Post-Award/Grant Oversight

Monitoring and Compliance

The U. S. Department of the Treasury requires that SLFRF recipients that are pass-through entities as described under 2 CFR 200.1 are required to manage and monitor their subrecipients to ensure compliance with requirements of the SLFRF award pursuant to 2 CFR 200.332 regarding requirements for pass-through entities.
Monitoring is designed to assist the entity being monitored by ensuring that projects are operated efficiently and in a timely manner and that the project is being conducted in compliance with applicable Federal and State laws and requirements.

• Program staff will monitor subrecipients to ensure that projects are being operated efficiently and in a timely manner and that the program is being conducted in compliance with Federal and State laws. 
• Program staff will advise, train, evaluate, interpret and provide technical assistance to subrecipients in using State and federal stimulus funds.

Fraud, Waste, and Abuse

The Office of State Controller Reporting defines fraud as an intentional act of deception, misrepresentation, or concealment in order to gain something of value.  Waste is defined as over utilization of services and misuse of resources.  Failure to comply with laws, rules, and regulations could lead to incurring unnecessary costs resulting from inefficient practices, systems, or controls.  Incurring these unnecessary costs may constitute waste and mismanagement of federal funds.  Abuse is defined as excessive or improper use of services or actions that are inconsistent with acceptable business practices SLFRF Fraud, Waste, and Abuse.  Information about fraud, waste, and abuse can be found in the U.S. Department of the Treasury, Office of Inspector General’s webpage at Report Fraud, Waste, and Abuse | Office of Inspector General. Lastly, a link for reporting fraud, waste, and abuse to the State’s Attorney General’s Office can be found on the Department of Local Affairs, Division of Local Government’s website.

• Program staff will monitor for fraud, waste, and abuse as part of their normal quarterly grantee financial and performance reviews as well as through virtual and onsite grantee monitoring visits.
• Program staff are responsible for reporting incidents of fraud, waste, and abuse to the State of Colorado Attorney General’s Office through either the link on the DLG website or by calling the anti-fraud, waste, and abuse hotline at (844) 775-1618.

Supplanting versus Supplementing

Supplanting occurs when an entity replaces funds for an activity because federal funds are available (or are expected to be available) to fund that same activity. Most federal funding specifically prohibits supplanting.  Existing funds for a project and the project’s activities may not be replaced by federal funds and reallocated for other organizational expenses. Supplementing funding occurs when federal grant funds are used in combination with other funds to enhance a planned expenditure in an existing budget. Supplementing funds is allowable to the extent that funds are used to meet the programmatic purpose and that no other provision prohibits its use this way. Entities may blend and braid their federal funding with other funding through supplementing.  The Office of State Controller Reporting provides guidance on supplementing vs.supplanting in the SLFRF resources section of their website.

• Program staff are responsible for ensuring that supplementing of funds and not supplanting of funds occurs in the development of individual SLFRF project budgets.

Conflict of Interest

Conflict of interest policies include standards for procurement, receiving federal awards, and for making subawards. Federal funds, including SLFRF, require all prime recipients as well as subrecipients to have established conflict of interest policies and procedures in place. There are different degrees of conflict that include an actual conflict, a potential conflict, and a perceived conflict. It is important to address all forms of conflict and clearly define the different levels of interests that can be involved in creating a conflict of interest policy.  More information on OSC’s guidance on Conflict of Interest can be found on the SLFRF resources pages of their website.

• Program staff will monitor for recipient’s conflict of interest policies during their routine virtual or onsite monitoring visits with SLFRF grantees.

FFATA

Federal awarding agencies are required to publicly report Federal awards that equal or exceed the micro-purchase threshold and publish the required information on a public-facing, OMB-designated, government-wide website and follow OMB guidance to support the Transparency Act.

Special reporting for the Federal Funding Accountability and Transparency Act (FFATA):

• Treasury received approval from the Office of Management and Budget (OMB) to increase the subaward reporting threshold outlined in 2 CFR Part 170 from $30,000 to $50,000 for SLFRF.
• Although FFATA reporting is applicable to SLFRF, Treasury is making all required FFATA reporting on behalf of recipients. Thus, compliance with FFATA reporting requirements is not subject to audit.

