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DOJ Grants Financial Guide 2022

II. Preaward requirements

Eligibility requirements for DOJ awards can be found in the notices of funding opportunities, generally referred to as solicitations, available on awarding agency websites. Eligible applicants vary by program and may include one or more of the following categories: States (including the District of Columbia and U.S. territories), units of local government, Indian tribes and tribal organizations, institutions of higher education, hospitals, nonprofit organizations, for-profit organizations, and (in limited circumstances) individuals.

OVW’s website contains brief descriptions of OVW programs to assist potential OVW applicants in identifying programs for which they are eligible to apply. OVW program solicitations will provide additional eligibility information each fiscal year.

DOJ grant-making components announce funding opportunities via Grants.gov. Applications are submitted through Grants.gov and JustGrants. A collection of available assistance programs can be found in the Assistance Listings (formerly the Catalog of Federal Domestic Assistance) available at https://sam.gov/content/assistance-listing. To view each grant-making component's available funding opportunities, visit the websites below:

Non-discrimination assurance: Applicants must assure and certify, on the applicable awarding agency assurance form, compliance with all civil rights nondiscrimination requirements. These assurances and certifications are made by signing an assurances form that addresses various cross-cutting federal requirements, including those prohibiting unlawful discrimination. The applicable form typically is referenced in the program solicitation, and signed during the application process (electronically for most programs).

Office for Civil Rights: The DOJ Office for Civil Rights (OCR) ensures that recipients of financial assistance from OJP, OVW, and COPS Office comply with federal laws that prohibit discrimination in both employment and the delivery of services or benefits based on race, color, national origin, sex, religion, and disability. In addition, federal law prohibits recipients of federal financial assistance from discriminating on the basis of age in the delivery of services or benefits. Recipients of financial assistance from OVW are prohibited from discriminating on the basis of sexual orientation or gender identity, either in employment or in the delivery of services or benefits. For more information see the OCR website

Discrimination findings: In the event of a finding of discrimination, send a copy of the hearing findings to OCR. This applies to recipients of Federal funds if a Federal or State court or administrative agency finds through a due process hearing that a recipient, subrecipient, or contractor, has unlawfully discriminated.

Other civil rights requirements: Depending on the size of the organization, how much federal funding is received, and the program under which funds are received, recipients (and subrecipients in certain cases) may be required to submit an Equal Employment Opportunity Plan to OCR. If awarded Federal funds, more specific information on civil rights compliance, including requirements regarding submission of Equal Employment Opportunity Plan will be provided in the award documents. For additional information see Equal Employment Opportunity Plans.

Intergovernmental review is a process described in Executive Order 12372 [PDF - 12 Kb], through which governments at the State and local levels coordinate in the review of proposed Federal financial assistance and direct Federal development.

For those DOJ grant programs that are subject to Executive Order 12372, applicants must access the Intergovernmental Review Single Point of Contact List (“SPOC List”) to find out about and, as applicable, comply with the applicant’s State process under Executive Order 12372. As part of the grant application process, to complete the SF-424, applicants must make the appropriate selection (and provide any required information) in response to the question,“Is Application Subject to Review by State Under Executive Order 12372 Process?”

To determine if a DOJ program is subject to Executive Order 12372, look in the notice of funding opportunity (program solicitation) or program announcement, check the program's Assistance listing (formerly CFDA) entry, or contact the DOJ awarding agency.

Applicants for DOJ funding can submit an Application for Federal Assistance (SF-424) and Disclosure of Lobbying Activities (SF-LLL) online through the federal grants portal Grants.Gov (www.grants.gov) and submit their full application including attachments in DOJ's JustGrants (https://justgrants.usdoj.gov/). Each program solicitation will contain detailed technical instructions on how to register and apply for funding, as well as application submission deadlines for both systems.

Note regarding applicant type on the SF-424: Generally, applicants for DOJ grants are one of the following types of entities: States, units of local government, Indian tribes, nonprofit organizations, for-profit organizations, institutions of higher education, and (in limited circumstances) individuals. It is possible to select other applicant types, as appropriate.

DOJ awarding agencies are required to ensure that awards meet certain legislative, regulatory, and administrative requirements. This requires that each DOJ awarding agency review and assess each application to determine the following:

  • The applicant is eligible for the specified program.
  • The costs and activities in the application are for allowable, allocable, necessary, and reasonable costs.
  • The applicant possesses the responsibility, financial management, fiscal integrity, and financial capability to administer Federal funds adequately and appropriately.

