[Federal Register Volume 72, Number 235 (Friday, December 7, 2007)]
[Notices]
[Pages 69236-69257]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 07-5941]


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OFFICE OF MANAGEMENT AND BUDGET


Financial Reporting for Grants and Cooperative Agreements: 
Federal Financial Report (FFR)

AGENCY: Office of Management and Budget, Office of Federal Financial 
Management.

ACTION: Comment request; final notice.

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SUMMARY: The Office of Management and Budget is consolidating and 
replacing four existing financial reporting forms (SF-269, SF-269A, SF-
272, and SF-272A) with a single Federal Financial Report (FFR). The 
purpose of the FFR is to give recipients of grants and cooperative 
agreements a standard format for reporting the financial status of 
their grants and cooperative agreements (hereby referred to 
collectively as awards). Federal awarding agencies developed the FFR as 
part of their implementation of the Federal Financial Assistance 
Management Improvement Act of 1999 (Pub. L. 106-107).

DATES: Comments must be received by January 7, 2008.

ADDRESSES: Comments should be addressed to Marguerite Pridgen, Office 
of Federal Financial Management, Office of Management and Budget, 725 
17th Street, NW., Washington, DC 20503; telephone 202-395-7844; fax 
202-395-3952; e-mail mpridgen@omb.eop.gov. Due to potential delays in 
OMB's receipt and processing of mail sent through the U.S. Postal 
Service, we encourage respondents to submit comments electronically to 
ensure timely receipt. We cannot guarantee that comments mailed will be 
received before the comment closing date. Please include ``FFR 
comments'' in the subject line of the e-mail message; please also 
include the full body of your comments in the text of the message and 
as an attachment. Include your name, title, organization, postal 
address, telephone number, and e-mail address in your message.

FOR FURTHER INFORMATION CONTACT: Marguerite Pridgen at the addresses 
noted above.

SUPPLEMENTARY INFORMATION:

I. Background

    On April 8, 2003, OMB announced in the Federal Register its intent 
to establish a new Federal Financial Report (FFR) (68 FR 17097). This 
new report would consolidate into a single report the current Financial 
Status Report (SF-269 and SF-269A) and the Federal Cash Transactions 
Report (SF-272 and SF-272A). This consolidation, consistent with 
government-wide grant streamlining efforts being carried out under the 
Federal Financial Assistance Management Improvement Act of 1999 (Pub. 
L. 106-107), is intended to streamline and simplify award-reporting 
requirements. This form was an undertaking of the interagency Post 
Award Workgroup that supports the Federal Grants Streamlining 
Initiative. Additional information on the Federal Grants Streamlining 
Initiative, which focuses on implementing Public Law 106-107, was 
announced in the Federal Register on September 13, 2006 (71 FR 54098). 
An overview of the FFR and five other report forms being developed 
under the Initiative was provided during a webcast of the Grants Policy 
Committee of the U.S. Chief Financial

[[Page 69237]]

Officer Council held on March 8, 2007 (72 FR 7090).
    The FFR standardizes reporting information by providing a pool of 
data elements from which agencies can choose to use for reporting 
purposes. As a result, Federal agencies are not required to collect all 
of the information included in the FFR. Instead, they will identify, 
prior to or at time of award, the data elements that recipients must 
complete, the reporting frequency, the periods covered by each report, 
the dates that the reports are due, and the locations to which the 
reports are to be submitted.
    Consistent with Federal efforts to promote standardization while 
giving agencies more flexibility in post-award administration, agencies 
may require recipients to submit interim FFRs on a quarterly, semi-
annual, or annual basis, all in accordance with standard period end 
dates. The immediate availability of the FFR may be in a paper format 
or portable document format (PDF). However, the FFR's data elements are 
intended to be used in the future for the electronic submission and 
collection of financial information. Note that the establishment of the 
government-wide FFR will necessitate amendments to OMB Circulars A-110 
(2 CFR 215) and A-102 which OMB will subsequently publish in the 
Federal Register.
    The April 8, 2003 announcement in the Federal Register generated 
nearly 200 comments from Federal agencies and a wide range of 
recipients including state and local governments, non-profit entities, 
institutions of higher education, and associations representing 
academic institutions. Those comments, which are summarized below, were 
considered in developing this Federal Register notice.
    Due to the number of the comments received and form revisions made, 
OMB announced that it intended to issue a second 60-day notice (68 FR 
44975). However, instead of issuing a second 60-day notice, OMB chose 
other avenues such as a webcast and posting of the forms on Grants.gov 
to allow for public viewing and feedback (72 FR 7090). The primary 
concern raised to OMB through this interaction is that as the draft 
form was written, different officials could be responsible for the 
``Federal cash'' and the ``Federal Expenditures and Unobligated 
Balances'' sections of the form. OMB determined that this was an issue 
for the submitting organization and therefore, OMB did not make any 
changes to the form based upon this concern. No other substantive 
comments were received during the webcast and posting and OMB did not 
make any changes based upon the posting. We anticipate that this will 
be the last notice before the form and instructions are finalized.

II. Comments and Responses on 2003 Federal Register Notice

    Comment 1: Six comments expressed strong support for the proposed 
FFR, viewing it as a welcome initiative to simplify and streamline 
grant-reporting requirements, consistent with the Federal Financial 
Assistance Management Improvement Act (Pub. L. 106-107).
    Response: The government-wide workgroup made a diligent effort to 
streamline and simplify Federal grant reporting requirements.
    Comment 2: Six comments suggested changes to the FFR's format to 
provide additional clarity.
    Response: In response to those comments, a page number block was 
added to the FFR Attachment, the OMB approval number was moved to the 
lower right corner of the FFR, section titles such as ``Federal 
Expenditures and Unobligated Balance'' are now in bold font, and 
references to sections of the FFR consistently state the line or box 
number followed by a reference to specific letters, if applicable.
    Comment 3: Ten comments suggested ways to strengthen and clarify 
the FFR's instructions.
    Response: In response to these suggestions, the following 
modifications were made to the FFR Instructions: (1) Noted the possible 
impact of the FFR on an agency's internal business processes; (2) 
Explained how the FFR could be used to provide reporting data on single 
and multiple awards; (3) Explained how the FFR could be used to report 
cash management and financial status activity; and (4) Requested 
additional supplemental pages if recipients needed more space.
    Comment 4: One comment indicated that the clearances conducted by 
OMB's Office of Information and Regulatory Affairs, as required under 
the Paperwork Reduction Act, were not shown on the FFR.
    Response: A burden statement has been added to the bottom of the 
FFR and the updated FFR has been cleared by the Office of Information 
and Regulatory Affairs.
    Comment 5: Three comments suggested that the frequency of reports 
should be based on the risk level associated with specific awards.
    Response: The FFR allows agencies to determine the frequency that 
recipients submit reports for each award or program. That frequency can 
be based on the agency's assessment of the level of risk associated 
with the award or program. Since agencies can base the frequency of 
reports on risk levels, no changes were made to either the FFR or its 
instructions.
    Comment 6: Two comments indicated that the timeframes for reporting 
on the cash management of a grant and the financial status of a grant 
differ and requested that the instructions provide directions on using 
the same form to meet these different reporting timeframes.
    Response: The workgroup is mindful of the differences between the 
current SF-269 and SF-272 reporting timeframes as well as the varying 
size, complexity, and risk associated with grant programs and 
individual awards. As a result, the FFR allows agencies to determine 
the cash management and financial status reporting requirements for 
each award. FFR Instructions have been updated to state: ``For a 
particular award, agencies may require cash management reporting more 
or less frequently than financial status reporting. Alternatively, 
agencies may request, for a particular award, the submission of FFRs at 
a given reporting interval (e.g., quarterly) to reflect cash management 
activity and a separate FFR at a different reporting interval (e.g., 
annually) to reflect financial status activity.''
    Comment 7: Two comments highlighted that a program's authorizing 
statutes should require the submission of monthly financial status 
reports.
    Response: The FFR instructions were amended to indicate that 
agencies requiring more frequent reporting may do so if more frequent 
reporting is prescribed by statute and/or consistent with the 
provisions in OMB Circulars A-102 or A-110 dealing with special award 
conditions and exceptions to standard reporting frequencies. If an 
agency wants to deviate from any of these requirements, it must obtain 
approval from OMB.
    Comment 8: One comment suggested substituting ``funding or grant 
period'' for ``project'' in the instructions concerning the submission 
of final reports: ``Final reports shall be submitted no later than 90 
days after the project end date.'' The primary reason for this comment 
was that each budget period has its own final report.
    Response: In accordance with OMB's administrative circulars, 
agencies should request final reports only at the completion of the 
project or grant period. The FFR instructions have not changed and 
continue to state ``Final reports shall be submitted no later than 90 
days after the project or grant period end date.'' If an agency wants 
to deviate from this requirement by submitting

