2010-17328. Conforming Changes to Applicant Submission Requirements; Implementing Federal Financial Report and Central Contractor Registration Requirements

AGENCY:

Office of the Secretary, HUD.

ACTION:

Interim rule.

SUMMARY:

This interim rule revises HUD regulations to reference the new governmentwide Federal Financial Report (FFR), approved by the Office of Management and Budget (OMB). The purpose of the FFR is to consolidate requirements from the OMB issued Standard Forms SF-269, SF-269A SF-272, and the SF-272A, into a single governmentwide form. The consolidation provides recipients of HUD grants and cooperative agreements a standard format for reporting the financial status of their grants and cooperative agreements and will assist in efforts to move to electronic grants management by reducing the variation and number of forms required for reporting. In including the new FFR in its regulations, HUD revises its regulations to remove references to SF-270 and SF-271, since they are no longer in use.

This interim rule also codifies the requirement that applicants for HUD assistance possess an active Central Contractor Registration (CCR). Registration with CCR assists HUD in collecting, validating, and storing information in support of its grant programs and assists in ensuring the accuracy of data placed on the USASpending.gov website.

DATES:

Effective Date: August 16, 2010. Comment Due Date: September 13, 2010.

ADDRESSES:

Interested persons are invited to submit comments regarding this rule to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street, SW., Room 10276, Washington, DC 20410-0500. Communications must refer to the above docket number and title. There are two methods for submitting public comments. All submissions must refer to the above docket number and title.

1. Submission of Comments by Mail. Comments may be submitted by mail to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street, SW., Room 10276, Washington, DC 20410-0500. HUD advises that comments submitted by mail are subject to irradiation security procedures which may result in a delay of up to 10 days before receipt by the HUD. As a result, HUD recommends that comments be submitted electronically, if feasible.

2. Electronic Submission of Comments. Interested persons may submit comments electronically through the Federal eRulemaking Portal at http://www.regulations.gov. HUD strongly encourages commenters to submit comments electronically. Electronic submission of comments allows the commenter maximum time to prepare and submit a comment, ensures timely receipt by HUD, and enables HUD to make them immediately available to the public. Comments submitted electronically through the http://www.regulations.gov website can be viewed by other commenters and interested members of the public. Commenters should follow the instructions provided on that site to submit comments electronically.

Note:

To receive consideration as public comments, comments must be submitted through one of the two methods specified above. Again, all submissions must refer to the docket number and title of the rule.

No Facsimile Comments. Facsimile (FAX) comments are not acceptable.

Public Inspection of Public Comments. All properly submitted comments and communications submitted to HUD will be available for public inspection and copying between 8 a.m. and 5 p.m. weekdays at the above address. Due to security measures at the HUD Headquarters building, an advance appointment to review the public comments must be scheduled by calling the Regulations Division at 202-402-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the Federal Information Relay Service, toll-free, at 800-877-8339. Copies of all comments submitted are available for inspection and downloading at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT:

Barbara Dorf, Director, Office of Departmental Grants Management and Oversight, Office of Administration, Department of Housing and Urban Development, 451 7th Street, SW., Room 3156, Washington, DC 20410-0500, telephone number 202-708-0667. Persons with hearing or speech impairments may access this number through TTY by calling the toll-free Federal Information Relay Service at 800-877-8339.

SUPPLEMENTARY INFORMATION:

I. This Interim Rule

A. Federal Financial Report (FFR)

On April 8, 2003 (68 FR 17097), OMB announced its intent to establish a new FFR. Consistent with the Federal Financial Assistance Management Improvement Act of 1999 (Pub. L. 106-107) and the goal of governmentwide grant streamlining efforts, the new FFR consolidates into a single report the current SF-269, Financial Status Report (Long Form); SF-269A, Financial Status Report (Short Form); SF-272, Federal Cash Transactions Report; and the SF-272A, Federal Cash Transactions Report. The use of the FFR provides a uniform, governmentwide format and reduces burden on grantees that are reporting using electronic systems by reducing the number of forms to report. The use of the FFR also provides for standard reporting period end dates and due dates for the submission of cash management and financial information. The FFR will simplify reporting procedures for grantees and facilitate uniformity in agencies' grantmaking processes.

