17.A
4440 Federal Register / Vol. 87, No. 18 / Thursday, January 27, 2022 / Rules and Regulations 390 See, e.g., Gabriel Chodorow-Reich et al., Does
state Fiscal Relief During Recessions Increase
Employment? Evidence from the American
Recovery and Reinvestment Act, 4 American
Economic Journal 118–145 (2012) http://dx.doi.org/
10.1257/pol.4.3.118.
391 See, e.g., Fitzpatrick, supra note 278.
understand the requirements and
parameters of the program as set forth in
the statute and deploy funds in a
manner that best reflects Congress’
mandate for targeted fiscal relief. This
final rule governs the use of $350 billion
in grant funds from the federal
government to states, territories, Tribal
governments, and localities, generating
a significant macroeconomic effect on
the U.S. economy. Treasury has sought
to implement the program in ways that
maximize its potential benefits while
minimizing its costs. It has done so by:
aiming to target relief in key areas
according to the congressional mandate;
offering clarity to states, territories,
Tribal governments, and localities while
maintaining their flexibility to respond
to local needs; and limiting
administrative burdens.
Analysis of Benefits
Relative to a pre-statutory baseline,
the SLFRF funds provide a combined
$350 billion to state, local, and Tribal
governments for fiscal relief and support
for costs incurred responding to the
COVID–19 pandemic. Treasury believes
that this transfer will generate
substantial additional economic
activity, although given the flexibility
accorded to recipients in the use of
funds, it is not possible to precisely
estimate the extent to which this will
occur and the timing with which it will
occur. Economic research has
demonstrated that state fiscal relief is an
efficient and effective way to mitigate
declines in jobs and output during an
economic downturn.
390 Absent such
fiscal relief, fiscal austerity among state,
local, and Tribal governments could
exert a prolonged drag on the overall
economic recovery, as occurred
following the 2007–2009 recession.
391
This final rule provides benefits
across several areas by implementing
the four eligible use categories, as
defined in statute: strengthening the
response to the COVID–19 public health
emergency and its negative economic
impacts; replacing lost revenue to ease
fiscal pressure on state, local, and Tribal
governments that might otherwise lead
to harmful cutbacks in employment or
government services; providing
premium pay to essential workers; and
making necessary investments in water,
sewer, and broadband infrastructure.
These benefits are achieved in the
final rule through a broadly flexible
approach that sets clear guidelines on
eligible uses of SLFRF funds and
provides state, local, and Tribal
government officials discretion within
those eligible uses to direct SLFRF
funds to areas of greatest need within
their jurisdiction. While preserving
recipients’ overall flexibility, the final
rule includes several provisions that
implement statutory requirements and
will help support use of SLFRF funds to
achieve the intended benefits.
Preserving flexibility for recipients not
only serves an important public policy
goal by allowing them to meet
particularized and diverse needs of their
local communities but also enhances the
economic benefits of the final rule by
allowing recipients to choose eligible
uses of funds that provide the highest
utility in their jurisdictions.
In implementing the ARPA, Treasury
has also prioritized supporting
underserved communities that have
been disproportionately impacted by the
pandemic. The SLFRF program as
implemented by the final rule provides
even greater flexibility to recipients for
uses of funds in underserved
communities, recognizing that pre-
existing health and economic disparities
in these communities amplified the
impact of the pandemic there. In
general, investments in improving
health outcomes and economic
opportunities provide high economic
returns, so this approach is likely to
achieve substantial near-term economic
and public health benefits, in addition
to the longer-term benefits arising from
the allowable investments in water,
sewer, and broadband infrastructure.
The remainder of this section clarifies
how Treasury’s approach to key
provisions in the final rule will
contribute to greater realization of
benefits from the program.
Public Health and Negative Economic
Impacts
The eligible use category for
responding to the public health and
negative economic impacts of the
pandemic covers a wide range of
eligible uses of funds. Treasury
addresses several key uses of funds in
this analysis, as well as ways that
Treasury has structured this eligible use
to minimize recipient administrative
burden while also maintaining targeting
of the funding to entities that
experienced negative impacts from the
pandemic.
Government Employment: In order to
bolster the government’s ability to
effectively administer services, the final
rule allows for a broader set of eligible
uses to restore and support public sector
employment relative to the interim final
rule. In particular, eligible uses include
hiring up to a pre-pandemic baseline
that is adjusted for historic
underinvestment in the public sector by
allowing funds to be used to pay for
payroll and covered benefits associated
with the recipient increasing its number
of employees up to 7.5 percent above its
pre-pandemic baseline. Eligible uses
also include providing additional funds
for employees who experienced pay
cuts or were furloughed, avoiding
layoffs, providing worker retention
incentives, and paying for ancillary
administrative costs related to hiring.
Treasury believes this expanded
approach, relative to the interim final
rule, provides useful flexibility to
recipients, which may increase a state or
local government’s ability to effectively
deliver services to its residents. While
the interim final rule already explicitly
permitted using funds to restore
recipients’ workforces up to pre-
pandemic levels, the final rule’s
inclusion of an upward adjustment
factor recognizes that, as the population
or economy of a jurisdiction grows over
time, more workers are generally needed
to effectively meet responsibilities. It
also provides recipients greater room to
employ funds toward building back the
public sector workforce after years of
chronic underinvestment since the
Great Recession. Treasury arrived at the
7.5 percent adjustment factor through an
analysis of data from the Bureau of
Labor Statistics on state and local
government employment and data from
the Census Bureau on population to
estimate the extent of underinvestment
in the public sector since the onset of
the Great Recession. While Treasury
considered a range of methodologies
and point estimates to set the
adjustment factor, a 7.5 percent factor
errs on the side of recipient flexibility.
Treasury believes this adjustment
enhances recipients’ ability to identify
and meet the particularized needs of
their communities. Treasury also
believes that the additional enumerated
eligible uses for supporting the
workforce provide recipients several
means to help retain current workers,
decreasing turnover costs.
Identifying Eligible Populations
Treasury has provided several
methods for recipients to identify
households, populations, and
communities eligible for services that
respond to the public health and
negative economic impacts of the
pandemic. In general, these methods
seek to provide recipients options to
identify eligible populations with
minimal administrative burden, while
also maintaining targeting of the funds
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4441 Federal Register / Vol. 87, No. 18 / Thursday, January 27, 2022 / Rules and Regulations 392 See U.S. Bureau of Labor Statistics,
Occupational Employment and Wage Estimates,
https://www.bls.gov/oes/current/oes_nat.htm (last
visited November 9, 2021).
to entities impacted by the pandemic.
Recipients also retain flexibility to
identify and serve other populations
and entities that experienced pandemic
impacts, ensuring that recipients can
meet the particularized needs of their
local communities.
Defining Low and Moderate Income:
To streamline the provision of funds
relating to negative economic impacts
resulting from the pandemic, Treasury
has created an eligibility standard
making it easier for recipients to provide
assistance to low- and moderate-income
populations without needing to identify
and document a specific negative
economic impact. Populations falling
under the definition of low income are
presumed to have been
disproportionately impacted by the
pandemic, while those falling under the
definition of moderate income are
presumed to have been impacted by the
pandemic. In addition, the final rule
recognizes categorical eligibility for
certain enumerated programs and
populations if a recipient chooses to
implement categorical eligibility when
identifying impacted and
disproportionately impacted
populations. Treasury considered
several options for eligibility standards
that would reduce administrative
burdens for recipients when
determining who qualifies as low and
moderate income.
One option involved defining a
household as low income or moderate
income based only on FPG thresholds
and could use levels lower than those
selected. This option involved setting
uniform thresholds throughout the
country.
A second option took a broader
approach, defining a household as low
income if it has (i) income at or below
185 percent of the FPG for the size of
its household or (ii) income at or below
40 percent of the AMI for its county and
size of household. The option defined a
household as moderate income if it has
(i) income at or below 300 percent of the
FPG for the size of its household or (ii)
income at or below 65 percent of the
AMI for its county and size of
household. The combination of an FPG
floor with AMI allows for a regional
adjustment in areas with substantially
higher costs and incomes. Finally,
Treasury also considered a range of FPG
and AMI thresholds above and below
these levels.
Treasury chose the second option.
Treasury believes that the higher FPG
floor will ease administrative burdens
by making more households
presumptively eligible for funds meant
to address negative economic impacts in
a targeted manner. With respect to the
low-income cutoff, 185 percent of the
FPG for a family of four is $49,025,
which is approximately the wage
earnings for a two-earner household
where both earners receive the median
wage in occupations, such as waiters
and waitresses and hotel clerks, that
were heavily impacted by COVID–19.
As such, this cutoff is likely to include
more workers in industries heavily
impacted by COVID–19, who may be
most likely to face disproportionate
impacts of the pandemic, than a lower
threshold.
392 With respect to the
moderate-income cutoff, many
households with incomes between 200
percent and 300 percent of the FPG
struggle with a lack of economic
security, suggesting that 300 percent of
the FPG was an appropriate cutoff for
moderate income.
Treasury also considered relatively
higher thresholds for both an FPG and
AMI approach; however, increasing
income thresholds for presumed
eligibility increases the likelihood that
higher-income workers, who generally
experienced fewer economic impacts
from the pandemic, would become
presumed eligible for responsive
services. Providing services to
households that did not experience a
negative economic impact, or
experienced a relatively minimal
impact, would provide much less
benefit than serving households that
experienced more severe impacts,
diluting the benefits of the SLFRF
funds.
In all, Treasury anticipates that these
selected thresholds, combined with the
regional adjustment, will allow
resources to be targeted toward
individuals and households with the
greatest need while also reducing
administrative burdens on recipients.
Disproportionately Impacted
Populations: In the interim final rule,
Treasury enumerated a broader set of
eligible uses for disproportionately
impacted communities, in recognition
of the pre-existing health, economic,
and social disparities that contributed to
disproportionate pandemic impacts in
certain communities and that
addressing root causes of those
disparities constitutes responding to the
public health and negative economic
impacts of the pandemic. To identify
these communities and reduce
administrative burden, Treasury
allowed recipients to presume that
certain populations—those in QCTs and
those being served by Tribal
governments—were disproportionately
impacted. In the final rule, to further
decrease administrative burden and
enhance recipient flexibility, Treasury is
allowing recipients to also presume that
low-income households were
disproportionately impacted. Treasury
anticipates that adding low-income
households as a presumed eligible
population will maintain targeting of
funds to populations and communities
most likely to have experienced severe
pandemic impacts, while providing a
more flexible approach for recipients.
Identifying Impacted Classes: In the
final rule, Treasury reiterated its stance
in the interim final rule allowing
recipients to designate a class of
households or other entities as impacted
or disproportionately impacted and
provide responsive services. After
designating a class, recipients can serve
a household or entity by simply
identifying that the household or entity
is a member of the class. Relative to
restricting services to only presumed
eligible populations identified by
Treasury, this decision provides vital
administrative flexibility for recipients
that may identify particular impacted
classes in the context of their
jurisdiction. Treasury anticipates that
SLFRF funds will be targeted to
impacted or disproportionately
impacted communities, as recipients
must demonstrate that the designated
class experienced negative economic
impacts or meaningfully more severe
negative economic impacts. This
approach maintains the requirement
that entities served have to have
experienced a negative economic
impact, while simultaneously
minimizing any administrative costs
associated with meeting this
requirement.
Additional Enumerated Uses
The interim final rule enumerated
eligible uses of SLFRF funds to serve
both impacted and disproportionately
impacted communities. For example,
enumerated eligible uses to serve
impacted communities included food
assistance; rent, mortgage, or utility
assistance; and counselling and legal aid
to prevent eviction or homelessness.
Examples of enumerated eligible uses to
serve disproportionately impacted
communities included remediation of
lead paint or other lead hazards and
housing vouchers and assistance
relocating to neighborhoods with higher
levels of economic opportunity. In the
final rule, Treasury had the option to
retain, expand, or reduce enumerated
eligible uses, or shift use eligibility
between disproportionately impacted
and impacted communities. Many
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4442 Federal Register / Vol. 87, No. 18 / Thursday, January 27, 2022 / Rules and Regulations public comments suggested potential
expansions of uses, including shifting
enumerated eligible uses for
disproportionately impacted
communities to serve a broader
population of impacted communities.
Taking these comments into account,
Treasury generally took this approach,
in anticipation that the benefits of the
program will increase while recipient
administrative costs in identifying and
justifying non-enumerated uses of funds
will decrease.
Specifically, Treasury added
enumerated eligible uses for impacted
populations including paid sick,
medical, or family leave; health
insurance subsidies; and services for the
unbanked and underbanked, on the
basis that impacts of the pandemic that
were broadly experienced by many
communities would be addressed by
these uses. Treasury also shifted some
eligible uses, formerly restricted only to
disproportionately impacted
communities, to impacted communities.
These uses included community
violence intervention, assistance
accessing or applying to public benefits
and services, affordable housing
development, and services to promote
healthy childhood environments like
childcare and early learning. These uses
were shifted on the basis that the
associated impacts of the pandemic
were experienced by a broader
population, and responses are,
accordingly, eligible to benefit a broader
population.
Additionally, the final rule clarified
that investments in parks and other
public outdoor recreation spaces are
enumerated eligible uses for
disproportionately impacted
communities. In including these uses,
Treasury took into account evidence on
the social determinants of health, or the
ways that social context, like the
neighborhood built environment,
impacts health outcomes. By taking a
more holistic approach to public health,
the final rule allows recipients to
respond more broadly to factors that
contributed to the pandemic’s health
impacts and more fully mitigate those
health impacts.
To balance administrative flexibility
with a maintenance of focus on impacts
of the pandemic, Treasury considered,
but did not include, other proposed
enumerated uses that did not respond to
the impacts of the pandemic or
responded to impacts that were not
experienced generally across the
country by many jurisdictions and
populations. For example, Treasury did
not include pollution remediation
broadly, a proposed enumerated eligible
use for disproportionately impacted
communities, on the basis that
associated projects would only respond
to disproportionate impacts of the
pandemic depending on the specific
issue addressed. In sum, Treasury
expanded enumerated eligible uses
while retaining a focus on broadly
experienced impacts of the pandemic.
Treasury anticipates that this will give
recipients further flexibility to presume
eligibility and respond to pandemic
impacts without increasing
administrative burden.
Capital Expenditures: In the interim
final rule, Treasury permitted funds to
be used for a limited number of capital
expenditures mostly related to the
COVID–19 public health response. This
decision granted recipients some
discretion to use SLFRF funds to
address COVID–19 prevention and
mitigation through certain investments
in equipment, real property, and
facilities, which Treasury recognized as
critical components of the public health
response. In the final rule, Treasury
considered maintaining the provisions
in the interim final rule or expanding
allowable capital expenditures to
provide recipients greater flexibility to
pursue other capital investments that
are responsive to the public health
emergency and its negative economic
impacts. While expanding allowable
capital expenditures may increase the
risk that recipients will undertake large
expenditures that do not sufficiently
address intended harms, or address
harms in a less cost-efficient manner
than an alternative investment (e.g., a
program or service), expanding
allowable capital expenditures would
likely help fill critical gaps in
recipients’ response to the pandemic
and provide equipment and facilities
that generate benefits beyond SLFRF’s
period of performance. To preserve
flexibility while mitigating risks, the
final rule allows recipients to undertake
an expanded set of capital expenditures
while requiring additional written
justifications for projects with an
expected total cost at or over $1 million.
Treasury believes this approach
balances the implementation of
appropriate risk-based compliance
requirements and the provision of
administrative convenience for smaller
capital expenditures, while generally
allowing recipients the flexibility to
undertake a greater variety of responsive
capital expenditures.
Revenue Loss
Revenue Loss Formula: In this final
rule, Treasury’s approach to revenue
loss allows recipients to compute the
extent of reduction in revenue by
comparing actual revenue to a
counterfactual trend representing what
could have plausibly been expected to
occur in the absence of the pandemic.
The counterfactual trend begins with
the last full fiscal year prior to the
public health emergency (as required by
statute) and projects forward with an
annualized growth adjustment. Treasury
has made several adjustments in the
final rule to decrease administrative
burden, reducing costs for recipients,
while still accurately capturing
reductions in revenue due to the
pandemic.
Under the interim final rule, Treasury
specified that recipients calculate
revenue loss on a calendar year basis. In
this final rule, Treasury is providing
recipients the option to calculate
revenue loss on a calendar year or fiscal
year basis, which will allow recipients
the administrative flexibility to
minimize administrative burdens based
on the data available to them.
Treasury’s decision to incorporate a
growth adjustment into the calculation
of revenue loss ensures that the formula
more fully captures revenue shortfalls
relative to recipients’ pre-pandemic
expectations. Recipients will have the
opportunity to calculate revenue loss at
several points throughout the program,
recognizing that some recipients may
experience revenue effects with a lag.
This option to re-calculate revenue loss
on an ongoing basis is intended to result
in more support for recipients to avoid
harmful cutbacks in future years. In
calculating revenue loss, recipients will
look at general revenue in the aggregate,
rather than on a source-by-source basis,
given that recipients may have
experienced offsetting changes in
revenues across sources. The final rule
also provides for removing the impact of
tax increasing or decreasing changes,
which affect the amount of revenue
collected but are not ‘‘due to’’ the
pandemic, from the calculation of
revenue loss due to the public health
emergency. Both of these components of
Treasury’s approach provide a more
accurate representation of the effect of
the pandemic on overall revenues.
Revenue Loss Standard Allowance: In
addition to largely preserving the
formula to calculate revenue loss from
the interim final rule, Treasury also
added an alternative ‘‘standard
allowance’’ option for the revenue loss
calculation to this final rule. Treasury’s
decision to elect to allow a fixed amount
of loss that can be used to fund
‘‘government services’’ allows recipients
the flexibility to use minimal
administrative capacity on the
calculation if desired. The decision also
benefits recipients by allowing them to
avoid expending administrative
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4443 Federal Register / Vol. 87, No. 18 / Thursday, January 27, 2022 / Rules and Regulations 393 Further, the final rule encourages, but does not
require, that recipients pursue broadband
infrastructure projects in locations not currently
served by a wireline connection that reliably
delivers at least 100 Mbps of download speed and
20 Mbps of upload speed.
394 Data from the Federal Communications
Commission shows that as of June 2020, 9.07
percent of the U.S. population had no available
cable or fiber broadband providers providing greater
than 25 Mbps download speeds and 3 Mbps upload
speeds. Federal Communications Commission,
Fixed Broadband Deployment, https://
broadbandmap.fcc.gov/#/ (last visited May 9, 2021).
395 See Federal Communications Commission,
Broadband Speed Guide, available at https://
www.fcc.gov/consumers/guides/broadband-speed-
guide (last visited October 28, 2021).
resources to determine how unique
variations in revenue interact with the
revenue loss formula.
Premium Pay
Per the ARPA statute, recipients have
broad latitude to designate critical
infrastructure sectors and make grants to
third-party employers for the purpose of
providing premium pay. While the final
rule provides significant flexibility to
implement the statutory requirement
that premium pay respond to essential
workers, it requires recipients give
written justification in the case that
premium pay would increase a worker’s
annual pay above a certain threshold or
is awarded to an individual whose
annual pay is already above that
threshold. To set this threshold,
Treasury analyzed data from the Bureau
of Labor Statistics to determine a level
that would not require further
justification for premium pay to the vast
majority of essential workers, while
requiring higher scrutiny for provision
of premium pay to higher earners who,
even without premium pay, would
likely have greater personal financial
resources to cope with the effects of the
pandemic. Alternatively, a recipient
need not submit written justification to
Treasury if the worker receiving
premium pay is eligible for overtime
under the FLSA. Treasury believes this
alternative, which is an addition to the
final rule, will give recipients more
flexibility and will simplify application
of the final rule as employers, public
and private, are already legally required
to determine whether an employee is
eligible for overtime pay under the
FLSA. Treasury believes the threshold
and overtime eligibility provision in the
final rule strike the appropriate balance
between preserving flexibility and
helping encourage use of these
resources to help those in greatest need.
The final rule also requires that workers
eligible for premium pay have regular
in-person interactions or regular
physical handling of items that were
also handled by others. This
requirement will help encourage use of
financial resources for those who have
endured the heightened risk of
performing essential work.
Water and Sewer Infrastructure
In the interim final rule, Treasury
aligned eligible uses of funds for water
and sewer infrastructure to those
projects eligible to receive financial
assistance through the DWSRF and
CWSRF administered by the EPA.
The benefits of this approach
included giving recipients an existing
list that would provide them clarity as
well as flexibility in identifying eligible
projects, particularly given the broad
range of projects eligible under the
CWSRF and DWSRF. The approach also
ensured that projects would conform to
vetted project types from a widely used
program. Treasury received comments
from recipients requesting additional
project categories to be considered
eligible, indicating a potential cost to
maintaining alignment with the CWSRF
and DWSRF.
For the final rule, Treasury has
expanded eligibility to include several
additional project types beyond those
covered by the CWSRF and DWSRF.
Treasury believes that expanded
eligibility will benefit recipients by
allowing them additional flexibility to
pursue beneficial projects, including
project categories that support the
provision of drinking water and the
removal, management, and treatment of
wastewater and stormwater: Additional
stormwater management projects,
private well infrastructure, additional
projects that address lead in water, and
certain dam and reservoir rehabilitation
projects undertaken to address the
provision of drinking water. A potential
cost of this approach is that uses beyond
the CSWRF and DWSRF may have less
public guidance available to understand
project eligibilities. However, Treasury
anticipates that this eligibility
expansion will provide a net benefit to
recipients by allowing them to pursue
projects relevant to their goals that were
ineligible under the interim final rule.
The expansion to allow private well
infrastructure may also affect the
distributional impact of SLFRF. Private
wells disproportionately serve rural
Americans, including low-income
households, and expanding eligibility to
include this use may allow SLFRF funds
to benefit such households. While
distributional impacts are uncertain,
Treasury believes that the potential for
benefits to accrue to rural and low-
income households makes it important
to clarify that these types of projects are
eligible.
Broadband Infrastructure
In the final rule, Treasury expands
eligible areas for broadband investment
by requiring that recipients invest in
projects designed to provide service to
households and businesses with an
identified need for additional
broadband investment, including
increasing access to high-speed
broadband, increasing the affordability
of broadband services, and improving
the reliability of broadband service.
393
Treasury considered multiple
alternatives when selecting this
standard. The threshold for the interim
final rule allowed benefits to accrue in
a more targeted manner to the
approximately 9 percent of the country
with access to speeds under the 25/3
Mbps threshold.
394 However, since
SLFRF funds are distributed to tens of
thousands of governments across the
country with a variety of broadband
needs, Treasury believes that allowing
recipients greater flexibility to
determine locations to serve in their
jurisdictions—including considering
affordability and competition barriers—
will lead to greater long-term public
benefit. Further, given that many federal
broadband grant programs are focused
solely on unserved and underserved
areas, Treasury believes that the final
rule’s flexibility enables these funds to
fill an important role in the overall
federal broadband landscape.
In the final rule, Treasury also
requires that broadband projects must
meet a standard of reliably delivering at
least 100 Mbps download speeds and
upload speeds, or in cases where it is
not practicable to do so, reliably
delivering at least 100 Mbps download
speed and between at least 20 Mbps and
100 Mbps upload speed while being
scalable to 100 Mbps upload and
download speeds. Treasury expects that
this threshold will yield long-term
benefits and allow networks to meet
both pandemic-related and future needs.
The Federal Communications
Commission (FCC) estimates that
currently a household with two to three
remote learners using the internet
simultaneously needs a connection
supporting 100 Mbps download
speeds.
395 While a lower threshold may
have resulted in lower near-term costs
to build, it would have potentially
constrained future utility from the
infrastructure by producing
infrastructure that would more
quickly—potentially in the near-term—
become obsolete and no longer meet
household needs, potentially requiring
sooner replacement and generally
decreasing the return on investment. As
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4444 Federal Register / Vol. 87, No. 18 / Thursday, January 27, 2022 / Rules and Regulations such, projects meeting a lower threshold
could not be considered ‘‘necessary’’
investments in broadband
infrastructure, so Treasury has retained
the threshold from the interim final
rule.
Further, the final rule adds a
requirement that recipients address the
affordability needs of low-income
consumers in accessing broadband
networks funded by SLFRF, either by
requiring service providers that provide
service to households to either
participate in the FCC’s Affordable
Connectivity Program (ACP), or a broad-
based affordability program with
commensurate benefits. Treasury
believes that this requirement will
increase the number of customers that
are able to take advantage of broadband
infrastructure funded by SLFRF,
increasing the effectiveness of funds in
connecting households and businesses
to high-speed internet that is critical to
work, health, and education. There is a
potential that this requirement may
marginally increase project costs for
recipients and providers, but this
impact is uncertain, given the varying
business models and pricing structures
of broadband projects and providers.
Labor Standards
In this Supplementary Information for
the final rule, Treasury encourages
recipients to ensure that capital
expenditures to respond to the public
health and negative economic impacts
of the pandemic and water, sewer, and
broadband projects use strong labor
standards, including, for example,
project labor agreements and
community benefits agreements that
offer wages at or above the prevailing
rate and include local hire provisions.
Treasury believes that its
encouragement of labor standards
carries benefits because it will ensure
that workers have access to strong
employment opportunities associated
with infrastructure projects, which will
in turn aid the economic recovery.
Treasury believes that infrastructure
projects may also benefit from stronger
labor standards due to the potential of
these standards to ensure a stronger
skilled labor supply and minimize labor
disputes and workplace injuries, which
can result in costly disruptions to
projects. Treasury assesses that these
benefits will increase the economy and
efficiency of infrastructure projects
undertaken through SLFRF and will
outweigh the potential for a marginal
increase in labor costs.
Splitting Payments to Recipients
Treasury is required by statute to
deliver funds to local governments in
two payments separated by at least
twelve months, and the interim final
rule provided for split payments to a
majority of states as well. As discussed
above, splitting payments ensures that
recipients can adapt spending plans to
evolving economic conditions and that
at least some of the economic benefits
will be realized in 2022 or later.
However, consistent with authorities
granted to Treasury in the statute,
Treasury recognizes that a subset of
states with significant remaining
elevation in the unemployment rate
could face heightened additional near
term needs to aid unemployed workers
and stimulate the recovery. Therefore,
for a subset of state governments,
Treasury has provided funds in one
payment. Treasury believes that this
approach strikes an appropriate balance
between the general reasons to provide
funds in two payments and the
heightened additional near-term needs
in specific states. As discussed above,
Treasury set a threshold based on
historical analysis of unemployment
rates in recessions.
Reaching Underserved Communities
Finally, the final rule aims to promote
and streamline the provision of
assistance to individuals and
communities in greatest need,
particularly communities that have been
historically underserved and have
experienced disproportionate impacts of
the COVID–19 crisis. Targeting relief is
in line with Executive Order 13985,
‘‘Advancing Racial Equity and Support
for Underserved Communities Through
the Federal Government,’’ which laid
out an Administration-wide priority to
support ‘‘equity for all, including people
of color and others who have been
historically underserved, marginalized,
and adversely affected by persistent
poverty and inequality.’’ To this end,
the final rule enumerates a list of
services that may be provided using
SLFRF funds in disproportionately
impacted communities, including low-
income areas, to address the more
severe impacts of the pandemic in these
communities; establishes the
characteristics of essential workers
eligible for premium pay and
encouragement to serve workers based
on financial need; provides that
recipients may use SLFRF funds to
restore state and local workforces,
where women and people of color are
disproportionately represented; and
requires that broadband infrastructure
projects participate in programs to
support affordability of broadband
service. Collectively, these provisions
will promote use of resources to
facilitate the provision of assistance to
individuals and communities with the
greatest need.
Analysis of Costs
This regulatory action will generate
administrative costs relative to a pre-
statutory baseline. This includes,
chiefly, costs required to administer
SLFRF funds, oversee subrecipients and
beneficiaries, and file periodic reports
with Treasury. It also requires states to
allocate SLFRF funds to nonentitlement
units, which are smaller units of local
government that are statutorily required
to receive their funds through states.
Treasury expects that the administrative
burden associated with this program
will be moderate for a grant program of
its size. Treasury expects that many
recipients receive direct or indirect
funding from federal government
programs and that many have
familiarity with how to administer and
report on federal funds or grant funding
provided by other entities. In particular,
states, territories, and large localities
will have received funds from the
Coronavirus Relief Fund (CRF) and
Treasury expects them to rely heavily
on established processes developed
through that program or other prior
grant funding, mitigating burden on
these governments. Treasury has
enhanced the level of recipient
reporting as compared to the CRF,
incorporating feedback from the
Government Accountability Office and
others that additions would improve the
oversight of recipients’ use of funds. To
balance the oversight benefits with the
costs of added reporting burdens,
Treasury has incorporated other
mechanisms to mitigate burden. For
example, Treasury is ‘‘tiering’’ reporting
requirements so that recipients that
receive relatively lesser amounts of
SLFRF funds are required to submit less
frequent reports than recipients
receiving greater amounts of funds.
