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[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]
BILLING CODE 4000-01-P
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