Presentation on theme: "Office of Grants Management Grants Management Fundamentals"— Presentation transcript:
1Office of Grants Management Grants Management Fundamentals Office of the National Coordinator for Health Information Technology (O N C)Grants 101
2Office of Grants Management – Organization and Functions Systems and Data ManagementBianca CostaCollect, report, and manage grants management dataAnalyze grant data to identify trends in implementation of fundsONC administrator for grants management systemsGMO: WorkforceTraining andTechnical AssistanceJen CramerDevelop and deliver grants management training for external stakeholders and ONC staffProvide customized, direct technical assistance servicesCoordinate overall grants management training and technical assistance effortsGMO: Beacon and SHARPGrant OperationsArlene RamseyProvide procedural and technical business support to award recipients and ONC program officesConduct on-site monitoring visits and desk reviewsDevelop grants management standard operating proceduresGMO: REC and State HIEOffice of Grants Management (OGM)Lisa LewisChief Grants Management OfficerPolicyWendy KilgoreDevelop and manage ONC grants management policiesFacilitate objective reviewsLiaison with other HHS Grants Management OfficesSystems and Data SupportBianca CostaCameline ToroGeoffrey NtosiPolicyWendy KilgoreTraining/TAJen CramerWes DayOperationsArlene RamseyMonifa ConstantKiki HallounYolanda TeagleFront OfficeEllen Wesley2
3O G M - Responsible for the Portfolio of O N C Cooperative Agreements Workforce:CompetencyExaminationCurriculumDevelopmentCentersUniversityBasedTrainingCommunityCollegeSHARPBeaconRegionalExtensionStateHealthInformationExchange156 Cooperative Agreements Totaling $1,554,218,978HIE - $547,703,438REC (62 awards)SHARP – (4 awards) $60,000,000BEACON – (17 awards) $219,999, new awards $30,000,000Community Colleges - $35,725,590Curriculum Development - $10,000,000Competency Exams - $6,000,000University Based Training - $32,000,0009 non-ARRA agreements
4O N C’s Program Offices and Grants Office Partnership Answer granteequestions on complextechnical grantsbusinessmanagement mattersPerform budgetanalyses & businessmgmt capabilityassessments &perform budgetnegotiationsTake action towithhold payment,suspend or terminateaward or to liftwithholding orsuspensionProvide input onsatisfaction ofbusiness mgmtspecial conditions;lift restrictionsvia NGAIdentify potential orexisting problems(business mgmt& program)& alert POEnsure effectiveuse of fundsby monitoringcommitments &projecting futurefunding requirementsReview financialstatus reports &evaluate financialperformance againstbudget, programplan, etc.Document site visits& desk reviews& coordinate resultswith program officeConduct financialmonitoring site visits& providepost-award TAEstablish &maintainofficial award,program information, & institutional filesGrantsManagementTeamWhat is my role as a Grants Management Professional?Grants management expertsGMO delegated specific authority to enter the Government into legally binding agreementsGrants management team (GMOs and Specialists) handle the business and other non-programmatic areas of grant award and administrationEnsure that for grants under their cognizance, both federal staff and grantees fulfill applicable statutory, regulatory, and administrative policy requirements, both pre and post awardThe GMO will ensure consistency across all programs: (1) bi-weekly Grants Steering Group Meetings (2) Program Information Notices and Program Announcement Letters (3) Standardized implementation of the same requirements – financial status reports; contract prior approvals; budget reviews, etc.AAGAM Chapter
5O N C’s Program Offices and Grants Office Partnership Answer granteequestions onprogrammaticgrants mattersAssist in ensuringbudget submissions& expenditurescomply with statute,regulation, & policyProvide programinput on proposedwithholding ofpayment/suspension/termination of award& input beforeliftingProvide input onwhether programmaticspecial conditionsare satisfied orwhether other actionshould be takenIdentify potential orexisting problems(program & businessmanagement) & alertprogram officials& GMO of findingsEnsure adequateprogress towardmeetingmilestonesReview programprogress reports &evaluate programperformance,progress& changes in scopeor objectiveDocumentreviews & granteediscussions &providedocumentationto GMOfor official fileConduct site visitsto gauge progressand complianceor to providepost-award TAEstablish andmaintain POfilesProjectOfficersWhat is my role as a Project Officer (PO)?Implement and execute program grants administration functionsSubject matter expertsDefine programmatic objectives; describe objectives in program announcements; evaluate compliance with objectives; provide advice on the scientific or programmatic suitability of applications for fundingProvide subject matter expertise in post-award administration AAGAM Chapter
6Partnership – The Key to Success Maximize program success and integrityFoster program credibilityEnsure rigor in stewardshipMinimize audit findingsReduce disallowed costsStrengthen internal controls to prevent fraud, waste, and abuseManage inherent riskEncourage professional developmentFoster synergy/collaboration
7Grants Management Lifecycle Review FOASubmit ApplicationRevise ApplicationReview Award PackageAccept AwardDrawdown FundsSubmit Financial ReportsSubmit Performance ReportsSubmitPost-Award RequestsEnsure Audit is CompleteGenerate Final Performance ReportsComplete Drawdown of FundsGenerate Final Financial ReportsSubmit Closeout PackageRetain RecordsLegend:PHASEGranteeOffice of Grants ManagementProgram OfficeONC BudgetOther Federal/HHS EntitiesPO/GMO JointProgram and Grants Management Training and Technical AssistanceAssist ApplicantsEstablish CommitmentsAPPLYReview Closeout PackageConduct Final Financial ReconciliationNotify Grantee of CloseoutEstablish Disposition of FundsEvaluate Final Performance ReportsCLOSEOUTObligate FundsSet Up Congressional Notification in SystemRelease FundsCreate Notice of Grant AwardAWARDNotify Grantee of AwardConduct Appropriations AnalysisDevelop Funding Opportunity Announcement (FOA)Release FOAAppropriationOMB ApportionmentAuthorizing StatuteESTABLISHAllocate FundsReview and Approve Post-Award ActionsConductFinancial MonitoringReviewFinancial ReportsReview Performance ReportsReview AuditsConduct Programmatic MonitoringMANAGEReview /Recommend Post-Award ActionsReview ApplicationPerform Budget ReviewObjective ReviewAssess Fiscal IntegrityDevelop Funding MemoREVIEWAssess Funds AvailabilityThe grants management life cycle has many stages. In each stage there are key actions that must happen in order for a grant program to be successful. During the presentation we will walk - each stage and discuss the foundational rules and regulations, different roles and responsibilities, importance of each.7
9Appropriations and Funding Process Phase 1: Budget FormulationPhase 2: Budget Presentation and the Congressional ProcessPhase 3: Budget Execution9
10Budget FormulationHHS Budgets for Grant ProgramsHHS Budget RequestHHS Total Budget RequestO M B/President’s Budget to Congress
11AppropriationsBudget Presentation to CongressCongressional Budget ResolutionAppropriation
12Office of Management and Budget (O M B) Apportionment Budget ExecutionOffice of Management and Budget (O M B) ApportionmentBudget Authority to distribute fundsHHS AllotmentO N C AllotmentAllocations to Each Grant Program
13Types of Appropriations Annual: Must be obligated within the fiscal yearO N C funds in HHS appropriationsMultiple Year: Available for obligation for a definite period in excess of one fiscal yearHHS has multi-year fundsNo-year: Available for obligation without financial year limitationsA R R A funding no longer no year (Bennett Amendment)Annual funding expires at the end of the fiscal year in which it was appropriated.
