[Federal Register Volume 66, Number 91 (Thursday, May 10, 2001)]
[Rules and Regulations]
[Pages 23860-23861]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-11578]


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DEPARTMENT OF TRANSPORTATION

Maritime Administration

46 CFR Part 205

[Docket No. MARAD-2000-8284]
RIN 2133-AB42


Audit Appeals; Policy and Procedure

AGENCY: Maritime Administration, Department of Transportation.

ACTION: Final rule.

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SUMMARY: The Maritime Administration (MARAD, we, our, or us) is 
updating our regulations on Audit Appeals; Policy and Procedure. The 
regulations establish audit appeal procedures for parties who contract 
with the Maritime Subsidy Board or MARAD. This final rule uses plain 
language to update the audit procedures to reflect our current 
practices. The intended effect of this rulemaking is to improve our 
audit appeals process by updating and clarifying the regulations.

DATES: The effective date of this final rule is June 11, 2001.

FOR FURTHER INFORMATION CONTACT: Mr. Lennis G. Fludd, Office of 
Financial and Rate Approvals, (202) 366-2324. You may send mail to Mr. 
Fludd at Maritime Administration, Office of Financial and Rate 
Approvals, Room 8117, 400 Seventh Street, SW, Washington, DC 20590.

SUPPLEMENTARY INFORMATION:

Background

    Part 205 establishes the policy and procedure for parties to use 
when seeking redress and appeals of audit decisions involving contracts 
with the Maritime Subsidy Board or MARAD. Part 205 applies to contracts 
of the Maritime Subsidy Board and MARAD which have included, for 
example, the Operating-Differential Subsidy, Construction-Differential 
Subsidy, Capital Construction Fund, Construction Reserve Fund, and 
Maritime Security Program.
    We published a notice of proposed rulemaking (NPRM) on November 16, 
2000 at 65 FR 69279. The NPRM proposed revisions to part 205 to reflect 
our current practices of making audit appeals decisions. This final 
rule essentially mirrors the NPRM to which we received no public 
comments. Accordingly, parties no longer appeal to the appropriate 
Coast Director's office. In the past, auditors were assigned to 
regional offices. However, we no longer have these auditors. MARAD 
headquarters is responsible for overseeing audits as deemed 
appropriate. Such audits may be performed by the Office of Inspector 
General. Also, as proposed, we are eliminating the discretionary 
hearing afforded appellants (under Sec. 205.2 (b)) when appealing to 
the Maritime Administrator. This final rule includes provisions that 
give the appellant 90 days from the date of receipt of the initial 
audit findings to file an appeal with the appropriate Associate 
Administrator and 30 days following the Associate Administrator's final 
audit appeals decision to submit an appeal in writing to the 
Administrator. However, the Administrator may, at his or her 
discretion, extend the 30 days in the case of extenuating 
circumstances.

Plain Language

    Executive Order 12866 and a Presidential memorandum on plain 
language in government writing of June 1, 1998, require each agency to 
write all rules in plain language. The Department of Transportation and 
MARAD are committed to plain language in government writing; therefore, 
we revised part 205 using plain language to provide easier 
understanding. Our goal is to improve the clarity of our regulations.

Rulemaking Analyses and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

    We have reviewed this final rule under Executive Order 12866 and 
have determined that this is not a significant regulatory action. 
Additionally, this final rule is not likely to result in an annual 
effect on the economy of $100 million or more. The purpose of this 
final rule is to update MARAD's audit appeals procedures to reflect 
current MARAD practices and to rewrite the regulations in plain 
language.
    This final rule is also not significant under the Regulatory 
Policies and Procedures of the Department of Transportation (44 FR 
11034; February 26, 1979). The costs and benefits associated with this 
rulemaking are considered to be so minimal that no further analysis is 
necessary. Because the economic impact, if any, should be minimal, 
further regulatory evaluation is not necessary.

Regulatory Flexibility Act

    This final rule will not have a significant economic impact on a 
substantial number of small entities. This final rule only updates 
procedures for appealing audit findings and decisions to the Maritime 
Administrator. Although a number of small entities may appeal audit 
findings, the cost of filing an audit appeal with MARAD is minimal, if 
any. Therefore, MARAD certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities.

Federalism

    We have analyzed this final rule in accordance with the principles 
and criteria contained in Executive Order 13132 (``Federalism'') and 
have determined that it does not have sufficient federalism 
implications to warrant the preparation of a federalism summary impact 
statement. These regulations have no substantial effects on the States, 
or on the current Federal-State relationship, or on the current 
distribution of power and responsibilities among the various local 
officials. Therefore, consultation with

[[Page 23861]]

State and local officials was not necessary.

