1. Understanding and Managing Your Federal Grant
As of October 2005

2. Summary Outline The Federal HRSA Grants Structure
Reading & Understanding your NGA
Accessing your Grant Funds
Establishing Financial Reserves
Key Federal Reporting Requirements
Key Post Award Issues
Financial Difficulties
Helpful Resources

3. The Federal Grants Administration Structure

4. HRSA Grants Organizational Structure

5. Division of Financial Integrity
Conducts pre-award audits of applicant organizations and grantees
Recommends appropriate grant restrictions
Advises on grants policy issues
Assists in identifying and resolving grants policy issues and problems

6. Division of Grants Policy
Provides oversight and establishes Agency grant policies and procedures aiding in consistent policy interpretations
Monitors and reviews application guidance to assure consistency across the Agency
Assists in identifying and resolving grants policy issues and problems

7. Division of Independent Review
Plans, directs and carries out HRSA’s independent objective review of applications for grants & cooperative agreement funding. Assures that the process is fair, open & competitive;
Provides technical assistance to independent reviewers ensuring that reviewers are aware of and comply with administrative policies & regulations; and

8. Division of Independent Review Continued
Provides HRSA’s Offices and Bureaus with the final disposition of all reviewed applications

9. Division of Grants Management Operations
Three Branches of Division:
Health Services Branch
Governmental & Special Focus Branch
Research & Training Branch

10. Division of Grants Management Operations Health Services Branch
The primary focus of this branch will be grants that are awarded primarily to community and faith based entities whose focus is service delivery or the improvement of services.

11. Division of Grants Management Operations Governmental & Special Focus Branch
The primary focus of this branch will be grants that are awarded primarily to governmental entities whose focus is health system or the improvement of services. In addition, this branch will also focus on grants of special focus and interest.

12. Division of Grants Management Operations Research & Training Branch
The primary focus of this branch will be grants that are awarded primarily to entities whose focus is training and research.

13. Grants Management Specialist
Your assigned Grants Specialist, in conjunction with the Project Officer, serves as the business management contact for the grant.
Reviews and make recommendations on continued federal support.
Clarifies grants regulations and requirements.
Monitors compliance with grant requirements and releases conditions of award.

14. Assigned Grants Specialist & Project Officer
Prepares Notices of Grant Award (NGA)
NOTE: Only the HRSA Grants Office has legal authority to approve changes in the award or program!

15. Reading & Understanding Your Notice of Grant Award (NGA) Documents

16. NGA Face Page Items 6 & 7: Period of Federal Support
Item 12 (aii): Amount of Federal funds awarded
Item 16: Remarks Section can communicate the purpose of the action & other additional program terms.
Document #: the number you use to report obligations & expenditures against the grant to the Payment Management System.

17. Additional NGA Pages
Additional pages of the Notice of Grant Award spells out:
Terms (Standard & Program Specific), Reporting Requirements and Conditions of Award.
Defines the use of Program Income.
Identifies Federal Contacts for the grant.

18. Additional NGA Pages TERMS OF AWARD
With the acceptance of a grant award from HRSA, the grantee has the responsibility to be aware of and comply with the terms and conditions of award.

19. Standard & Program Specific Terms:
Additional NGA Pages
Standard & Program Specific Terms:
Appear on the initial award of the period of funding.
Generally, informational and advisory nature, yet describe the various general terms & conditions of the grant.
In some instances, may require a response, typically to the Project Officer.

20. Program Specific Terms – Program Income
Additional NGA Pages
Program Specific Terms – Program Income
“Program Income (item 15e.) – Nongrant funds (State, Local and Other operational funding and fees, premiums, and third-party reimbursements which the project may reasonably be expected to receive, including any such funds in excess of those originally expected),
shall be used as permitted under the law and may be used for such other purposes as are not specifically prohibited under the law if such use furthers the objectives of the project

21. Management Assessment Items (MAIs)
Additional NGA Pages
Special Conditions:
Generally based on program or grant regulations.
A response is always required by a specific date.
Failure to satisfactory respond can result in an adverse action.
Management Assessment Items (MAIs)
Used to convey advice, assistance, and general information common to all grantees. In lieu of a separate letter, MAIs are mailed with the NGA.