On December 7, 2007 (72 FR 69248), OMB published a Federal Register notice announcing the promulgation of the new FFR. This notice also directed that Federal grant-making agencies begin using the FFR not later than September 30, 2008. Subsequently, on August 13, 2008 (73 FR 47246), OMB published a notice that requires Federal agencies to transition to the new form no later than October 1, 2009. In making this transition, OMB requested that agencies incorporate the requirement into agency grant agreements and program regulations as necessary.

HUD regulations at 24 CFR parts 84 and 85 reference the SF-269, SF-269A, SF-272, and the SF-272A. This rule removes these references and substitutes the FFR. This rule also amends §§ 84.52 and 85.41 to conform the reporting requirements to those provided for by the FFR.

B. Requirement for Central Contractor Registration

This interim rule also codifies the requirement that applicants for HUD assistance have an active registration in the Central Contractor Registration (CCR). CCR was established to facilitate the Federal government's compliance with the Prompt Payment Act (Pub. L. 97-177) (31 U.S.C. 3901 et seq.) as amended and is the primary registrant database for the Federal government. CCR collects, validates, stores and disseminates data in support of agency missions, including Federal agency contract and assistance awards, and the electronic payment process.

CCR registration is applicable to procurements awarded in accordance with the Federal Acquisitions Regulations (FAR). The use of CCR as a central grantee repository was instituted for competitive grant programs with the launch in 2005 of the Grants.gov system. Applicants for HUD competitive assistance should be familiar with the CCR registration requirement, since this requirement has been included in the notices of funding availability (NOFAs) published by HUD over the last several years (see e.g., 73 FR 79548, published December 29, 2008; 72 FR 11434, published March 13, 2007).

This interim rule codifies the CCR registration requirement by adding a new § 5.1004. Accordingly, entities (private nonprofits, educational organizations, state and regional agencies, etc,) subject to § 5.1001 that receive HUD assistance are required to register with CCR and have an active CCR registration in order for HUD to obligate funds and for an awardee to receive funds from HUD. HUD believes that codifying the CCR registration requirement will facilitate applicant and awardee use of a single public website which consolidates data on awards made under various types of Federal Financial Assistance, pursuant to the Federal Funding Accountability and Transparency Act of 2006 (Transparency Act) (Pub. L. 109-282) (Transparency Act) and help ensure data quality for grantee information for the USASpending.gov website created in conformance with the requirements of the Transparency Act.

C. Removal of References to SF-270 and SF-271

HUD is also using this interim rule to remove references to the SF-270, Request for Advance or Reimbursement, and the SF-271, Outlay Report and Request for Reimbursement for Construction Programs. The HUD electronic financial system does away with the need for the SF-270 and the SF-271. Both of these forms were initially referenced by OMB more than 30 years ago, and technological innovations have made these forms obsolete for HUD's purposes. To acknowledge this, this interim rule removes references to SF-270 and SF-271.

II. Justification for Interim Rulemaking

HUD generally publishes regulatory changes for public comment before issuing them for effect, in accordance with its own regulations on rulemaking in 24 CFR part 10. HUD, however, does provide in § 10.1 for exceptions from that general rule where the Department finds good cause to omit advance notice and public participation. The good cause requirement is satisfied when the prior public procedure is “impracticable, unnecessary, or contrary to the public interest.” The Department finds that a delay in the effectiveness of this interim rule in order to solicit prior public comment is unnecessary.

