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.

Rules and Regulations Federal Register

44573 

Vol. 86, No. 154 

Friday, August 13, 2021 

OFFICE OF MANAGEMENT AND 

BUDGET 

2 CFR Part 200 

Uniform Administrative Requirements, 

Cost Principles, and Audit 

Requirements 

AGENCY: Office of Management and 

Budget (OMB). 

ACTION: Guidance. 

SUMMARY: This document announces the 

availability of the 2021 Compliance 

Supplement (2021 Supplement) for the 

Office of Management and Budget’s 

uniform administrative requirements, 

cost principles, and audit requirements 

regulations. This document also offers 

interested parties an opportunity to 

comment on the 2021 Supplement. 

DATES: The 2021 Supplement replaces 

the 2020 Supplement (issued in August 

2020) and its Addendum (issued in 

December 2020). The Supplement 

applies to fiscal year audits beginning 

after June 30, 2020. 

ADDRESSES: All comments to the 2021 

Supplement must be in writing and 

received by August 30, 2021. Late 

comments will be considered to the 

extent practicable. Comments will be 

reviewed and addressed, when 

appropriate, in the 2022 Compliance 

Supplement. Electronic mail comments 

may be submitted to: http://

www.regulations.gov. Please include ‘‘2 

CFR Part 200 Subpart F—Audit 

Requirements, Appendix XI— 

Compliance Supplement—2021’’ in the 

subject line and the full body of your 

comments in the text of the electronic 

message and as an attachment. Please 

include your name, title, organization, 

postal address, telephone number, and 

email address in the text of the message. 

Comments may also be sent to: 

GrantsTeam@omb.eop.gov. 

Please note that all public comments 

received are subject to the Freedom of 

Information Act and will be posted in 

their entirety, including any personal 

and/or business confidential 

information provided. Do not include 

any information you would not like to 

be made publically available. 

The 2021 Supplement is available 

online on the OMB home page at 

https://www.whitehouse.gov/omb/ 

office-federal-financial-management/. 

FOR FURTHER INFORMATION CONTACT: 

Recipients and auditors should contact 

their cognizant or oversight agency for 

audit, or Federal awarding agency, as 

appropriate. The Federal agency 

contacts are listed in appendix III of the 

Supplement. Subrecipients should 

contact their pass-through entity. 

Federal agencies should contact Gil 

Tran at Hai_M._Tran@omb.eop.gov or 

(202) 395–3052 or the OMB Grants team 

at GrantsTeam@omb.eop.gov. 

SUPPLEMENTARY INFORMATION: The 2021 

Supplement (2 CFR part 200, subpart F, 

appendix XI) adds five new programs, 

deletes four programs and provides 

updates on many other programs 

(including the 14 programs previously 

included in the 2020 Addendum to the 

Single Audit Compliance Supplement), 

where necessary. The 2021 Supplement 

is a continuation of efforts to maximize 

the value of grant funding by applying 

a risk-based, data-driven framework that 

balances compliance requirements with 

demonstrating successful results. 

Consistent with the reduction in 

compliance areas in the 2019 

Supplement, the 2021 Compliance 

Supplement allows for a maximum of 

six compliance areas and requires a 

review for performance reporting for 57 

programs. OMB is continuing to work 

with Federal awarding agencies to 

further emphasize performance reviews 

and will make updates accordingly in 

future Supplements. The 2021 

Supplement also includes guidance 

related to the administrative flexibilities 

included in Appendix 3 of OMB 

memorandum M–21–20 (March 19, 

2021) and the revisions to 2 CFR— 

Grants and Agreements (published in 

August 12, 2020) in Part 8, Appendix 

VII of the Supplement. As part of the 

development of the audit guidance 

contained in the Supplement, OMB 

shared the draft language developed by 

the agencies with recipient and audit 

stakeholders, including the American 

Institute of Certified Public Accountants 

(AICPA), the National Association of 

State Auditors, Controllers and 

Treasurers (NASACT, the US 

Government Accountability Office 

(GAO), and agency Inspector General 

offices for comments. The comments 

were reviewed, adjudicated, and 

addressed by the relevant agencies and 

OMB. All necessary changes are 

reflected in the final published version. 

A summary of comments and OMB 

responses is shown below. 

Audit Extension—Commenters 

suggested clarifications on the Single 

Audit extension allowed in OMB M–21– 

20 to be included in the Supplement 

Part 8, Appendix VII. OMB concurred 

and added information related the audit 

extension. 

