This site displays a prototype of a “Web 2.0” version of the daily
Federal Register. It is not an official legal edition of the Federal
Register, and does not replace the official print version or the official
electronic version on GPO’s govinfo.gov.
The documents posted on this site are XML renditions of published Federal
Register documents. Each document posted on the site includes a link to the
corresponding official PDF file on govinfo.gov. This prototype edition of the
daily Federal Register on FederalRegister.gov will remain an unofficial
informational resource until the Administrative Committee of the Federal
Register (ACFR) issues a regulation granting it official legal status.
For complete information about, and access to, our official publications
and services, go to
About the Federal Register
on NARA's archives.gov.
The OFR/GPO partnership is committed to presenting accurate and reliable
regulatory information on FederalRegister.gov with the objective of
establishing the XML-based Federal Register as an ACFR-sanctioned
publication in the future. While every effort has been made to ensure that
the material on FederalRegister.gov is accurately displayed, consistent with
the official SGML-based PDF version on govinfo.gov, those relying on it for
legal research should verify their results against an official edition of
the Federal Register. Until the ACFR grants it official status, the XML
rendition of the daily Federal Register on FederalRegister.gov does not
provide legal notice to the public or judicial notice to the courts.
Rule
Enter a search term or FR citation e.g.
88 FR 38230 FR 78782024-13208USDA09/05/24RULE0503-AA39SORN
Choosing an item from
full text search results
will bring you to those results. Pressing enter in the search box
will also bring you to search results.
Choosing an item from
suggestions
will bring you directly to the content.
The rule is effective October 1, 2025, except for amendatory instruction 2, which is effective October 1, 2024.
Table of Contents
Enhanced Content - Table of Contents
This table of contents is a navigational tool, processed from the
headings within the legal text of Federal Register documents.
This repetition of headings to form internal navigation links
has no substantive legal effect.
Comments are no longer being accepted.
See DATES for details.
5 comments have
been received at Regulations.gov.
Agencies review all submissions and may choose to redact, or withhold,
certain submissions (or portions thereof). Submitted comments may not be
available to be read until the agency has approved them.
Docket Title
Document ID
Comments
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
FederalRegister.gov retrieves relevant information about this document
from Regulations.gov to provide users with additional context. This
information is not part of the official Federal Register document.
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
Document page views are updated periodically throughout the day and are
cumulative counts for this document. Counts are subject to sampling,
reprocessing and revision (up or down) throughout the day.
Page views
13,296
as of
07/14/2026 at 8:15 am EDT
Other Formats
Enhanced Content - Other Formats
This document is also available in the following formats:
This PDF is FR Doc. 2024-21984 as it appeared on Public Inspection on
09/26/2024 at 4:15 pm.
It was viewed
0
times while on Public Inspection.
If you are using public inspection listings for legal research, you
should verify the contents of the documents against a final, official
edition of the Federal Register. Only official editions of the
Federal Register provide legal notice of publication to the public and judicial notice
to the courts under 44 U.S.C. 1503 & 1507.
Learn more here.
Published Document: 2024-21984 (89 FR 80055)
This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.
( printed page 80055)
AGENCY:
Office of the Secretary, Office of the Assistant Secretary for Financial Resources, Office of Grants, HHS.
ACTION:
Interim final rule with comment period.
SUMMARY:
The Department of Health and Human Services (HHS) adopts with this rule OMB's Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, to include 12 existing HHS-specific modifications. This rule also repeals HHS' existing regulations governing the administration of HHS financial assistance awards. The existing HHS-specific modifications are described in the rule's preamble. Additionally, the rule will correct citations throughout all relevant HHS regulations.
DATES:
The rule is effective October 1, 2025, except for amendatory instruction 2, which is effective October 1, 2024.
Comment date:
Comments must be received by HHS electronically through
www.regulations.gov
no later than midnight Eastern Daylight Time (E.D.T) on November 1, 2024.
Johanna Nestor, Director for Grants Policy, Oversight, and Evaluation, Office of Grants at (202) 260-6118, or via email at
grantpolicyreq@hhs.gov.
SUPPLEMENTARY INFORMATION:
Background
OMB Adoptions
After decades of utilizing various circulars to provide guidance to agencies on federal grants, OMB engaged in a lengthy public process to create unified, consolidated, uniform guidance that was easy to locate and applied to all recipients regardless of recipient type. To do so, OMB provided opportunities for the general public to comment on an Advanced Notice of Proposed Guidance, 77 FR 11778 (Feb. 28, 2012) and a Notice of Proposed Guidance, 78 FR 7282 (Feb. 1, 2013), before publishing the Final Guidance, 78 FR 78590 (Dec. 26, 2013).
In 2020, OMB sought public comment on a Notice of Proposed Guidance, 85 FR 3766 (Jan. 22, 2020), and issued revised Final Guidance, 85 FR 49506 (Aug. 13, 2020). The 2020 revisions addressed program development and design, measuring recipient performance to assist Federal awarding agencies and recipients to improve program goals and objectives, share lessons learned, and adopt promising performance practices. In 2023, based on ongoing engagement with Federal agencies and the broader Federal financial assistance community, OMB again sought to update the Uniform Guidance. OMB allowed multiple rounds of public input, through a Notice of Request for Information, 88 FR 8480 (Feb. 9, 2023), and Notification of Proposed Guidance, 88 FR 69390 (Oct. 5, 2023). After review and consideration of received comments and to effectuate the goals of increasing accessibility and equity with respect to Federal funding opportunities, OMB updated the Uniform Guidance with an effective date of October 1, 2024. 89 FR 30046 (Apr. 22, 2024). The 2024 OMB revisions further streamline, clarify, and update the guidance, including raising certain thresholds, where permissible under law, in recognition of inflation over time.