[[Page 69238]]

final reports for each budget period, it must obtain approval from OMB.
    Comment 9: One comment pertained to the instructions on due-date 
extensions: ``Extensions of reporting due dates may be approved by the 
Federal awarding agency upon request of the recipient.'' Specifically, 
the comment expressed concern that requesting extensions past a 30-day 
timeframe would be an additional burden.
    Response: Due dates are necessary, but circumstances may dictate 
that due dates be extended to help ensure the submission of complete 
and accurate reports. As a result, the workgroup did not limit the 
extension period to 30 days.
    Comment 10: One comment recommended that the second bullet entitled 
``Instructions to Federal Agencies, Reporting Frequency,'' be removed 
because the language ``may be used'' is confusing when compared to the 
language in the three other bullets that is more prescriptive because 
the word ``shall'' is used.
    Response: The section called ``Instructions to Federal Agencies, 
Reporting Frequency'' has been removed; however, we have reviewed 
language in other parts of the instructions to ensure that the wording 
on reporting frequency is consistent.
    Comment 11: One comment suggested changing ``30 days'' to ``one 
month'' and ``90 days'' to ``three months.''
    Response: Days were used instead of months because of the need to 
establish consistent report submission periods. The periods are now 45 
days and 90 days.
    Comment 12: Several comments objected to reducing the timeframe for 
submission of interim annual reports from 90 days to 30 days. One 
comment requested 120 days to submit the FFR.
    Response: The instructions have been changed to state: ``Quarterly, 
semi-annual, and annual interim reports are due 45 days after the end 
of the reporting period. Final reports are due no later than 90 days 
after the project or grant period end date. Extensions of reporting due 
dates may be approved by the Federal agency upon request by the 
recipient.'' The due dates for submitting interim reports allow for 
standardization. The workgroup concluded that sound fiscal grant 
management throughout the annual reporting period, combined with the 
use of electronic systems to collect and transmit data, would allow 
recipients sufficient time to complete the annual reports within the 45 
day timeframe. The shortened timeframe for the submission of annual 
interim reports would also allow Federal agencies to obtain financial 
data in a more timely manner. Additionally, the timeframe for 
submission of quarterly and semi-annual reports was increased from 30 
days to 45 days. The workgroup further concluded that 120 days for 
submission of annual and final reports was too lengthy and would not 
provide agencies with the data necessary to monitor projects or grants 
effectively and to make timely funding decisions. Moreover, recipients 
are provided the opportunity to request extensions for submitting 
reports in both OMB Circular A-110 (2 CFR 215) and FFR Instructions.
    Comment 13: One comment noted that under existing timelines, the 
SF-269 Financial Status Report is due no later than 45 days after the 
end of each reporting period and requested that this existing 45-day 
timeline remain in place. Another comment requested reinstatement of 
the 90-day due date for interim reports, while still another disagreed 
with reducing the due date from 90 days to 30 days for final reports.
    Response: The existing timelines for submission of the SF-269, as 
stated in OMB Circular A-110 (2 CFR 215), are 30 days for quarterly and 
semi-annual reports and 90 days for annual and final reports. As a 
result, there currently is no provision for submission of interim 
reports 45 days after the reporting period end date. Moreover, only 
annual interim reports (not quarterly or semi-annual) are allowed to be 
submitted 90 days after the reporting period end date. The proposed 
notice stated: ``Final reports shall be submitted no later than 90 days 
after the project end date.'' The due date for final reports has not 
been reduced to 30 days in the final notice.
    Comment 14: One comment expressed concern regarding the costs of 
system, policy, and other changes associated with revised due dates.
    Response: In an effort to be responsive to public comments 
regarding grants streamlining and ensuing legislation, Federal agencies 
and recipients may need to make several system, policy, and other 
changes. The costs of these changes, which will be borne by both 
Federal agencies and recipients, are necessary to achieve long-term 
grants streamlining efficiencies and promote greater customer service. 
In some instances, provisions have been made to accommodate financial 
hardships that may be experienced by recipients with the advent of 
government-wide grants streamlining. For example, recipients may still 
be given the option of submitting forms and reports on paper rather 
than having to create or modify electronic systems that may be cost 
prohibitive. Also, Federal agencies that use grants data systems that 
are maintained by OMB-approved Grants Management Line of Business 
consortium leads will not be updating their agency's legacy systems to 
accommodate the receipt of the forms. Federal agencies that have not 
yet migrated to an OMB-approved Grants Management Line of Business 
consortium are required to coordinate with OMB prior to performing 
enhancements or interim improvements to legacy systems.
    Comment 15: One comment noted that the requirement to submit final 
reports no later than 90 days after the project end date conflicts with 
the instruction in section 23, ``Grants Management Common Rule,'' that 
requires grantees to liquidate all obligations incurred no later than 
90 days after the end date.
    Response: No conflict exists. Recipients should strive to liquidate 
obligations within 90 days of the project or grant period end date 
before they submit the final FFR, which is also due within 90 days 
after the project or grant period end date. If, however, the timing of 
liquidating obligations precludes submission of the final FFR within 90 
days of the project or grant period end date, recipients can request an 
extension.
    Comment 16: Seven comments requested that reporting period end 
dates be based on award dates, consistent with current practice, rather 
than on the proposed reporting period end dates: 3/31, 6/30, 9/30, or 
12/31.
    Response: The decision to adopt calendar quarters for the reporting 
period end dates was made to promote standardization, thereby reducing 
the current reporting burden associated with different reporting period 
end dates among different grants. If a Federal agency wants to use 
reporting period end dates other than 3/31, 6/30, 9/30, or 12/31, it 
must obtain approval from OMB.
    Comment 17: Eight comments requested greater standardization. Some 
of the comments suggested using one standardized format that could not 
be changed or modified. Others indicated that allowing agencies to 
determine the data elements to be submitted would diminish the 
objective of standardization and suggested having one set of data 
elements that all recipients must complete. Still other comments 
suggested that the FFR simply combines the data elements contained in 
the current SF-269, SF-269A, SF-272, and SF-272A, so it does not 
advance streamlining objectives.
    Response: The proposed FFR advances standardization by providing a

[[Page 69239]]

