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Rule

Audit Appeals; Policy and Procedure

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Information about this document as published in the Federal Register.

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Start Preamble

AGENCY:

Maritime Administration, Department of Transportation.

ACTION:

Final rule.

SUMMARY:

The Maritime Administration (MARAD, we, our, or us) is updating our regulations on Audit Appeals; Policy and Procedure. The regulations establish audit appeal procedures for parties who contract with the Maritime Subsidy Board or MARAD. This final rule uses plain language to update the audit procedures to reflect our current practices. The intended effect of this rulemaking is to improve our audit appeals process by updating and clarifying the regulations.

DATES:

The effective date of this final rule is June 11, 2001.

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FOR FURTHER INFORMATION CONTACT:

Mr. Lennis G. Fludd, Office of Financial and Rate Approvals, (202) 366-2324. You may send mail to Mr. Fludd at Maritime Administration, Office of Financial and Rate Approvals, Room 8117, 400 Seventh Street, SW, Washington, DC 20590.

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SUPPLEMENTARY INFORMATION:

Background

Part 205 establishes the policy and procedure for parties to use when seeking redress and appeals of audit decisions involving contracts with the Maritime Subsidy Board or MARAD. Part 205 applies to contracts of the Maritime Subsidy Board and MARAD which have included, for example, the Operating-Differential Subsidy, Construction-Differential Subsidy, Capital Construction Fund, Construction Reserve Fund, and Maritime Security Program.

We published a notice of proposed rulemaking (NPRM) on November 16, 2000 at 65 FR 69279. The NPRM proposed revisions to part 205 to reflect our current practices of making audit appeals decisions. This final rule essentially mirrors the NPRM to which we received no public comments. Accordingly, parties no longer appeal to the appropriate Coast Director's office. In the past, auditors were assigned to regional offices. However, we no longer have these auditors. MARAD headquarters is responsible for overseeing audits as deemed appropriate. Such audits may be performed by the Office of Inspector General. Also, as proposed, we are eliminating the discretionary hearing afforded appellants (under § 205.2 (b)) when appealing to the Maritime Administrator. This final rule includes provisions that give the appellant 90 days from the date of receipt of the initial audit findings to file an appeal with the appropriate Associate Administrator and 30 days following the Associate Administrator's final audit appeals decision to submit an appeal in writing to the Administrator. However, the Administrator may, at his or her discretion, extend the 30 days in the case of extenuating circumstances.

Plain Language

Executive Order 12866 and a Presidential memorandum on plain language in government writing of June 1, 1998, require each agency to write all rules in plain language. The Department of Transportation and MARAD are committed to plain language in government writing; therefore, we revised part 205 using plain language to provide easier understanding. Our goal is to improve the clarity of our regulations.

Rulemaking Analyses and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

We have reviewed this final rule under Executive Order 12866 and have determined that this is not a significant regulatory action. Additionally, this final rule is not likely to result in an annual effect on the economy of $100 million or more. The purpose of this final rule is to update MARAD's audit appeals procedures to reflect current MARAD practices and to rewrite the regulations in plain language.

This final rule is also not significant under the Regulatory Policies and Procedures of the Department of Transportation (44 FR 11034; February 26, 1979). The costs and benefits associated with this rulemaking are considered to be so minimal that no further analysis is necessary. Because the economic impact, if any, should be minimal, further regulatory evaluation is not necessary.

Regulatory Flexibility Act

This final rule will not have a significant economic impact on a substantial number of small entities. This final rule only updates procedures for appealing audit findings and decisions to the Maritime Administrator. Although a number of small entities may appeal audit findings, the cost of filing an audit appeal with MARAD is minimal, if any. Therefore, MARAD certifies that this final rule will not have a significant economic impact on a substantial number of small entities.

