[Federal Register Volume 80, Number 185 (Thursday, September 24, 2015)]
[Rules and Regulations]
[Pages 57509-57512]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-24276]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 80, No. 185 / Thursday, September 24, 2015 /
Rules and Regulations
[[Page 57509]]
DEPARTMENT OF ENERGY
2 CFR Part 910
RIN 1991-AB94
Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards
AGENCY: Department of Energy.
ACTION: Final rule.
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SUMMARY: This rule finalizes the Department of Energy (DOE)'s part of
the Federal Awarding Agency Regulatory Implementation of Office of
Management and Budget's Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards joint interim
rule which was issued December 19, 2014 and makes several technical
corrections to DOE's portion of the interim final rule.
DOE is not making new policy with either the interim final rule or
this final rule. All regulatory language included here is consistent
with either the policies in the Uniform Guidance or DOE's existing
policies and practices.
DATES: Effective: October 26, 2015.
FOR FURTHER INFORMATION CONTACT: Ellen Colligan, Procurement Analyst,
U.S. Department of Energy, Office of Acquisition Management, Contract
and Financial Assistance Policy Division MA-611, Telephone: (202) 287-
1776. Email: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Summary
II. Procedural Requirements
A. Review under Executive Orders 12866 and 13563.
B. Review under Executive Order 12988.
C. Review under the Regulatory Flexibility Act.
D. Review under the Paperwork Reduction Act.
E. Review under the National Environmental Policy Act.
F. Review under Executive Order 13132.
G. Review under the Unfunded Mandates Reform Act of 1995.
H. Review under Executive Order 13211.
I. Review under the Treasury and General Government
Appropriations Act, 2001.
J. Review under the Administrative Procedure Act
K. Congressional Notification
L. Approval by the Office of the Secretary of Energy
I. Summary
The Department makes substantial use of financial assistance awards
(grants and cooperative agreements) to meet its mission goals. To
manage these awards, the Department added requirements specifying
changes and additions to its Administrative Requirements for Grants and
Cooperative Agreements.
On December 19, 2014, OMB published a rulemaking in the Federal
Register finalizing the guidance on Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal
Awards (79 FR 75867). As a part of the same rulemaking, OMB issued the
interim final Federal Awarding Agency Regulatory Implementation of
Office of Management and Budget's Uniform Administrative Requirements,
Cost Principles, and Audit Requirements for Federal Awards which
contained a separate section for each federal awarding agency. DOE's
regulations are contained in 2 CFR part 910 (79 FR 76024).
DOE is finalizing this rule with technical corrections as detailed
below.
DOE received no comments from members of the public in response to
its section of the joint interim final rule. However, DOE has found
areas where technical corrections are necessary. Corrections are
included only where it has come to the attention of DOE that particular
language in the final guidance did not match with DOE's intent and
would result in an erroneous implementation of the guidance. The
technical corrections include:
a. Adding the national interest exception from competition
(consistent with the existing requirement in section 600.6(b)(8)). When
carrying requirements forward from our current regulations, this
section was inadvertently dropped from the regulations. We need this
exception for instances where non-competitive awards are necessary to
meet the national interest of the United States.
b. Clarifying that restricted eligibility needs to be approved one
level above CO. In an attempt to clarify this section of the
regulations when carrying the requirement forward to our new
regulations, the approval level was omitted. We need to add this back
since regulations as written do not require any higher level approval.
c. Adding section 910.127, Legal Authority and Effect which is
consistent with 10 CFR 600.16. There is nothing in the new regulations
to indicate what constitutes a legal award or exactly how the recipient
acknowledges that they have agreed to the terms and conditions of the
award. Therefore, we are carrying forward a section from our current
regulations which clarifies this issue.
d. Clarifying sections 910.501 and 910.507 to update some
references from ``program-specific'' to ``compliance'' audits. The
major difference between program-specific audits and compliance audits
is that program-specific audits require that the auditee prepare a
financial statement and that the auditor perform an audit of the
financial statements. The guidance provided in 2 CFR 910 corresponding
to Compliance Audits by for-profit entities is consistent with prior
DOE guidance. The requirements in 2 CFR 910 do not require an auditee
to prepare financial statements and do not require an auditor to
perform an audit of financial statements. Instead, the guidance in 2
CFR 910 specifies requirements to be met by the auditee and auditor
that ensures the audit complies with Generally Accepted Government
Auditing Standards (GAGAS), Federal statutes and regulations, and the
terms and conditions of Federal award. The effect is that 2 CFR 910
does not ``create new policy or requirements . . .'' in accordance with
OMB implementing guidance (consistent with the existing requirement in
section 600.316). The corrections primarily replace the term ``Program-
Specific'' Audit with the term ``Compliance'' Audit in order to
eliminate potential confusion between the two types of audits.