pool of data elements from which agencies can customize their reporting 
requirements without imposing an undue burden on recipients by adding 
or modifying elements. In addition, agencies cannot add or modify FFR 
data elements unless they submit compelling requests to OMB for 
approval. OMB will evaluate all requests for changes and modifications, 
and exercise utmost prudence in approving exceptions in order to 
prevent the proliferation of multiple financial reporting forms.
    Requiring agencies to use all of the data elements in the proposed 
FFR is not practical. As an example, ``Recipient Share and Program 
Income'' does not apply to some programs and awards. Furthermore, the 
FFR is designed to accommodate reporting on the cash management of 
single or multiple awards and on the financial status of a single 
award, so this flexibility is not conducive to mandating the completion 
of a required set of elements. Finally, the data that each agency needs 
to adequately monitor awards differ greatly because of the wide variety 
of governing statutes, regulations, and policies. As a result, 
requiring recipients to report on all data on a standardized FFR could 
actually result in the submission of data that would not be useful or 
required, while increasing the reporting burdens to recipients.
    In developing the standard pool of data elements, the workgroup 
assessed the SF-269, SF-269A, SF-272, and SF-272A, eliminating or 
combining many of the existing data elements. The FFR also promotes 
standardization through the development of one set of instructions and 
definitions for reports submitted to a single location within an 
agency, and the use of standardized timeframes for reporting period end 
dates and due dates.
    Comment 18: Five comments suggested that OMB follow a standard 
frequency for report submissions.
    Response: The degree to which monitoring is needed varies in view 
of the risks, statutes, regulations, and policies governing programs 
and awards, so the frequency of reporting should be commensurate with 
these factors. In addition, adopting a standardized frequency for 
report submissions could be detrimental to an agency's ability to 
adequately monitor a program or award.
    The FFR promotes standardization by requiring the use of reporting 
period end dates for quarterly, semi-annual, and annual interim 
reports: 3/31, 6/30, 9/30, or 12/31. It further requires the submission 
of quarterly, semi-annual, and annual interim reports 45 days after the 
end of each reporting period and final reports no later than 90 days 
after the project or grant period end date. Extensions of reporting due 
dates may be approved by the Federal agency upon request by the 
recipient.
    Comment 19: Eleven comments questioned use of the FFR to report on 
single and multiple awards. Some comments indicated that reporting 
financial status information for multiple awards on one report would be 
meaningless and an administrative burden. Other comments questioned why 
detailed data were required for individual awards, but not for multiple 
awards. One comment asked whether the Federal agency could require a 
recipient to report all Federal and recipient expenditures for a single 
award rather than multiple awards. Another comment stated that the FFR 
Attachment does not provide reporting for ``Cash Receipts'' or ``Cash 
on Hand,'' so the FFR cannot be used to determine if a recipient has 
excess cash on hand.
    Response: The FFR Instructions have been clarified to better 
explain the procedures for reporting on single and multiple awards.
    A single FFR will not be used to report totals on the financial 
status of multiple awards. Instead, a separate FFR must be completed 
for each award when the financial status (Lines 10d through 10q) for 
more than one award is requested by the agency. Currently, agencies 
have the choice between collecting detailed financial status data on a 
single award (using the SF-269 or SF-269A) or collecting summary cash 
management data on multiple awards (using the SF-272 or SF-272A). The 
FFR preserves this flexibility while allowing recipients to submit 
these data on one form. If an agency wants to obtain detailed financial 
status data on more than one award, it must instruct recipients to 
complete a separate FFR (the FFR Attachment would not be required) for 
each award. Conversely, if less detailed data are needed on multiple 
awards, agencies should instruct recipients to complete designated 
lines and boxes on the FFR as well as the FFR Attachment. According to 
the FFR Instructions, an agency can require a recipient to report cash 
management activity for a single award and for multiple awards. In 
doing so, the FFR will capture ``Cash Receipts'' and ``Cash on Hand,'' 
which can be used to determine if a recipient has excess cash on hand. 
The FFR Attachment does not provide this capability.
    Comment 20: Five comments indicated that the FFR does not capture 
certain data elements that currently exist within agency- or program-
specific reports that have been approved by OMB. One comment requested 
that the final notice clarify that the FFR is intended to replace the 
SF-269, SF-269A, and SF-270 and that agencies using alternative 
program-specific forms could continue to do so.
    Response: The FFR replaces the SF-269, SF-269A, SF-272 and SF-272A, 
and OMB-approved agency-specific and program-specific financial forms, 
but not the SF-270 or SF-271. The FFR Instructions have been clarified 
to state that the FFR is replacing the SF-269, SF-269A, SF-272, and SF-
272A and, in doing so, it is now the standard government-wide financial 
report that all agencies and recipients will be required to use. 
Furthermore, the use of new or existing agency-specific or program-
specific financial reports will require approval by OMB.
    Comment 21: Five comments requested that the FFR be modified to 
depict ``Total Outlays,'' which would be the sum of ``Total Federal 
Share,'' ``Total Recipient Share,'' and ``Expended Program Income.'' 
Two comments requested that the FFR be modified to include ``Total 
Unliquidated Obligations,'' the sum of ``Federal Share of Unliquidated 
Obligations'' and ``Recipient Share of Unliquidated Obligations.''
    Response: The ``Total Outlays'' and ``Total Unliquidated 
Obligations'' line items were not added to the FFR because the agencies 
and recipients that need this information can do so by performing 
simple calculations, without imposing additional requirements on all 
recipients.
    Comment 22: One comment noted that additional fields, which are 
currently not required on the SF-269, may be required by agencies 
submitting an individual grant expenditure report, thereby increasing 
the overall number of data elements that must be reported. The 
additional data elements include the following: ``Status of Federal 
Cash (previous, current, cumulative),'' ``Total Federal Funds 
Authorized (previous, current),'' ``Total Federal Share of Unliquidated 
Obligations (current),'' ``Total Recipient Share Required (previous, 
current, cumulative),'' ``Required Recipient Share of Unliquidated 
Obligations (current, cumulative),'' ``Program Income Expended in 
Accordance with the Addition Alternative (previous, current),'' and 
``Unexpended Program Income (current).''
    Response: The FFR has been modified to only collect cumulative 
totals. This action eliminates Column I (Previously Reported) and 
Column II (Current Period) for all line items. The ``Federal

[[Page 69240]]

Cash'' section has been modified to include Line 10a, ``Cash 
Receipts;'' Line 10b, ``Cash Disbursements;'' and Line 10c, ``Cash on 
Hand.'' By requiring only cumulative totals, this modification will 
allow the FFR to highlight activities that took place during the 
reporting period and facilitate the calculation of cash on hand as of 
the reporting period end date. With respect to ``Total Federal Funds 
Authorized,'' only one entry is required in the cumulative column. 
Accordingly, the instructions for Line 10d have been changed to state: 
``Enter the total Federal funds authorized as of the reporting period 
end date.'' ``Federal Share of Unliquidated Obligations,'' ``Recipient 
Share of Unliquidated Obligations,'' ``Program Income Expended in 
Accordance with the Addition Alternative,'' and ``Unexpended Program 
Income'' are now reported only as cumulative totals. ``Total Recipient 
Share Required'' was added to mirror the approach used to account for 
Federal dollars, while the ``Federal Expenditures and Unobligated 
Balance'' section begins with ``Total Federal Funds Authorized'' and 
depicts the manner in which authorized funds have been managed. 
Similarly, the ``Recipient Share'' section begins with ``Total 
Recipient Share Required'' and depicts the manner in which the 
recipient's required share is managed.
    Comment 23: One comment suggested that the proposed FFR cannot 
serve as a compiled Cash Transactions Report because it does not start 
with ``Cash on Hand, Beginning of Reporting Period,'' as does the 
current SF-272. Another comment suggested an alternative method to 
report cash management activity for multiple awards and requested an 
additional column, ``Total Obligated,'' on the FFR Attachment. Still 
another comment suggested an alternative method for reporting on the 
financial management of an award.
    Response: By requiring only cumulative totals, the FFR will be more 
useful in highlighting activity that took place during the reporting 
period and facilitating the calculation of cash on hand as of the 
reporting period end date. The alternative methods proposed to report 
cash and financial management activities for an award are more detailed 
and require more calculations by recipients than the proposed FFR 
requirements. As a result, adopting these methods would be counter to 
grant streamlining and improved customer service efforts.
    Comment 24: One comment requested adding a data element with the 
name of a particular person at each agency to whom the FFR should be 
submitted. Another comment requested including the recipient's 
Automated Clearinghouse (ACH) account number, two comments requested 
including the Catalog of Federal Domestic Assistance (CFDA) number on 
the FFR, and one comment requested including a glossary and definitions 
in the final FFR notice.
    Response: A data element was not added to identify a particular 
person at each agency to whom the report should be submitted. During 
the course of the reporting period for a particular award, contact 
points may vary and requiring recipients to provide this information 
prior to the submission of the FFR would be an undue burden. Instead, 
the required FFR identifying grant information, including the ``Federal 
Agency and Organizational Element to Which Report is Submitted'' (Box 
1) and ``Federal Grant or Other Identifying Number'' (Box 2), is 
sufficient for agencies to route the FFR to the appropriate person. 
Furthermore, the FFR Attachment includes information on multiple 
awards, which would make the identification of a point of contact for 
each award impractical. The ACH account number was not added to the FFR 
because this report will not be used to facilitate payment or drawdown 
activity. As a result, including the ACH account number would be 
extraneous to the FFR's purpose. Furthermore, the information disclosed 
on the ACH form is considered confidential and if included on the FFR 
would increase the risk of fraud. The CFDA number was not added to the 
FFR because it is not needed. The ``Federal Grant or Other Identifying 
Number Assigned by the Federal Agency'' (Box 2 of the FFR) and 
``Federal Grant Number'' (Box 5 on the FFR Attachment) provide 
sufficient information. OMB Circulars A-102, A-110, and A-133, combined 
with the FFR Instructions, provide sufficient information to facilitate 
understanding and completion of the FFR. As such, a glossary and 
definition of terms are not added.
    Comment 25: One comment suggested that the policy requiring the 
submission of one original and two copies of paper-based FFR submission 
should be retained.
    Response: A statement was added that ``The Federal agency shall 
request that the recipient submit the original and no more than two 
copies of the FFR.''
    Comment 26: One comment requested the retention of the instruction 
on the current SF-272 that requires an explanation when more than 3 
days of cash remains on hand at the end of the reporting period. Two 
comments asked whether there were alternative methods for assessing 
excess cash, such as OMB Circular A-133 audits, rather than using the 
FFR. Another comment noted that the requirement for recipients to have 
no more than 3 days of cash on hand is burdensome because it is 
difficult to estimate the amount of money needed to meet immediate cash 
needs. One comment asked how recipients are expected to report on cash 
advances to subgrantees and subcontractors when they are unable to 
provide expenditure reports within the timeframe required for the 
recipient's FFR submission.
    Response: A statement was added to the FFR Instructions requiring 
an explanation if more than 3 days of cash remains on hand at the end 
of the reporting period.
    The FFR is one tool that agencies may use to assess the cash 
management and financial status of an award. As a result, agencies must 
determine how they wish to use this tool, in conjunction with other 
tools, such as OMB Circular A-133 audits and site visits. However, the 
FFR is considered to be one of the most viable tools, primarily because 
all recipients are not subject to OMB Circular A-133 audits and 
conducting site visits may be cost and resource prohibitive. Award 
recipients are discouraged from having more than 3 days of cash on hand 
in order to maximize the government's opportunity to collect interest 
on unspent funds and ensure compliance with the Cash Management 
Improvement Act. Through the use of automated processes to request 
funds and facilitate electronic fund transfers, recipients should be 
able to accurately estimate their funding needs, thereby minimizing 
instances in which they have more than 3 days of cash on hand. 
Furthermore, the management of an award does not necessarily preclude 
having more than 3 days of excess cash on hand; instead, it requires 
that the reasons for such excess be reported to ensure appropriate 
stewardship of Federal funds. Recipients are expected to report the 
amount of cash disbursed, including advances to subrecipients and 
subcontractors, but they are not expected to report on how these 
disbursements and advances were actually expended. As a result, 
determining subrecipient and subcontractor expenditures will not affect 
the timely completion and submission of the FFR.
    Comment 27: Several comments requested clarification on the cash 
versus accrual basis reporting on the FFR. One comment indicated that 
the instructions for Line 10f, ``Federal Share of Unliquidated 
Obligations (current period),'' states: ``For accrual basis reporting, 
this is the amount of obligations incurred for which an