Performance Reporting Review— 

Commenters highlighted that there was 

a significant increase in the number of 

programs in the Supplement that 

require auditors to review the 

recipients’ performance reporting 

requirements. Commenters suggested 

agencies add the key line items in the 

performance reports that the agencies 

request the auditors verify, in order to 

focus the auditors on the important 

areas for review. OMB concurred and 

worked with the relevant agencies to 

add the key line items on the 

performance reports in the ‘‘Suggested 

Audit Procedures’’ section. 

2 CFR Revisions (effective November 

12, 2020)—Commenters requested that 

the Supplement contain two separate 

parts B for the Allowable Costs/Cost 

Principles—one for the applicable cost 

principles prior to 2 CFR updates on 

November 12, 2020 and one for 

applicable cost principles after 

November 12, 2020. OMB disagreed but 

provided clear indication of the cost 

principles and areas that were revised in 

November 12, 2020. Additionally, the 

Supplement provides the link to 

CFO.gov Uniform Guidance (cfo.gov) 

which contains the relevant information 

related to the 2 CFR and its revisions, 

including the redlined version of the 

guidance, a crosswalk document, and 

the latest set of Frequently Asked 

Questions (FAQs)—2CRFFrequentlyAskedQuestions_

2021050321.pdf (cfo.gov). 

Assistance Listing (CFDA)— 

Commenters noted that the term 

‘‘Assistance Listing’’ is now used on the 

Federal Government website Sam.gov 

instead of the previous term of ‘‘CFDA’’ 

to describe a Federal program. OMB 

concurred and replaced ‘‘CFDA’’ with 

‘‘Assistance Listing’’ for consistency. 


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44574 Federal Register / Vol. 86, No. 154 / Friday, August 13, 2021 / Rules and Regulations 

American Rescue Plan Act (ARP) 

Programs—The audit community, 

including GAO, requested that the 

agencies provide audit guidance 

expeditiously for the programs created 

under the ARP, since funds are material 

and many have complex compliance 

and reporting requirements. OMB is 

working with Federal awarding agencies 

to identify the new ARP programs with 

special compliance and reporting 

requirements. When completed by the 

agencies and reviewed by OMB, these 

audit guides will be published on the 

CFO.gov website. 

Deidre A. Harrison, 

Deputy Controller. 

[FR Doc. 2021–17363 Filed 8–12–21; 8:45 am] 

BILLING CODE 3110–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Office of the Secretary 

6 CFR Part 5 

[Docket No. DHS–2021–0028] 

Privacy Act of 1974: Implementation of 

Exemptions; U.S. Department of 

Homeland Security/ALL–046 

Counterintelligence Program System 

of Records 

AGENCY: U.S. Department of Homeland 

Security. 

ACTION: Final rule. 

SUMMARY: The U.S. Department of 

Homeland Security (DHS) is issuing a 

final rule to amend its regulations to 

exempt portions of a newly established 

system of records titled, ‘‘DHS/ALL–046 

Counterintelligence Program System of 

Records’’ from certain provisions of the 

Privacy Act. Specifically, the 

Department exempts portions from one 

or more provisions of the Privacy Act 

because of criminal, civil, and 

administrative enforcement 

requirements. 

DATES: This final rule is effective August 

13, 2021. 

FOR FURTHER INFORMATION CONTACT: For 

privacy questions please contact: Lynn 

Parker Dupree, (202) 343–1756, 

Privacy@hq.dhs.gov, Chief Privacy 

Officer, Privacy Office, U.S. Department 

of Homeland Security, Washington, DC 

20528–0655. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The U.S. Department of Homeland 

Security (DHS) published a notice of 

proposed rulemaking in the Federal 

Register, 85 FR 80667 (December 14, 

2020), proposing to exempt portions of 

the system of records from one or more 

provisions of the Privacy Act because of 

criminal, civil, and administrative 

enforcement requirements. In concert 

with that rulemaking, DHS issued a new 

system of records notice, ‘‘DHS/ALL– 

046 Counterintelligence Program 

System of Records’’ in the Federal 

Register, 85 FR 80800 (December 14, 

2020), outlining that DHS will collect 

and maintain records as part of the 

unified Counterintelligence Program 

across the Department. 

DHS invited comments on both the 

Notice of Proposed Rulemaking (NPRM) 

and System of Records Notice (SORN). 

