 FR 30136-30208 (April 22,
2024), while (ii) grants issued prior to the October 1, 2024
effective date of those revisions, 89 FR 30046-30208, are governed
by the version of the Uniform Guidance applicable at the time of the
Federal award, provided that for grants issued on or after June 21,
2024, where grantees drew down funds under the previous version of
Box 10, those grants are subject to Title 2 CFR part 200 as revised
at 89 FR 30136-30208 (April 22, 2024).
While grantees may not automatically receive a new printed GAN, the
revised Box 10 and this notice supersede any previous GAN or Notice.
Grantees are not required to take any action but are encouraged to
maintain a copy of this notice within their grant files as
documentation for grant management and auditing purposes.
Program Authority: 2 CFR part 200 as adopted at 89 FR 30046 (April
22, 2024); 2 CFR 3474.
Thomas Wheeler,
Acting General Counsel.
[FR Doc. 2025-02396 Filed 2-7-25; 8:45 am]
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