Federal Financial Assistance - PowerPoint Presentation

1. Federal Financial AssistanceUpdate May 2018

2. AgendaThis presentation includes the following five sections:IntroductionFundamentalsDetailed ProcessTerms and ConditionsAdditional Resources2

3. AcronymsThe following acronyms are used in this presentation:CFDA – Catalog of Federal Domestic AssistanceCFR – Code of Federal RegulationsDUNS – Data Universal Number SystemFAR – Federal Acquisition RegulationsFOIA – Freedom of Information Act OMB – Office of Management and BudgetSF – Standard FormUSC – United States Code3

4. FundamentalsMay 2018

5. History of Federal Financial AssistanceFederal assistance has increased in volume, type, and complexity over time. Major developments are presented below.Year(s)Development1800sFederal assistance began with land grants to states for schools, public buildings, and railroads1880sAssistance expanded with cash grants for agricultural research1930sWorks Progress Administration provided jobs for unemployed during the Great Depression1950sNational Science Foundation began funding research1960sGreat Society legislation included cash grants for educational materials and programs and loans and grants for rural development1972With a variety of assistance instruments among Federal agencies, the Commission on Government Procurement recommended legislation to clarify the difference between procurement and assistance, and instrument types within assistance1978Federal Grant and Cooperative Agreement Act defined three instruments (grants, cooperative agreements, and contracts)1999 – 2007Office of Management and Budget (OMB) and major grant-making agencies standardized several elements of grant application and administration2013 – 2014 OMB and major grant-making agencies standardized additional elements of grant administrative requirements, cost principles, and audit requirements5

6. Federal Financial Assistance StakeholdersThe following groups are involved in Federal financial assistance at various levels (not all stakeholders are required for each award):StakeholderRoleCongressProvides program authorization; appropriates funds for activities deemed deserving of stimulation and support from the Federal governmentOffice of Management and BudgetCoordinates development of US government-wide Federal financial assistance administration policies; issues guidance to agencies as neededFederal agenciesAward and administer grant funds; act as cognizant agencies responsible for indirect cost rate negotiation and audit oversightApplicants, pass-through entities, non-Federal entitiesCompete for funds, propose projects and sometimes administer funded projectsBeneficiariesThose in the general public who benefit from grant programsTaxpayersUltimate funders of most grant programs6

7. Award Instrument TypesAward TypeDescriptionGrant agreementTransfers money, property, services, or anything of value to a recipientin order to accomplish a public purpose of support1 without substantial involvement2 anticipated between the Federal agency and the non-Federal entity – 41 USC 504(5)3Cooperative agreementTransfers money, property, services, or anything of value to a recipient in order to accomplish a public purpose of support with substantial involvement anticipated between the Federal agency and the non-Federal entity – 41 USC 504(6)Joint venture agreementProvides money, in-kind services, or property in lieu of money, to an eligible cooperator, or to the agency (from the cooperator) with the agreement objectives serving a mutual interest of the parties in agricultural research, extension,4 or teaching activities – 7 USC 3318(b)Cost reimbursable agreementProcures goods and/or services to carry out agricultural research and teaching activities from authorized cooperators without the requirement to follow the Federal Acquisition Regulations – 7 USC 3319a1 In contrast, Federal procurement contracts acquires, by purchase, lease, or barter, property or services for the direct benefit or use of the Federal agency. Agencies have the authority through 41 USC 504(7) and 41 USC 503(4) to enter into contracts.2 Substantial involvement includes assisting, guiding, coordinating, or participating in project activities.3 That is, United States Code title 41, section 503, sub-section 4.4 “The term ‘extension’ means the informal education programs conducted in the States in cooperation with the Department of Agriculture.” – 7 USC 3103(8).7

8. Examples of Specific AuthorizationsAward TypeAuthorizationGrant agreementEach agency must have both an authorization and appropriation to issue an award. For example, FAS has 7 USC 3291(a), which allows grants and cooperative agreements for international agricultural research extension and training activities.Cooperative agreementEach agency must have both an authorization and appropriation to issue a Federal award. For example, FAS has 7 USC 3291(a), which allows grants and cooperative agreements for international agricultural research extension and training activities.Joint venture agreementUSDA has specific authorization through 7 USC 3318(b) to use a joint venture agreement if the agreement serves a mutual interest and both parties contribute resources to accomplishment of those objectives.Cost reimbursable agreementUSDA has specific authorization through 7 USC 3319a to carry out cost-reimbursable agreements with state cooperative institutions or other colleges or universities.Many Federal agencies are authorized to use grant agreements and cooperative agreements, while only USDA has the authority to use joint venture agreements and cost reimbursable agreements as defined below, as well as many others.8

