Ryan White HIV/AIDS Program Fiscal Health Series Systems to Sustainability TM Federal Grants
INTRODUCTION Sound fiscal management is critical for organizations to improve access to health care, advance health equity, and build healthy communities. In an ever-changing healthcare landscape, fiscal management, including compliance with federal grants, is difficult to achieve. The Sliding Fee Scales and Caps on Charges aims to strengthen Ryan White HIV/AIDS Program (RWHAP)-funded organizations financial management systems and compliance with fiscal aspects of the RWHAP and other federal requirements. The topics covered in this series are relevant to all RWHAP Parts and geared towards fiscal administrators and program managers, though collaboration across the organization is required to implement strong financial management systems. This publication offers practical, financial management infrastructure recommendations for nonprofit organizations, health departments, and health clinics.
OVERVIEW OF FEDERAL GRANTS COMPLIANCE The Ryan White HIV/AIDS Program (RWHAP) is subject to two sets of regulations: Congressional egislation, which is further interpreted in HRSA/HAB s Fiscal Monitoring Standards, and federal requirements out of the Office of Management and Budget that apply to all federal grants. Federal grant requirements are described in OMB s Uniform Guidance (5 CFR 75), which contains guidance on Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards. 5 CFR 75 supersedes requirements in previously existing OMB circulars (A-, A-87, A-0, A-, A-89, A-0, A-, and A-50). This brief will provide recommendations on time and effort reporting and procurement regulations, two topics in Uniform Guidance that are often challenging for RWHAPfunded organizations, and information on common Federal grant compliance pitfalls.
TOP 0 TIPS FOR TIME AND EFFORT REPORTING 5 6 7 8 9 0 There must be a system of internal controls to verify that records accurately reflect the work performed and that the actual time worked is consistent with the allocations of time and effort included in the Ryan White HIV/AIDS Program budget. There must be a written policy and procedure that allows organizations to review and adjust time and effort to ensure time reported matches actual hours worked. Every employee should have a job assignment record, or a written description of their duties across federal and non-federal awards. This description should also provide a specific charge code representing each federal award and an estimate of the anticipated number of hours worked in each pay period. This description should be issued to new hires, for new awards, and at the beginning of each fiscal year. New hires should be trained in proper timesheet preparation and refresher courses should be conducted if an employee does not comply. Timesheets should be completed daily, or tracked daily until timesheets are submitted, to ensure accuracy. There must be documentation to support the distribution of an employee s salary if he/she works on: a. More than one federal award b. A federal award and a non-federal award c. An indirect cost activity and direct cost activity d. Two or more indirect activities which are allocated using different allocation bases e. An unallowable and a direct or indirect activity such as fundraising and lobbying Time is computed on an actual hour basis, except for Institutes of Higher Education, which can record percentages of time. RWHAP is a direct charge award or sub-award that is normally cost reimbursable or may be in the form of units of service. Organizations must track labor cost by service category, direct or indirect administrative efforts, and other requirements as directed. Employees workload reports can be used to demonstrate Time & Effort. For example, if a provider is 0. FTE on a RWHAP grant, then her workload reports should reflect that allocation. Estimates can only be used in the interim for accounting but do not qualify as support for charges to awards. Understand the consequences of non-compliance and the implications of the False Claims Act, violations of which can result in criminal, civil, or administrative penalties. Source: 5 CFR 75.0(i), Standards for Documentation of Personnel Expense under Subpart E Cost Principles.
TOP 0 CHANGES IN UNIFORM GUIDANCE PROCUREMENT REGULATIONS FOR RYAN WHITE HIV/AIDS PROGRAM RECIPIENTS AND SUBRECIPIENTS 5 6 7 8 9 0 The Uniform Guidance procurement changes apply to all RWHAP recipients and subrecipients, but will impact most non-profit organizations and institutes of higher education, as they were not previously subject to these federal requirements. Procurement standards for non-profit organizations and institutes of higher education must be incorporated into Fiscal Year 07 workplans, bringing to an end the one-year grace period. Recipients should avoid acquiring unnecessary items by sharing or using surplus federal property before purchasing new items, and should conduct lease versus purchase analyses prior to procurement. The micro purchase threshold was established at less than or equal to $,000, allowing recipients and subrecipients to obtain supplies and services without soliciting competitive bids or conducting price or cost analyses. For small purchases ($,000 $50,000), recipients must obtain price and rate quotes from an adequate number of qualified sources but do not need to conduct a price or cost analysis, though it is recommended. All charges up to $50,000 must be documented, eventhough many states have lower thresholds. Records must include rationale for the method of procurement, selection of contract type, contractor selection or rejection, and basis for contract price. For any goods or services over $50,000, competition is encouraged. If sealed bids are not appropriate, the entity must have a written method for conducting evaluations, and requests for proposals must be publicly advertised. For sealed bids, the contract must be awarded to the lowest bidder. Sealed bidding is the preferred method for construction contracts. It should be noted that construction is not an allowable cost under RWHAP. Strategic and sole sourcing are still allowable. Sole sourcing can be applied at any level if the purchase is unique, for a public emergency, with prior approval from HRSA or a recipient, and if no other entity can provide goods or services in that area. HRSA can review procurement documents if there is concern of noncompliance. Source: 5 CFR 75.6-75.5
TOP 0 FEDERAL GRANT COMPLIANCE PITFALLS Lack of knowledge and/or understanding of Federal Office of Management and Budget (OMB) regulations. Ask for training or technical assistance if you need help interpreting this complex legislation. Restricted funds expended for unauthorized purposes per the funder memorandum of understanding (MOU) or Notice of Award. Improper or lack of supporting documentation for expenses and required matching funds (if applicable). Time and effort reports based on budgeted hours instead of actual time worked. 5 Federal financial reports cannot be reconciled to the general ledger for the appropriate Federal award. 6 Cash draws used to advance funds on Federal awards where such funds are not used to pay expenses in a timely fashion. 7 8 9 0 Inconsistent allocation of shared/indirect costs. Lack of written fiscal policies and procedures. Staffing programs with contractors to avoid paying FICA Employer Taxes. Commingling of federal funds. Acknowledgement: Paul Calabrese, Rubino & Company, Chartered
Systems to Sustainability TM Fiscal Health: Systems to Sustainability is an education, training, and technical assistance (TA) program led by HealthHIV that addresses the fiscal sustainability of RWHAP organizations by building their fiscal management capacity. Through this HRSA/HAB-supported program, a diverse and culturally competent team of fiscal management experts designs and implements effective Regional Trainings and individual TA, which focuses on fiscal requirements and grants management. To Request Technical Assistance or to Participate in Training, Contact: Training@HealthHIV.org 0..679 @HealthHIV www.facebook.com/healthhiv http://www.youtube.com/healthhiv http://tinyurl.com/healthhivlinked www.healthhiv.org