Treasury is noting administrative costs
as a generally allowable use of SLFRF
funds, which defrays administrative
expenses to recipients that may be
needed to comply with reporting
requirements. Treasury has also
provided options for recipients to use
eligibility thresholds they are already
familiar with during administration of
SLFRF funds, which will enable
recipients to avoid the costs of setting
up new programs and reporting
mechanisms to meet reporting and
compliance requirements. For example,
Treasury has permitted recipients to use
‘‘categorical eligibility’’ when delivering
assistance to particular groups, such as
impacted or disproportionately
impacted households.
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17.A
4445 Federal Register / Vol. 87, No. 18 / Thursday, January 27, 2022 / Rules and Regulations 396 See Coronavirus State and Local Fiscal
Recovery Funds, Frequently Asked Questions, 10.2,
as of July 19, 2021; https://home.treasury.gov/
system/files/136/SLFRPFAQ.pdf.
In making implementation choices,
Treasury has hosted numerous
consultations with a diverse range of
direct recipients—states, cities,
counties, and Tribal governments—
along with various communities across
the United States, including those that
are underserved. Furthermore, Treasury
has made clear in guidance that SLFRF
funds may be used to cover certain
expenses related to administering
programs established using SLFRF
funds.
396
Executive Order 13132
Executive Order 13132 (entitled
Federalism) prohibits an agency from
publishing any rule that has federalism
implications if the rule either imposes
substantial, direct compliance costs on
state, local, and Tribal governments, and
is not required by statute, or preempts
state law, unless the agency meets the
consultation and funding requirements
of section 6 of the Executive Order. This
final rule does not have federalism
implications within the meaning of the
Executive Order and does not impose
substantial, direct compliance costs on
state, local, and Tribal governments or
preempt state law within the meaning of
the Executive Order. The compliance
costs are imposed on state, local, and
Tribal governments by sections 602 and
603 of the Social Security Act, as
enacted by the ARPA. Notwithstanding
the above, Treasury has engaged in
efforts to consult and work
cooperatively with affected state, local,
and Tribal government officials and
associations in the process of
developing the interim final rule and
this final rule. Pursuant to the
requirements set forth in section 8(a) of
Executive Order 13132, Treasury
certifies that it has complied with the
requirements of Executive Order 13132.
Administrative Procedure Act
The Administrative Procedure Act
(APA), 5 U.S.C. 551 et seq., generally
requires public notice and an
opportunity for comment before a rule
becomes effective. However, the APA
provides that the requirements of 5
U.S.C. 553 do not apply ‘‘to the extent
that there is involved . . . a matter
relating to agency . . . grants.’’ The
APA also provides an exception to
ordinary notice-and-comment
procedures ‘‘when the agency for good
cause finds (and incorporates the
finding and a brief statement of reasons
therefor in the rules issued) that notice
and public procedure thereon are
impracticable, unnecessary, or contrary
to the public interest.’’ 5 U.S.C.
553(b)(B). The interim final rule was
issued without prior notice and
comment procedures because it
implemented statutory conditions on
the eligible uses of SLFRF funds, and
addressed the payment of those funds,
the reporting on uses of funds, and
potential consequences of ineligible
uses to help address the economic and
public health emergency. See the
SUPPLEMENTARY INFORMATION section of
the May 17, 2021 interim final rule for
the applicability of the requirements of
5 U.S.C. 553. In addition, under the
exception discussed in that section for
matters relating to agency grants, the
requirements of 5 U.S.C. 553 also do not
apply to this final rule. After careful
consideration of the comments received,
this final rule adopts the May 17, 2021
interim final rule with the revisions
discussed in this
SUPPLEMENTARY
INFORMATION.
Congressional Review Act
The Administrator of OIRA has
determined that this is a major rule for
purposes of Subtitle E of the Small
Business Regulatory Enforcement and
Fairness Act of 1996 (also known as the
Congressional Review Act or CRA) (5
U.S.C. 804(2) et seq.). Under the CRA,
a major rule generally may take effect no
earlier than 60 days after the rule is
published in the Federal Register. 5
U.S.C. 801(a)(3).
Paperwork Reduction Act
The information collections
associated with the SLFRF program
have been reviewed and approved by
OMB pursuant to the Paperwork
Reduction Act (44 U.S.C. Chapter 35)
(PRA) and assigned control number
1505–0271. Under the PRA, an agency
may not conduct or sponsor, and a
respondent is not required to respond
to, an information collection unless it
displays a valid OMB control number.
Estimates of hourly burden under this
program are set forth in the table below.
Reporting Number
respondents
Number
responses
per
respondent
Total
responses
Hours per
response
Total
burden
in hours
Cost to
respondents
($48.80 per
hour *)
Recipient Payment Form ...................................... 5,050 1 5,050 .25 (15 minutes) .... 1,262.5 $61,610 Acceptance of Award Terms ................................ 5,050 1 5,050 .25 (15 minutes) .... 1,262.5 61,610 Title VI Assurances .............................................. 5,050 1 5,050 .50 (30 minutes) .... 2,525 123,220 Tribal Employment Information Form ................... 584 1 584 .75 (45 minutes) .... 438 21,374 Request for Extension Form ................................ 96 1 96 1 ............................ 96 4,685 Annual Recovery Plan Performance Report ........ 430 1 430 100 ........................ 43,000 2,098,400 NEU Distribution Template ................................... 55 2 110 10 .......................... 1,100 53,680 Non-UGLG Distribution Template ........................ 55 2 110 5 ............................ 550 26,840 Transfer Forms ..................................................... 1,500 1 1,500 1 ............................ 1,500 73,200 Project and Expenditure Report ........................... 37,000 1 37,000 5 ............................ 185,000 9,028,000 Total .............................................................. 54,870 .................... 54,980 .......................... ..... 236,735 11,552,619 * Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Accountants and Auditors, on the internet at https:// www.bls.gov/ooh/business-and-financial/accountants-and-auditors.htm (visited March 28, 2020). Base wage of $33.89/hour increased by 44 per- cent to account for fully loaded employer cost of employee compensation (benefits, etc.) for a fully loaded wage rate of $48.80 .
Regulatory Flexibility Analysis
The Regulatory Flexibility Act (RFA)
generally requires that when an agency
issues a proposed rule, or a final rule
pursuant to section 553(b) of the
Administrative Procedure Act or
another law, the agency must prepare a
regulatory flexibility analysis that meets
the requirements of the RFA and
publish such analysis in the Federal
Register. 5 U.S.C. 603, 604.
Rules that are exempt from notice and
comment under the APA or any other
law are also exempt from the RFA
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17.A
4446 Federal Register / Vol. 87, No. 18 / Thursday, January 27, 2022 / Rules and Regulations requirements, including the requirement
to conduct a regulatory flexibility
analysis, when among other things the
agency for good cause finds that notice
and public procedure are impracticable,
unnecessary, or contrary to the public
interest. Because this rule is exempt
from the notice and comment
requirements of the APA, Treasury is
not required to conduct a regulatory
flexibility analysis.
Rule Text
List of Subjects in 31 CFR Part 35
Executive compensation, State and
Local Governments, Tribal
Governments, Public health emergency.
For the reasons stated in the
preamble, the United States Department
of the Treasury amends 31 CFR part 35
as follows:
PART 35—PANDEMIC RELIEF
PROGRAMS
■ 1. Revise Subpart A to read as follows:
Subpart A—Coronavirus State and
Local Fiscal Recovery Funds
Sec.
35.1 Purpose.
35.2 Applicability.
35.3 Definitions.
35.4 Reservation of authority, reporting.
35.5 Use of funds.
35.6 Eligible uses.
35.7 Pensions.
35.8 Tax.
35.9. Compliance with applicable laws.
35.10. Recoupment.
35.11 Payments to States.
35.12. Distributions to nonentitlement units
of local government and units of general
local government.
Authority: 42 U.S.C. 802(f); 42 U.S.C.
803(f).
§ 35.1 Purpose.
This part implements section 9901 of
the American Rescue Plan Act (Subtitle
M of Title IX of Pub. L. 117–2), which
amends Title VI of the Social Security
Act (42 U.S.C. 801 et seq.) by adding
sections 602 and 603 to establish the
Coronavirus State Fiscal Recovery Fund
and Coronavirus Local Fiscal Recovery
Fund.
§ 35.2 Applicability.
This part applies to states, territories,
Tribal governments, metropolitan cities,
nonentitlement units of local
government, counties, and units of
general local government that accept a
payment or transfer of funds made
under section 602 or 603 of the Social
Security Act.
§ 35.3 Definitions.
Baseline means tax revenue of the
recipient for its fiscal year ending in
2019, adjusted for inflation in each
reporting year using the Bureau of
Economic Analysis’s Implicit Price
Deflator for the gross domestic product
of the United States.
Capital expenditures has the same
meaning given in 2 CFR 200.1.
County means a county, parish, or
other equivalent county division (as
defined by the Census Bureau).
Covered benefits include, but are not
limited to, the costs of all types of leave
(vacation, family-related, sick, military,
bereavement, sabbatical, jury duty),
employee insurance (health, life, dental,
vision), retirement (pensions, 401(k)),
unemployment benefit plans (Federal
and State), workers’ compensation
insurance, and Federal Insurance
Contributions Act taxes (which includes
Social Security and Medicare taxes).
Covered change means a change in
law, regulation, or administrative
interpretation that reduces any tax (by
providing for a reduction in a rate, a
rebate, a deduction, a credit, or
otherwise) or delays the imposition of
any tax or tax increase. A change in law
includes any final legislative or
regulatory action, a new or changed
administrative interpretation, and the
phase-in or taking effect of any statute
or rule if the phase-in or taking effect
was not prescribed prior to the start of
the covered period.
Covered period means, with respect to
a state or territory, the period that:
(1) Begins on March 3, 2021; and
(2) Ends on the last day of the fiscal
year of such State or territory in which
all funds received by the State or
territory from a payment made under
section 602 or 603 of the Social Security
Act have been expended or returned to,
or recovered by, the Secretary.
COVID–19 means the Coronavirus
Disease 2019.
COVID–19 public health emergency
means the period beginning on January
27, 2020 and lasting until the
termination of the national emergency
concerning the COVID–19 outbreak
declared pursuant to the National
Emergencies Act (50 U.S.C. 1601 et
seq.).
Deposit means an extraordinary
payment of an accrued, unfunded
liability. The term deposit does not refer
to routine contributions made by an
employer to pension funds as part of the
employer’s obligations related to
payroll, such as either a pension
contribution consisting of a normal cost
component related to current employees
or a component addressing the
amortization of unfunded liabilities
calculated by reference to the
employer’s payroll costs.
Eligible employer means an employer
of an eligible worker who performs
essential work.
Eligible workers means workers
needed to maintain continuity of
operations of essential critical
infrastructure sectors, including health
care; emergency response; sanitation,
disinfection, and cleaning work;
maintenance work; grocery stores,
restaurants, food production, and food
delivery; pharmacy; biomedical
research; behavioral health work;
medical testing and diagnostics; home-
and community-based health care or
assistance with activities of daily living;
family or childcare; social services
work; public health work; vital services
to Tribes; any work performed by an
employee of a State, local, or Tribal
government; educational work, school
nutrition work, and other work required
to operate a school facility; laundry
work; elections work; solid waste or
hazardous materials management,
response, and cleanup work; work
requiring physical interaction with
patients; dental care work;
transportation and warehousing; work at
hotel and commercial lodging facilities
that are used for COVID–19 mitigation
and containment; work in a mortuary;
and work in critical clinical research,
development, and testing necessary for
COVID–19 response.
(1) With respect to a recipient that is
a metropolitan city, nonentitlement unit
of local government, or county, workers
in any additional non-public sectors as
each chief executive officer of such
recipient may designate as critical to
protect the health and well-being of the
residents of their metropolitan city,
nonentitlement unit of local
government, or county; or
(2) With respect to a State, territory,
or Tribal government, workers in any
additional non-public sectors as each
Governor of a State or territory, or each
Tribal government, may designate as
critical to protect the health and well-
being of the residents of their State,
territory, or Tribal government.
Essential work means work that:
(1) Is not performed while
teleworking from a residence; and
(2) Involves:
(i) Regular in-person interactions with
patients, the public, or coworkers of the
individual that is performing the work;
or
(ii) Regular physical handling of items
that were handled by, or are to be
handled by patients, the public, or
coworkers of the individual that is
performing the work.
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17.A
4447 Federal Register / Vol. 87, No. 18 / Thursday, January 27, 2022 / Rules and Regulations Funds means, with respect to a
recipient, amounts provided to the
recipient pursuant to a payment made
under section 602(b) or 603(b) of the
Social Security Act or transferred to the
recipient pursuant to section 603(c)(4)
of the Social Security Act.
General revenue means money that is
received from tax revenue, current
charges, and miscellaneous general
revenue, excluding refunds and other
correcting transactions and proceeds
from issuance of debt or the sale of
investments, agency or private trust
transactions, and intergovernmental
transfers from the Federal Government,
including transfers made pursuant to
section 9901 of the American Rescue
Plan Act. General revenue also includes
revenue from liquor stores that are
owned and operated by state and local
governments. General revenue does not
include revenues from utilities, except
recipients may choose to include
revenue from utilities that are part of
their own government as general
revenue provided the recipient does so
consistently over the remainder of the
period of performance. Revenue from
Tribal business enterprises must be
included in general revenue.
Intergovernmental transfers means
money received from other
governments, including grants and
shared taxes.
Low-income household means a
household with:
(1) Income at or below 185 percent of
the Federal Poverty Guidelines for the
size of its household based on the
poverty guidelines published most
recently by the Department of Health
and Human Services; or
(2) Income at or below 40 percent of
the Area Median Income for its county
and size of household based on data
published most recently by the
Department of Housing and Urban
Development.
Micro-business means a small
business that has five or fewer
employees, one or more of whom owns
the small business.
Moderate-income household means a
household with:
(1) Income at or below 300 percent of
the Federal Poverty Guidelines for the
size of its household based on poverty
guidelines published most recently by
the Department of Health and Human
Services; or
(2) Income at or below 65 percent of
the Area Median Income for its county
and size of household based on data
published most recently by the
Department of Housing and Urban
Development.
Metropolitan city has the meaning
given that term in section 102(a)(4) of
the Housing and Community
Development Act of 1974 (42 U.S.C.
5302(a)(4)) and includes cities that
relinquish or defer their status as a
metropolitan city for purposes of
receiving allocations under section 106
of such Act (42 U.S.C. 5306) for fiscal
year 2021.
Net reduction in total spending is
measured as the State or territory’s total
spending for a given reporting year
excluding its spending of funds,
subtracted from its total spending for its
fiscal year ending in 2019, adjusted for
inflation using the Bureau of Economic
Analysis’s Implicit Price Deflator for the
gross domestic product of the United
States for that reporting year.
Nonentitlement unit of local
government means a ‘‘city,’’ as that term
is defined in section 102(a)(5) of the
Housing and Community Development
Act of 1974 (42 U.S.C. 5302(a)(5)), that
is not a metropolitan city.
Nonprofit means a nonprofit
organization that is exempt from Federal
income taxation and that is described in
section 501(c)(3) or 501(c)(19) of the
Internal Revenue Code.
Obligation means an order placed for
property and services and entering into
contracts, subawards, and similar
transactions that require payment.
Pension fund means a defined benefit
plan and does not include a defined
contribution plan.
Period of performance means the time
period described in § 35.5 during which
a recipient may obligate and expend
funds in accordance with sections
602(c)(1) and 603(c)(1) of the Social
Security Act and this subpart.
Premium pay means an amount of up
to $13 per hour that is paid to an
eligible worker, in addition to wages or
remuneration the eligible worker
otherwise receives, for all work
performed by the eligible worker during
the COVID–19 public health emergency.
Such amount may not exceed $25,000 in
total over the period of performance
with respect to any single eligible
worker. Premium pay may be awarded
to non-hourly and part-time eligible
workers performing essential work.
Premium pay will be considered to be
in addition to wages or remuneration
the eligible worker otherwise receives if,
as measured on an hourly rate, the
premium pay is:
(1) With regard to work that the
eligible worker previously performed,
pay and remuneration equal to the sum
of all wages and remuneration
previously received plus up to $13 per
hour with no reduction, substitution,
offset, or other diminishment of the
eligible worker’s previous, current, or
prospective wages or remuneration; or
(2) With regard to work that the
eligible worker continues to perform,
pay of up to $13 per hour that is in
addition to the eligible worker’s regular
rate of wages or remuneration, with no
reduction, substitution, offset, or other
diminishment of the worker’s current
and prospective wages or remuneration.
Qualified census tract has the same
meaning given in 26 U.S.C.
42(d)(5)(B)(ii)(I).
Recipient means a State, territory,
Tribal government, metropolitan city,
nonentitlement unit of local
government, county, or unit of general
local government that receives a
payment made under section 602(b) or
603(b) of the Social Security Act or
transfer pursuant to section 603(c)(4) of
the Social Security Act.
Reporting year means a single year or
partial year within the covered period,
aligned to the current fiscal year of the
State or territory during the covered
period.
Secretary means the Secretary of the
Treasury.
State means each of the 50 States and
the District of Columbia.
Small business means a business
concern or other organization that:
(1) Has no more than 500 employees
or, if applicable, the size standard in
number of employees established by the
Administrator of the Small Business
Administration for the industry in
which the business concern or
organization operates, and
(2) Is a small business concern as
defined in section 3 of the Small
Business Act (15 U.S.C. 632).
Tax revenue means revenue received
from a compulsory contribution that is
exacted by a government for public
purposes excluding refunds and
corrections and, for purposes of § 35.8,
intergovernmental transfers. Tax
revenue does not include payments for
a special privilege granted or service
rendered, employee or employer
assessments and contributions to
finance retirement and social insurance
trust systems, or special assessments to
pay for capital improvements.
Territory means the Commonwealth
of Puerto Rico, the United States Virgin
Islands, Guam, the Commonwealth of
the Northern Mariana Islands, or
American Samoa.
Title I eligible schools means schools
eligible to receive services under section
1113 of Title I, Part A of the Elementary
and Secondary Education Act of 1965,
as amended (20 U.S.C. 6313), including
schools served under section
1113(b)(1)(C) of that Act.
Tribal enterprise means a business
concern:
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4448 Federal Register / Vol. 87, No. 18 / Thursday, January 27, 2022 / Rules and Regulations (1) That is wholly owned by one or
more Tribal governments, or by a
corporation that is wholly owned by one
or more Tribal governments; or
(2) That is owned in part by one or
more Tribal governments, or by a
corporation that is wholly owned by one
or more Tribal governments, if all other
owners are either United States citizens
or small business concerns, as these
terms are used and consistent with the
definitions in 15 U.S.C. 657a(b)(2)(D).
Tribal government means the
recognized governing body of any
Indian or Alaska Native Tribe, band,
nation, pueblo, village, community,
component band, or component
reservation, individually identified
(including parenthetically) in the list
published on January 29, 2021, pursuant
to section 104 of the Federally
Recognized Indian Tribe List Act of
1994 (25 U.S.C. 5131).
Unemployment rate means the U–3
unemployment rate provided by the
Bureau of Labor Statistics as part of the
Local Area Unemployment Statistics
program, measured as total
unemployment as a percentage of the
civilian labor force.
Unemployment trust fund means an
unemployment trust fund established
under section 904 of the Social Security
Act (42 U.S.C. 1104).
Unit of general local government has
the meaning given to that term in
section 102(a)(1) of the Housing and
Community Development Act of 1974
(42 U.S.C. 5302(a)(1)).
§ 35.4 Reservation of authority, reporting.
(a) Reservation of authority. Nothing
in this part shall limit the authority of
the Secretary to take action to enforce
conditions or violations of law,
including actions necessary to prevent
evasions of this subpart.
(b) Extensions or accelerations of
timing. The Secretary may extend or
accelerate any deadline or compliance
date of this part, including reporting
requirements that implement this
subpart, if the Secretary determines that
such extension or acceleration is
appropriate. In determining whether an
extension or acceleration is appropriate,
the Secretary will consider the period of
time that would be extended or
accelerated and how the modified
timeline would facilitate compliance
with this subpart.
(c) Reporting and requests for other
information. During the period of
performance, recipients shall provide to
the Secretary periodic reports providing
detailed accounting of the uses of funds,
modifications to a State or Territory’s
tax revenue sources, and such other
information as the Secretary may
require for the administration of this
section. In addition to regular reporting
requirements, the Secretary may request
other additional information as may be
necessary or appropriate, including as
may be necessary to prevent evasions of
the requirements of this subpart. False
statements or claims made to the
Secretary may result in criminal, civil,
or administrative sanctions, including
fines, imprisonment, civil damages and
penalties, debarment from participating
in Federal awards or contracts, and/or
any other remedy available by law.
§ 35.5 Use of funds.
(a) In general. A recipient may only
use funds to cover costs incurred during
the period beginning March 3, 2021, and
ending December 31, 2024, for one or
more of the purposes enumerated in
sections 602(c)(1) and 603(c)(1) of the
Social Security Act, as applicable,
including those enumerated in § 35.6,
subject to the restrictions set forth in
sections 602(c)(2) and 603(c)(2) of the
Social Security Act, as applicable.
(b) Costs incurred. A cost shall be
considered to have been incurred for
purposes of paragraph (a) of this section
if the recipient has incurred an
obligation with respect to such cost by
December 31, 2024.
(c) Return of funds. A recipient must
return any funds not obligated by
December 31, 2024. A recipient must
also return funds obligated by December
31, 2024 but not expended by December
31, 2026.
§ 35.6 Eligible uses.
(a) In general. Subject to §§ 35.7 and
35.8, a recipient may use funds for one
or more of the purposes described in
paragraphs (b) through (f) of this
section.
(b) Responding to the public health
emergency or its negative economic
impacts. A recipient may use funds to
respond to the public health emergency
or its negative economic impacts if the
use meets the criteria provided in
paragraph (b)(1) of this section or is
enumerated in paragraph (b)(3) of this
section; provided that, in the case of a
use of funds for a capital expenditure
under paragraphs (b)(1) or (b)(3) of this
section, the use of funds must also meet
the criteria provided in paragraph (b)(4)
of this section. Treasury may also
articulate additional eligible programs,
services, or capital expenditures from
time to time that satisfy the eligibility
criteria of this paragraph (b), which
shall be eligible under this paragraph
(b).
(1) Identifying eligible responses to
the public health emergency or its
negative economic impacts. (i) A
program, service, or capital expenditure
is eligible under this paragraph (b)(1) if
a recipient identifies a harm or impact
to a beneficiary or class of beneficiaries
caused or exacerbated by the public
health emergency or its negative
economic impacts and the program,
service, or capital expenditure responds
to such harm.
(ii) A program, service, or capital
expenditure responds to a harm or
impact experienced by an identified
beneficiary or class of beneficiaries if it
is reasonably designed to benefit the
beneficiary or class of beneficiaries that
experienced the harm or impact and is
related and reasonably proportional to
the extent and type of harm or impact
experienced.
(2) Identified harms: Presumptions of
impacted and disproportionately
impacted beneficiaries. A recipient may
rely on the following presumptions to
identify beneficiaries presumptively
impacted or disproportionately
impacted by the public health
emergency or its negative economic
impacts for the purpose of providing a
response under paragraph (b)(1) or (b)(3)
of this section:
(i) Households or populations that
experienced unemployment;
experienced increased food or housing
insecurity; qualify for the Children’s
Health Insurance Program (42 U.S.C.
1397aa et seq.), Childcare Subsidies
through the Child Care and
Development Fund Program (42 U.S.C.
9857 et seq. and 42 U.S.C. 618), or
Medicaid (42 U.S.C. 1396 et seq.); if
funds are to be used for affordable
housing programs, qualify for the
National Housing Trust Fund (12 U.S.C.
4568) or the Home Investment
Partnerships Program (42 U.S.C. 12721
et seq.); if funds are to be used to
address impacts of lost instructional
time for students in kindergarten
through twelfth grade, any student who
did not have access to in-person
instruction for a significant period of
time; and low- and moderate-income
households and populations are
presumed to be impacted by the public
health emergency or its negative
economic impacts;
(ii) The general public is presumed to
be impacted by the public health
emergency for the purposes of providing
the uses set forth in subparagraphs
(b)(3)(i)(A) and (b)(3)(i)(C); and
(iii) The following households,
communities, small businesses, and
nonprofit organizations are presumed to
be disproportionately impacted by the
public health emergency or its negative
economic impacts:
(A) Households and populations
residing in a qualified census tract;
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17.A
4449 Federal Register / Vol. 87, No. 18 / Thursday, January 27, 2022 / Rules and Regulations households and populations receiving
services provided by Tribal
governments; households and
populations residing in the territories;
households and populations receiving
services provided by territorial
governments; low-income households
and populations; households that
qualify for Temporary Assistance for
Needy Families (42 U.S.C. 601 et seq.),
the Supplemental Nutrition Assistance
Program (7 U.S.C. 2011 et seq.), Free
and Reduced Price School Lunch and/
or Breakfast programs (42 U.S.C. 1751 et
seq. and 42 U.S.C. 1773), Medicare Part
D Low-income Subsidies (42 U.S.C.
1395w–114), Supplemental Security
Income (42 U.S.C. 1381 et seq.), Head
Start (42 U.S.C. 9831 et seq.), Early Head
Start (42 U.S.C. 9831 et seq.), the
Special Supplemental Nutrition
Program for Women, Infants, and
Children (42 U.S.C. 1786), Section 8
Vouchers (42 U.S.C. 1437f), the Low-
Income Home Energy Assistance
Program (42 U.S.C. 8621 et seq.), Pell
Grants (20 U.S.C. 1070a), and, if SLFRF
funds are to be used for services to
address educational disparities, Title I
eligible schools;
(B) Small businesses operating in a
qualified census tract, operated by
Tribal governments or on Tribal lands,
or operating in the territories; and
(C) Nonprofit organizations operating
in a qualified census tract, operated by
Tribal governments or on Tribal lands,
or operating in the territories.
(3) Enumerated eligible uses:
Responses presumed reasonably
proportional. A recipient may use funds
to respond to the public health
emergency or its negative economic
impacts on a beneficiary or class of
beneficiaries for one or more of the
following purposes unless such use is
grossly disproportionate to the harm
caused or exacerbated by the public
health emergency or its negative
economic impacts:
(i) Responding to the public health
impacts of the public health emergency
for purposes including:
(A) COVID–19 mitigation and
prevention in a manner that is
consistent with recommendations and
guidance from the Centers for Disease
Control and Prevention, including
vaccination programs and incentives;
testing programs; contact tracing;
isolation and quarantine; mitigation and
prevention practices in congregate
settings; acquisition and distribution of
medical equipment for prevention and
treatment of COVID–19, including
personal protective equipment; COVID–
19 prevention and treatment expenses
for public hospitals or health care
facilities, including temporary medical
facilities; establishing or enhancing
public health data systems; installation
and improvement of ventilation systems
in congregate settings, health facilities,
or other public facilities; and assistance
to small businesses, nonprofits, or
impacted industries to implement
mitigation measures;
(B) Medical expenses related to
testing and treating COVID–19 that are
provided in a manner consistent with
recommendations and guidance from
the Centers for Disease Control and
Prevention, including emergency
medical response expenses, treatment of
long-term symptoms or effects of
COVID–19, and costs to medical
providers or to individuals for testing or
treating COVID–19;
(C) Behavioral health care, including
prevention, treatment, emergency or
first-responder programs, harm
reduction, supports for long-term
recovery, and behavioral health
facilities and equipment; and
(D) Preventing and responding to
increased violence resulting from the
public health emergency, including
community violence intervention
programs, or responding to increased
gun violence resulting from the public
health emergency, including payroll and
covered benefits associated with
community policing strategies;
enforcement efforts to reduce gun
violence; and investing in technology
and equipment;
(ii) Responding to the negative
economic impacts of the public health
emergency for purposes including:
(A) Assistance to households and
individuals, including:
(1) Assistance for food; emergency
housing needs; burials, home repairs, or
weatherization; internet access or digital
literacy; cash assistance; and assistance
accessing public benefits;
(2) Paid sick, medical, or family leave
programs, or assistance to expand access
to health insurance;
(3) Childcare, early learning services,
home visiting, or assistance for child
welfare-involved families or foster
youth;
(4) Programs to address the impacts of
lost instructional time for students in
kindergarten through twelfth grade;
(5) Development, repair, and
operation of affordable housing and
services or programs to increase long-
term housing security;
(6) Financial services that facilitate
the delivery of Federal, State, or local
benefits for unbanked and underbanked
individuals;
(7) Benefits for the surviving family
members of individuals who have died
from COVID–19, including cash
assistance to surviving spouses or
dependents of individuals who died of
COVID–19;
(8) Assistance for individuals who
want and are available for work,
including those who are unemployed,
have looked for work sometime in the
past 12 months, who are employed part
time but who want and are available for
full-time work, or who are employed but
seeking a position with greater
opportunities for economic
advancement;
(9) Facilities and equipment related to
the provision of services to households
provided in subparagraphs
(b)(3)(ii)(A)(1)–(8);
(10) The following expenses related to
Unemployment Trust Funds:
(i) Contributions to a recipient
Unemployment Trust Fund and
repayment of principal amounts due on
advances received under Title XII of the
Social Security Act (42 U.S.C. 1321) up
to an amount equal to the difference
between the balance in the recipient’s
Unemployment Trust Fund as of
January 27, 2020 and the balance of
such account as of May 17, 2021 plus
the principal amount outstanding as of
May 17, 2021 on any advances received
under Title XII of the Social Security
Act between January 27, 2020 and May
17, 2021; provided that if a recipient
repays principal on Title XII advances
or makes a contribution to an
Unemployment Trust Fund after April
1, 2022, such recipient shall not reduce
average weekly benefit amounts or
maximum benefit entitlements prior to
December 31, 2024; and
(ii) Any interest due on such advances
received under Title XII of the Social
Security Act (42 U.S.C. 1321); and
(11) A program, service, capital
expenditure, or other assistance that is
provided to a disproportionately
impacted household, population, or
community, including:
(i) Services to address health
disparities of the disproportionately
impacted household, population, or
community;
(ii) Housing vouchers and relocation
assistance;
(iii) Investments in communities to
promote improved health outcomes and
public safety such as parks, recreation
facilities, and programs that increase
access to healthy foods;
(iv) Capital expenditures and other
services to address vacant or abandoned
properties;
(v) Services to address educational
disparities; and
(vi) Facilities and equipment related
to the provision of these services to the
disproportionately impacted household,
population, or community.
