The Centers for Medicare and Medicaid Services plans to issue guidance to states explaining their responsibilities for participating in the Medicaid Interstate Match in response to a recent recommendation by the Department of Health and Human Services Office of Inspector General.
CMS estimated that about 5.8 percent, or $14.4 billion, of Medicaid payments made in fiscal year 2013 were improper, more than half of which were due to eligibility errors. One type of eligibility error occurs when beneficiaries remain enrolled in a state’s Medicaid program after they have become ineligible because they are no longer residents of the state or have failed to report a change of address.
CMS created the Public Assistance Reporting Information System (PARIS) Medicaid Interstate Match as a key tool to help reduce improper payments by identifying beneficiaries who are enrolled in multiple state Medicaid programs. States submit Medicaid enrollment data to the Defense Manpower Data Center, which compares Social Security Numbers of enrolled beneficiaries from one state another to develop its quarterly matching report.
After state Medicaid agencies receive their match information from DMDC, states must verify the matches to determine whether beneficiaries are still eligible to receive benefits in their state. If a state verifies a match and determines that a beneficiary is ineligible to receive Medicaid, it may act to discontinue benefits.
Even though CMS requires state participation in the Medicaid Interstate Match as a condition of receiving Medicaid funding, OIG found that state participation was limited. While all states in August 2011 submitted enrollment data, OIG found that 14 states did not submit enrollment data for all of their beneficiaries. For example, one state did not submit enrollment data for 79 percent of its Medicaid beneficiaries. “To maximize the potential for the Medicaid Interstate Match to identify beneficiaries who may be enrolled in multiple state Medicaid programs, each state needs to submit complete enrollment data for all of its beneficiaries,” OIG added. State officials explained that they did not submit complete enrollment data because they lacked staff to prepare the submission or because their state systems were not compatible with the DMDC system.
OIG also found that states did not verify about 68 percent of the matches found by the Medicaid Interstate Match system because of issues with enrollment data, OIG said. State officials told OIG that they did not verify the matches because other states submitted enrollment data for beneficiaries who were no longer enrolled in their Medicaid programs, or because they submitted incomplete or inaccurate enrollment data.
“When a state submits Medicaid eligibility data that indicates the beneficiary is no longer enrolled in its Medicaid program, it can create a ‘false positive’ match,” OIG said. When such inaccurate information is included in the match file, OIG added, it is difficult for other states to determine whether such beneficiaries have an overlapping Medicaid coverage period, thus requiring states to conduct resource-intense follow-up activities. “Given their limited information and resources, states may conclude that the match does not merit verification,” OIG explained.
States reduce improper payments in the program when one or more states discontinue Medicaid benefits to beneficiaries found to be enrolled in multiple state Medicaid programs. Still, while states verified 32 percent of the matches from the August 2011 match, only 41 percent of those matches resulted in a discontinuation of benefits. Moreover, OIG found that even for those instances where benefits were discontinued, none of the states recovered any improper payments from the managed care organizations because they lacked the time and resources needed to recover the payments.
OIG said that although CMS issued guidance in 2010 on state requirements to participate in PARIS, it does not address the submission of Medicaid enrollment data, verification of matches and the discontinuation of benefits. “Guidance for CMS could assist states in complying with the requirement for participating in the Medicaid Interstate Match [and] could help states receive the full benefit of their participation,” OIG said. “CMS should define the meaning of ‘participation’ in the match by establishing clear expectations for the actions that states should take to comply with the requirement.”
CMS officials concurred with an OIG recommendation to issue further guidance to states to clarify the requirement for participating in the Medicaid Interstate Match.
Officials with the Wisconsin Department of Administration planned to determine if a separate annual audit of the state’s Home Energy Assistance and Weatherization Assistance programs was warranted in response to a recent Wisconsin Legislative Audit Bureau audit recommendation.
The Wisconsin Home Energy Assistance Program provides financial assistance to low-income individuals and families to offset energy costs, and the Wisconsin Weatherization Program provides services for low-income individuals and families to reduce energy consumption. In fiscal year 2012-2013, expenditures in the two programs totaled about $217.1 million and aided more than 220,000 households. Local energy assistance and local weatherization agencies are required to review documentation to determine eligible participants.
The Wisconsin Department of Administration oversees the programs using desktop and administrative reviews of local energy assistance agencies. It also conducts annual administrative reviews and dwelling unit inspections of each local weatherization assistance agency.
Although state law requires WDOA to provide for an annual independent audit of the programs, the audit bureau found that it had not done so. “Annually auditing these programs could facilitate more effective program oversight,” WLAB said. It recommended that WDOA comply with state law and provide for the audit or, if it determines that the potential benefits of complying with this requirement do not justify the added costs, request that that the state legislature eliminate the statutory requirement for the audit.
WDOA staff said they would assess whether there are any “gaps” in the current audit efforts that would be addressed by a separate annual audit and would determine the cost of such an audit. “The energy assistance and weatherization programs are subject to several existing audit requirements,” WDOA said. “In most years, they are audited on an annual basis as required by federal funding agencies. DOA will review the federal audit requirements … to determine if there are efficiencies that may be gained by combining the audit efforts.”
As part of 78 desktop reviews conducted from FY 2008 to FY 2011, WDOA official told WLAB that it investigated 50 cases of participants using fictitious Social Security numbers. While WDOA contacts these agencies to address areas of noncompliance related to participant eligibility, WLAB found that WDOA does not require those agencies to retain original source documentation. WLAB noted that the U.S. Department of Health and Human Services in 2010 issued guidance for the energy assistance program emphasizing the important of implementing strategies to monitor and detect fraud, waste and abuse by applicants, contractors and administering agencies.
Without such documentation, “there is no mechanism in place for WDOA staff or outside parties to independently verify the accuracy of this information,” WLAB said. “Without original documentation, it is difficult to determine whether the information was recorded correctly or whether the information provided by applicants was inaccurate. In addition, obtaining access to additional sources of data on applicant income could further facilitate independent verification of eligibility.”
Therefore, WLAB recommended that WDOA:
ensure that applicant reported incomes are verified using additional sources of data;
implement policies that require retention of original source documentation that support applicant eligibility for at least three years from the date of application; and
report the status of its efforts by Nov. 14.
WDOA officials said they would consider alternatives that would provide assurance of program eligibility, do not increase administrative costs and burden for local delivery agencies, and do not present a risk to the security of confidential information. It also agreed to report on its efforts by the recommended date.
The Council on Governmental Relations, which represents numerous universities and research institutions, is urging the National Science Foundation to request a deviation from the Office of Management and Budget’s uniform grant guidance to extend the grant closeout reporting date to 120 days after the end date of the period of performance.
The recommendation came in comments submitted to NSF’s draft revision to its Proposal and Award Policies and Procedures Guide, which when finalized on Dec. 26, would implement the uniform guidance. The draft included only two deviations from requirements in the uniform guidance (see “NSF Seeks Comments on Draft Policy Guide,” July 2014). One deviation would limit to two months’ salary compensation for senior personnel/faculty. NSF regards time spent on research to be included within a faculty member’s regular organizational salary, and has maintained the two-month grant compensation limitation for more than 40 years. The other would allow for an alternative to the Federal Financial Report.
NSF concurred with all other requirements in the uniform grant guidance and submitted its draft revision to OMB, as all federal agencies were required to do so by June 26. After OMB’s review and approval, all agency revised regulations and the uniform grant guidance become effective as of Dec. 26 for all federal funding awarded after that date.
The PAPPG, which combines NSF’s Grant Proposal Guide and its Award and Administration Guide, states that NSF grantees also must liquidate all obligations incurred under their awards no later than 90 calendar days after the award end date, matching the requirement in the uniform guidance (§200.343). This timeframe is consistent with current practice, as defined under both OMB Circulars A-102 and A-110.
COGR, in its comments on the draft PAPPG, said it supports timely closeouts, but stressed that the 90-day standard is an “obstacle to effective award management.” Instead, COGR countered, “A new 120-day standard would ensure that research performance is not adversely impacted by an artificially short period for closeout.” The council continued, “Further, it would enable submission of accurate and compliant reports [that] do not require revisions and do not jeopardize institutional funds due to hurried reporting.”
COGR noted that §200.343(g) states, “federal awarding agencies should complete all closeout activities no later than one year after the acceptance of all required final reports.” The organization said this effectively provides a 15-month (i.e., one year plus 90 days) period for closeout activities after the end of the award for federal and nonfederal combined activities. The council argued that a 120-day reporting standard for nonfederal entities could be integrated within those 15 combined months to allow for timely and accurate closeouts.
COGR further asked NSF to request a deviation from OMB that would exempt institutions of higher education, nonprofit research organizations and other researcher from the procurement sections (§§200.317-200.326) in the uniform guidance, adding that the procurement standards in Circular A-110 be instated for these research institutions. COGR said the procurement provisions in the uniform guidance would: create increased cost and administrative burden via expensive processing and IT system changes; require a long lead time to implement that cannot effectively be accomplished by Dec. 26; and increase the risk to program performance.
