Rule2024-28168
Multi-Family Housing and Community Facilities Updates to Federal Financial Assistance Guidance
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Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 6, 2024
Effective
December 6, 2024
Issuing agencies
Agriculture DepartmentRural Housing Service
Abstract
The Rural Housing Service (RHS or Agency), an agency in the United States Department of Agriculture (USDA) Rural Development (RD) Mission area, is issuing a final rule to update the Multi-Family Housing (MFH) and Community Facility (CF) regulations by updating the audit and financial statement language to align with the Office of Management and Budget (OMB) 2024 revisions.
Full Text
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<title>Federal Register, Volume 89 Issue 235 (Friday, December 6, 2024)</title>
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[Federal Register Volume 89, Number 235 (Friday, December 6, 2024)]
[Rules and Regulations]
[Pages 96857-96860]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-28168]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 89, No. 235 / Friday, December 6, 2024 /
Rules and Regulations
[[Page 96857]]
DEPARTMENT OF AGRICULTURE
Rural Housing Service
7 CFR Parts 1942, 3560, 3570, and 5001
[Docket Number: RHS-24-ADMIN-0040]
Multi-Family Housing and Community Facilities Updates to Federal
Financial Assistance Guidance
AGENCY: Rural Housing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Rural Housing Service (RHS or Agency), an agency in the
United States Department of Agriculture (USDA) Rural Development (RD)
Mission area, is issuing a final rule to update the Multi-Family
Housing (MFH) and Community Facility (CF) regulations by updating the
audit and financial statement language to align with the Office of
Management and Budget (OMB) 2024 revisions.
DATES: Effective December 6, 2024.
FOR FURTHER INFORMATION CONTACT:
Julie Felhofer, Policy & Budget Branch Chief, United States
Department of Agriculture, 1400 Independence Avenue SW, Washington, DC
20250-1548. Telephone: (715) 295-4069. Email: <a href="/cdn-cgi/l/email-protection#266c534a4f430860434a4e49404354665355424708414950"><span class="__cf_email__" data-cfemail="b0fac5dcd9d59ef6d5dcd8dfd6d5c2f0c5c3d4d19ed7dfc6">[email protected]</span></a>.
Nathan Chitwood, Director, Community Facilities, United States
Department of Agriculture, 1400 Independence Avenue SW, Washington, DC
20250-1548. Telephone: (573) 876-0965. Email:
<a href="/cdn-cgi/l/email-protection#eda38c99858c83c3ae8584999a82828999ad989e898cc38a829b"><span class="__cf_email__" data-cfemail="86c8e7f2eee7e8a8c5eeeff2f1e9e9e2f2c6f3f5e2e7a8e1e9f0">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
RD is a mission area within USDA comprised of the RHS, the Rural
Business-Cooperative Service, and Rural Utilities Service, that strives
to increase economic opportunity and improve the quality of life for
all rural Americans. RD invests in rural America with loan, grant, and
loan guarantee programs to help drive economic security and prosperity.
USDA's RHS offers a variety of programs to build or improve housing
and essential community facilities in rural areas. The Agency offers
loans, grants and loan guarantees for single- and multi-family housing,
childcare centers, fire and police stations, hospitals, libraries,
nursing homes, schools, first responder vehicles and equipment, housing
for farm laborers and much more.
Multi-Family housing programs assist rural property owners through
loans, loan guarantees, and grants that enable owners to develop and
rehabilitate properties for low-income, elderly, and disabled
individuals and families as well as domestic farm laborers.
Community Facilities Programs offer direct loans, loan guarantees
and grants to develop or improve essential public services and
facilities in communities across rural America. These amenities help
increase the competitiveness of rural communities in attracting and
retaining businesses that provide employment and services for their
residents.
OMB revised several parts of OMB Guidance for Grants and Agreements
which is now called OMB Guidance for Federal Financial Assistance which
are applicable to all federal agencies. This guidance can be found in
Title 2 of the Code of Federal Regulations (CFR) (2 CFR part 200). The
revisions were published in the Federal Register on April 22, 2024, at
89 FR 30046, and are required to be implemented by October 1, 2024.
This final rule is being published as a technical-administrative
correction to ensure the Agency's audit and financial statement
requirements align with the OMB revisions made to 2 CFR part 200.
II. Summary of Changes
This rulemaking makes the following changes:
(1) Updates Sec. 1942.17 to increase the $750,000 audit threshold
to $1,000,000.