The 2024 OMB revisions to 2 CFR part 200 have three primary objectives: (1) to reduce agency and recipient burden; (2) to clarify sections that recipients or agencies may have interpreted in different ways; and (3) to rewrite applicable sections in plain language, improving flow and addressing inconsistent use of terms. In addition to the revisions in part 200, OMB revised other parts in subtitle A of 2 CFR for similar reasons, including parts 1, 25, 170, 175, 180, 182, and 183.
HHS Adoption
HHS is the largest grant-making agency in the United States and, historically, has had its own set of implementing regulations, codified prior to OMB's initial streamlining efforts, at 45 CFR parts 74 (regulating awards to institutions of higher education, hospitals, other non-profit organizations, commercial organizations, and certain grants and agreements with states, local governments, and Indian tribal governments), and 92 (regulating awards to state, local, and Indian tribal governments). In 2014, the Federal grant awarding agencies, including HHS, adopted the 2013 Final Guidance through a joint interim final rule (IFR) with comment period. 79 FR 75871 (Dec. 19, 2014). HHS' adoption codified the 2013 Final Guidance with HHS specific modifications at 45 CFR part 75,
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards. Id.
In the preamble to that rule, HHS explained all of the changes it made to the 2013 Final Guidance, each one of which was previously codified in either 45 CFR part 74 or 92. The changes consisted of:
Format and style changes, for example:
1. Replaced “Federal” with “HHS”
2. Removed titles of sections to improve readability
3. Revised numbering to allow for possible later changes
4. Revised internal citations to reflect codification in 45 CFR part 75
5. Replaced “non-Federal entity” with “recipient”
Substantive changes:
1. Added acronyms and definitions, for example:
a. Commercial organization
b. Departmental Appeals Board
c. Excess property
d. Principal Investigator/Program Director
e. Suspension of award activities
2. Included additional detail, for example:
a. Examples of cost sharing
( printed page 80056)
b. Examples of personal property
c. HHS-specific forms
d. Citations to existing HHS regulations and other statutes including:
Nonprocurement Debarment and Suspension, 2 CFR part 376,
Procedures of the Departmental Grant Appeals Board, 45 CFR part 16,
e. Supersession of HHS rules, and details regarding adoption of 45 CFR part 75
3. HHS-specific changes, for example:
a. Inclusion of appendix IX, Principles for Determining Costs Applicable to Research and Development under Grants and Contracts with Hospitals
b. Articulation of HHS' conflict of interest policies and disclosures
c. Special provisions for awards to commercial organizations and federal agencies, including application of patent law
d. Specified provisions for payments to States
e. Added additional prior approval requirement for research patient care costs, subaward relations to the Simplified Acquisition Threshold, and disposition of property and equipment
f. Added HHS policy related to property management
g. Reduced the period for close out
h. Added HHS select item of cost related to independent research and development costs
With this interim final rule, HHS will forgo the separate codification, fully adopt 2 CFR part 200, reduce the total number of HHS-specific changes, and codify those changes in 2 CFR part 300.
Nearly all the changes HHS adopted in 2014 have been formally adopted by OMB in the most recent Uniform Guidance, and thus are no longer necessary. For example, the Uniform Guidance has adopted terminology related to “recipient” and has expressly recognized its applicability to awards to for-profit entities and Federal agencies. It also modified the numbering system by eliminating individual numbers for each definition and removed the internal titles to improve readability. Thus, HHS will not retain those 2014 changes.
Many other HHS changes merely cite to other existing regulations or statutes, and thus are not legally required to be included; removing the citations has no effect on the other regulations, nor on their applicability to the regulated community. A few changes are articulation of HHS policy; these are better suited to sub-regulatory guidance. HHS will move these provisions to the HHS Grants Policy Statement (GPS). They include, for example: forms for HHS financial assistance (previously at 45 CFR 75.206) and HHS policy on property (previously at 45 CFR 75.316). HHS will also move the provision for the metric system of measurement (previously at 45 CFR 75.214) to the HHS GPS, as well as references to existing regulations that continue to be applicable to the regulated community.
Many revisions adopted in 2014 are no longer required because HHS policy is aligned with OMB policy. Therefore, HHS will eliminate the changes to the closeout provisions at 45 CFR 75.381 to align with the Uniform Guidance at 2 CFR 200.344. Likewise, HHS will not repromulgate minor changes in 45 CFR 75.309, 75.310, 75.311, 75.313, or 75.316 to increase clarity, and minimize the total number of HHS-specific modifications.
As such, HHS will include only twelve HHS-specific modifications to the Uniform Guidance that are currently codified in 45 CFR part 75. These are not new provisions for the HHS applicant and recipient community. All of the HHS-specific modifications have been previously presented to the public for comment appropriately, either through the Health and Human Services interim final rule in 2014, the HHS Notice of Proposed Rulemaking (NPRM) in 2019
,84 FR 63831 (Nov. 19, 2019), or the HHS NPRM in 2023
,88 FR 44750 (July 13, 2023).
