Memorandum
To: Solicitor
Inspector General
Assistant Secretaries
Bureau and Office Heads
From: Nina Rose Hatfield /signed/
Deputy Assistant Secretary - Budget and Finance
Subject: FINANCIAL ASSISTANCE (GRANTS): FINANCIAL REPORTING
REQUIREMENTS
This is the first of a series of two policy issuances regarding financial and performance reporting requirements associated with grants. The second policy issuance (to be issued within the next few months) will cover new Departmentwide performance reporting requirements.
For the purpose of this policy, grants are defined as all Federal financial assistance that provides support or stimulation to accomplish a public purpose. Use of the term "grant" includes grants, cooperative agreements, and other agreements in the form of money or property in lieu of money, by the Federal Government to eligible recipients.
Among the findings and recommendations contained in their Fiscal Year 2002 report to the Secretary and Inspector General, independent auditors, KPMG, stated that, with regard to grant monitoring:
Interior requests grant performance reports and related SF-269,
Financial Status Reports, from grant recipients; however, Interior
does
not perform sufficient monitoring to ensure grant recipients
submit
these reports timely … Interior uses the SF 269s to help
ensure that
expenses are recorded in the proper period and funds are de-obligated
at
the end of the grant period.
The resulting recommendation to improve the reporting of financial transactions in this area was that "Interior require grant recipients to submit grant performance reports and related SF-269's prior to receiving new grants."
In FY 2002, Department of the Interior (DOI) bureaus and offices awarded over $3.8 billion in grants and cooperative agreements. This represents a considerable portion of DOI's annual budget. As grant-makers, we must be especially vigilant in administering our grants and ensuring that recipients are held accountable for submitting financial status information in a timely manner so that expenses may be recorded in the proper period and funds de-obligated at the end of the grant period.
The attached policy reiterates financial reporting requirements as identified in Office of Management and Budget (OMB) Circular A-102, Grants and Cooperative Agreements with State and Local Governments, OMB Circular A-110, Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and Non-Profit Organizations, Title 43 Code of Federal Regulations (CFR), Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments, section 12.81, and Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations, sections 12.951 and 12.952. Sanctions for non-compliance by recipients, as provided for by the OMB Circulars and Title 43 CFR subparts 12.83 and 12.962, are also covered.
This policy applies to all DOI grant-making programs, and is effective upon issuance. A draft copy of the policy was provided to bureau/office members of the Interior Federal Assistance Work Group for review and comment in early June.
Bureau and office heads are responsible for ensuring that this policy is distributed to all of their bureau's/office's grant-making programs; preparing supplementary guidance, as appropriate; and implementing the policy's requirements. Grant programs' failure to properly monitor grants and hold recipients accountable for the timely receipt of financial status reports may cause the programs to be cited by auditors as a reportable condition or render the program materially weak.
If you have any questions regarding this policy, please contact Debra Sonderman, Director, Office of Acquisition and Property Management (PAM) on 202-208-6352. Members of your staff may contact Tammy Pataluna, PAM, on 202-208-4080 for further assistance.