14Continuing Resolution Applies if new Fiscal Year and annual appropriation is not passedContinues existing programs until annual appropriation passesCan impact internal operations and activitiesLegislation in the form of a joint resolution enacted by Congress, when the new fiscal year is about to begin or has begun, to provide budget authority for Federal agencies and programs to continue in operation until the regular appropriations acts are enacted.”The national government's budget calendar runs from October 1st - September 30th of each year. Each federal department, agency and program is authorized to spend congressionally specified amounts of money. That money cannot be spent, however, unless it is explicitly appropriated. For example, an agency might be authorized to spend $2 billion on a program, but it does not actually have that money to spend until it is appropriated for that program.
15Funding Opportunity Announcement (FOA) All information integral to the competition must be explicitly addressedGeneral descriptionAuthorizing statute/Award informationEligibility requirementsCost share/matching requirementsApplication requirementsFormsBudget and budget narrativeProgram narrativeOther submission requirementsDue datesReview CriteriaAnnouncement datesReporting requirementsOther informationThe end result of the Establish grant period is the FOA.AAGAM Part 2: Pre-Award Chapter Information for Potential Applicants Competing for Grants
17Applying for FundingHHS policy requires all competitive funding opportunities be announced atO M B mandated initiativeNo paperNo other submission method acceptedPL (which has since sunset) mandated that organizations move towards eGovernment. This law first required adoption of the DUNS in all grant systems/applications. This has since moved to posting announcements and receiving applications electronically… - Grants.govGrants.gov is a portal to receive applications. There is no functionality to administer awards - grants.gov.Applications submitted - grants.gov are pulled into GATES, where ONC staff can review and process the applications/awards.Grants.gov Help Desk: If applicants experience technical difficulties in Grants.gov, customer service can be reached by at or by phone at ( GRANTS). The Customer Support Center is open 24 hours a day, 7 days a week, excluding Federal holidays. To expedite inquiries, grantees are asked to have the following information at hand: Funding Opportunity Number, Name of Agency You Are Applying To, and the specific Area of Concern.
18Critical Application Information Applications must be complete and timelyAll forms and attachments must be submittedIncomplete applications will not be sent forward for reviewLate applications will not be sent forward for reviewAll applicants must have a Dun and Bradstreet (D&B) Data Universal Numbering System (D U N S) numberAll applicants must register in the Central Contractor Registry (CCR)Applicants should allow a minimum of five days to complete the CCR registration. CCR online registration (http://www.ccr.gov)CCR registrations must be current and renewed every 12 monthsApplicants that do not have a D U N S number or have not registered with the CCR will not move forward for review.
20Objective Review Process Completeness ReviewGrants staffAll required formsAll required attachmentsOn-time submissionResponsiveness ReviewProgram staffAll required program elementsIf YES to both → Panel review
21Objective Review Process - continued Panels of unbiased subject matter expertsEndure no conflicts of interest and consistent examination of applicationsIntended to provide recommendations and advice on funding proposalsScores and ranking developedFinal decisions determined by the program officeFunding decision memo sent to Grants Management OfficeObjective review/panel scores are intended to provide recommendations.Minim of 3 reviews to each applicationScores are normalized and applications rankedJustification necessary for applications funded out of rank orderProgram officials may perform additional reviews if necessary but must provide sufficient documentationFunding decision memo from PO to CGMOGMO for the programGMO policyBudgetDeputy National CoordinatorsNational CoordinatorCGMO—final sign off
22Program Office Financial Review Program Office StaffReview application budget to determine if costs are in line with program goals and objectivesReview to ensure costs are for intended program purposesSigned transmittal slip indicating approval of budgetGrants Management StaffConduct detailed financial reviewsBased on Program Office recommendationsCoordination during the budget review process is critical to the success of the grantee’s projects and the program overall.Program reviews to tie program goals back to costs in budget.Grants reviews for compliance with rules and regulations
23No Conflict of Interest Financial ReviewA-133 ComplianceNo Conflict of InterestApplicant’s Standing (Good, Debarred, Suspended)https://www.epls.gov/Dun and BradstreetBudget ReviewA review the organization and past performance can indicate if a grantee may require additional oversight.Have audits been submitted on time?What findings related to HHS grants (or grants in general)?Dun and Bradstreet review—credit risk, cash, revenues, etcHistoricalReview of itemized budget
24Budget Review and Approval Process Each application must include a detailed budget (SF424A) and budget narrative for the project.The budget must be complete, reasonable, allowable, allocable and cost effective in relation to the proposed project.The budget narrative must provide a detailed justification for each cost included in the budget.All project related costs must be included in the appropriate cost categories.Generally in the grants management life cycle budgets are reviewed and approved during the pre-award “review” phase.In order to get the $ out the door, ONC made conditional awards. The awards were made without approval of the budget.Grantees were awarded funds but could not access until released by OGM.