HHS retains the following HHS-specific modifications in 2 CFR part 300, making minor changes to previously-promulgated regulations to align with the text of the Uniform Guidance:
2. 2 CFR 300.112 Conflict of Interest, which describes supplementary conflict of interest requirements and directs Public Health Service recipients to align conflict of interest policies with requirements in 42 CFR part 50, subpart F, previously codified at 45 CFR 75.112;
3. 2 CFR 200.218 Special provisions for awards to for-profit organizations as recipients, which contains specific requirements for awards to for-profit organizations such as the prohibition against profit and program income requirements for Small Business Innovation Research and Small Business Technology Transfer Research (SBIR/STTR) programs, previously codified at 45 CFR 75.216, and 45 CFR 75.322(f);
4. 2 CFR 300.219 Special provisions for awards to Federal agencies, which contains specific requirements for awards to Federal agencies, such as program income requirements and salary and indirect cost restrictions, previously codified at 45 CFR 75.217;
5. 2 CFR 300.300 Nondiscrimination language, which includes recently promulgated HHS-specific nondiscrimination requirements, previously codified at 45 CFR 75.300;
7. 2 CFR 300.308 Revision of budget and program plans, which requires prior approval for research patient care costs, previously codified at 45 CFR 75.308(c)(1)(ix). We note that HHS is not repromulgating the other two provisions that required prior approval;
8. 2 CFR 300.315 Intangible property, which prohibits HHS from asserting rights in inventions under awards made for primarily educational purposes, previously codified at 45 CFR 75.307(c)(2);
9. 2 CFR 300.414 Indirect costs, which limits indirect costs on training awards, awards to Foreign organizations, and awards to Foreign public entities performed fully outside the US to a fixed rate of eight percent of MTDC and allows negotiated indirect cost rates for American University, Beirut and the World Health Organization, which were previously codified at 45 CFR 75.414(c)(1);
10. 2 CFR 300.477 Independent research and development costs, which defines, and describes requirements for, independent research and development costs, previously codified at 45 CFR 75.476;
11. 2 CFR 300.478 Shared responsibility payments, which describes requirements for payments for failure to maintain minimum essential health coverage and failure to offer health coverage to employees, previously codified at 45 CFR 75.477; and
With these twelve additions, HHS will adopt 2 CFR part 200 in its entirety. Where there are conflicts between OMB and HHS language, HHS adopts the OMB language to ensure consistency and afford recipients the most flexibility and least burden.
Good Cause Exception
HHS finds there is good cause under 5 U.S.C. 553(b)(B) and (d)(3) to dispense with the opportunity for advance notice and for public comment and good cause to publish this rule with an effective date of October 1, 2024, for the eight provisions noted in the preamble and reiterated below, and an effective date of October 1, 2025, for the remainder of the provisions. As provided in section 553(b), a department or agency may dispense with the prior notice and opportunity for public comment requirement when the agency, for “good cause” finds that notice and public comment are impracticable, unnecessary, or contrary to the public interest. With respect to this rule, advance notice and opportunity for public comment are unnecessary.
( printed page 80057)
After decades of utilizing various circulars to provide guidance to agencies on federal grants, beginning in 2012, OMB engaged in a lengthy public process to create unified, consolidated, uniform guidance that was easy to locate, and applied to all recipients regardless of recipient type. To do so, OMB provided opportunities for the general public to comment on an Advanced Notice of Proposed Guidance, 77 FR 11778 (Feb. 28, 2012) and a Notice of Proposed Guidance, 78 FR 7282 (Feb. 1, 2013), before publishing the Final Guidance, 78 FR 78590 (Dec. 26, 2013).
The Federal grant awarding agencies, including HHS, adopted the Final Guidance through a joint interim final rule (IFR) with comment period.
See79 FR 75871 (Dec. 19, 2014). The 2014 IFR had an effective date of December 26, 2014, with a one-year grace period for the implementation of the procurement standards as it applied to nonprofit organizations or institutions of higher education.[1]
HHS, through the 2014 IFR, adopted 45 CFR part 75 as its adapted version of 2 CFR part 200 to reflect HHS grant authorities, the unique needs of HHS awarding agencies, and the unique HHS recipient community.
See id.
at 75875. As explained in the preamble to the 2014 IFR, all HHS-specific changes to the Uniform Guidance codified in 45 CFR part 75 were taken directly from HHS' predecessor grant regulations, 45 CFR parts 74 and 92, and approved by OMB. “OMB has directed agencies to adopt the uniform guidance in part 200 without change, except to the extent that an agency can demonstrate that any conflicting agency requirements are required by statute or regulations, or consistent with longstanding practice and approved by OMB.”
Id.
at 75877.
As part of OMB's periodic review of the Uniform Guidance, OMB sought to make additional updates and revisions in 2020. It again solicited feedback from the broader Federal financial assistance community by publishing the proposed changes in the
Federal Register
.
See85 FR 3766 (Jan. 20, 2020). OMB published final guidance, 85 FR 49506 (Aug. 13, 2020), with an effective date of November 12, 2020, except for changes to 2 CFR 200.216 and 200.340, which were effective on August 13, 2020. HHS did not adopt the 2020 revisions and is therefore lagging behind the rest of the grant making agencies, causing confusion and additional administrative burden for HHS recipients.
OMB again made revisions beginning in 2023. As part of that process, OMB again sought multiple rounds of public input, through a Notice of Request for Information, 88 FR 8480 (Feb. 9, 2023), and Notification of Proposed Guidance, 88 FR 69390 (Oct. 5, 2023). After review and consideration of received comments and to effectuate the goals of increasing accessibility and equity with respect to Federal funding opportunities, OMB updated the Uniform Guidance with an effective date of October 1, 2024. 89 FR 30046 (Apr. 22, 2024).
To be responsive to the recipient community's inquiries regarding HHS's plans to align with OMB and other Federal agencies and fully adopt 2 CFR part 200, HHS now seeks to implement 2 CFR part 200 through this IFR. Given that in 2020 and 2023, OMB sought, obtained, and responded to public input and comment and that HHS intends to adopt all of the current version of 2 CFR part 200, providing an additional prior notice and comment period is unnecessary. Allowing for another round of public comment on the same 2 CFR part 200 provisions would be both duplicative and inefficient. Although HHS itself did not seek and respond to these multiple rounds of comment, we have determined that the government-wide adoption of the Uniform Guidance is of substantial benefit to the regulated community and that seeking additional comment is unnecessary, impracticable, and counterproductive. The Uniform Guidance promotes uniformity, understanding, compliance, and a uniform body of regulations across federal departments and agencies. Additional comment on these provisions is unnecessary.