(2) Updates Sec. 3560.308 to increase the $750,000 audit threshold
to $1,000,000.
(3) Updates Sec. 3570.51 to remove the 2 CFR issue date.
(4) Updates Sec. 3570.80 to replace the term ``applicant'' with
``recipient'' or ``subrecipient.''
III. Executive Orders
Executive Order 12372--Intergovernmental Consultation
These loans are subject to the provisions of Executive Order 12372,
which requires intergovernmental consultation with State and local
officials. RHS conducts intergovernmental consultations for each loan
in accordance with 2 CFR part 415, subpart C.
Executive Order 12866--Regulatory Planning and Review
This final rule is exempt from OMB review for purposes of Executive
Order 12866 and, therefore, has not been reviewed by OMB.
Executive Order 12988--Civil Justice Reform
This final rule has been reviewed under Executive Order 12988. In
accordance with this rule: (1) unless otherwise specifically provided,
all State and local laws that conflict with this rule will be
preempted; (2) no retroactive effect will be given to this rule except
as specifically prescribed in the rule; and (3) administrative
proceedings of the National Appeals Division of the Department of
Agriculture (7 CFR part 11) must be exhausted before bringing suit in
court that challenges action taken under this rule.
Executive Order 13132--Federalism
The policies contained in this final rule do not have any
substantial direct effect on States, on the relationship between the
National Government and the States, or on the distribution of power and
responsibilities among the various levels of government. Nor does this
final rule impose substantial direct compliance costs on State and
local governments. Therefore, consultation with the States is not
required.
Executive Order 13175--Consultation and Coordination With Indian Tribal
Governments
This final rule has been reviewed in accordance with the
requirements of Executive Order 13175, Consultation and Coordination
with Indian Tribal Governments. Executive Order 13175 requires Federal
agencies to consult and coordinate with tribes on a government-to-
government basis on policies that have tribal implications, including
[[Page 96858]]
regulations, legislative comments or proposed legislation, and other
policy statements or actions that have substantial direct effects on
one or more Indian tribes, on the relationship between the Federal
government and Indian tribes or on the distribution of power and
responsibilities between the Federal government and Indian tribes.
Consultation is also required for any regulation that preempts tribal
law or that imposes substantial direct compliance costs on Indian
tribal governments and that is not required by statute.
The Agency has determined that this final rule does not, to its
knowledge, have tribal implications that require formal tribal
consultation under Executive Order 13175. If a Tribe requests
consultation, the RHS will work with the Office of Tribal Relations to
ensure meaningful consultation is provided where changes, additions and
modifications identified herein are not expressly mandated by Congress.
Congressional Review Act
This final rule is not subject to the Congressional Review Act
(``CRA'') (5 U.S.C. 801 et seq.), as the CRA provides an exemption for
any rule relating to agency management or personnel and for rules
relating to agency organization, procedure, or practice that does not
substantially affect the rights or obligations of non-agency parties.
Assistance Listing Number
The Assistance Listing Numbers assigned to the programs affected by
this final rule are 10.405--``Farm Labor Housing Loans and Grants,''
10.415--``Rural Rental Housing Loans,'' 10.427--``Rural Rental
Assistance Payments,'' and 10.766--``Community Facilities Loans and
Grants.'' The Assistance Listings are available at <a href="http://SAM.gov">SAM.gov</a>.
Paperwork Reduction Act
This final rule contains no reporting or recordkeeping provisions
under OMB Control Numbers 0575-0015 and 0575-0089 requiring OMB
approval under the Paperwork Reduction Act of 1995 (44 U.S.C. chapter
35).
National Environmental Policy Act
In accordance with the National Environmental Policy Act of 1969,
Public Law 91-190, this final rule has been reviewed in accordance with
7 CFR part 1970 (``Environmental Policies and Procedures''). The Agency
has determined that: (i) this action meets the criteria established in
7 CFR 1970.53(f); (ii) no extraordinary circumstances exist; and (iii)
the action is not ``connected'' to other actions with potentially
significant impacts, is not considered a ``cumulative action'' and is
not precluded by 40 CFR 1506.1. Therefore, the Agency has determined
that this action does not have a significant effect on the human
environment, and therefore neither an Environmental Assessment nor an
Environmental Impact Statement is required.