Applicant Type

Examples of types of applicants include, but are not limited to:

  • Nonprofit organization – Some DOJ programs may require that an organization have 501(c)(3) status (as described in the U.S. Internal Revenue Code)
  • For-profit organization (including organizations designated as small businesses)
  • State
  • Unit of local government
  • Tribe
  • Institution of higher education
  • Courts
  • Individuals (in limited circumstances)

Pre-Award Risk Assessment

DOJ is required to review and assess the potential risks presented by applicants for Federal grants prior to making an award (2 C.F.R. § 200.206). DOJ will use a variety of factors, which may include financial capabilities and past performance, in a risk-based approach. To facilitate part of the risk assessment, DOJ applicants (other than an individual) may be required to complete a questionnaire to assess their financial capability and submit it to DOJ before they can be approved for an award.

DOJ High-Risk Grantee Designation

The DOJ's High-Risk Grantee Policy was adopted by its three-primary grant-making components: the Office of Justice Programs (OJP), the Office of Community Oriented Policing Services (COPS), and the Office on Violence Against Women (OVW). OJP's Office of Audit, Assessment, and Management (OAAM) is charged with administering the high-risk grantee (recipient) process on behalf of DOJ. When a recipient is designated as high-risk, all DOJ grant-making components must consider the recipient as high-risk.

The purpose of the high-risk policy is to provide DOJ with a means of continuing to fund much needed criminal justice programs benefiting communities across the U.S., while maintaining proper stewardship of Federal funds and mitigating risk in the administration of DOJ-funded grant programs. It is important to note that high-risk recipients are not prohibited from applying for or receiving new awards from DOJ. However, high-risk recipients are managed and monitored closely, and any new awards these recipients receive are subject to additional restrictions, typically imposed through the inclusion of high-risk award conditions. Such conditions may be imposed not just at the beginning of an award, but at any time throughout the period of the award, if appropriate.

In general, a recipient may be designated as high-risk if any of the following apply to the recipient:

Under DOJ's policy, recipients may be designated as high-risk automatically, or as a result of a referral from sources such as a DOJ grant-making component or other federal grant-making organization.

  • High-risk referrals can be made by any DOJ personnel who work with grants, and can result from a wide variety of reasons, including, but not limited to:
    • issues identified during grant programmatic or financial monitoring reviews, budget reviews, financial capability reviews, etc.;
    • concerns noted during the routine administration of grants;
    • audits/investigative issues;
    • complaints by recipient personnel, third parties, and/or the media, etc.
  • Automatic high-risk designations are made by DOJ if any of the following conditions apply:
    • Recipient has open audit reports (OIG and Single Audit) with recommendation(s) that have been open for more than one year, and has not submitted documentation adequate to close the recommendation(s).*
    • Recipient has not provided a corrective action plan to the DOJ within 105 days of transmission of the audit report to the recipient.*
    • Recipient has audit reports with questioned costs in excess of $500,000 (regardless of the amount of time the audit report has been open).
    • Recipient has been referred to the Department of Treasury for collection because of their failure to timely repay funds owed on a DOJ award.
    • Recipient has been placed on the COPS Restricted Grantees List due to non-compliance with a previous COPS award(s).
    • Recipient has been recommended for government-wide suspension or debarment by a DOJ office or component.

The “*” associated with bullets 1 and 2, is that “Exceptions” to time-related automatic designations may be granted in limited circumstances (e.g. delays resulting from circumstances beyond grantee’s control), if appropriately justified and documented.

If high-risk recipients do not comply with the additional conditions/restrictions imposed, or fail to make timely progress in addressing the issues that resulted in their high-risk designation, DOJ can consider more substantial sanctions, such as: withholding payments on current DOJ awards; suspension or termination of existing awards; barring the recipient from receiving future DOJ awards; and/or recommending the recipient for (non- procurement) government-wide suspension or debarment.

Audit Issues

  • DOJ may choose not to approve an applicant for an award if the applicant has an overdue audit report, an open audit report that has not been responded to, or if the applicant has not tried to resolve the issues identified in the audit.
  • Failure to comply with audit requirements may cause an application to be rejected, or funds to be withheld until audit compliance is achieved.

Review of Applicant Federal Debt

The SF-424 asks if the applicant is delinquent on any Federal debt.

  • The applicant is the organization that is requesting Federal assistance, not the person who signs the application as the authorized representative of the organization.
  • Federal debt includes delinquent audit disallowances, loans, taxes, and any outstanding debts with the Treasury.

Unique Entity Identifier

Unless an exception applies, all applicants and recipients must have a unique entity identifier when applying for Federal awards and cooperative agreements (initial or supplemental awards) (2 C.F.R. Part 25 - Universal Identifier and System of Award Management). Refer to the applicable solicitation for requirements and instructions on how to obtain a unique entity identifier.