The eight provisions with an effective date of October 1, 2024, are all provisions that HHS has either previously announced that it has already adopted, or that have been amended by OMB to provide additional flexibilities for recipients and subrecipients:
The provisions that HHS has already adopted are:
1. Micro-purchase and simplified acquisition thresholds as required by Pub. L. 115-91, and OMB Memorandum 18-18; 2 CFR 200.320; and
Each of these items have been sought by the regulated community, and HHS recognizes the value of having them go into effect as soon as administratively feasible. In addition, delaying this effective date would prevent HHS recipients from accessing these increased flexibilities and thresholds for their HHS awards, as they will be able to do for awards issued by other Federal agencies, thus creating both inequities and administrative burden for recipients. As such, for awards issued on or after October 1, 2024, HHS will use the 2 CFR part 200 citations for these provisions.
Through this IFR, HHS will adopt all of the rest of 2 CFR part 200 with an effective date of October 1, 2025. As already stated, additional comment on these provisions is unnecessary. In addition to the full adoption of 2 CFR part 200, this IFR will relocate twelve HHS-specific provisions to 2 CFR part 300. HHS already sought public comment on these provisions:
Eight of them were included in the promulgation of 45 CFR part 75.
See79 FR 75867, 75875-76 (Dec. 19, 2014). Each of these will be moved in substantially the same form, with only minor changes in phrasing to conform with the text in 2 CFR part 200. These provisions are:
6. Protection of recipient patent rights on awards made for primarily educational purposes, currently at 45 CFR 75.307(c)(2), to be moved to 2 CFR 300.315;
7. Independent research and development costs, currently at 45 CFR 75.476 to be moved to 2 CFR 300.477; and
8. Principles for determining costs applicable to research and development under grants and contracts with hospitals,
( printed page 80058)
currently at 45 CFR part 75, appendix IX, to be moved to 2 CFR part 300, appendix IX.
Three provisions were promulgated through a notice of proposed rulemaking, 84 FR 63831 (Nov. 19, 2019) and final rule, 86 FR 2257 (Jan. 12, 2021).[2]
These provisions are:
Finally, the last provision, 45 CFR 75.300 to be moved to 2 CFR 300.300, related to statutory and national policy requirements, is the most recently promulgated.
See
NPRM, 88 FR 44750 (July 13, 2023), and FR, 89 FR 36684 (May 3, 2024).[3]
There is no additional need to provide advance notice and an opportunity for comment on these provisions, as there are only minor modifications to ensure consistent terminology and readability to a few of the provisions, and the rest are being repromulgated exactly.
See Priests for Life
v.
U.S. Dep't of HHS,
772 F.3d 229, 276 (D.C. Cir. 2014),
vacated and remanded sub nom. Zubik
v.
Burwell,
578 U.S. 403 (2016) (per curiam). All HHS recipients should already be in compliance with these provisions.
For the above reasons, HHS finds there is good cause to dispense with prior public notice and the opportunity to comment before finalizing the rule. As the Secretary issues this rule as an interim final rule with comment, HHS will consider and address comments on HHS's plan and timeline for implementation, including the provision of two effective dates, that are received within 30 days of the date this IFR is published in the
Federal Register
. HHS will not respond to comments regarding OMB's 2020 or 2024 modifications to 2 CFR part 200, or on existing HHS specific provisions merely being moved to 2 CFR part 300, as those provisions have already been subject to public input and comment and the latter have been finalized in existing promulgated rules.
HHS will accept comments under this interim final rule regarding the plan and timeline for adopting the Uniform Guidance described herein. HHS will not respond to comments regarding OMB's 2020 or 2024 modifications to 2 CFR part 200. HHS will also not respond to comments related to the content of the HHS-specific modifications at 2 CFR 300, as these provisions are existing HHS regulations that have been promulgated and maintained at 45 CFR part 75, not new requirements for the HHS applicant and recipient community.
Regulatory Analysis
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Ch. 3506; 5 CFR 1320 Appendix A.1) (PRA), HHS reviewed this interim final rule and determined that there are no new collections of information contained therein. However, HHS's adoption of the Uniform Guidance in 2 CFR part 200 may have a negligible effect on burden estimates for existing information collections, including recordkeeping requirements for recipients of Federal awards.
Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601et seq.,
requires an agency that is issuing a rule subject to the notice-and-comment provisions of the Administrative Procedure Act to provide a final regulatory flexibility analysis or to certify that the rule will not have a significant economic impact on a substantial number of small entities. This interim final rule implements OMB final guidance issued on April 22, 2024, and HHS does not expect it to have a significant economic impact beyond the impact of the April 2024 guidance. The proposed revisions will impact some small entities but will not have a significant impact on a substantial number of small entities. There are some proposed revisions that may impose a non-significant burden; however, there are more proposed revisions that reduce burden to small entities. When reviewing all proposed revisions, the burden that will be reduced for recipients is much greater than the burden imposed. Thus, HHS certifies that the rule will not have a significant economic impact on a substantial number of small entities.
Promulgation of this interim final rule and repeal of 45 CFR part 75 will significantly streamline processes and reduce administrative burden for federal agencies and the award recipient community, including small entities.
Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of 1995, (Pub. L. 104-4, 109 Stat. 48) requires the Department to prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing a rule that exceeds a statutorily imposed threshold. This interim final rule would not result in an expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of an amount in excess of the statutory threshold (2 U.S.C. 1532) in any one year.