25Budget Review – Cost Principles Uniform cost principles when implementing Federal grant programs45 CFR and by reference 2 CFR Part 220 (A-21) – Educational Institutions2 CFR Part 225 (A-87) – State Local and Indian Tribal Governments2 CFR Part 230 (A-122) – Non-Profit Organizations48 CFR 31.2 (Federal Acquisition Regulation (F A R)) – For Profit OrganizationsGrant regulations requires that a cost be:Necessary to the performance of the projectAllowable (per FOA, cost principles, etc.)ReasonableAllocable to the project and consistently treatedPermissible under State and Federal laws and regulationsMust not result in a profit (Contractors generally have profit built in)For the prime or any subs that receive grantsClaimed against only one awardIf an item of cost does not pass all tests –not allowed under grant
26Budget Review – Object Categories and Key Requirements Example of a 424aClassification of Costs: Direct Costs and Indirect CostsDirect Costs: Costs that can be identified specifically with a particular award, project or service
27Budget Review – Personnel Budget Category Must pay personnel at a rate paid with non-Federal dollars or comparable to like organizations/positions.Is the basis for determining each employee’s compensation described (annual salary and % time devoted)?Is each position identified by title/responsibility?Are time commitments and the amount of compensation stated and reasonable?Are salary increases anticipated during the grant period and are they justified (C O L A, etc)Are any personnel costs unallowable?Dual Compensation?Federal Employee?Besides the 424a, grantees need to provide a budget narrative which details each budget category.The first budget category is Personnel.Personnel - Must pay personnel at a rate paid with non-Federal dollars or comparable to like organizations/positions. Must justify top 3 highest paid executives.
28Budget Review – Fringe Budget Category Fringe Benefits – typically include health care, retirement plans, etc. Must consider:Is the amount specified as a separate line item?Is each type of benefit indicated separately or does the organization have an approved fringe benefit rate?Are fringe increases contemplated during the grant period?Are costs included in fringe benefits that are unallowable?Fringe Benefits - Must pay fringe benefits at the same percentage as paid with non-Federal dollars or comparable to like organizations/positions.A grantee cannot include costs that are not actual fringe benefits included in the organization fringe benefit policy.Parking/Bonuses—cannot include for folks working on grant if not normally FB
29Budget Review – Travel Budget Category Is the basis for computation provided?Is the travel necessary for the purpose of the program?Are travel costs separately identifiable and reasonable (location, transportation, hotel, meals, mileage)?Does the organization have a written travel policy? Is this travel policy being followed?If no written policy—must follow Federal guidelinesTravel – Must be necessary for the program and must provide sufficient detail of costs.May use historical travel costs as basis.Items should be broken out; airfare, lodging, meals, etc.
30Budget Review – Equipment Budget Category Capitalization thresholdFederal $5K and useful life more than 1 yearAre equipment items specified by unit and cost?Is the request reasonable and allowable under the project?Does the organization have a procurement policy in place?Is a lease vs. purchase study necessary (vehicles, large items of equipment)?Are purchases distinguishable from rentals?Equipment - Must be reasonable and allowable
31Budget Review – Supplies Budget Category Are supplies listed separately?OfficeTrainingResearchOther types of suppliesHow was cost determined?Is the basis for the cost reasonable?Monthly estimates are sufficientConsistently treatedSupplies – Must be reasonable and allowableConsistently Treated – Direct/Indirect“Pick and Stick”Must be in IDC pool in indirect proposal/agreement
32Budget Review – Contractual Budget Category Is the type of each service to be rendered described?For Consultants/IndividualsIs an hourly, daily or weekly base rate given?Are rates allowable, justified, reasonable and comparable to market?Is procurement method described?Are appropriate procurement procedures being followed?Contractual - Must maintain sufficient control of the program and meet fair and open competition requirements.Procurement standards45 CFR Part 74.40; 45 CFR Part 92.36Procurement GMM provides additional guidance on procurement standards/policy
33Budget Review and Approval – Subrecipient Relationships Subrecipient Relationships (Subgrants/Subawards or Contracts)Is a substantial portion of the programmatic work being performed by another entity - a grant or contract?Subawards are documented in the “other” categorySubrecipient relationships in the form of a contract will be put in “contractual”If so, the following questions must be answered in regard to that specific grant or contract:Name of the subrecipientMethod of selectionPeriod of performanceScope of WorkMethod of AccountabilityItemized budget and justification (separate SF 424As for the subrecipient)ONC Reviews Subrecipient Documentation to determine if:There are any programmatic eligibility restrictions on who may perform the work.The proposed subaward is necessary to meet the objective of the project or activity described in the application.The grantee will retain adequate oversight of the subaward activity, andThe costs of the subaward are reasonable.OGM is not approving the contracts/subgrants themselves….we are approving the process the grantee is using to procure/award these contracts/grants.The grantees should have written policies and procedures which monitor activity/costs on subawardsThe grantee should have contractual deliverable tracking methods in place.The grantee is responsible for ensuring costs within contract/subawards are allowable
34Budget Review – Other Budget Category Are items listed by major type (space rental, printing, phone, maintenance, etc.)?Are all costs justified, reasonable and allowable?List each subaward and amount of awardEnsure adequate subrecipient information is provided(see 6 elements)Include separate SF 424 A for each subOther - Must describe costs in enough detail to ensure all costs are allowable. Must include subawards.
35Budget Review – Indirect Costs Costs incurred for a common/joint objective and cannot be readily identified with a specific activitytypically include utilities, rent, administrative staffAn organization may not charge specific costs both directly and indirectlyCosts may not be assigned as an indirect cost to an award if any other cost incurred for the same purpose has been allocated to an award as a direct costIndirect Costs - are not directly accountable to a cost object and often benefit more than one projectTo include in budget organizations must have a federally approved indirect cost rate agreement.HHS Division of Cost Allocation issues IDC agreements for non-profits.HHS DFAS issues IDC agreements to for profits organizations.Indirect Costs generally include:Maintenance of buildingsDepreciationRental expenseSalaries of non program-specific employees (accounting, hr, legal, etc.)