Maintaining an Active Registration in System for Award Management

The System for Award Management (SAM) is the Official U.S. Government system that collects, validates, stores, and disseminates data on organizations to help agencies in their acquisition missions, including Federal agency contract and assistance awards. The term "assistance awards" includes grants, cooperative agreements, and other forms of Federal assistance. Organizations must maintain an "active" registration in www.SAM.gov for the entire period of the award, which requires an annual update.

DOJ will complete a financial review of the grant application to ensure that recipients are financially capable and have the financial integrity to administer Federal funds. As part of this review, each grant-making component will take all of the following steps:

  • Perform a cost analysis of the project (may not be applicable to some formula programs).
  • Obtain cost breakdowns, verify cost data, evaluate specific elements of cost, and examine data to determine the necessity, reasonableness, allowability, allocability, and appropriateness of the proposed cost.
  • Review indirect cost rates and calculations if applicable. See Chapter 3.11 indirect costs.
  • Determine the adequacy of the accounting system and operations to ensure that Federal funds, if awarded, will be expended in a reasonable manner.
  • Non-Federal entities that have not received an award within the past 3 years may require an additional financial review.
  • Review the status of any Federal debt that the applicant may have to ensure the debt is not delinquent, and other prescreening information, including checking SAM to ensure the organization is not suspended or debarred from receiving Federal funds.

After applications have gone through the review process and have been approved, the next step in this process is award notification. Here are the details:

  • An email notification will be sent to the Application Submitter, the Authorized Representative(s) and the Entity Administrator to sign and accept their award.
  • The entity must successfully set up their JustGrants account and enroll in the Automated Standard Application for Payments (ASAP) in order to manage their award.
  • The email notification includes detailed instructions on how to access and accept the award in JustGrants.

ACTION ITEM

Recipients have 45 days from the award date to accept the award or the award may be rescinded.

Prior to accepting an award, the Entity Administrator must assign a Financial Manager, a Grant Award Administrator and an Authorized Representative with the authority to accept on behalf of the organization for each award (COPS Office recipients must assign two Authorized Representatives). Additional instructions regarding accepting an award and assigning or changing roles in JustGrants can be found on the JustGrants Training page.

Federal funds will not be disbursed to a recipient until the award is accepted. To decline the award, please contact the program manager identified in the award to discuss the reasons for this decision.

Direct questions concerning award notification and acceptance to the appropriate DOJ contact(s).

Award conditions are terms and conditions that are included with the award. Award conditions may include additional requirements covering areas such as programmatic and financial reporting, prohibited uses of Federal funds, consultant rates, changes in key personnel, and proper disposition of program income.

Some award conditions may be based on the program or the nature of the award itself. Regardless of the grant- making component or the award, there are several mandatory award conditions that will be included on any DOJ award. A list of all the mandatory award conditions for each DOJ grant-making component is available at the following links.

FINANCIAL MANAGEMENT TIP

Failure to comply with award conditions may result in remedial action, which may include (but is not limited to) withholding award funds, disallowing costs, or suspending or terminating the award. DOJ also may take other legal action as appropriate.

All recipients and subrecipients are required to establish and maintain adequate accounting systems and financial records and to accurately account for funds awarded to them. Recipients must have a financial management system in place that is able to record and report on the receipt, obligation, and expenditure of grant funds. Keep detailed accounting records and documentation to track all of the following information:

  • Federal funds awarded
  • Federal funds drawn down
  • Matching funds of State, local, and private organizations, when applicable
  • Program income
  • Subawards (amount, purpose, award conditions, and current status)
  • Contracts expensed against the award
  • Expenditures

Please consult Subpart D of 2 C.F.R. Part 200, including 2 C.F.R. § 200.302, for more information.

OJP SPECIFIC TIP

For the OVC Victim Compensation Program, there is no financial requirement to identify the source of individual payments to crime victims as either federal or state dollars, nor is there any requirement that restitution recoveries or other refunds be tracked to federal or state dollars paid out to victims. However, the state agency administering funds under this program must have in place an adequate accounting system to capture and track all financial transactions related to the victim compensation grant; and upon request, must provide authorized representatives with access to and the right to examine all records, books, paper or documents related to the victim compensation grant per the VOCA Victim Compensation Program Guidelines [ PDF - 162 Kb] – 66 Fed. Reg. 27158 (May 16, 2001), Sections V.G and IX.A.

What Is An Adequate Accounting System?