22. IMPORTANT NOTE
Acceptance of the grant terms and conditions is acknowledged by the grantee when funds are drawn or otherwise obtained from the Payment Management System

23. “How do you get your money?”
ACCESSING YOUR GRANT
FUNDS

24. Accessing Federal Funds
Payments for Federal grants are generally made through the Division of Payment Management.
Division of Payment Management
P.O. Box 6021
Rockville, MD
(877)

25. Accessing Federal Funds Important Reminders
If a health center has pledged grant-related non-Federal income, it is expected that such funds will be applied to the health center’s project costs FIRST (the Federal Grant is last dollar)
Only draw down funds expended in a 72-hour period. Manage your Account!
Submit required reports in a timely manner.

26. Establishing Financial Reserves

27. Establishing Financial Reserves
Health Center legislation allows Health Centers to establish Financial Reserves, utilizing Program Income, to cover unanticipated expenses.
The establishment of a Financial Reserve must be approved by the Governing Board and should be managed utilizing appropriate business policies & procedures.

28. Establishing Financial Reserves
The reasonable size of a financial reserve depends on several factors:
Operating size of the project
Whether it is just for unanticipated expenses, for prepaid activities, or both
Applicable State Laws
Center affordability

29. Establishing Financial Reserves
A Health Center is cautioned that there must be sufficient program income to maintain the approved scope of the project before establishing a Financial Reserve.
An acceptable guide to use to cover unanticipated expenses is 2-3 months of normal operating expenses.

30. Establishing Financial Reserves
A Financial Reserve should be presented in the application budget:
Under the “Other Category”
Identified as “Section 329 / 330 (d) Financial Reserve”
Statement that the Reserve will be established from non-Federal (program income) resources should be included in the budget justification.

31. Important Federal Reporting Requirements

32. Reporting Requirements
Financial Status Report SF-269
Standard Form (SF) 272 Payment Management System (PMS) Quarterly Report
Annual Audit – Organizational Fiscal Year
Uniform Data System (UDS) Report – Annual Calendar Year

33. Financial Status Report (SF 269)
The Financial Status Report (FSR) explains & reports on the spending of Federal grant funds.
Prepared based on the grant budget period (usually 12-months)
Submitted annually, due 90 days after budget period ends
Form should always be dated & signed by an authorized official.
Disposition of unobligated (unused) Federal funds after the end of the budget period is at the discretion of HRSA.

34. Financial Status Report (SF 269)
The Order of Spending for grant awards is:
State, Local & Other Dollars
Program Income up to budget
Federal grant (up to the amount authorized)
Program income earned over Budget

35. Financial Status Report (SF 269)
Reporting Outlays:
Accrual based expenses (if possible, reconciled to audited financial statements)
All non-cash outlays must be excluded (depreciation, bad debt, etc.)
Fixed asset additions (less proceeds from long term debt) should be included in the total outlays
Only capital lease and loan payments for capital expenditures can be included in total outlays.

36. Quarterly Report of Federal Cash Transactions (SF 272)
Monitor the timing of cash advances and disbursements.
Minimize the time between receipt and disbursement.
Reports submitted quarterly and are due 45 days after the end of the quarter.
Failure to submit reports will result in a HOLD on the PMS account.

37. Annual Audit
Program Legislation requires an annual audit. However, if Federal expenditures are greater than $500,000, the annual audit must be completed in accordance with OMB Circular A-133 requirements and include the compliance supplement for health centers.
Audits due 9 months after end of fiscal year or 30 days after receipt from auditor – whichever is first.