e. Making a wording change to 910.502 to parallel a technical
correction made by OMB December 19, 2014. Wording change is to say that
``. . . determination of when a Federal award is expended must be based
on
[[Page 57510]]
when the activity related to the Federal award occurs . . .''. The
previous wording said that it should be based on when the activity
related to the Federal award occurs. Making this change clarifies that
there are no other factors to consider when determining when an
expenses are incurred under the Federal award.
II. Procedural Requirements
A. Review Under Executive Orders 12866 and 13563
The regulatory action today has been determined not to be a
``significant regulatory action'' under Executive Order 12866,
``Regulatory Planning and Review,'' 58 FR 51735 (October 4, 1993).
Accordingly, this rule is not subject to review under the Executive
Order by the Office of Information and Regulatory Affairs within the
Office of Management and Budget.
DOE has also reviewed the regulation pursuant to Executive Order
13563, issued on January 18, 2011 (76 FR 3281 (Jan. 21, 2011)).
Executive Order 13563 is supplemental to and explicitly reaffirms the
principles, structures, and definitions governing regulatory review
established in Executive Order 12866. To the extent permitted by law,
agencies are required by Executive Order 13563 to: (1) Propose or adopt
a regulation only upon a reasoned determination that its benefits
justify its costs (recognizing that some benefits and costs are
difficult to quantify); (2) tailor regulations to impose the least
burden on society, consistent with obtaining regulatory objectives,
taking into account, among other things, and to the extent practicable,
the costs of cumulative regulations; (3) select, in choosing among
alternative regulatory approaches, those approaches that maximize net
benefits (including potential economic, environmental, public health
and safety, and other advantages; distributive impacts; and equity);
(4) to the extent feasible, specify performance objectives, rather than
specifying the behavior or manner of compliance that regulated entities
must adopt; and (5) identify and assess available alternatives to
direct regulation, including providing economic incentives to encourage
the desired behavior, such as user fees or marketable permits, or
providing information upon which choices can be made by the public.
DOE emphasizes as well that Executive Order 13563 requires agencies
to use the best available techniques to quantify anticipated present
and future benefits and costs as accurately as possible. In its
guidance, the Office of Information and Regulatory Affairs has
emphasized that such techniques may include identifying changing future
compliance costs that might result from technological innovation or
anticipated behavioral changes. DOE believes that today's NOPR is
consistent with these principles, including the requirement that, to
the extent permitted by law, agencies adopt a regulation only upon a
reasoned determination that its benefits justify its costs and, in
choosing among alternative regulatory approaches, those approaches
maximize net benefits.
B. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on
Executive agencies the general duty to adhere to the following
requirements: (1) Eliminate drafting errors and ambiguity; (2) write
regulations to minimize litigation; and (3) provide a clear legal
standard for affected conduct rather than a general standard and
promote simplification and burden reduction.
With regard to the review required by section 3(a), section 3(b) of
Executive Order 12988 specifically requires that Executive agencies
make every reasonable effort to ensure that the regulation: (1) Clearly
specifies the preemptive effect, if any; (2) clearly specifies any
effect on existing Federal law or regulation; (3) provides a clear
legal standard for affected conduct while promoting simplification and
burden reduction; (4) specifies the retroactive effect, if any; (5)
adequately defines key terms; and (6) addresses other important issues
affecting clarity and general draftsmanship under any guidelines issued
by the Attorney General. Section 3(c) of Executive Order 12988 requires
Executive agencies to review regulations in light of applicable
standards in section 3(a) and section 3(b) to determine whether they
are met or it is unreasonable to meet one or more of them. DOE has
completed the required review and determined that, to the extent
permitted by law; these regulations meet the relevant standards of
Executive Order 12988.
C. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) requires an agency that is
issuing a final rule to provide a final regulatory flexibility analysis
or to certify that the rule will not have a significant economic impact
on a substantial number of small entities. OMB determined that the
common interim final rule implements OMB final guidance issued on
December 26, 2013, and will not have a significant economic impact
beyond the impact of the December 2013 guidance.
D. Review Under the Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Ch. 3506; 5 CFR 1320 Appendix A.1) (PRA), DOE reviewed the interim
final rule and determined that there are no new collections of
information contained therein. DOE's procurement reporting and
recordkeeping burdens have been approved under OMB Control No. 1910-
4100.
E. Review Under the National Environmental Policy Act
DOE has concluded that promulgation of this rule falls into a class
of actions which would not individually or cumulatively have
significant impact on the human environment, as determined by DOE's
regulations (10 CFR part 1021, subpart D) implementing the National
Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et seq.).
F. Review Under Executive Order 13132
OMB determined that the joint interim final rule does not have any
Federalism implications, as required by Executive Order 13132
G. Review Under the Unfunded Mandates Reform Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995 (Unfunded
Mandates Act) (2 U.S.C. 1532) requires that covered agencies prepare a
budgetary impact statement before promulgating a rule that includes any
Federal mandate that may result in the expenditure by State, local, and
tribal governments, in the aggregate, or by the private sector, of $100
million or more in any one year. If a budgetary impact statement is
required, section 205 of the Unfunded Mandates Act also requires
covered agencies to identify and consider a reasonable number of
regulatory alternatives before promulgating a rule. OMB has determined
that this joint interim final rule will not result in expenditures by
State, local, and tribal governments, or by the private sector, of $100
million or more in any one year. Accordingly, the Federal agencies
participating in this joint interim final rule have not prepared a
budgetary impact statement or specifically addressed the regulatory
alternatives considered.
[[Page 57511]]
H. Review Under Executive Order 13211
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'', 66 FR 28355
(May 22, 2001), requires Federal agencies to prepare and submit to the
Office of Information and Regulatory Affairs (OIRA), Office of
Management and Budget, a Statement of Energy Effects for any
significant energy action. A ``significant energy action'' is defined
as any action by an agency that promulgates or is expected to lead to
promulgation of a Final Rule, and that: (1) Is a significant regulatory
action under Executive Order 12866, or any successor order; and (2) is
likely to have a significant adverse effect on the supply,
distribution, or use of energy, or (3) is designated by the
Administrator of OIRA as a significant energy action. For any
significant energy action, the agency must give a detailed statement of
any adverse effects on energy supply, distribution or use should the
proposal be implemented, and of reasonable alternatives to the action
and their expected benefits on energy supply, distribution and use.
Today's rule is not a significant energy action. Accordingly, DOE has
not prepared a Statement of Energy Effects.
I. Review Under the Treasury and General Government Appropriations Act,
2001
The Treasury and General Government Appropriations Act, 2001 (44
U.S.C. 3516, note) provides for agencies to review most disseminations
of information to the public under implementing guidelines established
by each agency pursuant to general guidelines issued by OMB. OMB's
guidelines were published at 67 FR 8452 (February 22, 2002), and DOE's
guidelines were published at 67 FR 62446 (October 7, 2002). DOE has
reviewed today's notice under the OMB and DOE guidelines and has
concluded that it is consistent with applicable policies in those
guidelines.
J. Review Under the Administrative Procedure Act
An agency may find good cause to exempt a rule from the requirement
for a notice of rulemaking and the opportunity for public under the
Administrative Procedure Act (APA) if the requirement is determined to
be unnecessary, impracticable, or contrary to the public interest under
5 U.S.C. 533(b)(3)(B). Today's rule finalizes DOE portion of issued the
interim final Federal Awarding Agency Regulatory Implementation of
Office of Management and Budget's Uniform Administrative Requirements,
Cost Principles, and Audit Requirements for Federal Awards (79 FR
75867; DOE's portion begins at 76024). In addition DOE is publishing as
final certain technical amendments which were omitted from the interim
final rule. These amendments address internal agency practices
concerning how DOE administers and have effect on members of the public
in general or on financial assistance applicants in particular.
Consequently, good cause exists for issuing these amendments as a final
rule as notice and comment is unnecessary.
