[Federal Register Volume 86, Number 33 (Monday, February 22, 2021)]
[Rules and Regulations]
[Pages 10439-10440]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-02969]



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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

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Federal Register / Vol. 86, No. 33 / Monday, February 22, 2021 / 
Rules and Regulations

[[Page 10439]]



OFFICE OF MANAGEMENT AND BUDGET

2 CFR Parts 25 and 200

[Docket No. 2020-17468]


Guidance for Grants and Agreements

AGENCY: Office of Management and Budget.

ACTION: Correcting amendments.

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

SUMMARY: The Office of Management and Budget (OMB) is correcting the 
final guidance that appeared in the Federal Register on August 13, 
2020. That document incorrectly cited specific sections or laws and 
inadvertently omitted specific language from the revisions. This 
amendment fixes citations and references and clarifies specific 
language.

DATES: Effective on February 22, 2021.

FOR FURTHER INFORMATION CONTACT: Nicole Waldeck or Gil Tran at the OMB 
Office of Federal Financial Management at <a href="/cdn-cgi/l/email-protection#da9da8bbb4aea98ebfbbb79ab5b7b8f4bfb5aaf4bdb5ac"><span class="__cf_email__" data-cfemail="226550434c56517647434f624d4f400c474d520c454d54">[email protected]</span></a> or 
202-395-3993.

SUPPLEMENTARY INFORMATION: This is a summary of the revisions to OMB's 
Guidance for Grants and Agreements published August 13, 2020 (85 FR 
49506).

List of Subjects in 2 CFR Parts 25 and 200

    Accounting, Administrative practice and procedure, Colleges and 
universities, Grant programs, Grants administration, Hospitals, 
Indians, Loan programs, Nonprofit organizations, Reporting and 
recordkeeping requirements, State and local governments.

    Accordingly, 2 CFR parts 25 and 200 are corrected by making the 
following correcting amendments:

PART 25--UNIVERSAL IDENTIFIER AND SYSTEM FOR AWARD MANAGEMENT

0
1. The authority citation for part 25 continues to read as follows:

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


0
2. Revise paragraph 3 of item C of Appendix A to Part 25 to read as 
follows:

Appendix A to 2 CFR Part 25--Award Term

* * * * *

C. * * *

    3. Entity includes non-Federal entities as defined at 2 CFR 
200.1 and also includes all of the following, for purposes of this 
part:
    a. A foreign organization;
    b. A foreign public entity;
    c. A domestic for-profit organization; and
    d. A Federal agency.
* * * * *

PART 200--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND 
AUDIT REQUIREMENTS FOR FEDERAL AWARDS

0
3. The authority citation for part 200 continues to read as follows:

    Authority:  31 U.S.C. 503.


0
4. In Sec.  200.1, add in alphabetical order the definition of Federal 
awarding agency and revise the definition of oversight agency for audit 
to read as follows:


Sec.  200.1   Definitions

* * * * *
    Federal awarding agency means the Federal agency that provides a 
Federal award directly to a non-Federal entity.
* * * * *
    Oversight agency for audit means the Federal awarding agency that 
provides the predominant amount of funding directly (direct funding) 
(as listed on the schedule of expenditures of Federal awards, see Sec.  
200.510(b)) to a non-Federal entity unless OMB designates a specific 
cognizant agency for audit. When the direct funding represents less 
than 25 percent of the total Federal expenditures (as direct and sub-
awards) by the non-Federal entity, then the Federal agency with the 
predominant amount of total funding is the designated oversight agency 
for audit. When there is no direct funding, the Federal awarding agency 
which is the predominant source of pass-through funding must assume the 
oversight responsibilities. The duties of the oversight agency for 
audit and the process for any reassignments are described in Sec.  
200.513(b).
* * * * *


Sec. Sec.  200.2  through 200.99 [Removed]

0
5. Remove Sec. Sec.  200.2 through 200.99.

0
6. In Sec.  200.101, revise paragraphs (e) introductory text and (f) 
introductory text to read as follows:


Sec.  200.101  Applicability.

* * * * *
    (e) Program applicability. Except for Sec. Sec.  200.203, 200.216, 
and 200.331 through 200.333, the requirements in subparts C, D, and E 
of this part do not apply to the following programs:
* * * * *
    (f) Additional program applicability. Except for Sec. Sec.  200.203 
and 200.216, the guidance in subpart C of this part does not apply to 
the following programs:
* * * * *

0
7. In Sec.  200.102, revise paragraph (c) to read as follows:


Sec.  200.102  Exceptions.

* * * * *
    (c) The Federal awarding agency may adjust requirements to a class 
of Federal awards or non-Federal entities when approved by OMB, or when 
required by Federal statutes or regulations, except for the 
requirements in subpart F of this part. A Federal awarding agency may 
apply less restrictive requirements when making fixed amount awards as 
defined in subpart A of this part, except for those requirements 
imposed by statute or in subpart F of this part.
* * * * *

0
8. In Sec.  200.206, revise paragraph (a)(1) to read as follows:


Sec.  200.206  Federal awarding agency review of risk posed by 
applicants.