36Budget Review – Indirect Costs Indirect Costs (continued)Must have a current Federally approved indirect cost rate agreementIs the rate applied to the correct distribution base?Need to consider:Is IDC rate current?Applied to appropriate base?The rate agreement must indicate the rate, base, period, exclusions.Several types of ratesFinal/ProvisionalPredeterminedFixed (with Carry Forward)On-siteOff-siteResearchTrainingF&ABasesTotal direct costsTotal modified direct (excludes capitalized equipment and portion of subcontracts over $25k)Total direct labor (Salaries and FB)Total direct salaries and wages (exclusive of FB)
37Recently in the NewsTierOne loses $19 million federal grant over CEO's fraud allegationsSeptember 6, 2010University of Florida professor and wife indicted for fraudulent grant proposalsOctober 30, 2009Cornell University Will Pay $2.6M in Fraud CaseMarch 24, 2009Former Professor Pleads Guilty to Fraud on NSF GrantMay 3, 2007Switching gear…. Why do we do all these reviews? Let’s talk about misuse of funds….ONC does as much financial review up front to ensure that grantees understand rules and regulations – avoid violationsTierOne loses $19 million federal grant over CEO's fraud allegationsA Dallas-based telecommunications company has had a $19 million federal grant rescinded after government officials learned the company's chief executive had been accused of securities fraud.tier1_04bus.ART.State.Edition1.26c2ad1.htmlFormer Professor Pleads Guilty to Fraud on NSF GrantIn a rare case of prosecuted fraud in a National Science Foundation grant, a former professor at Tennessee State University has pleaded guilty to a federal felony charge of making false statements. The professor, Barbara A. Nye, was a former faculty member in the department of educational administration and executive director of its Research and Policy Center on Basic Skills.UF professor and wife indicted for fraudulent grant proposalsA UF nuclear engineering professor and his wife have been indicted by a federal grand jury and arrested on charges related to $3.7 million in fraudulent grant proposals submitted to NASA, the U.S. Air Force and the Navy.cc4c03286.htmlC.U. Will Pay $2.6M in Fraud CaseWeill Cornell Medical College has agreed to pay over $2.6 million to settle civil charges that Cornell defrauded the National Institutes of Health and the Department of Defense as it sought more than $14 million in federal research grants, Acting U.S. Attorney Lev Dassin announced earlier this month.case
38Categories of Misuse of Federal Funds Indicators of Fraud, Waste and Misuse of grant funds can be due to a variety of causes. We must manage with due diligence to ensure that DHHS funds are not misused.MistakesGross NegligenceCriminal FraudRecipient includes costs in budget which are unallowable under specific O N C awards. Examples include: Food, Scholarships, ContingenciesDirect recipient failed to implement proper internal controls and adequately monitor subrecipient activity and expenditures resulting in theft of Federal funds.Recipients used Federal funds to pay for a wedding reception, building construction, and personal credit card bills. Resulted in loss of $500K and jail time.Fraud is the intentional, unlawful acquisition of benefits (money & services) by perpetrating wrongful acts affecting government programs and operations
39Who Commits Grant Fraud? When business entities, individuals, communities, and other organizations receive federal grant dollars, they are entrusted with their appropriate expenditure.Grant fraud is most often committed by:Grant recipients, company officers, business partners, board members, and managersBookkeepers, financial staff, and employeesContractors and subcontractors engaged with the recipientRecipient consultantsFurther information:
40Common Grant Fraud Scenarios Grant fraud occurs in many ways, but some of the most common fraud scenarios include:Charging personal expenses as business expenses against the grantCharging for costs which have not been incurredCharging for inflated labor costs or hoursSubmitting invoices for personal expensesFalse information on grant applications, progress reports, etc.Creating fictitious recordsFurther information:
41Fraud IndicatorsFraud is often difficult to detect and is a conclusion that is determined only after a careful examination of all the facts and circumstances.Indicators of fraud include:One person in controlLack of internal controlsAltered recordsNo separation of dutiesNo prior auditLack of responsivenessAllegations of fraudulent conductInternal controls are KEY
42Grants Management Lifecycle –Award Obligate FundsEnsure Congressional NotificationRelease FundsCreate Notice of Grant AwardAPPLYESTABLISHREVIEWAWARDMANAGECLOSEOUTNotify Grantee of AwardLegend:PHASEGranteeOffice of Grants ManagementProgram OfficeONC BudgetOther Federal/HHS EntitiesPO/GMO JointAward stage42
43Notice of Grant Award (NGA) The Notice of Grant Award NGA is the official document used for grants/cooperative agreementsEstablishes legally binding arrangement between O N C and recipientEstablishes Period of PerformanceContains or references Terms and Conditions of the grant or cooperative agreementObligates Federal Funds
44Notice of Grant Award (NGA) NGA includes:Grantee informationAward informationProject Period of PerformanceBudget Period of PerformanceTerms and Conditions of the awardProject Period of Performance (POP)Example: 04/01/2010 – 3/31/2013May begin obligating expenditures 04/01/2010Not earlier unless pre-award costs are approvedBudget Period of PerformanceMay or may not be for the entire POPThe period in which the POP extends beyond budget period indicates intention to provided support contingent upon:Availability of fundsSatisfactory performanceContinued best interest of Federal governmentMay require submission of non-competing application
45Award Notification and Acceptance Grants SolutionsNGATerms and ConditionsAward AcceptanceFirst request for disbursement of fundsAgree to abide by all applicable laws, regulations, program requirements, policy and terms and conditionsSpecific A R R A terms and conditions (incorporated by reference)Specific program and/or award T&C are added, as appropriate. ONC/OGM has a set of standard T&C. These include references to the 45 CFR, 2 CFR, A-133, HHS Grants Policy StatementGreen ProcurementReporting requirementsPayment informationARRA specific T&C are also included.GPS: I-33 “A recipient indicates acceptance of an awards and its associated terms and conditions by drawing or requesting funds from the designated HHS payment systems or office.
46Grant vs. Cooperative Agreement Grants are awarded to States, units of local government, or private organizations at the discretion of the awarding agency or on the basis of a formula. Grants are used to support a public purpose.Cooperative Agreements are awarded to States, units of local government, or private organizations at the discretion of the awarding agency. Like grants, cooperative agreements also support a public purpose.Substantial involvement is anticipated between the awarding agency and the recipient during performance of the contemplated activity. View as a “partnership”Cooperative agreements are not contractsKey difference between a Grant and a Cooperative Agreement– Substantial involvement.AAGAM--Chapter : Determining Appropriate Award Instrument. Includes detailed descriptions, tables, authorities on funding instruments.
48Order of Precedence-Who is Top Dog? Constitution of the United StatesStatutesProgram Statutes (Authorizing Statutes)Generally Applicable StatutesAnnual AppropriationsRegulationsExecutive OrdersO M B CircularsPoliciesProceduresSometimes it may be confusing as to what rules to follow. The statute may say one thing, HHS policy says something else, your terms and conditions…..this is the Federal order of precedence.