[[Page 69241]]

expenditure has not been recorded.'' However, if an organization that 
accounts on an accrual basis incurred obligations for which an 
expenditure had not been incurred, it would need to record those 
expenditures and include them in its total expenditures reported on an 
accrual basis. The need to report on expenditures that have not been 
recorded should only exist in an organization that maintains its books 
on a cash basis. Similarly, another comment stated that it might be 
advisable to require that reporting be done on an accrual basis even if 
the organization maintains its accounting on a cash basis because the 
requirement on Line 10f has the effect of requiring recipients to 
report an accrual on the FFR regardless whether the accrual is actually 
entered on its books or only used in producing the FFR. Another comment 
stated that OMB Circular A-110 defines obligations as ``the amounts of 
orders placed, contracts and grants awarded, services received and 
similar transactions during a given period that require payment by the 
recipient during the same or a future period.'' ``Orders placed'' and 
``awards'' and other obligations for ``future periods'' are not 
accrued, so these transactions would not be reported as unliquidated 
obligations. As a result, the comment requested clarification on 
whether these future-period obligations would be included in the 
``Federal Share of Unliquidated Obligations'' and ``Recipient Share of 
Unliquidated Obligations.''
    Response: The instructions for Line 10f have been clarified to 
provide one definition for ``Federal Share of Unliquidated 
Obligations,'' whether the recipient maintains a cash or accrual basis 
accounting system. The FFR Instructions have also been updated to 
indicate that, in accordance with OMB Circulars A-110 and A-102, if the 
Federal awarding agency requires accrual information and the 
recipient's accounting records are kept on the cash basis, the 
recipient shall not be required to convert its accounting system. 
Instead, the recipient must develop such accrual information through 
best estimates using available documentation. Consistent with the 
approach used to develop one definition for ``Federal Share of 
Unliquidated Obligations,'' regardless of whether the recipient 
maintains a cash or accrual basis accounting system, the FFR 
Instructions have been updated to include common definitions for Line 
10e, ``Federal Share of Expenditures;'' Line10j, ``Recipient Share of 
Expenditures;'' and Line 10k, ``Recipient Share of Unliquidated 
Obligations.''
    Comment 28: One comment asked why the ``Status of Federal Cash'' 
(Lines 10a through 10c) requires totals on a cash basis (Cash 
Disbursements) while the ``Status of Federal Expenditures'' (Lines 10e 
through 10k) require reporting on an accrual basis. Another comment 
stated that Box 7, ``Basis of Accounting,'' appears to apply only to 
Lines 10e through 10h because Lines 10a through 10c require cash basis 
reporting even if the recipient maintains an accrual basis accounting 
system. The same comment also asked how it was decided that cash or 
accrual accounting would be the appropriate basis for FFR reporting 
purposes.
    Response: The ``Federal Cash'' portion of the FFR enables agencies 
to determine the amount of a recipient's Federal cash on hand. This 
portion of the report also enables agencies to reconcile their internal 
cash receipt and disbursement records with Federal cash receipt and 
disbursement records maintained by recipients. The ``Federal 
Expenditures and Unobligated Balance'' portion of the FFR enables 
agencies to determine, for a single award, how much money has actually 
been expended and the expenses that have been incurred but not yet 
paid. This information gives agencies an overview of the amount of 
encumbered and unencumbered funds, at a given point in time, which is 
useful when assessing the financial status of an award. Obtaining cash 
and accrual information serves different, yet complimentary purposes, 
and determining the type of information to submit is left to the 
discretion of the agency. The instructions for Box 7, ``Basis of 
Accounting,'' have been clarified to indicate that recipients should 
specify whether they use a cash or accrual basis accounting system for 
recording transactions related to the award. The form permits agencies 
to request cash basis information (Lines 10a through 10c and the FFR 
Attachment) from recipients maintaining an accrual basis accounting 
system and accrual basis information (Lines 10f and 10k) from 
recipients maintaining a cash basis accounting system. If the Federal 
awarding agency requires accrual information and the recipient's 
accounting records are kept on a cash basis, the recipient shall not be 
required to convert its accounting system. Instead, it should develop 
the required accrual information through best estimates based on 
available information.
    Comment 29: One comment indicated that the FFR duplicates reporting 
now required for recipients using the Federal government's automated 
payment systems.
    Response: The FFR is used to show the activity of a single award or 
the amount of funds expended for multiple awards. The information 
collected through the FFR is required by Federal agencies to aid in 
monitoring their grant funds. Conversely, payment forms are used to 
generate disbursements in response to a specific request, and agencies 
utilize multiple payment systems and forms. The information required on 
these diverse payment forms may not be adequate for agencies to fulfill 
their fiscal stewardship responsibilities. Furthermore, agencies should 
instruct recipients to submit the FFR to a single location within the 
agency. Each agency will then modify its internal business processes to 
coordinate the distribution of the FFR to payment and financial offices 
that require the information.
    Comment 30: One comment asked whether using electronic payment 
mechanisms or receiving funds on a reimbursement basis obviate the need 
to account for cash disbursements by grant. Three comments questioned 
the usefulness of the SF-272 and, consequently, the FFR Attachment, 
given that agencies can obtain cash management information on a grant 
using the Payment Management System (PMS) and the Automated Standard 
Application for Payments (ASAP) systems.
    Response: Not all electronic payment mechanisms obviate the need to 
account for cash disbursements by grant because all funds obtained 
through cash advances may not be expended immediately and agencies may 
want to monitor cash disbursements and, consequently, cash on hand at a 
given point in time. Agencies may also want to obtain cash disbursement 
information by grant, even for recipients on a reimbursement basis, as 
a means of monitoring cash disbursements for which reimbursement has 
not been sought. For recipients on an advance payment system and the 
ASAP, agencies can readily determine the amount of cash advanced but 
these systems do not capture the amount of cash actually disbursed by 
recipients. Similarly, for recipients on a reimbursement payment system 
and ASAP, agencies cannot capture cash disbursements for which 
recipients have not requested reimbursement. Moreover, not all agencies 
use PMS or ASAP. Cash disbursement information, as provided on the FFR 
and the optional FFR Attachment sections which replace the

[[Page 69242]]

