The Pre-Award Phase involves the planning and application process for a federal grant award. During this phase, it is crucial for the applicant to ensure that the proposal aligns with the funding agency's goals and requirements and that it is eligible to receive the award. This includes thoroughly understanding the agency's mission, and requirements, as well as adhering to any specific guidelines and regulations outlined in the funding opportunity.
A grant is a “legal instrument of financial assistance between a federal awarding agency or pass-through entity and a non-federal entity.” Furthermore, a grant is a financial assistance provided by a federal agency to support a specific public purpose authorized by federal statute. Unlike loans, grants do not need to be repaid, provided that the grantee fulfills the terms and conditions of the grant.
The formal announcement of the availability of federal funding through a financial assistance program from a Federal Awarding Agency is made through a Notice of Funding Opportunity (NOFO). The NOFO is any paper or electronic issuance that an agency uses for the announcement. It provides information on the award, who is eligible to apply, the evaluation criteria for selection of an awardee, required components of an application, and how to submit the application.
Notice of funding opportunities can be found in various sources. Some of them are:
The eligibility criteria are specified in each grant announcement. Before applying for a grant, applicants are strongly encouraged to validate their eligibility. The eligibility requirements scan be found in the NOFO.
All entities that use or receive federal funds must be registered in SAM.gov. Entities that are debarred or suspended in SAM.gov are automatically ineligible to apply for a federal grant award
Typically, an application package will include the following:
A Subrecipient is typically a local government or nonprofit organization that independently administers a program on behalf of the grantee. An entity generally but not limited to non-Federal entities, that receives a grant from a pass-through entity to carry out part of a Federal award; but does not include a person who is a recipient or a beneficiary of that award. A Subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agency. (2 C.F.R. § 200.1).
As outlined in 2 CFR § 200.331,
A subrecipient:
A contractor:
In determining whether an agreement between a pass-through entity and another non-Federal entity casts the latter as a subrecipient or a contractor, the substance of the relationship is more important than the form of the agreement. The pass-through entity must use judgement in classifying each agreement as a subaward or a procurement contract.
A non-Federal entity that provides a subaward to a subrecipient to carry out part of a Federal program.
A State, local government, Indian tribe, Institution of Higher Education (IHE), or nonprofit organization that carries out a Federal award as a recipient or subrecipient.
Below are suggestions that could help improve your chances to receive a federal grant:
- Adhere to all the instructions and guidelines provided in the NOFO. Not meeting the NOFO requirements can disqualify an application.
- Ensure your proposal aligns with the grant’s goals and objectives.
- Provide a strong narrative work plan.
- Create a clear and detailed budget. Ensure that both the budget and program narrative justify the allowability and reasonableness of the items included in the budget.
- Demonstrate that the Applicant has an organizational structure that can execute the workplan.
- Submit the application on time. It is highly recommended to submit the application before the deadline to avoid technical issues.
- Include specific, measurable, achievable, relevant, and time-bound (SMART) Performance Measures.
- A well-crafted Program Design should have the following components:
o Evidence-based and/or best practice models: incorporate models supported by research.
o Data: provide data that clearly demonstrates the need for the project or program.
o Reasonable timeline: provide a detailed timeline that is realistic and achievable.
o Data Evaluation Capacity: demonstrate the entity’s capacity to analyze and collect the data for the reporting of the project’s progress and outcomes.
o Reasonable Outcome Expectations: outline realistic and achievable outcome expectations.
The Award Phase begins once the federal awarding agency sends a notice of award to the selected recipient(s).
Notifications are typically sent via email or through the federal agency platform. Selected applicants receive an official Notice of Award (NOA) from the granting agency.
The NOA is the official document that informs the recipient they have been awarded the grant. It includes important information such as the grant amount, terms and conditions, budget period, project period, and reporting requirements.
A legal instrument of financial assistance between a Federal awarding agency or pass-through entity and a non-Federal entity that, consistent with 31 U.S.C.6302, 6304:
An award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a Federal program. A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract.
Terms and conditions outline the requirements and restrictions on how the grant funds can be used. They include guidelines on allowable costs, reporting requirements, audit requirements, and compliance with federal regulations such as the Uniform Guidance (2 CFR Part 200).
Budget Period refers to the time frame for which grant funds are provided and expenditures are tracked (e.g., one year).On the other hand, Project Period refers to the total time span during which the grant activities are expected to be completed, which may encompass multiple budget periods (e.g., three years).
As outlined in 2 C.F.R. 200 Subpart E, all costs must meet the following criteria:
Indirect costs can be charged to a federal award using one of the following methods:
1) 10% de minimis rate - If the entity does not have an approved federally recognized indirect cost rate negotiated with a federal cognizant agency (NICRA), the entity may elect to charge a de minimis rate of 15% of modified total direct costs (MTDC). MTDC is defined as “all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs, and with the approval of the cognizant agency for indirect costs.”
The 2024 review of the Uniform Guidance, increases the de minimis rate from ten percent to fifteen percent. The changes will take effect on October 1, 2024.
