81 FR 7695 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards

DEPARTMENT OF AGRICULTURE
Farm Service Agency
Rural Housing Service
Rural Business-Cooperative Service
Rural Utilities Service
Office of the Chief Financial Officer
Farm Service Agency
Commodity Credit Corporation
National Institute of Food and Agriculture
Rural Utilities Service
Rural Business-Cooperative Service
Rural Housing Service
Rural Utilities Service

Federal Register Volume 81, Issue 30 (February 16, 2016)

The Office of the Chief Financial Officer, Farm Service Agency, Commodity Credit Corporation, National Institute of Food and Agriculture, Rural Utilities Service, Rural Business-Cooperative Service and Rural Housing Service finalize their portion of the uniform federal assistance rule and amend specific regulations to reference the conforming changes published by the Office of Management and Budget (OMB) in the Federal Register on December 19, 2014.

[Federal Register Volume 81, Number 30 (Tuesday, February 16, 2016)]
[Rules and Regulations]
[Pages 7695-7698]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-02473]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 81, No. 30 / Tuesday, February 16, 2016 / 
Rules and Regulations

[[Page 7695]]



DEPARTMENT OF AGRICULTURE

2 CFR Parts 400, 415, 416, 418, and 422

Office of the Chief Financial Officer

7 CFR Parts 3015, 3016, 3018, 3019, 3022, and 3052

Farm Service Agency

7 CFR Parts 761 and 785

Commodity Credit Corporation

7 CFR Parts 1407 and 1485

National Institute of Food and Agriculture

7 CFR Parts 3400, 3401, 3402, 3403, 3405, 3406, 3407, 3415, 3430, 
and 3431

Rural Utilities Service

7 CFR Parts 1703, 1709, 1710, 1717, 1724, 1726, 1737, 1738, 1739, 
1740, 1773, 1774, 1775, 1776, 1778, 1779, 1780, 1782, and 1783

Rural Business-Cooperative Service

Rural Housing Service

Rural Utilities Service

Farm Service Agency

7 CFR Parts 1942, 1944, 1951, and 1980

Rural Housing Service

7 CFR Parts 3570 and 3575

Rural Business-Cooperative Service

Rural Utilities Service

7 CFR Parts 4274, 4279, 4280, 4284, 4285 and 4290

RIN 0505-AA15


Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal Awards

AGENCY: Office of the Chief Financial Officer, Farm Service Agency, 
Commodity Credit Corporation, National Institute of Food and 
Agriculture, Rural Utilities Service, Rural Business-Cooperative 
Service, Rural Housing Service, Department of Agriculture.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Office of the Chief Financial Officer, Farm Service 
Agency, Commodity Credit Corporation, National Institute of Food and 
Agriculture, Rural Utilities Service, Rural Business-Cooperative 
Service and Rural Housing Service finalize their portion of the uniform 
federal assistance rule and amend specific regulations to reference the 
conforming changes published by the Office of Management and Budget 
(OMB) in the Federal Register on December 19, 2014.

DATES: This rule is effective February 16, 2016.

FOR FURTHER INFORMATION CONTACT: Tyson Whitney, Office of the Chief 
Financial Officer, Director, Transparency and Accountability Reporting 
Division, United States Department of Agriculture, 1400 Independence 
Avenue SW., Washington, DC 20250-9011, 202-720-8978, 
[email protected].

