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Spotlight On... Grants Management and Oversight

Did you know that the Department of Health and Human Services (HHS) is the largest grant-making organization in the Federal Government?

In fiscal year (FY) 2011 alone, HHS awarded over 82,000 grants totaling approximately $385 billion. Of these, 80,000 grants, for a combined $91 billion, were for programs other than Medicare and Medicaid. The Recovery Act provided an additional $31 billion in non-Medicaid/Children's Health Insurance Program funding in FYs 2009-2010, and the Affordable Care Act appropriated more than $127 billion in additional funding through FY 2019.

The programs funded by these HHS grants and the services that they provide affect the lives of nearly every American. However, without proper controls in place to ensure the appropriate use of funds and sufficient oversight of grantees, these vital HHS programs are at risk. Therefore, grants management and oversight is crucial to both the HHS mission and the health and well-being of the public.

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For this reason, the Office of Inspector General (OIG), tasked with ensuring the integrity of the HHS programs, named grants management as one of its "Top Management Challenges"1 every year for the last decade. Furthermore, OIG plans to build on its extensive body of work in this area, including audits, investigations, and evaluations, in the coming years. In its FY2013 budget request justification, OIG listed grants management and oversight as one of its two highest priorities for budget funds allocated for public health, human services, and Department-wide oversight. Additionally, OIG's 2013 Work Plan introduces several new projects related to grants management.

To get an idea of the breadth of OIG's work on grants management and oversight, read about a few of OIG's recent reports and ongoing projects below.

President's Emergency Plan for AIDS Relief Funds

The President's Emergency Plan for AIDS Relief (PEPFAR) program authorized $78 billion from 2003 through 2014 in support of international programs for prevention, treatment, and care to combat HIV/AIDS, tuberculosis, and malaria. OIG examined the funds spent through this program in a 2011 report focusing on whether the Centers for Disease Control and Prevention's (CDC) oversight met departmental and Federal regulations. OIG found that while CDC performed some oversight of recipients' fund use, most of the award files did not include all required documents or evidence to demonstrate that CDC performed required monitoring. Because of these concerns, OIG expanded its audits internationally to include CDC's monitoring of PEPFAR funds by offices in other countries as well as audits of recipient organizations abroad. OIG issued two audits on Namibia, one in 2012 and another in 2013, and has an additional eight audits conducted there and in South Africa and Vietnam that are near completion." OIG is also planning seven more audits of PEPFAR grantees in Ethiopia and Zambia for FY 2013.

The Clinical and Translational Science Awards Program

In the report NIH Administration of the Clinical and Translational Science Awards Program, OIG set out to determine whether the National Institutes of Health (NIH) followed Federal regulations and policies in its management of the Clinical and Translational Science Award (CTSA) program, which provides external grants to expedite scientific research for new medical treatments. After reviewing a sample of the files, OIG indentified several issues, including CTSA staff's failure to document grantees' progress in compliance with NIH policy. CTSA staff completed the required comparison of research objectives and accomplishments in only 1 of the 38 reviewed cases. Furthermore, awardees were frequently late in submitting required reports, and CTSA staff did not take action to address this. Failure to meet these and other basic Federal requirements raises questions about whether awardees properly used funding and furthered the mission of NIH. Therefore, OIG provided several recommendations for NIH to ensure that staff meet these requirements going forward.

OIG has also examined adherence to regulations for other NIH programs, including the National Cancer Institute. The report, the National Cancer Institute's Monitoring of Research Project Grants, found deficiencies in the financial oversight of these grants.

Administration of Grants by the Substance Abuse and Mental Health Services Administration

When OIG evaluated a sample of the 2,281 grants (totaling $906.8 million) administered by the Substance Abuse and Mental Health Services Administration (SAMHSA) for the 2009 report SAMHSA's Administration of Grants, OIG found that SAMHSA maintains grant files in accordance with Federal requirements and policies. Furthermore, the incidence of the problems that OIG did find-such as files missing initial applications, continuation applications, and Financial Status Reports or obstacles to communication-was low. Therefore, no specific recommendations for improvement were necessary.

Recovery Act-Related Audit and Evaluation Reports

The American Recovery and Reinvestment Act of 2009, known as the Recovery Act, provided $48 million for OIG to review HHS Recovery Act spending and to enhance OIG's accountability and enforcement activities to prevent fraud, waste, and mismanagement in the use of taxpayer dollars. As part of its response to this charge, OIG issued more than 200 Recovery Act-related audits and evaluations over the last 3 years. A portion of these looked at Head Start facilities receiving Recovery Act funds, including a series of reports looking at facility compliance with Federal health and safety requirements and a review of 83 Early Head Start applicants. A previous Spotlight discussed these studies in greater depth. The full breadth of OIG's work on the Recovery Act can be seen on the OIG website.

Child Care and Development Targeted Funds

The Child Care and Development Fund (CCDF), an Administration for Children and Families (ACF) grant, helps low-income families obtain childcare so family members can work, attend training, or further their education. OIG is reviewing the State agencies that oversee the provision of childcare services to ensure that they comply with Federal requirements when claiming CCDF targeted funds for reimbursement. So far, an audit in Iowa found that in regard to the approximately $12.8 million claimed for CCDF over 4 years, the State agency did not comply with Federal requirements when claiming $2,654,238. These errors were due to the State agency's inadequate monitoring policies and procedures; therefore, OIG recommended that the agency develop sufficient procedures to ensure compliance. Additional reports will be issued focusing on other States. Webcast

In addition to retrospectively auditing and evaluating, OIG provides guidance to help stakeholders involved with grants programs and/or oversight. One example is OIG's involvement in the Quarterly Stakeholder Webcast Series. Last year, OIG Special Agent Brandon Trice participated in a segment providing advice to grantees on the topics of preventing conflicts of interest, misuse of funds, and embezzlement. For example, Brandon states, "It's all about documentation... In that documentation, you have to be sure that you support every assertion that you make to the granting agency." View the entire video and transcript on the website.

1Top Management Challenges are the areas that OIG considers the most significant management and performance challenges, both continuing and new, facing HHS in the coming year.


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