Transcript Program Integrity at HRSA

Program and Financial Integrity
Preparing for the A-133
September 17, 2013
Presented by
Lawrence Horlamus, Auditor
Office of Federal Assistance Management
Division of Financial Integrity
Agenda
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Program Integrity Initiative at HRSA
A-133 Audit Findings
Allowable/Unallowable Costs
Allocation and Segregation of Costs
Grant Personnel Charges
Financial Management – Good and Bad Practices
Reporting
Sub-Recipient Requirements & Monitoring
Procurement
Questions and Answers
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Program Integrity Initiative
“The Program Integrity Initiative is designed
to target the greatest risks of fraud, waste
and abuse and reduce those risks by
enhancing existing program integrity
operations, share new and best program
integrity practices and measure the results
of our efforts.”
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Program Integrity at HRSA
• Agency-wide Workgroup
• Grantee Outreach: Technical
Assistance, Webinars, Social Media
• Increased collaboration amongst
Bureaus, Divisions, and Grants
Management Operations
• Training
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A-133 Audit Findings
Grantees can do their part to
strengthen Program Integrity
by having policies and
procedures that help them
avoid audit findings!
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Audit Finding Trends in 2012
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Reporting
Special Tests and Provisions
Allowable Costs/Cost Principles
Eligibility
Other (i.e. Segregation of Duties,
Bank Reconciliations, Management
Over-ride of internal controls)
As of April 2013
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Federal Cost Principles
Federal Regulations
Entity
Type
OMB
Circulars
Cost
Principles
Uniform
Admin.
Reqs.
Education
Institutions
OMB A-21
2 CFR 220
45 CFR
74.27
State and Local
Governments
OMB A-87
2 CFR 225
45 CFR
92.22
Non-Profits
OMB A-122 2 CFR 230
45 CFR
74.27
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Allowable Costs
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Cost Allocation and
Segregation
Grantees should be sure to fairly and
accurately charge direct costs to their
grant and non-grant activities.
Grantees should be sure to segregate
grant fund expenditures by grant to
ensure accurate accounting of federal
funds.
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Personnel/Labor Charges
• Allowed to charge grants for actual labor
not budgeted labor
• Actual labor charges help an organization
create accurate budgets and
applications.
• Accurate labor charges help an
organization determine the true cost of a
project or meeting grant objectives.
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Financial Management - Good Practices
• Having well documented Policies and
Procedures.
• Periodically performing internal audits of
grant performance and grant fund
management.
• Providing plenty of training on managing
grants and the OMB Circulars, including
cost principles.
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Financial Management - Bad Practices
• Not adequately documenting grant costs – would be
unallowable if audited/reviewed.
• Time sheets reflect budgeted hours instead of actual
hours worked.
• Drawing down funds in excess of immediate needs.
• Not segregating grant expenditures from non-grant
expenditures or other grant expenditures attributable
to other funding sources (not separating
expenditures by funding source).
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Reporting
• Information regarding submit audits, in
accordance with OMB Circular A-133:
• Federal Audit Clearinghouse
• Phone (301) 763-1551 or (800) 253-0696
• http://harvester.census.gov/sac/facconta.htm
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Sub-Recipient Requirements
&
Monitoring
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Sub-award
• Legal instrument to provide support for the
performance of any portion of the substantive
project/program for which the recipient received an
award and that you as the recipient award to an
eligible subrecipient
• May be provided through any legal agreement, even if
the agreement is called a contract
• The term does not include procurement of property
and services needed to carry out the project or
program (i.e.. general services)
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Sub-recipient
An entity that:
• Receives a sub-award from the recipient under the
award;
• Is accountable to the recipient for the use of the
Federal funds provided by the sub-award
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Flow of Financial Assistance
HRSA
Recipient
Sub-recipient
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Who is not a sub-recipient?
• Vendor means a seller providing goods or
services that are required for the conduct
of a Federal program (i.e. computers,
equipment, supplies)
• Does not perform substantive work
• Provides goods or services that are
ancillary to the operation of the program
OMB A-133 §__.210
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Subrecipient
Terms and conditions
All terms and conditions
apply
Vendor (routine
goods and services)
Governed by
procurement rules of
grantees and term of
contract
Differences between Sub-recipients and Vendors
Subject to A-133 audit
Yes
No
Receive profits or fees
Generally may not
May receive
Payment
Cost reimbursement
Advance for immediate
cash needs
Follow written
procurement
procedures
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Requirements
Recipient and any sub-recipient must have
• DUNS #
• Register annually with SAM
• Keeping this information current and accurate
• Recipient must ensure the subs have not
been debarred or suspended (EPLS)
• Recipient must monitor activities of subrecipients
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Recipient Requirements
• Provide information to sub-recipients
• CFDA
• Award information
• Include requirements of Federal laws and
regulations sub-recipients must comply
• NoA terms and conditions
• Reporting requirements
• Sub-recipients expending $500 K or more in
Federal awards have A-133 requirement
• All sub-awards in excess of $25K must be
reported in FSRS
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Recipient Requirements
• Seeking approvals
• Method of payment and documentation
• The prime recipient must have
copies/access to subrecipient’s records
• HHS, HRSA, the HHS OIG, GAO, or another
duly authorized representative of the Federal
Govt may request that the prime recipient
provide sub-recipient records.
