Grants and cooperative agreements are used when the principal purpose of the transaction is to support a public purpose authorized by the awarding agency's Federal statute. Grants are used when a recipient organization is expected to implement and achieve programmatic goals autonomously. Cooperative agreements are used when substantial involvement is expected between the funding agency and the recipient when carrying out the funded activities. Contracts are used when the principal purpose is the acquisition of property or services for the direct benefit or use by the Federal government.
Federal funds are restrictive, meaning they must be used for a specific purpose detailed in the grant or cooperative agreement. The actual terms of the arrangement between your organization and the Federal awarding agency will be specified in the cooperative agreement or grant, which will be mailed to you for negotiation and signature prior to the issuing of an award. If the Federal funding agency requires cost sharing or matching, you may be required to produce those funds before a cooperative agreement is signed and Federal funds are disbursed. Once you have signed and returned your cooperative agreement, an award will be made and funds will be released.
When a funding award is made, the Federal funding agency and the Division of Payment Management (DPM) initiate the process for receiving award payments.
Process for Receiving Award Payments
- Recipient submits application for grant
- Awarding agency reviews application and approves
- Data regarding grant is transmitted to Payment Management System (PMS)
- PMS updates databases
Information about how to set up your payment accounts is provided in your grant award package, or sometimes directly by DPM. It is also available on the DPM website at www.dpm.psc.gov. DPM serves many agencies, so it is important to note that organizations with multiple grants paid through DPM will have a single account for all of the grants.
Payment to your organization may be tied to reporting schedules, so it is critical to submit completed required reports on time and as specified by the Federal awarding agency. Payments to your organization may be withheld if one of the following situations occurs:
- Failure to comply with the project objectives, terms, and conditions of the award or Federal reporting requirements.
- A recipient or subrecipient is delinquent in a debt to the United States as defined in OMB Circular A-129.
Keep in Mind: DPM offers Payment Management System user-training classes for new grant recipient organizations. For information about registering for the training or obtaining a CD of the training, visit www.dpm.psc.gov.