The organization also discussed provisions related to indirect cost recovery in Chapter II.C.2.g(viii) in the Grants Policy Guide and Chapter V.D.1(i) in the Award and Administration Guide. These sections state, “foreign grantees that have never had a negotiated indirect cost rate are limited to an indirect cost rate recovery of 10 percent of modified total direct costs. Foreign grantees that have a negotiated rate agreement with a U.S. federal agency may recover indirect costs at the current negotiated rate.” COGR said this provision suggests that this rule would not be applicable to domestic grantees, so it sought clarification to state that these rules apply to all grantees. The uniform grant guidance explains the de minimis rate in §200.414 and in §200.331 for pass-through entities.
Another provision in the Grant Proposal Guide states that foreign subrecipients are not eligible for indirect cost recovery unless the subrecipient has a previously negotiated rate agreement with a U.S. federal agency that has a practice of negotiating rates with foreign entities. COGR contended that this provision was inconsistent with the previously mentioned related sections and the uniform guidance and requested that NSF update it accordingly.
The Department of Health and Human Services Departmental Appeals Board recently upheld an Administration for Children and Families disallowance of almost $1.4 million in federal Head Start and Early Head Start funding from fiscal year 2010 to FY 2012 sought by Texas Neighborhood Services, Inc. The disallowance primarily stemmed from TNS’ failure to show that it reasonably made incentive compensation payments under an established policy.
According to the Office of Management and Budget uniform grant guidance (§200.430(f)), “incentive compensation to employees based on cost reduction, or efficient performance, suggestion awards, safety awards, etc., is allowable to the extent that the overall compensation is determined to be reasonable and such costs are paid or accrued pursuant to an agreement entered into in good faith between the nonfederal entity and the employees before the services were rendered, or pursuant to an established plan followed by the nonfederal entity so consistently as to imply, in effect, an agreement to make such payment.” Head Start regulations require that Head Start grantees implement written personnel policies for staff, including the procedures for conducting staff performance appraisals.
TNS is a nonprofit organization that provides Head Start and Early Head Start services to several counties in Texas. In a February 2013 monitoring review, ACF found that TNS failed to ensure that its incentive compensation payments to employees for FY 2010-2012, totaling about $1.369 million, were reasonable, and that it did not document the basis for the amounts awarded. In September 2013, ACF disallowed these funds, and TNS subsequently appealed the determination.
Appeals Board Ruling In its ruling, the appeals board found the ACF properly disallowed the incentive compensation payments because TNS had not shown that the payments were reasonable, did not support them with adequate documentation and did not make them under its established plan. TNS has had a formal incentive compensation policy since August 2007, which allows TNS personnel to receive increases in salary (i.e., incentive awards) for consistent or exemplary job performance, based on a series of specific guidelines. It also had a compensation plan for determining salaries since 2009. TNS argued that its incentive compensation awards should be allowable because it made them pursuant to these policies.
The TNS compensation plan contains an appendix with a matrix for “determining employee worth to the organization that TNS will follow” in determining incentive compensation awards. Based on this matrix, TNS assigns letter grades based on certain criteria. However, the appeals board determined that some employees received less generous incentive compensation awards than did employees with equivalent or lower grades. Because the company did not provide any employee-specific documentation substantiating the reason for the differing awards, the board agreed with ACF’s ruling that TNS failed to follow its compensation policies.
The appeals board also determined that the incentive compensation awards were not reasonable. For example, in FY 2011, 10 out of 12 management employees received incentive payments in excess of 10 percent of their salaries, and TNS’ executive director received awards up to about 30 percent of his salary. The board said that TNS consistently gave differing incentive compensation awards, both in terms of actual money awarded and in terms of the award as a percentage of an employee’s annual salary, to employees who in the same letter grade, and at times gave more generous awards to employee with lower grade. It also gave larger incentive compensation awards to managers.
“The questions these differences raise about the reasonableness and necessity of the payments amount to more than a ‘subjective’ finding of unreasonableness,” the board said. “A prudent person would not determine incentive awards in what appears to be an arbitrary manner. Without further explanation or evidence supporting such differential treatment, these differences cannot be viewed as consistent with TNS’ own compensation plan.”
The appeals board also raised another issue. “If employees believe that awards are based on factors such as favoritism, rather than performance, the awards may act as a disincentive rather than an incentive to achieve superior performance,” it said. Therefore, the board upheld the ACF disallowance of the incentive compensation funds, along with erroneous charges for repair costs charged to a Head Start/Early Head Start award, which in all totaled $1.392 million.
Audit organizations should be aware that the quality of their single audits will be under federal scrutiny in four years under a provision in the Office of Management and Budget’s uniform grant guidance calling for a governmentwide audit quality review every six years. This is the first time the federal government has established a set schedule for reviewing single audit quality.
In §200.513, the guidance states that a federal agency designated by OMB will lead a governmentwide project to determine the quality of single audits by providing a “statistically reliable estimate of the extent that single audits conform to applicable requirements, standards, and procedures.” The agency will make recommendations to address any audit quality issues, which could include changes to applicable audit requirements, standards and procedures. This governmentwide audit quality project will be conducted every six years beginning in 2018, and the results must be public.
The governmentwide study will evaluate whether auditors are addressing single audit deficiencies identified most recently in an audit sampling project released in 2007 by the President’s Council on Integrity and Efficiency and the Executive Council on Integrity and Efficiency (now known as the Council of the Inspectors General on Integrity and Efficiency). The 2007 study found that more than a third of the 208 audits reviewed were unacceptable. The councils determined that 115, or 48.6 percent, of the single audits reviewed were acceptable and could be relied upon; 30 audits, or 16 percent, were of limited reliability; and 63 audits, or 35.5 percent, were unacceptable and could not be relied upon.
Some of the most prevalent deficiencies found in the 2007 study were the failure to audit a program as a major program, errors in the Schedule of Finding and Questions Cost, and missing documentation related to a finding. A recommendation in that study to revise and improve single audit standards, criteria and guidance helped spur the changes to the audit process now contained in the uniform guidance.
Other Audit Quality Deficiencies
During a session on audit quality at the American Institute of Certified Public Accountant’s recent Not-for-Profit Industry Conference, Nancy Miller, executive director with KPMG US, and AICPA Technical Manager Teresa Bordeaux discussed other leading audit deficiencies. When auditing major programs, auditors have failed to audit programs contained in a cluster, failed to meet audit percentage of coverage requirements and have applied an incorrect threshold for Type A and Type B programs (see ¶331 in the Single Audit Information Service). Another deficiency is the failure to document the testing of controls and compliance for the relevant assertions related to each compliance requirement with a direct and material effect for the major program (see ¶537 in theService).
document the evaluation of management’s skills, knowledge and experience to effectively oversee nonaudit services performed by the auditor;
document threats to independence that require the application of safeguards in accordance with the conceptual framework for independence; and
meet GAGAS continuing professional education (CPE) requirements.
Miller noted that the 2007 study specifically compared large and small audit firms. She anticipated that the 2018 study would be more detailed. “I think you will see a much broader statistical breakdown to try to get more root cause evidence on the deficiencies,” she said.
Advice to Auditors
Bordeaux advised audit firms to document policies and procedures for planning and performing audit engagements. This process includes ensuring that only qualified staff with appropriate GAGAS CPE credits are assigned to the engagements to enable the firm to demonstrate audit competency. “The important question is, ‘Do you have the competency to do the audit?’” she said. “It’s not just do you have the [CPE] hours.”
Miller stressed that the GAGAS peer reviews can help auditors address deficiencies and meet professional standards (see ¶733 in the Service). “The peer review program is intended to be remedial in nature, but we have to police ourselves,” she said. “If there are firms that have peer review deficiencies, the [deficiencies] need to be addressed in an appropriate fashion and resolved. If you can address them internally and develop promising practices, that’s a win for everybody.” An audit firm also should select a peer reviewer that has adequate experience and knowledge in the type of engagements conducted by the audit firm, Miller added.
The uniform grant guidance includes language in three sections (§200.210, §200.301 and §200.335) to clarify the information that must be included in a federal award announcement to hold newly awarded grantees accountable for meeting their stated performance goals in their proposals (§200.210), and to strengthen the position of federal agencies to improve program oversight and performance.
The uniform grant guidance requires that federal agencies measure the performance of recipients in a way that improves program outcomes, facilitates the dissemination and sharing of lessons learned and spreads the adoption of promising practices (§200.301).
In the uniform grant guidance, §200.210 dictates standard elements for an award announcement. Among the elements that federal agencies must include in award announcements is information about performance reporting frequency and content. The intent is to allow the federal awarding agency to better assess the nonfederal entity’s progress and to build a national body of evidence about promising practices that are proven successful.
In some instances, such as with the research community, federal performance reporting requirements may be limited to technical performance reports. Where appropriate, however, the federal award may include specific performance goals, indicators, milestones or outcomes with an expected timeline for accomplishment. Recipients of new awards under the uniform guidance, therefore, will need to perform and meet expectations, as proposed in their awarded applications.