II. Public Comments 

DHS received no comments on the 

NPRM and comments from one 

organization on the SORN. 

SORN 

DHS received comments suggesting 

that (1) the scope of the proposed 

records system is broad and DHS 

components’ access to records covered 

by the Counterintelligence Program 

System of Records create the risk that 

components would use the records 

system in ways that exceed their stated 

missions; (2) the proposed routine use 

exemptions are not narrowly tailored to 

the defined purpose of the SORN for 

which the records are collected, would 

be used to disclose records to foreign 

and private entities that are not subject 

to the Privacy Act, and would create 

substantial risks for potential data 

breaches; (3) the Counterintelligence 

Program System of Records creates a 

substantial risk of data breach since the 

Federal Government has demonstrated 

it is incapable of handling and 

safeguarding sensitive information; and 

(4) the proposed exemptions are 

unnecessary and limit individuals’ 

ability to correct harmful errors, thwart 

DHS’s public notice obligations, and 

permit unlimited data collection, even if 

unnecessary and irrelevant. After full 

consideration of public comments, the 

Department will implement the 

rulemaking as proposed for the reasons 

described in the NPRM and as described 

here in the final rule. 

List of Subjects in 6 CFR Part 5 

Freedom of information, Privacy. 

For the reasons stated in the 

preamble, DHS amends Chapter I of 

Title 6, Code of Federal Regulations, as 

follows: 

PART 5—DISCLOSURE OF RECORDS 

AND INFORMATION 

■ 1. The authority citation for part 5 

continues to read as follows: 

Authority: 6 U.S.C. 101 et seq.; Pub. L. 

107–296, 116 Stat. 2135; 5 U.S.C. 301. 

Subpart A also issued under 5 U.S.C. 552. 

Subpart B also issued under 5 U.S.C. 552a. 

■ 2. Amend Appendix C to Part 5 by 

adding paragraph 83 to read as follows: 

Appendix C to Part 5—DHS Systems of 

Records Exempt From the Privacy Act 

* * * * * 

83. The Department of Homeland Security 

(DHS)/ALL–046 Counterintelligence Program 

System of Records consists of electronic and 

paper records and will be used by DHS and 

its components. The DHS/ALL–046 

Counterintelligence Program System of 

Records is a repository of information held 

by DHS in connection with its several and 

varied missions and functions, including the 

enforcement of civil and criminal laws; 

investigations, inquiries, and proceedings 

there under; national security and 

intelligence activities; and protection of the 

President of the U.S. or other individuals 

pursuant to Section 3056 and 3056A of Title 

18. The system of records covers information 

that is collected by, on behalf of, in support 

of, or in cooperation with DHS and its 

components and may contain personally 

identifiable information collected by other 

federal, state, local, tribal, foreign, or 

international government agencies. 

The Secretary of Homeland Security, 

pursuant to 5 U.S.C. 552a(j)(2), has exempted 

this system from the following provisions of 

the Privacy Act, 5 U.S.C. secs. 552a(c)(3), 

(c)(4); (d); (e)(1), (e)(2), (e)(3), (e)(4)(G), 

(e)(4)(H), (e)(4)(I), (e)(5), (e)(8), (e)(12); (f); and 

(g)(1). Additionally, the Secretary of 

Homeland Security, pursuant to 5 U.S.C. 

552a(k)(1), (k)(2), and (k)(5), has exempted 

this system from the following provisions of 

the Privacy Act: 5 U.S.C. secs. 552a(c)(3); (d); 

(e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I); and (f). 

Exemptions from these particular subsections 

are justified, on a case-by-case basis to be 

determined at the time a request is made, for 

the following reasons: 

(a) From subsection (c)(3) and (4) 

(Accounting for Disclosures) because release 

of the accounting of disclosures could alert 

the subject of an investigation of an actual or 

potential criminal, civil, or regulatory 

violation to the existence of that investigation 

and reveal investigative interest on the part 

of DHS as well as the recipient agency. 

Disclosure of the accounting would therefore 

present a serious impediment to law 

enforcement efforts and/or efforts to preserve 

national security. Disclosure of the 

accounting would also permit the individual 

who is the subject of a record to impede the 

investigation, to tamper with witnesses or 

evidence, and to avoid detection or 

apprehension, which would undermine the 

entire investigative process. 

(b) From subsection (d) (Access and 

Amendment to Records) because access to 

the records contained in this system of 


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