SF-272A, is deemed useful to many agencies.
    Comment 31: One comment noted that the April 8, 2003, notice in the 
Federal Register did not reference continued use of SF-270. It was 
suggested that the SF-270 is the source of some of the reporting 
problems experienced by recipients and that there is a strong 
relationship between the SF-270 and the new forms. The comment further 
indicated that the SF-270 was created to meet the need for a paper 
document on which recipients could request cash, when such payments 
were also being made by paper check. However, with the required 
movement by Federal agencies to payment by electronic funds transfer, 
the form now serves, in some agencies, as a duplicative financial 
reporting tool.
    Response: The SF-269 and SF-272 are used to monitor the financial 
activity of a single award or multiple awards, while the SF-270 is used 
to obtain funds. These forms serve different purposes, which were 
considered in the development of the FFR proposal. Specifically, 
agencies are currently using various payment systems, some of which may 
require the submission of the SF-270 if funds cannot be requested 
electronically. As a result, eliminating the SF-270 through the current 
FFR proposal could have a negative effect on a recipient's ability to 
obtain funds, which would be an unacceptable consequence.
    Comment 32: Several comments requested delaying implementation of 
the FFR until a fully automated version was available, which would 
provide for calculation macros, carry forward prior period-ending 
balances to the current period report, automate comparisons between 
recipient and agency data, and support electronic submissions and Web 
accessibility.
    Response: The workgroup's primary goals included reducing the 
number of required financial forms and standardizing the resulting 
product. The FFR achieves these goals by consolidating four existing 
forms into one report and using standard data elements, instructions, 
definitions, reporting period end dates, and the due date for report 
submissions. Given the numerous benefits associated with the FFR, the 
workgroup does not want to delay its implementation. Instead, it seeks 
to proceed with implementation to achieve immediate benefits, while 
concurrently moving forward with automation initiatives. Under OMB's 
overall direction, the Federal awarding agencies began to address 
electronic solutions for financial reporting in February 2004. Those 
solutions include the electronic submission of the FFR through unified 
and common Federal electronic solutions. In the interim, agencies, 
using methods similar to those for automating the SF-269 and SF-272, 
may proceed, once they request and receive approval from OMB, with 
automating the FFR. This includes incorporating macros for facilitating 
calculations, linking the FFR to payment systems to facilitate 
electronic comparisons between recipient-reported figures and those 
maintained by the agency, allowing for electronic submission to 
agencies, and providing Web accessibility. As part of the approval 
request, agencies must confirm if automating the FFR will require 
either minor system enhancements or interim system improvements, and if 
development, modernization and enhancement (DME) funding would be 
necessary. These measures are not anticipated to be costly or time-
intensive because the FFR includes only four new data elements that are 
not currently resident on either the SF-269 or SF-272.
    Comment 33: One comment requested that the paper format of the 
consolidated financial report be made available so that it can be 
completed using a computer keyboard either in Microsoft Word or 
``writeable'' PDF. The comment further stated that applicants prefer 
filling out documents and forms using a computer keyboard and that the 
old-style PDF forms are difficult to use because they must be printed 
and then completed using a typewriter. Another comment requested that 
the paper FFR show a Web address that would provide specific 
instructions and information for completing the FFR.
    Response: As described previously, the Federal awarding agencies 
began addressing electronic solutions for financial reporting in 
February 2004, including the electronic submission of the FFR through 
unified and common Federal electronic solutions. The workgroup 
concluded that URL references should be included on Web sites rather 
than the FFR forms because the URL references may change.
    Comment 34: One comment requested assurance that security controls 
be established to prevent the electronic submission of an FFR report 
that had not been approved by the appropriate individuals.
    Response: Potential solutions for electronic submissions include 
submission and electronic authentication by an Authorized Agency 
Representative. In addition, existing payment systems only allow access 
by Authorized Agency Representatives. These agency security measures 
must be supplemented by the recipient's internal security measures to 
preclude the submission of reports by unauthorized representatives.
    Comment 35: One comment stated that there is a need to ensure that 
subrecipients and subcontractors be subject to the same requirements as 
recipients for reporting purposes. Another comment noted that States 
serving in a pass-through capacity should also adopt the FFR, which 
would then reap the FFR's benefits across the grant community. Another 
comment stated that the FFR does not contain a line item showing funds 
disbursed to subrecipients.
    Response: The Federal government may not impose prime recipient 
reporting requirements on subrecipients and subcontractors as a means 
of securing the contractual relationship between the prime and the sub. 
Instead, OMB, through its administrative circulars, requires recipients 
to manage and monitor each project, program, function, and activity 
supported by the award. Furthermore, agencies may obtain information 
regarding the subrecipient and subcontractor aspects of an award by 
requiring recipients to indicate the amount of monies advanced or 
disbursed to subrecipients and contractors through FFR submissions. 
Requesting that States adopt the FFR is beyond the scope of the 
workgroup, but it is considered to be an area worthy of continued 
exploration. ``Cumulative Cash Disbursements,'' as shown in the FFR 
Attachment, include funds disbursed to subrecipients. A separate line 
item was not added to capture disbursements to subrecipients because, 
in the interest of streamlining, recipients will only be required to 
report disbursements without detailing specific types of expenditures.
    Comment 36: One comment proposed enlarging Box 1, ``Federal Agency 
and Organizational Element to Which Report is Submitted;'' two comments 
noted the absence of instructions advising on the level to which 
reports should be submitted within an agency, particularly for multiple 
grants captured on the FFR; and a fourth comment stated that OMB should 
establish a single location for submission of the report, which would 
eliminate the submission of identical reports to multiple locations 
within an agency.
    Response: The size of Box 1 was not changed because recipients may 
use acronyms to depict the Federal agency and organizational element. 
The ability to group multiple grants will be at the discretion of the 
Federal awarding agency. Agencies can provide guidance on identifying 
``the organizational

[[Page 69243]]

element'' for recipients reporting on multiple grants. The instructions 
for Box 1 have been clarified to state ``Enter the name of the Federal 
agency and organizational element identified in the award document or 
as instructed by the agency.'' Even though electronic solutions for the 
FFR are pending, some recipients may still elect to submit paper-based 
reports. Agencies will not be required to request submissions to one 
location. However, the instructions have been modified to state: 
``Agencies should instruct recipients to submit the FFR to one single 
location within the agency.'' This language states that submission to 
one location in the agency is not required, but strongly encouraged.
    Comment 37: One comment requested that Box 4 be changed from 
``Universal Identifier'' to ``DUNS Number.'' Another comment asked if 
``Universal Identifier'' is the DUNS Number or the Employer 
Identification Number (EIN).
    Response: The DUNS number is the universal identifier for grants 
and cooperative agreements. As such, the term ``Universal Identifier 
Number'' has been changed to ``DUNS Number.'' Box 4 on the FFR has been 
modified to include separate entries of the ``DUNS Number'' (Box 4a) 
and ``Employer Identification Number (EIN)'' (Box 4b). The FFR 
Instructions have been amended to incorporate this change.
    Comment 38: Several comments were raised about the requirement for 
recipients to provide their DUNS number. One comment requested a 
reference in the FFR Instructions on how to obtain a DUNS number, 
another asked what mechanism OMB intends to employ to ensure that 
recipients use the correct DUNS number. Still another comment requested 
OMB to provide guidance on how to manage multiple DUNS numbers for 
organizations and their affiliates. Finally, three comments expressed 
overall concern with the requirement to obtain a DUNS number.
    Response: All of these comments pertain to pre-award activities and 
are outside of the scope of the FFR proposal. Instead, they should have 
been submitted in response to OMB's Federal Register notice dated June 
27, 2003, ``Use of a Universal Identifier by Grant Applicants.'' 
Although these comments did not result in any changes to the FFR, they 
still warrant some clarification. Use of the DUNS will allow Federal 
agencies and recipients to readily identify a DUNS ``family tree,'' 
allowing for more effective management of multiple grants. Also, a DUNS 
number is required for registering in the Business Partner Network 
(BPN), which includes the Central Contract Registry (CCR). The BPN/CCR 
maintains an applicant and recipient profile, which reduces the amount 
of data required for electronic submission of information to 
Grants.gov.
    Comment 39: Three comments addressed continued use of the EIN, 
along with the DUNS number, on the FFR. One comment requested that 
recipients furnish either the EIN or DUNS number, while another 
requested that the EIN be added to the FFR. One comment asked if the 
EIN was actually intended to be dropped.
    Response: On June 27, 2003, an OMB notice in the Federal Register, 
``Use of a Universal Identifier by Grant Applicants,'' established the 
requirement for recipients to obtain a DUNS number when applying for 
Federal grants and cooperative agreements. This policy has since been 
revised to apply to all forms of Federal financial assistance pursuant 
to the Federal Funding Accountability and Transparency Act of 2006 
(Pub. L. 109-282). It stipulated that Federal agencies could continue 
to use their EIN or similar vendor identification for their internal 
use. In response, the FFR has been modified to include both the DUNS 
number and EIN. The addition of the EIN to the FFR does not preclude 
furnishing a DUNS number. Instead, recipients providing an EIN (or 
similar vendor identification number) on the FFR will still be required 
to provide a DUNS number.
    Comment 40: Two comments indicated that basic information about a 
recipient, including financial information, should be stored in a 
password protected site that recipients could access to update their 
information annually or when major changes occur such as the name of a 
contact person. After the standard application is submitted to the 
clearinghouse, an applicant or recipient could access the information 
and submit a new grant application without having to fill out another 
form with the same information. This practice should be possible 
because standard information is required with every application, but 
rarely changes from one application to another.
    Response: These comments pertain to pre-award activity, so they are 
outside the scope of the FFR proposal. Although no changes were made to 
the FFR in response to these comments, some clarification is warranted. 
The Federal government is currently using BPN/CCR for grant applicants 
and recipients to help centralize applicant and recipient information, 
and to provide a central location for applicants and recipients to 
change organizational information. Use of BPN/CCR provides one location 
for applicants and recipients to change information about their 
organization for use by all Federal agencies. Currently, recipients 
will use the BPN/CCR template that is in place for vendors and 
contractors conducting business with the Federal government.
    Comment 41: Three comments pertained to Box 5, ``Recipient Account 
Number or Identifying Number.'' One comment requested an example of 
``any other identifying number,'' while another asked that ``For 
Recipient Use Only; Not Required by Federal Funding Agency'' be 
replaced with ``This Account Number May be the Same Number as Shown in 
Item 2, Federal Grant or Other Identifying Number.'' One comment 
suggested that Box 5 does not serve a useful purpose and it should be 
eliminated.
    Response: As stated in the FFR Instructions, Box 5 is intended for 
recipient use only, such as providing a tracking mechanism for 
reconciliation purposes. For example, a recipient could assign a number 
to an award that is automatically generated from its financial system, 
which would make Box 5 very useful in reconciling the recipient's 
internal data with that maintained by the Federal government. The 
language was not modified because the proposed language better depicts 
the intent and appropriate use of Box 5.
    Comment 42: One comment requested that the shading be removed from 
all the Column II, Current Period, cells because this information could 
be useful if the FFR is to be used for Current Cash Transactions.
    Response: The FFR has been modified to collect only cumulative 
totals. This action would eliminate Column I (Previously Reported) and 
Column II (Current Period) for all line items. The overall financial 
status of the award, as shown in the ``Cumulative'' column, should 
serve as the basis from which assessments and decisions are made. The 
``Federal Cash'' section has been modified to include Line 10c, ``Cash 
On Hand.'' By requiring only cumulative totals, this modification will 
allow the FFR to provide a good overview of activity that took place 
during the reporting period and facilitate the calculation of cash on 
hand as of the reporting period end date. The FFR Instructions have 
been amended to show these changes.
    Comment 43: One comment suggested revising the last sentence of the 
instructions for Line 10, ``Transactions,'' to state: ``If you need to 
adjust amounts entered on previous reports, include a note in Line 12 
of the Remarks section.''