Financial Data and Program Performance
A new condition in the uniform grant guidance (§200.301) is the requirement for applicants to explain in their proposals, and for recipients to demonstrate in reporting, how financial data relates to program performance. It appears recipients will need to break down objectives and their associated activities into “cost centers” that reflect the costs associated with the attainment of the activities and goals. In addition to presenting a yearly budget request, applicants may, therefore, be required to include sub-budgets for each performance objective. This new performance expectation will require some adjustment as applicants and recipients develop strategies and reporting styles that align program accomplishments to financial performance.
Federal agencies are responsible to clearly articulate these reporting expectations to applicants and grantees with standards or measures to meet during the execution of the federal award. Nonfederal recipients who are able to show the use of cost effective practices, especially through unit cost data, to meet performance goals will receive high grant management reviews.
Under §200.210, a federal agency may include program-specific requirements, as applicable, in an award notice. These requirements should be aligned with agency strategic goals, strategic objectives or performance goals that are relevant to the program as well as to the objectives, activities and deliverables that applicants promise in their proposals.
Federal agencies, for example, under OMB Circular A-11, must provide their goals and objectives in their yearly budget requests to Congress. The A-11 budget requests provide annual targets of agency performance goals, which they must meet and which any awarded grant programs must also reflect. The award documents, therefore, will include the types of requirements federal agencies are targeting for their own performance as well as the outcomes and timelines that awardees must deliver.
Another section (§200.335) in the guidance adds language on methods for the collection, transmission and storage of information to make clear that electronic, open, machine readable formats for report information is required. Recipient reporting on program performance must be posted on federal websites for transparency and must adhere to the data requirements stated in the uniform grant guidance for federal review and accountability. The new language is in response to the White House’s May 2013 Executive Order on Making Open and Machine Readable the New Default for Government Information and Presidential Memorandum M-13-13 Open Data Policy-Managing Information as an Asset. Under these federal directives and now the uniform grant guidance, federal agencies, applicants and grantees should, whenever practicable, collect, transmit and store federal award-related data in open and machine readable formats rather than in closed formats or on paper.
The new language stipulates that federal agencies must continue providing and accepting paper versions of federal solicitations and reporting documents if nonfederal entities do not have the capacity to submit applications or reports in open and machine readable formats; however, paper submissions can be accepted only after approving an advanced written request from the nonfederal entity. Additionally, the language clarifies storage methods for paper submissions. When original records are electronic and cannot be altered, applicants and grantees don’t need to create and retain paper copies. When original records are paper, electronic versions may be substituted through the use of duplication or other forms of electronic media, provided the documents remain readable through periodic quality control reviews and reasonable safeguards against alteration are put in place.
What to Expect
Grantees can expect greater emphasis on performance as they implement their newly funded program. The award notice will include not only their own stated goals and objectives from their proposals, but also expected timelines and deliverables.
Due to the provisions in the uniform grant guidance, federal agencies will raise the bar on program and financial performance in the award notifications. Applicants and grantees can prepare for these changes by starting or enhancing application development practices that tie the budget and program planning together and by looking for ways to ensure cost effectiveness. Having a “timeline mentality” can help prepare for the new provisions under the uniform grant guidance. In the application planning process, applicants may consider project implementation in three-, six- and nine-month increments of time, with goals and objectives set forth for each. This will help ensure they are putting forth a quality proposal, and also prepares them for a smoother transition if or when the federal agency grants them an award under the uniform grant guidance.
During a question-and-answer session at the American Institute of Certified Public Accountants’ recent Not-for-Profit Industry Conference, attendees asked questions concerning many key issues involving grants and audits, including several related to the Office of Management and Budget uniform grant guidance. Responding to the questions were Diane Edelstein, partner with Maher Duessel, and Brian Schebler, director of public sector services with McGladrey LLP. This is the first of two articles about the session, including abridged responses to questions from the audience.
Q: An auditee’s balance of loans at the beginning of the year has to be provided on the Schedule of Expenditures of Federal Awards. Are new loans obtained during the year also required to be listed on the SEFA even if they did not exist at the beginning of the year?
A: Diane Edelstein:Yes, continuing loans that have continuing requirements must be reported on your SEFA. In the new uniform guidance, OMB requires auditees to note the balances outstanding at the end of the audit period (§200.510). Loans no longer have an option to be in the footnotes. They must be up in the body. That’s one of the ways OMB has improved the new guidance by making it clear in what it is saying.
Q: Under the uniform guidance, will fixed-price contracts be reported on the SEFA?
A: Brian Schebler:It depends on the nature of the fixed-price contract and whether it is an arrangement that is really a contract or a subgrant (§200.330). The old terminology of “vendor” has been replaced with “contractor.” If it qualifies as a contract, it wouldn’t need to be included on the SEFA because that is an exchanged transaction. If it is a recipient, it would need to be reported. The responsibility for making the recipient type determination rests with the auditee. It is responsible for preparing the SEFA, so it should have already gone through the process of making that evaluation. (Editor’s note: This topic is different from the new fixed-amount award (§200.201)).
Q: Do you have to show expenditures for both cost reimbursement grants and fee for service grants on the SEFA?
A: B.S.:You have to show expenditures for federal grants and awards received on the SEFA. With respect to the cost reimbursement grant, it is an expenditure of federal awards and you do have to show those expenditures. With the fee for service, if you conclude it does meet the criteria to be considered a grant or award, it should be reported on the SEFA. The key again is that for a fee for service arrangement, you have to decide whether you are a contractor or grant recipient. If you conclude it’s a grant, it shows up on the SEFA.
Q: When can we auditors begin using the new $750,000 threshold under the uniform guidance?
A: B.S.:This becomes effective for [awards made during] fiscal years beginning on or after Dec. 26, 2014, or essentially the Dec. 26, 2015, year-end audits will be the first time auditors will use the new audit requirements. Auditees must follow the new requirements for new funding, or continuation of existing funding, on or after Dec. 26, 2014. Auditors will start doing the audits after the auditees have started implementing the new cost principle and administrative requirements under the uniform guidance (see ¶214 in the Single Audit Information Service).
Q: What should auditors and auditees do now to prepare for the new guidance?
A: B.S.:First, read the new guidance. Next, I would identify or highlight the differences from what you are used to dealing with compared to what you will deal with in the future. Gone are the old circulars that we are used to. They are being replaced with a uniform set of standards that will be applied to the administration of grants and awards. Some of those changes are going to be significant to the types of awards you are participating in, so make sure you look at ways to modify your controls appropriately to deal with them. Dec. 26 isn’t that far from now. For auditors, as you talk to auditees and wrap up your latest Circular A-133 single audits, you should start to talk to them about the changes.
Q: Will there be a requirement for us as a pass-through to change the previous pre-award assessment on a subrecipient when we get new money for a grant after Dec. 26 under the new guidance?
A: D.E.:With new money after Dec. 26, you will follow the new guidance. However, if you go out and monitor your current subrecipient on Dec. 28, for example, you will follow the old rules on an existing award.
Q: We get funds from several different federal agencies. Will the uniform guidance reduce the differences among the federal agencies? And what about the differences among pass-through entities?
A: D.E.:It should. We do know that in the real world the pass-through entity will try to add some extras on. But the idea is to have fewer differences.
Q: In the current requirements, if an auditee has a prior year significant deficiency for internal controls over financial reporting, which is not a Circular A-133 audit finding, is the auditee low risk?
A: B.S.: Yes, the auditee is low risk. But if it was a material weakness, then it would no longer be a low-risk auditee. It would be the same under the uniform grant guidance.
D.E.:However, if your financial statements as an auditee are a going concern, you can no longer be a low-risk auditee (§200.520).
Q: For federal awards, the new uniform grant guidance says personnel costs can be distributed based on performance-oriented metrics (§200.430(f)). What are examples of such and who at the federal awarding agencies have to approve this in advance?
B.S.:I’m not aware of a specific requirement that would require that to be approved. What we would be looking for as auditors would be that this be based on the development of sound controls to properly account for the allocation of personnel costs to the various programs where individuals are providing services. For example, if you use some sort of amount, there should be backup for that. I’d look at the last couple of years to analyze how time was spent and how this year’s grant compares to prior years’ grants. However, as I would with any control, I’d like to see that there was some sort of monitoring. You should periodically test it, at least annually, to have proof that those allocations are supported by actual fact.
The Department of Labor, Employment and Training Administration, in association with the Department of Education, plans to release a $100 million solicitation this fall to reward partnerships to help more workers participate in registered apprenticeship programs. The program is an extension of the high-profile Trade Adjustment Assistance Community College and Career Training competition.
The American Apprenticeship Initiative will supported by existing H-1B funding from the visa fees employers pay to hire foreign workers in areas where there are shortages of U.S. workers. A CFDA number hasn’t be assigned for the new program, but will be when the solicitation is released in the fall.