The information that the Department of Local Affairs, Division of Local Government is required to submit to the Office of the State Controller Reporting (OSC) includes the detailed level of information required when FFATA reporting kicks in based upon the dollar amount. The OSC Reporting Team takes the agency level data and enters it into the Treasury reporting portal. The OSC will report for all State agencies The Treasury will then handle the FFATA reporting.

Reporting and Payments

On forms supplied by the division for each program, each grantee shall submit reporting quarterly (at a minimum) to the division detailing activities, services provided and funds expended in the previous quarter through the grants portal. Program staff will review 100% of the quarterly reports and reimbursement requests as submitted by grantees to ensure compliance with programmatic, statutory, and federal requirements. Should discrepancies or noncompliance with any requirements occur, program staff will work with the grantee to reconcile awarded and reported expenditures.

• All reports and request for payment (reimbursement or advanced funds) must go through 4 levels of review through the grants portal: level 1 (program assistant or regional assistance level), level 2 (program manager or regional manager level), level 3 (contract administrator/CA level), and level 4 (division approver/DA level). Similar to the application process, quarterly reports and pay requests can be suspended and resubmitted as many times as necessary to achieve compliance up until level 4 approval. Pay request review levels (Appendix C) details tasks and key elements that each level of review must analyze during this process.
• Once a report/pay request has been accepted by level 4 (DA) through the portal, that report/pay request is locked and processed for payment through CORE, the State's enterprise financial system. The grantee may begin their next quarterly report or pay request. Because the portal is a live running balance against the contract total, a single report/pay request is allowed “in flight” at a time. This prevents math errors and overdraws on any budget line in the contract.
• Grantees are directed to not provide personal identifying information (PII) or other confidential and/or proprietary information in applications and/or reimbursement requests. Such information discovered at the time of application or report/reimbursement requests will be suspended back to the grantee for removal and resubmission.
• The process for a report/pay request to be submitted by a grantee and approved by all 4 levels of review, pending no errors or discrepancies, can happen in a matter of hours or days.

Program staff will review 100% of the quarterly reports and reimbursement requests as submitted by grantees to ensure compliance with programmatic, statutory, and federal requirements. Should discrepancies or noncompliance with any requirements occur, program staff will work with the grantee to reconcile awarded and reported expenditures.

For All Projects - The following will be tracked and verified through Quarterly Reports/Payments

Civil Rights Compliance

Recipients of Federal financial assistance from the Treasury are required to meet legal requirements relating to nondiscrimination and nondiscriminatory use of Federal funds. Those requirements include ensuring that entities receiving Federal financial assistance from the Treasury do not deny benefits or services, or otherwise discriminate on the basis of race, color, national origin (including limited English proficiency), disability, age, or sex (including sexual orientation and gender identity), in accordance with the following authorities: Title VI of the Civil Rights Act of 1964 (Title VI) Public Law 88-352, 42 U.S.C. 2000d-1 et seq., and the Department's implementing regulations, 31 CFR part 22; Section 504 of the Rehabilitation Act of 1973 (Section 504), Public Law 93-112, as amended by Public Law 93-516, 29 U.S.C. 794; Title IX of the Education Amendments of 1972 (Title IX), 20 U.S.C. 1681 et seq., and the Department's implementing regulations, 31 CFR part 28; Age Discrimination Act of 1975, Public Law 94-135, 42 U.S.C. 6101 et seq., and the Department implementing regulations at 31 CFR part 23.

• Program staff will ensure that recipients have a Civil Rights non-discrimination policy or statement in place as part of their internal controls prior to the start of the project and through the quarterly reporting activities.