In accordance with the Paperwork Reduction Act of 1995, OMB published the FFR for comment on April 8, 2003 (68 FR 17097). The April 8, 2003 publication generated nearly 200 comments from a wide range of recipients of Federal financial assistance, including state and local government, non-profit entities, institutions of higher education, and associations. These comments were considered by OMB in developing the FFR. The FFR has also been approved by OMB, OMB has directed Federal agencies to commence using this form, and it is already being used by recipients of Federal assistance.

In addition, this interim rule would require applicants and awardees of HUD financial assistance to register with CCR and possess an active CCR registration. This is not a new requirement for applicants of HUD assistance. Rather, as noted the requirement has existed for several years through HUD's NOFAs. Therefore, applicants and awardees for the bulk of HUD's financial assistance are familiar with the requirement and already possess an active Central Contractor Registration.

Although HUD has determined that good cause exists to publish this rule for effect without prior solicitation of public comment, the Department recognizes the value and importance of public input in the rulemaking process. Accordingly, HUD is issuing these regulatory amendments on an interim basis and providing for a 60-day public comment period. All comments will be considered in the development of the final rule.

III. Findings and Certifications

Executive Order 12866, Regulatory Planning and Review

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and it was not reviewed by the Office of Management and Budget. This rule is not significant because it would conform HUD regulations to refer to the FFR, remove outdated references to forms that are obsolete, and codify a requirement that HUD has included for several years in its notices of funding availability.

Paperwork Reduction Act

The information collection requirements contained in this interim rule have been submitted to the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). In accordance with the Paperwork Reduction Act, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection displays a currently valid OMB control number. The OMB control number for the FFR is 0348-0061.

Environmental Impact

This interim rule does not direct, provide for assistance or loan and mortgage insurance for, or otherwise govern or regulate real property acquisition, disposition, leasing, rehabilitation, alteration, demolition, or new construction; or establish, revise, or provide for standards for construction or construction materials, manufactured housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this rule is categorically excluded from environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321).

Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. As noted earlier in this preamble, this interim rule conforms HUD regulations to requirements applicable to all grantees that are already in place, as a result of action previously taken by OMB, and small entities were provided the opportunity for comment in connection with OMB's publications. With respect to financial reporting, the interim rule streamlines the financial reporting requirement by replacing one form for the several that have been used prior to fiscal year 2010. As a result, the FFR will reduce the burden on all entities, including small entities, by simplifying the task of filing required financial reports. Similarly, CCR registration has been required of applicants and grantees for HUD's competitive programs to ensure the proper identity of applicants. This interim rule codifies the CCR registration requirement that HUD grantees are already meeting. Therefore, the undersigned certifies that this rule will not have a significant impact on a substantial number of small entities within the meaning of the RFA.

Notwithstanding HUD's view that this rule will not have a significant effect on a substantial number of small entities, HUD specifically invites comments to this rule that will meet HUD's objectives as described in this preamble.

Executive Order 13132, Federalism

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 and local governments and is not required by statute, or the rule preempts state law, unless the agency meets the relevant requirements of section 6 of the Executive Order. This interim rule does not have federalism implications and does not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive Order.

Unfunded Mandates Reform Act.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (12 U.S.C. 1531-1538) establishes requirements for Federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments, and on the private sector. This interim rule would not impose any Federal mandates on any state, local, or tribal governments, or on the private sector, within the meaning of UMRA.

List of Subjects

24 CFR Part 5

• Administrative practice and procedure
• Aged
• Claims
• Crime
• Government contracts
• Grants programs-housing and community development
• Individuals with disabilities
• Intergovernmental relations
• Loans programs-housing and community development
• Low and moderate income housing
• Mortgage insurance
• Penalties
• Pets
• Public housing
• Rent subsidies
• Reporting and recordkeeping requirements
• Social security
• Unemployment compensation
• Wages

24 CFR Part 84

• Accounting, colleges and universities
• Grant programs, hospitals
• Non-profit organizations
• Reporting and recordkeeping requirements

24 CFR Part 85

• Accounting
• Grant programs
• Indians
• Intergovernmental relations
• Reporting and recordkeeping requirements

Accordingly, for the reasons described in the preamble, HUD amends 24 CFR parts 5, 84, and 85 as follows:

PART 5—GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

1. The authority citation for 24 CFR part 5 continues to read as follows:

Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437f, 1437n, 3535(d); Sec. 327, Pub. L. 109-115, 119 Stat. 2936, and Sec. 607, Pub. L. 109-162, 119 Stat. 3051.