SUPPLEMENTARY INFORMATION: OMB is streamlining the Federal government's 
guidance on Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal awards. In a final rule published in the 
Federal Register on December 26, 2013, (78 FR 78590) OMB adopted final 
guidance, Uniform Administrative Requirements, Cost Principles, and 
Audit Requirements for Federal Awards (Uniform Guidance), that 
supersedes and streamlines requirements from OMB Circulars A-21, A-87, 
A-110, and A-122 (which were located previously in title 2 of the Code 
of Federal Regulation (CFR)); Circulars A-89, A-102, and A-133; and the 
guidance in Circular A-50 on Single Audit Act follow-up. The final 
guidance is located in title 2 part 200.
    On December 19, 2014, OMB published a joint interim final rule in 
the Federal Register, (79 FR 75871). OMB made technical corrections to 
the Uniform Guidance, and Federal awarding agencies, including the 
Department of Agriculture, Office of the Chief Financial Officer, Farm 
Service Agency, Commodity Credit Corporation, National Institute of 
Food and Agriculture, Rural Utilities Service, Rural Business-
Cooperative Service and Rural Housing Service, implemented the guidance 
in their respective chapters and titles in the CFR.
    OMB's joint interim final rule requested additional comments on the 
rule. USDA received 13 comments. Of the 13 comments, one comment was 
directly related to USDA, Rural Housing Service (RHS). RHS will address 
this comment below as part of the preamble to 7 CFR 1944.422 of this 
final rule. The remaining comments were applicable to OMB and other 
Federal agencies. Notification was sent to OMB for resolution.
    As part of the December 2014 rulemaking, the Office of the Chief 
Financial Officer adopted 2 CFR part 200, along with an agency-specific 
addendum in a new 2 CFR part 400. The Department of Agriculture added 2 
CFR parts 415, 416, 418 and 422. In addition, the Office of the Chief 
Financial Officer removed parts 3015, 3016, 3018, 3019, 3022 and 3052 
from title 7 of the CFR, as they became obsolete with the publication 
of the interim final rule. See 79 FR 75981, December 19, 2014. Title 2 
of the CFR parts 400, 415, 416, 418 and 422 as described in the interim 
final rule are adopted with no changes.
    The Farm Service Agency 7 CFR parts 761 and 785, and Commodity 
Credit Corporation 7 CFR parts 1407 and 1485 as described in the 
interim final rule are adopted with no changes.
    The National Institute of Food and Agriculture 7 CFR parts 3400, 
3401, 3402, 3403, 3405, 3406, 3407, 3415, 3430, and 3431 as described 
in the interim final rule are adopted with no changes.
    The Rural Utilities Service 7 CFR parts 1703, 1709, 1710, 1717, 
1724, 1726, 1737, 1738, 1739, 1740, 1773, 1779, and 1782 as described 
in the interim final rule are adopted with no changes. The changes to 7 
CFR parts 1774, 1775, 1776, 1778, 1780, and 1783 as described in the 
interim final rule are

[[Page 7696]]

adopted with technical changes to address the following issues. First, 
there were specific new regulations (including 2 CFR parts 200, 400, or 
other 400 series regulations) that should have had been referenced in 
the conforming changes published in the December 19, 2014, rule, but 
which were inadvertently not included. An example is that the Emergency 
and Imminent Community Water Assistance Grants regulations (7 CFR part 
1778) should have had a conforming change reference to 2 CFR parts 200 
and 400. Second, there were some streamlining measures implemented by 
OMB that might be interpreted by some as not applicable to 7 CFR part 
1780 without the technical corrections. Examples include the change 
from $100,000 to $150,000 for the Simplified Acquisition Threshold for 
small purchase procedures, an increase in the associated threshold for 
the use of construction surety bonds, the addition of micro-purchases, 
and changes to contract clauses. Current language at 7 CFR 1780.72(a) 
states that small purchase procedures are applicable to procurement 
under $100,000 rather than referencing the Simplified Acquisition 
Threshold. The technical corrections would enable the use of the OMB 
streamlining measures. A standard contract clause that had been in 7 
CFR 3016.36 requiring compliance with state energy plans was removed by 
OMB and should also be removed from 7 CFR 1780.75.
    The Rural Housing Service, Rural Business-Cooperatives Service, 
Rural Utilities Service and Farm Service Agency 7 CFR parts 1942, 1951, 
and 1980 as described in the interim final rule are adopted with no 
changes. The regulation in 7 CFR part 1944 as described in the interim 
final rule is adopted with a technical change to 7 CFR 1944.422 in 
response to the following comment:
    Comment: It appears that the USDA Rural Development requirement for 
an audit to be submitted within 90 days of the end of the grantee's 
fiscal year (Sec.  1944.422) has not been brought in line with the 
overall deadline for audits contained in Sec.  200.512(a)(1). It is 
almost impossible for USDA funded affordable housing NFE's to complete 
the audit process and have even a draft Single Audit report within 90 
days of the end of their fiscal year. Many of these organizations have 
related LLC's for which they are general partners and they must wait 
for the completion of those related entities' audit before completing 
the overall organization's audit. Why was this unreasonable audit 
deadline not reviewed or revised with the publication of the interim 
rule?
    Response: USDA Rural Development agrees the regulation must be 
clear and consistent. The omission of language in 7 CFR 1944.422 was an 
oversight. We amended 7 CFR 1944.422 to address the oversight.
    The Rural Housing Service 7 CFR parts 3570 and 3575 as described in 
the interim final rule are adopted with no changes.
    The Rural Business-Cooperative Service and Rural Utilities Service 
7 CFR parts 4274, 4279, 4280, 4284, 4285, and 4290 as described in the 
interim final rule are adopted with no changes.
    Because the changes identified in the preamble are merely 
technical, advance notice and public comment are unnecessary and we 
find good cause to make these necessary changes effective immediately 
upon publication.