Federalism

We have analyzed this final rule in accordance with the principles and criteria contained in Executive Order 13132 (“Federalism”) and have determined that it does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement. These regulations have no substantial effects on the States, or on the current Federal-State relationship, or on the current distribution of power and responsibilities among the various local officials. Therefore, consultation with Start Printed Page 23861State and local officials was not necessary.

Environmental Impact Statement

We have analyzed this final rule for purposes of compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and have concluded that under the categorical exclusions provision in section 4.05 of Maritime Administrative Order (“MAO”) 600-1, “Procedures for Considering Environmental Impacts,” 50 FR 11606 (March 22, 1985), the preparation of an Environmental Assessment, and an Environmental Impact Statement, or a Finding of No Significant Impact for this final rule is not required. This final rule involves administrative and procedural regulations that have no environmental impact.

Executive Order 13175

MARAD does not believe that this final rule will significantly or uniquely affect the communities of Indian tribal governments when analyzed under the principles and criteria contained in Executive Order 13175 (“Consultation and Coordination with Indian Tribal Governments”). Therefore, the funding and consultation requirements of this Executive Order would not apply.

Unfunded Mandates Reform Act of 1995

This final rule does not impose an unfunded mandate under the Unfunded Mandates Reform Act of 1995. It does not result in costs of $100 million or more, in the aggregate, to any of the following: State, local, or Native American tribal governments, or the private sector. This final rule is the least burdensome alternative that achieves the objective of the rule.

Paperwork Reduction Act

This final rule does not contain information collection requirements covered by 5 CFR Part 1320 (specifically 5 CFR 1320.3(c)) in that appellants choose the information to be provided in their appeal and may choose to interpret the collection of information differently.

Regulation Identifier Number (RIN)

The Department of Transportation assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN number is contained in the heading of this document to cross-reference this action with the Unified Agenda.

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List of Subjects in 46 CFR Part 205

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Accordingly,

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PART 205—AUDIT APPEALS; POLICY AND PROCEDURE

205.1
Purpose.
205.2
Policy.
205.3
Procedure.
205.4
Finality of decisions.
205.5
Contracts containing disputes article.
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Authority: Sec. 204, 49 Stat. 1987, 1998, 2004, 2011; 46 U.S.C. 1114, 1155, 1176, 1212.

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Purpose.

This part establishes the policy and procedure for parties to use when seeking redress and appeals of audit decisions involving contracts with the Maritime Subsidy Board or the Maritime Administration (MARAD, we, our, or us). A party to a contract (you or your) may appeal MARAD's findings, interpretations, or decisions of annual or special audits.

Policy

If you disagree with audit findings and fail to settle any differences with the appropriate Office Director, you may ask the appropriate office Associate Administrator to review the audit findings. If you disagree with the Associate Administrator, you may appeal to the Maritime Administrator (Administrator).

Procedure.

(a) You have 90 days from the date you receive the initial audit findings to file a written request for review of the audit findings with the appropriate Associate Administrator. Your written request must state the legal or factual bases for your disagreement. The appropriate Associate Administrator will issue a written determination.

(b) You have 30 days following the Associate Administrator's final audit determination to submit your appeal in writing to the Administrator. Your written appeal must set forth the legal and factual bases for your appeal. The Administrator may, at his or her discretion, extend the time limitation in the case of extenuating circumstances.

(c) We will notify you, in writing, if you must submit additional facts for our consideration of the appeal. We will notify you, in writing, once the Administrator has made a decision regarding your appeal.

Finality of decisions.

The Administrator's decision will be the final administrative action on all audit appeals.

Contracts containing disputes article.

When a contract contains a disputes article, the disputes article will govern the bases for negotiating disputes regarding audit findings, interpretations, or decisions made by MARAD and any appeals.

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Dated: May 2, 2001.

By Order of the Acting Deputy Maritime Administrator.

Joel C. Richard,

Secretary, Maritime Administration.

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[FR Doc. 01-11578 Filed 5-9-01; 8:45 am]

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