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Keep in mind…
• Grantees are responsible for including the
applicable requirements in agreements
with collaborating organizations
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Public Policy Requirements
(HHS Grants Policy Statement)
Requirement
Applicability
Recipient
Sub-recipient
Contractor under
grant (routine
goods/services)
Acknowledgment of
Federal Funding
Age Discrimination
Act of 1975
All types of awards
Y
Y
NA
All applications from
and awards to
domestic entities
Y
Y
Y
Hatch Act
Awards to State or
local governments
All awards to
covered entities
(NA to foreign and
international
organizations)
Y
(NA to foreign and
international
organizations)
Y
(NA to foreign and
international
organizations)
NA
Health Insurance
Portability and
Accountability Act
(HIPAA)
Limited English
Proficiency
Smoke-Free
Workplace
Drug-Free Workplace
Y
(if a covered entity)
Y
(if a covered entity)
Y
(if a covered entity)
All types of awards
Y
Y
NA
All awards
Y
NA
NA
All covered
applications and
awards
Y
NA
NA
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What is Monitoring?
• A process whereby programmatic and
business management performance
are assessed by reviewing
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reports,
audits,
site visits,
other sources
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Who is Responsible?
Monitoring efforts of recipients must
provide a reasonable assurance that subrecipients administer Federal funds in
compliance with laws and regulations and
that performance goals are achieved
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What does monitoring look like?
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Risk Indicators
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Complexity of program requirements
Dollar amount
Audit findings
History of non-compliance
Number of sub-recipients can affect
frequency of monitoring actions
• Sub-recipient experience
• Sub-recipient environment
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Resource Assessment
• Determine the amount and type of
resources needed
• Identify available resources
• Address resource limitation
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Monitoring Plan
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Written policies and procedures
Monitoring schedule
Monitoring checklist
Risk assessment
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Monitoring
• To ensure grant funds are used for
approved purposes
• Reconcile sub-recipient budgeted
expenditures to actual expenditures
• Perform site visits to review financial and
programmatic operations
• Offer TA where needed
• Track report submission
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Monitoring
• Regular communications with subrecipients
• Determine if sub-recipient is required to submit
an audit report
• Follow-up with sub-recipient if audit report has
not been submitted
• Review reports and follow-up on areas of
concern
• Track and follow-up on reported deficiencies;
ensure corrective action is taken
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Procurement
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Written Procedures
Competition
Avoiding Conflict of Interest
Suspension and Debarment
45 CFR 74 or 45 CFR 92
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Document, Document, Document
• Maintain a file
• Schedule, perform, and document site
visits
• Document corrective action
• Retain audit reports
• Maintain other monitoring records
• Post-award changes
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Provisions
Federal agencies
• May require changes, remedies, changed
conditions, access and records retention,
suspension of work, and other clauses
• Must have access to any records pertinent to
that specific project
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Record Retention
• Must retain all records for three years
after submitting the final FFR (including
subrecipient records)
• Sub-recipients retention schedule must
meet the requirements of HRSA grantees
45 CFR 74 or 45 CFR 92
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Equipment and Supplies
• Title to equipment and supplies
acquired by a recipient or
subrecipient with HHS funds vests in
the recipient or sub-recipient upon
acquisition
45 CFR 74 or 45 CFR 92
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Program Income
Income earned by a recipient, sub-recipient, or a
contractor under a grant—directly generated by the
grant-supported activity or earned as a result of the
award
• May be used only for allowable costs in
accordance with the applicable cost principles and
the terms and conditions of the award
• Sub-awards are subject to the terms of the subaward with regard to any income generated
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Reporting Requirements
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Progress reports
Federal Financial Report (FFR)
Payment Management System (PMS)
Federal Funding Accountability and
Transparency Act (FFATA)
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Sub-recipient Agreement
• Identification of the PD and individuals
responsible for the programmatic activity
• Procedures for directing and monitoring the
programmatic effort
• Procedures to be followed in providing funding
to the sub-recipient
• CFDA #
• Title of equipment
• Disposition of program income
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Sub-recipient Agreement
• Documentation necessary for travel
reimbursement and salaries and fringe benefits
(time sheets, travel expense reports, payroll)
• Incorporation of applicable
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Public policy requirements
administrative requirements
cost principles
audit requirements
FFATA
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Resources
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45 CFR 74
http://www.ecfr.gov/cgi-bin/textidx?c=ecfr;sid=85fa827d5b4cde0a8286b0541125d28e;rgn=div5;view=text;node=45%3A1.0.1.1
.35;idno=45;cc=ecfr
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45 CFR 92
http://www.hhs.gov/opa/pdfs/45-cfr-92.pdf
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OMB Circulars
http://www.whitehouse.gov/omb/circulars_default
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HHS Grants Policy Statement http://www.hrsa.gov/grants/hhsgrantspolicy.pdf
HRSA Manage Your Grant http://www.hrsa.gov/grants/manage/index.html
System for Award Management
https://www.sam.gov/portal/public/SAM/
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Notice of Award Contact Section: PO and GMS
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Questions
To ask a question, please dial
800-369-3346
and use the passcode “HRSA”
Press *1 to enter the question queue.
Please mute your speakers when asking
your question.
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Contact Information
Health Resources and Services Administration
U.S. Department of Health and Human
Services
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