Regulatory Analysis

    For the regulatory analysis regarding this rulemaking, please refer 
to the analysis prepared by OMB in the interim final rule, which is 
incorporated herein. See 79 FR 75876, December 19, 2014.

Executive Order 12866 Determination

    Pursuant to Executive Order 12866, OMB has determined this final 
rule to be not significant. OMB has not reviewed this rule.

List of Subjects in 2 CFR Parts 400, 415, 416, 418, and 422; 7 CFR 
Parts 761, 785, 1407, 1485, 1703, 1709, 1710, 1717, 1724, 1726, 
1737, 1738, 1739, 1740, 1773, 1774, 1775, 1776, 1778, 1779, 1780, 
1782, 1783, 1942, 1944, 1951, 1980, 3015, 3016, 3018, 3019, 3022, 
3052, 3400, 3401, 3402, 3403, 3405, 3406, 3407, 3415, 3430, 3431, 
3570, 3575, 4274, 4279, 4280, 4284, 4285, and 4290

    Accounting, Administrative practice and procedure, Agriculture, 
Auditing, Business and industry, Colleges and universities, Community 
development, Cost principles, Economic development, Government 
Contracts, Grants administration, Grant programs, Grant programs 
housing and community development, Hospitals, Indians, Loan programs--
agriculture, Nonprofit organizations, State and local governments, 
Reporting and recordkeeping requirements, Research misconduct, Rural 
areas.
    For the reasons discussed above, the interim rule adding 2 CFR 
parts 400, 415, 416, 418, and 422, removing 7 CFR parts 3015, 3016, 
3018, 3019, 3022, and 3052, and amending 7 CFR parts 761, 785, 1407, 
1485, 1703, 1709, 1710, 1717, 1724, 1726, 1737, 1738, 1739, 1740, 1773, 
1774, 1775, 1776, 1778, 1779, 1780, 1782, 1783, 1942, 1944, 1951, 1980, 
3400, 3401, 3402, 3403, 3405, 3406, 3407, 3415, 3430, 3431, 3570, 3575, 
4274, 4279, 4280, 4284, 4285, and 4290, which was published at 79 FR 
75871 on December 19, 2014, is adopted as a final rule with the 
following changes:

Title 7--Agriculture

PART 1774--SPECIAL EVALUATION ASSISTANCE FOR RURAL COMMUNITIES AND 
HOUSEHOLDS PROGRAM (SEARCH)

0
1. The authority citation for part 1774 continues to read as follows:

    Authority:  7 U.S.C. 1926(a)(2)(C).

Subpart A--General Provisions

0
2. Amend Sec.  1774.8 by revising paragraphs (g) through (j) and adding 
paragraph (k) to read as follows:


Sec.  1774.8  Other Federal Statutes.

