Interim Final Rule: Cost Allocation Plans for Public Assistance Programs
May 12, 1982
TO: STATE AGENCIES ADMINISTERING CHILD SUPPORT ENFORCEMENT PLANS UNDER TITLE IV-D OF THE SOCIAL SECURITY ACT AND OTHER INTERESTED INDIVIDUALS
SUBJECT: Cost Allocation Plans for Public Assistance Programs
ATTACHMENT: Attached are interim final rules issued by the Department of Health and Human Services (HHS) which revise existing regulations concerning the preparation, submission and approval of State agency cost allocation plans used in computing claims for Federal financial participation under public assistance programs. The rules consolidate on a Department-wide basis all cost allocation requirements for public assistance agencies into a single new regulation, Subpart E - Cost Allocation Plans, of 45 CFR Part 95 - General Administration - Grant Programs (Public Assistance and Medical Assistance).
Other changes in the regulation which affect Child Support Enforcement programs are as follows:
(1) The responsibility for review and approval of cost allocation plans, previously assigned to the abolished Social and Rehabilitation Service, HEW (now HHS), is transferred to the Division of Cost Allocation (DCA) in the Department's regional offices.
(2) 45 CFR 302.16 is revised to make it consistent with 45 CFR Part 95, Subpart E, and redesignated as 45 CFR 304.15.
REGULATION REFERENCE: 45 CFR Parts 75, 95, 205, 232, 302,304, 1392
EFFECTIVE DATE: May 24, 1982
COMMENT PERIOD: Consideration will be given to written comments or suggestions mailed by June 22, 1982 to the Director, Office of Procurement and Assistance Policy, Office of Procurement Assistance and Logistics, Office of the Assistant Secretary for Management and Budget, U.S. Department of Health and Human Services, Room 513 D, Hubert H. Humphrey Building, 200 Independence Avenue, S.W., Washington, D.C. 20201, ATTN: Edward M. Tracy.
INQUIRIES TO: OCSE Regional Representatives
Office of Child Support Enforcement
Rules and Regulations
Office of the Secretary
Office of Family Assistance
Office for Child Support Enforcement
Office of Human Development Services
45 CFR Parts 75, 95, 205, 232, 302, 304, 1392
Cost Allocation Plan for Public Assistance Programs
AGENCY: Health and Human Services Department (HHS)
ACTION: Interim final rule with comment period.
SUMMARY: This rule revises existing regulations concerning the preparation, submission and approval of State agency cost allocation plans used in computing claims for Federal Financial Participation under public assistance programs. It also reflects the transfer of responsibility for review and approval of the plans to the Division of Cost Allocation (DCA) in the Department's regional offices. This responsibility was previously assigned to the Social and Rehabilitation Service which was abolished by Secretarial Order published on March 9, 1977 (42 FR 13262). The current rule has been rewritten so that it is clearer, easier to understand and more specific. The Department's Informal Grant Appeals regulation relative to cost allocation plans and indirect cost rates (45 CFR Part 75) is also being updated and revised to make it consistent with Subpart E, Cost allocation plans, of 45 CFR Part 95, General administration-grant programs (public assistance and medical assistance).
Although these regulations are final, the Department has decided to invite public comments for the reasons described in the Supplementary Information below. Comments may be submitted in the manner described below. If changes are needed as a result of the comments received, those changes will be published in the Federal Register along with the comments received and the Department's responses to those comments.
DATES: Effective date: May 24, 1982. Comment date: To assure considerations, comments should be mailed by June 22, 1982.
ADDRESS: Address comments in writing to: Director, Office of Procurement and Assistance Policy, Office of Procurement Assistance and Logistics, Office the Assistant Secretary for Management and Budget, U.S. Department of Health and Human Services, Room 513D, Hubert H. Humphrey Building, 200 Independence Avenue. SW, Washington, DC 20201
Comments will be available for public inspection at the above address Monday through Friday from 9:00a.m. to 5:30p.m.
FOR FURTHER INFORMATION CONTACT: Edward M. Tracy (202)245-7411.
SUPPLEMENTARY INFORMATION: A Notice of Proposed Rule Making was published in the Federal Register on January 22, 1981 at 46 FR 7011, inviting comments on a proposed revision to the Department's current regulations on the preparation, submission and approval of State cost allocation plans for public assistance programs. The regulation, Subpart E of 45 CFR Part 95, consolidates on a Department-wide basis all cost allocation requirements for public assistance agencies into a single regulation. Public comments were invited for 45 days ending March 9, 1981. Comments were received from nine State agencies and one association and were considered in the development of the final regulation.