Environmental Impact Statement

    We have analyzed this final rule for purposes of compliance with 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) 
and have concluded that under the categorical exclusions provision in 
section 4.05 of Maritime Administrative Order (``MAO'') 600-1, 
``Procedures for Considering Environmental Impacts,'' 50 FR 11606 
(March 22, 1985), the preparation of an Environmental Assessment, and 
an Environmental Impact Statement, or a Finding of No Significant 
Impact for this final rule is not required. This final rule involves 
administrative and procedural regulations that have no environmental 
impact.

Executive Order 13175

    MARAD does not believe that this final rule will significantly or 
uniquely affect the communities of Indian tribal governments when 
analyzed under the principles and criteria contained in Executive Order 
13175 (``Consultation and Coordination with Indian Tribal 
Governments''). Therefore, the funding and consultation requirements of 
this Executive Order would not apply.

Unfunded Mandates Reform Act of 1995

    This final rule does not impose an unfunded mandate under the 
Unfunded Mandates Reform Act of 1995. It does not result in costs of 
$100 million or more, in the aggregate, to any of the following: State, 
local, or Native American tribal governments, or the private sector. 
This final rule is the least burdensome alternative that achieves the 
objective of the rule.

Paperwork Reduction Act

    This final rule does not contain information collection 
requirements covered by 5 CFR Part 1320 (specifically 5 CFR 1320.3(c)) 
in that appellants choose the information to be provided in their 
appeal and may choose to interpret the collection of information 
differently.

Regulation Identifier Number (RIN)

    The Department of Transportation assigns a regulation identifier 
number (RIN) to each regulatory action listed in the Unified Agenda of 
Federal Regulations. The Regulatory Information Service Center 
publishes the Unified Agenda in April and October of each year. The RIN 
number is contained in the heading of this document to cross-reference 
this action with the Unified Agenda.

List of Subjects in 46 CFR Part 205

    Administrative practice and procedure, Government contracts.

    Accordingly, 46 CFR part 205 is revised to read as follows:

PART 205--AUDIT APPEALS; POLICY AND PROCEDURE

Sec.
205.1   Purpose.
205.2   Policy.
205.3   Procedure.
205.4   Finality of decisions.
205.5   Contracts containing disputes article.

    Authority: Sec. 204, 49 Stat. 1987, 1998, 2004, 2011; 46 U.S.C. 
1114, 1155, 1176, 1212.


Sec. 205.1  Purpose.

    This part establishes the policy and procedure for parties to use 
when seeking redress and appeals of audit decisions involving contracts 
with the Maritime Subsidy Board or the Maritime Administration (MARAD, 
we, our, or us). A party to a contract (you or your) may appeal MARAD's 
findings, interpretations, or decisions of annual or special audits.


Sec. 205.2  Policy

    If you disagree with audit findings and fail to settle any 
differences with the appropriate Office Director, you may ask the 
appropriate office Associate Administrator to review the audit 
findings. If you disagree with the Associate Administrator, you may 
appeal to the Maritime Administrator (Administrator).


Sec. 205.3  Procedure.

    (a) You have 90 days from the date you receive the initial audit 
findings to file a written request for review of the audit findings 
with the appropriate Associate Administrator. Your written request must 
state the legal or factual bases for your disagreement. The appropriate 
Associate Administrator will issue a written determination.
    (b) You have 30 days following the Associate Administrator's final 
audit determination to submit your appeal in writing to the 
Administrator. Your written appeal must set forth the legal and factual 
bases for your appeal. The Administrator may, at his or her discretion, 
extend the time limitation in the case of extenuating circumstances.
    (c) We will notify you, in writing, if you must submit additional 
facts for our consideration of the appeal. We will notify you, in 
writing, once the Administrator has made a decision regarding your 
appeal.


Sec. 205.4  Finality of decisions.

    The Administrator's decision will be the final administrative 
action on all audit appeals.


Sec. 205.5  Contracts containing disputes article.

    When a contract contains a disputes article, the disputes article 
will govern the bases for negotiating disputes regarding audit 
findings, interpretations, or decisions made by MARAD and any appeals.

    Dated: May 2, 2001.

    By Order of the Acting Deputy Maritime Administrator.
Joel C. Richard,
Secretary, Maritime Administration.
[FR Doc. 01-11578 Filed 5-9-01; 8:45 am]
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