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17.A
4450 Federal Register / Vol. 87, No. 18 / Thursday, January 27, 2022 / Rules and Regulations (B) Assistance to small businesses,
including:
(1) Programs, services, or capital
expenditures that respond to the
negative economic impacts of the
COVID–19 public health emergency,
including loans or grants to mitigate
financial hardship such as declines in
revenues or impacts of periods of
business closure, or providing technical
assistance; and
(2) A program, service, capital
expenditure, or other assistance that
responds to disproportionately
impacted small businesses, including
rehabilitation of commercial properties;
storefront and fac¸ade improvements;
technical assistance, business
incubators, and grants for start-ups or
expansion costs for small businesses;
and programs or services to support
micro-businesses;
(C) Assistance to nonprofit
organizations including programs,
services, or capital expenditures,
including loans or grants to mitigate
financial hardship such as declines in
revenues or increased costs, or technical
assistance;
(D) Assistance to tourism, travel,
hospitality, and other impacted
industries for programs, services, or
capital expenditures, including support
for payroll costs and covered benefits
for employees, compensating returning
employees, support for operations and
maintenance of existing equipment and
facilities, and technical assistance; and
(E) Expenses to support public sector
capacity and workforce, including:
(1) Payroll and covered benefit
expenses for public safety, public
health, health care, human services, and
similar employees to the extent that the
employee’s time is spent mitigating or
responding to the COVID–19 public
health emergency;
(2) Payroll, covered benefit, and other
costs associated with programs or
services to support the public sector
workforce and with the recipient:
(i) Hiring or rehiring staff to fill
budgeted full-time equivalent positions
that existed on January 27, 2020 but that
were unfilled or eliminated as of March
3, 2021; or
(ii) Increasing the number of its
budgeted full-time equivalent
employees by up to the difference
between the number of its budgeted full-
time equivalent employees on January
27, 2020, multiplied by 1.075, and the
number of its budgeted full-time
equivalent employees on March 3, 2021,
provided that funds shall only be used
for additional budgeted full-time
equivalent employees above the
recipient’s number of budgeted full-time
equivalent employees as of March 3,
2021;
(3) Costs to improve the design and
execution of programs responding to the
COVID–19 pandemic and to administer
or improve the efficacy of programs
addressing the public health emergency
or its negative economic impacts; and
(4) Costs associated with addressing
administrative needs of recipient
governments that were caused or
exacerbated by the pandemic.
(4) Capital expenditures. A recipient,
other than a Tribal government, must
prepare a written justification for certain
capital expenditures according to Table
1 to paragraph (b)(4) of this section.
Such written justification must include
the following elements:
(i) Describe the harm or need to be
addressed;
(ii) Explain why a capital expenditure
is appropriate; and
(iii) Compare the proposed capital
expenditure to at least two alternative
capital expenditures and demonstrate
why the proposed capital expenditure is
superior.
TABLE 1 TO PARAGRAPH (b)(4)
If a project has total expected
capital expenditures of and the use is enumerated in (b)(3), then and the use is not enumerated in (b)(3), then Less than $1 million ........................ No Written Justification required ............................... No Written Justification required.
Greater than or equal to $1 million,
but less than $10 million.
Written Justification required but recipients are not
required to submit as part of regular reporting to
Treasury.
Written Justification required and recipients must
submit as part of regular reporting to Treasury.
$10 million or more ......................... Written Justification required and recipients must submit as part of regular reporting to Treasury.
(c) Providing premium pay to eligible
workers. A recipient may use funds to
provide premium pay to eligible
workers of the recipient who perform
essential work or to provide grants to
eligible employers that have eligible
workers who perform essential work,
provided that any premium pay or
grants provided under this paragraph (c)
must respond to eligible workers
performing essential work during the
COVID–19 public health emergency. A
recipient uses premium pay or grants
provided under this paragraph (c) to
respond to eligible workers performing
essential work during the COVID–19
public health emergency if:
(1) The eligible worker’s total wages
and remuneration, including the
premium pay, is less than or equal to
150 percent of the greater of such
eligible worker’s residing State’s or
county’s average annual wage for all
occupations as defined by the Bureau of
Labor Statistics’ Occupational
Employment and Wage Statistics;
(2) The eligible worker is not exempt
from the Fair Labor Standards Act
overtime provisions (29 U.S.C. 207); or
(3) The recipient has submitted to the
Secretary a written justification that
explains how providing premium pay to
the eligible worker is responsive to the
eligible worker performing essential
work during the COVID–19 public
health emergency (such as a description
of the eligible workers’ duties, health, or
financial risks faced due to COVID–19,
and why the recipient determined that
the premium pay was responsive
despite the worker’s higher income).
(d) Providing government services. A
recipient may use funds for the
provision of government services to the
extent of the reduction in the recipient’s
general revenue due to the public health
emergency, calculated according to this
paragraph (d). A recipient must make a
one-time election to calculate the
amount of the reduction in the
recipient’s general revenue due to the
public health emergency according to
either paragraph (d)(1) or (d)(2) of this
section:
(1) Standard allowance. The
reduction in the recipient’s general
revenue due to the public health
emergency over the period of
performance will be deemed to be ten
million dollars; or
(2) Formula. The reduction in the
recipient’s general revenue due to the
public health emergency over the period
of performance equals the sum of the
reduction in revenue, calculated as of
each date identified in paragraph
(d)(2)(i) of this section and according to
the formula in paragraph (d)(2)(ii) of
this section:
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17.A
4451 Federal Register / Vol. 87, No. 18 / Thursday, January 27, 2022 / Rules and Regulations (i) A recipient must make a one-time
election to calculate the reduction in its
general revenue using information as of
either:
(A) December 31, 2020, December 31,
2021, December 31, 2022, and December
31, 2023; or
(B) The last day of each of the
recipient’s fiscal years ending in 2020,
2021, 2022, and 2023.
(ii) A reduction in a recipient’s
general revenue for each date identified
in paragraph (d)(2)(i) of this section
equals:
Max {[Base Year Revenue * (1 + Growth
Adjustment)
∧(nt/12)]¥Actual
General Revenue; 0}
Where:
(A) Base Year Revenue is the
recipient’s general revenue for the most
recent full fiscal year prior to the
COVID–19 public health emergency;
(B) Growth Adjustment is equal to the
greater of 5.2 percent (or 0.052) and the
recipient’s average annual revenue
growth over the three full fiscal years
prior to the COVID–19 public health
emergency;
(C) n equals the number of months
elapsed from the end of the base year to
the calculation date;
(D) Subscript t denotes the specific
calculation date; and
(E) Actual General Revenue is a
recipient’s actual general revenue
collected during the 12-month period
ending on each calculation date
identified in paragraph (d)(2)(i) of this
section, except:
(1) For purposes of all calculation
dates on or after April 1, 2022, in the
case of any change made after January
6, 2022 to any law, regulation, or
administrative interpretation that
reduces any tax (by providing for a
reduction in a rate, a rebate, a
deduction, a credit, or otherwise) or
delays the imposition of any tax or tax
increase and that the recipient assesses
has had the effect of decreasing the
amount of tax revenue collected during
the 12-month period ending on the
calculation date relative to the amount
of tax revenue that would have been
collected in the absence of such change,
the recipient must add to actual general
revenue the amount of such decrease in
tax revenue;
(2) For purposes of any calculation
date on or after April 1, 2022, in the
case of any change made after January
6, 2022 to any law, regulation, or
administrative interpretation that
increases any tax (by providing for an
increase in a rate, the reduction of a
rebate, a deduction, or a credit, or
otherwise) or accelerates the imposition
of any tax or tax increase and that the
recipient assesses has had the effect of
increasing the amount of tax revenue
collected during the 12-month period
ending on the calculation date relative
to the amount of tax revenue that would
have been collected in the absence of
such change, the recipient must subtract
from actual general revenue the amount
of such increase in tax revenue;
(3) If the recipient makes a one-time
election to adjust general revenue to
reflect tax changes made during the
period beginning on January 27, 2020
and ending on January 6, 2022, for
purposes of each calculation date
identified in paragraph (d)(2)(i) of this
section:
(i) In the case of any change made
during such prior period to any law,
regulation, or administrative
interpretation that reduces any tax (by
providing for a reduction in a rate, a
rebate, a deduction, a credit, or
otherwise) or delays the imposition of
any tax or tax increase and that the
recipient assesses has had the effect of
decreasing the amount of tax revenue
collected during the 12-month period
ending on the calculation date relative
to the amount of tax revenue that would
have been collected in the absence of
such change, the recipient must add to
actual general revenue the amount of
such decrease in tax revenue; and
(ii) In the case of any change made
during such prior period to any law,
regulation, or administrative
interpretation that increases any tax (by
providing for an increase in a rate, the
reduction of a rebate, a deduction, or a
credit, or otherwise) or accelerates the
imposition of any tax or tax increase
and that the recipient assesses has had
the effect of increasing the amount of
tax revenue collected during the 12-
month period ending on the calculation
date relative to the amount of tax
revenue that would have been collected
in the absence of such change, the
recipient must subtract from actual
general revenue the amount of such
increase in tax revenue; and
(4) With respect to any calculation
date during the period beginning on
January 6, 2022 and ending on March
31, 2022, if the recipient makes the
election in paragraph (d)(3) of this
section, the recipient must also make
the adjustments referenced in paragraph
(d)(3) of this section with respect to any
such changes in law, regulation, or
administrative interpretation during the
period beginning on January 6, 2022 and
ending on such calculation date.
(e) Making necessary investments in
water, sewer, and broadband
infrastructure. A recipient may use
funds to make the following
investments in water, sewer, and
broadband infrastructure.
(1) Water and sewer investments—(i)
Clean Water State Revolving Fund
projects. Projects or activities of the type
that meet the eligibility requirements of
section 603(c) of the Federal Water
Pollution Control Act (33 U.S.C.
1383(c));
(ii) Additional stormwater projects.
Projects to manage, reduce, treat, or
recapture stormwater or subsurface
drainage water regardless of whether
such projects would improve water
quality if such projects would otherwise
meet the eligibility requirements of
section 603(c)(5) of the Federal Water
Pollution Control Act (33 U.S.C.
1383(c)(5));
(iii) Drinking Water State Revolving
Fund projects. Projects or activities of
the type that meet the eligibility
requirements of section 1452 of the Safe
Drinking Water Act (42 U.S.C. 300j–12)
as implemented by the regulations
adopted by the Environmental
Protection Agency (EPA) under 40 CFR
35.3520, provided that:
(A) The recipient is not required to
comply with the limitation under 40
CFR 35.3520(c)(2) to acquisitions of
land from willing sellers or the
prohibition under 40 CFR 35.3520(e)(6)
on uses of funds for certain Tribal
projects; and
(B) In the case of lead service line
replacement projects, the recipient must
replace the full length of the service line
and may not replace only a partial
portion of the service line.
(iv) Additional lead remediation and
household water quality testing. Projects
or activities to address lead in drinking
water or provide household water
quality testing that are within the scope
of the programs the EPA is authorized
to establish under sections 1459A(b)(2),
1459B(b)(1), 1464(d)(2), and 1465 of the
Safe Drinking Water Act (42 U.S.C.
300j–19a(b)(2), 300j–19b(b)(1), 300j–
24(d)(2), and 300j–25), provided that:
(A) In the case of lead service line
replacement projects, the recipient must
replace the full length of the service line
and may not replace only a partial
portion of the service line; and
(B) In the case of projects within the
scope of the program the EPA is
authorized to establish under section
1459B(b)(1) of the Safe Drinking Water
Act, the recipient may determine the
income eligibility of homeowners
served by lead service line replacement
projects in its discretion.
(v) Drinking water projects to support
increased population. Projects of the
type that meet the eligibility
requirements of 40 CFR 35.3520 other
than the requirement of subparagraph
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17.A
4452 Federal Register / Vol. 87, No. 18 / Thursday, January 27, 2022 / Rules and Regulations (b)(1) of such regulation to address
present or prevent future violations of
health-based drinking water standards,
if the following conditions are met:
(A) The project is needed to support
increased population, with need
assessed as of the time the project is
undertaken;
(B) The project is designed to support
no more than a reasonable level of
projected increased need, whether due
to population growth or otherwise;
(C) The project is a cost-effective
means for achieving the desired level of
service; and
(D) The project is projected to
continue to provide an adequate level of
drinking water over its estimated useful
life.
(vi) Dams and reservoirs.
Rehabilitation of dams and reservoirs if
the following conditions are met:
(A) The project meets the
requirements of 40 CFR 35.3520 other
than the following requirements:
(1) The prohibition on the
rehabilitation of dams and reservoirs in
40 CFR 35.3520(e)(1) and (3); and
(2) The requirement in 40 CFR
35.3520(b)(1) that the project is needed
to address present or prevent future
violations of health-based drinking
water standards, provided that if the
dam or reservoir project does not meet
this requirement, the project must be
needed to support increased population,
with need assessed as of the time the
project is undertaken, and the project
must be projected to continue to provide
an adequate level of drinking water over
its estimated useful life;
(B) The primary purpose of the dam
or reservoir is for drinking water supply;
(C) The project is needed for the
provision of drinking water supply,
with need assessed as of the time the
project is initiated;
(D) The project is designed to support
no more than a reasonable level of
projected increased need, whether due
to population growth or otherwise; and
(E) The project is a cost-effective
means for achieving the desired level of
service.
(vii) Private wells. Rehabilitation of
private wells, testing initiatives to
identify contaminants in private wells,
and treatment activities and remediation
projects that address contamination in
private wells, if the project meets the
requirements of 40 CFR 35.3520 other
than the limitation to certain eligible
systems under 40 CFR 35.3520(a).
(2) Broadband investments—(i)
General. Broadband infrastructure if the
following conditions are met:
(A) The broadband infrastructure is
designed to provide service to
households and businesses with an
identified need, as determined by the
recipient, for such infrastructure;
(B) The broadband infrastructure is
designed to, upon completion:
(1) Reliably meet or exceed
symmetrical 100 Mbps download speed
and upload speeds; or
(2) In cases where it is not practicable,
because of the excessive cost of the
project or geography or topography of
the area to be served by the project, to
provide service reliably meeting or
exceeding symmetrical 100 Mbps
download speed and upload speeds:
(i) Reliably meet or exceed 100 Mbps
download speed and between at least 20
Mbps and 100 Mbps upload speed; and
(ii) Be scalable to a minimum of 100
Mbps download speed and 100 Mbps
upload speed; and
(C) The service provider for a
completed broadband infrastructure
investment project that provides service
to households is required, for as long as
the SLFRF-funded broadband
infrastructure is in use, by the recipient
to:
(1) Participate in the Federal
Communications Commission’s
Affordable Connectivity Program (ACP)
through the lifetime of the ACP; or
(2) Otherwise provide access to a
broad-based affordability program to
low-income consumers in the proposed
service area of the broadband
infrastructure that provides benefits to
households commensurate with those
provided under the ACP through the
lifetime of the ACP.
(ii) Cybersecurity infrastructure
investments. Cybersecurity
infrastructure investments that are
designed to improve the reliability and
resiliency of new and existing
broadband infrastructure. Such
investments may include the addition or
modernization of network security
hardware and software tools designed to
strengthen cybersecurity for the end-
users of these networks.
(f) Meeting the non-federal matching
requirements for Bureau of Reclamation
projects. A recipient may use funds to
meet the non-federal matching
requirements of any authorized Bureau
of Reclamation project.
§ 35.7 Pensions.
A recipient (other than a Tribal
government) may not use funds for
deposit into any pension fund.
§ 35.8 Tax.
(a) Restriction. A State or Territory
shall not use funds to either directly or
indirectly offset a reduction in the net
tax revenue of the State or Territory
resulting from a covered change during
the covered period.
(b) Violation. Treasury will consider a
State or Territory to have used funds to
offset a reduction in net tax revenue if,
during a reporting year:
(1) Covered change. The State or
Territory has made a covered change
that, either based on a reasonable
statistical methodology to isolate the
impact of the covered change in actual
revenue or based on projections that use
reasonable assumptions and do not
incorporate the effects of
macroeconomic growth to reduce or
increase the projected impact of the
covered change, the State or Territory
assesses has had or predicts to have the
effect of reducing tax revenue relative to
current law;
(2) Exceeds the de minimis threshold.
The aggregate amount of the measured
or predicted reductions in tax revenue
caused by covered changes identified
under paragraph (b)(1) of this section, in
the aggregate, exceeds 1 percent of the
State’s or Territory’s baseline;
(3) Reduction in net tax revenue. The
State or Territory reports a reduction in
net tax revenue, measured as the
difference between actual tax revenue
and the State’s or Territory’s baseline,
each measured as of the end of the
reporting year; and
(4) Consideration of other changes.
The aggregate amount of measured or
predicted reductions in tax revenue
caused by covered changes is greater
than the sum of the following, in each
case, as calculated for the reporting
year:
(i) The aggregate amount of the
expected increases in tax revenue
caused by one or more covered changes
that, either based on a reasonable
statistical methodology to isolate the
impact of the covered change in actual
revenue or based on projections that use
reasonable assumptions and do not
incorporate the effects of
macroeconomic growth to reduce or
increase the projected impact of the
covered change, the State or Territory
assesses has had or predicts to have the
effect of increasing tax revenue; and
(ii) Reductions in spending, up to the
amount of the State’s or Territory’s net
reduction in total spending, that are in:
(A) Departments, agencies, or
authorities in which the State or
Territory is not using funds; and
(B) Departments, agencies, or
authorities in which the State or
Territory is using funds, in an amount
equal to the value of the spending cuts
in those departments, agencies, or
authorities, minus funds used.
(c) Amount and revenue reduction
cap. If a State or Territory is considered
to be in violation pursuant to paragraph
(b) of this section, the amount used in
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17.A
4453 Federal Register / Vol. 87, No. 18 / Thursday, January 27, 2022 / Rules and Regulations violation of paragraph (a) of this section
is equal to the lesser of:
(1) The reduction in net tax revenue
of the State or Territory for the reporting
year, measured as the difference
between the State’s or Territory’s
baseline and its actual tax revenue, each
measured as of the end of the reporting
year; and,
(2) The aggregate amount of the
reductions in tax revenues caused by
covered changes identified in paragraph
(b)(1) of this section, minus the sum of
the amounts in identified in paragraphs
(b)(4)(i) and (ii) of this section.
§ 35.9 Compliance with applicable laws.
A recipient must comply with all
other applicable Federal statutes,
regulations, and executive orders, and a
recipient shall provide for compliance
with the American Rescue Plan Act, this
subpart, and any interpretive guidance
by other parties in any agreements it
enters into with other parties relating to
these funds.
§ 35.10 Recoupment.
(a) Identification of violations—(1) In
general. Any amount used in violation
of § 35.5, 35.6, or 35.7 may be identified
at any time prior to December 31, 2026.
(2) Annual reporting of amounts of
violations. On an annual basis, a
recipient that is a State or territory must
calculate and report any amounts used
in violation of § 35.8.
(b) Calculation of amounts subject to
recoupment—(1) In general. Except as
provided in paragraph (b)(2) of this
section, the Secretary will calculate any
amounts subject to recoupment
resulting from a violation of § 35.5, 35.6
or 35.7 as the amounts used in violation
of such restrictions.
(2) Violations of § 35.8. The Secretary
will calculate any amounts subject to
recoupment resulting from a violation of
§ 35.8, equal to the lesser of:
(i) The amount set forth in § 35.8(c);
and,
(ii) The amount of funds received by
such recipient.
(c) Initial notice. If the Secretary
calculates an amount subject to
recoupment under paragraph (b) of this
section, Treasury will provide the
recipient an initial written notice of the
amount subject to recoupment along
with an explanation of such amounts.
(d) Request for reconsideration.
Unless the Secretary extends or
accelerates the time period, within 60
calendar days of receipt of an initial
notice of recoupment provided under
paragraph (c) of this section, a recipient
may submit a written request to the
Secretary requesting reconsideration of
any amounts subject to recoupment
under paragraph (b) of this section. To
request reconsideration of any amounts
subject to recoupment, a recipient must
submit to the Secretary a written request
that includes:
(1) An explanation of why the
recipient believes all or some of the
amount should not be subject to
recoupment; and
(2) A discussion of supporting
reasons, along with any additional
information.
(e) Final amount subject to
recoupment. Unless the Secretary
extends or accelerates the time period,
within 60 calendar days of receipt of the
recipient’s request for reconsideration
provided pursuant to paragraph (d) of
this section or the expiration of the
period for requesting reconsideration
provided under paragraph (d), the
recipient will be notified of the
Secretary’s decision to affirm, withdraw,
or modify the notice of recoupment.
Such notification will include an
explanation of the decision, including
responses to the recipient’s supporting
reasons and consideration of additional
information provided. A recipient must
invoke and exhaust the procedures
available under this subpart prior to
seeking judicial review of a decision
under § 35.10.
(f) Repayment of funds. Unless the
Secretary extends or accelerates the time
period, a recipient shall repay to the
Secretary any amounts subject to
recoupment in accordance with
instructions provided by the Secretary:
(1) Within 120 calendar days of
receipt of the notice of recoupment
provided under paragraph (c) of this
section, in the case of a recipient that
does not submit a request for
reconsideration in accordance with the
requirements of paragraph (d) of this
section; or
(2) Within 120 calendar days of
receipt of the Secretary’s decision under
paragraph (e) of this section, in the case
of a recipient that submits a request for
reconsideration in accordance with the
requirements of paragraph (d) of this
section.
(g) Other remedial actions. Prior to
seeking recoupment or taking other
appropriate action pursuant to
paragraph (c), (d), (e), or (f) of this
section, the Secretary may notify the
recipient of potential violations and
provide the recipient an opportunity for
informal consultation and remediation.
§ 35.11 Payments to States.
(a) In general. With respect to any
State or Territory that has an
unemployment rate as of the date that
it submits an initial certification for
payment of funds pursuant to section
602(d)(1) of the Social Security Act that
is less than two percentage points above
its unemployment rate in February
2020, the Secretary will withhold 50
percent of the amount of funds allocated
under section 602(b) of the Social
Security Act to such State or territory
until at least May 10, 2022 and not more
than twelve months from the date such
initial certification is provided to the
Secretary.
(b) Payment of withheld amount. In
order to receive the amount withheld
under paragraph (a) of this section, the
State or Territory must submit to the
Secretary the following information:
(1) A certification, in the form
provided by the Secretary, that such
State or Territory requires the payment
to carry out the activities specified in
section 602(c) of the Social Security Act
and will use the payment in compliance
with section 602(c) of the Social
Security Act; and
(2) Any reports required to be filed by
that date pursuant to this part that have
not yet been filed.
§ 35.12 Distributions to nonentitlement
units of local government and units of
general local government.
(a) Nonentitlement units of local
government. Each State or Territory that
receives a payment from the Secretary
pursuant to section 603(b)(2)(B) of the
Social Security Act shall distribute the
amount of the payment to
nonentitlement units of local
government in such State or Territory in
accordance with the requirements set
forth in section 603(b)(2)(C) of the
Social Security Act and without
offsetting any debt owed by such
nonentitlement units of local
governments against such payments.
(b) Budget cap. A State or Territory
may not make a payment to a
nonentitlement unit of local government
pursuant to section 603(b)(2)(C) of the
Social Security Act and paragraph (a) of
this section in excess of the amount
equal to 75 percent of the most recent
budget for the nonentitlement unit of
local government as of January 27, 2020.
For purposes of this section 35.12, a
nonentitlement unit of local
government’s most recent budget shall
mean the nonentitlement unit of local
government’s total annual budget,
including both operating and capital
expenditure budgets, in effect as of
January 27, 2020. A State or Territory
shall permit a nonentitlement unit of
local government without a formal
budget as of January 27, 2020, to
provide a certification from an
authorized officer of the nonentitlement
unit of local government of its most
recent annual expenditures as of
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17.A
4454 Federal Register / Vol. 87, No. 18 / Thursday, January 27, 2022 / Rules and Regulations January 27, 2020, and a State or
Territory may rely on such certification
for purposes of complying with this
section 35.12.
(c) Units of general local government.
Each State or Territory that receives a
payment from the Secretary pursuant to
section 603(b)(3)(B)(ii) of the Social
Security Act, in the case of an amount
to be paid to a county that is not a unit
of general local government, shall
distribute the amount of the payment to
units of general local government within
such county in accordance with the
requirements set forth in section
603(b)(3)(B)(ii) of the Social Security
Act and without offsetting any debt
owed by such units of general local
government against such payments.
(d) Additional conditions. A State or
Territory may not place additional
conditions or requirements on
distributions to nonentitlement units of
local government or units of general
local government beyond those required
by section 603 of the Social Security Act
or this subpart.
Jacob Leibenluft,
Chief Recovery Officer.
[FR Doc. 2022–00292 Filed 1–26–22; 8:45 am]
BILLING CODE P
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17.A
13 Attachment C – Uniform Administrative Requirements, Cost Principles, Federal Provisions and Audit Requirements for Federal Awards -2 CFR Part 200 et seq
2 CFR Part 200 attached hereto
17.A
81 PART 200—UNIFORM ADMINISTRA-
TIVE REQUIREMENTS, COST PRIN-
CIPLES, AND AUDIT REQUIRE-
MENTS FOR FEDERAL AWARDS
Subpart A—Acronyms and Definitions
ACRONYMS
Sec.
200.0 Acronyms.
200.1 Definitions.
200.2 Acquisition cost.
200.3 Advance payment.
200.4 Allocation.
200.5 Audit finding.
200.6 Auditee.
200.7 Auditor.
200.8 Budget.
200.9 Central service cost allocation plan.
200.10 Catalog of Federal Domestic Assist-
ance (CFDA) number.
200.11 CFDA program title.
200.12 Capital assets.
200.13 Capital expenditures.
200.14 Claim.
200.15 Class of Federal awards.
200.16 Closeout.
200.17 Cluster of programs.
200.18 Cognizant agency for audit.
200.19 Cognizant agency for indirect costs.
200.20 Computing devices.
200.21 Compliance supplement.
200.22 Contract.
200.23 Contractor.
200.24 Cooperative agreement.
200.25 Cooperative audit resolution.
200.26 Corrective action.
200.27 Cost allocation plan.
200.28 Cost objective.
200.29 Cost sharing or matching.
200.30 Cross-cutting audit finding.
200.31 [Reserved]
200.32 Data Universal Numbering System
(DUNS) number.
200.33 Equipment.
200.34 Expenditures.
200.35 Federal agency.
200.36 Federal Audit Clearinghouse (FAC).
200.37 Federal awarding agency.
200.38 Federal award.
200.39 Federal award date.
200.40 Federal financial assistance.
200.41 Federal interest.
200.42 Federal program.
200.43 Federal share.
200.44 Final cost objective.
200.45 Fixed amount awards.
200.46 Foreign public entity.
200.47 Foreign organization.
200.48 General purpose equipment.
200.49 Generally Accepted Accounting Prin-
ciples (GAAP).
200.50 Generally Accepted Government Au-
diting Standards (GAGAS).
200.51 Grant agreement.
200.52 Hospital.
200.53 Improper payment.
200.54 Indian tribe (or ‘‘federally recognized
Indian tribe’’).
200.55 Institutions of Higher Education
(IHEs).
200.56 Indirect (facilities & administrative
(F&A)) costs.
200.57 Indirect cost rate proposal.
200.58 Information technology systems.
200.59 Intangible property.
200.60 Intermediate cost objective.
200.61 Internal controls.
200.62 Internal control over compliance re-
quirements for Federal awards.
