Revision to by 2b5145a4cf5ae297


									                          Federal Register / Vol. 68, No. 124 / Friday, June 27, 2003 / Notices                               38401

Since the beginning of the strike,           impact of the proposed action. The State        reassignment of oversight agency for
OCNGS has been operated by Senior            official had no comments.                       audit.
Reactor Operator licensed personnel. As                                                      DATES: The final revisions are effective
                                             Finding of No Significant Impact
a result, both types of licensed                                                             for fiscal years ending after December
personnel are unavailable for the               On the basis of the environmental
                                                                                             31, 2003, and early implementation will
requalification written examinations         assessment, the Commission concludes
                                                                                             not be permitted with the exception of
and operating tests until the strike is      that the proposed action will not have
                                                                                             the amendment to the definition of
over.                                        a significant effect on the quality of the
                                                                                             oversight agency for audit in Circular
                                             human environment. Accordingly, the
Environmental Impacts of the Proposed                                                        A–133, section _.105. The amendment
                                             Commission has determined not to                to the definition of oversight agency for
Action                                       prepare an environmental impact                 audit is effective July 28, 2003.
  The NRC completed its evaluation of        statement for the proposed action.
                                                For further details with respect to the      FOR FURTHER INFORMATION CONTACT:
the proposed action and concludes that
                                             proposed action, see the licensee’s letter      Recipients should contact their
there are no significant environmental
                                             dated May 30, 2003. Documents may be            cognizant agency for audit or oversight
impacts associated with the extension of
                                             examined, and/or copied for a fee, at the       agency for audit or Federal awarding
the completion date for the operator
                                             NRC’s Public Document Room (PDR),               agency, as may be appropriate in the
requalification program from June 30,
                                             located at One White Flint North, Public        circumstances. Subrecipients should
2003, to 90 days following resolution of
                                             File Area at O–1 F21, 11555 Rockville           contact their pass-through entity.
the strike, but no later than December                                                       Federal agencies should contact Terrill
31, 2003.                                    Pike (first floor), Rockville, Maryland.
                                             Publicly available records are accessible       W. Ramsey, Office of Federal Financial
  The proposed action will not
                                                                                             Management, Office of Management and
significantly increase the probability or    electronically from the Agencywide
                                                                                             Budget, 202–395–3993.
consequences of accidents, it will make      Documents Access and Management
                                             System (ADAMS) Public Electronic                SUPPLEMENTARY INFORMATION: On August
no changes to the types of effluents that
may be released off site, and there is no    Reading Room on the Internet at the             12, 2002, OMB proposed revisions (67
significant increase in occupational or      NRC Web site,               FR 52545) to OMB Circular A–133,
public radiation exposure. Therefore,        reading-rm/adams.html. Persons who              ‘‘Audits of States, Local Governments,
there are no significant radiological        do not have access to ADAMS or who              and Non-Profit Organizations.’’ The
environmental impacts associated with        encounter problems in accessing the             Office of Management and Budget
the proposed action.                         documents located in ADAMS, should              (OMB) is issuing final revisions to
  With regard to potential                   contact the NRC PDR Reference staff by          Circular A–133, ‘‘Audits of States, Local
nonradiological impacts, the proposed        telephone at 1–800–397–4209 or 301–             Governments, and Non-Profit
action does not have a potential to affect   415–4737, or by e-mail to          Organizations.’’ The revisions will (1)
any historic sites. It does not affect                                                       increase the threshold for audit from
                                               Dated at Rockville, Maryland, this 24th day   $300,000 to $500,000, (2) increase the
nonradiological plant effluents and has      of June, 2003.
no other environmental impact.                                                               threshold for cognizant agency for audit
                                               For the Nuclear Regulatory Commission.        from $25 million to $50 million, and (3)
Therefore, there are no significant          Peter S. Tam,
nonradiological environmental impacts                                                        make related technical changes to
                                             Senior Project Manager, Section 1, Project      facilitate the determination of cognizant
associated with the proposed action.         Directorate 1, Division of Licensing Project
  Accordingly, the NRC concludes that                                                        agency for audit and provide for Federal
                                             Management, Office of Nuclear Reactor           agency reassignment of oversight agency
there are no significant environmental       Regulation.
impacts associated with the proposed                                                         for audit.
