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H H S Department of Health and Human Services
Health Resources and Services Administration
HIV/AIDS Programs

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CARE Act Title II Manual - 2003 Version

II. Grants Administration

4. Grants Management

Introduction

  1. HAB/DSS Expectations
  2. Administration of Grants
  3. Costs Applicable to Grants and Contracts
  4. Audit Policies and Standards
  5. Additional Guidance
  6. Summary of Annual Fiscal Year Notice of Grant Award
  7. Carryover of Funds
  8. Maintenance of Effort and Matching Funds
  9. Grantee and Provider Contract Requirements
  10. References
  11. Attachment 1 - Ryan White Comprehensive AIDS Resources Emergency Act Contract/Subcontract Review Certification
  12. Attachment 2 - Budget and Budget Narrative Justification Guidance

Chapter 4
Grants Management

Introduction TOP

The Federal rules governing grants management for CARE Act service providers are provided in Office of Management and Budget (OMB) circulars and the Code of Federal Regulations (CFR). Title II grantees are expected to be familiar with these documents and assure that all service providers follow the procedures outlined in these documents.

The Grants Management Branch (GMB) of the Health Resources and Services Administration's HIV/AIDS Bureau (HRSA/HAB) oversees grant awards to Title I eligible metropolitan areas (EMAs). As the counterpart to the business office of the grantee, GMB handles business management aspects of the review, negotiation, award, and administration of grants, as follows:

  • Receiving all grant applications
  • Monitoring the objective review process
  • Performing cost analysis prior to grant award and negotiating changes in budgets as necessary
  • Providing business management consultation and technical assistance
  • Signing and issuing grant awards, amendments to awards, and notices of suspension and termination
  • Receiving and responding to all correspondence related to business activities
  • Receiving all documentation submitted for compliance with the terms and conditions of the grant award (progress reports, financial reports, revised budgets, and other conditions of award)
  • Maintaining the official grant file
  • Conducting continuous surveillance of the financial and management aspects of grants, and
  • Resolving audit findings.

HAB/DSS Expectations TOP

The Title II grantee is responsible for the proper stewardship of all grant funds (including conditions of award), even if some of the fiscal management of those funds is shared with lead agencies in consortia. This requires business management systems that meet the requirements outlined by OMB for recipients of Federal funding, as outlined in the OMB Circulars discussed below. Failure to comply with any of the conditions of award by the specified due date may result in the suspension of the grantee's ability to draw down funds, the disallowance of funds, or both.

Administration of Grants TOP

Title I grantees can find relevant information regarding the administration of grants in the following OMB Circulars (which can be obtained from OMB's Office of Federal Financial Management, at (202) 395-3993 (http://www.whitehouse.gov/omb/circulars or http://www.hhs.gov/grantsnet).

OMB Circular A-102 - Grants and Cooperative Agreements with State and Local Governments (codified by the U.S. Department of Health and Human Services [HHS] in 45 CFR Part 92), and

OMB Circular A-110 - Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations (codified by HHS in 45 CFR Part 74). A-110 applies to sub-awards and contracts made by State and local governments to organizations covered by this Circular.

They cover:

  • Standards for financial management systems, including payments, program income, revision of budget and program plans, and non-Federal audits
  • Purpose of property standards, including the purpose of insurance coverage, equipment, supplies, and other expendable property
  • Purpose of procurement standards, including recipient responsibilities, codes of conduct, competition, procurement procedures, cost and price analysis, and procurement records
  • Purpose of reports and records, including monitoring and reporting program performance reports, financial reports, and retention and access requirements
  • Purpose of termination and enforcement, and
  • Purpose of closeout procedures.

Costs Applicable to Grants and Contracts TOP

The following OMB resources establish principles and standards for determining costs applicable to grants, contracts, and other agreements entered into by the types of organizations specified:

OMB Circular A-122 - Cost Principles for Nonprofit Organizations

OMB Circular A-87 - Cost Principles for State, Local, and Indian Tribal Governments, and

OMB Circular A-21 - Cost Principles for Educational Institutions.

Audit Policies and Standards TOP

Government-wide policies and standards for non-Federal organization-wide audits of recipients of Federal awards are explained in:

OMB Circular A-133 - Audits of States, Local Governments, and Nonprofit Organizations.

