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Transcript for audio podcast: Rules for HHS Grantees

From the Office of Inspector General of Department of Health and Human Services

http://oig.hhs.gov

My name is Carla Lewis. I am an auditor in the HHS Office of Inspector General, Office of Audit Services.

As a grantee, you have a vital role to play in helping HHS reduce fraud, waste, and abuse in its grant programs. You have the primary responsibility to make sure all funds, are used properly.

I'm going to talk to you today about how to do that. Grant recipients should take an active role. It is important, especially for new grantees, to understand Federal grant requirements.

Federal requirements are different for every grant depending on the specific award, the awarding agency, and the type of grantee. So, it is important to look at your grant award, where your grant terms, and conditions are spelled out. You also want to look at HHS grant regulations and Federal cost principles.

All these things provide guidance and a roadmap for how to manage a Federal award. If you have questions about specific grant requirements, contact your Federal grant officer or others listed in the award agreement.

It is also crucial for all grant recipients to make sure all costs incurred are allowable. Put yourself on the right track by establishing a system of internal control. Internal controls are the actions and activities that help you meet program goals. They also help to ensure the proper and effective use of Federal funds.

How would you ensure that costs will be allowable? I'll discuss three - written policies and procedures, financial management systems, and documentation.

First, maintain written policies and procedures for your business operations. Think of policies as directives or rules that tell employees what to do. Think of procedures as what employees actually do on the job, day in and day out, to satisfy those directives.

Your policies and procedures should provide guidance and direction that will help you to address key questions. For example: Are the costs necessary to meet the goals of the program? Are the costs specifically for the grant? Is there a reasonable correlation between the costs incurred and the benefits provided? Is there an undisclosed conflict of interest-either in appearance or fact?

Second, grantees should have a robust financial management system. Financial management systems are the processes and procedures that the grantee uses to show funds are spent according to the rules. In fulfilling the grant requirements, you will want to make sure that you can:

  • account for all expenditures charged against the grant;
  • record and track costs;
  • distinguish grant costs from non-grant related costs; and
  • report information that is accurate, current, and complete.

For example, a recipient of Hurricane Sandy funds would need to separately track costs for Head Start funds, FEMA funds, and State funds. That way, grantees are not billing the same costs to multiple grants.

Finally, grantees need to manage and maintain documentation to support costs charged against the grant. Either electronic or manual records are acceptable.

Whichever system you use, be sure documentation containing personally identifiable information, such as a social security number, is securely stored and accessible to only authorized personnel. Electronic records should also be encrypted to reduce the risk of theft in case the documentation is compromised or stolen.

Remember, documentation should contain specific information about costs and provide an audit trail from authorization to completion.

The paper trail should include:

  • justification for the purchase of goods or services;
  • reflect costs incurred during the grant period; and
  • identify the grant award used.

Since grantees may get grants from multiple sources for one or more programs, it is very important to document the receipt and use of each source of funds.

Don't forget it's critical for key functions to be separated. That means no one person should have sole responsibility for authorizing, preparing, and approving a document.

Have your documentation ready for internal and external reviews, like an OIG audit. Taking these steps will protect against mismanagement of Federal funds in your organization. And after all, that's the goal. Getting Federal funds to those who need the most help in the aftermath of a disaster.

Thank you for listening and for taking an active role to help prevent fraud, waste, and abuse in HHS grant programs. If you suspect fraud involving an HHS grant, we want to know. Contact us at 1-800-HHS-TIPS or on the web at oig.hhs.gov.

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