DATE: May 11, 2004

SUBJECT: Office of Management and Budget; Regulations and Guidance for Grants and Agreements

SOURCE: Federal Register, May 10, 2004, Vol. 69, No. 91, page 26275 and 26281

AGENCIES: Office of Management and Budget (OMB)

ACTION: Establishment of Code of Federal Regulations (CFR) Title

SYNOPSIS: OMB is establishing, in the CFR, Title 2, Grants and Agreements, for grants and other financial assistance and nonprocurement agreements, and relocating OMB Circular A-110, Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations, to Title 2 of the CFR as Part 215.

EDITOR'S NOTE: For more on other efforts to implement the Federal Financial Assistance Management Improvement Act, see yesterday's FEDERAL CONTRACTS DISPATCH "Office of Management and Budget Circulars A-21, A-87, and A-122, Cost Principles," 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: May 11, 2004.

FOR FURTHER INFORMATION CONTACT: Elizabeth Phillips, Office of Federal Financial Management, Office of Management and Budget, 202-395-3053, e-mail: ephillip@omb.eop.gov.

SUPPLEMENTAL INFORMATION: OMB has decided to establish Title 2 of the CFR as a central location for federal government policies on grants and other financial assistance and nonprocurement agreements. OMB believes that consolidating its guidance and co-locating the agency regulations provides a good foundation for streamlining and simplifying the policy framework for grants and agreements as part of the efforts to implement the Federal Financial Assistance Management Improvement Act of 1999 (Public Law 106-107).

Title 2 of the CFR consists of two subtitles: Subtitle A, Office of Management and Budget Guidance for Grants and Agreements, for OMB's governmentwide guidance to federal agencies on the award and administration of grants and agreements; and Subtitle B, Federal Agency Regulations for Grants and Agreements, for federal agency regulations implementing that OMB guidance. Each agency that awards and administers grants and agreements will be assigned a chapter in Subtitle B for its implementing regulations.

In addition, Subtitle A has Chapter I and Chapter II. These two chapters will enable OMB to publish its governmentwide guidance in Title 2 in two phases. In the first phase, OMB will move circulars and other guidance, in their current form, into Chapter II and reserve Chapter I. During the first phase, agencies may publish their implementing regulations in Subtitle B if they wish, but are not required to do so. In the second phase, as OMB finalizes any changes to its guidance based on recommendations of interagency work groups implementing Public Law 106-107, the new, changed guidance will be published in Chapter I and the original guidance will be removed from Chapter II. If OMB is to make a substantive change in the guidance when publishing it in either Chapter I or II of Subtitle A, the change will be proposed in the Federal Register with an opportunity for comment.

An explanation of Title 2 is included in Part 1, About Title 2 of the Code of Federal Regulations and Subtitle A. The following are the contents of Part 1:

Subpart A, Introduction to Title 2 of the CFR
      1.100, Content of this title.
      1.105, Organization and subtitle content.
      1.110, Issuing authorities.
Subpart B, Introduction to Subtitle A
      1.200, Purpose of chapters I and II.
      1.205, Applicability to grants and other funding instruments.
      1.210, Applicability to Federal agencies and others.
      1.215, Relationship to previous issuances.
      1.220, Federal agency implementation of this subtitle.
      1.230, Maintenance of this subtitle.
Subpart C, Responsibilities of OMB and Federal Agencies
      1.300, OMB responsibilities.
      1.305, Federal agency responsibilities.

To begin the process of moving OMB circulars to the new Title 2, OMB Circular A-110 is being relocated to Title 2 as Part 215. OMB has made minor adjustments to conform to the formatting requirements of the CFR, but there are no substantive changes to the circular. The circular's section numbers remain the same, only now they are preceded by the Title 2 part number "215". For example, under OMB Circular A-110, Section 24 discusses program income -- the corresponding discussion of program income in Title 2 is in Section 215.24, or 2 CFR 215.24.

Agency implementing regulations may continue to reference OMB Circular A-110 and its title, and the OMB circulars continue to be available on the OMB Web site at http://www.whitehouse.gov/omb/circulars.

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2004 by Panoptic Enterprises. All Rights Reserved.

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