Department of Health and Human Services
OFFICE OF
INSPECTOR GENERAL
HHS OVERSIGHT OF
G RANTEES
COULD BE
IMPROVED THROUGH
BETTER INFORMATION-SHARING
Suzanne Murrin Deputy Inspector General
for Evaluation and Inspections
September 2015 OEI-07-12-00110
EXECUTIVE SUMMARY: HHS OVERSIGHT OF GRANTEES COULD BE IMPROVED THROUGH BETTER INFORMATION-SHARING OEI-07-12-00110
WHY WE DID THIS STUDY
The Department of Health and Human Services (HHS) is the largest grantmaking agency in the Federal Government. In fiscal year 2014, HHS awarded nearly $402 billion in grants. We conducted this study to assess how HHSs grant-awarding agencies share information with each other about grantees and potential grantees to assess and mitigate risks of poor performance or misuse of grant funds. Assessing and mitigating grantee risk is a component of HHS strategic initiatives. Additionally, since 2007, the Office of Inspector General has identified grants management as a top management challenge for HHS.
HOW WE DID THIS STUDY
We conducted structured telephone interviews with the Chief Grants Management Officer and/or designated staff from each of 13 HHS awarding agencies. We also collected data from awarding agencies regarding alert memorandums and fraud memorandums from the National External Audit Review Center (NEARC).
WHAT WE FOUND
Awarding agencies grant officials use various sources of information and communication to mitigate grantee risks; however, grant officials noted limitations in some instances. For example, information available in databases assists staff from awarding agencies in managing grantee risks, but lack of integration poses challenges. NEARC memorandums contain important information about grantee risks, but not all awarding agencies receive them. Awarding agencies lack a systematic method of sharing information about grantee risks, and sharing occurs infrequently. However, grant officials in the majority of awarding agencies we reviewed would like to receive such information from other awarding agencies.
WHAT WE RECOMMEND We recommend that the Assistant Secretary for Financial Resources (1) analyze whether to implement the use of integrated databases that contain adverse information on grantees past performance, (2) establish a departmentwide source of adverse information from audits of grantees, and (3) facilitate departmentwide information-sharing about grantees that have past performance issues. ASFR concurred with all three recommendations.
TABLE OF CONTENTS
Objectives ....................................................................................................1
Background..................................................................................................1
Methodology................................................................................................4
Findings........................................................................................................6
Awarding agencies grant officials use various sources of
information and communication to mitigate grantee risks; however, grant officials noted limitations in some instances ..........6
NEARC memorandums contain important information about grantee risks, but not all awarding agencies receive them ...............7
Awarding agencies lack a systematic method of sharing
information about grantee risks, and sharing occurs infrequently ...9
Conclusion and Recommendations ............................................................11
Agency Comments and Office of Inspector General Response.....................13
Appendixes ................................................................................................14
A: FY 2014 Grant Awards by Awarding Agency ..........................14
B: Databases Used By Awarding Agencies to Mitigate Grantee
Risks...............................................................................................15
C: Agency Comments ...................................................................16
Acknowledgments......................................................................................18
OBJECTIVES To determine:
1. how Department of Health and Human Services (HHS) agencies that award grants use information and communication to mitigate grantee risks;
2. the extent to which these agencies use alert memorandums and fraud memorandums from the National External Audit Review Center (NEARC); and
3. whether these agencies receive and/or share information on grantees that they are concerned about with regard to performance and/or accountability.
BACKGROUND HHS is the largest grantmaking agency in the Federal Government. In fiscal year (FY) 2014, HHS awarded nearly $402 billion in grants, approximately 24 percent of which funded programs other than Medicaid and the Childrens Health Insurance Program.1 We conducted this study to assess how HHS agencies that award grants (hereafter referred to as awarding agencies) share information and mitigate risks. Assessing and mitigating this risk is a component of HHS strategic initiatives.2
Since 2007, the Office of Inspector General (OIG) has identified grants management as a top management challenge for HHS. As discussed in OIGs top management challenges, implementation of planned program integrity initiatives such as evaluating and monitoring risks and resolving reported audit findings regarding grantees would better position HHS to integrate program integrity into all aspects of its operations.3
HHS Grants Within HHSs Office of the Assistant Secretary for Financial Resources (ASFR), the Office of Grants and Acquisition Policy and Accountability (OGAPA) provides departmentwide leadership and management in the areas of grants and acquisition management. OGAPA achieves this through policy development, data systems operations and analysis, performance measurement, oversight and workforce training, development, and certification. Within OGAPA, the Division of Grants
____________________________________________________________ 1 See Appendix A for the number and dollar amount of grants by awarding agency. 2 HHS, HHS Strategic Plan. Accessed at http://www.hhs.gov/strategic-plan/goal4.html on August 6, 2014. 3 OIG, 2014 Top Management & Performance Challenges. Accessed at https://oig.hhs.gov/reports-and-publications/top-challenges/2014/ on December 2, 2014.
HHS Oversight of Grantees Could Be Improved Through Better Information-Sharing (OEI-07-12-00110) 1
https://oig.hhs.gov/reports-and-publications/top-challenges/2014http://www.hhs.gov/strategic-plan/goal4.html
provides technical assistance to the Departments grant-awarding agencies; evaluates effectiveness of the grant programs and processes; develops pertinent departmentwide regulatory guidance, policies, and performance standards; and maintains and reports departmental grant/financial assistance award information.4
Grantees may receive funding through multiple awarding agencies within HHS. For example, a community social service agency might receive funds from both the Administration for Children and Families (ACF) and the Substance Abuse and Mental Health Services Administration (SAMHSA). Similarly, grantees may receive funding through multiple offices within the same awarding agency.
Federal Regulations and Departmental Guidance Awarding agencies must comply with Federal regulations and departmental guidance in issuing grants. Federal regulations contained in 45 CFR part 74 establish uniform administrative requirements governing HHS grants to institutions of higher education, hospitals, and other nonprofit organizations. Federal regulations contained in 45 CFR part 92 establish uniform administrative requirements governing HHS grants to State, local, and tribal governments.5 The HHS Grants Policy Directives (GPD) provide guidance on grants management issues to affected program offices at all organizational levels within the Department. The GPD are the highest level of departmental grants policy within the Department. The Awarding Agency Grants Administration Manual (AAGAM) implements the GPD by providing detailed guidance to awarding agency staff involved in grants administration. The AAGAM must be used by any awarding agency that does not maintain its own grants administration manual (GAM).6 The National Institutes of Health (NIH) is the only awarding agency with its own GAM. The Division of Grants is working on a new Grants Policy and Administration Manual that will incorporate the recently implemented Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards7 and will replace the AAGAM.
____________________________________________________________ 4 HHS, Office of the Assistant Secretary for Financial Resources Functional Statement. Accessed at http://www.hhs.gov/asfr/asfr-functional-statement.html on January 26, 2015. 5 On December 19, 2014, 45 CFR pts. 74 and 92 were replaced by 45 CFR pt. 75, which
adapts the Office of Management and Budgets final guidance in 2 CFR pt. 200 with
certain amendments. 79 Fed. Reg. 75871 (Dec. 19, 2014).
6 AAGAM ch. 1.01.101-2.
7 The Department implemented Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards in 2 CFR pt. 300 and 45 CFR pt. 75.
79 Fed. Reg. 75872, 75875 (Dec. 19, 2014).
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http://www.hhs.gov/asfr/asfr-functional-statement.html
Databases Relevant to Grants and Grantees Many d