AAI will focus on rewarding partnerships between employers, labor organizations, training providers, community colleges, local and state governments, the workforce system, nonprofits and community- and faith-based organizations. The main objective is to expand the availability of registered apprenticeships, which are offered by numerous employers, industry associations and labor-management organizations. Registered apprenticeship programs are offered in a variety of career areas such as advanced manufacturing, healthcare and IT fields. Of special interest are careers where there is a current shortage of U.S. workers.
A registered apprenticeship is a proven and structured “earn and learn” model that pairs paid on-the-job learning with related technical classroom instruction. The apprenticeships offer American job seekers immediate employment opportunities that usually pay higher-than-average wages and offer continued career growth.
DOL’s Office of Apprenticeship, in conjunction with state apprenticeship agencies, administers the Registered Apprenticeship program nationally. These state agencies: register apprenticeship programs meeting federal and state standards; protect the safety and welfare of apprentices; issue nationally recognized and portable Certificates of Completion to apprentices; promote the development of new programs through marketing and technical assistance; and assure all programs provide high quality training and produce skilled and competent workers.
Apprentices learn highly sought-after skill sets and earn portable credentials that would be recognized as U.S. workers move from employer to employer or geographically. They also receive an opportunity to enroll in apprenticeship training at two- and four-year colleges.
New Program Funding Goals
As of this writing, the AAI competition is expected to have three goals: (1) launch apprenticeship models in new, high-growth fields; (2) align apprenticeships to pathways for further learning and career advancement; and (3) scale apprenticeship models that work.
Applicants should focus on fast-growing occupations and industries with open positions such as information technology, high-tech services, healthcare and advanced manufacturing. Training should also provide credentials and/or college credit, linked to the apprenticeship. Finally, ETA seeks programs that are scalable or can be replicated for broader impact, particularly for diverse populations.
DOL, in association with ED, have created the Register Apprenticeship-College Consortium to strengthen relationships between apprenticeship programs and institutions of higher education.
RACC memberships are composed of management groups and associations with Registered Apprenticeship programs, institutions of higher education and state, regional and national organizations. RACC members agree to accept the college credit value of a Registered Apprenticeship completion certificate as recommended by a recognized third party evaluator to transfer credits between member colleges.
Currently, numerous articulation agreements exist between a single college and a local Registered Apprenticeship program. The consortium will create a national network of colleges and Registered Apprenticeship sponsors allowing apprenticeship graduates to attend and complete their postsecondary degrees at member colleges.
Membership is free, but members must agree to abide by the RACC Framework outlining goals, principles and criteria for membership and the RACC Standardsof Good Practice.
Applicants meeting or exceeding any of the proposed AAI goals should be sure to discuss past performance, prior experience and successful implementation in submissions.
Additionally, applicants should become familiar with all the resources available, including the RACC documents. Exploring membership in the RACC also would be a good idea. Subsequent coverage will follow as more information becomes available.
The uniform grant guidance (§200.319) contains new language limiting the use of geographic preference by nonfederal entities when procuring goods and services with federal funding. Applicants should note full and open competition in their budget narratives to reflect purchasing expectations of the uniform grant guidance, if awarded.
Overall, the section focuses on competition in the procurement process. The language seeks to ensure a level playing field in the process used by nonfederal entities, including but not limited to state, tribal and local governments, institutions of higher education and nonprofits, in obtaining goods and services with federal awards. The language stipulates geographic preference generally is only allowed in the procurement process when the federal government allows it.
Under §200.319(b), nonfederal entities: Must conduct procurements in a manner that prohibits the use of statutorily or administratively imposed state or local geographical preferences in the evaluation of bids or proposals, except in those cases where applicable federal statutes expressly mandate or encourage geographic preference.
The language dilutes state, tribal and local policies providing preference for firms located in their state, city or county in the procurement bidding process when federal funding is involved. The federal government believes these preferences could result in the nonfederal entities not making the most efficient possible use of federal dollars.
As the language indicates, cases exist where federal statutes will expressly mandate or encourage geographic preference. For instance, the Farm Bill law, which oversees the nation’s nutrition funding programs, contains a prime example with its geographic provision allowing school districts to give preference in procuring local, unprocessed agricultural products. Applicants beware, however, because this language pre-dates the uniform grant guidance. It is unclear if other statutory changes will follow.
The provision currently doesn’t dictate that school districts must procure local products, but merely gives preference to local offerings. School districts at this time have free will to decide if they want to use the geographic provision in their procurement practices for these products.
In school districts using this provision, contractors offering local, unprocessed products have an advantage in securing school contracts, but must still compete with those not offering local products.
Under this new language, furthermore, when there is a conflict between state or tribal law and the uniform guidance, the federal guidance prevails. The uniform grant guidance contains numerous other changes to procurement language (§§200.318 -.326); however, §200.319 contains some of the most powerful language by dictating that federal law outweighs state and local law, including tribal law, unless authorized by federal statute, for example, the Farm Bill.
The inclusion of this stricter language, not only limits geographic preference, but also other differences for all nonfederal entities, and shows the federal government is concerned about fair competition in any scenario where federal funding is being used.
In fact, §200.319 drives home this point from the beginning, stating: All procurement transactions must be conducted in a manner providing full and open competition consistent with the standards of this section.
Nonfederal entities should be revising their existing procurement policies to make way for this significant change, and developing plans to incorporate some of this language into proposal and budget narratives to assure federal agencies they are informed and prepared to implement the uniform grant guidance, if awarded.
As the uniform guidance becomes effective for nonfederal entities Dec. 26, grantees and grantseekers can contact program officials from their favorite programs for insights.
Check Solicitations and Dates
Another helpful step would be to review upcoming solicitations very carefully for references to geographic preference and any other procurement language that may either require or exempt compliance. The key is to look at the anticipated award date. If the award is anticipated before Dec. 26, the prior OMB circulars and prior language would apply. If the award is anticipated after Dec. 26 when the uniform guidance takes effect for nonfederal entities, the new language would apply.
Questions to ask program officials could include:
When is the award anticipated and what regulations would apply – the prior circulars or the uniform grant guidance?
Are there any pre-release solicitations underway that would provide a comment period for nonfederal entity input?
For those with multi-year awards and existing geographic preference provisions, how will future award increments be handled?
Commodity Supplemental Food Program (CSFP): Implementation of the Agricultural Act of 2014 — Effective: August 8, 2014. C.F.R.: 7 C.F.R. Part 247. Action: The Food and Nutrition Service amended the regulations for the Commodity Supplemental Food Program to phase out the eligibility of women, infants and children, in accordance with the amendments made by the Agricultural Act of 2014. Contact: Erica Antonson, 703-305-2662. More information:http://www.gpo.gov/fdsys/pkg/FR-2014-07-09/pdf/2014-16055.pdf.
Interdisciplinary Research in Hazards and Disasters or Hazards SEES —Deadline: November 28, 2014. Eligibility: Institutions of higher education. Fund uses: To support well-integrated interdisciplinary research efforts in hazards-related science and engineering to reduce the impact of hazards, enhance the safety of society and contribute to sustainability. Contact: Gregory J. Anderson, 703-292-4693; firstname.lastname@example.org. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=259228.
Ryan White Part A HIV Emergency Relief Grant Program — Deadline: September 19, 2014. Eligibility: State and local governments. Fund uses: To provide a continuum of care for people living with HIV disease who are primarily low income, underserved, uninsured and underinsured. Contact: Steven Young, 301-443-6745; email@example.com. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=259029.
Prevention & Public Health Fund: Alzheimer's Disease Initiative -- Specialized Supportive Services Project — Deadline: August 6, 2014.Eligibility: State and local governments, institutions of higher education, for-profits and nonprofits. Fund uses: To fill gaps in services and supports for persons living with Alzheimer’s disease and related dementias and their caregivers. Contact: Erin Long, Erin.Long@acl.gov. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258996.
Affordable Care Act: New Access Point Grants — Deadline: August 20, 2014. Eligibility: State and local governments, institutions of higher education, public housing authorities and nonprofits. Fund uses: To increase access to comprehensive, culturally competent, quality primary health care services and improve the health status of underserved and vulnerable populations. Contact: HRSA Call Center, 877-464-4772; CallCenter@HRSA.GOV. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=259053.
Prevention & Public Health Fund: Improving Immunization Rates and Enhancing Disease Prevention through Partnerships with Providers and National Organizations — Deadline: August 21, 2014. Eligibility: State and local governments, institutions of higher education and nonprofits. Fund uses: To improve immunization rates by increasing the number of healthcare providers assessing vaccination needs and recommending vaccinations. Contact: 770-488-2700; firstname.lastname@example.org. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=259070. Pediatric Cardiac Genomics Consortium — Deadline: October 15, 2014. Eligibility: State and local governments, institutions of higher education, public housing authorities and nonprofits. Fund uses: To identify genetic causes of human congenital heart disease through collaborative research. Contact: Bryan Clark, 301-435-6975; email@example.com. More information: http://www.grants.gov/web/grants/view-opportunity.html?oppId=259049.