49Administrative Requirements vs. Cost Principles Prescribe standards for grant administration to achieve uniformity and consistency for recipients of Federal AssistanceDefine allowable costs for different types of recipients; failure to mention a particular item of cost in the Cost Principles is not intended to imply that it is either allowable or unallowableAdministrative requirements– Prescribes standards for grants administrations. Promotes consistency across gov’tFinancial management systemsProcurement requirementsReportingRecord retentionCost Principles – describes what is a cost allowable at the highest levelMust refer to cost principle AND program policy (FOA)A cost may be allowable under circular and not allowable under a program
50Applicable Regulations Summary of Applicable RegulationsGrantee TypeAdministrative RequirementsCost PrinciplesAudit RequirementsState & Local Governments45 CFR Part 922 CFR, Part 225(A-87)A-133Educational Institutions45 CFR Part 7445 CFR and by reference 2 CFR Part 220 (A-21)Non-Profits2 CFR, Part 230(A-122)Hospitals45 CFR Part 74 Appendix E – Principles for determining costs applicable to research and development under grants and contracts with hospitalsFor Profit Organizations45 CFR Part 74 Subpart E- Special provisions for awards to commercial organizations (no additional alternative for program income)FAR 31.2
51Recipient Grants Management Responsibilities Grantee responsibilities include:Cash managementMaintaining adequate financial recordsReturning Federal funds for disallowed expendituresComplying with reporting requirementsReviewing and recording financial operationsBudgeting and budget reviewReporting irregularitiesRefrain from doing business with debarred and suspended organizationsCash management includes Accounting of receipts and expenditures; Federal and non- Federal sources; Disbursements; Interest45 CFR Parts 92 and 74HHS Grants Policy Statement
52Recipient Grants Management Responsibilities Managing Subawards A recipient has full responsibility for the conduct of the project or activity supported and for the results achievedDirect recipients are responsible for adequate monitoring of subawardee activities45 CFR Part or 74.51, Monitoring and Reporting Program Performance45 CFR Part 92.40, Monitoring and Reporting Program PerformanceGrantees are responsible for managing day to day activitiesMonitoring activities of subs
53Financial Management Systems At a minimum, a grantee’s financial system should be able to:Meet 45 CFR or 74.21, Standards for financial management systemsProvide financial and performance reporting required by 45 CFR Part 92 and 74, and other regulationsAssociate grant expenditures with the specific funding source and application of fundsProvide a clear audit trailComply with the Cash Management Improvement ActMinimize the time elapsing between the transfer of funds and disbursement by the grantee or subgrantee in accordance with Treasury Regulation 31 CFR 205.A State should follow the same state laws and procedures as they would for non-Federal fundsFinancial management systems must be able to record and report on the Receipt, Obligation, and Expenditure/Disbursement of grant funds
54Financial Management Systems – continued In order for an accounting system to be considered adequate, it must meet the following criteria:Internal controls / segregation of duties (For example, the person authorizing an expenditure should not sign the check)Ability to track expenditures on an accrual basis (budget control)Grantees can use a cash or accrual basis for their accounting methodEnsure allowability of costs charged to Federal grantsDocumentation for all grant-related expenditures, broken down by awardAbility to fulfill government-required financial reportingInternal controls - Person authorizing expenditure should not sign checkChart of accountsHow costs are coded in the financial systemCan be numerical, alphabetic, or alpha-numeric.The structure and headings of accounts should assist in consistent posting of transactionsReconciling of expenditures/payments to source documentation
55Matching and cost sharing are often used interchangeably Understanding MatchMatching and cost sharing are often used interchangeablyMatching usually refers to a statutorily specified percentageSpecified as a fixed or minimum percentage of non-Federal participation in allowable program or project costs that must be contributed by a recipient in order to be eligible for Federal funding or a not-to-exceed percentage of Federal participation.Cost Sharing refers to any situation in which the recipient shares in the costs of a project other than as statutorily required matchingApproved/accepted matching or cost sharing is shown in the NGAUnless restricted by statute or regulation, matching or cost sharing may be provided as direct and/or indirect costs.Recipient contributions may be derived from:any non-Federal source;or from other program income, if authorized by the OPDIV; otherwise,unless there is specific statutory authority, Federal funds may not be used to match HHS grant funds.Reference :AAGAM, ChapterGPS, II-4545 CFR Part Part 92.2455
56Understanding Match – continued Cash MatchCash spent for project related costsMatching costs must adhere to Federal rulesIf not allowed with Federal dollars, not allowable with matching dollarsIn-kind Matchare the value of goods and/or services third parties donate for program or project purposes without charge to a recipientThird party in-kind contributionsMay satisfy a matching or cost-sharing requirement only when payment for them would be an allowable cost if the party receiving the contributions (recipient, subrecipient, or cost-type contractor) were to pay for themCost-sharing requirements may NOT be met from the following sources:Costs paid by another Federal award or subaward.Costs or contributions used to satisfy a matching or cost-sharing requirement on another Federal grantIn-Kind“In-kind contributions” are the value of goods and/or services third parties donate for program or project purposes without charge to a recipient (or subrecipient or cost-type contractor under a grant).By definition, recipients do not provide in-kind contributions.Third party in-kind contributionsMay satisfy a matching or cost-sharing requirement only when payment for them would be an allowable cost if the party receiving the contributions (recipient, subrecipient, or cost-type contractor) were to pay for them.Use fair market value to determine valueKeep fair market value analysis in filesSource documentationVolunteer servicesmay be furnished by professional or technical personnel, consultants, or other skilled or unskilled labor.Volunteer services may be counted as matching or cost sharing if they provide an integral and necessary part of an approved program or project and if payment for them would constitute an allowable cost if the recipient had to pay for them.