Additional Guidance TOP

For additional guidance, Title II grantees may also utilize the April 1, 1994 Public Health Service (PHS) Grants Policy Statement, which was provided by the GMB to grantees when they received their first award. This policy statement compiles policies and reviews policy issues that have been raised in the past regarding the administration of grant awards.

The information provided in this chapter about conditions of award is not sufficient alone to guide grantees on their grants management deadlines and obligations. Only the current Fiscal Year Notice of Grant Award sufficiently identifies actual deadlines and obligations for Title II grantees.

Summary of Annual Fiscal Year Notice of Grant Award TOP

In the administration of Title II awards, grantees are responsible for meeting all special conditions and fulfilling all reporting requirements indicated in the Notice of Grant Award (NGA). Because each NGA includes dates and deadlines that are specific to that budget period, it is very important that Title II grantees follow the special conditions and reporting requirements for the appropriate budget period. Always be sure to consult the NGA for the current budget period to identify deadlines and obligations for Title II grant expenditures.

Failure to comply with any of the special conditions and reporting requirements of award by the specified due date may result in the suspension of the grantee's ability to draw down funds, the disallowance of funds, or both.

In addition, the NGA includes a Special Remarks section, a Standard Remarks section, and a Contacts section. The Special Remarks section contains information such as matching requirements, expenditure limitations, and the dollar amount included in the award for a specific activity (e.g., Minority HIV/AIDS Initiative funding, AIDS Drug Assistance Program funding). The Standard Remarks section contains general grants administration information. Names, addresses, and telephone numbers of persons to contact regarding grants management issues and/or programmatic issues are located in the Contacts section of the NGA.

Carryover of Funds TOP

Requests for carryover of funds from the previous to current budget period must be submitted to the GMB within HAB. Carryover requests are reviewed on a case-by-case basis. HAB retains the authority to offset future grant awards and reallocate unspent funds to other Title II grantees. As always, it is incumbent on the grantee to expeditiously and effectively utilize Title II funds to meet the needs of people living with HIV disease.

In reviewing requests for approval of carry over funds, HAB will continue to assess the following:

  • History of expenditures and carry over requests
  • Specific situations regarding the current year's awards
  • Submission of the final Financial Status Report, along with the intended purpose and budget justification for the request
  • Performance issues, including compliance with conditions of grant award.

Also, with regard to the intended purpose and budget justification, HAB will require grantees to address the following issues:

  • Source of the unexpended carry over funds (administrative, direct service, program support, certain provider categories)
  • Proposed use (existing or new service, new priority, one-time use, maintenance of enhanced levels of service, and cost annualization in future years)
  • Justification for use of funds (quantification of number of clients, units of service, link/responsiveness of proposed use to identified need)
  • Time period proposed for use of funds and ability to use
  • Capacity of the grantee to make funds available for use and of the entities to utilize such funds in the designated time period

Maintenance of Effort and Matching Funds TOP

All States are required to demonstrate an annual maintenance of effort in State contributions to HIV programs, and matching funds are required of States with 1% of AIDS cases reported nationally. (For information about these requirements, see relevant chapters in this Manual.)

Grantee and Provider Contract Requirements TOP

According to OMB Circular A-102 (or 45 CFR Part 92), local government grantees may use their own procurement procedures that reflect applicable State and local laws and regulations, provided that the procurement procedures conform to applicable Federal law and the standards identified in the Circular (Part 92.36). Identified standards concern the following areas:

  • Written code of standards of conduct for employees involved in the award and administration of contracts
  • Procedures to avoid the purchase of unnecessary and duplicative items
  • Making awards to responsible contractors
  • Maintaining records to detail the history of a procurement
  • Settlement of all contractual and administrative issues
  • Protest procedures to handle and resolve disputes
  • Providing for full and open competition
  • Written selection procedures for procurement transactions.

A contract must contain the clauses necessary to ensure that all requirements under the grant will be satisfied, since neither 45 CFR Parts 74 and 92 nor other documents are directly binding on a contractor.

REFERENCES TOP

OMB Circulars are available from the Office of Federal Financial Management, Office of Management and Budget, 725 17th Street NW, Washington, DC 20503; telephone (202) 395-3993.

Hard copies of the PHS Grants Policy Statement (April 1, 1994) may be obtained at the PHS website.

