[Federal Register: January 29, 1997 (Volume 62, Number 19)]
[Rules and Regulations]               
[Page 4165-4167]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



34 CFR Part 75

RIN 1880-AA61

Direct Grant Programs

AGENCY: Department of Education.

ACTION: Final regulations.


SUMMARY: The Secretary amends the Department's regulations on direct 
grant programs to expand the basis for selecting applications for new 
grants to include a recipient's previous

[[Page 4166]]

performance under any Department grant program as well as its failure 
to submit a final performance report or submission of a report of 
unacceptable quality. The Secretary has decided not to amend the 
regulations to change the date by which applications are considered 
received by the Department of Education. These amendments to the final 
regulations are part of the Department's continuing effort to improve 
the discretionary grantmaking process.

EFFECTIVE DATE: These regulations take effect February 28, 1997.

FOR FURTHER INFORMATION CONTACT: Ronelle Holloman, U.S. Department of 
Education, 600 Independence Avenue, S.W., Room 3636, ROB-3, Washington, 
D.C. 20202-4248. Telephone: (202) 205-3501. Individuals who use a 
telecommunications device for the deaf (TDD) may call the Federal 
Information Relay Service (FIRS) at 1-800-877-8339 between 8 a.m. and 8 
p.m., Eastern time, Monday through Friday.

SUPPLEMENTARY INFORMATION: On September 20, 1995, the Secretary 
published in the Federal Register (60 FR 48844) a notice of proposed 
rulemaking (NPRM) proposing to revise sections in the Education 
Department General Administrative Regulations (EDGAR) regarding the 
deadline date for applications and how the Secretary selects 
applications for new grants. These proposed amendments were expected to 
reduce the processing time for discretionary grants, improve the 
quality of the final performance report and increase the ability of the 
Department to ensure that qualified applicants receive grants.
    The significant difference between the NPRM and this final 
regulation is the deletion of the amendment that would have changed the 
requirement for meeting the deadline date for a competition from the 
postmarked date to the date the application is actually received. Most 
commenters opposed this change for one or both of the following 
reasons: (1) those applicants closest in proximity to the Washington, 
D.C. metropolitan area would have an unfair advantage; and (2) the 
change would cause additional cost burdens to recipients. Although the 
Department did receive several responses in support of the change, from 
commenters who felt that the change would not cause additional hardship 
and would be fair if ED allowed for reasonable exceptions to the rule, 
the Secretary decided not to implement this proposed change at this 
    The final regulation changes how the Secretary selects applications 
for new grants (34 CFR 75.217). The regulation expands the basis for 
selection to include a recipient's prior performance under any 
Department program, including use of funds and the applicant's failure 
to submit a final performance report or the submission of a report of 
unacceptable quality. The Department's motivation for this change is to 
promote accountability and good stewardship. The change will require a 
stronger commitment from a recipient to submit a final performance 
report and allow ED the opportunity to inform the general public and 
the educational community of successful project outcomes. The majority 
of commenters who responded agreed with the change and felt that this 
change would set a precedent for sound performance and accountability. 
Further details of the comments received are discussed below.