200.63 Loan.
200.64 Local government.
200.65 Major program.
200.66 Management decision.
200.67 Micro-purchase.
200.68 Modified Total Direct Cost (MTDC).
200.69 Non-Federal entity.
200.70 Nonprofit organization.
200.71 Obligations.
200.72 Office of Management and Budget
(OMB).
200.73 Oversight agency for audit.
200.74 Pass-through entity.
200.75 Participant support costs.
200.76 Performance goal.
200.77 Period of performance.
200.78 Personal property.
200.79 Personally Identifiable Information
(PII).
200.80 Program income.
200.81 Property.
200.82 Protected Personally Identifiable In-
formation (Protected PII).
200.83 Project cost.
200.84 Questioned cost.
200.85 Real property.
200.86 Recipient.
200.87 Research and Development (R&D).
200.88 Simplified acquisition threshold.
200.89 Special purpose equipment.
200.90 State.
200.91 Student Financial Aid (SFA).
200.92 Subaward.
200.93 Subrecipient.
200.94 Supplies.
200.95 Termination.
200.96 Third-party in-kind contributions.
200.97 Unliquidated obligations.
200.98 Unobligated balance.
200.99 Voluntary committed cost sharing.
Subpart B—General Provisions
200.100 Purpose.
200.101 Applicability.
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17.A
82 2 CFR Ch. II (1–1–21 Edition) Pt. 200
200.102 Exceptions.
200.103 Authorities.
200.104 Supersession.
200.105 Effect on other issuances.
200.106 Agency implementation.
200.107 OMB responsibilities.
200.108 Inquiries.
200.109 Review date.
200.110 Effective/applicability date.
200.111 English language.
200.112 Conflict of interest.
200.113 Mandatory disclosures.
Subpart C—Pre-Federal Award Require-
ments and Contents of Federal Awards
200.200 Purpose.
200.201 Use of grant agreements (including
fixed amount awards), cooperative agree-
ments, and contracts.
200.202 Program planning and design.
200.203 Requirement to provide public no-
tice of Federal financial assistance pro-
grams.
200.204 Notices of funding opportunities.
200.205 Federal awarding agency review of
merit of proposals.
200.206 Federal awarding agency review of
risk posed by applicants.
200.207 Standard application requirements.
200.208 Specific conditions.
200.209 Certifications and representations.
200.210 Pre-award costs.
200.211 Information contained in a Federal
award.
200.212 Public access to Federal award infor-
mation.
200.213 Reporting a determination that a
non-Federal entity is not qualified for a
Federal award.
200.214 Suspension and debarment.
200.215 Never contract with the enemy.
200.216 Prohibition on certain telecommuni-
cations and video surveillance services or
equipment.
Subpart D—Post Federal Award
Requirements
200.300 Statutory and national policy re-
quirements.
200.301 Performance measurement.
200.302 Financial management.
200.303 Internal controls.
200.304 Bonds.
200.305 Federal payment.
200.306 Cost sharing or matching.
200.307 Program income.
200.308 Revision of budget and program
plans.
200.309 Modifications to period of perform-
ance.
P
ROPERTY STANDARDS
200.310 Insurance coverage.
200.311 Real property.
200.312 Federally-owned and exempt prop-
erty.
200.313 Equipment.
200.314 Supplies.
200.315 Intangible property.
200.316 Property trust relationship.
P
ROCUREMENT STANDARDS
200.317 Procurements by states.
200.318 General procurement standards.
200.319 Competition.
200.320 Methods of procurement to be fol-
lowed.
200.321 Contracting with small and minority
businesses, women’s business enterprises,
and labor surplus area firms.
200.322 Domestic preferences for procure-
ments.
200.323 Procurement of recovered materials.
200.324 Contract cost and price.
200.325 Federal awarding agency or pass-
through entity review.
200.326 Bonding requirements.
200.327 Contract provisions.
P
ERFORMANCE AND FINANCIAL MONITORING
AND REPORTING
200.328 Financial reporting.
200.329 Monitoring and reporting program
performance.
200.330 Reporting on real property.
SUBRECIPIENT MONITORING AND MANAGEMENT
200.331 Subrecipient and contractor deter-
minations.
200.332 Requirements for pass-through enti-
ties.
200.333 Fixed amount subawards.
RECORD RETENTION AND ACCESS
200.334 Retention requirements for records.
200.335 Requests for transfer of records.
200.336 Methods for collection, trans-
mission, and storage of information.
200.337 Access to records.
200.338 Restrictions on public access to
records.
R
EMEDIES FOR NONCOMPLIANCE
200.339 Remedies for noncompliance.
200.340 Termination.
200.341 Notification of termination require-
ment.
200.342 Opportunities to object, hearings,
and appeals.
200.343 Effects of suspension and termi-
nation.
C
LOSEOUT
200.344 Closeout.
POST-CLOSEOUT ADJUSTMENTS AND
CONTINUING RESPONSIBILITIES
200.345 Post-closeout adjustments and con-
tinuing responsibilities.
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17.A
83 OMB Guidance Pt. 200
COLLECTION OF AMOUNTS DUE
200.346 Collection of amounts due.
Subpart E—Cost Principles
GENERAL PROVISIONS
200.400 Policy guide.
200.401 Application.
BASIC CONSIDERATIONS
200.402 Composition of costs.
200.403 Factors affecting allowability of
costs.
200.404 Reasonable costs.
200.405 Allocable costs.
200.406 Applicable credits.
200.407 Prior written approval (prior ap-
proval).
200.408 Limitation on allowance of costs.
200.409 Special considerations.
200.410 Collection of unallowable costs.
200.411 Adjustment of previously negotiated
indirect (F&A) cost rates containing un-
allowable costs.
D
IRECT AND INDIRECT (F&A) COSTS
200.412 Classification of costs.
200.413 Direct costs.
200.414 Indirect (F&A) costs.
200.415 Required certifications.
S
PECIAL CONSIDERATIONS FOR STATES, LOCAL
GOVERNMENTS AND INDIAN TRIBES
200.416 Cost allocation plans and indirect
cost proposals.
200.417 Interagency service.
SPECIAL CONSIDERATIONS FOR INSTITUTIONS OF
HIGHER EDUCATION
200.418 Costs incurred by states and local
governments.
200.419 Cost accounting standards and dis-
closure statement.
GENERAL PROVISIONS FOR SELECTED ITEMS OF
COST
200.420 Considerations for selected items of
cost.
200.421 Advertising and public relations.
200.422 Advisory councils.
200.423 Alcoholic beverages.
200.424 Alumni/ae activities.
200.425 Audit services.
200.426 Bad debts.
200.427 Bonding costs.
200.428 Collections of improper payments.
200.429 Commencement and convocation
costs.
200.430 Compensation—personal services.
200.431 Compensation—fringe benefits.
200.432 Conferences.
200.433 Contingency provisions.
200.434 Contributions and donations.
200.435 Defense and prosecution of criminal
and civil proceedings, claims, appeals
and patent infringements.
200.436 Depreciation.
200.437 Employee health and welfare costs.
200.438 Entertainment costs.
200.439 Equipment and other capital expend-
itures.
200.440 Exchange rates.
200.441 Fines, penalties, damages and other
settlements.
200.442 Fund raising and investment man-
agement costs.
200.443 Gains and losses on disposition of de-
preciable assets.
200.444 General costs of government.
200.445 Goods or services for personal use.
200.446 Idle facilities and idle capacity.
200.447 Insurance and indemnification.
200.448 Intellectual property.
200.449 Interest.
200.450 Lobbying.
200.451 Losses on other awards or contracts.
200.452 Maintenance and repair costs.
200.453 Materials and supplies costs, includ-
ing costs of computing devices.
200.454 Memberships, subscriptions, and pro-
fessional activity costs.
200.455 Organization costs.
200.456 Participant support costs.
200.457 Plant and security costs.
200.458 Pre-award costs.
200.459 Professional service costs.
200.460 Proposal costs.
200.461 Publication and printing costs.
200.462 Rearrangement and reconversion
costs.
200.463 Recruiting costs.
200.464 Relocation costs of employees.
200.465 Rental costs of real property and
equipment.
200.466 Scholarships and student aid costs.
200.467 Selling and marketing costs.
200.468 Specialized service facilities.
200.469 Student activity costs.
200.470 Taxes (including Value Added Tax).
200.471 Telecommunication costs and video
surveillance costs.
200.472 Termination costs.
200.473 Training and education costs.
200.474 Transportation costs.
200.475 Travel costs.
200.476 Trustees.
Subpart F—Audit Requirements
GENERAL
200.500 Purpose.
AUDITS
200.501 Audit requirements.
200.502 Basis for determining Federal
awards expended.
200.503 Relation to other audit require-
ments.
200.504 Frequency of audits.
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17.A
84 2 CFR Ch. II (1–1–21 Edition) § 200.0
200.505 Sanctions.
200.506 Audit costs.
200.507 Program-specific audits.
A
UDITEES
200.508 Auditee responsibilities.
200.509 Auditor selection.
200.510 Financial statements.
200.511 Audit findings follow-up.
200.512 Report submission.
F
EDERAL AGENCIES
200.513 Responsibilities.
AUDITORS
200.514 Scope of audit.
200.515 Audit reporting.
200.516 Audit findings.
200.517 Audit documentation.
200.518 Major program determination.
200.519 Criteria for Federal program risk.
200.520 Criteria for a low-risk auditee.
M
ANAGEMENT DECISIONS
200.521 Management decision.
APPENDIX I TO PART 200—F ULL TEXT OF NO-
TICE OF FUNDING OPPORTUNITY
APPENDIX II TO PART 200—C ONTRACT PROVI-
SIONS FOR NON-FEDERAL ENTITY CON-
TRACTS UNDER FEDERAL AWARDS
APPENDIX III TO PART 200—I NDIRECT (F&A)
COSTS IDENTIFICATION AND ASSIGNMENT,
AND RATE DETERMINATION FOR INSTITU-
TIONS OF HIGHER EDUCATION (IHES)
APPENDIX IV TO PART 200—I NDIRECT (F&A)
COSTS IDENTIFICATION AND ASSIGNMENT,
AND RATE DETERMINATION FOR NONPROFIT
ORGANIZATIONS
APPENDIX V TO PART 200— S TATE/LOCAL GOV-
ERNMENTWIDE CENTRAL SERVICE COST AL-
LOCATION PLANS
APPENDIX VI TO PART 200—P UBLIC ASSIST-
ANCE COST ALLOCATION PLANS
APPENDIX VII TO PART 220—S TATES AND
LOCAL GOVERNMENT AND INDIAN TRIBE IN-
DIRECT COST PROPOSALS
APPENDIX VIII TO PART 200—N ONPROFIT OR-
GANIZATIONS EXEMPTED FROM SUBPART E
OF PART 200
APPENDIX IX TO PART 200—H OSPITAL COST
PRINCIPLES
APPENDIX X TO PART 200—D ATA COLLECTION
FORM (FORM SF–SAC)
APPENDIX XI TO PART 200—C OMPLIANCE SUP-
PLEMENT
APPENDIX XII TO PART 200—A WARD TERM AND
CONDITION FOR RECIPIENT INTEGRITY AND
PERFORMANCE MATTERS
AUTHORITY: 31 U.S.C. 503
SOURCE: 78 FR 78608, Dec. 26, 2013, unless
otherwise noted.
Subpart A—Acronyms and
Definitions
ACRONYMS
§ 200.0 Acronyms.
ACRONYM TERM
CAS Cost Accounting Standards
CFR Code of Federal Regulations
CMIA Cash Management Improve-
ment Act
COG Councils Of Governments
COSO Committee of Sponsoring Orga-
nizations of the Treadway Commis-
sion
EPA Environmental Protection Agen
cy
ERISA Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1301–
1461)
EUI Energy Usage Index
F&A Facilities and Administration
FAC Federal Audit Clearinghouse
FAIN Federal Award Identification
Number
FAPIIS Federal Awardee Perform-
ance and Integrity Information Sys-
tem
FAR Federal Acquisition Regulation
FFATA Federal Funding Account-
ability and Transparency Act of 2006
or Transparency Act—Public Law
109–282, as amended by section 6202(a)
of Public Law 110–252 (31 U.S.C. 6101)
FICA Federal Insurance Contribu-
tions Act
FOIA Freedom of Information Act
FR Federal Register
FTE Full-time equivalent
GAAP Generally Accepted Account-
ing Principles
GAGAS Generally Accepted Govern-
ment Auditing Standards
GAO Government Accountability Of-
fice
GOCO Government owned, contractor
operated
GSA General Services Administration
IBS Institutional Base Salary
IHE Institutions of Higher Education
IRC Internal Revenue Code
ISDEAA Indian Self-Determination
and Education and Assistance Act
MTC Modified Total Cost
MTDC Modified Total Direct Cost
NFE Non-Federal Entity
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17.A
85 OMB Guidance § 200.1
OMB Office of Management and Budg-
et
PII Personally Identifiable Informa-
tion
PMS Payment Management System
PRHP Post-retirement Health Plans
PTE Pass-through Entity
REUI Relative Energy Usage Index
SAM System for Award Management
SFA Student Financial Aid
SNAP Supplemental Nutrition Assist-
ance Program
SPOC Single Point of Contact
TANF Temporary Assistance for
Needy Families
TFM Treasury Financial Manual
U.S.C. United States Code
VAT Value Added Tax
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75880, Dec. 19, 2014; 80 FR 43308, July 22,
2015; 85 FR 49529, Aug. 13, 2020]
§ 200.1 Definitions.
These are the definitions for terms
used in this part. Different definitions
may be found in Federal statutes or
regulations that apply more specifi-
cally to particular programs or activi-
ties. These definitions could be supple-
mented by additional instructional in-
formation provided in governmentwide
standard information collections. For
purposes of this part, the following
definitions apply:
Acquisition cost means the cost of the
asset including the cost to ready the
asset for its intended use. Acquisition
cost for equipment, for example, means
the net invoice price of the equipment,
including the cost of any modifica-
tions, attachments, accessories, or aux-
iliary apparatus necessary to make it
usable for the purpose for which it is
acquired. Acquisition costs for soft-
ware includes those development costs
capitalized in accordance with gen-
erally accepted accounting principles
(GAAP). Ancillary charges, such as
taxes, duty, protective in transit insur-
ance, freight, and installation may be
included in or excluded from the acqui-
sition cost in accordance with the non-
Federal entity’s regular accounting
practices.
Advance payment means a payment
that a Federal awarding agency or
pass-through entity makes by any ap-
propriate payment mechanism, includ-
ing a predetermined payment schedule,
before the non-Federal entity disburses
the funds for program purposes.
Allocation means the process of as-
signing a cost, or a group of costs, to
one or more cost objective(s), in rea-
sonable proportion to the benefit pro-
vided or other equitable relationship.
The process may entail assigning a
cost(s) directly to a final cost objective
or through one or more intermediate
cost objectives.
Assistance listings refers to the pub-
licly available listing of Federal assist-
ance programs managed and adminis-
tered by the General Services Adminis-
tration, formerly known as the Catalog
of Federal Domestic Assistance
(CFDA).
Assistance listing number means a
unique number assigned to identify a
Federal Assistance Listings, formerly
known as the CFDA Number.
Assistance listing program title means
the title that corresponds to the Fed-
eral Assistance Listings Number, for-
merly known as the CFDA program
title.
Audit finding means deficiencies
which the auditor is required by
§ 200.516(a) to report in the schedule of
findings and questioned costs.
Auditee means any non-Federal enti-
ty that expends Federal awards which
must be audited under subpart F of
this part.
Auditor means an auditor who is a
public accountant or a Federal, State,
local government, or Indian tribe audit
organization, which meets the general
standards specified for external audi-
tors in generally accepted government
auditing standards (GAGAS). The term
auditor does not include internal audi-
tors of nonprofit organizations.
Budget means the financial plan for
the Federal award that the Federal
awarding agency or pass-through enti-
ty approves during the Federal award
process or in subsequent amendments
to the Federal award. It may include
the Federal and non-Federal share or
only the Federal share, as determined
by the Federal awarding agency or
pass-through entity.
Budget period means the time inter-
val from the start date of a funded por-
tion of an award to the end date of that
funded portion during which recipients
are authorized to expend the funds
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17.A
86 2 CFR Ch. II (1–1–21 Edition) § 200.1
awarded, including any funds carried
forward or other revisions pursuant to
§ 200.308.
Capital assets means:
(1) Tangible or intangible assets used
in operations having a useful life of
more than one year which are capital-
ized in accordance with GAAP. Capital
assets include:
(i) Land, buildings (facilities), equip-
ment, and intellectual property (in-
cluding software) whether acquired by
purchase, construction, manufacture,
exchange, or through a lease accounted
for as financed purchase under Govern-
ment Accounting Standards Board
(GASB) standards or a finance lease
under Financial Accounting Standards
Board (FASB) standards; and
(ii) Additions, improvements, modi-
fications, replacements, rearrange-
ments, reinstallations, renovations or
alterations to capital assets that mate-
rially increase their value or useful life
(not ordinary repairs and mainte-
nance).
(2) For purpose of this part, capital
assets do not include intangible right-
to-use assets (per GASB) and right-to-
use operating lease assets (per FASB).
For example, assets capitalized that
recognize a lessee’s right to control the
use of property and/or equipment for a
period of time under a lease contract.
See also § 200.465.
Capital expenditures means expendi-
tures to acquire capital assets or ex-
penditures to make additions, improve-
ments, modifications, replacements,
rearrangements, reinstallations, ren-
ovations, or alterations to capital as-
sets that materially increase their
value or useful life.
Central service cost allocation plan
means the documentation identifying,
accumulating, and allocating or devel-
oping billing rates based on the allow-
able costs of services provided by a
State or local government or Indian
tribe on a centralized basis to its de-
partments and agencies. The costs of
these services may be allocated or
billed to users.
Claim means, depending on the con-
text, either:
(1) A written demand or written as-
sertion by one of the parties to a Fed-
eral award seeking as a matter of
right:
(i) The payment of money in a sum
certain;
(ii) The adjustment or interpretation
of the terms and conditions of the Fed-
eral award; or
(iii) Other relief arising under or re-
lating to a Federal award.
(2) A request for payment that is not
in dispute when submitted.
Class of Federal awards means a group
of Federal awards either awarded under
a specific program or group of pro-
grams or to a specific type of non-Fed-
eral entity or group of non-Federal en-
tities to which specific provisions or
exceptions may apply.
Closeout means the process by which
the Federal awarding agency or pass-
through entity determines that all ap-
plicable administrative actions and all
required work of the Federal award
have been completed and takes actions
as described in § 200.344.
Cluster of programs means a grouping
of closely related programs that share
common compliance requirements. The
types of clusters of programs are re-
search and development (R&D), student
financial aid (SFA), and other clusters.
‘‘Other clusters’’ are as defined by OMB
in the compliance supplement or as
designated by a State for Federal
awards the State provides to its sub-
recipients that meet the definition of a
cluster of programs. When designating
an ‘‘other cluster,’’ a State must iden-
tify the Federal awards included in the
cluster and advise the subrecipients of
compliance requirements applicable to
the cluster, consistent with § 200.332(a).
A cluster of programs must be consid-
ered as one program for determining
major programs, as described in
§ 200.518, and, with the exception of
R&D as described in § 200.501(c), wheth-
er a program-specific audit may be
elected.
Cognizant agency for audit means the
Federal agency designated to carry out
the responsibilities described in
§ 200.513(a). The cognizant agency for
audit is not necessarily the same as the
cognizant agency for indirect costs. A
list of cognizant agencies for audit can
be found on the Federal Audit Clear-
inghouse (FAC) website.
Cognizant agency for indirect costs
means the Federal agency responsible
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87 OMB Guidance § 200.1
for reviewing, negotiating, and approv-
ing cost allocation plans or indirect
cost proposals developed under this
part on behalf of all Federal agencies.
The cognizant agency for indirect cost
is not necessarily the same as the cog-
nizant agency for audit. For assign-
ments of cognizant agencies see the
following:
(1) For Institutions of Higher Edu-
cation (IHEs): Appendix III to this
part, paragraph C.11.
(2) For nonprofit organizations: Ap-
pendix IV to this part, paragraph C.2.a.
(3) For State and local governments:
Appendix V to this part, paragraph F.1.
(4) For Indian tribes: Appendix VII to
this part, paragraph D.1.
Compliance supplement means an an-
nually updated authoritative source for
auditors that serves to identify exist-
ing important compliance require-
ments that the Federal Government
expects to be considered as part of an
audit. Auditors use it to understand
the Federal program’s objectives, pro-
cedures, and compliance requirements,
as well as audit objectives and sug-
gested audit procedures for deter-
mining compliance with the relevant
Federal program.
Computing devices means machines
used to acquire, store, analyze, process,
and publish data and other information
electronically, including accessories
(or ‘‘peripherals’’) for printing, trans-
mitting and receiving, or storing elec-
tronic information. See also the defini-
tions of supplies and information tech-
nology systems in this section.
Contract means, for the purpose of
Federal financial assistance, a legal in-
strument by which a recipient or sub-
recipient purchases property or serv-
ices needed to carry out the project or
program under a Federal award. For
additional information on subrecipient
and contractor determinations, see
§ 200.331. See also the definition of
subaward in this section.
Contractor means an entity that re-
ceives a contract as defined in this sec-
tion.
Cooperative agreement means a legal
instrument of financial assistance be-
tween a Federal awarding agency and a
recipient or a pass-through entity and
a subrecipient that, consistent with 31
U.S.C. 6302–6305:
(1) Is used to enter into a relation-
ship the principal purpose of which is
to transfer anything of value to carry
out a public purpose authorized by a
law of the United States (see 31 U.S.C.
6101(3)); and not to acquire property or
services for the Federal Government or
pass-through entity’s direct benefit or
use;
(2) Is distinguished from a grant in
that it provides for substantial involve-
ment of the Federal awarding agency
in carrying out the activity con-
templated by the Federal award.
(3) The term does not include:
(i) A cooperative research and devel-
opment agreement as defined in 15
U.S.C. 3710a; or
(ii) An agreement that provides only:
(A) Direct United States Government
cash assistance to an individual;
(B) A subsidy;
(C) A loan;
(D) A loan guarantee; or
(E) Insurance.
Cooperative audit resolution means the
use of audit follow-up techniques which
promote prompt corrective action by
improving communication, fostering
collaboration, promoting trust, and de-
veloping an understanding between the
Federal agency and the non-Federal en-
tity. This approach is based upon:
(1) A strong commitment by Federal
agency and non-Federal entity leader-
ship to program integrity;
(2) Federal agencies strengthening
partnerships and working coopera-
tively with non-Federal entities and
their auditors; and non-Federal enti-
ties and their auditors working coop-
eratively with Federal agencies;
(3) A focus on current conditions and
corrective action going forward;
(4) Federal agencies offering appro-
priate relief for past noncompliance
when audits show prompt corrective
action has occurred; and
(5) Federal agency leadership sending
a clear message that continued failure
to correct conditions identified by au-
dits which are likely to cause improper
payments, fraud, waste, or abuse is un-
acceptable and will result in sanctions.
Corrective action means action taken
by the auditee that:
(1) Corrects identified deficiencies;
(2) Produces recommended improve-
ments; or
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88 2 CFR Ch. II (1–1–21 Edition) § 200.1
(3) Demonstrates that audit findings
are either invalid or do not warrant
auditee action.
Cost allocation plan means central
service cost allocation plan or public
assistance cost allocation plan.
Cost objective means a program, func-
tion, activity, award, organizational
subdivision, contract, or work unit for
which cost data are desired and for
which provision is made to accumulate
and measure the cost of processes,
products, jobs, capital projects, etc. A
cost objective may be a major function
of the non-Federal entity, a particular
service or project, a Federal award, or
an indirect (Facilities & Administra-
tive (F&A)) cost activity, as described
in subpart E of this part. See also the
definitions of final cost objective and in-
termediate cost objective in this section.
Cost sharing or matching means the
portion of project costs not paid by
Federal funds or contributions (unless
otherwise authorized by Federal stat-
ute). See also § 200.306.
Cross-cutting audit finding means an
audit finding where the same under-
lying condition or issue affects all Fed-
eral awards (including Federal awards
of more than one Federal awarding
agency or pass-through entity).
Disallowed costs means those charges
to a Federal award that the Federal
awarding agency or pass-through enti-
ty determines to be unallowable, in ac-
cordance with the applicable Federal
statutes, regulations, or the terms and
conditions of the Federal award.
Discretionary award means an award
in which the Federal awarding agency,
in keeping with specific statutory au-
thority that enables the agency to ex-
ercise judgment (‘‘discretion’’), selects
the recipient and/or the amount of Fed-
eral funding awarded through a com-
petitive process or based on merit of
proposals. A discretionary award may
be selected on a non-competitive basis,
as appropriate.
Equipment means tangible personal
property (including information tech-
nology systems) having a useful life of
more than one year and a per-unit ac-
quisition cost which equals or exceeds
the lesser of the capitalization level es-
tablished by the non-Federal entity for
financial statement purposes, or $5,000.
See also the definitions of capital as-
sets, computing devices, general purpose
equipment, information technology sys-
tems, special purpose equipment, and sup-
plies in this section.
Expenditures means charges made by
a non-Federal entity to a project or
program for which a Federal award was
received.
(1) The charges may be reported on a
cash or accrual basis, as long as the
methodology is disclosed and is con-
sistently applied.
(2) For reports prepared on a cash
basis, expenditures are the sum of:
(i) Cash disbursements for direct
charges for property and services;
(ii) The amount of indirect expense
charged;
(iii) The value of third-party in-kind
contributions applied; and
(iv) The amount of cash advance pay-
ments and payments made to sub-
recipients.
(3) For reports prepared on an ac-
crual basis, expenditures are the sum
of:
(i) Cash disbursements for direct
charges for property and services;
(ii) The amount of indirect expense
incurred;
(iii) The value of third-party in-kind
contributions applied; and
(iv) The net increase or decrease in
the amounts owed by the non-Federal
entity for:
(A) Goods and other property re-
ceived;
(B) Services performed by employees,
contractors, subrecipients, and other
payees; and
(C) Programs for which no current
services or performance are required
such as annuities, insurance claims, or
other benefit payments.
Federal agency means an ‘‘agency’’ as
defined at 5 U.S.C. 551(1) and further
clarified by 5 U.S.C. 552(f).
Federal Audit Clearinghouse (FAC)
means the clearinghouse designated by
OMB as the repository of record where
non-Federal entities are required to
transmit the information required by
subpart F of this part.
Federal award has the meaning, de-
pending on the context, in either para-
graph (1) or (2) of this definition:
(1)(i) The Federal financial assistance
that a recipient receives directly from
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89 OMB Guidance § 200.1
a Federal awarding agency or indi-
rectly from a pass-through entity, as
described in § 200.101; or
(ii) The cost-reimbursement contract
under the Federal Acquisition Regula-
tions that a non-Federal entity re-
ceives directly from a Federal award-
ing agency or indirectly from a pass-
through entity, as described in § 200.101.
(2) The instrument setting forth the
terms and conditions. The instrument
is the grant agreement, cooperative
agreement, other agreement for assist-
ance covered in paragraph (2) of the
definition of Federal financial assistance
in this section, or the cost-reimburse-
ment contract awarded under the Fed-
eral Acquisition Regulations.
(3) Federal award does not include
other contracts that a Federal agency
uses to buy goods or services from a
contractor or a contract to operate
Federal Government owned, contractor
operated facilities (GOCOs).
(4) See also definitions of Federal fi-
nancial assistance, grant agreement,
and cooperative agreement.
Federal award date means the date
when the Federal award is signed by
the authorized official of the Federal
awarding agency.
Federal financial assistance means
(1) Assistance that non-Federal enti-
ties receive or administer in the form
of:
(i) Grants;
(ii) Cooperative agreements;
(iii) Non-cash contributions or dona-
tions of property (including donated
surplus property);
(iv) Direct appropriations;
(v) Food commodities; and
(vi) Other financial assistance (ex-
cept assistance listed in paragraph (2)
of this definition).
(2) For § 200.203 and subpart F of this
part, Federal financial assistance also in-
cludes assistance that non-Federal en-
tities receive or administer in the form
of:
(i) Loans;
(ii) Loan Guarantees;
(iii) Interest subsidies; and
(iv) Insurance.
(3) For § 200.216, Federal financial as-
sistance includes assistance that non-
Federal entities receive or administer
in the form of:
(i) Grants;
(ii) Cooperative agreements;
(iii) Loans; and
(iv) Loan Guarantees.
(4) Federal financial assistance does
not include amounts received as reim-
bursement for services rendered to in-
dividuals as described in § 200.502(h) and
(i).
Federal interest means, for purposes of
§ 200.330 or when used in connection
with the acquisition or improvement of
real property, equipment, or supplies
under a Federal award, the dollar
amount that is the product of the:
(1) The percentage of Federal partici-
pation in the total cost of the real
property, equipment, or supplies; and
(2) Current fair market value of the
property, improvements, or both, to
the extent the costs of acquiring or im-
proving the property were included as
project costs.
