OFFICE
OF MANAGEMENT AND BUDGET
Grants Streamlining
Activities Under P. L. 106-107, Federal Financial Assistance Management
Improvement Act of 1999
AGENCY:
Office of Management and Budget
ACTION:
Notice
SUMMARY:
This Notice precedes five additional notices that relate to the interagency
grants streamlining effort, prepared jointly by the Office of Management
and Budget (OMB) staff and the interagency groups dedicated to implementing
Public Law (P. L.) 106-107, the Federal Financial Assistance Management
Improvement Act of 1999. This first Notice provides background and contextual
information for the next five notices, which:
- Propose
revisions to Office of Management and Budget (OMB) Circular A-133, "Audits
of States, Local Governments, and Non-Profit Organizations;"
- Provide
information about the OMB decision to not revise OMB Circular A-110,
"Uniform Administrative Requirements for Grants and Agreements
with Institutions of Higher Education, Hospitals, and Other Non-Profit
Organizations," based on comments relating to the May 1, 2000,
Advanced Notice of Proposed Revision;
- Propose
a standard format for Federal agency use in announcing discretionary
grant and cooperative agreement funding opportunities;
- Propose
standard data elements for Federal agency use in creating grant funding
opportunity announcement summaries, to be used under the E-Grants initiative
for its "E-FIND" option; and
- Propose
revisions to three 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") to clarify ambiguous language, thereby
preventing inconsistent interpretations of similar cost items across
the three circulars.
FOR FURTHER
INFORMATION CONTACT: Elizabeth C. Phillips, Office of Federal Financial
Management, Office of Management and Budget, telephone 202-395-3053 (direct)
or 202-395-3993 (main office) and e-mail: ephillip@omb.eop.gov.
SUPPLEMENTARY
INFORMATION:
The purposes
of P. L. 106-107 are to (1) improve the effectiveness and performance
of Federal financial assistance programs, (2) simplify Federal financial
assistance 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. P. L. 106-107 requires
the Director of the Office of Management and Budget (OMB) to direct, coordinate,
and assist Federal agencies in establishing a common application and reporting
system, including electronic processes, and uniform administrative rules
for Federal financial assistance programs across different Federal agencies.
Under joint
leadership from OMB and a lead agency (the Department of Health and Human
Services) agencies are working together to make it easier for States,
local, and Tribal governments; universities; and non-profit organizations
to administer Federal grant programs. The work is done under interagency
work groups created in June 2000 to develop and recommend streamlining
and simplification proposals to the Grants Management Committee of the
Chief Financial Officers Council, and include the Pre-Award, Post-Award,
and Audit Oversight Work Groups. A fourth group, the Electronic Processing
Work Group, operational in 2000 and 2001, was integrated this year into
the organizational structure that supports an electronic grants (E-Grants)
initiative. [E-Grants is part of the electronic government (E-Gov) priority
under the President's Management Agenda.]
Streamlining
improvements to the grant process were proposed in hundreds of comments
sent by 77 different sources responding to the January 17, 2001, Federal
Register notice. Many of those comments directly relate to the proposals
which follow this background Notice. Future notices will propose government-wide
standards for grant applications and reports. OMB expects to issue these
proposals in Fall 2002. E-Grants plans to deploy an electronic application
process (E-APPLY) using the government-wide standards in Fall 2003.
- The next
Notice proposes to revise OMB Circular A-133, "Audits of States,
Local Governments, and Non-Profit Organizations," by (1) increasing
the threshold for audit from $300,000 to $500,000; (2) increasing the
threshold for cognizant agency for audit from $25 million to $50 million;
and (3) making related technical changes to facilitate the determination
of cognizant agency for audit and provide for Federal agency reassignment
of oversight agency for audit.
This Notice was endorsed by the Audit Oversight Work Group, whose goal
under grants streamlining is to ensure that audits provide useful and
reliable information to Federal agencies and pass-through entities,
and that recipient audits are in compliance with Federal audit requirements.