Regulatory Flexibility Act Certification
This final rule has been reviewed with regard to the requirements
of the Regulatory Flexibility Act (5 U.S.C. 601-612). The undersigned
has determined and certified by signature on this document that this
final rule will not have a significant economic impact on a substantial
number of small entities since this rulemaking action does not involve
a new or expanded program nor does it require any more action on the
part of a small business than required of a large entity.
Administrative Pay-As-You-Go Act of 2023
Section 270 of the Administrative Pay-As-You-Go Act of 2023 (Pub.
L. 118-5, div. B, title III, 137 Stat 31) amended 5 U.S.C. 801(a)(2)(A)
to require U.S. Government Accountability Office (GAO) to assess agency
compliance with the Act, which establishes requirements for
administrative actions that affect direct spending, in GAO's major rule
reports. The Act does not apply to this rule because it does not
increase direct spending.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act (UMRA), Public Law
104-4 (2 U.S.C. 1501 et seq.), establishes requirements for Federal
Agencies to assess the effects of their regulatory actions on State,
local, and tribal Governments and on the private sector. Under section
202 of the UMRA, Federal Agencies generally must prepare a written
statement, including cost-benefit analysis, for proposed and final
rules with ``Federal mandates'' that may result in expenditures to
State, local, or tribal Governments, in the aggregate, or to the
private sector, of $100 million or more in any one year. When such a
statement is needed for a rule, section 205 of the UMRA generally
requires a Federal Agency to identify and consider a reasonable number
of regulatory alternatives and adopt the least costly, most cost-
effective, or least burdensome alternative that achieves the objectives
of the rule.
This final rule contains no Federal mandates (under the regulatory
provisions of title II of the UMRA) for State, local, and tribal
Governments or for the private sector. Therefore, this final rule is
not subject to the requirements of sections 202 and 205 of the UMRA.
E-Government Act Compliance
RD is committed to the E-Government Act (44 U.S.C. 101 et seq.),
which requires Government agencies in general to provide the public the
option of submitting information or transacting business electronically
to the maximum extent possible and to promote the use of the internet
and other information technologies to provide increased opportunities
for citizen access to Government information and services, and for
other purposes.
Civil Rights Impact Analysis
RD has reviewed this final rule in accordance with USDA Regulation
4300-4, Civil Rights Impact Analysis, to identify any major civil
rights impacts the rule might have on program participants on the basis
of age, race, color, national origin, sex, disability, or marital or
familial status. Based on the review and analysis of this final rule
and all available data, issuance of this final rule is not likely to
negatively impact low and moderate-income populations, minority
populations, women, Indian tribes, or persons with disability, by
virtue of their age, race, color, national origin, sex, disability, or
marital or familial status. No major civil rights impact is likely to
result from this final rule.
USDA Non-Discrimination Statement
In accordance with Federal civil rights laws and USDA civil rights
regulations and policies, the USDA, its Mission Areas, agencies, staff
offices, employees, and institutions participating in or administering
USDA programs are prohibited from discriminating based on race, color,
national origin, religion, sex, gender identity (including gender
expression), sexual orientation, disability, age, marital status,
family/parental status, income derived from a public assistance
program, political beliefs, or reprisal or retaliation for prior civil
rights activity, in any program or activity conducted or funded by USDA
(not all bases apply to all programs). Remedies and complaint filing
deadlines vary by program or incident.
Program information may be made available in languages other than
English. Persons with disabilities who require alternative means of
communication to obtain program information (e.g., Braille, large
print,
[[Page 96859]]
audiotape, American Sign Language) should contact the responsible
Mission Area, agency, or staff office; or the 711 Relay Service.
To file a program discrimination complaint, a complainant should
complete a Form AD-3027, USDA Program Discrimination Complaint Form,
which can be obtained online at <a href="http://www.usda.gov/sites/default/files/documents/ad-3027.pdf">www.usda.gov/sites/default/files/documents/ad-3027.pdf</a>, from any USDA office, by calling (866) 632-9992,
or by writing a letter addressed to USDA. The letter must contain the
complainant's name, address, telephone number, and a written
description of the alleged discriminatory action in sufficient detail
to inform the Assistant Secretary for Civil Rights (ASCR) about the
nature and date of an alleged civil rights violation. The completed AD-
3027 form or letter must be submitted to USDA by:
(1) Mail: U.S. Department of Agriculture, Office of the Assistant
Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC
20250-9410; or
(2) Fax: (833) 256-1665 or (202) 690-7442; or
(3) Email: <a href="/cdn-cgi/l/email-protection#4d1d3f222a3f2c20630423392c26280d383e292c632a223b"><span class="__cf_email__" data-cfemail="5f0f2d30382d3e327116312b3e343a1f2a2c3b3e71383029">[email protected]</span></a>.
