The file below has been archived for historical reference purposes only. The content and links are no longer maintained and may be outdated. See the OER Public Archive Home Page for more details about archived files.

5. AWARD PROCESS (PHS GPS 9505)


TERMS OF AWARD

PHS will not award a grant without an approved application in conformance with legislative, regulatory, and policy requirements and which describes the purpose and scope of the project to be funded. When an application is approved for funding, the Grants Management Officer (GMO) will prepare, or cause to be prepared, a Notice of Grant Award (NGA). For a valid grant to exist, the NGA must be signed by a duly designated PHS official and released to the recipient.

The NGA includes, among other things, the dates of the budget period or other specified funding period, the approved budget, and the amount of Federal funds authorized for obligation by the grantee during the period indicated. If applicable, the NGA will also indicate the dates of the approved project period and the amount of PHS support recommended for each subsequent budget period of the approved project. Award notices also contain special terms and conditions binding upon the award and refer to all general terms applicable to the award. Any action, such as the award of a supplement or the noncompeting extension of a budget period, resulting in a change in the amount of funds awarded, a change in the duration of support, or a change in the terms and conditions of the award, will be reflected in a revised NGA.

The award document will also identify the approved grant application or its equivalent; indicate the grantee's specific matching requirement; include the name of the individual (project or program director or principal investigator) who by the terms of the application will have responsibility for the conduct of the project or program; and, as appropriate, specify the option to be exercised by the grantee concerning the disposition of general program income earned from the grant-supported activities.

The terms of the award, either contained in or referenced by the award document, will be binding on both the grantee and the PHS awarding office until such time as they are modified by a revised award notice signed by the GMO.

It should be understood that any revisions in the terms of an award are permitted only when consistent with applicable statutes and regulations and deemed to be in the best interest of the Government

If the awarding office has determined that a prospective grantee is financially unstable, has a history of poor performance, or has a management system which does not meet the agency's standards, the awarding office may impose special conditions more restrictive than those prescribed by 45 CFR Part 74 (see 45 CFR Parts 74.7 and 74.72(e)) and 45 CFR Part 92 (see 45 CFR Part 92.12) and/or arrange for appropriate technical assistance to be provided to the grantee. When a special condition requires the grantee to take specific action by a certain date, the condition will include a statement of the resulting PHS awarding office action to be taken in case of noncompliance. The PHS office responsible for imposing the special conditions shall follow up on grantee performance to determine compliance and to lift or recommend removal of the special condition when it has been satisfactorily complied with. Removal of special conditions will be communicated in writing to the grantee by the official authorized to sign the award notice.

Under all PHS grant awards, a grantee indicates acceptance of the terms of an award by requesting funds from the grant payment system. If the grantee cannot accept the terms, it should notify the GMO. If resolution cannot be reached, the grant will become void. The grantee does not have appeal rights with respect to the terms appearing on the NGA or with respect to a denial by the PHS awarding office of a request to change the terms of the award, since the actions and decisions resulting in the issuance of the award document are normally considered to be preaward determinations.

AWARD AND FUNDING

Discretionary Grants

All PHS discretionary grants are funded either by a single award covering the entire period of support or incrementally by a series of successive awards. A single award covering the entire period of support will generally be used only when --

When incremental funding is used, projects may be programmatically approved for support in their entirety or in part, but funded in annual increments called budget periods.

The length of an initial project period or any subsequent extension is determined by the PHS awarding office on the basis of statutory and regulatory requirements, the length of time requested by the applicant to complete the project, the frequency of competitive review desirable for proper management of the project, and limitations on the length of the project period recommended by the independent objective review group(s). However, except where specifically required by legislation or regulation or approved by OASH, an initial project period or competitive continuation thereof may not exceed 5 years (3 years for foreign grants) exclusive of noncompeting extensions. The total project period consists of the initial project period and any extensions (competitive segments) thereof.

The initial grant award provides funds for the conduct of the project during the first budget period. A budget period is normally 12 months. Shorter or longer budget periods may be established for compelling programmatic or administrative reasons such as to arrange more advantageous anniversary dates, to allow for project periods not evenly divisible into 12-month increments, to take into account an unavoidable extended absence of a principal investigator, to merge two or more grants into a consolidated grant, or to accommodate a change in the grantee's fiscal year.

An NGA that documents the approval of a project period that extends beyond the budget period for which funds are provided, including recommended levels of future support, expresses the PHS intention of providing continued financial support to the project. However, the recommended levels of future support within a project period are not guarantees by PHS that either the project will be funded or funded at those levels and creates no legal obligation to provide such future support. Instead, these amounts represent projections of future funding levels based on the information available at the time of the initial award.

The actual amount of subsequent awards will be determined by --

Funding of a noncompeting continuation award within a previously approved project period may be withheld for justifiable reasons. (See section 8, "Suspension, Termination, and Withholding.")

Grant funds, including amounts awarded for the current budget period and estimated or actual unobligated Federal funds carried over from prior budget periods, are authorized for grantee use only in the current budget period and only up to the amount specified by the PHS awarding office in an approved budget on an NGA. As a result of carryovers of unobligated grant funds, the total amount of funds available in the grant account may exceed the Federal share of the approved budget. Those funds are not automatically available to the grantee. The PHS awarding office exercises sole discretion as to the use of unobligated grant funds. See section 8, "Reporting" for further information concerning the application and disposition of unobligated balances.