Federal program means:
(1) All Federal awards which are as-
signed a single Assistance Listings
Number.
(2) When no Assistance Listings
Number is assigned, all Federal awards
from the same agency made for the
same purpose must be combined and
considered one program.
(3) Notwithstanding paragraphs (1)
and (2) of this definition, a cluster of
programs. The types of clusters of pro-
grams are:
(i) Research and development (R&D);
(ii) Student financial aid (SFA); and
(iii) ‘‘Other clusters,’’ as described in
the definition of cluster of programs in
this section.
Federal share means the portion of
the Federal award costs that are paid
using Federal funds.
Final cost objective means a cost ob-
jective which has allocated to it both
direct and indirect costs and, in the
non-Federal entity’s accumulation sys-
tem, is one of the final accumulation
points, such as a particular award, in-
ternal project, or other direct activity
of a non-Federal entity. See also the
definitions of cost objective and inter-
mediate cost objective in this section.
Financial obligations, when ref-
erencing a recipient’s or subrecipient’s
use of funds under a Federal award,
means orders placed for property and
services, contracts and subawards
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90 2 CFR Ch. II (1–1–21 Edition) § 200.1
made, and similar transactions that re-
quire payment.
Fixed amount awards means a type of
grant or cooperative agreement under
which the Federal awarding agency or
pass-through entity provides a specific
level of support without regard to ac-
tual costs incurred under the Federal
award. This type of Federal award re-
duces some of the administrative bur-
den and record-keeping requirements
for both the non-Federal entity and
Federal awarding agency or pass-
through entity. Accountability is based
primarily on performance and results.
See §§ 200.102(c), 200.201(b), and 200.333.
Foreign organization means an entity
that is:
(1) A public or private organization
located in a country other than the
United States and its territories that is
subject to the laws of the country in
which it is located, irrespective of the
citizenship of project staff or place of
performance;
(2) A private nongovernmental orga-
nization located in a country other
than the United States that solicits
and receives cash contributions from
the general public;
(3) A charitable organization located
in a country other than the United
States that is nonprofit and tax ex-
empt under the laws of its country of
domicile and operation, and is not a
university, college, accredited degree-
granting institution of education, pri-
vate foundation, hospital, organization
engaged exclusively in research or sci-
entific activities, church, synagogue,
mosque or other similar entities orga-
nized primarily for religious purposes;
or
(4) An organization located in a coun-
try other than the United States not
recognized as a foreign public entity.
Foreign public entity means:
(1) A foreign government or foreign
governmental entity;
(2) A public international organiza-
tion, which is an organization entitled
to enjoy privileges, exemptions, and
immunities as an international organi-
zation under the International Organi-
zations Immunities Act (22 U.S.C. 288–
288f);
(3) An entity owned (in whole or in
part) or controlled by a foreign govern-
ment; or
(4) Any other entity consisting whol-
ly or partially of one or more foreign
governments or foreign governmental
entities.
General purpose equipment means
equipment which is not limited to re-
search, medical, scientific or other
technical activities. Examples include
office equipment and furnishings, mod-
ular offices, telephone networks, infor-
mation technology equipment and sys-
tems, air conditioning equipment, re-
production and printing equipment,
and motor vehicles. See also the defini-
tions of equipment and special purpose
equipment in this section.
Generally accepted accounting prin-
ciples (GAAP) has the meaning specified
in accounting standards issued by the
GASB and the FASB.
Generally accepted government auditing
standards (GAGAS), also known as the
Yellow Book, means generally accepted
government auditing standards issued
by the Comptroller General of the
United States, which are applicable to
financial audits.
Grant agreement means a legal instru-
ment of financial assistance between a
Federal awarding agency or pass-
through entity and a non-Federal enti-
ty that, consistent with 31 U.S.C. 6302,
6304:
(1) Is used to enter into a relation-
ship the principal purpose of which is
to transfer anything of value to carry
out a public purpose authorized by a
law of the United States (see 31 U.S.C.
6101(3)); and not to acquire property or
services for the Federal awarding agen-
cy or pass-through entity’s direct ben-
efit or use;
(2) Is distinguished from a coopera-
tive agreement in that it does not pro-
vide for substantial involvement of the
Federal awarding agency in carrying
out the activity contemplated by the
Federal award.
(3) Does not include an agreement
that provides only:
(i) Direct United States Government
cash assistance to an individual;
(ii) A subsidy;
(iii) A loan;
(vi) A loan guarantee; or
(v) Insurance.
Highest level owner means the entity
that owns or controls an immediate
owner of the offeror, or that owns or
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91 OMB Guidance § 200.1
controls one or more entities that con-
trol an immediate owner of the offeror.
No entity owns or exercises control of
the highest-level owner as defined in
the Federal Acquisition Regulations
(FAR) (48 CFR 52.204–17).
Hospital means a facility licensed as
a hospital under the law of any state or
a facility operated as a hospital by the
United States, a state, or a subdivision
of a state.
Improper payment means:
(1) Any payment that should not
have been made or that was made in an
incorrect amount under statutory, con-
tractual, administrative, or other le-
gally applicable requirements.
(i) Incorrect amounts are overpay-
ments or underpayments that are made
to eligible recipients (including inap-
propriate denials of payment or serv-
ice, any payment that does not account
for credit for applicable discounts, pay-
ments that are for an incorrect
amount, and duplicate payments). An
improper payment also includes any
payment that was made to an ineli-
gible recipient or for an ineligible good
or service, or payments for goods or
services not received (except for such
payments authorized by law).
Note 1 to paragraph (1)(i) of this defini-
tion. Applicable discounts are only
those discounts where it is both advan-
tageous and within the agency’s con-
trol to claim them.
(ii) When an agency’s review is un-
able to discern whether a payment was
proper as a result of insufficient or
lack of documentation, this payment
should also be considered an improper
payment. When establishing docu-
mentation requirements for payments,
agencies should ensure that all docu-
mentation requirements are necessary
and should refrain from imposing addi-
tional burdensome documentation re-
quirements.
(iii) Interest or other fees that may
result from an underpayment by an
agency are not considered an improper
payment if the interest was paid cor-
rectly. These payments are generally
separate transactions and may be nec-
essary under certain statutory, con-
tractual, administrative, or other le-
gally applicable requirements.
(iv) A ‘‘questioned cost’’ (as defined
in this section) should not be consid-
ered an improper payment until the
transaction has been completely re-
viewed and is confirmed to be im-
proper.
(v) The term ‘‘payment’’ in this defi-
nition means any disbursement or
transfer of Federal funds (including a
commitment for future payment, such
as cash, securities, loans, loan guaran-
tees, and insurance subsidies) to any
non-Federal person, non-Federal enti-
ty, or Federal employee, that is made
by a Federal agency, a Federal con-
tractor, a Federal grantee, or a govern-
mental or other organization admin-
istering a Federal program or activity.
(vi) The term ‘‘payment’’ includes
disbursements made pursuant to prime
contracts awarded under the Federal
Acquisition Regulation and Federal
awards subject to this part that are ex-
pended by recipients.
(2) See definition of improper pay-
ment in OMB Circular A–123 appendix
C, part I A (1) ‘‘What is an improper
payment?’’ Questioned costs, including
those identified in audits, are not an
improper payment until reviewed and
confirmed to be improper as defined in
OMB Circular A–123 appendix C.
Indian tribe means any Indian tribe,
band, nation, or other organized group
or community, including any Alaska
Native village or regional or village
corporation as defined in or established
pursuant to the Alaska Native Claims
Settlement Act (43 U.S.C. Chapter 33),
which is recognized as eligible for the
special programs and services provided
by the United States to Indians be-
cause of their status as Indians (25
U.S.C. 450b(e)). See annually published
Bureau of Indian Affairs list of Indian
Entities Recognized and Eligible to Re-
ceive Services.
Institutions of Higher Education (IHEs)
is defined at 20 U.S.C. 1001.
Indirect (facilities & administrative
(F&A)) costs means those costs incurred
for a common or joint purpose benefit-
ting more than one cost objective, and
not readily assignable to the cost ob-
jectives specifically benefitted, with-
out effort disproportionate to the re-
sults achieved. To facilitate equitable
distribution of indirect expenses to the
cost objectives served, it may be nec-
essary to establish a number of pools of
indirect (F&A) costs. Indirect (F&A)
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92 2 CFR Ch. II (1–1–21 Edition) § 200.1
cost pools must be distributed to bene-
fitted cost objectives on bases that will
produce an equitable result in consider-
ation of relative benefits derived.
Indirect cost rate proposal means the
documentation prepared by a non-Fed-
eral entity to substantiate its request
for the establishment of an indirect
cost rate as described in appendices III
through VII and appendix IX to this
part.
Information technology systems means
computing devices, ancillary equip-
ment, software, firmware, and similar
procedures, services (including support
services), and related resources. See
also the definitions of computing devices
and equipment in this section.
Intangible property means property
having no physical existence, such as
trademarks, copyrights, patents and
patent applications and property, such
as loans, notes and other debt instru-
ments, lease agreements, stock and
other instruments of property owner-
ship (whether the property is tangible
or intangible).
Intermediate cost objective means a
cost objective that is used to accumu-
late indirect costs or service center
costs that are subsequently allocated
to one or more indirect cost pools or
final cost objectives. See also the defi-
nitions of cost objective and final cost ob-
jective in this section.
Internal controls for non-Federal enti-
ties means:
(1) Processes designed and imple-
mented by non-Federal entities to pro-
vide reasonable assurance regarding
the achievement of objectives in the
following categories:
(i) Effectiveness and efficiency of op-
erations;
(ii) Reliability of reporting for inter-
nal and external use; and
(iii) Compliance with applicable laws
and regulations.
(2) Federal awarding agencies are re-
quired to follow internal control com-
pliance requirements in OMB Circular
No. A–123, Management’s Responsi-
bility for Enterprise Risk Management
and Internal Control.
Loan means a Federal loan or loan
guarantee received or administered by
a non-Federal entity, except as used in
the definition of program income in this
section.
(1) The term ‘‘direct loan’’ means a
disbursement of funds by the Federal
Government to a non-Federal borrower
under a contract that requires the re-
payment of such funds with or without
interest. The term includes the pur-
chase of, or participation in, a loan
made by another lender and financing
arrangements that defer payment for
more than 90 days, including the sale of
a Federal Government asset on credit
terms. The term does not include the
acquisition of a federally guaranteed
loan in satisfaction of default claims or
the price support loans of the Com-
modity Credit Corporation.
(2) The term ‘‘direct loan obligation’’
means a binding agreement by a Fed-
eral awarding agency to make a direct
loan when specified conditions are ful-
filled by the borrower.
(3) The term ‘‘loan guarantee’’ means
any Federal Government guarantee, in-
surance, or other pledge with respect
to the payment of all or a part of the
principal or interest on any debt obli-
gation of a non-Federal borrower to a
non-Federal lender, but does not in-
clude the insurance of deposits, shares,
or other withdrawable accounts in fi-
nancial institutions.
(4) The term ‘‘loan guarantee com-
mitment’’ means a binding agreement
by a Federal awarding agency to make
a loan guarantee when specified condi-
tions are fulfilled by the borrower, the
lender, or any other party to the guar-
antee agreement.
Local government means any unit of
government within a state, including a:
(1) County;
(2) Borough;
(3) Municipality;
(4) City;
(5) Town;
(6) Township;
(7) Parish;
(8) Local public authority, including
any public housing agency under the
United States Housing Act of 1937;
(9) Special district;
(10) School district;
(11) Intrastate district;
(12) Council of governments, whether
or not incorporated as a nonprofit cor-
poration under State law; and
(13) Any other agency or instrumen-
tality of a multi-, regional, or intra-
State or local government.
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93 OMB Guidance § 200.1
Major program means a Federal pro-
gram determined by the auditor to be a
major program in accordance with
§ 200.518 or a program identified as a
major program by a Federal awarding
agency or pass-through entity in ac-
cordance with § 200.503(e).
Management decision means the Fed-
eral awarding agency’s or pass-through
entity’s written determination, pro-
vided to the auditee, of the adequacy of
the auditee’s proposed corrective ac-
tions to address the findings, based on
its evaluation of the audit findings and
proposed corrective actions.
Micro-purchase means a purchase of
supplies or services, the aggregate
amount of which does not exceed the
micro-purchase threshold. Micro-pur-
chases comprise a subset of a non-Fed-
eral entity’s small purchases as defined
in § 200.320.
Micro-purchase threshold means the
dollar amount at or below which a non-
Federal entity may purchase property
or services using micro-purchase proce-
dures (see § 200.320). Generally, the
micro-purchase threshold for procure-
ment activities administered under
Federal awards is not to exceed the
amount set by the FAR at 48 CFR part
2, subpart 2.1, unless a higher threshold
is requested by the non-Federal entity
and approved by the cognizant agency
for indirect costs.
Modified Total Direct Cost (MTDC)
means all direct salaries and wages, ap-
plicable fringe benefits, materials and
supplies, services, travel, and up to the
first $25,000 of each subaward (regard-
less of the period of performance of the
subawards under the award). MTDC ex-
cludes equipment, capital expendi-
tures, charges for patient care, rental
costs, tuition remission, scholarships
and fellowships, participant support
costs and the portion of each subaward
in excess of $25,000. Other items may
only be excluded when necessary to
avoid a serious inequity in the dis-
tribution of indirect costs, and with
the approval of the cognizant agency
for indirect costs.
Non-discretionary award means an
award made by the Federal awarding
agency to specific recipients in accord-
ance with statutory, eligibility and
compliance requirements, such that in
keeping with specific statutory author-
ity the agency has no ability to exer-
cise judgement (‘‘discretion’’). A non-
discretionary award amount could be
determined specifically or by formula.
Non-Federal entity (NFE) means a
State, local government, Indian tribe,
Institution of Higher Education (IHE),
or nonprofit organization that carries
out a Federal award as a recipient or
subrecipient.
Nonprofit organization means any cor-
poration, trust, association, coopera-
tive, or other organization, not includ-
ing IHEs, that:
(1) Is operated primarily for sci-
entific, educational, service, chari-
table, or similar purposes in the public
interest;
(2) Is not organized primarily for
profit; and
(3) Uses net proceeds to maintain,
improve, or expand the operations of
the organization.
Notice of funding opportunity means a
formal announcement of the avail-
ability of Federal funding through a fi-
nancial assistance program from a Fed-
eral awarding agency. The notice of
funding opportunity provides informa-
tion on the award, who is eligible to
apply, the evaluation criteria for selec-
tion of an awardee, required compo-
nents of an application, and how to
submit the application. The notice of
funding opportunity is any paper or
electronic issuance that an agency uses
to announce a funding opportunity,
whether it is called a ‘‘program an-
nouncement,’’ ‘‘notice of funding avail-
ability,’’ ‘‘broad agency announce-
ment,’’ ‘‘research announcement,’’
‘‘solicitation,’’ or some other term.
Office of Management and Budget
(OMB) means the Executive Office of
the President, Office of Management
and Budget.
Oversight agency for audit means the
Federal awarding agency that provides
the predominant amount of funding di-
rectly (direct funding) (as listed on the
schedule of expenditures of Federal
awards, see § 200.510(b)) to a non-Fed-
eral entity unless OMB designates a
specific cognizant agency for audit.
When the direct funding represents less
than 25 percent of the total Federal ex-
penditures (as direct and sub-awards)
by the non-Federal entity, then the
Federal agency with the predominant
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17.A
94 2 CFR Ch. II (1–1–21 Edition) § 200.1
amount of total funding is the des-
ignated cognizant agency for audit.
When there is no direct funding, the
Federal awarding agency which is the
predominant source of pass-through
funding must assume the oversight re-
sponsibilities. The duties of the over-
sight agency for audit and the process
for any reassignments are described in
§ 200.513(b).
Participant support costs means direct
costs for items such as stipends or sub-
sistence allowances, travel allowances,
and registration fees paid to or on be-
half of participants or trainees (but not
employees) in connection with con-
ferences, or training projects.
Pass-through entity (PTE) means a
non-Federal entity that provides a
subaward to a subrecipient to carry out
part of a Federal program.
Performance goal means a target level
of performance expressed as a tangible,
measurable objective, against which
actual achievement can be compared,
including a goal expressed as a quan-
titative standard, value, or rate. In
some instances ( e.g., discretionary re-
search awards), this may be limited to
the requirement to submit technical
performance reports (to be evaluated in
accordance with agency policy).
Period of performance means the total
estimated time interval between the
start of an initial Federal award and
the planned end date, which may in-
clude one or more funded portions, or
budget periods. Identification of the
period of performance in the Federal
award per § 200.211(b)(5) does not com-
mit the awarding agency to fund the
award beyond the currently approved
budget period.
Personal property means property
other than real property. It may be
tangible, having physical existence, or
intangible.
Personally Identifiable Information
(PII) means information that can be
used to distinguish or trace an individ-
ual’s identity, either alone or when
combined with other personal or iden-
tifying information that is linked or
linkable to a specific individual. Some
information that is considered to be
PII is available in public sources such
as telephone books, public websites,
and university listings. This type of in-
formation is considered to be Public
PII and includes, for example, first and
last name, address, work telephone
number, email address, home telephone
number, and general educational cre-
dentials. The definition of PII is not
anchored to any single category of in-
formation or technology. Rather, it re-
quires a case-by-case assessment of the
specific risk that an individual can be
identified. Non-PII can become PII
whenever additional information is
made publicly available, in any me-
dium and from any source, that, when
combined with other available infor-
mation, could be used to identify an in-
dividual.
Program income means gross income
earned by the non-Federal entity that
is directly generated by a supported ac-
tivity or earned as a result of the Fed-
eral award during the period of per-
formance except as provided in
§ 200.307(f). (See the definition of period
of performance in this section.) Program
income includes but is not limited to
income from fees for services per-
formed, the use or rental or real or per-
sonal property acquired under Federal
awards, the sale of commodities or
items fabricated under a Federal
award, license fees and royalties on
patents and copyrights, and principal
and interest on loans made with Fed-
eral award funds. Interest earned on
advances of Federal funds is not pro-
gram income. Except as otherwise pro-
vided in Federal statutes, regulations,
or the terms and conditions of the Fed-
eral award, program income does not
include rebates, credits, discounts, and
interest earned on any of them. See
also § 200.407. See also 35 U.S.C. 200–212
‘‘Disposition of Rights in Educational
Awards’’ applies to inventions made
under Federal awards.
Project cost means total allowable
costs incurred under a Federal award
and all required cost sharing and vol-
untary committed cost sharing, includ-
ing third-party contributions.
Property means real property or per-
sonal property. See also the definitions
of real property and personal property in
this section.
Protected Personally Identifiable Infor-
mation (Protected PII) means an individ-
ual’s first name or first initial and last
name in combination with any one or
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17.A
95 OMB Guidance § 200.1
more of types of information, includ-
ing, but not limited to, social security
number, passport number, credit card
numbers, clearances, bank numbers,
biometrics, date and place of birth,
mother’s maiden name, criminal, med-
ical and financial records, educational
transcripts. This does not include PII
that is required by law to be disclosed.
See also the definition of Personally
Identifiable Information (PII) in this sec-
tion.
Questioned cost means a cost that is
questioned by the auditor because of an
audit finding:
(1) Which resulted from a violation or
possible violation of a statute, regula-
tion, or the terms and conditions of a
Federal award, including for funds used
to match Federal funds;
(2) Where the costs, at the time of
the audit, are not supported by ade-
quate documentation; or
(3) Where the costs incurred appear
unreasonable and do not reflect the ac-
tions a prudent person would take in
the circumstances.
(4) Questioned costs are not an im-
proper payment until reviewed and
confirmed to be improper as defined in
OMB Circular A–123 appendix C. (See
also the definition of Improper payment
in this section).
Real property means land, including
land improvements, structures and ap-
purtenances thereto, but excludes
moveable machinery and equipment.
Recipient means an entity, usually
but not limited to non-Federal entities
that receives a Federal award directly
from a Federal awarding agency. The
term recipient does not include sub-
recipients or individuals that are bene-
ficiaries of the award.
Renewal award means an award made
subsequent to an expiring Federal
award for which the start date is con-
tiguous with, or closely follows, the
end of the expiring Federal award. A
renewal award’s start date will begin a
distinct period of performance.
Research and Development (R&D)
means all research activities, both
basic and applied, and all development
activities that are performed by non-
Federal entities. The term research
also includes activities involving the
training of individuals in research
techniques where such activities utilize
the same facilities as other research
and development activities and where
such activities are not included in the
instruction function. ‘‘Research’’ is de-
fined as a systematic study directed to-
ward fuller scientific knowledge or un-
derstanding of the subject studied.
‘‘Development’’ is the systematic use
of knowledge and understanding gained
from research directed toward the pro-
duction of useful materials, devices,
systems, or methods, including design
and development of prototypes and
processes.
Simplified acquisition threshold means
the dollar amount below which a non-
Federal entity may purchase property
or services using small purchase meth-
ods (see § 200.320). Non-Federal entities
adopt small purchase procedures in
order to expedite the purchase of items
at or below the simplified acquisition
threshold. The simplified acquisition
threshold for procurement activities
administered under Federal awards is
set by the FAR at 48 CFR part 2, sub-
part 2.1. The non-Federal entity is re-
sponsible for determining an appro-
priate simplified acquisition threshold
based on internal controls, an evalua-
tion of risk, and its documented pro-
curement procedures. However, in no
circumstances can this threshold ex-
ceed the dollar value established in the
FAR (48 CFR part 2, subpart 2.1) for the
simplified acquisition threshold. Re-
cipients should determine if local gov-
ernment laws on purchasing apply.
Special purpose equipment means
equipment which is used only for re-
search, medical, scientific, or other
technical activities. Examples of spe-
cial purpose equipment include micro-
scopes, x-ray machines, surgical instru-
ments, and spectrometers. See also the
definitions of equipment and general
purpose equipment in this section.
State means any state of the United
States, the District of Columbia, the
Commonwealth of Puerto Rico, U.S.
Virgin Islands, Guam, American
Samoa, the Commonwealth of the
Northern Mariana Islands, and any
agency or instrumentality thereof ex-
clusive of local governments.
Student Financial Aid (SFA) means
Federal awards under those programs
of general student assistance, such as
those authorized by Title IV of the
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17.A
96 2 CFR Ch. II (1–1–21 Edition) § 200.2
Higher Education Act of 1965, as
amended, (20 U.S.C. 1070–1099d), which
are administered by the U.S. Depart-
ment of Education, and similar pro-
grams provided by other Federal agen-
cies. It does not include Federal awards
under programs that provide fellow-
ships or similar Federal awards to stu-
dents on a competitive basis, or for
specified studies or research.
Subaward means an award provided
by a pass-through entity to a sub-
recipient for the subrecipient to carry
out part of a Federal award received by
the pass-through entity. It does not in-
clude payments to a contractor or pay-
ments to an individual that is a bene-
ficiary of a Federal program. A
subaward may be provided through any
form of legal agreement, including an
agreement that the pass-through enti-
ty considers a contract.
Subrecipient means an entity, usually
but not limited to non-Federal entities,
that receives a subaward from a pass-
through entity to carry out part of a
Federal award; but does not include an
individual that is a beneficiary of such
award. A subrecipient may also be a re-
cipient of other Federal awards di-
rectly from a Federal awarding agency.
Subsidiary means an entity in which
more than 50 percent of the entity is
owned or controlled directly by a par-
ent corporation or through another
subsidiary of a parent corporation.
Supplies means all tangible personal
property other than those described in
the definition of equipment in this sec-
tion. A computing device is a supply if
the acquisition cost is less than the
lesser of the capitalization level estab-
lished by the non-Federal entity for fi-
nancial statement purposes or $5,000,
regardless of the length of its useful
life. See also the definitions of com-
puting devices and equipment in this sec-
tion.
Telecommunications cost means the
cost of using communication and te-
lephony technologies such as mobile
phones, land lines, and internet.
Termination means the ending of a
Federal award, in whole or in part at
any time prior to the planned end of
period of performance. A lack of avail-
able funds is not a termination.
Third-party in-kind contributions
means the value of non-cash contribu-
tions (i.e., property or services) that—
(1) Benefit a federally-assisted
project or program; and
(2) Are contributed by non-Federal
third parties, without charge, to a non-
Federal entity under a Federal award.
Unliquidated financial obligations
means, for financial reports prepared
on a cash basis, financial obligations
incurred by the non-Federal entity
that have not been paid (liquidated).
For reports prepared on an accrual ex-
penditure basis, these are financial ob-
ligations incurred by the non-Federal
entity for which an expenditure has
not been recorded.
Unobligated balance means the
amount of funds under a Federal award
that the non-Federal entity has not ob-
ligated. The amount is computed by
subtracting the cumulative amount of
the non-Federal entity’s unliquidated
financial obligations and expenditures
of funds under the Federal award from
the cumulative amount of the funds
that the Federal awarding agency or
pass-through entity authorized the
non-Federal entity to obligate.
Voluntary committed cost sharing
means cost sharing specifically pledged
on a voluntary basis in the proposal’s
budget on the part of the non-Federal
entity and that becomes a binding re-
quirement of Federal award. See also
§ 200.306.
[85 FR 49529, Aug. 13, 2020]
§ 200.2 Acquisition cost.
Acquisition cost means the cost of the
asset including the cost to ready the
asset for its intended use. Acquisition
cost for equipment, for example, means
the net invoice price of the equipment,
including the cost of any modifica-
tions, attachments, accessories, or aux-
iliary apparatus necessary to make it
usable for the purpose for which it is
acquired. Acquisition costs for soft-
ware includes those development costs
capitalized in accordance with gen-
erally accepted accounting principles
(GAAP). Ancillary charges, such as
taxes, duty, protective in transit insur-
ance, freight, and installation may be
included in or excluded from the acqui-
sition cost in accordance with the non-
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17.A
97 OMB Guidance § 200.13
Federal entity’s regular accounting
practices.
§ 200.3 Advance payment.
Advance payment means a payment
that a Federal awarding agency or
pass-through entity makes by any ap-
propriate payment mechanism, includ-
ing a predetermined payment schedule,
before the non-Federal entity disburses
the funds for program purposes.
§ 200.4 Allocation.
Allocation means the process of as-
signing a cost, or a group of costs, to
one or more cost objective(s), in rea-
sonable proportion to the benefit pro-
vided or other equitable relationship.
The process may entail assigning a
cost(s) directly to a final cost objective
or through one or more intermediate
cost objectives.
§ 200.5 Audit finding.
Audit finding means deficiencies
which the auditor is required by
§ 200.516 Audit findings, paragraph (a)
to report in the schedule of findings
and questioned costs.
§ 200.6 Auditee.
Auditee means any non-Federal enti-
ty that expends Federal awards which
must be audited under Subpart F—
Audit Requirements of this part.
§ 200.7 Auditor.
Auditor means an auditor who is a
public accountant or a Federal, state,
local government, or Indian tribe audit
organization, which meets the general
standards specified for external audi-
tors in generally accepted government
auditing standards (GAGAS). The term
auditor does not include internal audi-
tors of nonprofit organizations.
[79 FR 75880, Dec. 19, 2014]
§ 200.8 Budget.
Budget means the financial plan for
the project or program that the Fed-
eral awarding agency or pass-through
entity approves during the Federal
award process or in subsequent amend-
ments to the Federal award. It may in-
clude the Federal and non-Federal
share or only the Federal share, as de-
termined by the Federal awarding
agency or pass-through entity.
§ 200.9 Central service cost allocation
plan.
Central service cost allocation plan
means the documentation identifying,
accumulating, and allocating or devel-
oping billing rates based on the allow-
able costs of services provided by a
state, local government, or Indian tribe
on a centralized basis to its depart-
ments and agencies. The costs of these
services may be allocated or billed to
users.
§ 200.10 Catalog of Federal Domestic
Assistance (CFDA) number.
CFDA number means the number as-
signed to a Federal program in the
CFDA.
§ 200.11 CFDA program title.
CFDA program title means the title of
the program under which the Federal
award was funded in the CFDA.
§ 200.12 Capital assets.
Capital assets means tangible or in-
tangible assets used in operations hav-
ing a useful life of more than one year
which are capitalized in accordance
with GAAP. Capital assets include:
(a) Land, buildings (facilities), equip-
ment, and intellectual property (in-
cluding software) whether acquired by
purchase, construction, manufacture,
lease-purchase, exchange, or through
capital leases; and
(b) Additions, improvements, modi-
fications, replacements, rearrange-
ments, reinstallations, renovations or
alterations to capital assets that mate-
rially increase their value or useful life
(not ordinary repairs and mainte-
nance).
§ 200.13 Capital expenditures.
Capital expenditures means expendi-
tures to acquire capital assets or ex-
penditures to make additions, improve-
ments, modifications, replacements,
rearrangements, reinstallations, ren-
ovations, or alterations to capital as-
sets that materially increase their
value or useful life.
