03-21437. NASA Grant and Cooperative Agreement Handbook-Financial Reporting

AGENCY:

National Aeronautics and Space Administration

ACTION:

Final rule.

SUMMARY:

This final rule amends the NASA Grant and Cooperative Agreement Handbook by updating the requirement for submission of quarterly Federal Cash Transactions Reports (Standard Form (SF) 272s) to reflect the existing practice of submitting these reports electronically, and clarifying the circumstances under which NASA may suspend or terminate grantee advance payments. The intended effect of this change is to formalize a process change (electronic submission of quarterly financial reports) and to ensure that NASA takes corrective action in a timely and coordinated fashion when grantee financial reports are late.

EFFECTIVE DATE:

August 21, 2003.

FOR FURTHER INFORMATION CONTACT:

Rita Svarcas, NASA Headquarters, Code HK, Washington DC, [phone], e-mail: [e-mail].

SUPPLEMENTARY INFORMATION:

 

A. Background

This change amends the NASA Grant and Cooperative Agreement Handbook to reflect NASA's implementation of the Department of Health and Human Services' Payment Management System (DHHS/PMS), including electronic submission of grantees' quarterly Federal Cash Transactions Reports (SF 272s). The changes also clarify NASA's policies and internal practices with regard to suspension or termination of advance payments. This change delegates responsibility for suspension and termination of advance payments to the NASA Financial Management Office in certain cases involving financial reporting. In all other cases, the Grant Officer retains responsibility for suspension and termination of advance payments. Additionally, this change amends the withholding provision. The change removes a phrase in that provision addressing withholding of future awards, as the phrase duplicates another provision and is not directly relevant to withholding of advance payments. The withholding provision is also amended to more specifically state the conditions under which NASA may withhold advance payments consistent with existing guidance and procedures contained in the Grant and Cooperative Agreement Handbook.

B. Regulatory Flexibility Act

NASA certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., because the change updates and clarifies existing operational practices.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because this final rule does not impose any new recordkeeping or information collection requirements, or collection of information from offerors, contractors, or members of the public that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in CFR Part 1260

• Grant Programs—Science and Technology

Tom Luedtke,

Assistant Administrator for Procurement.

Accordingly, 14 CFR Part 1260 is amended as follows:

1. The authority citation for 14 CFR 1260 continues to read as follows:

Authority: 42 U.S.C. 2473(c)(1) and Pub. L. 97-258, 96 Stat. 1003 (31 U.S.C. 6301, et seq.)

PART 1260—GRANTS AND COOPERATIVE AGREEMENT

2. Section 1260.26 is revised to read as follows:

§ 1260.26

Financial management.

Financial Management

August 2003

(a) Advance payments through a Letter of Credit will be made by the Financial Management Office of the NASA Center assigned financial cognizance of the grant, using the Department of Health and Human Services' Payment Management System (DHHS/PMS), in accordance with procedures provided to the Recipient. The Recipient shall submit a Federal Cash Transactions Report (SF 272), and, when applicable, a Continuation Sheet (SF 272A) electronically to DHHS/PMS within 15 working days following the end of each Federal Fiscal quarter (i.e., December 31, March 31, June 30, and September 30). One Federal Cash Transactions Report shall be submitted for all grants financed under a letter of credit arrangement with each NASA Center.

(b) In addition, the Recipient shall submit a final SF 272 in paper form to NASA within 90 calendar days after the expiration date of the grant. The final SF 272 shall pertain only to the completed grant and shall include total disbursements from inception through completion. The report shall be marked “Final”. The final SF 272 shall be submitted to the Financial Management Office, with a copy sent to the NASA Grant Officer.

(c) Unless otherwise directed by the Grant Officer, any unexpended balance of funds which remains at the end of any funding period, except the final funding period of the grant, shall be carried over to the next funding period, and may be used to defray costs of any funding period of the grant. This includes allowing the carry over of funds to the second and subsequent years of a multiple year grant. This provision also applies to subcontractors performing substantive work under the grant. For grant renewals, the estimated amount of unexpended funds shall be identified in the grant budget section of the Recipient's renewal proposal. NASA reserves the right to remove unexpended balances from grants when insufficient efforts have been made by the grantee to liquidate funding balances in a timely fashion.