Implementation of Strategic Plans for Billing for Immunization Services in Health Department Clinics — Deadline: August 8, 2014. Eligibility: Public health departments. Fund uses: To enable public health departments to bill health insurance plans, with the intent of capturing immunization service delivery fees. Contact: 770-488-2700; firstname.lastname@example.org. More information: http://www.grants.gov/web/grants/view-opportunity.html?oppId=259208.
Medicare and Medicaid Programs; CY 2015 Home Health Prospective Payment System Rate Update; Home Health Quality Reporting Requirements; and Survey and Enforcement Requirements for Home Health Agencies — C.F.R.: 42 C.F.R. Parts 409, 424, 484, 488 and 498. Action: The Centers for Medicare and Medicaid Services proposed to update the Home Health Prospective Payment System rates effective Jan. 1, 2015. Contact: Hillary Loeffler, 410-786-0456. More information:http://www.gpo.gov/fdsys/pkg/FR-2014-07-07/pdf/2014-15736.pdf.
Individuals With Disabilities
Rehabilitative Services Administration: Parent Information and Training Centers — Deadline: August 11, 2014. Eligibility: Nonprofits. Fund uses: To help individuals with disabilities meet vocational, independent living and rehabilitation needs through providing training and technical assistance to their parents and guardians. Contact: Tara Jordan, 202-245-7341; email@example.com. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=259230.
Native Americans/Alaska Natives
Tribal Management Grant Program — Deadline: August 5, 2014. Eligibility: Native American tribal governments. Fund uses: To allow tribes to assume control of their health care programs, with grantees receiving assistance in planning, evaluation and management. Contact: Paul Gettys, 301-443-2114. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258928.
The National Drug Abuse Treatment Clinical Trials Network —Deadline: December 3, 2014. Eligibility: State and local governments. Fund uses: To develop and test interventions for the management of the wide spectrum of substance use disorders with input from and collaboration with clinical research investigators, healthcare providers, patients and relevant stakeholders. Contact: 866-504-9552; firstname.lastname@example.org. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258914.
Mathematical Sciences Postdoctoral Research Fellowships — Deadline: October 15, 2014. Eligibility: Individuals affiliated with public and private colleges and universities and government agencies. Fund uses: To nurture future leaders in mathematics and statistics by facilitating their participation in postdoctoral research environments that will have maximal impact on their future scientific development. Contact: Bruce Palka, 703/292-4856; email@example.com. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=259269.
Grants for Adaptive Sports Programs for Disabled Veterans and Members of the Armed Forces — Deadline: August 7, 2014. Eligibility: State and local governments, institutions of higher education and nonprofits. Fund uses: To support adaptive sports programs providing opportunities for disabled veterans and disabled members of the military. Contact: Michael Welch, 202-632-7136. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258778.
Military Families Learning Network — Deadline: August 8, 2014. Eligibility: Institutions of higher education including land-grant colleges and universities, state agricultural experiment stations and cooperative extension services and other domestic or foreign organizations. Fund uses: To support cross-cutting programs that serve military families, particularly those who are geographically dispersed, to improve local workforce development in the food and agricultural sciences. Contact: NIFA Help Desk Phone, 202-401-5048. More information: http://www.grants.gov/web/grants/view-opportunity.html?oppId=259270.
A uniform grant guidance section (§200.431) contains revised language including family-related leave among the examples of allowable paid leave that non-federal entities can provide to their employees through written policies. The section gives family-related leave equal billing with more traditional types of leave, such as vacation, sick, holiday, court, administrative and military. Nonfederal entities who submitted grant proposals this year and who receive funding after Dec. 26 may need to revise grant budgets to align with the uniform grant guidance.
The section focuses on fringe benefits that non-federal entities can offer their employees in compensation packages. §200.431 defines fringe benefits as: allowances and services provided by employers to their employees as compensation in addition to regular salaries and wages.
In addition to leave, other fringe benefits include employee insurance, pensions and unemployment benefit plans.
Employees take family-related leave for a variety of reasons, including child birth, adoption of a newborn or foster child, chronic disease and care of a relative with a serious health condition. Federal agencies, school districts and private sector employers with 50 or more employees have been required under federal law to provide unpaid family-related leave since the passage of the Family and Medical Leave Act in the early 1990s. Grants must also reflect federal law.
Employees can take up to 12 workweeks of unpaid, job-protected leave a year. Additionally, group health benefits must be maintained during the leave as if employees continued to work instead of taking leave. Up to 26 workweeks can be taken during a single 12-month period for military caregiver leave. It may be taken to care for a covered servicemember with a serious injury or illness if the eligible employee is the servicemember’s spouse, son, daughter, parent or next of kin.
The United States remains the only industrialized country to not have a national paid family leave program, but three states, California, New Jersey and Rhode Island, have adopted these types of programs. These programs are funded through employee-paid payroll taxes and are administered through the state disability programs. Washington State passed a paid family leave law in 2007, but the law was never implemented.
The inclusion of the family-related leave provision in §200.431 aids this burgeoning effort by encouraging those receiving federal funding to provide this paid benefit to their employees. Another funding effort at the Employment and Training Administration (Labor Department) also encourages more states to adopt family-related leave programs. The Women’s Bureau Paid Leave Analysis Grant Program will provide five awards to state governments ranging from $50,000 to $250,000 to conduct paid leave studies to support the development or implementation of paid family and medical leave programs at the state level. The CFDA Number is 17.261; applications are due July 28.
The funded states will use the awards to conduct activities including: (1) statistical analysis such as feasibility, cost benefit and actuarial studies; (2) economic impact analysis; (3) financing, eligibility and benefit modeling; and (4) education, outreach and marketing analysis for implementation purposes.
While states grapple with the paid leave issue, the uniform guidance offers details on how non-federal entities can start providing paid family-friendly leave. The costs are allowable if the benefits are reasonable and are required by law, an employee agreement or an established policy of the non-federal entity.
Nonfederal entities that are recipients and subrecipients of federal funds should review local leave policies and revise, as needed, to align with the uniform grant guidance. The nonfederal entity can establish a policy allowing employees to use any vacation or sick time for family-related leave or offer the fringe benefit as part of a grant budget.
In addition to creating these written leave policies, nonfederal entities are guided by two other criteria:
costs must be equitably allocated to all related activities;
the accounting basis (cash or accrual) selected for costing each type of leave must be consistently followed by the nonfederal entity or specified grouping of employees.
The section offers guidance on handling leave costs for the two types of accounting – cash basis and accrual basis. Cash basis accounting recognizes expenses when the leave is taken, while accrual recognizes the leave when it is earned.
Under §200.431, when nonfederal entities recognize the cost of leave under cash basis accounting, it must be done in the period that it is taken and paid. Additionally, payments for unused leave when an employee retires or terminates employment are allowable as indirect costs in the year of the payments.
The accrual basis accounting may only be used for those types of leave for which a liability as defined by General Accepted Accounting Principles exists when the leave is earned. Most leave, including family-related, would meet GAAP’s liability definition of a present obligation of the federal government to provide assets or services to another entity at a determinable date, when a specified event occurs, or on demand.
Many nonfederal entities require employees to accrue leave, instead of providing the entire allotment at the beginning of each year. This creates a liability situation. When a nonfederal entity uses the accrual basis of accounting, the guidance specifies allowable leave costs are the lesser of the amount accrued or funded – a common provision in federal agency grant solicitations.
Grantseekers should familiarize themselves with all of the “family-friendly” and ‘family-related” provisions in the uniform guidance by conducting a search of the document. For example, a search uncovers family-friendly provisions in §200.432 (Conferences) and §200.474 (Travel Costs). Local policies should be updated to align with the guidance.
New language in these sections gives nonfederal entities flexibility in creating policies that allow their employees to balance personal responsibilities while maintaining successful careers contributing to federal awards. The provisions seek to ease dependent care costs when attending conferences and traveling.
The Centers for Disease Control and Prevention and the National Institute for Occupational Safety and Health are partnering on a program to support states in developing or expanding occupational safety and health surveillance programs. OSH surveillance programs track and develop solutions to address occupational injuries, illnesses, deaths, hazards or exposures.
The State Occupational Safety and Health Surveillance Program, managed by NIOSH, will fund programs that include: OSH data acquisition, analysis and dissemination of findings; outreach and partnership development; developing prevention/intervention recommendations; and state-proposed surveillance priority research projects. The CFDA Number is 93.262.
Overall, the program seeks to ensure that occupational safety and health is part of broader public health goals and objectives. This is accomplished through creating and expanding top-notch programs with four objectives: (1) collect and analyze OSH data, 2) identify work-related disease, injury and exposure trends; 3) set program priorities; and 4) develop OSH prevention and outreach strategies.
The solicitation will fund three types of programs: (1) Fundamental; (2) Fundamental-Plus; and (3) Expanded. Fundamental programs are for states with limited experience in collecting, analyzing and interpreting occupational health indicators.