    (a) * * * (1) Prior to making a Federal award, the Federal awarding 
agency is required by the Payment Integrity Information Act of 2019, 31 
U.S.C. 3301 note, and 41 U.S.C. 2313 to review information available 
through any OMB-designated repositories of governmentwide eligibility 
qualification or financial integrity information as appropriate. See 
also suspension and debarment requirements at 2 CFR part

[[Page 10440]]

180 as well as individual Federal agency suspension and debarment 
regulations in title 2 of the Code of Federal Regulations.
* * * * *

0
9. In Sec.  200.318, revise paragraph (e) to read as follows:


Sec.  200.318   General Procurement standards.

* * * * *
    (e) To foster greater economy and efficiency, and in accordance 
with efforts to promote cost-effective use of shared services across 
the Federal Government, the non-Federal entity is encouraged to enter 
into state and local intergovernmental agreements or inter-entity 
agreements where appropriate for procurement or use of common or shared 
goods and services. Competition requirements will be met with 
documented procurement actions using strategic sourcing, shared 
services, and other similar procurement arrangements.
* * * * *

0
10. In Sec.  200.332, revise paragraph (d)(4) to read as follows:


Sec.  200.332  Requirements for pass-through entities.

* * * * *
    (d) * * *
    (4) The pass-through entity is responsible for resolving audit 
findings specifically related to the subaward and not responsible for 
resolving crosscutting findings. If a subrecipient has a current Single 
Audit report posted in the Federal Audit Clearinghouse and has not 
otherwise been excluded from receipt of Federal funding (e.g., has been 
debarred or suspended), the pass-through entity may rely on the 
subrecipient's cognizant audit agency or cognizant oversight agency to 
perform audit follow-up and make management decisions related to cross-
cutting findings in accordance with section Sec.  200.513(a)(3)(vii). 
Such reliance does not eliminate the responsibility of the pass-through 
entity to issue subawards that conform to agency and award-specific 
requirements, to manage risk through ongoing subaward monitoring, and 
to monitor the status of the findings that are specifically related to 
the subaward.
* * * * *

0
11. In Sec.  200.416, revise paragraph (c) to read as follows:


Sec.  200.416   Cost allocation plans and indirect cost proposals.

* * * * *
    (c) The requirements for development and submission of cost 
allocation plans (for central service costs and public assistance 
programs) and indirect cost rate proposals are contained in appendices 
V, VI and VII to this part.
* * * * *

0
12. In Sec.  200.509, revise paragraph (a) to read as follows:


Sec.  200.509  Auditor selection.

    (a) Auditor procurement. In procuring audit services, the auditee 
must follow the procurement standards prescribed by the Procurement 
Standards in Sec. Sec.  200.317 through 200.327 of subpart D of this 
part or the FAR (48 CFR part 42), as applicable. In requesting 
proposals for audit services, the objectives and scope of the audit 
must be made clear and the non-Federal entity must request a copy of 
the audit organization's peer review report which the auditor is 
required to provide under GAGAS. Factors to be considered in evaluating 
each proposal for audit services include the responsiveness to the 
request for proposal, relevant experience, availability of staff with 
professional qualifications and technical abilities, the results of 
peer and external quality control reviews, and price. Whenever 
possible, the auditee must make positive efforts to utilize small 
businesses, minority-owned firms, and women's business enterprises, in 
procuring audit services as stated in Sec.  200.321, or the FAR (48 CFR 
part 42), as applicable.
* * * * *

0
13. In Sec.  200.514, revise paragraph (c)(4) to read as follow:


Sec.  200.514   Scope of audit.

* * * * *
    (c) * * *
    (4) When internal control over some or all of the compliance 
requirements for a major program are likely to be ineffective in 
preventing or detecting noncompliance, the planning and performing of 
testing described in paragraph (c)(3) of this section are not required 
for those compliance requirements. However, the auditor must report a 
significant deficiency or material weakness in accordance with Sec.  
200.516, assess the related control risk at the maximum, and consider 
whether additional compliance tests are required because of ineffective 
internal control.
* * * * *

0
14. Revise Appendix IX to Part 200 to read as follows:

Appendix IX to Part 200--Hospital Cost Principles

    Until such time as revised guidance is proposed and implemented for 
hospitals, the existing principles located at 45 CFR part 75 Appendix 
IX, entitled ``Principles for Determining Cost Applicable to Research 
and Development Under Grants and Contracts with Hospitals,'' remain in 
effect.

Deidre A. Harrison,
Deputy Controller (Acting).
[FR Doc. 2021-02969 Filed 2-19-21; 8:45 am]
BILLING CODE 3110-01-P


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