9. Detailed ProcessMay 2018

10. Federal Financial Assistance from Authorization to Closeout10

11. Authorization (1 of 3)Authorization statutes, in which Congress grants authority to a Federal agency to create a Federal financial assistance program, include the following two types: Permanent authorizationsFor programs with ongoing broad applicabilityExample: the School Breakfast Program, administered by USDA Food and Nutrition Service.Time-limited authorizationsFor programs serving specialized purposes or interest groupsExample: the McGovern–Dole International Food for Education and Child Nutrition Program, administered by USDA Foreign Agriculture Service.11

12. Common Authorization Statute Elements (2 of 3)ElementDescriptionTitleShort, descriptive title of a statute; may have two meaningful titles if an act within an act (e.g., Title X of the Community Services Act is also called the Legal Services Corporation Act)Statement of findings and purposeGoals and challenges to be addressed by the Federal assistance (i.e., the activities deemed deserving of stimulation and support from the Federal government)DefinitionsPrecise definitions of terms used in the statuteAuthorization of assistanceThe executive branch agency to administer the program; Federal assistance instrument(s) to be used; guidance on levels of discretion given to the agency (e.g., distinguishing between whether assistance may or must be given)EligibilityRequired non-Federal entity attributes (e.g., only local governments are eligible to receive assistance)Funding directionsInstructions on how to disburse funds (e.g., a maximum amount to be given to each non-Federal entity); specification if the statute creates a discretionary assistance program (i.e., the agency administering the assistance program has discretion over whether to make a grant to an applicant and how much to award)Conditions of aidAdditional requirements for recipients of assistance (i.e., non-Federal entities are required to match a certain percentage of assistance with non-Federal funds)12

13. Common Authorization Statute Elements (3 of 3)ElementDescriptionNondiscriminationProhibitions of discrimination based on factors such as race, sex, handicap, age, and religionFiscal accountabilityDescriptions of audit and record-keeping requirementsFiscal sanctionsConsequences for noncompliance; incentives for exceeding minimum audit requirementsRulemaking powerDescription of power given to the executive branch agency administering the assistance program to develop rules to administer the programAdministrative and judicial reviewInstructions for an aggrieved non-Federal entity to seek recourse for perceived ill-treatment by the executive branch agency administering the assistance programRequired reporting Information and date due to be delivered to Congress by the executive branch agency administering the assistance programAuthorization of appropriationsSuggested funding levels to be included in subsequent appropriations legislation13

14. Appropriation ( 1 of 2)Federal Financial assistance program funds are funded through a discretionary budget or appropriated. AppropriationOMB supervises creating the executive branch’s proposed Federal budget. The President delivers the proposed budget to Congress, including funds for Federal assistance programs. Second, Congress appropriates funds for Federal assistance programs, through the annual fiscal budget or permanent funding statutes.Appropriation through annual fiscal budgets may be designated for one-year, two-year, or no-year (i.e., no time-based restrictions) use. Funding levels may change by year with different budget availability and priorities. Funds appropriated through permanent funding statutes are more predictable, as funding levels require a legislative update to be changed.14

15. Apportionment and Allotment (2 of 2)Following funds appropriation, OMB apportions funds to the Federal agency administering the program, and the agency allots funds to the program. Through apportionment, OMB controls distribution of funds from the Department of Treasury to the Federal agency administering the program. Distribution typically takes place gradually through the fiscal year, to lessen the risk that funds are spent before the program is complete.When the agency administering the program allots funds, it delegates authority to agency officials, allowing them to incur obligations (in which an initial liability is made against the appropriation, which is subsequently expended) or make disbursements (direct expenditures). Both obligations and disbursements for Federal assistance programs must be made within the appropriation period authorized by Congress.15

16. Program Regulations and GuidelinesFederal agencies may specify regulations and guidelines for assistance programs in order to guide program implementation.Program regulations typically have a statutory basis, carrying the force and effect of law.Program guidelines (i.e., nonregulatory program requirements) are only legally binding on non- Federal entities if they are incorporated into the general agreement terms and conditions.Federal financial assistance terms and conditions are covered in detail in the following module.16

17. Funds AdvertisementMany funding availability announcements for Federal financial assistance are posted publicly in order to promote competition among potential non-Federal entities.Funds advertisements are often found in the following four places:Catalog of Federal Domestic Assistance (CFDA) All CFDA users will now be redirected to (https://sam.gov/content/assistance-listings), which is now the authoritative site for assistance listings. Grants.gov (http://www.grants.gov)Federal agency’s website, such as ezFedGrants external portal (https://grants.fms.usda.gov)Federal Register (https://www.federalregister.gov)17