List of Subjects
7 CFR Part 1942
Business and industry, Community facilities, Fire prevention, Grant
programs--business, Grant programs--housing and community development,
Grant programs--Indians, Indians, Loan programs--agriculture, Loan
programs--housing and community development, Loan programs--Indians,
Loan programs--natural resources, Reporting and recordkeeping
requirements, Rural areas, Soil conservation, Waste treatment and
disposal, Water supply, Watersheds.
7 CFR Part 3560
Accounting, Administrative practice and procedure, Aged, Conflicts
of interest, Government property management, Grant programs--housing
and community development, Insurance, Loan programs--agriculture, Loan
programs--housing and community development, Low- and moderate-income
housing, Migrant labor, Mortgages, Nonprofit organizations, Public
housing, Rent subsidies, Reporting and recordkeeping requirements,
Rural areas.
7 CFR Part 3570
Administrative practice and procedure, Fair housing, Grant
programs--housing and community development, Housing, Low- and
moderate-income housing, Reporting and recordkeeping requirements,
Rural areas.
7 CFR Part 5001
Business and industry, Community development, Community facilities,
Energy conservation, Fees, Loan programs--natural resources, Renewable
energy, Rural areas, Rural development, Water and waste disposal.
Accordingly, for the reasons set forth in the preamble, the Agency
amends 7 CFR parts 1942, 3560, 3570, and 5001 as follows:
PART 1942--ASSOCIATIONS
0
1. The authority citation for part 1942 continues to read as follows:
Authority: 5 U.S.C. 301; 7 U.S.C. 1989.
Subpart A--Community Facility Loans
Sec. 1942.17 Community facilities.
0
2. Revise and republish Sec. 1942.17 paragraphs (q)(4) and (5) to read
as follows:
* * * * *
(q) * * *
(4) Audits. Any applicant that expends $1 million or more in
Federal financial assistance during their fiscal year must submit an
audit report conducted in accordance with 2 CFR part 200, subpart F,
``Audit Requirements.'' Applicants expending less than $1 million in
Federal financial assistance per fiscal year are exempt from 2 CFR part
200 audit requirements. All audits are to be performed in accordance
with the latest revision of the Generally Accepted Government
Accounting Standards (GAGAS), developed by the Comptroller General of
the United States. Further guidance on preparing an acceptable audit
can be obtained from any Agency office. It is not intended that audits
required by this part be separate and apart from audits performed in
accordance with State and local laws. To the extent feasible, the audit
work should be done in conjunction with those audits. Audits should be
supplied to the Processing Official within the timeframes stated in
paragraph (f) of this section. OMB Circulars and Agency Compliance
Supplements are available in any USDA/Agency office or OMB's website.
Any state, local government, or Indian tribe that is required by
constitution or state statute, in effect on January 1, 1987, to undergo
its audits less frequently than annually, is permitted to undergo its
audits biennially, pursuant to 2 CFR 200.504(a). This requirement must
still be in effect for the biennial period. Any nonprofit organization
that had biennial audits for all biennial periods ending between July
1, 1992, and January 1, 1995, is permitted to undergo its audits
biennially, pursuant to 2 CFR 200.504(b). All biennial audits must
cover both years within the biennial period.
(5) Exemption from audits. Except as noted in 2 CFR 200.503,
``Relation to other audit requirement,'' public bodies or nonprofits
expending less than $1 million in Federal awards during its fiscal
year, whose payments are current, and are having no signs of
operational or financial difficulty may submit a management report. A
management report, at a minimum, will include a balance sheet and
income and expense statement. Financial information may be reported on
Form RD 442-2, ``Statement of Budget, Income and Equity'' and RD Form
442-3, ``Balance Sheet'', or similar. The following management data
will be submitted by the borrower to the servicing office. Records must
be available for review or audit by appropriate officials of the
Federal agency, pass-through entity, and Government Accountability
Office (GAO).
