Code of Federal Regulations Title 2 - Grants and Agreements
Title 2 of the Code of Federal Regulations (CFR), titled "Grants and Agreements" (though it's recently been updated to "Federal Financial Assistance"), is the cornerstone of federal grant management in the United States. Its primary purpose is to establish uniform administrative requirements, cost principles, and audit requirements for federal awards to non-federal entities (such as states, local governments, Indian tribes, institutions of higher education, and non-profit organizations).
Before its comprehensive revision, the rules were spread across various OMB Circulars (e.g., A-21, A-87, A-110, A-122, A-133). The goal of Title 2, particularly 2 CFR Part 200, "Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards" (often called the "Uniform Guidance" or "Super Circular"), was to consolidate, streamline, and simplify these regulations, reduce administrative burden, and improve oversight and accountability for federal funds.
Title 2 is organized into two main subtitles:
Subtitle A: Office of Management and Budget (OMB) Guidance for Federal Financial Assistance. This subtitle contains the government-wide policies and procedures issued by the OMB. The most significant part here is 2 CFR Part 200.
Subtitle B: Federal Agency Regulations for Grants and Agreements. This subtitle contains the specific regulations that individual federal agencies (e.g., Department of Health and Human Services, Department of Agriculture) issue to implement the OMB guidance and to add any agency-specific requirements, provided they are not inconsistent with the Uniform Guidance unless approved by OMB or required by statute.
Key Components of 2 CFR Part 200 (Uniform Guidance):
The Uniform Guidance is structured into six subparts:
Subpart A: Acronyms and Definitions. Provides a glossary of terms used throughout the guidance.
Subpart B: General Provisions.
Describes the purpose, applicability, and scope of the Uniform Guidance.
Outlines exceptions and sets forth the overarching requirements for federal agencies and award recipients.
Emphasizes the prohibition against agencies imposing additional or inconsistent requirements unless specifically approved.
Subpart C: Pre-Federal Award Requirements and Contents of Federal Awards.
Covers the initial stages of the grant lifecycle.
Includes guidance on program planning, announcement of funding opportunities (NOFOs), application processes, and federal awarding agency review of risk posed by applicants (e.g., considering financial integrity, past performance, and compliance).
Addresses certifications, representations, and the information that must be contained in a federal award.
Mentions crucial aspects like suspension and debarment, and the prohibition on certain telecommunications and video surveillance services or equipment.
Subpart D: Post-Federal Award Requirements.
Focuses on the management of federal awards once they have been made.
Covers performance management, financial management (including standards for financial systems, internal controls, and allowable payments), property standards (management of equipment, real property, and supplies acquired with federal funds), and procurement standards (rules for how recipients procure goods and services with federal funds).
Includes requirements related to record retention, closeout procedures, and statutory and national policy requirements.
Subpart E: Cost Principles.
Provides comprehensive guidance on which costs are allowable, reasonable, and allocable to a federal award.
Sets principles for direct and indirect (F&A) costs.
Includes specific rules for various types of costs, such as salaries, travel, equipment, and subawards.
Subpart F: Audit Requirements.
Outlines the requirements for the Single Audit Act, which mandates annual audits for non-federal entities that expend a certain threshold of federal awards (currently $750,000 or more in a fiscal year).
Specifies audit objectives, auditor responsibilities, and reporting requirements for these audits.
Why is Title 2 important?
Uniformity: It creates a common framework across all federal agencies and recipients, reducing confusion and inconsistency.
Accountability: It establishes clear expectations for how federal funds are managed and audited, guarding against waste, fraud, and abuse.
Reduced Burden: By consolidating and simplifying rules, it aims to lessen the administrative workload for both federal agencies and award recipients.
Risk Management: It mandates federal agencies to assess the risk posed by applicants and recipients, allowing for tailored oversight.
Anyone involved in receiving, managing, or overseeing federal grants and cooperative agreements must be familiar with the regulations in Title 2 of the CFR, particularly 2 CFR Part 200.
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