* * * * *
    (g) 2 CFR part 415--General Program Administrative Requirements.
    (h) 2 CFR part 180, as adopted by USDA through 2 CFR part 417, 
Nonprocurement Debarment and Suspension, implementation of Executive 
Order 12549 on debarment and suspension.
    (i) 2 CFR part 418, New Restrictions on Lobbying, prohibiting the 
use of appropriated funds to influence Congress or a Federal agency in 
connection with the making of any Federal grant and other Federal 
contracting and financial transactions.
    (j) 2 CFR part 421, Requirements for Drug-Free Workplace (Financial 
Assistance), implementing the Drug-Free Workplace Act of 1988 (41 U.S.C 
8102).
    (k) 7 CFR part 15b, USDA implementation of section 504 of the 
Rehabilitation Act of 1973 (29 U.S.C. 794), as amended, prohibiting 
discrimination on the basis of physical or mental handicap in Federally 
assisted programs.

PART 1775--TECHNICAL ASSISTANCE GRANTS

0
3. The authority citation for part 1775 continues to read as follows:

    Authority:  5 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005.

Subpart A--General Provisions

0
4. Amend Sec.  1775.8 by adding paragraphs (g) and (k) to read as 
follows:

[[Page 7697]]

Sec.  1775.8  Other Federal statutes.

* * * * *
    (g) 2 CFR part 415--General Program Administrative Requirements.
* * * * *
    (k) 2 CFR part 200, subpart F--Audit Requirements.
* * * * *

PART 1776--HOUSEHOLD WATER WELL SYSTEM GRANT PROGRAM

0
5. The authority citation for part 1776 continues to read as follows:

    Authority:  7 U.S.C. 1926e.

Subpart A--General

0
6. Revise Sec.  1776.2 to read as follows:


Sec.  1776.2  Uniform Federal Assistance Provisions.

    (a) This program is subject to the general provisions that apply to 
all grants made by USDA and that are set forth in 2 CFR part 200, 
Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal Awards, as adopted by USDA through 2 CFR part 
400, as well as the following:
    (1) 2 CFR part 415--General Program Administrative Requirements.
    (2) 2 CFR part 180, as adopted by USDA through 2 CFR part 417, 
Nonprocurement Debarment and Suspension, implementing Executive Order 
12549 on debarment and suspension.
    (3) 2 CFR part 418, New Restrictions on Lobbying, prohibiting the 
use of appropriated funds to influence Congress or a Federal agency in 
connection with the making of any Federal grant and other Federal 
contracting and financial transactions.
    (4) 2 CFR part 421, Requirements for Drug-Free Workplace (Financial 
Assistance), implementing the Drug-Free Workplace Act of 1988 (41 U.S.C 
8102).
    (b) [Reserved]

PART 1778--EMERGENCY AND IMMINENT COMMUNITY WATER ASSISTANCE GRANTS

0
7. The authority citation for part 1778 continues to read as follows:

    Authority:  5 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005.


0
8. Amend Sec.  1778.14 by revising paragraph (e) and adding paragraphs 
(g) through (i) to read as follows:


Sec.  1778.14  Other considerations.

* * * * *
    (e) Governmentwide debarment and suspension (nonprocurement). All 
projects must comply with the requirements of 2 CFR part 180, as 
adopted by USDA through 2 CFR part 417, Nonprocurement Debarment and 
Suspension, implementing Executive Order 12549 on debarment and 
suspension.
* * * * *
    (g) Uniform administrative requirements. All projects funded under 
this part are subject to 2 CFR part 200, as adopted by USDA through 2 
CFR part 400, Uniform Administrative Requirements, Cost Principles, and 
Audit Requirements for Federal Awards, and 2 CFR part 415, General 
Program Administrative Requirements.
    (h) Restrictions on lobbying. All projects funded under this part 
are subject to 2 CFR part 418, New Restrictions on Lobbying.
    (i) Requirements for drug-free workplace. This program is subject 
to 2 CFR part 421, Requirements for Drug-Free Workplace (Financial 
Assistance).

PART 1780--WATER AND WASTE LOANS AND GRANTS

0
9. The authority citation for part 1780 continues to read as follows:

    Authority:  5 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005.