[End of provision]

3. Section 1260.56 is revised to read as follows:

§ 1260.56

Withholding.

Withholding

August 2003

If a Recipient fails to comply with the project objectives, the terms and conditions of this award, or reporting requirements under this or previous NASA awards, NASA may withhold advance payments under this award including its augmentations, and may also withhold advance payments under future awards to the Recipient, pending correction of the deficiency by the Recipient. Upon determination that the deficiency has been corrected, the cognizant NASA Financial Management Office shall resume advance payments and release of previously withheld amounts after coordination with the Grant Officer.

4. Section 1260.75 is amended by revising paragraphs (b)(1) and (c)(2) to read as follows:

§ 1260.75

Summary of report requirements.

* * * * *

(b) * * *

(1) The Federal Cash Transactions Report (SF 272) shall be submitted by the recipient, in accordance with § 1260.26, as a condition of receiving advance payments. Instructions and answers to payment questions will be provided by the NASA Financial Management Office of the Center that has been assigned financial cognizance of the grant. (See § 1260.152.)

* * * * *

(c) * * *

(2) A Final Federal Cash Transactions Report, SF 272, is required from the recipient for each grant, in accordance with §§ 1260.26 and 1260.152. The report is due within 90 calendar days after the expiration date of the grant or cooperative agreement.

* * * * *

5. Section 1260.76 is amended by revising paragraphs (d) and (e) and adding new paragraphs (f), (g), and (h) to read as follows:

§ 1260.76

Termination and enforcement.

* * * * *

(d) Failure of the recipient to provide a required report can result in the Agency and the public being denied information about grant activities, NASA officials having less information for making decisions, grant closeout being delayed, and confidence being undermined as to whether the recipient will meet the requirements under other grants. Because NASA grants provide for advance payments, a recipient could be fully paid before final reports are due. At this point, it is too late to withhold payment on the existing grant. Consistent with §§ 1260.122(h) and 1260.162(a), NASA may suspend or terminate advance payments from recipients that fail to comply with reporting requirements.

(e) To remedy failure to furnish timely reports, special condition at § 1260.56, Withholding, should be used when awarding a new grant or modifying an existing grant with non-responsive organizations. Special condition at § 1260.56 allows NASA to suspend or terminate advance payments under an institution's letter of credit pending receipt of the satisfactorily completed reports required in § 1260.75.

(f) The NASA Financial Management Office, notifying the Grant Officer, shall take action to either suspend or terminate a recipient's advance payments when—

(1) A recipient organization is unwilling or unable to establish a financial management system that meets the requirements of advance payments as evidenced by an audit report or failure to comply with the NASA requirements;

(2) A recipient organization is unwilling or unable to report, on an accurate and timely basis, cash disbursements or cash balances as required by NASA. Advance payments shall be temporarily suspended when two (2) successive quarterly reports are late or when two (2) reports are late in a fiscal year; or

(3) A recipient organization has demonstrated an unwillingness or inability to establish procedures that will minimize time elapsing between drawdowns and related disbursements.

(g) In addition to the situations delineated in paragraph (f) of this section, the NASA Grant Officer may direct the NASA Financial Management Office to either suspend or terminate a recipient's advance payments under circumstances where a recipient has otherwise failed to comply with the project objectives, the terms and conditions of the award, or NASA reporting requirements.

(h) The Financial Management Office (for the cases set forth in paragraph (f) of this section) or the Grant Officer (for all other cases) may resume advance payments and may release any previously withheld amounts when the recipient has taken corrective action that makes suspension or withholding no longer necessary. To release for payment amounts they have previously withheld, grant officers shall send a memorandum to the Financial Management Office. The Financial Management Office shall likewise coordinate any release of withheld payments with the grant officer.

6. Section 1260.152 is amended by revising paragraph (b) and adding paragraph (c) to read as follows:

§ 1260.152

Financial reporting.

* * * * *

(b) Recipients are required to submit the report electronically to the Department of Health and Human Services' Payment Management System (DHHS/PMS) within 15 working days following the end of each Federal fiscal quarter. Reports are required for each quarter whether or not advances have been made during that quarter.

(c) Additionally, recipients shall submit a final SF 272 in paper form to the NASA Financial Management Office, and shall furnish a copy of the final SF 272 to the appropriate grant officer.