Subpart K—Application, Registration, and Submission Requirements

2. Revise the heading of subpart K to read as set forth above.

3. Add § 5.1004 to read as follows:

§ 5.1004

Central contractor registration.

Applicants for HUD financial assistance that are subject to this subpart are required to register with the Central Contractor Registration (CCR) and have an active registration in CCR in order for HUD to obligate funds and for an awardee to receive an award of funds from HUD.

PART 84—UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, AND OTHER NON-PROFIT ORGANIZATIONS

4. The authority citation for 24 CFR part 84 continues to read as follows:

Authority: 42 U.S.C. 3535(d).

5. In § 84.22, revise the first sentence of paragraph (d) and remove paragraph (m) to read as follows:

§ 84.22

Payment.

* * * * *

(d) Requests for Treasury check advance payments shall be submitted through electronic means determined by the authorizing HUD program, or on forms as may be authorized by OMB. * * *

* * * * *

6. Revise § 84.52 to read as follows:

§ 84.52

Financial reporting.

(a) The Federal financial report (FFR), or such other form as may be approved by OMB, is authorized for obtaining financial information from recipients. The applicability of the FFR form shall be determined by the appropriate HUD program, and the grantee will be notified of any program requirements in reference to the FFR upon receipt of the award. A HUD program may, where appropriate, waive the use of the FFR for its grantees and require an alternative reporting system.

(b) HUD shall prescribe whether the FFR shall be on a cash or accrual basis. If HUD requires accrual information and the recipient's accounting records are not normally kept on the accrual basis, the recipient shall not be required to convert its accounting system, but shall develop such accrual information through best estimates based on an analysis of the documentation on hand.

(c) HUD shall determine the frequency of the FFR for each project or program, considering the size and complexity of the particular project or program. However, the report shall not be required more frequently than quarterly or less frequently than annually. The reporting period end dates shall be March 31, June 30, September 30 or December 31. A final FFR shall be required at the completion of the award agreement and shall use the end date of the project or grant period as the reporting end date.

(d) HUD requires recipients to submit the FFR no later than 30 days after the end of each specified reporting period for quarterly and semi-annual reports, and 90 calendar days for annual reports. Final reports shall be submitted no later than 90 days after the project or grant period end date. Extensions of reporting due dates may be approved by HUD upon request of the recipient. HUD may require awardees to submit the FFR electronically. Electronic submission may be waived for cause in accordance with HUD's waiver policy in § 5.110 of this title.

(e) (1) When funds are advanced to recipients HUD shall use the FFR to monitor cash advanced to recipients and to obtain disbursement information for each agreement with the recipients. HUD may require forecasts of Federal cash requirements in the “Remarks” section of the FFR and may require recipients to report in the “Remarks” section the amount of cash advances received and retained in excess of three days and any interest earned on such cash advances. Recipients shall provide short narrative explanations of actions taken to reduce early drawdowns and excess balances.

(2) Recipients shall be required to submit not more than the original and two copies of the FFR or submit the report electronically. HUD may require a quarterly report from recipients receiving advances totaling $1 million or more per year.

(f) When HUD needs additional information or more frequent reports, the following shall be observed.

(1) When additional information is needed to comply with legislative requirements or governmentwide requirements, HUD shall issue instructions to require recipients to submit such information under the “Remarks” section of the reports or other means.

(2) When HUD determines that a recipient's accounting system does not meet the standards in § 84.21, additional pertinent information to further monitor awards may be obtained by written notice to the recipient until such time as the system is brought up to standard. HUD, in obtaining this information, shall comply with report clearance requirements of 5 CFR part 1320.