57Understanding Match – continued All costs and contributions used to satisfy a matching or cost- sharing requirement must be documented by the recipient at the same level of detail as Federal fundsMatching contributions are subject to auditIf a recipient fails to provide required cost sharing, the GMO generally will make a downward adjustment in the Federal award amountMatching is not in proportion to drawdowns but to expenditures.If on a cash basis would be as cash exchanged handsIf on accrual would be based on when encumber—book in accounting system57
58Understanding Match – continued Valuation of in-kind contributions:Rates for volunteers must be consistent with established rates paid for similar work by the recipient or subrecipientIf a third party donates the use of equipment or space in a building but retains title, the contribution shall be valued at the fair rental rate of the equipment or spaceIf a third party donates supplies, the contribution shall be valued at the market value of the supplies at the time of donationValue based on service being provided not title the person holds or the function they come from.Eg. Attorney provided services and doing work as an “accountant”.Would charge rate of accountant not attorney.May be less than hourly rate of position holdDetermine how to make decision on valueMay require market research for specific grantee areaNot all areas pay the same rate (Washington DC vs Mobile, AL)Market research may be necessary for the serviceIf the recipient or subrecipient does not have employees performing similar work, rates used must be consistent with those paid for similar work in the labor market in which the recipient competes for the kind of services involved.When an employer other than the recipient, subrecipient, or cost-type contractor furnishes free of charge the services of an employee in the employee’s normal line of work, these services shall be valued at the employee’s regular rate of pay.If the donated services are in a different line of work, rates used must be consistent with those paid for similar work in the labor market in which the recipient competes for the kind of services involved.GPD II-4758
59Gross income earned as a result of the award Program IncomeGross income earned as a result of the awarddirectly generated by the grant-supported activity or earnedThere would be no income of this type or level.Activities that generate program income includeRegistration feesSale of videos, publications, other mediaRental/usage feesService feesSubject to same requirements as Federal fundsMust be reported on FFR (SF 425)Grants Management AdvisoryGrants Policy Statement II-62-6445 CFR part 74.2445 CFR Part 92.25Possible issue re Tuition—while it is income of the same type…would not be at the same level (difference courses, # courses)Royalties, Patents, Copyrights, inventions—only considered program income if noted in NGA (generally not program income)92.34 Copyrights--Even if not program income the Feds reserve a royalty-free, nonexclusive and irrevocable license to reproduce, publish and use…forever
60Program IncomeThe Notice of Grant Award includes the type of program income applicable to the Program/awardDeduction alternativeAddition alternativeCost Sharing/Matching alternativeCombination alternativeDeduction alternativeDeduct from total project costsEx: Allowable costs for a budget period = $100K. PI = $10K. Net funding = $90KAddition alternativeAdd to the funds committedUsed to further eligible project or program objectives.Allowable costs for a budget period = $100K. PI = $10K. Total project costs $110KCannot use for For-Profit organizationsCost Sharing/Matching AlternativeUsed to finance some or all of the non-Federal share of the projectIncome must meet all of the tests of allowability for cost-sharing or matching contributions from a non-federal sourceCombination AlternativeUsed when large amounts of program incomeMust specify amounts and typesCGMO will determine when this method is appropriate
61Prior ApprovalSeveral changes to an award require O N C prior approvalChanges of grantee organizationChange in scopeTransfer of substantive programmatic work if not previously approvedSignificant rebudgeting (lesser of 25% or $250K, cumulative)Other as defined by program officeChanges in key personnelCarry over fundsIndirect costs (if indirect costs not approved in initial budget)Request from grantee, with written justification, should be 30 days from when need approvalScope-Program office must define changes in scope other than those listed.Would be different for each program, and possibly each project/awardE.g. HIE—3 CANS…moving $$ bw CANSA prior-approval request for a post-award change must be:Initiated by the recipient (who must obtain that approval before taking the proposed change);In writing;Signed by an authorized organizational official ( or facsimile requests may be considered if submitted by an authorized organizational official); andTo ensure timely action, submitted directly to the GMO (see subparagraph A.3).MUST BE APPROVED BY PO BEFORE OGM WILL APPROVEReferences:GPS II-48AAGAM Chapter
62Payments to GranteesGrantees request funds from HHS’ Payment Management System (PMS)Payment requests may be made as often as needed: (daily, weekly, monthly, etc.)No checks; electronic transfers onlyAlso used to submit quarterly financial reportsPMS is administered by HHS’ Division of Payment ManagementPMS Helpdesk: (877) orGrantees must minimize time between draw and expenditureCash Management Improvement Act (CMIA)Immediate needs basis; funds must be spent within three business daysWhat may impact a grantee’s ability to draw funds?No budget approvalLate report submissionOther restrictionsRemember the first payment is the grantee’s acceptance of the award’s terms and conditions.Advances accrue interest. Must consider CMIA annual interest caps:$250 NGO$100 GovernmentThe Payment Management System (PMS) is administered by HHS’ Division of Payment Management.PMS helpdesk: (877) or
63Grantee Reporting Requirements Report RequiredFrequencyReporting PeriodDue DateSubmission MethodAmerican Recovery and Reinvestment Act (ARRA) ReportQuarterlyApril 1 – June 30July 10Federalreporting.govJuly 1 – September 30October 10October 1 – December 31January 10January 1 – March 31April 10Federal Financial Report (FFR) Federal Cash Transaction Report (SF-425)July 30Payment Management System (PMS)October 30January 30April 30Federal Financial Report (FFR) Federal (SF-425)AnnuallyOctober 1 – September 30December 30Online Data Collection System (OLDC)Program Progress ReportSemi-AnnuallyDetermined by Program OfficeCRM, , etc.Other requested questions…Cost share? Source of cost shareDescribe any deviations from your approved budget and budget narrativeDoes this change represent a change to your approved scope of work?Did you obtain prior approval from HHS/ONC for this changeAre there any impediments to your progress against the grant milestones/objectives? If so, what impediments and will these impediments impact your drawdown rate?What are your projected outlays for the next 6 months?Did you earn program income? If so, how much? Will you be applying this funding to your cost-share?Does your organization have any other Federal grants? If so, was there any possibility of overlap in expenditures (i.e. shared personnel charging to multiple grants)? If so, please explain
64Official Grant and Program Files Office of Grants Management filesOfficial award fileAll award transactions, financial information, correspondence, approvals, etcProgram information fileInformation for each program announcementInformation related to all applicationsInstitution fileContains information on a specific entity which receives multiple awards from multiple programsProject officer filesDocuments project management activities from inception to closeoutRecord of that PO’s activities with respect to the awardAuditor or reviewer will request to review for adequate documentationThe first step to managing effectively is to have a filing system.Grantees are required to keep files with adequate documentation.It is critical that project officers develop and maintain individual files for each award.