38. Annual Audit Audit report must be submitted to the
Audit Clearinghouse and to HRSA DGMO.
Audit Results Expectations:
Unqualified opinion
Gross charges exceed billable expenses
Acceptable Financial Ratios
Minimal to no material audit findings

39. Reporting Requirements (Other)
Monthly financial reporting to the board
Medicaid cost reports
Medicare cost reports
Quarterly Federal Payroll Tax Report
State Tax Filings
Annual IRS tax return form 990

40. Important Post Award Issues

41. Common Post Award Items Requiring Prior Approval
Change in scope
Carryover of a balance of unobligated Federal funds
Affiliation Agreements
Contracting/transferring substantive work
Additional Funds (supplement)
Successor in Interest/Change of Grantee

42. Other Post Award Items Requiring Notification
Change of Project Director
Change of Address
Organization Address
DUNS Number

43. Post Award Submission Procedures
All post award requests should be discussed with your Project Officer and/or Grant Specialist prior to submission.
All post award requests should be sent to the Grants Management Office with a copy to the Project Officer.

44. Post Award Submission Procedures
Post Award Requests should contain the following information, at a minimum:
Grant Number
Reason for the communication:
Response to condition
Requesting prior approval
Other requests
Narrative justification or explanation for the specific post award request.
Name and number of contact person if further information is needed.

45. Post Award Submission Procedures
REMINDER:
Requests for Changes in Scope
MUST
Follow a Different Process.

46. When You Have Financial Difficulties!

47. Signs of Financial Difficulties
An excessive pattern of draw down of grant funds early in the grant year.
Difficulty in meeting payroll.
Delinquent payment of Payroll Taxes.
Turnover in the CEO and CFO positions.
Audit report findings.

48. Grantee Financial Difficulty Options
Grantee Actions
Provide documentation on cash sources exhausted
Exhaust efforts to improve / maximize collection of receivables.
Provide information on other potential sources (Ex: outside donations and utilizing restricted cash.)
Line of credit and short term loans
Grantee Documentation
Analyze financial statements related to cash utilization.
Billing follow-up documentation, phone logs (if applicable)
Documentation on outside donations, other assets/equity sources that can be converted to cash.
Available line of credit, commitments from banks and/or other lending institutions.

49. Grantee Financial Difficulty Options
Identify HRSA Unobligated Balances that may be reprogrammed.
Grantee Action
Official correspondence to the Grants Office & Program Office requesting carryover along with justification and financial status report identifying available funds from prior year(s), in conjunction with long-term recovery plan.

50. Grantee Financial Difficulty Options
Request Supplemental funding against the upcoming budget year grant funding (only in last quarter of budget year)
Grantee Action
Official correspondence to the Grants Office & Program Office requesting emergency supplemental funding, in conjunction with a long-term recovery plan.

51. Financial Recovery Plan Basic Contents
Analysis of the Cause of the Current Problem
Description of proposed solutions or corrective actions.
Time framed financial projections with supporting narrative.
Board approval.
Refer to
PIN : Creating a Financial Recovery Plan

52. Typical HRSA Actions to Expect
Placement on PMS Draw Down Restriction.
Submission of monthly or quarterly financial reports.
Closer monitoring by HRSA, particularly on financial progress and recovery.
Other sanctions on grant, as appropriate.
Typically, sanctions will remain until financial recovery is obtained and verified through the Audit.

53. HELPFUL RESOURCES

54. Program Resources
Section 330 of the Public Health Service Act, as amended by P.L (Health Care Safety Net Amendments of 2002)
Health Center Program Expectations
BPHC Program Issuances: Program Information Notices
UDS Reporting Requirements

55. Grants Resources
OMB Circular A-133 Federal Audit Guide and Health Center Compliance Supplement
Cost Principles: OMB Circular A-122
45 CFR 74: Regulations governing the administration of grants
Administrative Standards: OMB Circular A-110

56. Internet Sites Electronic Application Submission (EHB)
HRSA Preview: Funding Opportunities
DHHS Funding Opportunities/Application Submission
HRSA –
BPHC –
Grants Net –