[Federal Register Volume 65, Number 84 (Monday, May 1, 2000)]
[Notices]
[Pages 25396-25397]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-10738]
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OFFICE OF MANAGEMENT AND BUDGET
OMB Circular A-110, ``Grants and Agreements with Institutions of
Higher Education, Hospitals and Other Non-Profit Organizations''
AGENCY: Office of Management and Budget, Executive Office of the
President.
ACTION: Advance Notice of Proposed Revision.
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SUMMARY: This advance notice seeks comments on a proposal by the Grants
Management Committee of the Chief Financial Officer's Council that
would ask OMB to amend Circular A-110, ``Uniform Administrative
Requirements for Grants and Agreements with Institutions of Higher
Education, Hospitals, and Other Non-Profit Organizations.'' The
amendment would require Federal awarding agencies to offer recipients
the option to request cash advances on a ``pooled'' basis. Before
making this recommendation, the Council seeks comments from recipients
and Federal agencies on the merits of pooled payment systems and grant-
by-grant payment systems.
DATES: Comments must be received by June 30, 2000.
ADDRESSES: Comments should be addressed to: F. James Charney, Policy
Analyst, Office of Management and Budget, Room 6025, New Executive
Office Building, Washington, DC 20503. Comments may be submitted via e-
mail ([email protected]), but must be made in the text of the message
and not as an attachment. The full text of Circular A-110 may be
obtained by accessing OMB's home page (http://www.whitehouse.gov/omb),
under the heading ``Grants Management.''
FOR FURTHER INFORMATION CONTACT: Gary Maupin, Chief Financial Officer,
Food and Nutrition Service, United States Department of Agriculture, at
(703) 305-2046.
SUPPLEMENTARY INFORMATION: Section 22(c) of the Circular provides that
``whenever possible, advances shall be consolidated to cover
anticipated cash needs for all awards made by the Federal awarding
agency to the recipient.'' The Chief Financial Officers Council
(Council) is considering whether to recommend an amendment to the
Circular that would expand on this provision by requiring agencies to
offer a pooled payment procedure (where cash advances are requested
from a ``pool'' of grants rather than on a grant-by-grant basis) as an
option for recipients in requesting cash advances under Federal awards.
Under either method, however, a recipient must maintain systems that
minimize the time elapsing between the receipt of Federal advance
payments and their disbursement for program purposes. This issue
emerged from the work of the Council's Grants Management Committee as
it considered a proposal to formally incorporate a pooled payment
process into the Federal Government's body of accounting standards.
[[Page 25397]]
In considering this proposal, the Council has consulted with
several Federal agencies and some recipients subject to the Circular.
However, OMB and the Council are interested in soliciting comments from
the broader grants community, learning how pooled and grant-by-grant
payment systems affect Federal agencies and recipients, as well as what
specific problems or benefits are created for recipients under the two
systems.
This proposal will not affect the policy recently adopted by the
Council that each civilian agency permit recipients the option of using
one of two governmentwide payment systems, the Automated Standard
Application for Payments (ASAP) system managed by the Department of the
Treasury, and the Payment Management System (PMS) operated by the
Department of Health and Human Services (HHS). Both of these systems
have the ability to track either pooled or award-by-award payment
requests.
The Pooled Payment System
Under a pooled payment process, the recipient estimates the
aggregate amount of cash that it will need for all its Federal awards
from each awarding agency and requests a draw in that amount. The draw
is then allocated among all the awards based on a formula. When
recipients report expenditures, the allocation is adjusted to the
actual reported expenditures.
The Council found that two major agencies currently using the
pooling method--HHS and the National Science Foundation--believe it
provides a more efficient and customer-friendly method of drawing cash
for grant purposes. Recipients report individual cash expenditures for
each grant via a financial report such as the Standard Form (SF) 269
(Financial Status Report) or SF-272 (Report of Federal Cash
Transactions). Many recipients have expressed an inability to
accurately determine cash needs on a grant-by-grant basis at the time
of draw. Requiring this determination ``up front'' may cause recipients
to draw larger amounts of cash, less frequently, resulting in poor
management of Federal funds.
Grant-By-Grant Payment Systems
Other Federal agencies have developed systems that require
recipients to request funds on a grant-by-grant basis. Some of these
agencies approve the requests on a grant-by-grant basis; pool the
individual amounts; and issue payments in the aggregate. At least one
agency accepts grant-by-grant payments as reports of cash usage and
records them as expenditures, eliminating the requirement for
recipients to submit the SF-272 or, in most cases, the SF-269.
Agencies that use grant-by-grant payment systems believe that
agency grant officers have more timely information on payments and can
provide more immediate technical assistance to a recipient experiencing
problems with a particular grant. These agencies believe that, under
pooled payment systems, reports often come in too late for them to be
able to help recipients take corrective actions on specific grants.
Effect on Federal Agencies
Federal agencies face some challenges accounting for advances
similar to those of their recipients. These challenges include
identifying advances to multiple awards. Those agencies that currently
use pooling address this challenge by using estimates of how recipients
will distribute a pooled payment request among the various grants held
by the institution. These estimates are then adjusted to actual when
the recipients submit their expense reports (SF-269 or SF-272).
After the agency has made these adjustments, it gains a better
understanding of how the recipients are using funds under each specific
award. Thus, accurate and timely reporting is essential to the success
of any pooling method. For this reason, some agencies believe that a
transition from grant-by-grant to pooled payments for their awards must
be accompanied by monthly reporting of actual expenditures, in an
electronic format, rather than the paper-based quarterly reporting that
is currently required by agencies currently using pooled payment
systems.
Request for Comment
OMB and the Council seek comments from both recipients and Federal
agencies on the merits of pooled payment systems and grant-by-grant
payment systems, as well as whether recipients should have this option.
Specifically, commenters are asked to respond to the following
questions:
1. Would it be worth it to recipients if they were allowed to make
pooled payment requests only in exchange for a requirement to
electronically report their actual costs on a monthly basis? (Section
52(a)(2)(iv) of the Circular authorizes Federal agencies to require
monthly submission of the SF-272 from recipients that receive advances
of $1 million or more annually.)
2. Should the Circular include a minimum number of awards and/or
dollars below which the pooled payment option is not be offered? That
is, recipients that only get a few awards, or for only small amounts,
would not be offered the option to make pooled payment requests.
3. How might a pool payment system impact the Federal agencies'
abilities to monitor the financial performance of recipients, and thus
determine program compliance?
4. Should recipients be permitted to determine whether they receive
advances on a pooled or grant-by-grant basis, or should Federal
agencies continue to make that determination?
Joshua Gotbaum,
Executive Associate Director and Controller.
[FR Doc. 00-10738 Filed 4-28-00; 8:45 am]
BILLING CODE 3110-01-P