Occupational health indicators are measures of health (work-related disease or injury) or factors associated with health (workplace exposures, hazards, or interventions) that allow a state to compare its health or risk status with that of other states and evaluate trends over time. Fundamental awardees start by collecting, analyzing and interpreting data on at least 15 of the 20 occupational health indicators uncovered by CSTE. These include data on work-related hospitalizations, hospitalizations for work-related burns and carpal tunnel syndrome cases identified in state workers’ compensation systems. The fundamental-plus and expanded grants go to states with existing, more advanced OSH programs.
NIOSH anticipates making up to 25 new and renewal cooperative agreements worth an estimated $6.5 million in Fiscal Year 2015. It is estimated that a total of $32.5 million may be invested in this grant program over five years. The maximum funding for awards is expected to be: fundamental, up to $130,000 each; fundamental-plus, up to $140,000 each; and expanded, up to $675,000 each. Those creating -- or with interventions dealing with -- work-related adult blood lead cases may be eligible for additional funding.
The grantees should expect substantial federal involvement, with a NIOSH scientist appointed to assist, guide, coordinate or participate in project activities.
State and local governments and institutions of higher education can apply for the funding. NIOSH considers partnerships to be an integral part of success. Strong partnerships with organizations, such as Workforce Investment Act offices and hospitals, can add expertise or specialized experience that can expedite the collection, analysis, interpretation and communication of OSH results. These partnerships can ensure fundamental awardees move to the next levels of fundamental-plus and expanded funding.
The program is run via a standing solicitation, meaning application deadlines are currently set for the next three fiscal years. The first deadline is Sept. 15, with subsequent application due dates the same day in 2015 and 2016. Non-binding letters of intent are due to NIOSH by Aug. 15, for those planning to apply by Sept. 15.
While NIOSH is overseeing the program, applicants must follow the NIH submission system. Applications will use the PHS 398 research grant application forms and instructions for preparing a research grant application. Applicants will submit a signed, typewritten original of the application and three signed photocopies in one package to: Center for Scientific Review, National Institutes of Health, 6701 Rockledge Dr., Room 1040, MSC 7710
Bethesda, MD 20892-7710 (U.S. Postal Service Express or regular mail), Bethesda, MD 20817 (for express/courier service; non-USPS service).
At the time of submission, two additional signed paper copies of the application and all copies of the Appendix files must be sent to: Price Connor, Ph.D., Office of Extramural Programs, National Institute for Occupational Safety and Health, Centers for Disease Control and Prevention, 1600 Clifton Rd, Mailstop E-74, Atlanta, GA 30329-4018. The overnight mail address is 2400 Century Parkway NE (4th floor), Atlanta, GA 30345. Connor’s office can be contacted by phone at 404/498-2530, fax at 404/498-2571 or by e-mail, firstname.lastname@example.org.
Applicants also should be aware that in addition to having a DUNS number and SAM registration, they must have an eRA Commons registration, which provides them access to NIH’s electronic system for grants administration. Applicants must have an active DUNS number and SAM registration in order to complete the eRA Commons registration. eRA Commons requires organizations to identify at least one Signing Official and at least one Program Director/Principal Investigator account in order to submit an application.
Saudi American Educational and Cultural Initiative Grant — Deadline: June 30, 2015. Eligibility: Institutions of higher education, nonprofits and individuals. Fund uses: To support innovative forms of collaboration between Saudi and U.S. non-governmental and community organizations, universities, entrepreneurs, cultural organizations and qualified individuals to promote mutual understanding and respect through long-term partnership and cooperation between the two countries. Contact: Joan Ahmed, email@example.com. More information: http://www.grants.gov/web/grants/view-opportunity.html?oppId=257748.
National Urban Search and Rescue Response System Readiness Cooperative Agreement — Deadline: July 28, 2014. Eligibility: Current US&R task forces. Fund uses: To fund 28 national task forces staffed and equipped to conduct round-the-clock search-and-rescue operations following earthquakes, tornadoes, floods, hurricanes, aircraft accidents, hazardous materials spills and catastrophic structure collapses. Contact: Centralized Services Information Desk, 800-368-6498; firstname.lastname@example.org. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258616.
Alliance for Innovation on Maternal & Child Health: Cooperative Agreement Expanding Access to Care for the Maternal and Child Health Population: Category 1: Collaborative Engagement; and Category 2: Measuring Collaborative Engagement — Deadline: July 28, 2014. Eligibility: Any public or private entity. Fund uses: To improve healthcare access for new moms and children by: focusing on continuity of coverage and care; improving systems of care for children with special health care needs; and promoting the use of Bright Futures Guidelines for all children. Contact: Sylvia Sosa, 301-443-2259; email@example.com. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258624.
Multidisciplinary and Collaborative Research Consortium to Reduce Oral Health Disparities in Children: A Multilevel Approach — Deadline: February 27, 2015. Eligibility: State and local governments, institutions of higher education, public housing authorities, nonprofits and for-profits. Fund uses: To support research focusing on reducing or eliminating oral health disparities among children from birth to age 21. Contact: Diana Rutberg, 301-594-4798; firstname.lastname@example.org. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258692.
Outstanding Investigator Award — Deadline: January 7, 2015. Eligibility: State and local governments, institutions of higher education, public housing authorities and nonprofits. Fund uses: To provide long-term support to experienced cancer investigators proposing to conduct cutting-edge research. Contact: 301-451-5939; email@example.com. More information: http://www.grants.gov/web/grants/view-opportunity.html?oppId=258669.
International Research Collaboration on Alcohol and Alcoholism —Deadline: October 5, 2014. Eligibility: State and local governments, institutions of higher education, public housing authorities, nonprofits and for-profits. Fund uses: To foster international collaborations between U.S. substance abuse research investigators and those located in foreign countries. Contact: 301-451-5939; firstname.lastname@example.org. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258771.
Individuals With Disabilities
Pathways to Careers: Community Colleges for Youth and Young Adults with Disabilities Demonstration Project — Deadline: August 11, 2014. Eligibility: Institutions of higher education, with a focus on community colleges. Fund uses: To support education and career development efforts successfully getting youth with disabilities into a job or on a career path. Contact: Cassandra Mitchell, 202-693-4570; email@example.com. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258621.
Disability and Rehabilitation Research Projects and Centers Program: Minority-Serving Institution Field-Initiated Projects — Deadline: September 2, 2014. Eligibility: Historically black institutions of higher education and Hispanic-serving institutions of higher education. Fund uses: To develop methods, procedures and rehabilitation technologies to maximize full inclusion and integration into society of individuals with disabilities, especially those with the most severe disabilities. Contact: Marlene Spencer, 202-245-7532; Marlene.Spencer@ed.gov.More information: http://www.grants.gov/web/grants/view-opportunity.html?oppId=258773.
Native Americans/Alaska Natives
Tribal Colleges Research Grants Program — Deadline: July 25, 2014. Eligibility: Tribal colleges. Fund uses: To assist tribal colleges in building institutional research capacity through applied projects addressing student educational needs and solving community, reservation or regional problems. Contact: NIFA Help Desk Phone, 202-401-5048. More information: http://www.grants.gov/web/grants/view-opportunity.html?oppId=258848.
Supplemental Nutrition Assistance Program Recipient Trafficking Prevention Grant — Deadline: August 15, 2014. Eligibility: State governments. Fund uses: To aid states in the prevention of SNAP fraud by implementing process improvements designed to detect, investigate and prosecute individuals suspected of trafficking benefits. Contact: Dawn Addison, firstname.lastname@example.org. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258623.
Capacity Building for Non-Land Grant Colleges of Agriculture —Deadline: September 5, 2014. Eligibility: Institutions of higher education other than land-grant institutions. Fund uses: To assist non-land grant institutions of higher education in maintaining and expanding their capacity to conduct education, research and outreach activities relating to agriculture and renewable resources. Contact: NIFA Help Desk Phone, 202-401-5048. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258849.
Demonstration Grants for Domestic Victims of Severe Forms of Human Trafficking — Deadline: August 11, 2014. Eligibility: State and local governments and nonprofits. Fund uses: To provide support services to victims of severe forms of human trafficking, including coordination and referral services. Contact: Katrina Morgan, 855-792-6551; TechAssist@fysb.net. More information: http://www.grants.gov/web/grants/view-opportunity.html?oppId=258675.
Facilitating Research at Primarily Undergraduate Institutions: Research in Undergraduate Institutions and Research Opportunity Awards —Deadline: December 31, 2014. Eligibility: Institutions of higher education that have awarded 20 or fewer Ph.D. degrees in all NSF-supported fields during the combined previous two academic years. Fund uses: To support research by faculty members at institutions of higher education focused on improving participation and completion of advanced degrees at their schools. Contact: 703-292-5111; email@example.com. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258835.