In the intervening period of time, however, a number of changes have been introduced that have necessitated revisions to the Notice of Proposed Rulemaking. In addition, a Guide designed to assist States in the preparation and implementation of cost allocation plans for public assistance agencies has been developed with the assistance of a number of States and is being circulated for comment to all States. We believe it appropriate, therefore, that this regulation be issued as interim final to give the public an opportunity to comment and recommend additional changes. Commentators may also wish to address the General Accounting Office findings in their Report HRD-81-51 issued May 18, 1981 recommending that more detailed standards be included in the regulation. Comments are also solicited indicating whether the flexibility provided in this regulation that allows for a variety of State organization alignments, program configurations and accounting structures currently in existence is adequate or inadequate. Comments or changes that should be made to assist States in preparing and obtaining approved cost allocation plans, while assuring the necessary documentation as required for audit purposes, are desirable. The suggested areas of consideration for comment should not be construed as restricting comments to those areas; all comments will be considered.
The Notice of Proposed Rulemaking was published before the Administration proposed or Congress established seven block grant programs in the Omnibus Budget Reconciliation Act of 1981 (Pub. L. 97-35). The Notice of Proposed Rulemaking included Title XX of the Social Security Act which is now a part of the Social Services Block Grant. Since the block grant regulations deleted all regulations in 45 CFR Part 1395 and Part 1396, the references to Title XX are removed from this rule. The Social Services Block Grant will be treated as a State operated program for cost allocation purpose and the State need only separate the Title XX Block Grant costs from those incurred under other programs. In addition, 45 CFR 1392.64 contains a cross reference to 45 CFR 1395.2 in establishing cost allocation requirements for Service Programs for Families and Children under Parts A and B of Title IV of the Social Security Act. Since Part 1395 has been removed as of October 1, 1981, 45 CFR 1392.64 has been revised to reference Subpart E of 45 CFR Part 95.
The comments to the Notice of Proposed Rulemaking were generally favorable, especially with respect to consolidating the cost allocation requirements in one location, strengthening and simplifying the cost allocation plan approval process and in simplifying the cost disallowance and appeal process. The following summarizes and discusses the public comments and the major changes made in the regulation in consideration of these comments:
Comment: The regulations does not indicate whether the approval of a cost allocation plan by the Department's regional Division of Cost Allocation (DCAs) also applies to programs of other Federal Agencies.
Response: The Office of Management and Budget Circular A-87 requires that a single Federal agency (referred to as the "cognizant agency") be designed to approve a State agency's cost allocation plan on behalf of all Federal agencies. A list of cognizant agencies was published in the Federal Register on February 28, 1980 at 45 FR 13396. Since this subject is adequately covered in these documents, it is not necessary that it also be addressed in this regulation.
Comment: The definition of "administrative costs" is too broad since it would include the direct delivery of social services by State agency staffs. These costs are a direct program cost and should therefore be excluded from the definition of administrative costs so that there is not a distortion of the true administrative costs of the Title XX program.
Response: Pub. L. 97-35 has since established the Title XX Social Services Block Grant. Also, the term "administrative costs" has been changed in the interim final rule to clarify the intended meaning and to eliminate any possible confusion. "State agency costs" include all costs normally identified as "indirect" as well as costs incurred by the State agency in the direct delivery of services. The Department continues to require the inclusion of all State agency costs in the cost allocation plan in order to ensure that they are properly distributed to the appropriate programs on a consistent basis as required by the cost principles published by OMB.
Comment: The definition of a "State agency" should be clarified to indicate how it applies in situations where there is one large department (i.e., an "umbrella Department") that has several operating components or agencies, each of which may administer one or more of the programs identified in 95.503. Specifically, is the "State agency" defined to be the overall department or is it defined as the individual component or agency.
Response: In those States where this form of organizational arrangement exists, the term "State agency" for purposes of this regulation, is defined to mean the individual component or agency that is directly responsible for the administration of, or supervising the administration of a program noted in §95.503. This point has been clarified in the rule.