                                             [FR Doc. 03–16295 Filed 6–26–03; 8:45 am]          The Single Audit Act Amendments of
action.                                      BILLING CODE 7590–01–P                          1996, 31 U.S.C. 7502(a)(3), provide for
Environmental Impacts of the                                                                 the Director of OMB to review the single
Alternatives to the Proposed Action                                                          audit threshold on a biennial basis and
  As an alternative to the proposed          OFFICE OF MANAGEMENT AND                        increase it as appropriate. The audit
action, the NRC staff considered denial      BUDGET                                          threshold established in 1997 required
of the proposed action (i.e., the ‘‘no-                                                      all non-Federal entities (States, local
                                             Audits of States, Local Governments,            governments, and non-profit
action’’ alternative). Denial of the         and Non-Profit Organizations
application would result in no change                                                        organizations) that expend $300,000 or
in current environmental impacts. Thus,      AGENCY: Office of Management and                more in a year in Federal awards to have
the environmental impacts of the             Budget.                                         an audit conducted in accordance with
proposed action and the alternative          ACTION: Revision of OMB Circular No.            Circular A–133. The revision increases
action are similar.                          A–133.                                          the audit threshold from $300,000 to
                                                                                             $500,000. This increase relieves almost
Alternative Use of Resources                 SUMMARY: The Office of Management               6,000 entities from the audit
  The action does not involve the use of     and Budget (OMB) is issuing final               requirements of Circular A–133 while
any different resources than those           revisions to Circular A–133, ‘‘Audits of        only exempting from audit less than one
previously considered in the Final           States, Local Governments, and Non-             half of one percent of Federal awards
Environmental Statement for OCNGS,           Profit Organizations.’’ The purpose of          expended (in dollars) by entities
dated December 1974.                         these revisions is to (1) increase the          currently conducting Circular A–133
                                             threshold for audit from $300,000 to            audits.
Agencies and Persons Consulted               $500,000, (2) increase the threshold for           The revision increases the threshold
  On June 9, 2003, the NRC staff             cognizant agency for audit from $25             for cognizant agency for audit from $25
consulted with the State official, Mr.       million to $50 million, and (3) make            million to $50 million. This change will
Rich Pinney of the New Jersey                related technical changes to facilitate         reduce the number of non-Federal
Department of Environment and Natural        the determination of cognizant agency           entities with a cognizant agency for
Resources, regarding the environmental       for audit and provide for Federal agency        audit assignment from approximately
38402                     Federal Register / Vol. 68, No. 124 / Friday, June 27, 2003 / Notices

1,000 to 500. This revision will allow        throughout the year rather than relying      Availability of Revised Circular
Federal agencies to provide more              solely on a once-a-year audit.                 OMB has prepared an updated
focused attention where there is the          Monitoring activities may take various       version of Circular A–133, as amended
greatest risk in terms of Federal awards      forms; however, a first monitoring tool      herein. It is available electronically on
expended, but still provide each non-         should be identifying to the grantee the     the OMB Home Page at http://
Federal entity with an assigned               Federal award information (e.g., Catalog and then select ‘‘Grants
oversight agency for audit from which to      of Federal Domestic Assistance (CFDA)        Management’’ followed by ‘‘Circulars.’’
request technical advice. The revision        title and number, award name, name of
also changes the base years for               Federal agency) and applicable                Dated: June 23, 2003.
determining cognizant agency for audit        compliance requirements. Other               Augustine T. Smythe,
assignments. (Currently, the cognizant        monitoring tools include reviewing           Acting Director.
agency for audit determination is based       grantee financial and performance               1. OMB hereby amends Circular A–
on the amount of Federal funding in the       reports, performing site visits to review    133 by replacing $300,000 with
year immediately preceding each five-         financial and programmatic records and       $500,000 in the following sections:
year audit cognizant period. This             observe operations, and arranging for        § ll.200(a); § ll.200(b);
revision changes the base year to the         agreed-upon procedures engagements           § ll.200(d); § ll.230(b)(2); and
second year preceding the five-year           for certain aspects of grantee activities,   § ll.400(d)(4).
audit cognizant period to allow               such as described in § _.230(b)(2) of           2. OMB hereby amends Circular A–
sufficient time to make cognizant             Circular A–133. Factors such as the size     133 by replacing $25 million with $50
agency for audit determinations before        of awards, the complexity of the             million in section § ll.400(a), first
the start of the audit cognizance period.)    compliance requirements, and risk of         sentence.
