March 12, 1987

Memorandum for the Heads of Executive Departments and Agencies

Subject: Uniform Requirements for Grants to State and Local Governments

In 1971, the Office of Management and Budget (OMB) issued standards governing the fiscal and administrative requirements for grants and assistance to State and local governments in Circular A - 102, ``Uniform Requirements for Assistance to State and Local Governments.'' Circular A - 102 was a significant step toward the simplification of grants management at the time. However, after 16 years, some of the provisions are out of date, there are gaps where the standards do not cover important areas, and agencies have interpreted the circular in numerous different ways in their regulations. It is now time for the circular to be revised to reflect developments consistent with our Federalism policies and State and local regulatory relief objectives and the President's Management Improvement Program.

A 20-agency Task Force under the President's Council on Management Improvement, chaired by the OMB, was established to review OMB Circular A - 102 and suggest ways to simplify grants management requirements. To complete this effort, I hereby direct the following actions:

1. The OMB will revise Circular A - 102 to specify uniform, Government-wide terms and conditions for grants to State and local governments and provide policy guidance to Federal agencies on grants management.

2. Within 90 days of the date of this memorandum, all affected Executive departments and agencies shall simultaneously propose common regulations that adopt the Government-wide terms and conditions verbatim, except where there are inconsistent statutory requirements. Within one year of the date of this memorandum, such departments and agencies shall issue common regulations.

3. The OMB shall consult periodically with State and local governments and other affected organizations and interest groups to consider improvements in grants management.

Ronald Reagan