DATE: May 10, 2004
SUBJECT: Office of Management and Budget Circulars A-21, A-87, and A-122, Cost Principles
SOURCE: Federal Register, May 10, 2004, Vol. 69, No. 90, page 25969
AGENCIES: Office of Management and Budget (OMB)
SYNOPSIS: OMB is amending the cost principles in OMB Circulars A-21, Cost Principles for Educational Institutions; A-87, Cost Principles for State, Local and Indian Tribal Governments; and A-122, Cost Principles for Non-Profit Organizations. These changes further the objectives of the Federal Financial Assistance Management Improvement Act (Public Law 106-107), by simplifying the cost principles, making the descriptions of similar cost items consistent across the circulars where possible, and reducing the possibility of misinterpretation.
EDITOR'S NOTE: OMB Circulars A-21, A-87, and A-122 are available at http://www.whitehouse.gov/omb, then click on "Circulars."
For more on the proposed revisions to OMB Circulars A-21, A-87, and A-122, and four other actions taken to implement the Federal Financial Assistance Management Improvement Act, see the August 12, 2002, FEDERAL CONTRACTS DISPATCH "Office of Management and Budget; Grants Streamlining Activities Under the Federal Financial Assistance Management Improvement Act of 1999 (Public Law 106-107)."
For more on other efforts to implement the Federal Financial Assistance Management Improvement Act, see the June 27, 2003, FEDERAL CONTRACTS DISPATCH "Office of Management and Budget; Use of a Universal Identifier by Grant Applicants," the June 27, 2003, FEDERAL CONTRACTS DISPATCH "Office of Management and Budget Circular No. A-133, Audits of States, Local Governments, and Non-Profit Organizations," and the June 23, 2003, FEDERAL CONTRACTS DISPATCH "Announcements of Grants and Cooperative Agreements."
EFFECTIVE DATE: June 9, 2004.
FOR FURTHER INFORMATION CONTACT: OMB intends to keep these cost principles current with changes in laws, modifications to accounting standards, and advances in technology. Comments on ways to improve these principles should be submitted to Gilbert Tran, Office of Federal Financial Management, Office of Management and Budget, 725 17th Street, NW, Room 6025, Washington 20503. OMB encourages comments to be sent by e-mail to firstname.lastname@example.org, or by fax to 202-395-4915.
SUPPLEMENTAL INFORMATION: The purposes of Public Law 106-107 are to (1) improve the effectiveness and performance of federal grants programs, (2) simplify federal grant application and reporting requirements, (3) improve the delivery of services to the public, and (4) facilitate greater coordination among those responsible for delivering the services.
Under the joint leadership of OMB and the Department of Health and Human Services, interagency work groups developed and recommended streamlining and simplification proposals that would make it easier for state, local, and tribal governments, universities, and non-profit organizations to administer federal grants.
On August 12, 2002, OMB published five actions related to the implementation of Public Law 106-107. One of the actions was a proposal to make to make the cost principles in OMB Circulars A-21, A-87, and A-122 more consistent and to clarify some aspects of the cost principles. Rather than include the revised language in the three circulars' cost principles separately, OMB created a 206 page chart that permitted side-by-side comparison of proposed changes to the language in the circulars. In the chart, the first column listed the A-21 cost principle; the second column listed the similar item, if any, from A-87; the third column listed the similar item, if any, from A-122; and the fourth column listed any proposed change to the item and which of the circulars would include the revised item. Given the separate development of the three circulars, some items contained more than one concept and some of those concepts were stated in different places in the other circulars. (The chart is available at http://www.whitehouse.gov/omb/fedreg/cost_principle_nprm_table.pdf.)
OMB received 184 comments on the proposed changes: 147 from universities, 13 from state and local governments, 8 from federal agencies, 4 from not-for-profit organizations, and 12 from individuals and other entities. As a result of the comments, OMB made revisions to the proposed language for 24 cost items, withdrew proposed language for 6 cost items, deleted 11 cost items, and adopted 45 changes to cost items as proposed.
The following are the cost items that have been adopted for all three circulars (an asterisk (*) indicates the cost item is adopted as amended):
The following are the cost items that have been adopted for two of the three circulars (the circulars are in parentheses, and an asterisk (*) indicates the cost item is adopted as amended):
The following are the cost items that have been adopted for one of the three circulars (the circular is in parentheses, and an asterisk (*) indicates the cost item is adopted as amended):
The proposed changes for the following cost items are withdrawn:
The following cost items are deleted:
EDITOR'S NOTE: The introduction to this revision states, "In addition to comments on the proposed items, we [OMB] received various comments for improvement to the circulars that were not included in our original proposal. We appreciated these comments. However, these recommendations are beyond the scope of the current project. We will consider them at a later phase of the cost consistency streamlining project."
FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.
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