Executive Orders on Regulatory Review
Executive Order 12866 (Regulatory Planning and Review), Executive Order 13563 (Improving Regulation and Regulatory Review), and Executive Order 14094 (Modernizing Regulatory Review) direct us to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Office of Information and Regulatory Affairs (OIRA) has determined that this interim final rule is not a significant regulatory action under section 3(f)(1) of E.O. 12866, as amended by E.O. 14094. This interim final rule has, however, been designated “a significant regulatory action” under section 3(f) of Executive Order 12866, as amended by Executive Order 14094. OIRA has also determined that this regulatory action does not meet the criteria set forth in 5 U.S.C. 804(2) under the Congressional Review Act. Currently, HHS agencies, applicants, and recipients must be familiar and comply with HHS's implementing regulations at 45 CFR part 75, which is a separate codification from the Uniform Guidance at 2 CFR part 200. The single set of Federal financial assistance requirements at 2 CFR part 200 and 2 CFR part 300 resulting from this interim final rule will lessen confusion and reduce burden for HHS applicants and recipients that apply for and receive financial assistance from other Federal agencies outside of HHS. This interim final rule provides consistency with other Federal awarding agencies. Applicant and recipient entities will no longer be required to analyze, keep track of, and implement a separate set of regulations solely for HHS awards.
Aligning requirements for HHS recipients with those for agencies outside of HHS reduces administrative burden for the financial assistance applicant and recipient community overall.
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a rule
( printed page 80059)
that imposes substantial direct requirement costs on State and local governments or has Federalism implications. The Uniform Guidance is inherently national in scope and significance. Regardless, OMB consulted with appropriate State and local officials prior to finalizing its most recent update. OMB weighed carefully the interests of those who submitted comments. The OMB revisions balance the State interests with the need to provide Federal agencies with consistent, uniform, efficient, and transparent guidance, which is consistent with authorizing law. The Department has therefore determined that this interim final rule does not impose such costs or have any Federalism implications.
HHS has analyzed this interim final rule in accordance with the principles and criteria contained in E.O. 13175, “Consultation and Coordination with Indian Tribal Governments” 65 FR 67249 (Nov. 9, 2000). HHS determined that previous OMB tribal consultation sufficiently covers requirements for tribal consultation, as OMB held a Tribal consultation to solicit feedback from Tribal representatives and HHS is adopting OMB's uniform guidance with minimally impactful changes to tribes. HHS adopts OMB provisions that provide greater flexibility to Tribal governments centered on procurement standards and disposition of equipment and clarify the definition of Indian Tribes.
For the reasons stated in the preamble, the Department of Health and Human Services amends 2 CFR part 300, 42 CFR chapters I, IV, and V, and 45 CFR subtitles A and B as follows:
Title 2—Grants and Agreements
PART 300—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
1. The authority citation continues to read as follows:
Under the authority listed above, the Department of Health and Human Services adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, and has codified the text, with HHS-specific amendments in 45 CFR part 75 and the following provisions of 2 CFR part 200: §§ 200.1 (definitions of Modified Total Direct Cost, Equipment, and Supplies), 200.313(e), 200.314(a), 200.320, 200.333, 200.344, 200.414(f), and 200.501 . Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the Department.
3. Revise part 300 to read as follows:
PART 300—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
The Department of Health and Human Services adopts the Office of Management and Budget (OMB) guidance in 2 CFR part 200, with the additions included in this part and part 376 of this chapter. Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the Department.
In addition to 2 CFR 200.112, the following requirements apply:
(a) HHS agencies' conflict of interest policies must:
(1) Address conditions under which outside activities, relationships, or financial interests are proper or improper;
(2) Provide for advance notification of outside activities, relationships, or financial interests, and a process of review as appropriate; and
(3) Outline how financial conflicts of interest may be addressed.
(b) Agencies with Public Health Service (PHS) funded research will ensure that any conflict-of-interest policies are aligned with the requirements of 42 CFR part 50, subpart F.
Subpart C—Pre-Federal Award Requirements and Contents of Federal Awards
Special provisions for awards to for-profit organizations as recipients.
(a)
For-profit organizations.
This section contains provisions that apply to awards to for-profit organizations. These provisions are in addition to other applicable provisions of this part, or they make exceptions from other provisions of this part for awards to for-profit organizations.
(b)
Prohibition against profit.
Except for awards under the Small Business Innovation Research (SBIR) and Small Business Technology Transfer Research (STTR) programs (15 U.S.C. 638), no HHS funds may be paid as profit to any recipient even if the recipient is a for-profit organization. Profit is any amount in excess of allowable direct and indirect costs.
(c)
Program income.
Except for grants for research, program income earned by a for-profit organization may not be used to further eligible project or program objectives except in the SBIR and STTR programs.
(d)
For-profit organization audits.
(1) For-profit organizations that receive awards (including for-profit hospitals) have two options regarding audits:
(i) A financial related audit of a particular award in accordance with GAGAS, in those cases where the for-profit organization receives awards under only one HHS program; or, if awards are received under multiple HHS programs, a financial related audit of all awards in accordance with GAGAS; or
(2) For-profit organizations that receive annual awards totaling less than the audit requirement threshold in subpart F are exempt from HHS audit requirements for that year, but records must be available for review by appropriate officials of Federal agencies or the GAO. (See § 200.501).
(e)
Applicability.
The provisions of § 200.315(e) do not apply to for-profit organizations.
Special provisions for awards to Federal agencies.
(a) An HHS agency must have explicit statutory authority that makes Federal agencies eligible for awards.
(b) All provisions of 2 CFR part 200, this part, and other HHS regulations apply to Federal entities receiving Federal awards, except for the following:
(1) Except for grants for research, any program income earned by a Federal institution must be used under the deduction alternative. Any program income earned after the period of performance should be returned to the United States Treasury.