2) Negotiated Indirect Cost Rate Agreement (NICRA) - A negotiated rate based on identified indirect cost with a federal cognizant agency. A federal cognizant agency is the Federal agency responsible for reviewing, negotiating, and approving cost allocation plans, or indirect cost proposals developed under this part on behalf of all Federal agencies (2 C.F.R. § 200.1).
The Post-Award Phase involves the management, monitoring, and reporting of the grant project to ensure compliance with the grant terms and successful completion of project objectives.
All federal funding agencies have a responsibility to maintain effective internal controls. A non-federal entity must establish and maintain effective internal controls over the federal award, thereby providing reasonable assurance that its awards are managed in compliance with local and federal laws, regulations, and the terms and conditions of the award 2 CFR 200.303(a)A.
2. Federal awarding agencies are required to follow internal control compliance requirements in OMB Circular No. A-123, Management's Responsibility for Enterprise Risk Management and Internal Control.
The adoption of financial and programmatic internal controls leads to a more successful audit.
Even though reporting requirements vary, they typically include:
- Performance and Program Reports: Updates on project or program activities, milestones achieved, and KPIs.
- Financial Reports: Detailed reports on how grant funds were spent, often required quarterly or annually.
- Final and Closeout Reports.
A Financial Report details how the grant funds were spent, including a breakdown of expenditures by category. On the other hand, a Progress Report provides information on the activities and accomplishments achieved with the grant funds, including progress toward project goals and objectives.
Recipients and Subrecipients are required to comply with all procurement requirements established in 2 CFR § 200.318 through 2 CFR § 200.327 while acquiring goods or services with Federal funds.
Refer to 2 C.F.R. § 200.320
Informal methods are those in which the acquisition of goods and/or services do not exceed $250,000. These include micro-purchases and small purchases. Formal methods are those in which the acquisition of goods and/or services exceeds $250,000. These include sealed bids, request for proposals and non-competitive processes, the latter of which does not require advertising.
The most used procurement methods are Micro Purchase, Small Purchase, Sealed Bids and Request for Proposals. 4. What is a Micro Purchase? Procurement of goods and/or services that does not exceed $10,000. It May be awarded without soliciting quotations, if the price is determined to be reasonable based on research, experience, purchase history or other information(2 C.F.R. § 200.320).
Procurement of goods and/or services between $10,001 and $250,000. It must be distributed equally among qualified suppliers. Price quotations or rates must be obtained from an adequate number of qualified sources (2 C.F.R. § 200.320).
A procurement method in which bids are publicly solicited, and a fixed-price (lump sum or unit price) contract is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price (2 C.F.R. §200.320).
When procuring goods or services in excess of $250,000.This procurement method allows for consideration of technical factors other than price; discussion with offerors on bids submitted; negotiation of other terms and conditions of the contract; review of proposals prior to final selection of the offeror; and withdrawal of a bid at any time up to the time of award. 2 C.F.R. § 200.320. 11. Under what considerations contracts should be awarded under a Requests for Proposals procurement method? Contract award must be given to the responsible offeror whose proposal is most advantageous to the non–Federal entity, and that represents the best overall value, considering price and other factors, such as technical expertise, experience, quality of proposed personnel and others, set forth in the solicitation and not just the lowest price (2 C.F.R. § 200.320.)
An independent review of the cost estimate of the goods or services to be procured, prepared by the Subrecipient, or a third party prior to issuing a request for bids. The independent cost estimate is a confidential document, and its publication may affect full and open competition (2 C.F.R. §200.324).
No. Independent cost estimates are required for all procurement processes over $250,000. (2 C.F.R. § 200.324). However, it is recommended that the independent cost estimate be completed on all processes as a tool to determine the reasonableness of the cost and justification for the selected acquisition method.
It should include solicitation documents; independent cost estimate; justification for the selected procurement method; evaluations, recommendations and determinations made by the procuring entity; advertisements; bids received; and any information considered by the procuring entity.
Changes usually require prior approval from the funding agency. The changes can include:
At the end of the grant period:
Recipients and subrecipients that expend more than $750,000 in Federal awards during their fiscal year will still be subject to an audit under the Single Audit Act and 2 CFR Part 200, Subpart F.
Note: The OMB reviewed the Uniform Guidance in April 2024. As part of the final updates, effective on or after October 1, 2024, the Single Audit (200.501) threshold increases from $750,000 to $1 million.
Below are the steps you should follow to prepare for a grant audit:
The process by which the Federal awarding agency or pass-through entity determines that all applicable administrative actions and all required work of the Federal award have been completed and takes actions as described in 2 CFR 200.344.
All the information presented in this guide is publicly available. All grant recipient, subrecipients, and contractors must ensure to review the applicable compliance requirements. Each federal award is subject to the specific legal authorities unique to that award.
Cualquier ciudadano puede informar sobre irregularidades en el uso de fondos públicos o que puedan representar el delito de fraude o actos de corrupción pública. Envié un correo electrónico a informa@oig.pr.gov o presente su queja a través de https://www.oig.pr.gov/informa. También puede comunicarse con la línea confidencial de la Oficina del Inspector General (OIG) al 787-679-7979. El denunciante está protegido por ley contra represalias por presentar una queja.