Subpart A--General Policies and Requirements

0
10. Amend Sec.  1780.1 as follows:
0
a. Revise paragraph (l)(3);
0
b. Remove paragraphs (l)(4) and (5); and
0
c. Revise paragraph (m).
    The revisions read as follows:


Sec.  1780.1  General.

* * * * *
    (l) * * *
    (3) 2 CFR part 421-Requirements for Drug-Free Workplace (Financial 
Assistance).
* * * * *
    (m) Applicants for loan or grant assistance will be required to 
comply with the following requirements as applicable:
    (1) 2 CFR part 200, subpart F, ``Audit Requirements.''
    (2) 2 CFR part 180, as adopted by USDA through 2 CFR part 417, 
Nonprocurement Debarment and Suspension, implementation of Executive 
Order 12549 and Executive Order 12689 on debarment and suspension.
    (3) 2 CFR part 418, New Restrictions on Lobbying.

0
11. Amend Sec.  1780.3 by adding, in alphabetical order, the definition 
for ``Simplified acquisition threshold'' to read as follows:


Sec.  1780.3  Definitions and grammatical rules of construction.

    (a) * * *
* * * * *
    Simplified acquisition threshold means the dollar amount below 
which an applicant or owner may purchase property or services using 
small purchase methods as defined further at 2 CFR 200.88.
* * * * *

Subpart C--Planning, Designing, Bidding, Contracting, Constructing 
and Inspections

0
12. Amend Sec.  1780.72 by revising the introducty text to read as 
follows:


Sec.  1780.72  Procurement methods.

    Procurement shall be made by one of the following methods and in 
accordance with requirements of 2 CFR 200.320: Micro-purchases, 
procurement by small purchase procedures, procurement by sealed bids 
(formal advertising), procurement by competitive proposals, or 
procurement by noncompetitive proposals. The sealed bid method is the 
preferred method for procuring construction.
* * * * *

0
13. Amend Sec.  1780.75 as follows:
0
a. In paragraph (a), remove ``Contracts other than small purchases'' 
and add ``Contracts for more than the Simplified Acquisition 
Threshold'' in its place;
0
b. In paragraph (c), remove ``exceeding $100,000,'' and add ``exceeding 
the Simplified Acquisition Threshold,'' in its place;
0
c. Remove and reserve paragraphs (f) and (g);
0
d. Revise paragraph (k); and
0
e. Add paragraphs (l) through (o).
    The revision and additions reads as follows:


Sec.  1780.75  Contract provisions.

* * * * *
    (k) Clean Air Act (42 U.S.C. 7401-7671q) and the Federal Water 
Pollution Control Act (33 U.S.C. 1251-1388). Contracts and subgrants of 
amounts in excess of $150,000 must contain a provision that requires 
the contractor to agree to comply with all applicable standards, orders 
or regulations issued pursuant to the Clean Air Act (42 U.S.C. 7401-
7671q) and the Federal Water Pollution Control Act as amended (33 
U.S.C. 1251-1387). Violations must be reported to the Federal awarding 
agency and the Regional Office of the Environmental Protection Agency 
(EPA).
    (l) Contract Work Hours and Safety Standards Act (40 U.S.C. 3701-
3708). Where applicable, all contracts awarded

[[Page 7698]]