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17.A
98 2 CFR Ch. II (1–1–21 Edition) § 200.14
§ 200.14 Claim.
Claim means, depending on the con-
text, either:
(a) A written demand or written as-
sertion by one of the parties to a Fed-
eral award seeking as a matter of
right:
(1) The payment of money in a sum
certain;
(2) The adjustment or interpretation
of the terms and conditions of the Fed-
eral award; or
(3) Other relief arising under or relat-
ing to a Federal award.
(b) A request for payment that is not
in dispute when submitted.
§ 200.15 Class of Federal awards.
Class of Federal awards means a group
of Federal awards either awarded under
a specific program or group of pro-
grams or to a specific type of non-Fed-
eral entity or group of non-Federal en-
tities to which specific provisions or
exceptions may apply.
§ 200.16 Closeout.
Closeout means the process by which
the Federal awarding agency or pass-
through entity determines that all ap-
plicable administrative actions and all
required work of the Federal award
have been completed and takes actions
as described in § 200.343 Closeout.
§ 200.17 Cluster of programs.
Cluster of programs means a grouping
of closely related programs that share
common compliance requirements. The
types of clusters of programs are re-
search and development (R&D), student
financial aid (SFA), and other clusters.
‘‘Other clusters’’ are as defined by OMB
in the compliance supplement or as
designated by a state for Federal
awards the state provides to its sub-
recipients that meet the definition of a
cluster of programs. When designating
an ‘‘other cluster,’’ a state must iden-
tify the Federal awards included in the
cluster and advise the subrecipients of
compliance requirements applicable to
the cluster, consistent with § 200.331
Requirements for pass-through enti-
ties, paragraph (a). A cluster of pro-
grams must be considered as one pro-
gram for determining major programs,
as described in § 200.518 Major program
determination, and, with the exception
of R&D as described in § 200.501 Audit
requirements, paragraph (c), whether a
program-specific audit may be elected.
§ 200.18 Cognizant agency for audit.
Cognizant agency for audit means the
Federal agency designated to carry out
the responsibilities described in
§ 200.513 Responsibilities, paragraph (a).
The cognizant agency for audit is not
necessarily the same as the cognizant
agency for indirect costs. A list of cog-
nizant agencies for audit may be found
at the FAC Web site.
§ 200.19 Cognizant agency for indirect
costs.
Cognizant agency for indirect costs
means the Federal agency responsible
for reviewing, negotiating, and approv-
ing cost allocation plans or indirect
cost proposals developed under this
part on behalf of all Federal agencies.
The cognizant agency for indirect cost
is not necessarily the same as the cog-
nizant agency for audit. For assign-
ments of cognizant agencies see the
following:
(a) For IHEs: Appendix III to Part
200—Indirect (F&A) Costs Identifica-
tion and Assignment, and Rate Deter-
mination for Institutions of Higher
Education (IHEs), paragraph C.11.
(b) For nonprofit organizations: Ap-
pendix IV to Part 200—Indirect (F&A)
Costs Identification and Assignment,
and Rate Determination for Nonprofit
Organizations, paragraph C.2.a.
(c) For state and local governments:
Appendix V to Part 200—State/Local
Governmentwide Central Service Cost
Allocation Plans, paragraph F.1.
(d) For Indian tribes: Appendix VII to
Part 200—States and Local Govern-
ment and Indian Tribe Indirect Cost
Proposal, paragraph D.1.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75880, Dec. 19, 2014; 80 FR 54407, Sept. 10,
2015]
§ 200.20 Computing devices.
Computing devices means machines
used to acquire, store, analyze, process,
and publish data and other information
electronically, including accessories
(or ‘‘peripherals’’) for printing, trans-
mitting and receiving, or storing elec-
tronic information. See also §§ 200.94
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99 OMB Guidance § 200.28
Supplies and 200.58 Information tech-
nology systems.
§ 200.21 Compliance supplement.
Compliance supplement means Appen-
dix XI to Part 200—Compliance Supple-
ment (previously known as the Cir-
cular A–133 Compliance Supplement).
§ 200.22 Contract.
Contract means a legal instrument by
which a non-Federal entity purchases
property or services needed to carry
out the project or program under a
Federal award. The term as used in
this part does not include a legal in-
strument, even if the non-Federal enti-
ty considers it a contract, when the
substance of the transaction meets the
definition of a Federal award or
subaward (see § 200.92 Subaward).
§ 200.23 Contractor.
Contractor means an entity that re-
ceives a contract as defined in § 200.22
Contract.
§ 200.24 Cooperative agreement.
Cooperative agreement means a legal
instrument of financial assistance be-
tween a Federal awarding agency or
pass-through entity and a non-Federal
entity that, consistent with 31 U.S.C.
6302–6305:
(a) Is used to enter into a relation-
ship the principal purpose of which is
to transfer anything of value from the
Federal awarding agency or pass-
through entity to the non-Federal enti-
ty to carry out a public purpose au-
thorized by a law of the United States
(see 31 U.S.C. 6101(3)); and not to ac-
quire property or services for the Fed-
eral Government or pass-through enti-
ty’s direct benefit or use;
(b) Is distinguished from a grant in
that it provides for substantial involve-
ment between the Federal awarding
agency or pass-through entity and the
non-Federal entity in carrying out the
activity contemplated by the Federal
award.
(c) The term does not include:
(1) A cooperative research and devel-
opment agreement as defined in 15
U.S.C. 3710a; or
(2) An agreement that provides only:
(i) Direct United States Government
cash assistance to an individual;
(ii) A subsidy;
(iii) A loan;
(iv) A loan guarantee; or
(v) Insurance.
§ 200.25 Cooperative audit resolution.
Cooperative audit resolution means the
use of audit follow-up techniques which
promote prompt corrective action by
improving communication, fostering
collaboration, promoting trust, and de-
veloping an understanding between the
Federal agency and the non-Federal en-
tity. This approach is based upon:
(a) A strong commitment by Federal
agency and non-Federal entity leader-
ship to program integrity;
(b) Federal agencies strengthening
partnerships and working coopera-
tively with non-Federal entities and
their auditors; and non-Federal enti-
ties and their auditors working coop-
eratively with Federal agencies;
(c) A focus on current conditions and
corrective action going forward;
(d) Federal agencies offering appro-
priate relief for past noncompliance
when audits show prompt corrective
action has occurred; and
(e) Federal agency leadership sending
a clear message that continued failure
to correct conditions identified by au-
dits which are likely to cause improper
payments, fraud, waste, or abuse is un-
acceptable and will result in sanctions.
§ 200.26 Corrective action.
Corrective action means action taken
by the auditee that:
(a) Corrects identified deficiencies;
(b) Produces recommended improve-
ments; or
(c) Demonstrates that audit findings
are either invalid or do not warrant
auditee action.
§ 200.27 Cost allocation plan.
Cost allocation plan means central
service cost allocation plan or public
assistance cost allocation plan.
§ 200.28 Cost objective.
Cost objective means a program, func-
tion, activity, award, organizational
subdivision, contract, or work unit for
which cost data are desired and for
which provision is made to accumulate
and measure the cost of processes,
products, jobs, capital projects, etc. A
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100
2 CFR Ch. II (1–1–21 Edition) § 200.29
cost objective may be a major function
of the non-Federal entity, a particular
service or project, a Federal award, or
an indirect (Facilities & Administra-
tive (F&A)) cost activity, as described
in Subpart E—Cost Principles of this
Part. See also §§ 200.44 Final cost objec-
tive and 200.60 Intermediate cost objec-
tive.
§ 200.29 Cost sharing or matching.
Cost sharing or matching means the
portion of project costs not paid by
Federal funds (unless otherwise author-
ized by Federal statute). See also
§ 200.306 Cost sharing or matching.
§ 200.30 Cross-cutting audit finding.
Cross-cutting audit finding means an
audit finding where the same under-
lying condition or issue affects Federal
awards of more than one Federal
awarding agency or pass-through enti-
ty.
§ 200.31 Disallowed costs.
Disallowed costs means those charges
to a Federal award that the Federal
awarding agency or pass-through enti-
ty determines to be unallowable, in ac-
cordance with the applicable Federal
statutes, regulations, or the terms and
conditions of the Federal award.
§ 200.32 [Reserved]
§ 200.33 Equipment.
Equipment means tangible personal
property (including information tech-
nology systems) having a useful life of
more than one year and a per-unit ac-
quisition cost which equals or exceeds
the lesser of the capitalization level es-
tablished by the non-Federal entity for
financial statement purposes, or $5,000.
See also §§ 200.12 Capital assets, 200.20
Computing devices, 200.48 General pur-
pose equipment, 200.58 Information
technology systems, 200.89 Special pur-
pose equipment, and 200.94 Supplies.
§ 200.34 Expenditures.
Expenditures means charges made by
a non-Federal entity to a project or
program for which a Federal award was
received.
(a) The charges may be reported on a
cash or accrual basis, as long as the
methodology is disclosed and is con-
sistently applied.
(b) For reports prepared on a cash
basis, expenditures are the sum of:
(1) Cash disbursements for direct
charges for property and services;
(2) The amount of indirect expense
charged;
(3) The value of third-party in-kind
contributions applied; and
(4) The amount of cash advance pay-
ments and payments made to sub-
recipients.
(c) For reports prepared on an ac-
crual basis, expenditures are the sum
of:
(1) Cash disbursements for direct
charges for property and services;
(2) The amount of indirect expense
incurred;
(3) The value of third-party in-kind
contributions applied; and
(4) The net increase or decrease in
the amounts owed by the non-Federal
entity for:
(i) Goods and other property re-
ceived;
(ii) Services performed by employees,
contractors, subrecipients, and other
payees; and
(iii) Programs for which no current
services or performance are required
such as annuities, insurance claims, or
other benefit payments.
§ 200.35 Federal agency.
Federal agency means an ‘‘agency’’ as
defined at 5 U.S.C. 551(1) and further
clarified by 5 U.S.C. 552(f).
§ 200.36 Federal Audit Clearinghouse
(FAC).
FAC means the clearinghouse des-
ignated by OMB as the repository of
record where non-Federal entities are
required to transmit the reporting
packages required by Subpart F—Audit
Requirements of this part. The mailing
address of the FAC is Federal Audit
Clearinghouse, Bureau of the Census,
1201 E. 10th Street, Jeffersonville, IN
47132 and the web address is: http://har-
vester.census.gov/sac/. Any future up-
dates to the location of the FAC may
be found at the OMB Web site.
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OMB Guidance § 200.42
§ 200.37 Federal awarding agency.
Federal awarding agency means the
Federal agency that provides a Federal
award directly to a non-Federal entity.
§ 200.38 Federal award.
Federal award has the meaning, de-
pending on the context, in either para-
graph (a) or (b) of this section:
(a)(1) The Federal financial assist-
ance that a non-Federal entity receives
directly from a Federal awarding agen-
cy or indirectly from a pass-through
entity, as described in § 200.101 Applica-
bility; or
(2) The cost-reimbursement contract
under the Federal Acquisition Regula-
tions that a non-Federal entity re-
ceives directly from a Federal award-
ing agency or indirectly from a pass-
through entity, as described in § 200.101
Applicability.
(b) The instrument setting forth the
terms and conditions. The instrument
is the grant agreement, cooperative
agreement, other agreement for assist-
ance covered in paragraph (b) of § 200.40
Federal financial assistance, or the
cost-reimbursement contract awarded
under the Federal Acquisition Regula-
tions.
(c) Federal award does not include
other contracts that a Federal agency
uses to buy goods or services from a
contractor or a contract to operate
Federal Government owned, contractor
operated facilities (GOCOs).
(d) See also definitions of Federal fi-
nancial assistance, grant agreement,
and cooperative agreement.
§ 200.39 Federal award date.
Federal award date means the date
when the Federal award is signed by
the authorized official of the Federal
awarding agency.
§ 200.40 Federal financial assistance.
(a) Federal financial assistance means
assistance that non-Federal entities re-
ceive or administer in the form of:
(1) Grants;
(2) Cooperative agreements;
(3) Non-cash contributions or dona-
tions of property (including donated
surplus property);
(4) Direct appropriations;
(5) Food commodities; and
(6) Other financial assistance (except
assistance listed in paragraph (b) of
this section).
(b) For § 200.202 Requirement to pro-
vide public notice of Federal financial
assistance programs and Subpart F—
Audit Requirements of this part, Fed-
eral financial assistance also includes as-
sistance that non-Federal entities re-
ceive or administer in the form of:
(1) Loans;
(2) Loan Guarantees;
(3) Interest subsidies; and
(4) Insurance.
(c) Federal financial assistance does
not include amounts received as reim-
bursement for services rendered to in-
dividuals as described in § 200.502 Basis
for determining Federal awards ex-
pended, paragraph (h) and (i) of this
part.
[78 FR 78608, Dec. 26, 2013, as amended at 80
FR 54407, Sept. 10, 2015]
§ 200.41 Federal interest.
Federal interest means, for purposes of
§ 200.329 Reporting on real property or
when used in connection with the ac-
quisition or improvement of real prop-
erty, equipment, or supplies under a
Federal award, the dollar amount that
is the product of the:
(a) Federal share of total project
costs; and
(b) Current fair market value of the
property, improvements, or both, to
the extent the costs of acquiring or im-
proving the property were included as
project costs.
§ 200.42 Federal program.
Federal program means:
(a) All Federal awards which are as-
signed a single number in the CFDA.
(b) When no CFDA number is as-
signed, all Federal awards to non-Fed-
eral entities from the same agency
made for the same purpose must be
combined and considered one program.
(c) Notwithstanding paragraphs (a)
and (b) of this definition, a cluster of
programs. The types of clusters of pro-
grams are:
(1) Research and development (R&D);
(2) Student financial aid (SFA); and
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102
2 CFR Ch. II (1–1–21 Edition) § 200.43
(3) ‘‘Other clusters,’’ as described in
the definition of Cluster of Programs.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75880, Dec. 19, 2014]
§ 200.43 Federal share.
Federal share means the portion of
the total project costs that are paid by
Federal funds.
§ 200.44 Final cost objective.
Final cost objective means a cost ob-
jective which has allocated to it both
direct and indirect costs and, in the
non-Federal entity’s accumulation sys-
tem, is one of the final accumulation
points, such as a particular award, in-
ternal project, or other direct activity
of a non-Federal entity. See also
§§ 200.28 Cost objective and 200.60 Inter-
mediate cost objective.
§ 200.45 Fixed amount awards.
Fixed amount awards means a type of
grant agreement under which the Fed-
eral awarding agency or pass-through
entity provides a specific level of sup-
port without regard to actual costs in-
curred under the Federal award. This
type of Federal award reduces some of
the administrative burden and record-
keeping requirements for both the non-
Federal entity and Federal awarding
agency or pass-through entity. Ac-
countability is based primarily on per-
formance and results. See §§ 200.201 Use
of grant agreements (including fixed
amount awards), cooperative agree-
ments, and contracts, paragraph (b)
and 200.332 Fixed amount subawards.
§ 200.46 Foreign public entity.
Foreign public entity means:
(a) A foreign government or foreign
governmental entity;
(b) A public international organiza-
tion, which is an organization entitled
to enjoy privileges, exemptions, and
immunities as an international organi-
zation under the International Organi-
zations Immunities Act (22 U.S.C. 288–
288f);
(c) An entity owned (in whole or in
part) or controlled by a foreign govern-
ment; or
(d) Any other entity consisting whol-
ly or partially of one or more foreign
governments or foreign governmental
entities.
§ 200.47 Foreign organization.
Foreign organization means an entity
that is:
(a) A public or private organization
located in a country other than the
United States and its territories that is
subject to the laws of the country in
which it is located, irrespective of the
citizenship of project staff or place of
performance;
(b) A private nongovernmental orga-
nization located in a country other
than the United States that solicits
and receives cash contributions from
the general public;
(c) A charitable organization located
in a country other than the United
States that is nonprofit and tax ex-
empt under the laws of its country of
domicile and operation, and is not a
university, college, accredited degree-
granting institution of education, pri-
vate foundation, hospital, organization
engaged exclusively in research or sci-
entific activities, church, synagogue,
mosque or other similar entities orga-
nized primarily for religious purposes;
or
(d) An organization located in a
country other than the United States
not recognized as a Foreign Public En-
tity.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75880, Dec. 19, 2014]
§ 200.48 General purpose equipment.
General purpose equipment means
equipment which is not limited to re-
search, medical, scientific or other
technical activities. Examples include
office equipment and furnishings, mod-
ular offices, telephone networks, infor-
mation technology equipment and sys-
tems, air conditioning equipment, re-
production and printing equipment,
and motor vehicles. See also Equip-
ment and Special Purpose Equipment.
§ 200.49 Generally Accepted Account-
ing Principles (GAAP).
GAAP has the meaning specified in
accounting standards issued by the
Government Accounting Standards
Board (GASB) and the Financial Ac-
counting Standards Board (FASB).
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103
OMB Guidance § 200.56
§ 200.50 Generally Accepted Govern-
ment Auditing Standards (GAGAS).
GAGAS, also known as the Yellow
Book, means generally accepted gov-
ernment auditing standards issued by
the Comptroller General of the United
States, which are applicable to finan-
cial audits.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75880, Dec. 19, 2014]
§ 200.51 Grant agreement.
Grant agreement means a legal instru-
ment of financial assistance between a
Federal awarding agency or pass-
through entity and a non-Federal enti-
ty that, consistent with 31 U.S.C. 6302,
6304:
(a) Is used to enter into a relation-
ship the principal purpose of which is
to transfer anything of value from the
Federal awarding agency or pass-
through entity to the non-Federal enti-
ty to carry out a public purpose au-
thorized by a law of the United States
(see 31 U.S.C. 6101(3)); and not to ac-
quire property or services for the Fed-
eral awarding agency or pass-through
entity’s direct benefit or use;
(b) Is distinguished from a coopera-
tive agreement in that it does not pro-
vide for substantial involvement be-
tween the Federal awarding agency or
pass-through entity and the non-Fed-
eral entity in carrying out the activity
contemplated by the Federal award.
(c) Does not include an agreement
that provides only:
(1) Direct United States Government
cash assistance to an individual;
(2) A subsidy;
(3) A loan;
(4) A loan guarantee; or
(5) Insurance.
§ 200.52 Hospital.
Hospital means a facility licensed as
a hospital under the law of any state or
a facility operated as a hospital by the
United States, a state, or a subdivision
of a state.
§ 200.53 Improper payment.
(a) Improper payment means any pay-
ment that should not have been made
or that was made in an incorrect
amount (including overpayments and
underpayments) under statutory, con-
tractual, administrative, or other le-
gally applicable requirements; and
(b) Improper payment includes any
payment to an ineligible party, any
payment for an ineligible good or serv-
ice, any duplicate payment, any pay-
ment for a good or service not received
(except for such payments where au-
thorized by law), any payment that
does not account for credit for applica-
ble discounts, and any payment where
insufficient or lack of documentation
prevents a reviewer from discerning
whether a payment was proper.
§ 200.54 Indian tribe (or ‘‘federally rec-
ognized Indian tribe’’).
Indian tribe means any Indian tribe,
band, nation, or other organized group
or community, including any Alaska
Native village or regional or village
corporation as defined in or established
pursuant to the Alaska Native Claims
Settlement Act (43 U.S.C. Chapter 33),
which is recognized as eligible for the
special programs and services provided
by the United States to Indians be-
cause of their status as Indians (25
U.S.C. 450b(e)). See annually published
Bureau of Indian Affairs list of Indian
Entities Recognized and Eligible to Re-
ceive Services.
§ 200.55 Institutions of Higher Edu-
cation (IHEs).
IHE is defined at 20 U.S.C. 1001.
§ 200.56 Indirect (facilities & adminis-
trative (F&A)) costs.
Indirect (F&A) costs means those costs
incurred for a common or joint purpose
benefitting more than one cost objec-
tive, and not readily assignable to the
cost objectives specifically benefitted,
without effort disproportionate to the
results achieved. To facilitate equi-
table distribution of indirect expenses
to the cost objectives served, it may be
necessary to establish a number of
pools of indirect (F&A) costs. Indirect
(F&A) cost pools must be distributed to
benefitted cost objectives on bases that
will produce an equitable result in con-
sideration of relative benefits derived.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75880, Dec. 19, 2014]
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2 CFR Ch. II (1–1–21 Edition) § 200.57
§ 200.57 Indirect cost rate proposal.
Indirect cost rate proposal means the
documentation prepared by a non-Fed-
eral entity to substantiate its request
for the establishment of an indirect
cost rate as described in Appendix III
to Part 200—Indirect (F&A) Costs Iden-
tification and Assignment, and Rate
Determination for Institutions of High-
er Education (IHEs) through Appendix
VII to Part 200—States and Local Gov-
ernment and Indian Tribe Indirect Cost
Proposals of this part, and Appendix IX
to Part 200—Hospital Cost Principles.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75880, Dec. 19, 2014]
§ 200.58 Information technology sys-
tems.
Information technology systems means
computing devices, ancillary equip-
ment, software, firmware, and similar
procedures, services (including support
services), and related resources. See
also §§ 200.20 Computing devices and
200.33 Equipment.
§ 200.59 Intangible property.
Intangible property means property
having no physical existence, such as
trademarks, copyrights, patents and
patent applications and property, such
as loans, notes and other debt instru-
ments, lease agreements, stock and
other instruments of property owner-
ship (whether the property is tangible
or intangible).
§ 200.60 Intermediate cost objective.
Intermediate cost objective means a
cost objective that is used to accumu-
late indirect costs or service center
costs that are subsequently allocated
to one or more indirect cost pools or
final cost objectives. See also § 200.28
Cost objective and § 200.44 Final cost
objective.
§ 200.61 Internal controls.
Internal controls means a process, im-
plemented by a non-Federal entity, de-
signed to provide reasonable assurance
regarding the achievement of objec-
tives in the following categories:
(a) Effectiveness and efficiency of op-
erations;
(b) Reliability of reporting for inter-
nal and external use; and
(c) Compliance with applicable laws
and regulations.
§ 200.62 Internal control over compli-
ance requirements for Federal
awards.
Internal control over compliance re-
quirements for Federal awards means a
process implemented by a non-Federal
entity designed to provide reasonable
assurance regarding the achievement
of the following objectives for Federal
awards:
(a) Transactions are properly re-
corded and accounted for, in order to:
(1) Permit the preparation of reliable
financial statements and Federal re-
ports;
(2) Maintain accountability over as-
sets; and
(3) Demonstrate compliance with
Federal statutes, regulations, and the
terms and conditions of the Federal
award;
(b) Transactions are executed in com-
pliance with:
(1) Federal statutes, regulations, and
the terms and conditions of the Federal
award that could have a direct and ma-
terial effect on a Federal program; and
(2) Any other Federal statutes and
regulations that are identified in the
Compliance Supplement; and
(c) Funds, property, and other assets
are safeguarded against loss from un-
authorized use or disposition.
§ 200.63 Loan.
Loan means a Federal loan or loan
guarantee received or administered by
a non-Federal entity, except as used in
the definition of § 200.80 Program in-
come.
(a) The term ‘‘direct loan’’ means a
disbursement of funds by the Federal
Government to a non-Federal borrower
under a contract that requires the re-
payment of such funds with or without
interest. The term includes the pur-
chase of, or participation in, a loan
made by another lender and financing
arrangements that defer payment for
more than 90 days, including the sale of
a Federal Government asset on credit
terms. The term does not include the
acquisition of a federally guaranteed
loan in satisfaction of default claims or
the price support loans of the Com-
modity Credit Corporation.
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OMB Guidance § 200.69
(b) The term ‘‘direct loan obligation’’
means a binding agreement by a Fed-
eral awarding agency to make a direct
loan when specified conditions are ful-
filled by the borrower.
(c) The term ‘‘loan guarantee’’ means
any Federal Government guarantee, in-
surance, or other pledge with respect
to the payment of all or a part of the
principal or interest on any debt obli-
gation of a non-Federal borrower to a
non-Federal lender, but does not in-
clude the insurance of deposits, shares,
or other withdrawable accounts in fi-
nancial institutions.
(d) The term ‘‘loan guarantee com-
mitment’’ means a binding agreement
by a Federal awarding agency to make
a loan guarantee when specified condi-
tions are fulfilled by the borrower, the
lender, or any other party to the guar-
antee agreement.
§ 200.64 Local government.
Local government means any unit of
government within a state, including a:
(a) County;
(b) Borough;
(c) Municipality;
(d) City;
(e) Town;
(f) Township;
(g) Parish;
(h) Local public authority, including
any public housing agency under the
United States Housing Act of 1937;
(i) Special district;
(j) School district;
(k) Intrastate district;
(l) Council of governments, whether
or not incorporated as a nonprofit cor-
poration under state law; and
(m) Any other agency or instrumen-
tality of a multi-, regional, or intra-
state or local government.
§ 200.65 Major program.
Major program means a Federal pro-
gram determined by the auditor to be a
major program in accordance with
§ 200.518 Major program determination
or a program identified as a major pro-
gram by a Federal awarding agency or
pass-through entity in accordance with
§ 200.503 Relation to other audit re-
quirements, paragraph (e).
§ 200.66 Management decision.
Management decision means the eval-
uation by the Federal awarding agency
or pass-through entity of the audit
findings and corrective action plan and
the issuance of a written decision to
the auditee as to what corrective ac-
tion is necessary.
§ 200.67 Micro-purchase.
Micro-purchase means a purchase of
supplies or services using simplified ac-
quisition procedures, the aggregate
amount of which does not exceed the
micro-purchase threshold. Micro-pur-
chase procedures comprise a subset of a
non-Federal entity’s small purchase
procedures. The non-Federal entity
uses such procedures in order to expe-
dite the completion of its lowest-dollar
small purchase transactions and mini-
mize the associated administrative
burden and cost. The micro-purchase
threshold is set by the Federal Acquisi-
tion Regulation at 48 CFR Subpart 2.1
(Definitions). It is $3,000 except as oth-
erwise discussed in Subpart 2.1 of that
regulation, but this threshold is peri-
odically adjusted for inflation.
§ 200.68 Modified Total Direct Cost
(MTDC).
MTDC means all direct salaries and
wages, applicable fringe benefits, mate-
rials and supplies, services, travel, and
up to the first $25,000 of each subaward
(regardless of the period of perform-
ance of the subawards under the
award). MTDC excludes equipment,
capital expenditures, charges for pa-
tient care, rental costs, tuition remis-
sion, scholarships and fellowships, par-
ticipant support costs and the portion
of each subaward in excess of $25,000.
Other items may only be excluded
when necessary to avoid a serious in-
equity in the distribution of indirect
costs, and with the approval of the cog-
nizant agency for indirect costs.
[79 FR 75880, Dec. 19, 2014]
§ 200.69 Non-Federal entity.
Non-Federal entity means a state,
local government, Indian tribe, institu-
tion of higher education (IHE), or non-
profit organization that carries out a
Federal award as a recipient or sub-
recipient.
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2 CFR Ch. II (1–1–21 Edition) § 200.70
§ 200.70 Nonprofit organization.
Nonprofit organization means any cor-
poration, trust, association, coopera-
tive, or other organization, not includ-
ing IHEs, that:
(a) Is operated primarily for sci-
entific, educational, service, chari-
table, or similar purposes in the public
interest;
(b) Is not organized primarily for
profit; and
(c) Uses net proceeds to maintain,
improve, or expand the operations of
the organization.
§ 200.71 Obligations.
When used in connection with a non-
Federal entity’s utilization of funds
under a Federal award, obligations
means orders placed for property and
services, contracts and subawards
made, and similar transactions during
a given period that require payment by
the non-Federal entity during the same
or a future period.
§ 200.72 Office of Management and
Budget (OMB).
OMB means the Executive Office of
the President, Office of Management
and Budget.
§ 200.73 Oversight agency for audit.
Oversight agency for audit means the
Federal awarding agency that provides
the predominant amount of funding di-
rectly to a non-Federal entity not as-
signed a cognizant agency for audit.
When there is no direct funding, the
Federal awarding agency which is the
predominant source of pass-through
funding must assume the oversight re-
sponsibilities. The duties of the over-
sight agency for audit and the process
for any reassignments are described in
§ 200.513 Responsibilities, paragraph (b).
§ 200.74 Pass-through entity.
Pass-through entity means a non-Fed-
eral entity that provides a subaward to
a subrecipient to carry out part of a
Federal program.
§ 200.75 Participant support costs.
Participant support costs means direct
costs for items such as stipends or sub-
sistence allowances, travel allowances,
and registration fees paid to or on be-
half of participants or trainees (but not
employees) in connection with con-
ferences, or training projects.
§ 200.76 Performance goal.
Performance goal means a target level
of performance expressed as a tangible,
measurable objective, against which
actual achievement can be compared,
including a goal expressed as a quan-
titative standard, value, or rate. In
some instances (e.g., discretionary re-
search awards), this may be limited to
the requirement to submit technical
performance reports (to be evaluated in
accordance with agency policy).