18. Application Materials (1 of 2)Agencies use standard forms (form names prefixed with “SF”) to collect information from applicants for Federal assistance. For Federal financial assistance, these application materials typically include the following:SF-424: Form face page collecting information, such as contact information, applicant type, project description, congressional district, and more.SF-424A: Budget information for non-construction projects.AD-3030 or 3031: Assurance regarding felony conviction or tax delinquent statusPartners and points of contact: Key individuals within the applicant organization.Additional details: A cover letter or form capturing information such as the project title, recipient type, and whether the proposal includes research, subawards, program income, publications, and more.Detailed project budget and narrative: Costs for the proposed project, presented by category with detailed justifications.Project narrative, scope of work, and operating plan: Description of project background, goals, activities, and plans.18

19. Application Materials Required for Grants and Cooperative Agreements (2 of 2)Grants and cooperative agreements additionally require the following forms:SF-424B: Assurances for non-construction projectsSF-424C and 424D: Budget information and assurances for construction projectsAD-1047 or 1048: Certification regarding debarment and suspension, for the primary recipient or subcontractor, respectivelyAD-1049, 1050, or 1052: Certification regarding drug-free workplace, separated by recipient type19

20. Application ReviewOnce an application for funding is received by the agency administering the Federal assistance program, it is reviewed by agency officials. This typically includes robust reviews by assembled panels or field readers.Panel reviews are conducted by several people assembled in the same place that review, rate, and comment on applications as a group. These panels may be conducted by standing committees, which meet regularly on a continuing basis, or by ad-hoc committees, which are established to perform a single, short-term task.Field readers independently review, rate, and comment on applications.Reviewers are given criteria on which to rate applications, however agency officials may use discretion in recommending applications for funding.20

21. Proposal Selection and NotificationAgency officials compile results of application review, taking into consideration ranking by reviewers’ scores, program policy factors, additional agency priorities, and the decision-making officials’ discretion.Proposals selected to receive funding are sent a notification of award, which includes the following items:Basic information about the awardInformation about the programInformation about the projectRequirements applicable to the awardResponsible partiesIn making the award, the agency obligates funds to support each selected project.21

22. Project Implementation and MonitoringHaving successfully applied for and received a Federal assistance award, the non-Federal entity begins to implement the approved project, expending funds according to the approved budget. Recipients are responsible for submitting the following items, according to timelines agreed upon in the notice of award:SF-270: Receipts (for projects paid on advance basis) or invoices (for projects paid on reimbursement basis)SF-PPR: performance progress reportsSF-425: Federal Financial ReportSF-428: Tangible Personal Property ReportThe agency monitors the project and provides technical assistance, as agreed upon in the notice of award.22

23. Project ModificationsMost deviations from the project implementation plan agreed to in the notice of award must be detailed in an amendment to the agreement unless the original agreement allows specific changes without prior written approval.Many programmatic changes require written amendments, such as the following:Change in the project scope, timeline, and/or objectives Revisions requiring additional Federal fundsTransfers of funds between budget categories exceeding a certain proportion or dollar amount (such as 10% of the approved budget or $100,000)Changes in key personnel specified in the application or agreement A one-time, unfunded (i.e., no-cost) project extension of up to 12 months may be allowed with a simplified amendment process. 23

24. Award Closeout – Non-Federal Entity Actions (1 of 2)Closing out a Federal award completes the agreement between the Federal agency and the recipient. The recipient takes the following actions to close out a Federal award after project activities are complete:Submits final reports (financial, performance, and property, as applicable)Disposes of property purchased with grant fundsEither disposes of or returns government-furnished property no longer being used for grant-related activitiesThe recipient retains financial records and supporting documentation for three years from 90 days after the end of the grant.24

25. Award Closeout – Agency Actions (2 of 2)Before closing out the agreement, Agency officials should confirm that all of the following areas have been successfully completed, as applicable: All work is satisfactorily completed per the project narrativeThe agreement is free of pending litigation or appealsTermination actions are complete (applicable for terminated agreements)All allowable, allocable, and reasonable costs have been paid to the recipientFunds due to the Agency for all disallowed costs have been collectedExcess funds have been de-obligatedThe grants official has certified that all required actions (e.g., interim and final report submission and property disposal or return) are complete25

26. Program CloseoutOnce the authorization or appropriation for a Federal assistance program is discontinued, agency officials do the following:Ensure that all agreements under the program are closed outEnsure that all fund reservation balances under the program are closed outArchive or remove all funding advertisements26

27. Terms and ConditionsMay 2018

28. Terms and ConditionsUSDA agreements include general terms and conditions based on a variety of requirements, typically including the following:General terms – apply to many awardsNational policy general terms and conditionsAdministrative general terms and conditionsAgency general terms and conditionsSpecific terms – differ for each awardThe non-Federal entity’s application packageAward-specific terms and conditionsUpon signing the Federal award, the non-Federal entity consents to fulfill and comply with all conditions.28