Cost-sharing and Match

For all Federal awards, any shared costs or matching funds and all contributions, including cash and third-party in-kind contributions, must be accepted as part of the non-Federal entity's cost sharing or matching when such contributions meet all of the following criteria: 

• Are verifiable from the non-Federal entity's records;
• Are not included as contributions for any other Federal award; 
• Are necessary and reasonable for accomplishment of project or program objectives; 
• Are allowable under subpart E; 
• Are not paid by the Federal Government under another Federal award, except where the Federal statute authorizing a program specifically provides that Federal funds made available for such program can be applied to matching or cost sharing requirements of other Federal programs; 
• Are provided for in the approved budget when required by the Federal awarding agency; and 
• Conform to other provisions of this part, as applicable.

If a recipient seeks to use SLFRF funds to satisfy match or cost-share requirements for a federal grant program, it should first confirm with the relevant awarding agency that no waiver has been granted for that program, that no other circumstances enumerated under 2 CFR 200.306 (b) would limit the use of SLFRF funds to meet the match or cost-share requirement and there is no other statutory or regulatory impediment to using the SLFRF funds for the match or cost-share requirement. Revenue loss may generally be used to meet the non-federal match requirements of other federal programs.  However, SLFRF funds may not be used as the non-federal match for purposes of a state’s Medicaid and CHIP programs. SLFRF funding that is not in Expenditure Category 6.1 can only be used for non-federal match of other federal programs if it is specifically provided for by statute.

• Program staff will review a recipient’s cost-sharing and matching funds prior to the start of the project and approve or disapprove these based on the above mentioned criteria. The purpose of this review is to check for allowances, restrictions and impediments to cost-sharing and matching per the SLFRF funded program and are necessary and reasonable for the accomplishment of project or program objectives.
• Program staff will monitor a recipient’s cost-sharing and matching during quarterly reporting activities and through periodic subrecipient compliance reviews for compliance with the SLFRF funded activity.

Duplication of Benefits

A duplication of benefits occurs when the amount of the assistance to a beneficiary exceeds the total allowable assistance to that beneficiary.  Regardless of the type of project, Federal law requires all funding must be assessed for duplication of assistance received from other sources. The Duplication of Benefits Guide (Appendix D) provides guidance for such a determination. Recipients can complete a duplication of benefits analysis which demonstrates the funding received for the SLFRF funded activity and the funding reasonably anticipated. Typically, SLFRF funding is provided after most other assistance has been provided.  The Office of State Controller Reporting provides information on Duplication of Benefits on the SLFRF resources pages of their website.

• Program staff must determine how detailed the subrecipient and/or subrecipients were in collecting information from beneficiaries on prior assistance. 
• Program staff will require recipients to identify sources of funds and amounts of covered assistance (sources and uses) and certify that the SLFRF award funds do not duplicate covered assistance that has been received or expected to be received from other sources. 
• In conjunction with actions to prevent fraud waste and abuse, program staff will ensure that recipients have employed data systems, data sharing, and data matching to identify duplication of benefits.

Eligible Activities

A list of eligible activities can be found in the policies and procedures for each program detailed in this manual, and within the executed grant agreements for each specific grantee.

For Specific Projects - The following will be tracked and verified through Quarterly Reports/Payments, Depending on Project Activities

Equipment and Real Property Acquisition

The review of the economic development portion of the subrecipient’s files is to ensure that the contractual provisions contained in the subrecipient’s contract have been carried out. When funds are used for inventory acquisition, the change in the inventory balance from the pre-assistance period to the current inventory balance on the latest balance sheet should approximate the amount of funds drawn to date. Grantees are prohibited from obligating or expending grant funds on certain telecommunications and video surveillance services or equipment pursuant to 2 CFR 200.216.

• Program staff will ensure that the contractual provisions contained in the subrecipient’s contract have been carried out.