(3) HUD may elect to accept the identical information from the recipients through a system to system data interface as determined by HUD.

§ 84.82

[Amended]

7. In § 84.82, remove paragraph (c)(3).

PART 85—ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND COOPERATIVE AGREEMENTS TO STATE, LOCAL AND FEDERALLY RECOGNIZED INDIAN TRIBAL GOVERNMENTS

8. The authority citation for 24 CFR part 85 continues to read as follows:

Authority: 42 U.S.C. 3535(d).

9. In § 85.3, revise the definition of “ expenditure report” to read as follows:

§ 85.3

Definitions.

* * * * *

Expenditure report means the Federal financial report (FFR) or such other financial reporting form as may be approved by the Office of Management and Budget.

* * * * *

10. Revise § 85.23(b) to read as follows:

§ 85.23

Period of availability of funds.

* * * * *

(b) Liquidation of obligations. A grantee must liquidate all obligations incurred under the award not later than 90 days after the end of the funding period (or as specified in a program regulation) to coincide with the submission of the FFR. HUD may extend this deadline at the request of the grantee.

11. In § 85.41, revise the first sentence of paragraph (a)(3), revise paragraphs (b) and (c), and remove paragraphs (d) and (e), to read as follows:

§ 85.41

Financial reporting.

(a) * * *

(3) Grantees shall follow all applicable standard and supplemental Federal agency instructions approved by OMB to the extent required under the Paperwork Reduction Act of 1980 for use in connection with forms specified in paragraphs (b) and (c) of this section. * * *

* * * * *

(b) Financial Status Report—(1) Form: Grantees will use the FFR to report the status of funds for all non-construction grants, for construction grants or grants which include both construction and non-construction activities as determined by HUD.

(2) Accounting basis. HUD shall prescribe whether the FFR shall be on a cash or accrual basis. If HUD requires accrual information and the grantee's accounting records are not normally kept on the accrual basis, the grantee shall not be required to convert its accounting system but shall develop such accrual information through an analysis of the documentation on hand.

(3) HUD shall determine the frequency of the FFR for each project or program, considering the size and complexity of the particular project or program. However, the report will not be required more frequently than quarterly or less frequently than annually. The reporting period end dates shall be March 31, June 30, September 30 or December 31. A final FFR shall be required at the completion of the award agreement and shall use the end date of the project or grant period as the reporting end date.

(4) HUD requires recipients to submit the FFR (original and two copies), not later than 30 days after the end of each specified reporting period for quarterly and semiannual reports and 90 days for annual reports. Final reports shall be submitted no later than 90 days after the expiration or termination of grant support.

(c) (1) For grants paid by Treasury check advances or electronic transfer of funds, the grantee will submit the FFR, unless the terms of the award exempt the grantee from this requirement or proscribe an alternate method of financial reporting. HUD will use these reports to monitor cash advanced to grantees and to obtain disbursement or financial status information for each grant from grantees. The format of the FFR may be adapted as appropriate when reporting is to be accomplished with the assistance of automatic data processing equipment provided that the information to be submitted is not changed in substance. HUD may require forecasts of Federal cash requirements in the “Remarks” section of the report.

(2) Cash in hands of subgrantees. When considered necessary and feasible HUD may require grantees to report the amount of cash advances in excess of three days' needs in the hands of their subgrantees or contractors and to provide short narrative explanations of actions taken by the grantee to reduce the excess balances.

12. In § 85.50, revise paragraph (b)(2), remove paragraph (b)(3), and redesignate paragraph (b)(4) as paragraph (b)(3) and paragraph (b)(5) as paragraph (b)(4) to read as follows:

§ 85.50

Closeout.

* * * * *

(b) * * *

(2) The Federal financial report form, as well as other forms prescribed by the program.

* * * * *

Dated: June 16, 2010.

Shaun Donovan,

Secretary.