* * * * *
PART 3560--DIRECT MULTI-FAMILY HOUSING LOANS AND GRANTS
0
3. The authority citation for part 3560 continues to read as follows:
Authority: 42 U.S.C. 1480.
Subpart G--Financial Management
0
4. Revise and republish Sec. 3560.308 paragraphs (a)(2) and (3) to
read as follows:
Sec. 3560.308 Annual financial reports.
* * * * *
(a) * * *
(2) Non-profit borrowers that receive $1 million or more in
combined Federal financial assistance must meet the audit requirements
set forth by OMB, Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards, found at 2 CFR parts 200 and
400. Borrowers must provide a copy of this audit to RHS in compliance
with these financial reporting requirements.
(3) Non-profit borrowers that receive less than $1 million, and
for-profit borrowers that receive less than $500,000 in combined
Federal financial assistance will submit annual owner certified
prescribed forms on the accrual method of accounting in accordance with
the Statements on Standards for Accounting and Review Services
promulgated by the Accounting and
[[Page 96860]]
Review Services Committee of the American Institute of Certified Public
Accountants (AICPA). Borrowers may use a CPA to prepare this
compilation report of the prescribed forms.
* * * * *
PART 3570--COMMUNITY PROGRAMS
0
5. The authority citation for part 3570 continues to read as follows:
Authority: 5 U.S.C. 301; 7 U.S.C. 1989.
Subpart B--Community Facilities Grant Program
0
6. Revise and republish Sec. 3570.51 paragraph (j) to read as follows:
Sec. 3570.51 General.
* * * * *
(j) The Office of Management and Budget (OMB) issued guidance on
Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards at 2 CFR part 200. In 2 CFR part 400.1,
the Department adopted OMB's guidance in subparts A through F of 2 CFR
part 200, as supplemented by 2 CFR part 400, as the Department's
policies and procedures for uniform administrative requirements, cost
principles, and audit requirements for federal awards. As a result,
this regulation contains references to 2 CFR part 200 as it has
regulatory effect for the Department's programs and activities.
* * * * *
0
8. Revise and republish Sec. 3570.80 to read as follows:
Sec. 3570.80 Grant closing and delivery of funds.
(a) ``Community Facilities Grant Agreement'' will be used as the
grant agreement between the Agency and the grantee and will be signed
by the grantee before grant funds are advanced.
(b) Approval officials may require recipients to record liens or
other appropriate notices of record to indicate that personal or real
property has been acquired or improved with Federal grant funds and
that use and disposition conditions apply to the property as provided
by 2 CFR part 200, as subsequently modified.
(c) Approval officials may require recipients to record liens or
other appropriate notices of record to indicate that personal or real
property has been acquired or improved with Federal grant funds and
that use and disposition conditions apply to the property as provided
by 2 CFR part 200 as adopted by USDA through 2 CFR part 400 as
subsequently modified.
(d) Grant funds will not be disbursed until they are actually
needed by the recipient and all borrower or other funds are expended,
except when:
(1) Interim financing of the total estimated amount of loan funds
needed during construction is arranged,
(2) All interim funds have been disbursed, and
(3) Agency grant funds are needed before RHS or other loans can be
closed.
(e) If grant funds are available from other agencies and are
transferred for disbursement by RHS, these grant funds will be
disbursed in accordance with the agreement governing such other
agencies' participation in the project.
PART 5001--GUARANTEED LOANS
0
7. The authority citation for part 5001 continues to read as follows:
Authority: 5 U.S.C. 301; 7 U.S.C. 1926(a); 7 U.S.C. 1932(a); 7
U.S.C. 8107.
Subpart F--Servicing Provisions
0
8. Revise and republish Sec. 5001.504 paragraph (c) to read as
follows:
Sec. 5001.504 Financial reports.
* * * * *
(c) Annual financial statements must be in accordance with
accounting practices acceptable to the Agency as prescribed in Sec.
5001.9 for all borrowers with a guaranteed loan balance in excess of
$600,000. The lender may determine the type and frequency of financial
statements for borrowers with a total guaranteed loan balance below
$600,000 upon notification and justification to the Agency. This
section does not supersede the borrower financial statement
requirements of 2 CFR part 200, subpart F.
* * * * *
Joaquin Altoro,
Administrator, Rural Housing Service.
[FR Doc. 2024-28168 Filed 12-5-24; 8:45 am]
BILLING CODE 3410-XV-P
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