Direct and Indirect Costs

Recipients may use funds for administering the SLFRF program, including costs of consultants to support effective management and oversight, including consultation for ensuring compliance with legal, regulatory, and other requirements. Further, costs must be reasonable and allocable as outlined in 2 CFR 200.404 and 2 CFR 200.405. Pursuant to the SLFRF Award Terms and Conditions, recipients are permitted to charge both direct and indirect costs to their SLFRF award as administrative costs as long as they are accorded consistent treatment per 2 CFR 200.403. Direct costs are those that are identified specifically as costs of implementing the SLFRF program objectives, such as contract support, materials, and supplies for a project. Indirect costs are general overhead costs of an organization where a portion of such costs are allocable to the SLFRF award such as the cost of facilities or administrative functions like a director’s office. Each category of cost should be treated consistently in like circumstances as direct or indirect, and recipients may not charge the same administrative costs to both direct and indirect cost categories, or to other programs. If a recipient has a current Negotiated Indirect Costs Rate Agreement (“NICRA”) established with a Federal cognizant agency responsible for reviewing, negotiating, and approving cost allocation plans or indirect cost proposals, then the recipient may use its current NICRA. Alternatively, if the recipient does not have a NICRA, the recipient may elect to use the de minimis rate of 10 percent of the modified total direct costs pursuant to 2 CFR 200.414(f).

• Program staff will ensure and monitor that each recipient’s costs are treated consistently as direct or indirect costs.
• Program staff will verify if a recipient has a Negotiated Indirect Costs Rate Agreement or not prior to the award agreement.
• If de minimis rate is utilized, program staff will calculate the cost based on the Modified Total Direct Cost.

Procurement

The procurement standards for federal financial assistance are located in the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR 200.317 through 2 CFR 200.327 and apply to procurements using SLFRF funds. Pursuant to 2 CFR 200.317, recipients that are non-state entities, such as, metropolitan cities, counties, non-entitlement units of local government, and Tribes must comply with the procurement standards set forth in 2 CFR 200.318, through 2 CFR 200.327, when using their SLFRF award funds to procure goods and services to carry out the objectives of their SLFRF award. States must follow their own procurement policies pursuant to 2 CFR 200.317, as well as comply with the procurement standards set forth at 2 CFR 200.321 through 2 CFR 200.323, and 2 CFR 200.327 when using their SLFRF award funds to procure goods and services to carry out the objectives of their SLFRF award. A Procurement Checklist (Appendix E) may be used to assist ensuring compliance with these 2 CRF 200 regulations.

In addition, as appropriate and to the extent consistent with law, the non-Federal entity should, to the greatest extent practicable under a Federal award, provide a preference for the purchase, acquisition, or use of goods, products, or materials produced in the United States (including but not limited to iron, aluminum, steel, cement, and other manufactured products).

• Program staff will ensure through monitoring that a recipient’s procurement of goods and/or services comply with the procurement standards set forth in 2 CFR 200.317-200.327.

Cost Reasonableness

Treasury has reiterated in the final rule that responses to negative economic impacts should be reasonably proportional to the impact that they are intended to address. Reasonably proportional refers to the scale of the response compared to the scale of the harm.

As set forth in 2 CFR 200.404, a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Cost reasonableness is especially important when the non-Federal entity is predominantly Federally-funded. In determining reasonableness of a given cost, consideration must be given to:

• Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award.
• The restraints or requirements imposed by such factors as sound business practices; arm’s length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award. 
• Market prices for comparable goods or services for the geographic area.
• Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable the public at large, and the Federal Government.
• Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award’s cost.

Program Income

In compliance with 2 CFR 200.307, non-federal entities that will earn program income from expenditures of SLFRF funds during the SLFRF award’s period of performance will need to adopt a program income policy. Program income should be tracked and recorded in a separate account and not commingled with other SLFRF funds.

Generally, recipients may add program income to the Federal award. Any program income generated from SLFRF funds must be used for the purposes and under the conditions of the Federal award. Program income includes, but is not limited to income from fees for services performed, the use or rental of real property acquired under the SLFRF Federal award and principal and interest on loans made with Federal award funds.

Program income does not include advances of Federal funds, rebates, credits, discounts, or interest on rebates, credits, or discounts.

• Program staff will ensure that recipients who earn income from expenditures of SLFRF award funds have written income policies that identify appropriate allocation methods, accounting standards and principles. This will occur during routine monitoring checks.
• Program staff will ensure that program income, if applicable, is calculated, documented, and recorded.