[[Page 69244]]

    Response: The statement ``If you need to adjust amounts entered on 
previous reports, include a note in Line 12 of the Remarks section'' 
has been added to the instructions for Line 10. Any information deemed 
necessary to support or explain FFR information should be noted in Line 
12, ``Remarks.''
    Comment 44: One comment noted that recipients are now instructed to 
report adjustments to prior report periods in Column I (Previously 
Reported). This instruction is consistent with generally accepted 
accounting principles, which require publicly traded corporations to 
report prior period adjustments as revisions to retained earnings 
rather than as results of current year operations. Nevertheless, the 
comment requests that recipients be allowed to report adjustments in 
the period in which they are recognized (Column II, Current Period) 
because the FFR is a cumulative document. The amount that ultimately is 
of interest to the agency is the amount captured in Column III 
(Cumulative) and an adjustment has the same effect on Column III 
whether the recipient enters it in Column I or Column II.
    Response: The FFR has been modified to collect only cumulative 
totals. This action eliminates Column I (Previously Reported) and 
Column II (Current Period) for all line items. Since the practice of 
reflecting adjustments within the period that the error occurred is a 
generally accepted accounting principle, no changes will be imposed on 
the recipient community. If an agency has unique reporting situations 
requiring adjustments in the prior period, it can request an exemption 
from OMB.
    Comment 45: One comment requested that the instructions for Line 
10a be changed to read: ``Enter the amount of actual cash received to 
date from the Federal awarding agency.''
    Response: The instructions for Line 10a, ``Cash Receipts,'' have 
been amended to include the requested language.
    Comment 46: One comment asked if Line 10d, ``Total Federal Funds 
Authorized,'' includes the amount of Federal increase resulting from 
program income reported on Line 10o, ``Program Income Expended in 
Accordance with the Addition Alternative.''
    Response: Line 10d, ``Total Federal Funds Authorized,'' does not 
include program income since, by definition, program income is 
generated by award activities and not provided by the awarding agency. 
The instructions for Line 10d have been modified to provide 
clarification.
    Comment 47: One comment noted that recipients are given a total 
award amount without limitations on when those funds can be spent, 
other than the restrictions on the start and end dates of each award. 
However, the instructions for Line 10d, ``Total Federal Funds 
Authorized,'' request recipients to report on ``Total Federal funds 
authorized for the current funding period.'' This information is 
currently requested on SF-269 on a cumulative basis for an award, not 
for the current reporting period. The comment further requests that the 
same option be available to recipients on the FFR and that this detail 
be included in the line item instructions.
    Response: Columns I and II for ``Total Federal Funds Authorized'' 
have been eliminated, requiring a cumulative total entry only. The 
instructions for Line 10d, ``Total Federal Funds Authorized,'' have 
been changed to state: ``Enter the total Federal funds authorized as of 
the reporting period end date.''
    Comment 48: One comment noted that the instruction for Line 11e, 
``Indirect Expense, Federal Share,'' should explain that this is the 
amount of indirect expense that has been combined with direct expenses 
and reported in Lines 10e, 10f, and 10g.
    Response: The FFR instruction at Line 11e was not modified because 
we felt it would be clearer to the user if we modified the instructions 
at 10e, f and g. The FFR instructions at Line 10e, ``Federal Share of 
Expenditures,''have been modified to read: ``Expenditures are the sum 
of actual cash disbursements for direct charges for goods and services, 
the amount of indirect expenses charged to the award, and the amount of 
cash advances and payments made to subrecipients and subcontractors, 
minus program income expended in accordance with the deduction 
alternative, rebates, refunds or other credits.'' The instructions for 
Line 10f, ``Federal Share of Unliquidated Obligations,'' have been 
modified to read: ``Unliquidated obligations reflect expenses incurred 
that have not yet been paid, as of the reporting period end date (cash 
basis), or expenses that have been incurred but not yet recorded 
(accrual basis). Enter the Federal portion of unliquidated obligations, 
which includes direct and indirect expenses incurred but not yet paid 
or charged to the award, including amounts due to subrecipients and 
subcontractors. On the final report, this line should be zero unless 
the awarding agency has provided specific instructions.'' The 
instructions for Line 10g, ``Total Federal Share,'' were not changed 
because Total Federal Share is the sum of Line 10e, ``Federal Share of 
Expenditures'' and Line 10f, ``Federal Share of Unliquidated 
Obligations,'' and the instructions for these two lines have been 
modified to reflect the treatment of indirect expenses.
    Comment 49: One comment noted that it is unclear what resources are 
contemplated in the instructions for Line 10e, ``Federal Share of 
Expenditures,'' particularly the phrase ``the value of in-kind 
contributions applied.'' OMB's use of the term ``in-kind 
contributions'' in circulars and related documentation is confined to 
resources related to the non-Federal share and is usually modified by 
the term ``third-party'' to indicate that such non-cash contributions 
come from a party other than the Federal agency and recipient. As a 
result, such discussion should be included in the section of the report 
related to ``Status of Recipient Share.''
    Response: The reference to ``the value of in-kind contributions 
applied'' has been removed from the definition of Line 10e, ``Federal 
Share of Expenditures.'' The instructions for Line 10j, ``Recipient 
Share of Expenditures,'' have been clarified to state: ``This amount 
may include the value of allowable in-kind match contributions * * *.''
    Comment 50: One comment stated that the sentence ``Do not include 
any amounts on Line 10f that have been included on Line 10e'' in the 
current SF-269 instructions for reporting unliquidated obligations has 
been dropped from the FFR Instructions for Lines 10f and 10k. This 
sentence is needed to control against ``double dipping.''
    Response: The instructions for Line 10f have been clarified to 
state: ``Do not include any amount in Line 10f that has been reported 
in Line 10e.'' Also, the instructions for Line 10k have been clarified 
to state: ``Do not include any amount in Line 10k that has been 
reported in Line 10j.''
    Comment 51: One comment indicated that the instructions for Line 
10i, ``Total Recipient Share Required,'' on the new FFR requests 
recipients to report on total recipient share required by reporting 
period, yet some awards require recipients to agree to a specific match 
for the entire grant period, which means that recipients would be able 
to report their required share only on a cumulative basis, rather than 
on a period-by-period basis. Another comment asked if the recipient 
share to be provided relates only to mandatory cost sharing amounts or 
if it also included committed cost sharing. A similar comment requested 
clarification for Lines 10i through 10m to show that the terms 
``recipient share'' and

[[Page 69245]]