Grants Management: Attachment

The documents in this Attachment include the following from the Fiscal Year 2001 Conditions of Award:

Contract Review Certification (Attachment 1 to Conditions of Award)

Budget and Budget Narrative Justification Guidance (Attachment 2 to Conditions of Award)

ATTACHMENT 1 TOP
(to Notice of Award)

RYAN WHITE COMPREHENSIVE AIDS RESOURCES EMERGENCY ACT CONTRACT/SUBCONTRACT REVIEW CERTIFICATION

GRANTEE NAME: ____________________________________________________

CONTRACTOR/SUBCONTRACTOR NAME: _______________________________

TITLE II AMOUNT AWARDED: _________________
DATE FUNDS AWARDED: ___________________

PURPOSE AND SCOPE OF CONTRACT (activities and services to be provided):

A. PROGRAM REVIEW: I certify that the purpose and scope of the contract has been reviewed and found to be in compliance with any existing policies of the Division of Service Systems, HIV/AIDS Bureau in effect at the time this contract was executed.

Project Director (signature): __________________________ Date: ______________

B. ADMINISTRATIVE/FISCAL REVIEW

1. I certify that the procedures used to advertise and award these funds meet the minimum standards required by the Office of Management and Budget (OMB) in the following Circular (check one only).

___ A-102 (Administrative requirements applicable to grants to State and local governments) codified by DHHS in 45 CFR Part 92.

___ A-110 (Administrative requirements applicable to grants to Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations) codified by DHHS in 45 CFR Part 74.

 2. I certify that the proposed costs have been determined allowable according to principles and standards established by OMB in the following Circulars (check one only).

___ A-122, Cost Principles for Nonprofit Organizations

___ A-87, Cost Principles for State, Local, and Indian Tribal Governments

___ A-21, Cost Principles for Educational Institutions

3. I certify that there are no mathematical errors in the budget of this contract.

ADMINISTRATIVE/BUDGET OFFICER (FISCAL): ___________________________

 DATE: __________________

 ATTACHMENT 2 TOP

(to Notice of Award)

BUDGET AND BUDGET NARRATIVE JUSTIFICATION GUIDANCE

A categorical budget must be submitted for each contract and subcontract awarded with grant funds. The following categories must be defined in terms of dollars and must be justified in a budget narrative. A budget narrative tells the who, what, where, when, and why to justify the amount budgeted.

Unit cost reimbursement contracts must report the total amount of the contract, the precise unit cost, and the proportion of the unit cost represented by each of the object classes listed below. The narrative justification must provide sufficient detail to define how the unit cost was established, and the rationale for the number of clients proposed to be served.

ALL CHARGES TO THE GRANT MUST BE IN ACCORDANCE WITH APPLICABLE OFFICE OF MANAGEMENT AND BUDGET COST PRINCIPLES (A-87, A-122, AND A-21)

PersonnelList all personnel whose salaries are to be paid in whole or in part with Title II funds. For each position, provide the job title, employee last name, brief description of duties and responsibilities as they relate to the Title II funded work (job descriptions or qualifications for the position are not acceptable); annual salary, percentage of time to be devoted to and paid for by this grant; and amount to be charged to the grant. If the position is vacant, indicate such and estimate when the position is expected to be filled.
Fringe BenefitsProvide the aggregate amount of fringe benefits. It is not necessary to provide the calculations for arriving at the amount of fringe benefits for each position.
TravelAll travel must directly benefit the work supported by the grant. List all travel anticipated to occur during the budget/contract period. Be specific about who will travel, where, when and why the travel is necessary.
EquipmentList specifically equipment that is being purchased. Explain who will use the equipment and why is it necessary to purchase the equipment. A purchase versus lease analysis should be done for large dollar items. Cost sharing must be applied when equipment will be used by other than Ryan White activities. Equipment items costing over $25,000 require prior approval from HRSA.
SuppliesProvide a general description of the types of items classified as supplies. Computer software should be included in this category.
OtherInclude items such as rent, printing of brochures, telephone, postage, utilities, advertising, training, interpreter fees, insurance, equipment maintenance, and other allowable costs. Items that are not supplies or equipment and are not included in the indirect cost base should be included in this category. Be specific in describing each item listed in terms what it is, who will benefit, and why it is necessary. A cost for each item listed must also be provided.
ContractualThis includes funds that are to be used to provide services for clients that are not provided directly by the grantee.
Indirect CostsFor grantees, indirect costs are allowable only within the ten percent limit for administrative costs. For contractors and sub-contractors, indirect costs are allowable only in accordance with applicable Cost Principles and the legislative limit on administrative costs.