65Sample ChecklistSection 1 Applicant Submissions and Contacts – New Awards and Other Competing AwardsSection 2 Review, Evaluation, and Negotiations – New Awards and Other Competing AwardsSection 3 Award Notices and Restrictions/Special ConditionsSection 4 Post-Award Prior-Approval RequestsSection 5 Post-Award Monitoring and CloseoutSection 6 OtherSee checklist
66Financial and Programmatic Monitoring Financial MonitoringProgrammatic MonitoringEvidence of expenditures show that purchases are necessary, reasonable, allocable and allowableFlow of FundsAccounting SystemInternal ControlsCash ManagementA-133 SubmissionInterest accrual (as necessary)Programmatic AdministrationCompare accomplishments to goals and objectivesReinforce priorities and policiesAdherence to project scopePerformance according to Ops PlansProgress (completion on time)ObjectivesGrantee monitoring is another area where partnership between the program and grants office is important.Doing tandem site visits will allow for everyone, including the grantee, to see things holistically.
67Financial Monitoring – Goals The goals of financial monitoring include:To ensure that grant funds are used as intended and compliant with regulatory requirementsTo ensure O N C is meeting the highest of management and fiduciary standardsTo ensure grantee compliance with the terms and conditions of the grant awardTo meet requirements imposed on O N C by law (A R R A)67
68Financial Monitoring – Risk Factors General Selection CriteriaNew GranteeDollar Amount of AwardMultiple AwardsEntity TypeSubawardsReporting Findings (FSR, Audit, A R R A)Unobligated/Unexpended BalancesProgram Office Referral/RecommendationsSamplesThe above general criteria was weighted based on various factorsOther risk factors not included above may also be considered based on data analysis -out life of award68
69Types of Financial Monitoring that OGM Conducts Desk-based Financial MonitoringCash AnalysisDesk ReviewOn-Site Financial Monitoring69
70Desk-based Monitoring – Cash Analysis Cash analysis reviews:Recipient cash transactionsRate of drawsPayment trendsUnobligated balanceGrant statusReview of last program reportPrevents minor issues regarding non-compliance from becoming major issuesGMS shares analysis with Program Office staff to compare the financial and programmatic dataProgram Office should compare against milestones in Operations plan
71Desk-based Monitoring – Cash Analysis continued During the O G M quarterly review, O G M and Project Officers discuss thefollowing :Has the grantee submitted timely performance reports?Is the grantee on target as outlined in their approved plan?Has contact been made with the grantee if not on target?If contact has been made, what corrective action has been discussed?
72Desk-based Monitoring – Desk Reviews Limited verification of grantee complianceFederal regulationsTerms and conditionsIdentifies potential issuesGrants reviewed on a regular basisCore review of a grantee’s general management practicesMay require further scrutiny - on-site financial monitoringReview key policies (procurement, accounting chart of accounts, etc.)
73On-Site Monitoring Visits On-Site Monitoring Visits are performed at grantee locationEnsure adequate internal controls, policies, processes, and systems exist to appropriately manage awardsAssess capability, performance and compliance against administrative regulations and public policy requirementsReport on the effectiveness of O N C grantees and grant programs and the stewardship of public fundsCollaboration with program office(s) is key to successful monitoringJoint site visits with program office when feasiblePre-site visit meeting with program staffEntrance MeetingReview DocumentationExit Interview / De-brief
74Common Issues Discovered During Financial Monitoring No written policies and/or proceduresInadequate procurement standardsLack of documentationInadequate/untimely submission of reportsInadequate Subaward MonitoringInadequate time and effort recordsLack of competition during procurementConflicts of interestQuestioned expendituresExcess Cash on HandCommingling of fundsNo written policies and/or proceduresInadequate procurement standardsLack of documentationInadequate/untimely submission of reportsInventory management deficienciesInadequate Subaward MonitoringInadequate time and effort recordsLack of competition during procurementConflicts of interestFailure to manage audit resultsInadequate accounting proceduresInaccurate reportsQuestioned expendituresExcess Cash on HandCommingling of funds
75Monitoring vs. Auditing Monitoring is preventativePerformed by grants and program staffResolve before auditsAuditing is corrective / curativePerformed by auditorsIn the record booksMonitoring is completed by OGM staff.Audits are of two typesA-133 required annual auditsIG audits
76Audits – What is a Statewide Single Audit (A-133)? Required for Entities that Expend $500K or More in Federal Funds during their Fiscal YearReview of All Federal Grant Programs and RequirementsAudit Report Is Due 9 Months after the End of the Fiscal YearSubmit the Audit Package to the Federal Audit Clearinghouse (FAC)Effective January 2004, The Office of Management and Budget Circular No. A-133, Audits of States, Local Governments, and Non-Profit Organizations, requires entities that expend $500,000 or more a year in federal awards to have a single or program-specific audit conducted.
77A-133: Most Common Audit Findings Unallowable activitiesUnallowable costsPoor cash managementInadequate equipment and real property management practicesExpending funds outside of the period of availability of fundsInadequate procurement standardsUntimely and inaccurate reportingLack of subrecipient monitoringExamples of Audit FindingsConflicts of InterestInaccurate Financial Status ReportsInappropriate ChangesInadequate Time and Effort RecordsUnallowable CostsInadequate Submission of ReportsExcess Cash on HandLack of DocumentationCommingling of FundsUntimely Submission of Reports
78Health and Human Services Audit ResolutionHealth and Human ServicesASFR, Division of Systems Policy, Payment Integrity, and Audit Resolution (DSPPIAR) is responsible for A-133 audit resolutionOGM will assist in resolution of audit findings only as requested by DSPPIARASFR also serves as a liaison with O M B, the O P D I Vs, and the OIG on grant-related audit issuesRecipient responsibilitiesResolve audit findings of subawardsMost O N C programs have a large number of subsDivision of Systems Policy, Payment Integrity, and Audit Resolution (DSPPIAR), within the Office of Program Management and Systems Policy, Office of Finance, ASFR.ASFR, serves as a liaison with OMB, the OPDIVs, and the OIG on grant- related audit issues. This office also is responsible for audit resolution if OMB Circular A-133 audit findings (systemic and/or monetary) affect more than one OPDIV or an HHS OPDIV(s) and another Federal department(s) or agency(ies).
79Corrective Action Plan (C A P) should include: Audit ResolutionCorrective Action Plan (C A P) should include:Description of each findingSpecific steps to be taken to implement the recommendationTimetable for performance of each corrective actionDescription of monitoring to be performed to ensure implementation of the C A P
80HHS Office of the Inspector General (OIG) Performance Audits Evaluates HHS Goals and Objectives with grantee activitiesRotating schedule of states and programsAnnual audit planIdentifies key issuesImplementation planConducted by OIG staffCompares expenditures to program impactReports posted on OIG website (http://oig.hhs.gov/reports.asp)ONC grants are also subject to IG audits.