``recipient funds'' include all matching and cost sharing funds that 
have been committed to the project by the recipient and other 
providers. A fourth comment asked whether the amount reported on Line 
10i includes level of effort requirements.
    Response: The FFR has been modified to collect only cumulative 
totals. This action eliminates Column I (Previously Reported) and 
Column II (Current Period) for all line items. The instructions for 
Line 10i, ``Total Recipient Share Required,'' have been amended to 
state: ``Enter the total required recipient share for budget, funding, 
and project periods. The required recipient share to be provided 
includes all matching and cost sharing provided by recipients and 
third-party providers to meet the level required by the Federal agency. 
This amount should not include cost sharing and match amounts in excess 
of the amount required by the Federal agency (such as cost overruns for 
which the recipient incurs additional expenses and, therefore, 
contributes a greater level of cost sharing or matching than the level 
required by the Federal agency).''
    Comment 52: One comment indicated that the current long version of 
SF-269 allows the agency to break the recipient's share of outlays into 
in-kind and cash matches, while the proposed FFR combines in-kind and 
cash match totals and reports them as one figure on Line 10i, ``Total 
Recipient Share Required.'' The comment further asked that the FFR be 
revised to show a break in the recipient's share between in-kind and 
cash matches. Another comment suggested using the term ``mandatory'' 
cost sharing instead of recipient's share, while another comment asked 
that the word ``required'' used in front of ``recipient funds'' and 
``match or cost sharing amount'' be deleted because the match actually 
received may be different than what was committed.
    Response: Since documentation requirements for third-party and in-
kind contributions and cash matches are virtually the same, no purpose 
would be served by differentiating between the two on the FFR. If an 
agency wants to obtain this information, it may do so through progress 
reporting mechanisms. Recipients may not universally understand the 
terms ``mandatory'' and ``committed'' in reference to cost sharing. As 
such, introducing these terms may result in greater confusion than the 
term ``required recipient share,'' which is currently used. The word 
``required'' was not removed from the line item instructions because it 
ensures a correct, mutual understanding between the recipient and the 
agency regarding the precise amount of match required against the funds 
awarded. The match or cost sharing reported may be different from the 
required amount, but the amount required has significance for this 
report because adjustments can be made prior to or during closeout to 
reconcile differences between actual cost sharing amounts and the 
amount required by the Federal agency.
    Comment 53: One comment requested that the phrases--(current period 
only) and (This period)--be removed from Line 10k, ``Recipient Share of 
Unliquidated Obligations.'' The shaded and unshaded cells for each line 
item are sufficient for determining the period of time for which the 
information needs to be reported. As a result, (current period only) 
and (This period) are redundant.
    Response: The two phrases were not on Line 10k of the form but were 
in the instructions for Line 10k. The two phrases have been removed 
from the instructions. The FFR has been modified to collect only 
cumulative totals. The instructions for Line 10k now state: 
``Unliquidated obligations reflect expenses incurred that have not yet 
been paid, as of the reporting period end date. Enter the recipient's 
portion of unliquidated obligations which includes direct and indirect 
expenses incurred but not yet paid or charged to the award, including 
amounts due to subrecipients and subcontractors.''
    Comment 54: One comment stated that the proposed form includes a 
new line item, Line 10m, ``Remaining Recipient Share to be Provided,'' 
that requires the total recipient share less the total recipient share 
disbursed and obligated leaving the remaining recipient share to be 
provided. The comment further indicated that this information is not 
useful because the recipient frequently does not spend the entire grant 
award, so it does not need to provide the entire match shown in the 
grant award.
    Response: Even if the entire amount of the award is not spent, the 
information on Line 10m enables the Federal agency to readily view 
required and actual recipient share activity and make necessary 
adjustments prior to or at time of closeout. The information also 
provides a valuable tool for agencies to assess the sufficiency of the 
recipient's contributions throughout the project or grant period, 
enabling agencies to monitor awards, identify deficiencies, and make 
adjustments, as necessary.
    Comment 55: One comment indicated that the FFR does not address the 
three methods in which program income can be treated. Two comments 
requested a separate line item for identifying program income that is 
used to finance the non-Federal share of the project.
    Response: The FFR and instructions capture the three ways in which 
program income can be treated. Specifically, Line 10o is used for 
program income expended in accordance with the deduction alternative; 
Line 10p is used for program income expended in accordance with the 
addition alternative; and Line 10j may include program income expended 
to meet the recipient's share of the program or project. A separate 
line item for program income used to finance the recipient's share is 
not necessary because the instructions for Line 10j state: ``This 
amount may include the value of allowable in-kind match contributions 
and recipient share of program income used to finance the non-Federal 
share of the project or program.''
    Comment 56: One comment asked whether it would be better to include 
a question or a pair of boxes to be checked on whether the award in 
question requires the use of the deduction or the addition alternative. 
Alternatively, if the award does not include such a provision, indicate 
whether the recipient should be required to choose one or the other. 
The form would then be arranged so that if the deduction alternative 
were indicated, the Federal share of expenditures would be shown in 
total and the amount of program income would be deducted from the total 
to arrive at a net, which the federal government would need to 
reimburse. If the addition alternative were indicated, the recipient 
would then demonstrate the total program income earned, the total spent 
on costs of the program, and the amount not used.
    Response: The FFR was not modified to ask a question or show boxes 
indicating whether the deduction or addition method for program income 
was used because the method used to account for program income should 
be evident by virtue of the line items completed by the recipient. It 
should also be noted that if the award is silent with respect to the 
treatment of program income, the recipient does not have the option of 
choosing the method to be utilized. Instead, it is the agency's 
decision regarding which method is used to account for program income 
and, if applicable, the expenditure of program income. The instructions 
for Lines 10e and 10o have been modified in response to the portion of 
the comment regarding the manner in which program income, utilizing the 
deduction alternative, is reported. The instruction for Line 10e 
states: ``Enter the amount of Federal fund

[[Page 69246]]

expenditures. Expenditures are the sum of actual cash disbursements for 
direct charges for goods and services, the amount of indirect expenses 
charged to the award, and the amount of cash advances and payments made 
to subrecipients and subcontractors, minus program income expended in 
accordance with the deduction alternative, rebates, refunds, or other 
credits.'' Program Income expended in accordance with the deduction 
alternative should be reported separately on Line 10o. The instructions 
for Line 10o state: ``Enter the amount of program income that was used 
to reduce the Federal share of the total project costs.'' No change was 
made regarding the depiction of program income utilizing the addition 
alternative because the current proposal presents the amount expended 
and unexpended without requesting extraneous information.
    Comment 57: Two comments requested that two phrases--(current 
period) and (This Period)--be removed from Line 10p,--``Unexpended 
Program Income,'' because the shaded and unshaded cells for each line 
item are sufficient for determining for what period of time the 
information needs to be reported. As such, (current period) and (This 
Period) are redundant.
    Response: The phrase (This Period) appeared in the instructions for 
Line 10p but not on Line 10p of the form. The phrase (current period) 
appeared on Line 10p of the form. The phrase (current period only) 
appeared in the instructions for Line 10p. These phrases have been 
removed from the instructions of the form. The FFR has been modified to 
collect only cumulative totals. The instructions for Line 10q now 
state: ``Enter the amount of Line 10n minus Line 10o on Line 10p. This 
is the amount of program income that has been earned but not expended, 
as of the reporting period end date.''
    Comment 58: One comment indicated that the instructions should 
include a title line for indirect expense; otherwise, it appears that 
indirect expense falls under program income.
    Response: The FFR section for Indirect Expense has not been 
modified because the separate line number and block formatting of the 
section makes it stand out from the preceding section.
    Comment 59: One comment requested that Box 11a, ``Indirect Expense, 
Type of Rate,'' be amended by changing the term ``Fixed'' to ``Fixed 
with Carry-Forward'' to conform to current practices used by Federal 
agencies. Another comment requested that definitions be provided for 
the types of rate identified in Box 11a (provisional, predetermined, 
final, or fixed).
    Response: The FFR has not been modified because the terminology 
``Fixed'' is currently used in OMB Circulars. Also, the type of 
indirect expense rate should be identified in the negotiated indirect 
cost rate agreement with the Federal agency or identified in the grant 
agreement. Definitions for each type of rate were not added to the FFR 
because at this post-award phase of the award cycle, recipients should 
already be aware of their indirect cost rates and their meanings. If 
recipients need additional information on indirect cost rates, they 
should consult the cognizant agency or OMB cost principles circulars.
    Comment 60: One comment requested that the instructions for Line 
11b, ``Indirect Expense Rate,'' should be revised to state: ``Enter the 
actual approved rate in effect during this reporting period. This rate 
should be contained in the grant agreement or otherwise negotiated.'' 
Two comments requested that guidance be added to the instructions for 
Line 11b advising recipients on how to complete the FFR when multiple 
indirect cost rates apply to the reporting period.
    Response: The FFR instructions have been modified to state ``Enter 
the indirect cost rate in effect during the reporting period. This rate 
should be contained in the grant agreement or agreement negotiated with 
the cognizant federal agency.''
    Comment 61: One comment asked whether the amount reported in Box 
11e, ``Indirect Expense, Federal Share,'' was also included in Line 
10e, ``Federal Share of Expenditures,'' and Line 10f, ``Federal Share 
of Unliquidated Obligations.''
    Response: The FFR instructions have been modified to explain that 
the amount of indirect expense is combined with the Federal share of 
direct expenses and is to be reported on Lines 10e and 10f.
    Comment 62: One comment noted that the language associated with Box 
13, ``Certification,'' does not convey that civil or criminal penalties 
exist for making a knowingly false statement or willful 
misrepresentation in regards to the reported information including cash 
receipts and disbursements, and expenditures and unliquidated 
obligations. Including such a certification would ensure that 
recipients are aware of their responsibilities and provide a stronger 
basis for the Federal government to take legal action if recipients 
knowingly make a false certification or willful misrepresentation. 
Another comment indicated that the instructions should state who 
qualifies as an ``authorized certifying official.'' Still another 
comment asked that the instructions for Box 13e, ``Date Report 
Submitted,'' prescribe the date format to be used (for example, month, 
day, year).
    Response: Determining who qualifies as an ``authorized certifying 
official'' should be made by the recipient, not the Federal agency. In 
general, the ``authorized certifying official'' has the authority to 
commit the recipient to a course of action and agreement, and ensure 
compliance with that action and agreement. The FFR has been modified to 
specify a date format and instructions for Box 13e have been modified 
to state: ``Enter the date the FFR is submitted to the Federal agency 
in the format of month, day, year.''
    Comment 63: One comment requested that Box 2, ``Federal Grant or 
Other Identifying Number Assigned by the Federal Agency,'' also ask for 
the name of the Federal grant. A second comment asked that the legal 
name of the recipient be provided in Box 3, ``Recipient Organization,'' 
while a third comment asked that the agency be identified on the FFR. A 
fourth comment asked that the recipient's fax number be provided on the 
FFR.
    Response: Box 2 is intended for the award number or other 
identifying number that the Federal awarding agency assigns to the 
grant or cooperative agreement. This unique number precludes the need 
to ask recipients to provide additional identifying information, such 
as the name of the grant program. In addition, the recipient's legal 
name and fax number should be obtained in the pre-award phase, if that 
information is pertinent. There is no need to impose an undue burden on 
recipients by requesting this information again during the reporting 
phase.
    Comment 64: One comment requested that the instructions for Box 8, 
``Project/Grant Period,'' and Box 9, ``Period Covered by the Report,'' 
be clarified to indicate that the two reporting periods may not agree 
since awards are sent out late and project activities are often not 
completed by the project or grant period end date. Another comment 
asked that the instructions for Box 9 be revised to state: ``Enter 
beginning and ending dates of the current reporting period * * *.''
    Response: The first comment most likely pertains to the submission 
of final FFRs, in which case the ``Reporting Period End Date'' (Box 9) 
end date should be the same as the ``Project/Grant Period'' (Box 8) end 
date. If project activities are not completed by the project or grant 
period end date, then the recipient should request an