§ 200.77 Period of performance.
Period of performance means the time
during which the non-Federal entity
may incur new obligations to carry out
the work authorized under the Federal
award. The Federal awarding agency or
pass-through entity must include start
and end dates of the period of perform-
ance in the Federal award (see §§ 200.210
Information contained in a Federal
award paragraph (a)(5) and 200.331 Re-
quirements for pass-through entities,
paragraph (a)(1)(iv)).
§ 200.78 Personal property.
Personal property means property
other than real property. It may be
tangible, having physical existence, or
intangible.
§ 200.79 Personally Identifiable Infor-
mation (PII).
PII means information that can be
used to distinguish or trace an individ-
ual’s identity, either alone or when
combined with other personal or iden-
tifying information that is linked or
linkable to a specific individual. Some
information that is considered to be
PII is available in public sources such
as telephone books, public Web sites,
and university listings. This type of in-
formation is considered to be Public
PII and includes, for example, first and
last name, address, work telephone
number, email address, home telephone
number, and general educational cre-
dentials. The definition of PII is not
anchored to any single category of in-
formation or technology. Rather, it re-
quires a case-by-case assessment of the
specific risk that an individual can be
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OMB Guidance § 200.87
identified. Non-PII can become PII
whenever additional information is
made publicly available, in any me-
dium and from any source, that, when
combined with other available infor-
mation, could be used to identify an in-
dividual.
§ 200.80 Program income.
Program income means gross income
earned by the non-Federal entity that
is directly generated by a supported ac-
tivity or earned as a result of the Fed-
eral award during the period of per-
formance except as provided in § 200.307
paragraph (f). (See § 200.77 Period of
performance.) Program income in-
cludes but is not limited to income
from fees for services performed, the
use or rental or real or personal prop-
erty acquired under Federal awards,
the sale of commodities or items fab-
ricated under a Federal award, license
fees and royalties on patents and copy-
rights, and principal and interest on
loans made with Federal award funds.
Interest earned on advances of Federal
funds is not program income. Except as
otherwise provided in Federal statutes,
regulations, or the terms and condi-
tions of the Federal award, program in-
come does not include rebates, credits,
discounts, and interest earned on any
of them. See also § 200.407 Prior written
approval (prior approval). See also 35
U.S.C. 200–212 ‘‘Disposition of Rights in
Educational Awards’’ applies to inven-
tions made under Federal awards.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75880, Dec. 19, 2014]
§ 200.81 Property.
Property means real property or per-
sonal property.
§ 200.82 Protected Personally Identifi-
able Information (Protected PII).
Protected PII means an individual’s
first name or first initial and last name
in combination with any one or more
of types of information, including, but
not limited to, social security number,
passport number, credit card numbers,
clearances, bank numbers, biometrics,
date and place of birth, mother’s maid-
en name, criminal, medical and finan-
cial records, educational transcripts.
This does not include PII that is re-
quired by law to be disclosed. (See also
§ 200.79 Personally Identifiable Informa-
tion (PII)).
§ 200.83 Project cost.
Project cost means total allowable
costs incurred under a Federal award
and all required cost sharing and vol-
untary committed cost sharing, includ-
ing third-party contributions.
§ 200.84 Questioned cost.
Questioned cost means a cost that is
questioned by the auditor because of an
audit finding:
(a) Which resulted from a violation
or possible violation of a statute, regu-
lation, or the terms and conditions of a
Federal award, including for funds used
to match Federal funds;
(b) Where the costs, at the time of
the audit, are not supported by ade-
quate documentation; or
(c) Where the costs incurred appear
unreasonable and do not reflect the ac-
tions a prudent person would take in
the circumstances.
§ 200.85 Real property.
Real property means land, including
land improvements, structures and ap-
purtenances thereto, but excludes
moveable machinery and equipment.
§ 200.86 Recipient.
Recipient means a non-Federal entity
that receives a Federal award directly
from a Federal awarding agency to
carry out an activity under a Federal
program. The term recipient does not
include subrecipients. See also § 200.69
Non-Federal entity.
§ 200.87 Research and Development
(R&D).
R&D means all research activities,
both basic and applied, and all develop-
ment activities that are performed by
non-Federal entities. The term re-
search also includes activities involv-
ing the training of individuals in re-
search techniques where such activities
utilize the same facilities as other re-
search and development activities and
where such activities are not included
in the instruction function.
‘‘Research’’ is defined as a system-
atic study directed toward fuller sci-
entific knowledge or understanding of
the subject studied. ‘‘Development’’ is
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17.A
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2 CFR Ch. II (1–1–21 Edition) § 200.88
the systematic use of knowledge and
understanding gained from research di-
rected toward the production of useful
materials, devices, systems, or meth-
ods, including design and development
of prototypes and processes.
§ 200.88 Simplified acquisition thresh-
old.
Simplified acquisition threshold means
the dollar amount below which a non-
Federal entity may purchase property
or services using small purchase meth-
ods. Non-Federal entities adopt small
purchase procedures in order to expe-
dite the purchase of items costing less
than the simplified acquisition thresh-
old. The simplified acquisition thresh-
old is set by the Federal Acquisition
Regulation at 48 CFR Subpart 2.1 (Defi-
nitions) and in accordance with 41
U.S.C. 1908. As of the publication of
this part, the simplified acquisition
threshold is $150,000, but this threshold
is periodically adjusted for inflation.
(Also see definition of § 200.67 Micro-
purchase.)
§ 200.89 Special purpose equipment.
Special purpose equipment means
equipment which is used only for re-
search, medical, scientific, or other
technical activities. Examples of spe-
cial purpose equipment include micro-
scopes, x-ray machines, surgical instru-
ments, and spectrometers. See also
§§ 200.33 Equipment and 200.48 General
purpose equipment.
§ 200.90 State.
State means any state of the United
States, the District of Columbia, the
Commonwealth of Puerto Rico, U.S.
Virgin Islands, Guam, American
Samoa, the Commonwealth of the
Northern Mariana Islands, and any
agency or instrumentality thereof ex-
clusive of local governments.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75880, Dec. 19, 2014]
§ 200.91 Student Financial Aid (SFA).
SFA means Federal awards under
those programs of general student as-
sistance, such as those authorized by
Title IV of the Higher Education Act of
1965, as amended, (20 U.S.C. 1070–1099d),
which are administered by the U.S. De-
partment of Education, and similar
programs provided by other Federal
agencies. It does not include Federal
awards under programs that provide
fellowships or similar Federal awards
to students on a competitive basis, or
for specified studies or research.
§ 200.92 Subaward.
Subaward means an award provided
by a pass-through entity to a sub-
recipient for the subrecipient to carry
out part of a Federal award received by
the pass-through entity. It does not in-
clude payments to a contractor or pay-
ments to an individual that is a bene-
ficiary of a Federal program. A
subaward may be provided through any
form of legal agreement, including an
agreement that the pass-through enti-
ty considers a contract.
§ 200.93 Subrecipient.
Subrecipient means a non-Federal en-
tity that receives a subaward from a
pass-through entity to carry out part
of a Federal program; but does not in-
clude an individual that is a bene-
ficiary of such program. A subrecipient
may also be a recipient of other Fed-
eral awards directly from a Federal
awarding agency.
§ 200.94 Supplies.
Supplies means all tangible personal
property other than those described in
§ 200.33 Equipment. A computing device
is a supply if the acquisition cost is
less than the lesser of the capitaliza-
tion level established by the non-Fed-
eral entity for financial statement pur-
poses or $5,000, regardless of the length
of its useful life. See also §§ 200.20 Com-
puting devices and 200.33 Equipment.
§ 200.95 Termination.
Termination means the ending of a
Federal award, in whole or in part at
any time prior to the planned end of
period of performance.
§ 200.96 Third-party in-kind contribu-
tions.
Third-party in-kind contributions
means the value of non-cash contribu-
tions (i.e., property or services) that—
(a) Benefit a federally assisted
project or program; and
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17.A
109
OMB Guidance § 200.100
(b) Are contributed by non-Federal
third parties, without charge, to a non-
Federal entity under a Federal award.
§ 200.97 Unliquidated obligations.
Unliquidated obligations means, for fi-
nancial reports prepared on a cash
basis, obligations incurred by the non-
Federal entity that have not been paid
(liquidated). For reports prepared on an
accrual expenditure basis, these are ob-
ligations incurred by the non-Federal
entity for which an expenditure has
not been recorded.
§ 200.98 Unobligated balance.
Unobligated balance means the
amount of funds under a Federal award
that the non-Federal entity has not ob-
ligated. The amount is computed by
subtracting the cumulative amount of
the non-Federal entity’s unliquidated
obligations and expenditures of funds
under the Federal award from the cu-
mulative amount of the funds that the
Federal awarding agency or pass-
through entity authorized the non-Fed-
eral entity to obligate.
§ 200.99 Voluntary committed cost
sharing.
Voluntary committed cost sharing
means cost sharing specifically pledged
on a voluntary basis in the proposal’s
budget or the Federal award on the
part of the non-Federal entity and that
becomes a binding requirement of Fed-
eral award.
Subpart B—General Provisions
§ 200.100 Purpose.
(a) Purpose. (1) This part establishes
uniform administrative requirements,
cost principles, and audit requirements
for Federal awards to non-Federal enti-
ties, as described in § 200.101. Federal
awarding agencies must not impose ad-
ditional or inconsistent requirements,
except as provided in §§ 200.102 and
200.211, or unless specifically required
by Federal statute, regulation, or Ex-
ecutive order.
(2) This part provides the basis for a
systematic and periodic collection and
uniform submission by Federal agen-
cies of information on all Federal fi-
nancial assistance programs to the Of-
fice of Management and Budget (OMB).
It also establishes Federal policies re-
lated to the delivery of this informa-
tion to the public, including through
the use of electronic media. It pre-
scribes the manner in which General
Services Administration (GSA), OMB,
and Federal agencies that administer
Federal financial assistance programs
are to carry out their statutory respon-
sibilities under the Federal Program
Information Act (31 U.S.C. 6101–6106).
(b) Administrative requirements. Sub-
parts B through D of this part set forth
the uniform administrative require-
ments for grant and cooperative agree-
ments, including the requirements for
Federal awarding agency management
of Federal grant programs before the
Federal award has been made, and the
requirements Federal awarding agen-
cies may impose on non-Federal enti-
ties in the Federal award.
(c) Cost principles. Subpart E of this
part establishes principles for deter-
mining the allowable costs incurred by
non-Federal entities under Federal
awards. The principles are for the pur-
pose of cost determination and are not
intended to identify the circumstances
or dictate the extent of Federal Gov-
ernment participation in the financing
of a particular program or project. The
principles are designed to provide that
Federal awards bear their fair share of
cost recognized under these principles
except where restricted or prohibited
by statute.
(d) Single Audit Requirements and
Audit Follow-up. Subpart F of this part
is issued pursuant to the Single Audit
Act Amendments of 1996, (31 U.S.C.
7501–7507). It sets forth standards for
obtaining consistency and uniformity
among Federal agencies for the audit
of non-Federal entities expending Fed-
eral awards. These provisions also pro-
vide the policies and procedures for
Federal awarding agencies and pass-
through entities when using the results
of these audits.
(e) Guidance on challenges and prizes.
For OMB guidance to Federal awarding
agencies on challenges and prizes,
please see memo M–10–11 Guidance on
the Use of Challenges and Prizes to
Promote Open Government, issued
March 8, 2010, or its successor.
[78 FR 78608, Dec. 26, 2013, as amended at 85
FR 49536, Aug. 13, 2020]
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17.A
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2 CFR Ch. II (1–1–21 Edition) § 200.101
§ 200.101 Applicability.
(a) General applicability to Federal
agencies. (1) The requirements estab-
lished in this part apply to Federal
agencies that make Federal awards to
non-Federal entities. These require-
ments are applicable to all costs re-
lated to Federal awards.
(2) Federal awarding agencies may
apply subparts A through E of this part
to Federal agencies, for-profit entities,
foreign public entities, or foreign orga-
nizations, except where the Federal
awarding agency determines that the
application of these subparts would be
inconsistent with the international re-
sponsibilities of the United States or
the statutes or regulations of a foreign
government.
(b) Applicability to different types of
Federal awards. (1) Throughout this
part when the word ‘‘must’’ is used it
indicates a requirement. Whereas, use
of the word ‘‘should’’ or ‘‘may’’ indi-
cates a best practice or recommended
approach rather than a requirement
and permits discretion.
(2) The following table describes what
portions of this part apply to which
types of Federal awards. The terms and
conditions of Federal awards (including
this part) flow down to subawards to
subrecipients unless a particular sec-
tion of this part or the terms and con-
ditions of the Federal award specifi-
cally indicate otherwise. This means
that non-Federal entities must comply
with requirements in this part regard-
less of whether the non-Federal entity
is a recipient or subrecipient of a Fed-
eral award. Pass-through entities must
comply with the requirements de-
scribed in subpart D of this part,
§§ 200.331 through 200.333, but not any
requirements in this part directed to-
wards Federal awarding agencies un-
less the requirements of this part or
the terms and conditions of the Federal
award indicate otherwise.
T
ABLE 1 TO PARAGRAPH (b)
The following portions of this Part
Are applicable to the following types of
Federal Awards and Fixed-Price Con-
tracts and Subcontracts (except as
noted in paragraphs (d) and (e) of this
section):
Are NOT applicable to the following
types of Federal Awards and Fixed-Price
Contracts and Subcontracts:
Subpart A—Acronyms and Definitions ...... —All.
Subpart B—General Provisions, except
for §§ 200.111 English Language,
200.112 Conflict of Interest, 200.113
Mandatory Disclosures.
—All.
§§ 200.111 English Language, 200.112
Conflict of Interest, 200.113 Mandatory
Disclosures.
—Grant Agreements and cooperative
agreements.
—Agreements for loans, loan guaran-
tees, interest subsidies and insurance.
—Procurement contracts awarded by
Federal Agencies under the Federal
Acquisition Regulation and sub-
contracts under those contracts.
Subparts C–D, except for §§ 200.203 Re-
quirement to provide public notice of
Federal financial assistance programs,
200.303 Internal controls, 200.331–333
Subrecipient Monitoring and Manage-
ment.
—Grant Agreements and cooperative
agreements.
—Agreements for loans, loan guaran-
tees, interest subsidies and insurance.
—Procurement contracts awarded by
Federal Agencies under the Federal
Acquisition Regulation and sub-
contracts under those contracts.
§ 200.203 Requirement to provide public
notice of Federal financial assistance
programs.
—Grant Agreements and cooperative
agreements.
—Agreements for loans, loan guaran-
tees, interest subsidies and insurance.
—Procurement contracts awarded by
Federal Agencies under the Federal
Acquisition Regulation and sub-
contracts under those contracts.
§§ 200.303 Internal controls, 200.331–333
Subrecipient Monitoring and Manage-
ment.
—All.
Subpart E—Cost Principles ....................... —Grant Agreements and cooperative agreements, except those providing
food commodities.
—All procurement contracts under the
Federal Acquisition Regulations ex-
cept those that are not negotiated.
—Grant agreements and cooperative
agreements providing foods commod-
ities.
—Fixed amount awards.
—Agreements for loans, loans guaran-
tees, interest subsidies and insurance.
—Federal awards to hospitals (see Ap-
pendix IX Hospital Cost Principles).
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OMB Guidance § 200.101
TABLE 1 TO PARAGRAPH (b)—Continued
The following portions of this Part
Are applicable to the following types of
Federal Awards and Fixed-Price Con-
tracts and Subcontracts (except as
noted in paragraphs (d) and (e) of this
section):
Are NOT applicable to the following
types of Federal Awards and Fixed-Price
Contracts and Subcontracts:
Subpart F—Audit Requirements ............... —Grant Agreements and cooperative agreements.
—Contracts and subcontracts, except for
fixed price contacts and subcontracts,
awarded under the Federal Acquisition
Regulation.
—Agreements for loans, loans guaran-
tees, interest subsidies and insurance
and other forms of Federal Financial
Assistance as defined by the Single
Audit Act Amendment of 1996.
—Fixed-price contracts and subcontracts
awarded under the Federal Acquisition
Regulation.
(c) Federal award of cost-reimbursement
contract under the FAR to a non-Federal
entity. When a non-Federal entity is
awarded a cost-reimbursement con-
tract, only subpart D, §§ 200.331 through
200.333, and subparts E and F of this
part are incorporated by reference into
the contract, but the requirements of
subparts D, E, and F are supplementary
to the FAR and the contract. When the
Cost Accounting Standards (CAS) are
applicable to the contract, they take
precedence over the requirements of
this part, including subpart F of this
part, which are supplementary to the
CAS requirements. In addition, costs
that are made unallowable under 10
U.S.C. 2324(e) and 41 U.S.C. 4304(a) as
described in the FAR 48 CFR part 31,
subpart 31.2, and 48 CFR 31.603 are al-
ways unallowable. For requirements
other than those covered in subpart D,
§§ 200.331 through 200.333, and subparts
E and F of this part, the terms of the
contract and the FAR apply. Note that
when a non-Federal entity is awarded a
FAR contract, the FAR applies, and
the terms and conditions of the con-
tract shall prevail over the require-
ments of this part.
(d) Governing provisions. With the ex-
ception of subpart F of this part, which
is required by the Single Audit Act, in
any circumstances where the provi-
sions of Federal statutes or regulations
differ from the provisions of this part,
the provision of the Federal statutes or
regulations govern. This includes, for
agreements with Indian tribes, the pro-
visions of the Indian Self-Determina-
tion and Education and Assistance Act
(ISDEAA), as amended, 25 U.S.C 450–
458ddd–2.
(e) Program applicability. Except for
§§ 200.203 and 200.331 through 200.333, the
requirements in subparts C, D, and E of
this part do not apply to the following
programs:
(1) The block grant awards author-
ized by the Omnibus Budget Reconcili-
ation Act of 1981 (including Community
Services), except to the extent that
subpart E of this part apply to sub-
recipients of Community Services
Block Grant funds pursuant to 42
U.S.C. 9916(a)(1)(B);
(2) Federal awards to local education
agencies under 20 U.S.C. 7702–7703b,
(portions of the Impact Aid program);
(3) Payments under the Department
of Veterans Affairs’ State Home Per
Diem Program (38 U.S.C. 1741); and
(4) Federal awards authorized under
the Child Care and Development Block
Grant Act of 1990, as amended:
(i) Child Care and Development Block
Grant (42 U.S.C. 9858).
(ii) Child Care Mandatory and Match-
ing Funds of the Child Care and Devel-
opment Fund (42 U.S.C. 9858).
(f) Additional program applicability.
Except for § 200.203, the guidance in
subpart C of this part does not apply to
the following programs:
(1) Entitlement Federal awards to
carry out the following programs of the
Social Security Act:
(i) Temporary Assistance for Needy
Families (title IV–A of the Social Secu-
rity Act, 42 U.S.C. 601–619);
(ii) Child Support Enforcement and
Establishment of Paternity (title IV–D
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17.A
112
2 CFR Ch. II (1–1–21 Edition) § 200.102
of the Social Security Act, 42 U.S.C.
651–669b);
(iii) Foster Care and Adoption Assist-
ance (title IV–E of the Act, 42 U.S.C.
670–679c);
(iv) Aid to the Aged, Blind, and Dis-
abled (titles I, X, XIV, and XVI–AABD
of the Act, as amended);
(v) Medical Assistance (Medicaid)
(title XIX of the Act, 42 U.S.C. 1396–
1396w–5) not including the State Med-
icaid Fraud Control program author-
ized by section 1903(a)(6)(B) of the So-
cial Security Act (42 U.S.C.
1396b(a)(6)(B)); and
(vi) Children’s Health Insurance Pro-
gram (title XXI of the Act, 42 U.S.C.
1397aa–1397mm).
(2) A Federal award for an experi-
mental, pilot, or demonstration project
that is also supported by a Federal
award listed in paragraph (f)(1) of this
section.
(3) Federal awards under subsection
412(e) of the Immigration and Nation-
ality Act and subsection 501(a) of the
Refugee Education Assistance Act of
1980 (Pub. L. 96–422, 94 Stat. 1809), for
cash assistance, medical assistance,
and supplemental security income ben-
efits to refugees and entrants and the
administrative costs of providing the
assistance and benefits (8 U.S.C.
1522(e)).
(4) Entitlement awards under the fol-
lowing programs of The National
School Lunch Act:
(i) National School Lunch Program
(section 4 of the Act, 42 U.S.C. 1753);
(ii) Commodity Assistance (section 6
of the Act, 42 U.S.C. 1755);
(iii) Special Meal Assistance (section
11 of the Act, 42 U.S.C. 1759a);
(iv) Summer Food Service Program
for Children (section 13 of the Act, 42
U.S.C. 1761); and
(v) Child and Adult Care Food Pro-
gram (section 17 of the Act, 42 U.S.C.
1766).
(5) Entitlement awards under the fol-
lowing programs of The Child Nutri-
tion Act of 1966:
(i) Special Milk Program (section 3 of
the Act, 42 U.S.C. 1772);
(ii) School Breakfast Program (sec-
tion 4 of the Act, 42 U.S.C. 1773); and
(iii) State Administrative Expenses
(section 7 of the Act, 42 U.S.C. 1776).
(6) Entitlement awards for State Ad-
ministrative Expenses under The Food
and Nutrition Act of 2008 (section 16 of
the Act, 7 U.S.C. 2025).
(7) Non-discretionary Federal awards
under the following non-entitlement
programs:
(i) Special Supplemental Nutrition
Program for Women, Infants and Chil-
dren (section 17 of the Child Nutrition
Act of 1966) 42 U.S.C. 1786;
(ii) The Emergency Food Assistance
Programs (Emergency Food Assistance
Act of 1983) 7 U.S.C. 7501 note; and
(iii) Commodity Supplemental Food
Program (section 5 of the Agriculture
and Consumer Protection Act of 1973) 7
U.S.C. 612c note.
[85 FR 49536, Aug. 13, 2020]
§ 200.102 Exceptions.
(a) With the exception of subpart F of
this part, OMB may allow exceptions
for classes of Federal awards or non-
Federal entities subject to the require-
ments of this part when exceptions are
not prohibited by statute. In the inter-
est of maximum uniformity, exceptions
from the requirements of this part will
be permitted as described in this sec-
tion.
(b) Exceptions on a case-by-case basis
for individual non-Federal entities may
be authorized by the Federal awarding
agency or cognizant agency for indirect
costs, except where otherwise required
by law or where OMB or other approval
is expressly required by this part.
(c) The Federal awarding agency may
apply adjust requirements to a class of
Federal awards or non-Federal entities
when approved by OMB, or when re-
quired by Federal statutes or regula-
tions, except for the requirements in
subpart F of this part. A Federal
awarding agency may apply less re-
strictive requirements when making
fixed amount awards as defined in sub-
part A of this part, except for those re-
quirements imposed by statute or in
subpart F of this part.
(d) Federal awarding agencies may
request exceptions in support of inno-
vative program designs that apply a
risk-based, data-driven framework to
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113
OMB Guidance § 200.106
alleviate select compliance require-
ments and hold recipients accountable
for good performance. See also § 200.206.
[85 FR 49538, Aug. 13, 2020]
§ 200.103 Authorities.
This part is issued under the fol-
lowing authorities.
(a) Subparts B through D of this part
are authorized under 31 U.S.C. 503 (the
Chief Financial Officers Act, Functions
of the Deputy Director for Manage-
ment), 41 U.S.C. 1101–1131 (the Office of
Federal Procurement Policy Act), Re-
organization Plan No. 2 of 1970, and Ex-
ecutive Order 11541 (‘‘Prescribing the
Duties of the Office of Management
and Budget and the Domestic Policy
Council in the Executive Office of the
President’’), the Single Audit Act
Amendments of 1996, (31 U.S.C. 7501–
7507), as well as The Federal Program
Information Act (Pub. L. 95–220 and
Pub. L. 98–169, as amended, codified at
31 U.S.C. 6101–6106).
(b) Subpart E of this part is author-
ized under the Budget and Accounting
Act of 1921, as amended; the Budget
and Accounting Procedures Act of 1950,
as amended (31 U.S.C. 1101–1125); the
Chief Financial Officers Act of 1990 (31
U.S.C. 503–504); Reorganization Plan
No. 2 of 1970; and Executive Order 11541,
‘‘Prescribing the Duties of the Office of
Management and Budget and the Do-
mestic Policy Council in the Executive
Office of the President.’’
(c) Subpart F of this part is author-
ized under the Single Audit Act
Amendments of 1996, (31 U.S.C. 7501–
7507).
[85 FR 49538, Aug. 13, 2020]
§ 200.104 Supersession.
As described in § 200.110, this part su-
persedes the following OMB guidance
documents and regulations under title
2 of the Code of Federal Regulations:
(a) A–21, ‘‘Cost Principles for Edu-
cational Institutions’’ (2 CFR part 220);
(b) A–87, ‘‘Cost Principles for State,
Local and Indian Tribal Governments’’
(2 CFR part 225) and also F
EDERAL REG-
ISTER notice 51 FR 552 (January 6, 1986);
(c) A–89, ‘‘Federal Domestic Assist-
ance Program Information’’;
(d) A–102, ‘‘Grant Awards and Cooper-
ative Agreements with State and Local
Governments’’;
(e) A–110, ‘‘Uniform Administrative
Requirements for Awards and Other
Agreements with Institutions of Higher
Education, Hospitals, and Other Non-
profit Organizations’’ (codified at 2
CFR 215);
(f) A–122, ‘‘Cost Principles for Non-
Profit Organizations’’ (2 CFR part 230);
(g) A–133, ‘‘Audits of States, Local
Governments and Non-Profit Organiza-
tions’’; and
(h) Those sections of A–50 related to
audits performed under subpart F of
this part.
[78 FR 78608, Dec. 26, 2013, as amended at 79
FR 75882, Dec. 19, 2014; 85 FR 49538, Aug. 13,
2020]
§ 200.105 Effect on other issuances.
(a) Superseding inconsistent require-
ments. For Federal awards subject to
this part, all administrative require-
ments, program manuals, handbooks
and other non-regulatory materials
that are inconsistent with the require-
ments of this part must be superseded
upon implementation of this part by
the Federal agency, except to the ex-
tent they are required by statute or au-
thorized in accordance with the provi-
sions in § 200.102.
(b) Imposition of requirements on recipi-
ents. Agencies may impose legally
binding requirements on recipients
only through the notice and public
comment process through an approved
agency process, including as authorized
by this part, other statutes or regula-
tions, or as incorporated into the terms
of a Federal award.
[85 FR 49538, Aug. 13, 2020]
§ 200.106 Agency implementation.
The specific requirements and re-
sponsibilities of Federal agencies and
non-Federal entities are set forth in
this part. Federal agencies making
Federal awards to non-Federal entities
must implement the language in sub-
parts C through F of this part in codi-
fied regulations unless different provi-
sions are required by Federal statute
or are approved by OMB.
[85 FR 49538, Aug. 13, 2020]
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2 CFR Ch. II (1–1–21 Edition) § 200.107
§ 200.107 OMB responsibilities.
OMB will review Federal agency reg-
ulations and implementation of this
part, and will provide interpretations
of policy requirements and assistance
to ensure effective and efficient imple-
mentation. Any exceptions will be sub-
ject to approval by OMB. Exceptions
will only be made in particular cases
where adequate justification is pre-
sented.
§ 200.108 Inquiries.
Inquiries concerning this part may be
directed to the Office of Federal Finan-
cial Management Office of Manage-
ment and Budget, in Washington, DC.
Non-Federal entities’ inquiries should
be addressed to the Federal awarding
agency, cognizant agency for indirect
costs, cognizant or oversight agency
for audit, or pass-through entity as ap-
propriate.
§ 200.109 Review date.
OMB will review this part at least
every five years after December 26,
2013.
§ 200.110 Effective/applicability date.
(a) The standards set forth in this
part that affect the administration of
Federal awards issued by Federal
awarding agencies become effective
once implemented by Federal awarding
agencies or when any future amend-
ment to this part becomes final.
(b) Existing negotiated indirect cost
rates (as of the publication date of the
revisions to the guidance) will remain
in place until they expire. The effective
date of changes to indirect cost rates
must be based upon the date that a
newly re-negotiated rate goes into ef-
fect for a specific non-Federal entity’s
fiscal year. Therefore, for indirect cost
rates and cost allocation plans, the re-
vised Uniform Guidance (as of the pub-
lication date for revisions to the guid-
ance) become effective in generating
proposals and negotiating a new rate
(when the rate is re-negotiated).
[85 FR 49538, Aug. 13, 2020]
§ 200.111 English language.
(a) All Federal financial assistance
announcements and Federal award in-
formation must be in the English lan-
guage. Applications must be submitted
in the English language and must be in
the terms of U.S. dollars. If the Federal
awarding agency receives applications
in another currency, the Federal
awarding agency will evaluate the ap-
plication by converting the foreign cur-
rency to United States currency using
the date specified for receipt of the ap-
plication.