We recognize, though, that this is a narrow definition but believe that it will simplify the overall cost allocation plan preparation process. For instance, the development of a cost allocation plan will not be required for those components or agencies of a overall department that do not have any direct Federal awards. In addition, in those situations where a cost allocation plan is required for more than one component or agency within the State department, we encourage the consolidation of individual plans into one overall submission wherever possible. We also encourage that the Director, DCA be consulted during the plan preparation process.
Further, where an action is required, the term "State" has been substituted for the term "State Agency." This has been done to allow States flexibility in the preparation and submission of required plans and amendments. As stated in the NPRM, the "State agency" would have had to submit its plan directly to the DCA, without clearly allowing the Governor or umbrella agency a role.
While we believe that most States will continue to write and submit plans from the agency directly responsible for the administration of the program, this revision will allow alternative processes to be used at State option. In all cases, we would expect the expertise of the State agency administering each program to be reflected in the plan.
3. Cost Allocation Plan Requirements
Comment: Official organizational charts are developed and issued once a year. The requirement of submitting organizational charts with every cost allocation plan submission is therefore an unnecessary additional administrative burden.
Response: The submission of an organizational chart is only required in those instances where a plan or plan amendment is being proposed because of an organizational change that materially affects the distribution of costs (see § 95.509). The submission of an organizational chart depicting the change being proposed to a currently approved plan is necessary to allow for an adequate evaluation of the proposal. In those situations where "official" organizational charts are prepared on an annual basis, the plan or plan amendment submitted should, as a minimum, include an interim chart that clearly reflects the organizational relationships and responsibilities of the units being described in the proposal. The accuracy of the interim chart should be certified by the District of the State agency.
Comment: The requirement for including the "* * * estimated cost impact resulting from a proposed change * * *" should be eliminated or significantly revised. Determining the actual impact would be difficult to predict in a number of cases and, where obtainable, would be prejudicial and only hinder the approval process.
Response: The requirement for the "* * * estimated cost impact resulting from a proposed change * * *" was suggested by a Task Force of State finance officers that worked with the Department in developing the regulation. This provision was proposed as a means of simplifying the current procedures that requires the "* * * estimated costs for an annual period by cost centers or pools which include the costs of all organizational units***". While we agree that the acceptance of a proposed cost allocation procedure should be governed primarily by the equity of the procedure, an indication of the dollar effect of the procedure is useful in determining the scope of the Department's review of the procedure. In all situations it may not be practical to obtain this data without incurring significant additional costs and therefore we have modified the language contained in the Notice. Where it is not practical to obtain this information the revised language requires that the State agency reach agreement with the DCA on an alternative approach, prior to submitting a cost allocation proposal.
Comment: The regulation should address the submission of cost allocation plans for local government agencies who operate public assistance programs under a "State supervised system.
Response: We agree with this comment and have modified the regulation by adding a new paragraph §95.507(b)(7). The current requirements allow for the submission of a cost allocation plan for local public assistance agencies as part of a State agency's cost allocation plan. However, this has generally been limited to one plan for all local agencies within the State. The revised regulation specifically suggests that the affected State agency consult with the DCA on this matter during the development of the cost allocation plan.
The Department's Informal Grant Appeals Procedures (Part 75 of this Title) have also been updated and amended to make them consistent with Subpart E of Part 95 and Part 16 of this Title. Part 75 has been amended to reflect current organizational identifications of various components of the Department and incorporates the cost disallowance/appeal procedure previously addressed in the Notice of Proposed Rulemaking for Subpart E of Part 95 (46 FR 7011). Consequently, proposed rulemaking procedures were considered unnecessary with respect to Part 75. Part 75 with the above modifications will be published in its entirety to facilitate reading.
The Department has determined that this is not a "major rule" as defined in Executive Order 12291. Pursuant to the provisions of 5 U.S.C. 605(b), I hereby certify that this rule will not have a significant economic impact on a substantial number of small entities. The reporting and recordkeeping requirements contained in this regulation have been approved by OMB in accordance with the Paperwork Reduction Act of 1980 (Pub. L. 96-511). The OMB number for these requirements is 0990-0073.
Accordingly, a new Subpart E is added to 45 CFR Part 95 and 45 CFR Parts 75, 205, 232, 302, 304 and 1392 are amended as follows.
Dated: April 1, 1982
Richard S. Schweiker,
Secretary of Health and Human Services.
A. 45 CFR 205.150 is revised to read as follows:
§ 205.150 Cost allocation.