[[Page 69247]]

extension. If the extension is approved, the project or grant period 
end date (Box 8) would be extended and the reporting period end date 
(Box 9) on the final FFR would be the same as the extended project or 
grant period end date. The instructions for Box 9 have been revised to 
state: ``Enter the ending date of the reporting period.''
    Comment 65: One agency stated that the existing financial reporting 
forms are not inherently burdensome, but they often become so because 
of misuse and misinterpretation of their instructions by some Federal 
agencies. One comment indicated that the current SF-269 and SF-272 
function well on their own since the recipients for each report are 
distinct and the combined FFR merely combines the information requested 
on the current forms into one form, which does not decrease the amount 
of time required to submit financial data. Another comment indicated 
that several opportunities for streamlining were missed. They included 
eliminating interim financial status reports and relying on nearly 
identical data submitted quarterly on the Federal Cash Transactions 
Report, reducing the frequency with which agencies may require reports, 
and standardizing reporting requirements like those for outstanding 
obligations and carry forward of unobligated balances. One comment 
asked whether a standardized report comparing budgets to actual 
expenditures will be required or will this function continue to be left 
to individual program officials.
    Response: Four individual financial reports have been combined into 
one FFR with standardized informational reporting requirements. 
Agencies may require recipients to provide all of the information 
included on the FFR, but no agency can require recipients to provide 
additional information, without approval from OMB. The FFR allows for 
flexibility in the frequency of reporting, but it establishes uniform 
reporting period end dates and uniform due dates for the submission of 
interim reports. Furthermore, the FFR Instructions provide 
clarification and standardization with respect to reporting on the cash 
management activity and financial status of single or multiple awards. 
Use of the FFR and its instructions across the government will minimize 
instances of misuse and misinterpretation. Some recipients currently 
complete the SF-269; others complete the SF-272, while others complete 
both forms, depending on agency reporting requirements. These forms 
serve both distinct and overlapping populations. As such, having an FFR 
that encompasses both financial status activity (currently resident on 
the SF-269) and cash management activity (the SF-272) allows agencies 
to preserve reporting flexibilities while serving distinct and 
overlapping populations with one form. Furthermore, completing the FFR 
reduces the number of data elements that are currently required on the 
current SF-269 and SF-272. Interim FFRs were not eliminated because the 
information submitted on those reports depicts information that does 
not appear on the Federal Cash Transaction Report. Many agencies need 
that information during interim timeframes throughout the project or 
grant period to adequately monitor the financial status of their 
awards. The frequency with which agencies may require submission of 
FFRs remains flexible because their needs differ in terms of the 
related risks associated with a particular program or award. The scope 
of the FFR proposal was not designed to address an agency's internal 
policies regarding financial management of grant and cooperative 
agreement funds, nor was it designed to be used as a tool to compare 
budgets to actual expenditures. Instead, the FFR provides a 
standardized format through which recipients report on the cash 
management and financial status of grants and cooperative agreements in 
accordance with each agency's existing internal policies.
    Comment 66: One comment indicated that the proposed change does not 
contain information about OMB's plans to revise Circulars A-102 and A-
110. Those circulars prescribe the use of the current forms that would 
be replaced by the FFR.
    Response: OMB issued the proposed revisions to Circulars A-102 and 
A-110 as a way of initiating changes associated with several 
government-wide grant streamlining initiatives.

III. Paperwork Reduction Act

    Submission for OMB Review; Comment Request.
    Title: Federal Financial Report (FFR).
    OMB No.: New Collection.
    Description: In furtherance of Public Law 106-107, and its goal of 
streamlining the Federal grant process, the Federal Financial Report 
(FFR) will reduce the burden and reporting effort on recipients by 
consolidating four forms into one. The purpose of the FFR is to give 
recipients of grants and cooperative agreements a standard format for 
reporting the financial status of their grants and cooperative 
agreements (hereby referred to collectively as awards).
    Respondents: Federal agencies and their assistance recipients.
    Estimated Total Annual Burden Hours: 2.00.
    Estimated Cost: There is no expected cost to the respondents or to 
OMB.

                                             Annual Burden Estimates
----------------------------------------------------------------------------------------------------------------
                                                                Number of      Average burden
               Instrument                     Number of       responses per       hours per       Total burden
                                             respondents       respondent         response            hours
----------------------------------------------------------------------------------------------------------------
Federal Financial Report (FFR)..........                 1                 1              1.50              1.50
Federal Financial Report (FFR)                           1                 1              0.50              0.50
 Attachment.............................
                                         -----------------------------------------------------------------------
    Total...............................  ................  ................  ................              2.00
----------------------------------------------------------------------------------------------------------------

    Agencies and the public are asked to comment on:
     Whether the collection of information is necessary for the 
proper performance of the functions of the agency, including whether 
the information will have practical utility;
     The accuracy of the agency's estimate of the burden of the 
collection of information;
     Ways to enhance the quality, utility, and clarity of the 
information to be collected;
     Ways to minimize the burden of the collection of 
information on respondents, including through the use of automated 
collection techniques or other forms of information technology; and
     Estimates of capital or start-up costs and costs of 
operation, maintenance, and purchase of services to provide 
information.

[[Page 69248]]

IV. Summary of Actions

    OMB, through this Federal Register publication, is establishing the 
government-wide FFR. The FFR provides a standard format from which 
agencies can determine data elements that recipients must complete to 
report on the cash management and financial status of single or 
multiple awards. Consistent with government-wide grant streamlining 
objectives, the FFR will result in the use of standard reporting period 
end dates and due dates for the submission of cash management and 
financial information.
    This establishment of the government-wide FFR requires amendments 
to OMB Circulars A-110 (2 CFR part 215) and A-102. Those amendments 
will be published under a separate notice. We also recognize that a 
transition period will be necessary to provide agencies and grantees 
with time to adapt their processes to the new form and phase out the 
use of old ones. When the FFR is approved by OMB, the SF-269, SF-269A, 
SF-272 and SF-272A may continue to be accepted by agencies until 
September 30, 2008. Agencies must determine the earliest practical time 
that their recipients will transition to using the FFR on or before 
September 30, 2008.

Danny Werfel,
Acting Controller.

Attachments

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[FR Doc. 07-5941 Filed 12-6-07; 8:45 am]
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