29. Award-Specific Terms and ConditionsFederal agencies have discretion to prescribe terms and conditions for Federal award recipients to follow as long as they do not conflict with general terms and conditions. That is, where general terms and conditions allow flexibility, agencies are free to adapt requirements. Examples of award-specific terms and conditions are as follows:Cost-sharing or matching requirements (e.g., the recipient must contribute 20% of the amount awarded through non-Federal funds).How to treat program income (e.g., any funds directly generated from award-related activities must be added to project funds).Different reporting details or timelines than prescribed by administrative requirements (e.g., because of a non-Federal entity’s history of poor financial performance, the agency may decide to require more financial reporting than is typical, as long as it remains within the general terms and conditions’ parameters).These terms and conditions may be found in the authorizing statute and funding opportunity advertisement; they must be found on the notice of award in order to be legally binding.Award-specific T&CAgency general T&CAdministrative general T&CNational policy general T&C29

30. Agency General Terms and ConditionsUSDA has specified numerous terms and conditions that apply to all awards, specified by instrument type. These general terms and conditions are posted publicly on the USDA website, such as athttps://www.fas.usda.gov/grants/general_terms_and_conditions/default.aspFor example, FAS general terms and conditions for cost reimbursable agreements include restrictions on goods and services procured outside the United States, whereas FAS joint venture agreements do not include these conditions.Award- specific T&CAgency general T&CAdministrative general T&CNational policy general T&C30

31. Administrative General Terms and ConditionsOMB and major grant-making agencies compiled a number of administrative terms and conditions that apply to many Federal financial assistance awards. Administrative general terms and conditions are applied to awards through reference in the notice of award.Examples of administrative terms and conditions include the following:Cost principles: definitions of which costs are allowable, allocable, and reasonableAccounting system requirementsAudit requirementsLobbying restrictionsAward- specific T&CAgency general T&CAdministrative general T&CNational policy general T&C31

32. National Policy Terms and ConditionsSeveral national policies apply to Federal financial assistance as well as many other groups and organizations (e.g., requirements not to discriminate “on the grounds of race, color, national origin, sex, age, religion, political beliefs, or disability” apply to the vast majority of organizations). Several examples of national policy terms and conditions follow:Non-Federal entities have a Data Universal Number System (DUNS) number.Organizations are not permitted to receive Federal assistance if they are on the government-wide suspensions and debarment list.Federal assistance awards are subject to Freedom of Information Act (FOIA) requests.Award- specific T&CAgency general T&CAdministrative general T&CNational policy general T&C32

33. Additional Resources May 2018

34. Additional ResourcesFor more information on Federal financial assistance, see any of these resources.ResourceLocation2 CFR 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awardshttp://www.ecfr.gov/cgi-bin/text-idx?SID=86d18880b77ca75d2273f61c9b0caaa3&node=pt2.1.200&rgn=div5 FAS Grants and Agreements Management web pagehttp://www.fas.usda.gov/grants34

35. Additional CoursesThe following formal courses provide further details on Federal financial assistance:Introduction to Grants and Cooperative AgreementsMonitoring Grants and Cooperative AgreementsUniform Administrative Requirements for Federal Grants: 2 CFR 200 (Subparts A-D) Cost Principles for Federal Grants: 2 CFR Part 200 (Subpart E) and FAR 31.2Cooperative Agreements and Substantial InvolvementAccountability for Federal GrantsDetecting and Preventing Fraud on Federal Grant ProjectsBecause joint venture and cost reimbursable agreements are specific to USDA, non-USDA courses will emphasize grants and cooperative agreements.35

36. The EndMay 2018

37. Congratulations! Q&A37

38. Knowledge CheckHow many types of instruments are discussed?What instruments does USDA use?What is a Grant?38

39. Knowledge Check ResponsesHow many types of instruments are discussed?Five – Grant Agreement, Joint Venture, Cooperative Agreement, Cost Reimbursable Agreement, Procurement Contract What instruments does USDA use?Grant Agreement and Cooperative Agreement, Cost Reimbursable Agreement, Joint Venture AgreementWhat is a grant?Instrument providing money, property, or services to a non-Federal entityTo accomplish a public purpose, without substantial involvement by the Federal government.39

40. Knowledge CheckaWhat are some of the agency’s responsibilities during closeout?FOIA does not apply to agreements? True or False40

41. Knowledge CheckbWhat are some of the agency’s responsibilities during closeout?Ensure excess funds are de-obligated, no litigation or appeals are pending, work has been completed according to project narrative, etc.FOIA does not apply to agreements?FalseFOIA is one the national policies terms and conditions applicable to awards.41