A State plan under Title I, IV-A, X, XIV, or XVI (AABD) of the Social Security Act must provide that the State agency will have an approved cost allocation plan on file with the Department in accordance with the requirements contained in Subpart E of 45 CFR Part 95, Subpart E also sets forth the effect on FFP if the requirements contained in that Subpart are not met.
PART 1392-SERVICE PROGRAMS
FOR FAMILIES AND CHILDREN: TITLE
IV PARTS A AND B OF THE SOCIAL
B. 45 CFR 1392.64 is revised to read as follows:
§ 1392.64 Cost allocation.
A State plan for the Child Welfare Services Program and the services program in the territories under Title IV Parts A and B of the Social Security Act must provide that the State agency will have an approved cost allocation plan on file with the Department in accordance with the requirements contained in Subpart E of 45 CFR Part 95. Subpart E also sets forth the effect on FFP if the requirements contained in that Subpart are not met.
PART 232-SPECIAL PROVISIONS
APPLICABLE TO TITLE IV-A OF THE
SOCIAL SECURITY ACT
§ 232.30 [Amended]
C. The title to § 232.30 is revised as follows:
§ 232.30 Cost of staff of special administrative units.
* * * * *
In addition, 45 CFR 232.30 paragraph (a) is removed, and the (b) preceding the second paragraph is also removed.
PART 302-STATE PLAN
§ 302.16 (Redesignated as § 304.15 and Revised)
D. 45 CFR 302.16 is redesignated as § 304.15 and is revised to read as follows:
A State agency in support of its claims under Title IV-D of the Social Security Act must have an approved cost allocation plan on file with the Department in accordance with the requirements contained in Subpart E of 45 CFR Part 95. Subpart E also sets forth the effect on FFP if the requirements contained in that subpart are not met.
PROGRAMS PUBLIC ASSISTANCE
AND MEDICAL ASSISTANCE
E. 45 CFR Part 95 is amended by adding a new subpart E to read as follows:
Subpart E-Cost Allocation Plans
95.507 Plan requirements.
95.509 Cost allocation plan amendments and certifications.
95.511 Approval of the cost allocation plan or plan amendment.
95.513 Disapproval of the cost allocation plan or plan amendment.
95.515 Effective date of a cost allocation plan or plan amendment.
95.517 Claims for Federal financial participation.
95.519 Cost disallowances.
Authority: Sec. 1102, 49 Stat. 647, 42 U.S.C. 1302
Subpart E--Cost Allocation Plans
§ 95.501 Purpose.
This subpart establishes requirements for:
(a) Preparation, submission, and approval of State agency cost allocation plans for public assistance programs; and
(b) Adherence to approved cost allocation plans in computing claims for Federal financial participation.
§ 95.503 Scope.
This subpart applies to all State agency costs applicable to awards made under Title I, IV-A, IV-B, IV-C, IV-D, IV-E, X, XIV, XVI(AABD), and XIX, of the Social Security Act, and under the Refugee Act of 1980, Title IV, Chapter 2 of the Immigration and Nationality Act (8 U.S.C. 1521 et seq.), and under Title V of Pub. L. 96-422, the Refugee Education Assistance Act of 1980.
§ 95.505 Definitions.
As used in this subpart:
"State agency costs" include all costs incurred by or allocable to the State agency except expenditures for financial assistance, medical vendor payments, and payments for services and goods provided directly to program recipients such as day care services, family planning services or household items as provided for under the approved State program plan.
"Cost allocation plan" means a narrative description of the procedures that the State agency will use in identifying, measuring, and allocating all State agency costs incurred in support of all programs administered or supervised by the State agency.
"FFP" or "Federal financial participation" means the Federal Government's share of expenditures made by a State agency under any of the programs cited in §95.503.
"Operating Divisions" means The Department of Health and Human Services (HHS) organizational components responsible for administering public assistance programs. These components are the Social Security Administration, Office of Human Development Services, Office of Child Support Enforcement, Health Care Financing Administration, and Office of Refugee Resettlement.
"Public assistance programs" means the programs cited in §95.503.
"State" means the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, the Northern Mariana Islands, and Guam.
"State agency" means the State agency administering or supervising the administration of the State plan for any program cited in § 95.503. A State agency may be an organizational part of a larger State department that also contains other components and agencies. Where that occurs, the expression "State agency" refers to the specific component or agency within the State department that is directly responsible for the administration of, or supervising the administration of, one or more programs identified in § 95.503.