Analysis of Comments and Changes

    In response to the Secretary's invitation in the NPRM, 44 parties 
submitted comments on the proposed regulations. An analysis of the 
comments and of the resulting changes in the regulations since the 
publication of the NPRM follows. Substantive issues are discussed under 
the section of the regulations to which they pertain. Technical and 
other minor changes--and suggested changes the Secretary is not legally 
authorized to make under the applicable statutory authority--are not 
    Section 75.217  How the Secretary selects applications for new 
    Comments: The Department received a total of 11 comments on this 
section. The majority of commenters agreed with this change and felt 
that an institution that received grant funds should be held 
accountable for meeting the objectives of the grant.
    Discussion: The Secretary agrees. Accountability is important to 
ensure progress and success. The submission of a final report provides 
opportunity for the general public to know that their tax dollars were 
spent wisely and provides the educational community with the 
opportunity to replicate a successful project. The failure to meet all 
of the obligations in a previous grant would alert the Department that 
something could be seriously wrong and ED would conduct a further 
review before funds could be granted in the future.
    Changes: None
    Comments: One commenter disagreed with the proposed change because 
the commenter thought it was unfair to penalize an entity for the acts 
of one individual and that ED does not have standards for report 
    Discussion: This amendment broadened the range of information the 
Secretary could consider in selecting new grants. The criteria for 
selection of new grants are established in regulations of the 
Department. The Secretary does not agree that there need to be separate 
criteria for reports. In fact, the Secretary has avoided any effort to 
narrowly circumscribe final reports. This is consistent with the 
Department's new reengineered grants process that encourages a 
partnership with its recipients and supports flexibility in the 
administration of their projects. In filing an interim or final report 
the grantee must demonstrate that it is making substantial progress 
toward meeting the objectives of the grant or that it has met the 
objectives of the grant. A report will be considered substandard if it 
fails to address how the recipient met the objectives of a grant or, if 
it failed to meet any objectives, how it will take steps to improve the 
project and meet the objectives.
    Changes: None
    Comments: Several commenters agreed with the proposed change but 
expressed two similar concerns: (1) How long will a recipient's past 
poor performance be considered by the Department? (2) What mechanism 
will be used to allow applicants to receive further funding?
    Discussion: Generally, in most cases where poor performance has 
been an issue, the Department relied on the high-risk procedures 
authorized under Secs. 74.14 and 80.12 of the Education Department 
General Administrative Regulations (EDGAR). Under the high-risk 
regulations, ED may impose additional conditions on a recipient to help 
ensure proper performance. However, there are rare cases where an 
applicant poses such a risk of misuse of Federal funds that no award 
should be made. This regulation is intended to be used in those rare 
cases. ED is aware that recipients face unexpected challenges, some of 
which can cause a recipient to perform poorly on a grant; therefore, 
when making future funding decisions, ED will consider any extenuating 
circumstances on a case-by-case basis.

Paperwork Reduction Act of 1995

    These regulations have been examined under the Paperwork Reduction 
Act of 1995 and have been found to contain no information collection 

Assessment of Educational Impact

    In the notice of proposed rulemaking, the Secretary requested 
comments on whether the proposed regulations would

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require transmission of information that is being gathered by or is 
available from any other agency or authority of the United States.
    Based on the response to the proposed rules and on its own review, 
the Department has determined that the regulations in this document do 
not require transmission of information that is being gathered by or is 
available from any other agency or authority of the United States.

List of Subjects in 34 CFR Part 75

    Education Department, Discretionary grant programs--education, 
Continuation funding, Grant administration, Incorporation by reference, 
Reporting and recordkeeping requirements, Performance reports, 
Unobligated funds.

    Dated: January 23, 1997.
Richard W. Riley,
Secretary of Education.

(Catalog of Federal Domestic Assistance Number does not apply)

    The Secretary amends Part 75 of Title 34 of the Code of Federal 
Regulations as follows:


    1. The authority citation for Part 75 continues to read as follows:

    Authority: 20 U.S.C. 1221e-3 and 3474, unless otherwise noted.

    2. Section 75.217 is amended by revising paragraph (d)(3) to read 
as follows:

Sec. 75.217  How the Secretary selects applications for new grants.

* * * * *
    (d) * * *
    (3) Any other information--
    (i) Relevant to a criterion, priority, or other requirement that 
applies to the selection of applications for new grants;
    (ii) Concerning the applicant's performance and use of funds under 
a previous award under any Department program; and
    (iii) Concerning the applicant's failure under any Department 
program to submit a performance report or its submission of a 
performance report of unacceptable quality.
* * * * *
[FR Doc. 97-2196 Filed 1-28-97; 8:45 am]