Finally, the revision changes the             grantee non-compliance as assessed by           3. OMB hereby amends Circular A–
definition of oversight agency for audit      the grantor may influence the nature         133 by replacing section § ll.400(a),
to permit Federal agencies to make            and extent of monitoring procedures.         third, fourth, and fifth (parenthetical)
reassignments.                                Federal laws or regulations may impose       sentences with the following: § ll.400
                                              monitoring requirements specific to a        Responsibilities.
Response to Comments
                                              Federal program. The 2003 OMB                   (a) * * * The determination of the
   OMB received 43 comment letters:           Circular A–133 Compliance Supplement         predominant amount of direct funding
Eight from Federal agencies, seven from       clarifies the guidance to auditors related   shall be based upon direct Federal
State governments, four from                  to subrecipient monitoring.                  awards expended in the recipient’s
universities, five from non-profit               It should also be noted that the          fiscal years ending in 2004, 2009, 2014,
organizations, 14 from certified public       Federal Government has the authority to      and every fifth year thereafter. For
accountants, and five from individuals.       audit and/or investigate any entity          example, audit cognizance for periods
Nearly all comments focused on raising        suspected of using Federal funds             ending in 2006 through 2010 will be
the audit threshold: 28 were in favor         improperly, regardless of the amount of      determined based on Federal awards
and 10 opposed. Of the 10 that were           funds involved. Allegations of fraud         expended in 2004. (However, for 2001
opposed to raising the audit threshold,       should be directed to the Federal            through 2005, the cognizant agency for
two were from Federal agencies; two           awarding agency’s Office of Inspector        audit is determined based on the
were from one State; one from a               General fraud hotline phone numbers          predominant amount of direct Federal
university; and five from individuals.        which are available on the Internet at       awards expended in the recipient’s
Opposition centered on concerns over                        fiscal year ending in 2000).
specific programs and the perceived              Nine comments addressed the
lack of accountability over Federal                                                        *      *     *    *     *
                                              increase from $25 million to $50 million
                                                                                              4. OMB hereby amends Circular A–
funds that would fall below the new           of the threshold for cognizant agency for
                                                                                           133, section § ll.105, by adding at the
threshold. On the other hand, several         audit. Seven commenters (two Federal
                                                                                           end of the definition of oversight agency
commenters suggested raising the              and five non-Federal) supported the
                                                                                           for audit: ‘‘A Federal agency with
threshold to $1 million to further            increase and two Federal agencies
                                                                                           oversight for an auditee may reassign
alleviate the burden on non-Federal           opposed. One concern was that the
                                                                                           oversight to another Federal agency
entities expending smaller amounts of         reduction in the number of cognizant
Federal funds. OMB believes that,                                                          which provides substantial funding and
                                              agency for audit assignments would
because the revisions only exempt an                                                       agrees to be the oversight agency for
                                              reduce Federal agency monitoring of
additional one-half of one percent of                                                      audit. Within 30 days after any
                                              audit quality. OMB is actively working
Federal dollars expended from audit           with Federal agencies to strengthen          reassignment, both the old and the new
while providing administrative relief to      quality control reviews of audits by         oversight agency for audit shall notify
approximately 6,000 entities, the risk to     selecting a statistical sample of single     the auditee, and, if known, the auditor
Federal funds does not outweigh the           audits to measure audit quality across       of the reassignment.’’
benefits to grant recipients. OMB,            Federal programs. This work is expected      [FR Doc. 03–16355 Filed 6–26–03; 8:45 am]
however, appreciates the comments             to improve our ability to measure and        BILLING CODE 3110–01–P
about reduced accountability and              improve audit quality.
concerns expressed by several                    Four comments concerned the
commenters that raising the audit             technical changes. One Federal agency        OFFICE OF MANAGEMENT AND
threshold could provide more                  (which opposed all of the proposed           BUDGET
opportunities for fraud.                      revisions to Circular A–133) expressed
   It is important to note that Circular A–   concern about accountability over            Use of a Universal Identifier by Grant
133 audit is only one of many                 Federal funds. As noted above, OMB           Applicants
monitoring tools available to oversee the     believes that the revisions to Circular      AGENCY: Office of Management and
administration of and strengthen              A–133 provide an appropriate balance         Budget.
accountability over Federal grants.           between administrative relief and the
                                                                                           ACTION: Notice of final policy issuance.
Grantee monitoring should occur               risk to Federal funds.

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