"State Plan" means a comprehensive written commitment by the State agency to administer or supervise the administration of any of the public assistance programs cited in § 95.503 in accordance with all Federal requirements.
§ 95.507 Cost allocation plan requirements.
(a) The State shall submit a cost allocation plan for the State agency as required below to the Director, Division of Cost Allocation (DCA), in the appropriate HHS Regional Office. The plan shall:
(1) Describe the procedures used to identify, measure, and allocate all costs to each of the programs operated by the State agency;
(2) Conform to the accounting principles and standards prescribed in Office of Management and Budget Circular A-87, and other pertinent Department regulations and instructions;
(3) Be compatible with the State plan for public Assistance Programs described in 45 CFR Chapters II, III and XIII, and 42CFR Chapter IV Subchapter C; and
(4) Contain sufficient information in such detail to permit the Director, Division of Cost Allocation, after consulting with the Operating Divisions, to make an informed judgment on the correctness and fairness of the State's procedures for identifying, measuring and allocating all costs to each of the program operated by the State agency.
(b) The cost allocation plan shall contain the following information:
(1) An organizational chart showing the placement of each unit whose costs are charged to the programs operated by the State agency.
(2) A listing of all Federal and all non-Federal programs performed, administered, or serviced by these organizational units.
(3) A description of the activities performed by each organizational unit and, where not self-explanatory an explanation of the benefits provided to Federal programs.
(4) the procedures used to identify, measure, and allocate all costs to each benefiting program and activity (including activities subject to different rates of FFP).
(5) The estimated cost impact resulting from the proposed changes to a previously approved plan. These estimated costs are required solely to permit an evaluation of the procedures used for identifying, measuring, and allocating costs. Therefore, approval of the cost allocation plan shall not constitute approval of these estimated costs for use in calculating claims for FFP. Where it is impractical to obtain this data, an alternative approach should then be negotiated with the Director, DCA, prior to submission of the cost allocation plan.
(6) A statement stipulating that wherever costs are claimed for services provided by a governmental agency outside the State agency, that they will be supported by a written agreement that includes, at a minimum (i) the specific service(s) being purchased, (ii) the basis upon which the billing will be made by the provider agency (e.g. time reports, number of homes inspected, etc.) and (iii) a stipulation that the billing will be based on the actual cost incurred. This statement would not be required if the costs involved are specifically addressed in a State-wide cost allocation plan, local-wide cost allocation plan, or an umbrella/department cost allocation plan.
(7) If the public assistance programs are administered by local government agencies under a State supervised system, the overall State agency cost allocation plan shall also include a cost allocation plan for the local agencies. It shall be developed in accordance with the requirements set forth above. More than one local agency plan shall be submitted if the accounting systems or other conditions at the local agencies preclude an equitable allocation of costs by the submission of a single plan for all local agencies. Prior to submitting multiple plans for local agencies, the State should consult with the Director, DCA. Where more than one local agency plan is submitted, the State shall identify the specific local agencies covered by each plan.
(8) A certification by a duly authorized official of the State stating:
(i) That the information contained in the proposed cost allocation plan was prepared in conformance with Office of Management and Budget Circular A-87.
(ii) That the costs are accorded consistent treatment through the application of generally accepted accounting principles appropriate to the circumstances.
(iii) That an adequate accounting and statistical system exists to support claims that will be made under the cost allocation plan; and
(iv) That the information provided in support of the proposed cost allocation plan is accurate.
(9) Other information as is necessary to establish the validity of the procedures used to identify, measure, and allocate costs to all programs being operated by the State agency.
§ 95.509 Cost allocation plan amendments and certifications.
(a) The State shall promptly amend the cost allocation plan and submit the amended plan to the Director, DCA if any of the following events occur:
(1) The procedures shown in the existing cost allocation plan become outdated because of organizational changes, changes in Federal law or regulations, or significant changes in program levels, affecting the validity of the approved cost allocation procedures.
(2) A material defect is discovered in the cost allocation plan by the Director, DCA or the State.
(3) The State plan for public assistance programs is amended so as to affect the allocation of costs.
(4) Other changes occur which make the allocation basis or procedures in the approval cost allocation plan invalid.
(b) If a State has not submitted a plan or plan amendment during a given State fiscal year, an annual statement shall be submitted to the Director, DCA certifying that its approved cost allocation plan is not outdated. This statement shall be submitted within 60 days after the end of that fiscal year.