K. Congressional Notification
As required by 5 U.S.C. 801, DOE will report to Congress on the
promulgation of this rule prior to its effective date. The report will
state that it has been determined that the rule is not a ``major rule''
as defined by 5 U.S.C. 804(2).
L. Approval by the Office of the Secretary of Energy
The Office of the Secretary of Energy has approved issuance of this
rule.
List of Subjects in 2 CFR Part 910
Accounting, Administrative practice and procedure, Grant programs,
Reporting and recordkeeping requirements.
Issued in Washington, DC, on September 17, 2015.
Patrick Ferraro,
Director, Office of Acquisition Management.
Joseph Waddell,
Deputy Associate Administrator, Acquisition and Project, Management,
National Nuclear Security Administration.
Accordingly, the interim rule amending 2 CFR part 910 which was
published at 79 FR 75867 on December 19, 2014, is adopted as a final
rule with the following changes:
PART 910--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS
0
1. The authority citation for part 910 continues to read as follows:
Authority: 42 U.S.C. 7101, et seq.; 31 U.S.C. 6301-6308; 50
U.S.C. 2401 et seq.; 2 CFR part 200.
0
2. Section 910.126 is amended by:
0
a. Removing ``and'' at the end of paragraph (b)(1);
0
b. Removing the punctuation at the end of paragraph (b)(2), and adding
in its place ``; and''; and
0
c. Adding paragraphs (b)(3) and (c)(8).
The additions read as follows:
Sec. 910.126 Competition.
* * * * *
(b) * * *
(3) Approved, prior to award, by an approver at least one level
above the Contracting Officer.
(c) * * *
(8) The responsible program Assistant Secretary, Deputy
Administrator, or other official of equivalent authority has determined
that making the award non-competitively is in the public interest. This
authority cannot not be delegated.
* * * * *
0
3. Section 910.127 is added to read as follows:
Sec. 910.127 Legal authority and effect.
(a) A DOE financial assistance award is valid only if it is in
writing and is signed, either in writing or electronically, by a DOE
Contracting Officer.
(b) Recipients are free to accept or reject the award. A request to
draw down DOE funds constitutes the Recipient's acceptance of the terms
and conditions of this Award.
0
4. Section 910.501 is amended by revising paragraphs (b)(1) and (2) to
read as follows:
Sec. 910.501 Audit requirements.
* * * * *
(b) Compliance audit. (1) If a for-profit entity has one or more
DOE awards with expenditures of $750,000 or more during the for-profit
entity's fiscal year, they must have a compliance audit for each of the
awards with $750,000 or more in expenditures. A compliance audit should
comply with the applicable provisions in Sec. 910.514--Scope of Audit.
The remaining awards do not require, individually or in the aggregate,
a compliance audit.
(2) If a for-profit entity receives more than one award from DOE
with a sum total of expenditures of $750,000 or more during the for-
profit entity's fiscal year, but does not have any single award with
expenditures of $750,000 or more; the entity must determine whether any
or all of the awards have common compliance requirements (i.e., are
considered a cluster of awards) and determine the total expenditures of
the awards with common compliance requirements. A compliance audit is
required for the largest cluster of awards (if multiple clusters of
awards exist) or the largest award not in a cluster of awards,
whichever corresponding expenditure total is greater. A compliance
audit should comply with the applicable provisions in Sec. 910.514--
Scope of Audit. The remaining awards
[[Page 57512]]
do not require, individually or in the aggregate, a compliance audit;
* * * * *
0
5. Section 910.507 is amended by:
0
a. Revising the section heading;
0
b. Removing the second occurrence of ``program-specific audit'' in the
last sentence in paragraph (a) introductory text and adding in its
place ``compliance audit'';
0
c. Removing ``Program-specific audits'' in the second sentence in
paragraph (b) introductory text and adding in its place ``Compliance
audits''.
The revision reads as follows:
Sec. 910.507 Compliance audits.
* * * * *
0
6. In Sec. 910.502 introductory text, revise the subject heading and
the first sentence to read as follows:
Sec. 910.502 Basis for determining DOE awards expended.
Determining Federal awards expended. The determination of when a
Federal award is expended must be based on when the activity related to
the DOE award occurs. * * *
* * * * *
[FR Doc. 2015-24276 Filed 9-23-15; 8:45 am]
BILLING CODE 6450-01-P