Preventative Measures to Ensure Accountability

You need Adobe Flash Player to view some content on this site.

Click to install Adobe Flash Player

Providing training and technical assistance for potential applicants can go a long way to help ensure accountability from your subawardees. As an intermediary, your organization is responsible for making sure that all Federal funds provided through subawards are managed and monitored to ensure compliance with Federal requirements and regulations, and the funds are used in the manner for which they were approved. If subawardees violate Federal requirements, the requirements specified in their subaward, or otherwise improperly use the funds they receive, you as the grantor as well as the subawardee may both be subject to legal action. If a subawardee uses its funds fraudulently, it could be subject to criminal prosecution. It is therefore important to stay well-informed about your legal obligations, and those of your subawardees.

Here is a brief overview of some major legal obligations and issues regarding the use of Federal funds by grantees.

Since as an intermediary you may be making subawards to faith-based and community organizations, some of these issues specifically involve matters that rise up when faith-based groups receive Federal funds. Request guidance on these matters from your Federal program officer.

Financial reporting requirements.  To make sure that grant funds are used properly, organizations that receive Federal funds must file regular financial status reports based on the requirements of the individual grant.  At the time of writing, the basic financial report for Federal funds is a one-page document called Standard Form 269.  (Programs are slowly phasing out the use of this form and replacing it with the Federal Financial Report).  As a Federal grantee providing subawards, you will need to complete and compile financial reports on your subawardees and submit them on a regular basis.  Accordingly, your subawardees will need to submit financial reports to you in the same format used for your own report. For more information about the Federal Financial Report (FFR) visit the Division of Payment Management website, http://www.dpm.psc.gov.

Support of only non-religious social services.  A subawardee cannot use any part of a direct Federal grant to fund "inherently religious" activities which can include religious worship, instruction, or proselytization. Instead, organizations should use government funds to support only the non-religious social services that they provide.  This doesn't mean the organization cannot have religious activities.  It does mean that they cannot use taxpayer dollars to fund those religious activities.

Social services open to all eligible persons.  If an organization takes Federal money, it cannot discriminate against a person seeking help who is eligible for the service.  Religious organizations receiving public funds for a service that they are providing cannot serve only persons of their faith and turn others away.  In addition, the faith-based organization may not require those they serve to profess a certain faith or participate in religious activities in order to receive the services they provide for the Federal government.

Click to open interactivity Review your knowledge of the major legal obligations and issues regarding the use of Federal funds.

Review your knowledge of the major legal obligations and issues regarding the use of Federal funds.

You need Adobe Flash Player to view some content on this site.

Click to install Adobe Flash Player

Ensure that organizations comply with Federal requirements and regulations.

The following provides some ideas on how your organization can take preventative measures, starting with soliciting proposals, to help ensure that the organizations that receive awards comply with Federal requirements and regulations. 

  • Include all requirements and regulations in the RFP application packet and in supporting documentation.  Be sure to explain all requirements and regulations clearly and directly and provide examples, if helpful. Consider requiring applicants to sign a statement indicating that they understand and agree to abide by these requirements.
  • Provide pre-award training on what receiving a Federal award entails. Be sure to cover the Federal requirements and regulations as well as reporting requirements, monitoring requirements, and restrictions on use of funds.
  • Make a site visit to the selected applicants (prior to finalizing an award) to ensure that all submitted documentation is correct and that the applicant understands the requirements associated with receiving the award.  If it is not possible to make an on-site visit, consider setting up a conference call with organizational leadership (executive director, board president, etc.) to discuss their organization, the grant application, proposed project, and understanding of grant requirements.
  • Design a monitoring plan to oversee the subaward project and spending of subaward funds. Develop a memorandum of agreement for each subawardee that outlines subaward requirements for grantees. Be sure to include your obligations in the document, and have each party sign.
  • Develop intervention procedures to be implemented by your organization with the grantee if problems arise.  Communicate those procedures clearly to all subaward candidates or include in the memorandum of agreement also known as a memorandum of understanding.

Investing the time to create a thoughtful, well-planned solicitation process will yield strong candidates for subaward consideration as well as strong subawardees to help achieve your overall program goals.