(b) Non-Federal entities may trans-
late the Federal award and other docu-
ments into another language. In the
event of inconsistency between any
terms and conditions of the Federal
award and any translation into another
language, the English language mean-
ing will control. Where a significant
portion of the non-Federal entity’s em-
ployees who are working on the Fed-
eral award are not fluent in English,
the non-Federal entity must provide
the Federal award in English and the
language(s) with which employees are
more familiar.
§ 200.112 Conflict of interest.
The Federal awarding agency must
establish conflict of interest policies
for Federal awards. The non-Federal
entity must disclose in writing any po-
tential conflict of interest to the Fed-
eral awarding agency or pass-through
entity in accordance with applicable
Federal awarding agency policy.
§ 200.113 Mandatory disclosures.
The non-Federal entity or applicant
for a Federal award must disclose, in a
timely manner, in writing to the Fed-
eral awarding agency or pass-through
entity all violations of Federal crimi-
nal law involving fraud, bribery, or
gratuity violations potentially affect-
ing the Federal award. Non-Federal en-
tities that have received a Federal
award including the term and condi-
tion outlined in appendix XII to this
part are required to report certain
civil, criminal, or administrative pro-
ceedings to SAM (currently FAPIIS).
Failure to make required disclosures
can result in any of the remedies de-
scribed in § 200.339. (See also 2 CFR part
180, 31 U.S.C. 3321, and 41 U.S.C. 2313.)
[85 FR 49539, Aug. 13, 2020]
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17.A
115
OMB Guidance § 200.202
Subpart C—Pre-Federal Award
Requirements and Contents of
Federal Awards
SOURCE: 85 FR 49539, Aug. 13, 2020, unless
otherwise noted.
§ 200.200 Purpose.
Sections 200.201 through 200.216 pre-
scribe instructions and other pre-award
matters to be used by Federal awarding
agencies in the program planning, an-
nouncement, application and award
processes.
§ 200.201 Use of grant agreements (in-
cluding fixed amount awards), co-
operative agreements, and con-
tracts.
(a) Federal award instrument. The Fed-
eral awarding agency or pass-through
entity must decide on the appropriate
instrument for the Federal award ( i.e.,
grant agreement, cooperative agree-
ment, or contract) in accordance with
the Federal Grant and Cooperative
Agreement Act (31 U.S.C. 6301–08).
(b) Fixed amount awards. In addition
to the options described in paragraph
(a) of this section, Federal awarding
agencies, or pass-through entities as
permitted in § 200.333, may use fixed
amount awards (see Fixed amount
awards in § 200.1) to which the following
conditions apply:
(1) The Federal award amount is ne-
gotiated using the cost principles (or
other pricing information) as a guide.
The Federal awarding agency or pass-
through entity may use fixed amount
awards if the project scope has measur-
able goals and objectives and if ade-
quate cost, historical, or unit pricing
data is available to establish a fixed
amount award based on a reasonable
estimate of actual cost. Payments are
based on meeting specific requirements
of the Federal award. Accountability is
based on performance and results. Ex-
cept in the case of termination before
completion of the Federal award, there
is no governmental review of the ac-
tual costs incurred by the non-Federal
entity in performance of the award.
Some of the ways in which the Federal
award may be paid include, but are not
limited to:
(i) In several partial payments, the
amount of each agreed upon in ad-
vance, and the ‘‘milestone’’ or event
triggering the payment also agreed
upon in advance, and set forth in the
Federal award;
(ii) On a unit price basis, for a de-
fined unit or units, at a defined price or
prices, agreed to in advance of perform-
ance of the Federal award and set forth
in the Federal award; or,
(iii) In one payment at Federal award
completion.
(2) A fixed amount award cannot be
used in programs which require manda-
tory cost sharing or match.
(3) The non-Federal entity must cer-
tify in writing to the Federal awarding
agency or pass-through entity at the
end of the Federal award that the
project or activity was completed or
the level of effort was expended. If the
required level of activity or effort was
not carried out, the amount of the Fed-
eral award must be adjusted.
(4) Periodic reports may be estab-
lished for each Federal award.
(5) Changes in principal investigator,
project leader, project partner, or scope
of effort must receive the prior written
approval of the Federal awarding agen-
cy or pass-through entity.
§ 200.202 Program planning and de-
sign.
The Federal awarding agency must
design a program and create an Assist-
ance Listing before announcing the No-
tice of Funding Opportunity. The pro-
gram must be designed with clear goals
and objectives that facilitate the deliv-
ery of meaningful results consistent
with the Federal authorizing legisla-
tion of the program. Program perform-
ance shall be measured based on the
goals and objectives developed during
program planning and design. See
§ 200.301 for more information on per-
formance measurement. Performance
measures may differ depending on the
type of program. The program must
align with the strategic goals and ob-
jectives within the Federal awarding
agency’s performance plan and should
support the Federal awarding agency’s
performance measurement, manage-
ment, and reporting as required by
Part 6 of OMB Circular A–11 (Prepara-
tion, Submission, and Execution of the
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17.A
116
2 CFR Ch. II (1–1–21 Edition) § 200.203
Budget). The program must also be de-
signed to align with the Program Man-
agement Improvement Accountability
Act (Pub. L. 114–264).
§ 200.203 Requirement to provide pub-
lic notice of Federal financial as-
sistance programs.
(a) The Federal awarding agency
must notify the public of Federal pro-
grams in the Federal Assistance List-
ings maintained by the General Serv-
ices Administration (GSA).
(1) The Federal Assistance Listings is
the single, authoritative, government-
wide comprehensive source of Federal
financial assistance program informa-
tion produced by the executive branch
of the Federal Government.
(2) The information that the Federal
awarding agency must submit to GSA
for approval by OMB is listed in para-
graph (b) of this section. GSA must
prescribe the format for the submission
in coordination with OMB.
(3) The Federal awarding agency may
not award Federal financial assistance
without assigning it to a program that
has been included in the Federal As-
sistance Listings as required in this
section unless there are exigent cir-
cumstances requiring otherwise, such
as timing requirements imposed by
statute.
(b) For each program that awards
discretionary Federal awards, non-dis-
cretionary Federal awards, loans, in-
surance, or any other type of Federal
financial assistance, the Federal
awarding agency must, to the extent
practicable, create, update, and man-
age Assistance Listings entries based
on the authorizing statute for the pro-
gram and comply with additional guid-
ance provided by GSA in consultation
with OMB to ensure consistent, accu-
rate information is available to pro-
spective applicants. Accordingly, Fed-
eral awarding agencies must submit
the following information to GSA:
(1) Program Description, Purpose,
Goals, and Measurement. A brief sum-
mary of the statutory or regulatory re-
quirements of the program and its in-
tended outcome. Where appropriate,
the Program Description, Purpose,
Goals, and Measurement should align
with the strategic goals and objectives
within the Federal awarding agency’s
performance plan and should support
the Federal awarding agency’s per-
formance measurement, management,
and reporting as required by Part 6 of
OMB Circular A–11;
(2) Identification. Identification of
whether the program makes Federal
awards on a discretionary basis or the
Federal awards are prescribed by Fed-
eral statute, such as in the case of for-
mula grants.
(3) Projected total amount of funds
available for the program. Estimates
based on previous year funding are ac-
ceptable if current appropriations are
not available at the time of the sub-
mission;
(4) Anticipated source of available
funds. The statutory authority for
funding the program and, to the extent
possible, agency, sub-agency, or, if
known, the specific program unit that
will issue the Federal awards, and asso-
ciated funding identifier (e.g., Treasury
Account Symbol(s));
(5) General eligibility requirements. The
statutory, regulatory or other eligi-
bility factors or considerations that de-
termine the applicant’s qualification
for Federal awards under the program
(e.g., type of non-Federal entity); and
(6) Applicability of Single Audit Re-
quirements. Applicability of Single
Audit Requirements as required by
subpart F of this part.
§ 200.204 Notices of funding opportuni-
ties.
For discretionary grants and cooper-
ative agreements that are competed,
the Federal awarding agency must an-
nounce specific funding opportunities
by providing the following information
in a public notice:
(a) Summary information in notices of
funding opportunities. The Federal
awarding agency must display the fol-
lowing information posted on the OMB-
designated governmentwide website for
funding and applying for Federal finan-
cial assistance, in a location preceding
the full text of the announcement:
(1) Federal Awarding Agency Name;
(2) Funding Opportunity Title;
(3) Announcement Type (whether the
funding opportunity is the initial an-
nouncement of this funding oppor-
tunity or a modification of a pre-
viously announced opportunity);
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17.A
117
OMB Guidance § 200.206
(4) Funding Opportunity Number (re-
quired, if applicable). If the Federal
awarding agency has assigned or will
assign a number to the funding oppor-
tunity announcement, this number
must be provided;
(5) Assistance Listings Number(s);
(6) Key Dates. Key dates include due
dates for applications or Executive
Order 12372 submissions, as well as for
any letters of intent or pre-applica-
tions. For any announcement issued
before a program’s application mate-
rials are available, key dates also in-
clude the date on which those mate-
rials will be released; and any other ad-
ditional information, as deemed appli-
cable by the relevant Federal awarding
agency.
(b) Availability period. The Federal
awarding agency must generally make
all funding opportunities available for
application for at least 60 calendar
days. The Federal awarding agency
may make a determination to have a
less than 60 calendar day availability
period but no funding opportunity
should be available for less than 30 cal-
endar days unless exigent cir-
cumstances require as determined by
the Federal awarding agency head or
delegate.
(c) Full text of funding opportunities.
The Federal awarding agency must in-
clude the following information in the
full text of each funding opportunity.
For specific instructions on the con-
tent required in this section, refer to
appendix I to this part.
(1) Full programmatic description of
the funding opportunity.
(2) Federal award information, in-
cluding sufficient information to help
an applicant make an informed deci-
sion about whether to submit an appli-
cation. (See also § 200.414(c)(4)).
(3) Specific eligibility information,
including any factors or priorities that
affect an applicant’s or its applica-
tion’s eligibility for selection.
(4) Application Preparation and Sub-
mission Information, including the ap-
plicable submission dates and time.
(5) Application Review Information
including the criteria and process to be
used to evaluate applications. See also
§§ 200.205 and 200.206.
(6) Federal Award Administration In-
formation. See also § 200.211.
(7) Applicable terms and conditions
for resulting awards, including any ex-
ceptions from these standard terms.
§ 200.205 Federal awarding agency re-
view of merit of proposals.
For discretionary Federal awards,
unless prohibited by Federal statute,
the Federal awarding agency must de-
sign and execute a merit review process
for applications, with the objective of
selecting recipients most likely to be
successful in delivering results based
on the program objectives outlined in
section § 200.202. A merit review is an
objective process of evaluating Federal
award applications in accordance with
written standards set forth by the Fed-
eral awarding agency. This process
must be described or incorporated by
reference in the applicable funding op-
portunity (see appendix I to this part.).
See also § 200.204. The Federal awarding
agency must also periodically review
its merit review process.
§ 200.206 Federal awarding agency re-
view of risk posed by applicants.
(a) Review of OMB-designated reposi-
tories of governmentwide data. (1) Prior
to making a Federal award, the Fed-
eral awarding agency is required by the
Improper Payments Elimination and
Recovery Improvement Act of 2012, 31
U.S.C. 3321 note, and 41 U.S.C. 2313 to
review information available through
any OMB-designated repositories of
governmentwide eligibility qualifica-
tion or financial integrity information
as appropriate. See also suspension and
debarment requirements at 2 CFR part
180 as well as individual Federal agency
suspension and debarment regulations
in title 2 of the Code of Federal Regula-
tions.
(2) In accordance 41 U.S.C. 2313, the
Federal awarding agency is required to
review the non-public segment of the
OMB-designated integrity and perform-
ance system accessible through SAM
(currently the Federal Awardee Per-
formance and Integrity Information
System (FAPIIS)) prior to making a
Federal award where the Federal share
is expected to exceed the simplified ac-
quisition threshold, defined in 41 U.S.C.
134, over the period of performance. As
required by Public Law 112–239, Na-
tional Defense Authorization Act for
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2 CFR Ch. II (1–1–21 Edition) § 200.207
Fiscal Year 2013, prior to making a
Federal award, the Federal awarding
agency must consider all of the infor-
mation available through FAPIIS with
regard to the applicant and any imme-
diate highest level owner, predecessor
(i.e.; a non-Federal entity that is re-
placed by a successor), or subsidiary,
identified for that applicant in FAPIIS,
if applicable. At a minimum, the infor-
mation in the system for a prior Fed-
eral award recipient must demonstrate
a satisfactory record of executing pro-
grams or activities under Federal
grants, cooperative agreements, or pro-
curement awards; and integrity and
business ethics. The Federal awarding
agency may make a Federal award to a
recipient who does not fully meet these
standards, if it is determined that the
information is not relevant to the cur-
rent Federal award under consideration
or there are specific conditions that
can appropriately mitigate the effects
of the non-Federal entity’s risk in ac-
cordance with § 200.208.
(b) Risk evaluation. (1) The Federal
awarding agency must have in place a
framework for evaluating the risks
posed by applicants before they receive
Federal awards. This evaluation may
incorporate results of the evaluation of
the applicant’s eligibility or the qual-
ity of its application. If the Federal
awarding agency determines that a
Federal award will be made, special
conditions that correspond to the de-
gree of risk assessed may be applied to
the Federal award. Criteria to be evalu-
ated must be described in the an-
nouncement of funding opportunity de-
scribed in § 200.204.
(2) In evaluating risks posed by appli-
cants, the Federal awarding agency
may use a risk-based approach and
may consider any items such as the fol-
lowing:
(i) Financial stability. Financial sta-
bility;
(ii) Management systems and stand-
ards. Quality of management systems
and ability to meet the management
standards prescribed in this part;
(iii) History of performance. The appli-
cant’s record in managing Federal
awards, if it is a prior recipient of Fed-
eral awards, including timeliness of
compliance with applicable reporting
requirements, conformance to the
terms and conditions of previous Fed-
eral awards, and if applicable, the ex-
tent to which any previously awarded
amounts will be expended prior to fu-
ture awards;
(iv) Audit reports and findings. Re-
ports and findings from audits per-
formed under subpart F of this part or
the reports and findings of any other
available audits; and
(v) Ability to effectively implement re-
quirements. The applicant’s ability to
effectively implement statutory, regu-
latory, or other requirements imposed
on non-Federal entities.
(c) Risk-based requirements adjustment.
The Federal awarding agency may ad-
just requirements when a risk-evalua-
tion indicates that it may be merited
either pre-award or post-award.
(d) Suspension and debarment compli-
ance. (1) The Federal awarding agency
must comply with the guidelines on
governmentwide suspension and debar-
ment in 2 CFR part 180, and must re-
quire non-Federal entities to comply
with these provisions. These provisions
restrict Federal awards, subawards and
contracts with certain parties that are
debarred, suspended or otherwise ex-
cluded from or ineligible for participa-
tion in Federal programs or activities.
§ 200.207 Standard application re-
quirements.
(a) Paperwork clearances. The Federal
awarding agency may only use applica-
tion information collections approved
by OMB under the Paperwork Reduc-
tion Act of 1995 and OMB’s imple-
menting regulations in 5 CFR part 1320
and in alignment with OMB-approved,
governmentwide data elements avail-
able from the OMB-designated stand-
ards lead. Consistent with these re-
quirements, OMB will authorize addi-
tional information collections only on
a limited basis.
(b) Information collection. If applica-
ble, the Federal awarding agency may
inform applicants and recipients that
they do not need to provide certain in-
formation otherwise required by the
relevant information collection.
§ 200.208 Specific conditions.
(a) Federal awarding agencies are re-
sponsible for ensuring that specific
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OMB Guidance § 200.211
Federal award conditions are con-
sistent with the program design re-
flected in § 200.202 and include clear
performance expectations of recipients
as required in § 200.301.
(b) The Federal awarding agency or
pass-through entity may adjust spe-
cific Federal award conditions as need-
ed, in accordance with this section,
based on an analysis of the following
factors:
(1) Based on the criteria set forth in
§ 200.206;
(2) The applicant or recipient’s his-
tory of compliance with the general or
specific terms and conditions of a Fed-
eral award;
(3) The applicant or recipient’s abil-
ity to meet expected performance goals
as described in § 200.211; or
(4) A responsibility determination of
an applicant or recipient.
(c) Additional Federal award condi-
tions may include items such as the
following:
(1) Requiring payments as reimburse-
ments rather than advance payments;
(2) Withholding authority to proceed
to the next phase until receipt of evi-
dence of acceptable performance within
a given performance period;
(3) Requiring additional, more de-
tailed financial reports;
(4) Requiring additional project mon-
itoring;
(5) Requiring the non-Federal entity
to obtain technical or management as-
sistance; or
(6) Establishing additional prior ap-
provals.
(d) If the Federal awarding agency or
pass-through entity is imposing addi-
tional requirements, they must notify
the applicant or non-Federal entity as
to:
(1) The nature of the additional re-
quirements;
(2) The reason why the additional re-
quirements are being imposed;
(3) The nature of the action needed to
remove the additional requirement, if
applicable;
(4) The time allowed for completing
the actions if applicable; and
(5) The method for requesting recon-
sideration of the additional require-
ments imposed.
(e) Any additional requirements must
be promptly removed once the condi-
tions that prompted them have been
satisfied.
§ 200.209 Certifications and represen-
tations.
Unless prohibited by the U.S. Con-
stitution, Federal statutes or regula-
tions, each Federal awarding agency or
pass-through entity is authorized to re-
quire the non-Federal entity to submit
certifications and representations re-
quired by Federal statutes, or regula-
tions on an annual basis. Submission
may be required more frequently if the
non-Federal entity fails to meet a re-
quirement of a Federal award.
§ 200.210 Pre-award costs.
For requirements on costs incurred
by the applicant prior to the start date
of the period of performance of the
Federal award, see § 200.458.
§ 200.211 Information contained in a
Federal award.
A Federal award must include the
following information:
(a) Federal award performance goals.
Performance goals, indicators, targets,
and baseline data must be included in
the Federal award, where applicable.
The Federal awarding agency must
also specify how performance will be
assessed in the terms and conditions of
the Federal award, including the tim-
ing and scope of expected performance.
See §§ 200.202 and 200.301 for more infor-
mation on Federal award performance
goals.
(b) General Federal award information.
The Federal awarding agency must in-
clude the following general Federal
award information in each Federal
award:
(1) Recipient name (which must
match the name associated with its
unique entity identifier as defined at 2
CFR 25.315);
(2) Recipient’s unique entity identi-
fier;
(3) Unique Federal Award Identifica-
tion Number (FAIN);
(4) Federal Award Date (see Federal
award date in § 200.201);
(5) Period of Performance Start and
End Date;
(6) Budget Period Start and End
Date;
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2 CFR Ch. II (1–1–21 Edition) § 200.212
(7) Amount of Federal Funds Obli-
gated by this action;
(8) Total Amount of Federal Funds
Obligated;
(9) Total Approved Cost Sharing or
Matching, where applicable;
(10) Total Amount of the Federal
Award including approved Cost Sharing
or Matching;
(11) Budget Approved by the Federal
Awarding Agency;
(11) Federal award description, (to
comply with statutory requirements
(e.g., FFATA));
(12) Name of Federal awarding agen-
cy and contact information for award-
ing official,
(13) Assistance Listings Number and
Title;
(14) Identification of whether the
award is R&D; and
(15) Indirect cost rate for the Federal
award (including if the de minimis rate
is charged per § 200.414).
(c) General terms and conditions. (1)
Federal awarding agencies must incor-
porate the following general terms and
conditions either in the Federal award
or by reference, as applicable:
(i) Administrative requirements. Admin-
istrative requirements implemented by
the Federal awarding agency as speci-
fied in this part.
(ii) National policy requirements. These
include statutory, executive order,
other Presidential directive, or regu-
latory requirements that apply by spe-
cific reference and are not program-
specific. See § 200.300 Statutory and na-
tional policy requirements.
(iii) Recipient integrity and perform-
ance matters. If the total Federal share
of the Federal award may include more
than $500,000 over the period of per-
formance, the Federal awarding agency
must include the term and condition
available in appendix XII of this part.
See also § 200.113.
(iv) Future budget periods. If it is an-
ticipated that the period of perform-
ance will include multiple budget peri-
ods, the Federal awarding agency must
indicate that subsequent budget peri-
ods are subject to the availability of
funds, program authority, satisfactory
performance, and compliance with the
terms and conditions of the Federal
award.
(v) Termination provisions. Federal
awarding agencies must make recipi-
ents aware, in a clear and unambiguous
manner, of the termination provisions
in § 200.340, including the applicable
termination provisions in the Federal
awarding agency’s regulations or in
each Federal award.
(2) The Federal award must incor-
porate, by reference, all general terms
and conditions of the award, which
must be maintained on the agency’s
website.
(3) If a non-Federal entity requests a
copy of the full text of the general
terms and conditions, the Federal
awarding agency must provide it.
(4) Wherever the general terms and
conditions are publicly available, the
Federal awarding agency must main-
tain an archive of previous versions of
the general terms and conditions, with
effective dates, for use by the non-Fed-
eral entity, auditors, or others.
(d) Federal awarding agency, program,
or Federal award specific terms and con-
ditions. The Federal awarding agency
must include with each Federal award
any terms and conditions necessary to
communicate requirements that are in
addition to the requirements outlined
in the Federal awarding agency’s gen-
eral terms and conditions. See also
§ 200.208. Whenever practicable, these
specific terms and conditions also
should be shared on the agency’s
website and in notices of funding op-
portunities (as outlined in § 200.204) in
addition to being included in a Federal
award. See also § 200.207.
(e) Federal awarding agency require-
ments. Any other information required
by the Federal awarding agency.
§ 200.212 Public access to Federal
award information.
(a) In accordance with statutory re-
quirements for Federal spending trans-
parency (e.g., FFATA), except as noted
in this section, for applicable Federal
awards the Federal awarding agency
must announce all Federal awards pub-
licly and publish the required informa-
tion on a publicly available OMB-des-
ignated governmentwide website.
(b) All information posted in the des-
ignated integrity and performance sys-
tem accessible through SAM (currently
FAPIIS) on or after April 15, 2011 will
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OMB Guidance § 200.213
be publicly available after a waiting
period of 14 calendar days, except for:
(1) Past performance reviews required
by Federal Government contractors in
accordance with the Federal Acquisi-
tion Regulation (FAR) 48 CFR part 42,
subpart 42.15;
(2) Information that was entered
prior to April 15, 2011; or
(3) Information that is withdrawn
during the 14-calendar day waiting pe-
riod by the Federal Government offi-
cial.
(c) Nothing in this section may be
construed as requiring the publication
of information otherwise exempt under
the Freedom of Information Act (5
U.S.C 552), or controlled unclassified
information pursuant to Executive
Order 13556.
§ 200.213 Reporting a determination
that a non-Federal entity is not
qualified for a Federal award.
(a) If a Federal awarding agency does
not make a Federal award to a non-
Federal entity because the official de-
termines that the non-Federal entity
does not meet either or both of the
minimum qualification standards as
described in § 200.206(a)(2), the Federal
awarding agency must report that de-
termination to the designated integ-
rity and performance system accessible
through SAM (currently FAPIIS), only
if all of the following apply:
(1) The only basis for the determina-
tion described in this paragraph (a) is
the non-Federal entity’s prior record of
executing programs or activities under
Federal awards or its record of integ-
rity and business ethics, as described in
§ 200.206(a)(2) (i.e., the entity was deter-
mined to be qualified based on all fac-
tors other than those two standards);
and
(2) The total Federal share of the
Federal award that otherwise would be
made to the non-Federal entity is ex-
pected to exceed the simplified acquisi-
tion threshold over the period of per-
formance.
(b) The Federal awarding agency is
not required to report a determination
that a non-Federal entity is not quali-
fied for a Federal award if they make
the Federal award to the non-Federal
entity and include specific award terms
and conditions, as described in § 200.208.
(c) If a Federal awarding agency re-
ports a determination that a non-Fed-
eral entity is not qualified for a Fed-
eral award, as described in paragraph
(a) of this section, the Federal award-
ing agency also must notify the non-
Federal entity that—
(1) The determination was made and
reported to the designated integrity
and performance system accessible
through SAM, and include with the no-
tification an explanation of the basis
for the determination;
(2) The information will be kept in
the system for a period of five years
from the date of the determination, as
required by section 872 of Public Law
110–417, as amended (41 U.S.C. 2313),
then archived;
(3) Each Federal awarding agency
that considers making a Federal award
to the non-Federal entity during that
five year period must consider that in-
formation in judging whether the non-
Federal entity is qualified to receive
the Federal award when the total Fed-
eral share of the Federal award is ex-
pected to include an amount of Federal
funding in excess of the simplified ac-
quisition threshold over the period of
performance;
(4) The non-Federal entity may go to
the awardee integrity and performance
portal accessible through SAM (cur-
rently the Contractor Performance As-
sessment Reporting System (CPARS))
and comment on any information the
system contains about the non-Federal
entity itself; and
(5) Federal awarding agencies will
consider that non-Federal entity’s
comments in determining whether the
non-Federal entity is qualified for a fu-
ture Federal award.
(d) If a Federal awarding agency en-
ters information into the designated
integrity and performance system ac-
cessible through SAM about a deter-
mination that a non-Federal entity is
not qualified for a Federal award and
subsequently:
(1) Learns that any of that informa-
tion is erroneous, the Federal awarding
agency must correct the information in
the system within three business days;
and
(2) Obtains an update to that infor-
mation that could be helpful to other
Federal awarding agencies, the Federal
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2 CFR Ch. II (1–1–21 Edition) § 200.214
awarding agency is strongly encour-
aged to amend the information in the
system to incorporate the update in a
timely way.
(e) Federal awarding agencies must
not post any information that will be
made publicly available in the non-
public segment of designated integrity
and performance system that is cov-
ered by a disclosure exemption under
the Freedom of Information Act. If the
recipient asserts within seven calendar
days to the Federal awarding agency
that posted the information that some
or all of the information made publicly
available is covered by a disclosure ex-
emption under the Freedom of Infor-
mation Act, the Federal awarding
agency that posted the information
must remove the posting within seven
calendar days of receiving the asser-
tion. Prior to reposting the releasable
information, the Federal awarding
agency must resolve the issue in ac-
cordance with the agency’s Freedom of
Information Act procedures.
§ 200.214 Suspension and debarment.
Non-Federal entities are subject to
the non-procurement debarment and
suspension regulations implementing
Executive Orders 12549 and 12689, 2 CFR
part 180. The regulations in 2 CFR part
180 restrict awards, subawards, and
contracts with certain parties that are
debarred, suspended, or otherwise ex-
cluded from or ineligible for participa-
tion in Federal assistance programs or
activities.
§ 200.215 Never contract with the
enemy.
Federal awarding agencies and re-
cipients are subject to the regulations
implementing Never Contract with the
Enemy in 2 CFR part 183. The regula-
tions in 2 CFR part 183 affect covered
contracts, grants and cooperative
agreements that are expected to exceed
$50,000 within the period of perform-
ance, are performed outside the United
States and its territories, and are in
support of a contingency operation in
which members of the Armed Forces
are actively engaged in hostilities.
§ 200.216 Prohibition on certain tele-
communications and video surveil-
lance services or equipment.
(a) Recipients and subrecipients are
prohibited from obligating or expend-
ing loan or grant funds to:
(1) Procure or obtain;
(2) Extend or renew a contract to pro-
cure or obtain; or
(3) Enter into a contract (or extend
or renew a contract) to procure or ob-
tain equipment, services, or systems
that uses covered telecommunications
equipment or services as a substantial
or essential component of any system,
or as critical technology as part of any
system. As described in Public Law
115–232, section 889, covered tele-
communications equipment is tele-
communications equipment produced
by Huawei Technologies Company or
ZTE Corporation (or any subsidiary or
affiliate of such entities).
(i) For the purpose of public safety,
security of government facilities, phys-
ical security surveillance of critical in-
frastructure, and other national secu-
rity purposes, video surveillance and
telecommunications equipment pro-
duced by Hytera Communications Cor-
poration, Hangzhou Hikvision Digital
Technology Company, or Dahua Tech-
nology Company (or any subsidiary or
affiliate of such entities).
(ii) Telecommunications or video sur-
veillance services provided by such en-
tities or using such equipment.
(iii) Telecommunications or video
surveillance equipment or services pro-
duced or provided by an entity that the
Secretary of Defense, in consultation
with the Director of the National Intel-
ligence or the Director of the Federal
Bureau of Investigation, reasonably be-
lieves to be an entity owned or con-
trolled by, or otherwise connected to,
the government of a covered foreign
country.
(b) In implementing the prohibition
under Public Law 115–232, section 889,
subsection (f), paragraph (1), heads of
executive agencies administering loan,
grant, or subsidy programs shall
prioritize available funding and tech-
nical support to assist affected busi-
nesses, institutions and organizations
as is reasonably necessary for those af-
fected entities to transition from cov-
ered communications equipment and
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