(2) No salary or fringe benefit payments may be made from HHS agency funds to support career, career-conditional, or other Federal employees (civilian or uniformed services) without permanent appointments at a Federal institution receiving an award. While the level of effort required for the project must be allowed by the recipient as part of each individual's official duties, salary costs associated with an individual participating in an official capacity as a Federal employee under an award to that Federal institution are not allowable costs under an HHS award.
(3) Federal agencies may not be reimbursed for indirect costs under Federal awards.
In addition to 2 CFR 200.300(a), the following requirements apply:
(a) It is a public policy requirement of HHS that no person otherwise eligible will be excluded from participation in, denied the benefits of, or otherwise subjected to discrimination in the administration of HHS programs, activities, projects, assistance, and services, to the extent doing so is prohibited by Federal statute.
(b) HHS will follow all applicable Supreme Court decisions in administering its award programs.
(c) In the statutes listed in paragraphs (c)(1) through (13) of this section that HHS administers which prohibit discrimination on the basis of sex, the Department interprets those provisions to include a prohibition against discrimination on the basis of sexual orientation and gender identity, consistent with the Supreme Court's decision in
Bostock
v.
Clayton County,
590 U.S. 644 (2020), and other Federal court precedent applying
Bostock'
s reasoning that sex discrimination includes discrimination based on sexual orientation and gender identity. This provision is interpretive and does not impose any substantive obligations on entities outside the Department. This paragraph (c) interprets the following HHS authorities that prohibit discrimination on the basis of sex:
(1)
8 U.S.C. 1522.
Authorization for programs for domestic resettlement of and assistance to refugees.
(2)
42 U.S.C. 290cc-33.
Projects for Assistance in Transition from Homelessness.
(3)
42 U.S.C. 290ff-1.
Children with Serious Emotional Disturbances.
(4)
42 U.S.C. 295m.
Title VII Health Workforce Programs.
(12)
42 U.S.C. 9918.
Community Services Block Grant Program.
(13)
42 U.S.C. 10406.
Family Violence Prevention and Services.
(d)(1) A grant applicant or recipient may rely on applicable Federal
( printed page 80063)
protections for religious freedom and conscience, and application of a particular provision(s) of this section to specific contexts, procedures, or services shall not be required where such protections apply.
(2) A grant applicant or recipient that seeks assurance consistent with paragraph (d)(1) of this section regarding the application of particular provision(s) of this part to specific contexts, procedures, or services may do so by submitting a notification in writing to the HHS awarding agency, the Office of the Assistant Secretary for Financial Resources (ASFR), or the Office for Civil Rights (OCR). Notification may be provided by the grant applicant or recipient at any time, including before an investigation is initiated or during the pendency of an investigation. The notification must include:
(i) The particular provision(s) of this section from which the applicant or recipient asserts they are exempt under Federal religious freedom or conscience protections;
(ii) The legal basis supporting the applicant's or recipient's exemption should include the standards governing the applicable Federal religious freedom and conscience protections, such as the provisions in the relevant statute from which the applicant or recipient is requesting an exemption; the Church, Coats-Snowe, and Weldon Amendments; the generally applicable requirements of the Religious Freedom Restoration Act (RFRA); and
(iii) The factual basis supporting the applicant's or recipient's exemption, including identification of the conflict between the applicant's or recipient's religious or conscience beliefs and the requirements of this section, which may include the specific contexts, procedures, or services that the applicant or recipient asserts will violate their religious or conscience beliefs overall or based on an individual matter related to a particular grant.
(3) A temporary exemption from administrative investigation and enforcement will take effect upon the applicant's or recipient's submission of the notification—regardless of whether the assurance is sought before or during an investigation. The temporary exemption is limited to the application of the particular provision(s) of the relevant statute as applied to the specific contexts, procedures, or services identified in the notification to the HHS awarding agency, ASFR, or OCR.
(i) If the notification is received before an investigation is initiated, within 30 days of receiving the notification, OCR, ASFR, or the HHS awarding agency must provide the applicant or recipient with email confirmation acknowledging receipt of the notification. The HHS awarding agency, working jointly with ASFR and OCR, will then work expeditiously to reach a determination of applicant's or recipient's notification request.
(ii) If the notification is received during the pendency of an investigation, the temporary exemption will exempt conduct as applied to the specific contexts, procedures, or services identified in the notification during the pendency of the HHS awarding agency's review and determination, working jointly with ASFR and OCR, regarding the notification request. The notification shall further serve as a defense to the relevant investigation or enforcement activity regarding the applicant or recipient until the final determination of the applicant's or recipient's exemption assurance request or the conclusion of the investigation.
(4) If the HHS awarding agency, working jointly with ASFR and OCR, makes a determination to provide assurance of the applicant's or recipient's exemption from the application of the relevant statutory provision(s) or that modified application of certain provision(s) is required, the HHS awarding agency, ASFR, or OCR, will provide the applicant or recipient the determination in writing, and if granted, the applicant or recipient will be considered exempt from OCR's administrative investigation and enforcement with regard to the application of that provision(s) as applied to the specific contexts, procedures, or services provided. The determination does not otherwise limit the application of any other provision of the relevant statute to the applicant or recipient or to other contexts, procedures, or services.
(5) An applicant or recipient subject to an adverse determination of its request for an exemption assurance may appeal the Department's determination under the administrative procedures set forth at 45 CFR part 81. The temporary exemption provided for in paragraph (f)(3) of this section will expire upon a final decision under 45 CFR part 81.
(6) A determination under this paragraph (d) is not final for purposes of judicial review until after a final decision under 45 CFR part 81.