§ 95.511 Approval of the cost allocation plan or plan amendment.
(a) The Director, DCA, after consulting with the affected Operating Divisions, shall notify the State in writing of his/her findings. This notification will be made within 60 days after receipt of the proposed plan or amendment and shall either: (1) Advise the State that the plan or plan amendment is approved or disapproved, (2) advise the State of the changes required to make the plan or amendment acceptable, or (3) request the State to provide additional information needed to evaluate the proposed plan or amendment. If the DCA cannot make a determination with the 60-day period, it shall so advise the State.
(b) For purpose of this subpart, State agency cost allocation plans which have been approved by an authorized official of the Department of HHS prior to the effective date of this regulation are considered approved until such time as a new plan or plan amendment is required by §95.509(a).
§ 95.513 Disapproval of the cost allocation plan or plan amendment.
(a) the Director, DCA, shall notify a State in writing of the disapproval of its cost allocation plan or plan amendment. The notification will set forth the reasons for the determination and the basic changes required in sufficient detail to enable the State to respond and will inform the State of its opportunity for reconsideration of the determination under 45 CFR Part 75.
(b) If the State in accordance with 45 CFR Part 75, wishes to request a reconsideration of the DCA's determination, the application for reconsideration must be postmarked no later than 30 days after receipt of the DCA's determination letter.
§ 95.515 Effective date of a cost allocation plan amendment.
As a general rule, the effective date of a cost allocation plan amendment shall be the first day of the calendar quarter following the date of the event that required the amendment (See § 95.509). However, the effective date of the amendment may be earlier or later under the following conditions:
(a) An earlier date is needed to avoid a significant inequity to either the State or the Federal Government.
(b) The information provided by the State which was used to approve a previous plan or plan amendment is later found to be materially incomplete or inaccurate, or the previously approved plan is later found to violate a Federal statute or regulation. In either situation, the effective date of any required modification to the plan will be the same as the effective date of the plan or plan amendment that contained the defect.
(c) It is impractical for the State to implement the amendment on the first day of the next calendar quarter. In these instances, a later date may be established by agreement between the State and the DCA.
§ 95.517 Claims for Federal financial participation.
(a) A State must claim FFP for costs associated with a program only in accordance with its approved cost allocation plan. However, if a State has submitted a plan or plan amendment for a State agency, it may, at its option claim FFP based on the proposed plan or plan amendment, unless otherwise advised by the DCA. However, where a State has claimed costs based on a proposed plan or plan amendment the State, if necessary, shall retroactively adjust its claims in accordance with the plan or amendment as subsequently approved by the Director, DCA. The State may also continue to claim FFP under its existing approved cost allocation plan for all costs not affected by the proposed amendment.
§ 95.519 Cost disallowance.
If costs under a Public Assistance program are not claimed in accordance with the approved cost allocation plan (except as otherwise provided in § 95.517), or if the State failed to submit an amended cost allocation plan as required by § 95.509, the costs improperly claimed will be disallowed.
(a)(1) If the issue affects the program(s) of only one Operating Division and does not affect the programs of other Operating Divisions of Federal departments, that Operating Division will determine the amount of the disallowance and will also inform the State of its opportunity for reconsideration of the determination in accordance with the Operating Division's procedures. Prior to issuing the notification, however, the Operating Division shall consult with the DCA to ensure that the issue does not affect the programs of other Operating Divisions or Federal departments.
(2) If the State wishes to request a reconsideration of the Operating Division's determination, it must submit the request in accordance with the Operating Division's procedures.
(b)(1) If the issue affects the programs of more than one Operating Division, or Federal department or the State, the Director, DCA, after consulting with the Operating Divisions, shall determine the amount inappropriately claimed under each program. The Director, DCA will notify the State of this determination, of the dollar affect of the determination on the claims made under each program, and will inform the State of its opportunity for reconsideration of the determination under 45 CFR Part 75. The State will subsequently be notified by the appropriate Operating Division as to the disposition of the funds in question.
(2) If the State, in accordance with 45 CFR Part 75, wishes to request a reconsideration of the DCA's determination, the application for reconsideration must be postmarked no later than 30 days after receipt of the DCA's determination letter. In considering an appeal under the process, the Regional Director shall consult with HHS Operating and staff Divisions as appropriate.
