1. The Governors Grants Office Presents: Smart Issues for Effective Grants Management Governors Grants Office Higher Education Conference May 22, 2012 Martin OMalley, Governor Anthony Brown, Lt. Governor

2. What We Will Cover Today! Best Practices in Grant Management Sustainability Strategies Legal Considerations in Distinguishing Subrecipients from Vendors We want this to be interactive!

3. Best Practices in Grant Management Yippee - We got the grant! Everyone is thrilled, your boss, colleagues, etc. Oh no – We got the grant! And, reality sets in!

4. Best Practices in Grant Management What is Effective Grants Management? Process or result of adequate overall oversight and monitoring of grant awards that includes project resources, activities and results. Begins BEFORE the award is signed.

5. Best Practices in Grant Management Organize for Receipt and Management of Funding Upon award convene all stakeholders ASAP (AIMM meetings at AACC) Effective communication is essential/Building a consensus Help keep team on task

6. Best Practices in Grant Management Compliance Issues: –Federal/State government funding Authorizing legislation Code of Federal Regulations OMB Circulars Accountability & transparency –Foundation funding Accountability & transparency Endorsement requirements Conflicts of interest –Individual donations Accountability & transparency Endorsement requirements Conflicts of interest

7. Best Practices in Grant Management Develop a Task Management Plan (Metrics, Fiscal Reporting, Program Reporting) Maintain a Sound Purchasing System Follow Necessary Personnel Practices Manage Property Purchased with Grants System of Quality Review and Control

8. Sustainability Strategies Plan from DAY ONE Collaborate, Collaborate, Collaborate Employers/Community Partners Engaged

9. Sustainability Strategies Align with similar projects within your organization Be knowledgeable about other funding sources Success of project is important factor – did it build goodwill?

10. Distinguishing Subrecipients from Vendors OMB Circular A-110 Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations OMB Circular A-133 Audits of States, Local Governments, and Non-Profit Organizations

11. OMB Circular A-133 §___.105 Definitions Subrecipient means a non-Federal entity that expends Federal awards received from a pass-through entity to carry out a Federal program, but does not include an individual that is a beneficiary of such a program. Guidance on distinguishing between a subrecipient and a vendor is provided in OMB Circular A-133§___.210.

12. OMB Circular A-133 §___.210 (b) Federal award. Characteristics indicative of a Federal award received by a subrecipient are when the organization: (1) Determines who is eligible to receive Federal financial assistance; (2) Has its performance measured against whether the objectives of the Federal program are met; (3) Has responsibility for programmatic decision making; (4) Has responsibility for adherence to applicable Federal program compliance requirements; and (5) Uses the Federal funds to carry out a program of the organization as compared to providing goods or services for a program of the pass-through entity.

13. OMB Circular A-133 §___.105 Definitions Who is Not a Subrecipient? Vendor means a dealer, distributor, merchant, or other seller providing goods or services that are required for the conduct of a Federal program. These goods or services may be for an organization's own use or for the use of beneficiaries of the Federal program. Additional guidance on distinguishing between a subrecipient and a vendor is provided in OMB Circular A-133 §___.210

14. OMB Circular A-133 §___.210 (c) Payment for Goods and Services. Characteristics indicative of a payment for goods and services received by a vendor are when the organization: (1) Provides the goods and services within normal business operations; (2) Provides similar goods or services to many different purchasers; (3) Operates in a competitive environment; (4) Provides goods or services that are ancillary to the operation of the Federal program; and (5) Is not subject to compliance requirements of the Federal program.

15. OMB Circular A-133 §___.210 (d) Use of judgment in making determination. There may be unusual circumstances or exceptions to the listed characteristics. In making the determination of whether a subrecipient or vendor relationship exists, the substance of the relationship is more important than the form of the agreement. It is not expected that all of the characteristics will be present and judgment should be used in determining whether an entity is a subrecipient or vendor.

16. Why Does it Matter? Different Terms and Conditions: All grant terms and conditions apply to Awards and Subawards Almost all of the requirements for the primary recipient flow down to the subrecipient, but not to vendors Vendor Contracts are governed by procurement rules of Grantee and terms of the contract Subrecipients are subject to full audit Vendors are not Vendors may receive profits or fees Subrecipients generally may not Subrecipients are treated same as recipient

17. Why Does it Matter? Different Procedural Requirements: Vendor- Free and Open Competition Subrecipient – Prior Federal Approval Usually in proposal Subrecipient – Limits on ability to terminate Vendor contract terms spell out termination rights Subaward is cost-reimbursement agreement Vendor contract can be fixed-price, time and materials, etc.

18. Why Does it Matter? Subrecipients/Subgrantees are subject to the audit requirements of OMB Circular A-133 Vendor compliance – ensure that procurement of, receipt, and payment for goods and services comply with law Program compliance do not normally pass through to vendors Recipient responsible for ensuring that vendor transactions are in compliance with program Vendors records must be reviewed to determine program compliance

19. Procurement Applicability Per COMAR 21.01.03.04 This title does not apply to any procurement or contract to the extent of any conflict with: –A governing federal law, regulation, assistance instrument, or other requirement; or –The terms of any gift as defined in Article 1, Subsection 22, Annotated Code of Maryland A grant from anywhere other than the federal government is treated as a gift.

20. Thank you! Kathy Bolton, Executive Director Sponsored Programs Anne Arundel Community College kebolton@aacc.edu 410.777.2028 Merril Oliver, Deputy Director Maryland Governor's Grants Office moliver@gov.state.md.us President, National Grants Management Association NGMA.org