by the non-Federal entity in excess of $100,000 that involve the 
employment of mechanics or laborers must include a provision for 
compliance with 40 U.S.C. 3702 and 3704, as supplemented by Department 
of Labor regulations (29 CFR part 5). Under 40 U.S.C. 3702, each 
contractor must be required to compute the wages of every mechanic and 
laborer on the basis of a standard work week of 40 hours. Work in 
excess of the standard work week is permissible provided that the 
worker is compensated at a rate of not less than one and a half times 
the basic rate of pay for all hours worked in excess of 40 hours in the 
work week. The requirements of 40 U.S.C. 3704 are applicable to 
construction work and provide that no laborer or mechanic must be 
required to work in surroundings or under working conditions which are 
unsanitary, hazardous or dangerous. These requirements do not apply to 
the purchases of supplies or materials or articles ordinarily available 
on the open market.
    (m) Debarment and suspension. A contract award (see 2 CFR 180.220) 
must not be made to parties listed on the governmentwide exclusions in 
the System for Award Management (SAM), in accordance with the OMB 
guidelines at 2 CFR part 180, as supplemented by 2 CFR part 417, 
``Debarment and Suspension.'' SAM exclusion records contain the names 
of parties debarred, suspended, or otherwise excluded by agencies, as 
well as parties declared ineligible under statutory or regulatory 
authority other than Executive Order 12549.
    (n) Byrd anti-lobbying amendment (31 U.S.C. 1352). Contractors that 
apply or bid for an award exceeding $100,000 must file the required 
certification. Each tier certifies to the tier above that it will not 
and has not used Federal appropriated funds to pay any person or 
organization for influencing or attempting to influence an officer or 
employee of any agency, a member of Congress, officer or employee of 
Congress, or an employee of a member of Congress in connection with 
obtaining any Federal contract, grant or any other award covered by 31 
U.S.C. 1352. Each tier must also disclose any lobbying with non-Federal 
funds that takes place in connection with obtaining any Federal award. 
Such disclosures are forwarded from tier to tier up to the non-Federal 
award.
    (o) Procurement of recovered materials. A public body, such as a 
state government, state agency, municipality, county, district, 
authority, or other political subdivision of a state, territory or 
commonwealth, must ensure its contracts include provisions requiring 
compliance with section 6002 of the Solid Waste Disposal Act, as 
amended by the Resource Conservation and Recovery Act. The requirements 
of Section 6002 include procuring only items designated in guidelines 
of the Environmental Protection Agency (EPA) at 40 CFR part 247 that 
contain the highest percentage of recovered materials practicable, 
consistent with maintaining a satisfactory level of competition, where 
the purchase price of the item exceeds $10,000 or the value of the 
quantity acquired during the preceding fiscal year exceeded $10,000; 
procuring solid waste management services in a manner that maximizes 
energy and resource recovery; and establishing an affirmative 
procurement program for procurement of recovered materials identified 
in the EPA guidelines.

PART 1783--REVOLVING FUNDS FOR FUNDING WATER AND WASTEWATER 
PROJECTS (REVOLVING FUND PROGRAM)

0
14. The authority citation for part 1783 continues to read as follows:

    Authority:  7 U.S.C. 1926 (a)(2)(B).

Subpart A--General

0
15. Amend Sec.  1783.2 by adding paragraphs (c), (d), and (e) to read 
as follows:


Sec.  1783.2  What Uniform Federal Assistance Provisions apply to the 
Revolving Fund Program?

* * * * *
    (c) 2 CFR part 180, as adopted by USDA through 2 CFR part 417, 
Nonprocurement Debarment and Suspension, implementing Executive Order 
12549 and Executive Order 12689 on debarment and suspension.
    (d) This program is subject to 2 CFR part 418, New Restrictions on 
Lobbying, prohibiting the use of appropriated funds to influence 
Congress or a Federal agency in connection with the making of any 
Federal grant and other Federal contracting and financial transactions.
    (e) This program is subject to 2 CFR part 421, Requirements for 
Drug-Free Workplace (Financial Assistance), implementing the Drug-Free 
Workplace Act of 1988 (41 U.S.C. 8102).

PART 1944--HOUSING

0
16. The authority for part 1944 continues to read as follows:

    Authority:  5 U.S.C. 301; 42 U.S.C. 1480.

Subpart I--Self-Help Technical Assistance Grants


Sec.  1944.422  [Amended]

0
17. Amend Sec.  1944.422 in the introductory text by removing ``within 
90 days of the end of the grantee's fiscal year, grant period, or 
termination of the grant.'' and adding ``the earlier of 30 calendar 
days after receipt of the auditor's report or nine months after the end 
of the grantee's audit period.'' in its place.

Jon M. Holladay,
Chief Financial Officer.
[FR Doc. 2016-02473 Filed 2-12-16; 8:45 am]
 BILLING CODE 3410-KS-P