F. 45 CFR Part 75 is revised to read as follows:
PART 75--INFORMAL GRANT APPEALS PROCEDURES
Subpart A--Indirect Cost Appeals
75.5 Submission to the Regional Director.
75.6 Action by the Regional Director.
Authority: Sec. 1102, 49 Stat. 647, 42 U.S.C. 1302.
Subpart A--Indirect Cost Appeals
§ 75.1 Purpose.
This subpart establishes informal procedures for resolving disputes arising in the negotiation of indirect cost rates and certain other cost allocations (as set forth in §75.2) that are used in determining amounts to be reimbursed under grants awarded by the Operating Divisions of the Department of Health and Human services. A grantee must exhaust the procedures set forth in this subpart prior to appealing a disputed issue(s) to the Departmental Grants Appeals Board under Part 16 of this subtitle.
§ 75.2 Scope.
(a) This subpart applies to all disputes arising from determinations made by a Director, Division of Cost Allocation (DCA), in the Department's regional Offices including, but not limited to:
(1) Indirect cost rates negotiated with colleges and universities, State and local government agencies, hospitals, and non-profit institutions.
(2) Patient care rates and amounts associated with the care of patients participating in research programs supported by the Department.
(3) Cost allocation plans negotiated with State and local units of government other than plans provided for under paragraph (a)(5)of this section.
(4) Fringe benefit rates, computer rates or costing methodologies and other special rates negotiated with colleges and universities, State and local government agencies, hospitals, and non-profit institutions.
(5) Cost allocation plans with State public assistance agencies as described in Subpart E of 45 CFR Part 95.
(6) Disallowances by the Director, DCA, of costs as described in Subpart E of 45 CFR Part 95.
(b) Notwithstanding paragraph (a) of this section, this subpart shall not be applicable to disputed issues which are appealed to the Armed Services Board of Contract Appeals under a contract with the Department.
§ 75.3 Definitions.
For purposes of the subpart:
(a) "Grantee" means the agency institution or organization named as grantee in a grant award document issued by an Operating Division of the Department. For disputes involving cost allocation plans, this term also includes a State or local unit of government which includes an agency that is named as grantee in a grant award document and a State agency as defined in Subpart E of 45 CFR Part 95.
(b) Other terms shall have the meaning set forth in Part 74 of this title, unless the context below indicates otherwise.
§ 75.4 Notification.
Where an agreement cannot be reached between the Director, DCA, and the grantee, the Director, DCA will promptly notify the grantee in writing of the Director's determination. This notification will set forth the reasons for the determination in sufficient detail to enable the grantee to respond and will inform the grantee of its opportunity for reconsideration under this subpart.
§ 75.5 Submission to the Regional Director.
If the grantee wishes to request reconsideration of the DCA Director's determination, it may submit an application for such reconsideration to the Regional Director. The grantee's application must be postmarked or hand delivered no later than 30 days after receipt of the notification described in § 75.4. The Regional Director, however, may grant an extension of time for submission of the application if the extension is requested and justified by the grantee. Although the application need not follow any prescribed format, it must clearly identify the issues(s) in dispute and must contain a full statement of the grantee's position on such issue(s) along with pertinent facts and reasons in support of its position.
§ 75.6 Action by the Regional Director.
(a) Upon receipt of an application for reconsideration, the Regional Director will immediately notify the grantee that its application has been received and will be acted upon as soon as possible.
(b) The Regional Director will review all background material on the issue(s). Within 30 days after receipt of the grantee's application, and with at least 10 day's written notice, the grantee will be provided the opportunity to meet with the Regional Director to discuss the issue(s) and to submit additional information in support of its position. The Regional Director may consult the DCA, other regional officials, Departmental central office officials, and other individuals in conducting the review.
(c) Within 45 days after the meeting described in § 75.6(b) (or 45 days after submission of any supplemental information provided by the grantee) the Regional Director will notify the grantee in writing of the decision, in accordance with the provisions of § 74.304 of this title. If the Regional Director's decision is adverse to the grantee's position, this notification will state the basis of the decision and will inform the grantee of its right to appeal the decision to the Departmental Grants Appeals Board under Part 16 of this title.
(d) The Regional Director may delegate the responsibilities described in this section to another senior Departmental official in his region. This delegation, however, may not be made to the Director, Regional Administrative Support Center, or to the Director, DCA.
[FR Doc. 82-11110 Filed 4-22-82: 8:45 am]
Billing Code 4150-84-M