Grants for Adaptive Sports Programs for Disabled Veterans and Disabled Members of the Armed Forces — Effective: July 1, 2014. C.F.R.: 38 C.F.R. Part 77. Action: The Department of Veterans Affairs established a new program to provide grants to eligible entities to provide adaptive sports activities to disabled veterans and disabled members of the Armed Forces. Contact: Michael F. Welch, 202-632-7136. More information:http://www.gpo.gov/fdsys/pkg/FR-2014-07-01/pdf/2014-15191.pdf.
The uniform grant guidance includes a new section (§200.303) about internal controls that also requires nonfederal entities, both applicants and grantees, to take reasonable measures to safeguard and protect personally identifiable information as well as any information that the federal awarding agency or pass-through entity designates as sensitive.
The language previously was only included in audit provisions, but now is part of the administrative requirements of the uniform grant guidance, a significant change. The revision seeks to encourage nonfederal entities to better structure their internal controls earlier in the process, further mitigating risks of waste, fraud and abuse with federal funding, a central concern of the uniform grant guidance, with 61 references on this topic alone.
Meeting this new requirement will require creation or enhancement of internal controls to ensure proper oversight during the administration of a federal award. A system of internal control must: (1) provide reasonable assurance of compliance with federal statutes, regulations and the terms and conditions for the funding program; and (2) protect any personally identifiable information and other information deemed sensitive under federal, state and local privacy and confidentiality laws.
Applicants would clearly want to provide reasonable assurance in any proposal including examples of their internal controls to demonstrate they would be accountable once awarded. Nonfederal entities, once awarded, must include evaluation and monitoring mechanisms in their system of internal control to assure compliance, as well as processes to take prompt action when instances of noncompliance are identified.
Standards and Framework
Internal control must be in compliance with guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, and the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission.
The CGUS and COSO publications define internal control as: “An integral component of an organization’s management that provides reasonable assurance that the following objectives are being achieved: effectiveness and efficiency of operations; reliability of financial reporting; and compliance with applicable laws and regulations.”
The CGUS publication sets the following five standards for internal control:
Control Environment:Management and employees should establish and maintain an environment with a supportive attitude toward internal control and conscientious management.
Risk Assessment:Internal control should provide for an assessment of the risks the agency faces from both external and internal sources.
Control Activities:Internal control activities help ensure that management’s directives are met.
Information and Communication: Information should be recorded and communicated to management and others within the entity who need it and in a form and within a time frame that enables them to carry out their internal control and other responsibilities.
Monitoring:Internal control monitoring should assess the quality of performance over time and ensure that the findings of audits and other reviews are promptly resolved.
The COSO publication, which was updated in 2013 and is consistent with the uniform grant guidance, helps nonfederal entities take these five standards and design and implement a system of internal control at their organizations. Business and operating environments have changed since the release of the original version in 1992, with the revised publication broadening the scope of internal control to address new operations and reporting objectives and clarify the requirements for determining what constitutes effective internal control.
As nonfederal entities are revising and adapting their local policies and regulations to better align with the uniform grant guidance, it would be beneficial to conduct a review of internal controls, particularly for grants administration and the term “reasonable assurance.” Often, nonfederal entities, whether grantees or applicants, will hear the term “internal control” and get bogged down trying to address all the needs or devise a comprehensive system.
The CGUS publications recommend organizations design and implement internal control based on reasonable assurance. The publication recognizes: “No matter how well designed and operated, internal control cannot provide absolute assurance that all agency objectives will be met. Factors outside the control or influence of management can affect the entity’s ability to achieve all of its goals. For example, human mistakes, judgment errors, and acts of collusion to circumvent control can affect meeting agency objectives. Therefore, once in place, internal control provides reasonable, not absolute, assurance of meeting agency objectives.”
What To Do
Federal applicants and grantees should hold brainstorming sessions to devise methods to ensure all five of the internal control standards are met from a grant administration perspective. A brainstorming session by a Head Start grantee, for instance, would likely focus on issues with protecting the personal identification for children in their care. Other programs would want to protect social security numbers of program participants or staff. This could include devising safeguards and processes to protect this information, such as limiting access to personnel or electronic records and having written guidelines in place about handling information requests from internal or external parties who may want access to the information, like a relative who isn’t authorized on file or a third-party provider. The processes would include a system to address any infractions or issues brought to light in the implementation of the grant program.
The Corporation for National and Community Service offers $11.2 million to advance and evaluate an emerging funding model that aligns payment for social services with verified social outcomes, a performance-basedstrategy central to the uniform grant guidance.
The Social Innovation Fund: Pay for Success Grants Competition will target innovative community-based solutions in low-income communities, focusing on devising methods to ensure federal funding is spent wisely. The CFDA number is 94.024.
Social Innovation Fund
SIF, a White House signature program, transforms low-income communities by uniting public and private resources to evaluate and grow innovative community-based solutions with a history of results. The programs must focus on at least one of three priority areas: (1) economic opportunity; (2) healthy futures; and (3) youth development.
SIF funding goes to identify, validate and cultivate promising approaches to address challenges facing low-income communities. SIF works with and through existing grantmaking institutions to direct resources to innovative community-based nonprofit organizations focused on the three priorities, through sub-awards. SIF’s funding model is distinguished by six key characteristics:
match dollars; and
Pay for Success
PFS financing is a mechanism to increase investments in effective social interventions by changing the way government allocates and invests its resources, with an emphasis on results and outcomes. PFS strategies are typically associated with preventive social solutions and are put in action through contracts between a government or foundation and a nonprofit social service provider.
Under PFS, grantees are only paid after they have demonstrated success, a model also described in the uniform grant guidance under fixed-amount awards (§200.201) which differs from the conventional practice of funding providers for a promise of success or a standard cost-reimbursement award simply based on expenditure of funds. Grantees agree that all or some portion of payment for services will not be paid until an agreed-upon set of outcomes or level of impact has been verified. Achievement of outcomes is typically verified by an independent evaluator agreed upon by all parties to a transaction.
CNCS provides preferences to those focusing on: (1) opportunity youth (ages 14-24) who are homeless, in foster care, or involved in the juvenile justice system; (2) traditionally underserved geographic areas and populations that include rural and economically depressed communities, tribal communities, disabled populations and veterans; and (3) government savings.
Applicants include state and local governments, as well as foundations and nonprofits. Current SIF grantees and sub-recipients are encouraged to apply under this new category of funding. Applicants also are required to demonstrate how SIF grants will supplement, and not supplant, any current PFS activities.
CNCS estimates multiple cooperative agreements will be awarded ranging from $200,000 to $1,800,000 each year over the three-year project period. Prime awardees will receive the funding and then make sub-awards to state and local governments, regional governmental partnerships and nonprofit organizations. The ultimate goal for CNCS, awardees and sub-awardees is to work together on attaining outcomes.
Prime awardees can expect substantial involvement by CNCS, especially with subrecipient selection. The assigned CNCS program officer will confer with prime awardees on a regular and frequent basis to develop and review service delivery and project status.
Every SIF grant dollar must be matched by the grantee with nonfederal dollars and services. At least 50 percent of the match must be in non-federal cash and up to 50 percent can be in-kind services. At the time of the application, applicants must demonstrate the ability to meet 10 percent of their first year match requirement in non-federal cash.
Proposals must be submitted through CNCS’ eGrants system by July 31, no later than 5 p.m. Eastern time. Applicants are strongly encouraged to send a Notice of Intent to Apply in July via e-mail to firstname.lastname@example.org. Because proposals are not submitted through Grants.gov, applicants should attend to any registration requirements for eGrants in advance of submitting an application.
CNCS may consider an application after the deadline under certain circumstances, but only if an applicant submits an e-mail to LateApplications@cns.gov within the 24 hours immediately after the deadline explaining the extenuating technical circumstance that caused the delay. If technical issues prevented the submission, applicants should include an eGrants National Service Hotline ticket number in the e-mail. A ticket number can be obtained by calling the National Service Hotline before the deadline and explaining the technical issues that prevented timely submission.
CNCS will determine the acceptance of late applications on a case-by-case basis. Advance request to submit a late application will never be considered.
Small Business Innovation Research Program (Phase I) — Deadline: October 2, 2014. Eligibility: Small businesses. Fund uses: To stimulate small business involvement in developing agricultural technologies, especially those owned by women or socially and economically disadvantaged individuals and groups. Contact: Elden Hawkes, 202-401-4002; email@example.com.More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258169.
Competitive Abstinence Education Grant Program — Deadline: August 7, 2014. Eligibility: State and local governments, institutions of higher education, public housing authorities, nonprofits and for-profits. Fund uses: To develop abstinence education programs to reduce teen pregnancies, with a focus on adolescent youth who are at greatest risk of sexually transmitted diseases and bearing children out of wedlock. Contact: Jewellynne Tinsley, 202-205-9462; Jewellyne.Tinsley@acf.hhs.gov. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258345.
Studies Program on Ethnic Disparities in Juvenile Justice — Deadline: July 21, 2014. Eligibility: State and local governments, institutions of higher education, nonprofits and for-profits. Fund uses: To study existing data to determine the severity of ethnic disparities effecting Hispanic/Latino youth’s contact with the juvenile justice system. Contact: Justice Information Center, 877-927-5657; JIC@telesishq.com. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258175.