(e) Any provision of this section held to be invalid or unenforceable by its terms, or as applied to any person or circumstance, shall be severable from this section and shall not affect the remainder thereof or the application of the provision to other persons not similarly situated or to other, dissimilar circumstances.
In addition to 2 CFR 200.305(b), the following requirement applies:
(a) For States, payments are governed by Treasury-State Cash Management Improvement Act (CMIA) agreements and default procedures codified at 31 CFR part 205 and TFM 4A-2000 Overall Disbursing Rules for All Federal Agencies. To the extent that Treasury-State CMIA agreements and default procedures do not address expenditure of program income, rebates, refunds, contract settlements, audit recoveries and interest earned on such funds, such funds must be expended before requesting additional cash payments.
In addition to the requirements of 2 CFR 200.308(f) a recipient or subrecipient must also request approval from the Federal agency or pass-through entity for the inclusion of research patient care costs in research awards made for the performance of research work.
In addition to the requirements of 2 CFR 200.315(c), no scholarship, fellowship, training grant, or other funding agreement made primarily to a recipient for educational purposes will contain any provision giving the Federal agency rights to inventions made by the recipient or subrecipient.
In addition to 2 CFR 200.414(c), the following specific indirect cost provisions apply:
(a) Indirect costs on training grants are limited to a fixed rate of eight percent of MTDC exclusive of tuition and related fees, direct expenditures for equipment, and subawards in excess of $25,000;
(b) Indirect costs on grants awarded to foreign organizations and foreign public entities and performed fully outside of the territorial limits of the U.S. may be paid to support the costs of compliance with federal requirements at a fixed rate of eight percent of MTDC exclusive of tuition and related fees, direct expenditures for equipment, and subawards in excess of $25,000; and
(c) Negotiated indirect costs may be paid to the American University, Beirut, and the World Health Organization.
( printed page 80064)
Independent research and development is research and development which is conducted by an organization, and which is not sponsored by Federal or non-Federal awards, contracts, or other agreements. Independent research and development shall be allocated its proportionate share of indirect costs on the same basis as the allocation of indirect costs to sponsored research and development. The cost of independent research and development, including their proportionate share of indirect costs, are unallowable.
(a)
Payments for failure to maintain minimum essential health coverage.
Any payments or assessments imposed on an individual or individuals pursuant to 26 U.S.C. 5000A(b) as a result of any failure to maintain minimum essential coverage as required by 26 U.S.C. 5000A(a) with respect to any period prior to January 1, 2019, are not allowable expenses under Federal awards from an HHS awarding agency.
(b)
Payments for failure to offer health coverage to employees.
Any payments or assessments imposed on an employer pursuant to 26 U.S.C. 4980H as a result of the employer's failure to offer to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan are not allowable expenses under Federal awards from an HHS awarding agency.
2 CFR parts 200 and 300—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
* * * * *
PART 50—POLICIES OF GENERAL APPLICABILITY
7. The authority citation for part 50 continues to read as follows:
Authority: Sec. 215, Public Health Service Act, 58 Stat. 690 (42 U.S.C. 216); Sec. 1006, Public Health Service Act, 84 Stat. 1507 (42 U.S.C. 300a-4), unless otherwise noted.
11. Amend § 50.606 in paragraph (b) in the last sentence, by removing “specific award conditions under 45 CFR 75.207” and adding in its place “specific conditions under 2 CFR 200.208” and removing “45 CFR 75.371” and adding in its place “2 CFR 200.339”.
12. Amend § 50.607 by:
a. Adding in alphanumeric order an entry for 2 CFR parts 200 and 300; and
b. Removing the entry for “ 45 CFR part 75—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards”.
PART 51a—PROJECT GRANTS FOR MATERNAL AND CHILD HEALTH
16. The authority citation for part 51a continues to read as follows:
Authority: Sec. 1102 of the Social Security Act, 49 Stat. 647 (42 U.S.C. 1302); sec. 502(a), 502(b)(1)(A), and 506(a)(3) of the Social Security Act, 95 Stat. 819-20 (42 U.S.C. 702(a), 702(b)(1)(A) and 706(a)(3)).
17. Amend § 51a.7,
a. In paragraph (a) by adding in alphanumeric order “ 2 CFR parts 200 and 300—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
b. In paragraph (b) by removing “ 45 CFR part 75—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards.”
2 CFR parts 200 and 300—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.
* * * * *
PART 51b—PROJECT GRANTS FOR PREVENTIVE HEALTH SERVICES
18. The authority citation for part 51b continues to read as follows:
( printed page 80065)
Authority: Secs. 317 and 318, Public Health Service Act, 92 Stat. 3574 and 3582 (42 U.S.C. 247b, 247c); sec. 1743 Pub. L. 97-35, 95 Stat. 763 (31 U.S.C. 1243 note).
19. Amend § 51b.105 by removing “ 45 CFR part 75—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards” and adding in alphanumeric order “2 CFR parts 200 and 300—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards”.
b. Removing the entry for “ 45 CFR part 75—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards” and adding in alphanumeric order “2 CFR parts 200 and 300—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.”
PART 57—GRANTS FOR CONSTRUCTION OF TEACHING FACILITIES, EDUCATIONAL IMPROVEMENTS, SCHOLARSHIPS AND STUDENT LOANS
56. The authority citation for part 57 continues to read as follows:
Authority: Sec. 215 of the Public Health Service Act, 58 Stat. 690, as amended, 63 Stat. 35 (42 U.S.C. 216); secs. 740-747 of the Public Health Service Act, 77 Stat. 170-173, as amended by 90 Stat. 2266-2268, 91 Stat. 390-391, 95 Stat. 920, 99 Stat. 532-536, and 102 Stat. 3125 (42 U.S.C. 294m-q); renumbered as secs. 721-735, as amended by Pub. L. 102-408, 106 Stat. 2011-2022 (42 U.S.C. 292q-292y).
