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4394 Federal Register/Vol. 87, No. 18/Thursday, January 27, 2022/Rules and Regulations
<br /> and state,local, and Tribal governments including an agreement that the pass- entity as a result of experiencing a
<br /> are authorized to transfer funds to other through entity considers a contract." public health impact or negative
<br /> entities,including private entities like Further, 2 CFR 200.1 of the Uniform economic impact of the pandemic,the
<br /> nonprofits.The interim final rule stated Guidance defines a subrecipient,in that individual or entity is acting as a
<br /> that, "[a] transferee receiving a transfer "[s]ubrecipient means an entity,usually beneficiary.Acting as a beneficiary,the
<br /> from a recipient under sections 602(c)(3) but not limited to non-Federal entities, individual or entity is not subject to
<br /> and 603(c)(3)will be a subrecipient. that receives a subaward from a pass- subrecipient monitoring and reporting
<br /> Subrecipients are entities that receive a through entity to carry out part of a requirements.
<br /> subaward from a recipient to carry out Federal award;but does not include an
<br /> a program or project on behalf of the individual that is a beneficiary of such d.Uses Outside the Scope of This
<br /> recipient with the recipient's Federal award.A subrecipient may also be a Category
<br /> award funding." recipient of other Federal awards Summary of the Interim Final Rule and
<br /> For funds transferred to a directly from a Federal awarding Final Rule Structure
<br /> subrecipient,the interim final rule agency."Treasury is aligning the In the interim final rule,
<br /> definition of subrecipient in the final Treasury
<br /> noted that Ir]ecipients continue to be p noted that certain uses of funds are not
<br /> responsible for monitoring and rule with the definition of subrecipient permissible under the eligible use
<br /> overseeingthe sub recipient's use of in the Uniform Guidance.
<br /> sureci p Treasury is maintaining the category of responding to the public
<br /> SLFRF funds and other activities related health and negative economic impacts
<br /> to the award to ensure that the monitoring and subrecipient reporting of the pandemic.In the final rule,these
<br /> subrecipient complies with the statutory requirements outlined in the final rule.
<br /> p p y Per 2 CFR 200101 (b)(2) of the Uniform uses remain impermissible,but
<br /> .
<br /> and regulatory requirements and the Treasury has re-categorized where the
<br /> terms and conditions of the award. Guidance,the terms and conditions of are addressed to increase clarity.
<br /> y
<br /> Recipients also remain responsible for federal awards flow down to subawards y
<br /> p p to subrecipients Therefore,non-federal Specifically,the interim final rule
<br /> .
<br /> reporting to Treasury on their provided that the following uses of
<br /> use o a subrecipients' f payments from the entities, as defined in the Uniform p g
<br /> p p y Guidance,must comply with the funds are not eligible under this eligible
<br /> SLFRF funds for the duration of the applicable requirements in the Uniform use category: Contributions to rainy day
<br /> award. funds,financial reserves,or similar
<br /> Public Comment:Treasuryreceived Guidance regardless of whether the non-
<br /> ve funds;payment of interest or principal
<br /> federal entity is a recipient or
<br /> many comments requesting clarification subrecipient of a federal award.This on outstanding debt instruments; fees or
<br /> about which entities qualify as includes requirements such as the issuance costs associated with the
<br /> subrecipients and are,in turn, subject to issuance of new debt; and satisfaction of
<br /> treatment of eligible uses of funds,
<br /> subrecipient monitoring and reporting procurement,and reporting any obligation arising under or pursuant
<br /> requirements. For example,commenters requirements. to a settlement agreement,judgment,
<br /> sought clarification about whether a The Uniform Guidance definitions for consent decree, or judicially confirmed
<br /> nonprofit that received a grant to both subaward and subrecipient specify debt restructuring plan in a judicial,
<br /> provide services under a program to that payments to individuals or entities administrative, or regulatory
<br /> carry out an enumerated eligible use that are direct beneficiaries of a federal proceeding,except to the extent the
<br /> would qualify as a subrecipient and be award are not considered subrecipients. judgment or settlement requires the
<br /> subject to subrecipient monitoring and The final rule adopts this definition of provision of services that would
<br /> reporting requirements. Similarly, a beneficiary and outlines that respond to the COVID-19 public health
<br /> commenters also wondered if a households, communities,small emergency. These uses of funds remain
<br /> nonprofit that received a grant in businesses,nonprofits, and impacted ineligible under the final rule;Treasury
<br /> recognition of experiencing a negative industries are all potential beneficiaries has re-categorized these issues to the
<br /> economic impact of the public health of projects carried out with SLFRF section Restrictions on Use,which
<br /> emergency would also be a subrecipient funds. Beneficiaries are not subject to describes restrictions that apply to all
<br /> and subject to subrecipient reporting the requirements placed on eligible use categories,to clarify that
<br /> requirements. subrecipients in the Uniform Guidance, these uses are not eligible under any
<br /> Treasury Response:Treasury is including audit pursuant to the Single eligible use category of SLFRF. Treasury
<br /> clarifying the distinction between a Audit Act and 2 CFR part 200, subpart responds to public comments on this
<br /> subrecipient and beneficiary in the final F or subrecipient reporting issue in the section Restrictions on Use.
<br /> rule. The Uniform Guidance definitions requirements. As noted above,the interim final rule
<br /> for subaward and subrecipient inform The distinction between a also posed several questions on what
<br /> Treasury's distinction between subrecipient and a beneficiary, other types of services or costs Treasury
<br /> subrecipients and beneficiaries. therefore,is contingent upon the should consider as eligible uses to
<br /> First,per 2 CFR 200.1 of Uniform rationale for why a recipient is respond to the public health and
<br /> Guidance Is]ubaward means an award providing funds to the individual or negative economic impacts of COVID—
<br /> provided by a pass-through entity 256 to entity.If the recipient is providing 19, including in disproportionately
<br /> a subrecipient for the subrecipient to funds to the individual or entity for the impacted communities. In this section,
<br /> carry out part of a Federal award purpose of carrying out a SLFRF Treasury addresses proposed uses of
<br /> received by the pass-through entity.It program or project on behalf of the funds suggested by commenters that
<br /> does not include payments to a recipient,the individual or entity is Treasury has not included as
<br /> contractor or payments to an individual acting as a subrecipient.Acting as a enumerated eligible uses of funds in this
<br /> that is a beneficiary of a Federal subrecipient,the individual or entity is eligible use category.
<br /> program.A subaward may be provided subject to subrecipient monitoring and General Eligible Uses
<br /> through any form of legal agreement, reporting requirements.Conversely,if
<br /> the recipient is providing funds to the Public Comment:Commenters
<br /> 256In this context,a pass-through entity means a individual or entity for the purpose of proposed a wide variety of additional
<br /> recipient of SLFRF funds. directly benefitting the individual or recommended enumerated eligible uses
<br />
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