Tuesday, October 28, 2014

Who Is Managing Compliance With Your Federal Grant Funding?

What's the first thing a public agency should do after receiving notice that it has obtained a federal grant for a project (right after celebrating!)?  Appoint someone to be responsible for compliance with the terms of the grant.

Complying with grant terms:  When you receive a grant, it's important to also pay attention to the following:
  • Understand the grant:  Read the terms of the grant and what it requires the recipient (your public agency) to do.
  • Solicitation requirements:  Determine what must be included in the terms of any Invitation to Bid or Request for Proposals/Qualifications.

  • Changed practices:  Figure out what agency practices need to change in order to be in compliance with the grant.
  • Monitor:  Ensure you have a monitoring system in place so that the various reporting and other requirements of the grant are complied with.
A common mistake:  What is one of the most common mistakes that public agencies make in administering the terms of a federal grant?  Not checking and documenting whether any company you contract with has been debarred or suspended by the federal government for violation of various federal laws and regulations.   

Automatic audit finding:  Public agencies who do not check and document the federal debarment and suspension status of firms contracted with are very likely to be issued an audit finding.  Recently, the Washington State Auditor's Office issued audit findings against the following public agencies for not ensuring compliance with this requirement:
Why do agencies miss this requirement?  There are a couple of reasons why agencies find themselves out of compliance with the debarment and suspension requirements:
  • Lack of awareness:  Some agencies simply aren't aware that it is a requirement to check and document whether firms contracted with have been debarred or suspended. The agency may infrequently receive federal funding or there may have been staff turnover.
  • Relying on others:  Some agencies delegate compliance with federal grant requirements to the architect or engineer who may not be familiar with the requirements or have the staffing and systems in place to ensure compliance.

  • Not tracking whether project has federal funds:  Without an adequate internal system to identify what projects have federal funding, some agencies fail to check on the debarment and suspension status of vendors, contractors, and consultants.  

  • Pass through funds:  Sometimes, federal funds are passed through to a local agency via a state agency.  It is important to track the source of the funding.  If the state received it from the federal government, the various grant requirements will continue to be passed through to local agencies.
  • Emergency contracts:   In issuing an emergency contract without competition, some public agencies forget that the federal debarment and suspension requirements still apply.
When do federal requirements apply?  
  • $25,000:  The federal debarment and suspension checking requirements apply to all vendors, contractors, and consultants receiving $25,000 or more on a federally funded project.

  • $1 taints the pot:  A project with any federal funding, regardless of how small, will trigger all of the requirements associated with such funding.
How to check for federal debarment:  It's easy to check for whether a business your agency is contracting with has been suspended or debarred from doing business with the federal government.  Go to www.sam.gov, and enter the name of the business.  If the search does not reveal a record, click on the "save PDF" link that will include the name you searched for as well as a note indicating there were no search results.  Print this PDF and maintain it in your contract/project file for when you are audited.
Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC

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