81Examples of Inspector General Audit Findings No measurable program goals and objectivesLack of monitoring and oversightUntimely/incorrect financial reportingQuestioned costsInadequate procurement practicesInadequate personal property controls
82Grants Management Lifecycle – Closeout Review Closeout PackageConduct Final Financial ReconciliationNotify Grantee of CloseoutRetain RecordsEstablish Disposition of FundsEvaluate Final Performance ReportsAPPLYESTABLISHREVIEWAWARDMANAGECLOSEOUTLegend:PHASEGranteeOffice of Grants ManagementProgram OfficeONC BudgetOther Federal/HHS EntitiesPO/GMO JointCloseout stage of grant lifecycle82
83Due within 90 Days after End of Award Final Progress Report Recipient CloseoutDue within 90 Days after End of AwardFinal Progress ReportFinal SF-269 Financial Status reportUnobligated funds balanceNo unliquidated obligationsFinal drawdownReturn excess fundsInvention Disclosure (if applicable)Federally Owned Property Control (if applicable)
84Retention of Records – Grantees Grantee Requirements (45 CFR and 74.53)At least 3 years from the date of submission of the final expenditure reportIf litigation, claim or an audit is initiated prior to the expiration of the 3 year period, records must be retained until completion of the action and resolution of issues or the end of the 3 year period, whichever is laterRecords may be retained in an electronic format
85Retention of Records – ONC Office of Grants Management1 year unsuccessful applications6 years 3 months official filesIf open audit, litigation, administrative proceeding retention may be longerProject Officer files2 years after closeoutOGM-Program Files6 years 3 months for successful1 year unsuccessful
86Grants Management Lifecycle Review FOASubmit ApplicationRevise ApplicationReview Award PackageAccept AwardDrawdown FundsSubmit Financial ReportsSubmit Performance ReportsSubmitPost-Award RequestsEnsure Audit is CompleteGenerate Final Performance ReportsComplete Drawdown of FundsGenerate Final Financial ReportsSubmit Closeout PackageRetain RecordsLegend:PHASEGranteeOffice of Grants ManagementProgram OfficeONC BudgetOther Federal/HHS EntitiesPO/GMO JointAssist ApplicantsEstablish CommitmentsAPPLYReview Closeout PackageConduct Final Financial ReconciliationNotify Grantee of CloseoutEstablish Disposition of FundsEvaluate Final Performance ReportsCLOSEOUTObligate FundsSet Up Congressional Notification in SystemRelease FundsCreate Notice of Grant AwardAWARDNotify Grantee of AwardConduct Appropriations AnalysisDevelop Funding Opportunity Announcement (FOA)Release FOAAppropriationOMB ApportionmentAuthorizing StatuteESTABLISHAllocate FundsReview and Approve Post-Award ActionsConductFinancial MonitoringReviewFinancial ReportsReview Performance ReportsReview AuditsConduct Programmatic MonitoringMANAGEReview /Recommend Post-Award ActionsProgram and Grants Management Training and Technical AssistanceReview ApplicationPerform Budget ReviewObjective ReviewAssess Fiscal IntegrityDevelop Funding MemoREVIEWAssess Funds AvailabilityReview grants lifecycle86
87Critical Reference Documents American Recovery and Reinvestment Act of 2009 (Recovery Act)What does the law sayStatute is highest in order of precedence45 CFR Part 74 and Part 92 - Administrative RequirementsPart 92 – Government organizations (Including Tribal)Part 74 – NGOUniform administrative rules when implementing Federal grant programsCost Principles2 CFR Part 220 – Educational Institutions2 CFR Part 225 – Government Organizations (Including Tribal)2 CFR Part 230 – Non-Profit OrganizationsFAR 31.2OMB Circular A Audits of States, Local Governments, and NonProfit Organizations
88Critical Reference Documents – continued HHS Grants Policy Statement (GPS)Grants policy for recipientsIncorporated as a term in NGADos and Don’tsONC staff should also know the GPS in order to provide support to granteesFunding Opportunity Announcement (F O A)Notice of Grant Award (NGA) with Award Terms and ConditionsGrants Management Advisories (GMAs)Grants Management Memorandum (GMM)Program Information Notices (P I Ns)Program Assistance Letters (P A Ls)
89Critical Reference Documents – continued Grants Management Advisories (GMAs) – technical assistance resource which will provide additional information in specific grants management areas for GranteesO N C-GMA Roles and Responsibilities Grants and Cooperative AgreementsO N C-GMA Review of Proposed Subawards and Procurement Contracts Under GrantsO N C-GMA Matching and Cost SharingO N C-GMA Use of Unobligated Balances under Grants and Cooperative AgreementsO N C-GMA Allowability of Food CostsO N C-GMA Program IncomeO N C-GMA Subrecipient MonitoringO N C-GMA Allowability of Payments to Uniformed Services and Civilian Federal Employees
90Training and Technical Assistance Plan ONC Office of Grants Management has a Training and Technical Assistance (T A) Plan based on three different levels of assistance:Level I: Guidance and Information Sharing – Consists of the daily technical assistance of grants administration.Level II: Sample Protocols, Templates and Models – Targeted telephone and electronic assistance involves assisting recipients in the development of protocols and templates, as well as other specific needs, as requested by a recipient.Level III: Targeted Training Deliveries and Direct On-Site Assistance – Includes targeted internal and external training sessions.Level 1 - The TA provided in level one may include answering simple grants questions, providing specific regulatory references and/or sharing readily available grants information. Issues raised during this level of TA will be catalogued and used to guide future TA.Level 2 - This level of TA also consists of more intensive support to recipients via telephone and . Issues raised during this level of TA will be catalogued and used to guide future TA.Level 3 - These sessions may be in the form of face-to-face training sessions, webinars, TA workshops, program office conferences. Level III also includes direct on- site assistance, consisting of intensive, site-specific guidance and consultation on recipient policies, procedures, and administrative capabilities.
91Office of Grants Management – TA Requests Grants Management T A request formPlease use this form to request Training and Technical Assistance from the ONC Office of Grants ManagementCompleted forms are available from, and should be submitted toThis is should not be completed for specific questions. Please contact the appropriate GMS.