58. The authority citation for part 57, subpart D, continues to read as follows:
Authority: Sec. 215 of the Public Health Service Act, 58 Stat. 690, 67 Stat. 631 (42 U.S.C. 216); secs. 835-842 of the Public Health Service Act, 77 Stat. 913-916, as amended by 99 Stat. 397-400, 536-537, and 102 Stat. 3160-3161 (42 U.S.C. 297 a-i).
2 CFR parts 200 and 300—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.
* * * * *
PART 62—NATIONAL HEALTH SERVICE CORPS SCHOLARSHIP AND LOAN REPAYMENT PROGRAMS
71. The authority citation for part 62 continues to read as follows:
Authority: Sec. 215 of the Public Health Service Act, 58 Stat. 690, as amended, 63 Stat. 35 (42 U.S.C. 216); sec. 751 of the Public Health Service Act, 90 Stat. 2281 (42 U.S.C. 294t), unless otherwise noted.
72. Amend § 62.58 by:
a. Adding in alphanumeric order an entry for 2 CFR parts 200 and 300; and
b. Removing the entry for “ 45 CFR part 75—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards”.
2 CFR parts 200 and 300—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.
* * * * *
PART 67—AGENCY FOR HEALTH CARE POLICY AND RESEARCH GRANTS AND CONTRACTS
87. The authority citation for part 67 continues to read as follows:
Authority: Pub. L. 103-43, 107 Stat. 214-215, Pub. L. 102-410, 106 Stat. 2094-2101 and sec. 6103, Pub. L. 101-239, 103 Stat. 2189-2208, Title IX of the Public Health Service Act (42 U.S.C. 299-299c-6); and sec. 1142, Social Security Act (42 U.S.C. 1320b-12).
100. Amend § 136.111 by redesignating the note at the end of the section as “Note 1 to § 136.111” and by removing “ 45 CFR 75.305(b)(9)” and adding in its place “2 CFR 200.305(b)(12)” in the newly redesignated note.
101. Amend § 136.114 by:
a. Adding in alphanumeric order an entry for 2 CFR parts 200 and 300; and
b. Removing the entry for “ 45 CFR part 75—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards.”
b. By redesignating the note at the end of the section as “Note 1 to § 136.116” and by removing “ 45 CFR part 75” and adding in its place “2 CFR parts 200 and 300” in the newly redesignated note.
104. Amend § 136.120 by redesignating the note at the end of the section as “Note 1 to § 1366.120” and by removing “ 45 CFR part 75” and adding in its place “2 CFR parts 200 and 300” in the newly redesignated note.
110. Amend § 417.911 in paragraph (1) of the definition of “Small capital expenditure” by removing “ 45 CFR 75.2” and adding in its place “2 CFR 200.1”.
PART 430—GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS
111. The authority citation for part 430 continues to read as follows:
Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 1302).
112. Amend § 430.2 in paragraph (b) by:
a. Adding in alphanumeric order an entry for 2 CFR parts 200 and 300; and
b. Removing the entry for “ 45 CFR part 75—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards
154. Amend § 95.613 in the first sentence of paragraph (a) by removing “part 75” and adding in its place “ 2 CFR parts 200 and 300” and in the second sentence by removing “§ 75.328” and adding in its place “2 CFR 200.319”.
171. Amend § 265.7 in paragraph (d)(4) by removing “§ 75.302(a) of this title” and adding in its place “ 2 CFR 200.302(a)” and in paragraph (g) by removing “§§ 75.361 through 75.370 of this title” and adding in its place “2 CFR 200.334 through 200.338”.
PART 286—TRIBAL TANF PROVISIONS
172. The authority citation for part 286 continues to read as follows:
181. Amend § 301.15 in paragraph (d) introductory text by removing “part 75 of this title” and adding in its place “ 2 CFR parts 200 and 300”, in paragraph (d)(1) by removing “45 CFR 75.306” and adding in its place “2 CFR 200.306”, and in paragraph (d)(2) by removing “45 CFR 75.341” and adding in its place “2 CFR 200.328”.
PART 302—STATE PLAN REQUIREMENTS
182. The authority citation for part 302 continues to read as follows:
(i) 2 CFR parts 200 and 300—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR parts 200 and 300 are applicable to title IV-B programs and the John H. Chafee Foster Care Independence Program under Section 477 of the Act that are operated by States and/or Tribes. 2 CFR parts 200 and 300 are applicable to title IV-E foster care and adoption assistance programs operated by a State title IV-E agency, except that section 2 CFR 200.306 Cost sharing and 2 CFR 200.328 Financial reporting do not apply. 2 CFR parts 200 and 300 are applicable to title IV-E foster care and adoption assistance programs operated by a Tribal title IV-E agency pursuant to section 479B, except that 2 CFR 200.328 and the sections specified in § 1356.68 do not apply to a Tribal title IV-E agency.
Secretary, Department of Health and Human Services.
Footnotes
1.
In 2014, some agencies adopting OMB's Final Guidance found good cause to waive agency proposed rulemaking as unnecessary, stating that OMB had already provided the public with an opportunity to comment through its advanced notice of proposed guidance as well as a notice of proposed guidance.
See
79 FR at 75877. As described below, HHS believes that same reasoning supports a good cause finding at this time.
2.
These same provisions were also promulgated in 2016.
See
notice of proposed rulemaking (NPRM), 81 FR 45270 (July 13, 2016), and final rule (FR), 81 FR 89393 (Jan. 11, 2017).
5 comments have been received at Regulations.gov.
Agencies review all submissions and may choose to redact, or withhold, certain submissions (or portions thereof). Submitted comments may not be available to be read until the agency has approved them.