Enhancements to Juvenile Drug Courts — Deadline: July 23, 2014. Eligibility: State and local governments. Fund uses: To enhance the capacity and services provided by juvenile drug courts. Contact: Justice Information Center, 877-927-5657; JIC@telesishq.com. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258373.
NIJ DNA Arrestee Collection Process Implementation Grants Program —Deadline: August 7, 2014. Eligibility: State governments with designated DNA database laboratories. Fund uses: To assist with the costs associated with the implementation of DNA arrestee collection processes that improve the National DNA Index System. Contact: Charles Heurich, 202-616-9264; Charles.Heurich@usdoj.gov. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258347.
Secretary's Proposed Supplemental Priorities and Definitions for Discretionary Grant Programs — Action: The Department of Education proposed 15 priorities and related definitions for use in discretionary grant programs. Contact: Margo Anderson, 202-205-3010. More information:http://www.gpo.gov/fdsys/pkg/FR-2014-06-24/pdf/2014-14671.pdf.
Institutional Eligibility Under the Higher Education Act of 1965, as Amended; Delay of Implementation Date — Effective: July 1, 2015. C.F.R.: 34 C.F.R. Part 600. Action: The Department of Education delayed until July 1, 2015, the implementation date for certain state authorization regulations for institutions of postsecondary education whose state authorization does not meet the requirements of these regulations. Contact: Sophia McArdle, 202-219-7078. More information:http://www.gpo.gov/fdsys/pkg/FR-2014-06-24/pdf/2014-14721.pdf.
Vocational Rehabilitation Services Projects for American Indians With Disabilities — C.F.R.: 34 C.F.R. Parts 369 and 371. Action: The Department of Education proposed to amend the definition of "reservation" under the regulations governing the American Indian Vocational Rehabilitation Services program. Contact: Thomas Finch; 202-245-7343. More information: http://www.gpo.gov/fdsys/pkg/FR-2014-06-23/pdf/2014-14387.pdf.
Women’s Business Center Program Initial Grant — Deadline: July 30, 2014. Eligibility: Nonprofits in Alaska, Arizona, California, Delaware, Florida, Georgia, Guam, Louisiana, New Hampshire, Tennessee, Texas and West Virginia. Fund uses: To create centers in the selected states and territory providing technical assistance to women entrepreneurs in the areas of finance, management and marketing. Contact: Office of Women’s Business Ownership, 202-205-6673. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258370.
National Priorities: Systems-Based Strategies to Improve The Nation’s Ability to Plan And Respond to Water Scarcity and Drought Due to Climate Change —Deadline: August 5, 2014.Eligibility: Nonprofits. Fund uses: To investigate how drought caused by climate change is impacting surface water and groundwater quality and availability. Contact: Angela Page, 703-347-8046; firstname.lastname@example.org. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258328.
The Housing and Economic Recovery Act of 2008 (HERA): Changes to the Section 8 Tenant-Based Voucher and Section 8 Project-Based Voucher Programs — Effective: July 25, 2014. C.F.R.:24 C.F.R. Parts 5, 982 and 983. Action: The Department of Housing and Urban Development conformed its Section 8 Tenant-Based Voucher and Project-Based Voucher program regulations to meet the statutory program changes made by the Housing and Economic Recovery Act of 2008. Contact: Michael Dennis, 202-402-3882. More information:http://www.gpo.gov/fdsys/pkg/FR-2014-06-25/pdf/2014-14632.pdf.
HUD Implementation of Fiscal Year 2014 Appropriations Provisions on Public Housing Agency Consortia, Biennial Inspections, Extremely Low-Income Definition, and Utility Allowances — Effective: July 1, 2014. C.F.R.: 24 C.F.R. Parts 5, 943 and 982. Action: The Department of Housing and Urban Development established the terms and conditions by which it will implement changes to the statutory definition of a "public housing agency," the frequency of housing inspections, the statutory definition of "extremely low-income" and utility allowances for tenant-paid utilities. Contact: Michael Dennis, 202-402-4059. More information:http://www.gpo.gov/fdsys/pkg/FR-2014-06-25/pdf/2014-14915.pdf.
Assistance to High Energy Cost Rural Communities — Deadline: August 1, 2014. Eligibility: State and local governments, public housing authorities, institutions of higher education, nonprofits and for-profits. Fund uses: To improve energy generation, transmission or distribution facilities serving communities where the average residential expenditure for home energy exceeds 275 percent of the national average. Contact: Kristi Kubista-Hovis, 202-720-9545; Kristi.email@example.com. More information:http://www.grants.gov/web/grants/view-opportunity.html?oppId=258500.
The Education Department, Office of Innovation and Improvement offers $26.5 million to replicate and expand high-quality charter schools with successful performance in improving student achievement.
Applicants for the Charter Schools Program: Grants for Replication and Expansion of High Quality Charter Schools funding will propose: expanding the enrollment of one or more existing charter schools by substantially increasing the number of available seats per school; or open one or more new schools based on a charter school model showing evidence of success. The CFDA Number is 84.282M.
The Charter School Program
CSP increases national understanding of the charter school model by expanding the number of high-quality charter schools; providing financial assistance for the planning, program design and initial implementation of charter schools; and evaluating the effects of charter schools.
In addition to this program, CSP offers seven other funding programs, including the State Educational Agency Grants (CFDA Number: 84.282A) and the National Leadership Activities Grants (CFDA Number. 84.282N). Additionally, CSP funds many technical assistance providers, including the National Charter School Resource Center, a one-stop center for charter schools.
This year’s competition has a new competitive preference priority focusing on Promise Zones, which are communities partnering with the federal government to create jobs, increase economic activity, improve educational opportunities, reduce violent crime and leverage private investment. The initiative has given five communities the Promise Zone designation – San Antonio, Philadelphia, Los Angeles, Southeastern Kentucky, and the Choctaw Nation of Oklahoma – with the intent to designate 15 additional communities over the next three years.
The designation, which is active for 10 years, enables the federal government to partner with local leaders who are addressing multiple community revitalization challenges in a collaborative way and have demonstrated a commitment to results. These communities can receive up to two bonus points in the grant scoring process.
The new competitive priority joins the existing competitive priorities that benefit those focusing on: (1) low-income populations (up to 10 bonus points); (2) school improvement (up to four bonus points); (3) diversity promotion (up to five bonus points). Another competitive priority provides up to three bonus points for novice applicants.
ED offers a helpful list of definitions, which can aid in the development of quality applications. For instance, the agency has revised the project design criteria to ensure it is supported by evidence of promise. The definition for evidence of promise offers details on what constitutes legitimate supporting evidence and where this information should be included.
In this case, the evidence should support at least one critical component of the program and one significant outcome. This information will be included in the logic model required by all applicants. The definition for logic model isn’t universal, so information on this method to devise a program’s framework also is defined in detail.
In January, ED updated Section E of the CSP Nonregulatory Guidance to clarify circumstances where charter schools receiving CSP funding can use weighted lotteries. Applicants may propose using these types of lotteries to give educationally disadvantaged students slightly better chances for admission, and to help those seeking to switch schools under the school choice provisions of the Elementary and Secondary Education Act.
Weighted lotteries may not be used to create schools exclusively to serve a particular subset of students. Additionally, ED strongly encourages charter schools to use weighted lotteries as part of a broader strategy to fulfill their existing responsibilities related to outreach, recruitment and retention for all students.
The fiscal year 2014 appropriations law (Pub. L. 113-76) includes language allowing CSP funding to support preschool education in charter schools. The solicitation clarifies CSP funds may be used for these purposes as long as the preschool program is offered by a school that meets ED’s charter school definition. Under the definition, charter schools must provide elementary or secondary education, or both. This means applicants wanting to provide just preschool are ineligible.
CSP applicants will receive more direction on this situation later this summer when ED releases nonregulatory guidance with additional information about how CSP funds may be used to support preschool education in charter schools. The new guidance will be posted on the main CSP website.
Eligibility and Funding
Each state will receive a portion of $26.5 million in funding, with 14-19 awards expected ranging from $500,000 to $3 million each. The average award is expected to be $1.6 million. The maximum limit per new school created is $800,000, with up to $3,000 allowed per student. The maximum limit for an existing charter school that is substantially expanding is also $800,000, with up to $1,500 allowed per student. A grantee may use up to 20 percent of an award for initial operational costs associated with the expansion or improvement of the charter schools.
Nonprofit charter management organizations may apply for the funding. NCMOs are nonprofits operating multiple charter schools and launching new ones
Proposals must be submitted through Grants.gov by July 21, no later than 4:30 p.m. Eastern time. Those experiencing problems submitting applications through the system should immediately contact the Grants.gov Support Desk at 800-518-4726. Applicants must obtain a Grants.gov Support Desk Case Number to obtain an extension until the following business day at 4:30 p.m. Eastern Time.