Construction Grants

Generally, for construction grants, one award that may cover more than 1 year is made on the basis of an application covering the entire project. Incremental funding is not normally used for construction grants.

Training Grants

PHS grants that provide funds for the training of individuals are made to institutions and are funded incrementally as described above. The grantee institution selects the trainees, whose periods of training may not necessarily coincide with the budget period of the project. However, the periods of training may not extend beyond the end date of the project period, nor may stipends be paid from an expired grant. Under these programs, a new appointment is the first appointment for a trainee under the PHS grant-supported project. A reappointment is a subsequent appointment for the same trainee under the same project. An appointment or reappointment may not be for less than 9 months (except under approved programs or projects that specifically include provisions for short-term training) or exceed 12 months without prior approval by the PHS awarding office. The full amount of the stipend and tuition for each year covered by the appointment or reappointment is considered a cost of the budget period in effect on the beginning date of the appointment or reappointment unless other instructions are furnished by the PHS awarding office.

Individual Fellowships

An individual fellowship may be activated at any time during the 6-month period immediately following the issue date shown on the Notice of Research Fellowship Award. An approved continuation award must be activated on the day following the completion of the previous award period.

PAYMENT

Grant payment requirements are prescribed in policies issued by the Office of Management and Budget and the Department of Treasury. These policies are designed to minimize the time elapsing between transfer of funds from the Federal Government and disbursement by a recipient.

Recipients of grant awards will receive payments through the HHS Payment Management System (PMS). This system is administered by the Federal Assistance Financing Branch, Office of the Assistant Secretary for Health. Operational guidance for recipients is contained in the "DHHS Manual for Recipients Financed Under the PMS." Requests for this manual as well as inquiries regarding payments should be directed to:

Division of Payment Management, ORM
Box 6021
Rockville, MD 20852
Telephone: 301-443-1438

Grant payments are made by monthly cash request (Treasury check), reimbursement by Treasury check, or SMARTLINK II/ACH.

Monthly Cash Request (Treasury Check)

Grantees that are not eligible for advance of funds by letter of credit are financed on a monthly cash request basis. Under this method of payment, grantee organizations may request grant funds monthly, based on expected disbursements during the succeeding month and the amount of Federal funds already on hand. For timely receipt of cash, a grantee must submit its request to reach the Federal Assistance Financing Branch at least 2 weeks before the date the cash is needed.

Reimbursement by Treasury Check

Reimbursement financing is used for a few specifically designated programs such as construction and for those grantees who have abused advanced funding privileges. For example, it would be used where it is determined that the grantee's financial management system does not meet the standards in 45 CFR Part 74, Subpart H, or 45 CFR Part 92.20, as applicable, or that the grantee has not maintained or demonstrated the willingness and ability to maintain procedures that will minimize the time between transfer of funds from the Treasury and their disbursement for grant-related purposes.

Under this method, payment is made to the grantee with a Treasury check upon receipt of a request approved by a PHS awarding office for reimbursement from the grantee. A request for reimbursement may be submitted monthly or more often if authorized.

SMARTLINK II/ACH

Grantees previously paid through the TFCS Letter of Credit will be converted to the HHS SMARTLINK II/ACH (Automated Clearing House) method of payment. This advanced payment system makes a direct deposit of funds to the recipient's bank account and requires recipients to have access to a computer terminal or other equipment that is able to telecommunicate a request for funds to the Division of Federal Assistance Financing (DFAF). SMARTLINK II/ACH provides funds the day following the request with direct deposit using the Federal Reserve Bank of Richmond, Virginia, through its ACH process.

Secondary Recipient Advances

Advances made by the grantee to subgrantee and contractor organizations must conform substantially to the same standards of timing and amount that govern advances made by the Federal Government to the grantee under the above mentioned payment methods.

Assignment of Payments

When the grant provides for payment only after incurrence of costs, i.e., the reimbursement payment method, several alternatives for ensuring adequate working capital are appropriate.

With approval of the PHS awarding office, grant payments may be assigned to financial institutions under the following conditions:

Requests to assign payments should be submitted to the designated GMO. Upon approval, necessary information as to how assignment may be accomplished will be provided by the GMO. Any interest charges resulting from loans obtained on the basis of the assignment may not be charged to project funds.

When lack of Federal funds due would cause a hardship on the grantee, it is possible to accelerate the grant payments. The grantee should contact the GMO of the PHS awarding office to request expeditious handling of its reimbursement request or to obtain authorization to submit reimbursement requests more often than monthly.

Grantees might also consider arranging a short-term loan from a lending institution in an amount sufficient for the initial phase of the grant-supported activity. Using the grant award as collateral, a grantee could secure such a loan and pay off the loan upon receipt of the Federal payment. Grantees would have to absorb interest payments, but this would be for a lesser amount over a shorter period of time than that incurred by assigning grant payments. This process of securing short-term loans could be repeated if necessary.




prev next