An audit threshold increase, as proposed from $300,000 to $500,000,
would relieve almost 6,000 entities from the audit requirements of Circular
A-133 while retaining audit coverage for 99.5 percent of Federal awards
currently audited (in dollars)
- The third
Notice explains the conclusions reached by OMB and the Grants Management
Committee of the Chief Financial Officers (CFO) Council regarding a
previous request for comment from Federal agencies and grant recipients,
in May 2000, on the merits of pooled payment systems and grant-by-grant
payment systems. The proposal to amend OMB Circular A-110, Uniform Administrative
Requirements for Grants and Agreements with Institutions of Higher Education,
Hospitals and Other Non-Profit Organizations, that would have required
Federal agencies to offer recipients the option to request cash advances
on a pooled basis, resulted in 65 comment letters from universities,
State and local government agencies, Federal agencies, and other sources.
There were differing perspectives on the issue, leading OMB and the
CFO Council to believe that a revision to Circular A-110 is not needed.
This Notice was prepared by the Post-Award Work Group after analysis
of the comments received in response to the May 1, 2000, Advanced Notice
of Proposed Revision.
- The fourth
Notice proposes a government-wide standard format for Federal agency
use in announcing discretionary grant and cooperative agreement funding
opportunities. Each year the agencies publish hundreds of funding opportunity
announcements for discretionary grants under programs with a broad range
of purposes, to give potential applicants the information they need,
such as the types of activity the agency will support, who is eligible
to apply, and when/how to apply. Comments from the applicant and recipient
communities noted vast differences in Federal agencies' announcement
formats, making it hard for potential applicants to quickly locate key
information, such as who is eligible to apply or whether cost sharing
is required. Commentors asked for clear language in announcements and
consistency in the placement of information.
This Notice was developed by the Pre-Award Work Group after a review
of agency announcements and related business processes. The group developed
the standard format for government-wide use, which will make it easier
for potential applicants to quickly find the information they need.
- The fifth
Notice proposes standard data elements for Federal agency use in creating
grant funding opportunity announcement summaries, to be used under the
E-Grants initiative for its E-FIND option. The E-Grants initiative plans
to provide a single Internet site for Federal agencies to post electronic
summaries, or synopses, of the funding opportunity announcements on
the General Services Administration's FedBizOpps Internet site (www.FedBizOps.gov).
E-FIND will greatly facilitate a potential applicant's search for funding
opportunities.
This Notice was prepared by the Pre-Award Work Group, which made use
of previous work on a set of FedBizOpps data elements completed by the
Inter-Agency Electronic Grants Committee. The earlier work proposed
a limited set of synopsis data elements (nine) to be used in a pilot
on the use of FedBizOpps for grant opportunities. The result of that
pilot demonstrated that agencies could, indeed, use the FedBizOpps Internet
site to post electronic synopses of funding opportunities leading to
the award of grants, cooperative agreements, and other financial assistance
instruments. The Pre-Award Work Group expanded the synopsis to become
a standard data set of twenty data elements. These data elements and
the posting of information at the FedBizOpps site respond to many comments
received during the P. L. 106-107 consultation process. Commentors requested
a single searchable Internet site for information about Federal agencies'
funding opportunities, to reduce potential their frustration with having
to search multiple sites that individual Federal agencies configure
in different ways.
- The sixth
and final Notice relating to grants streamlining proposes revisions
to three 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") to clarify ambiguous language, thereby
addressing many grantee concerns expressed in the comments relating
to the P. L. 106-107 initial plan published in the Federal Register
on January 16, 2001. Commentors noted inconsistent allocation methods
and different interpretations about indirect cost recovery. The three
circulars apply to different types of recipient organizations and were
developed separately. Consequently, different language is used in the
three circulars to describe similar cost items, sometimes causing inconsistent
interpretations by Federal staff, recipients, and auditors.
This Notice was prepared by the Cost Principles Subgroup of the Post-Award
Work Group, after reviewing 74 cost items in the three circulars for
consistency. The Subgroup determined that 11 cost items can be deleted,
22 cost items do not need changes, and 41 cost items need common language
in the three circulars. The Notice proposes revisions to incorporate
consistent descriptions of similar cost items and, where possible, clarify
existing policies in the three circulars. Information about the proposed
revisions is also available on the OMB Internet site (http://www.whitehouse.gov/omb/grants).
Mark W.
Everson
Controller
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