  • An adequate accounting system can be used to generate reports required by award and Federal regulations. The system must support all of the following:
    • Financial reporting that is accurate, current, complete, and compliant with all financial reporting requirements of the award or subaward.
    • Recipients must establish reasonable procedures to ensure the receipt of reports on subrecipients’ cash balances and cash disbursements in sufficient time to enable them to prepare complete and accurate cash transactions reports to the awarding agency.
    • Accounting systems must be able to account for award funds separately (no commingling of funds).
  • An adequate accounting system allows recipients to maintain documentation to support all receipts and expenditures and obligations of Federal funds.
  • An adequate accounting system collects and reports financial data for planning, controlling, measuring, and evaluating direct and indirect costs.
  • The system should have all of the following capabilities:
    • Internal control. The system must allow for effective control and accountability for all award and subaward cash, real and personal property, and other assets. Recipients and subrecipients must adequately safeguard all such property and assure that it is used solely for authorized purposes. Please consult 2 C.F.R. § 200.303 for additional information.
    • Budget control. The system must compare actual expenditures or outlays with budgeted amounts for each award and subaward. It also must relate financial information to performance or productivity data, including the development of unit cost information whenever appropriate or specifically required in the award or subaward agreement.
    • Allowable cost. The system must support making sure that Federal cost principles, agency program regulations, and the terms of award and subaward agreements are followed in determining the reasonableness, allowability, and allocability of costs.
    • Source documentation. The system must require support for accounting records with source documentation (e.g., cancelled checks, paid bills, payrolls, time and attendance records, and contract and subaward documents).
    • Cash management. An adequate system must require following procedures for minimizing the time between the transfer of funds from the U.S. Department of the Treasury and disbursement by recipients and subrecipients whenever advance payment procedures are used.
  • An adequate accounting system for a recipient must be able to accommodate a fund and account structure to separately track receipts, expenditures, assets, and liabilities for awards, programs, and subrecipients.

The adequacy of the financial management system may be reviewed as part of the application process or at any time subsequent to the award. For additional information see Subpart D of 2 C.F.R. Part 200.

Separate Tracking of Awards

To properly account for all awards, recipients should establish and maintain program accounts which will enable separate identification and accounting for:

  • Award funds expended through subrecipients
  • Formula funds utilized to develop a State plan and to pay that portion of expenditures necessary for administration
  • Receipt and disposition of all funds (including program income)
  • Funds applied to each budget category included within the approved award
  • Expenditures governed by any specific and/or general requirements
  • Non-Federal matching contribution, if required

For additional information see Subpart D of 2 C.F.R. Part 200.

To ensure adequate fiscal administration, accounting, and auditability of all awards, recipients must maintain records to track the total project costs, which include the following types of funding sources:

  • Federal funds
  • State funds
  • Match
  • Program income
  • Any other funds received for the project

In addition, recipients must maintain records to track project cost by budget category. If the recipient's or subrecipient's automated general ledger accounting system cannot comply with this requirement, a system should be established to adequately track funds according to each budget category.

Budgets should be based upon the total estimated costs for the project including all funding sources. List anticipated expenditures according to the funding source from which they will be paid.

Although separate depository accounts for award funds generally are not required, the accounting systems of all recipients and subrecipients must track funds received, obligated, and expended under each award:

  • Recipients and subrecipients must account for each award separately.
  • Funds received for one award may not be used to support a different award unless specific policy guidance directs otherwise (e.g. AEAP funds).

FINANCIAL MANAGEMENT TIP

Some programs, such as the Justice Assistance Grant program, require the deposit of funds into a trust fund. In addition, a high-risk designation may require a recipient to segregate awards into separate bank accounts.

If the recipient's or subrecipient's accounting system does not make it possible to identify funds and expenditures with a particular award (with the identification supported by source documentation), those costs will be questioned or may be disallowed.

Recipients that receive awards under programs that prohibit supplanting by law must ensure that federal funds do not supplant funds that have been budgeted for the same purpose through non-federal sources.

  • Supplanting will be reviewed during post-award monitoring and audit.
  • If reviewers think that supplanting may have occurred, then the recipient will be required to supply documentation demonstrating that the reduction in non-Federal resources occurred for reasons other than the receipt or expected receipt of Federal funds.
  • For certain programs, a written certification may be requested by the awarding agency or recipient agency stating that Federal funds will not be used to supplant State or local funds.

Example

To help clarify the difference between supplementing and supplanting, we provide the following example:

Supplementing: State funds are appropriated to hire 50 new police officers, and Federal funds are awarded to hire 60 new police officers. At the end of the year, the State has hired 50 new officers with State funds and 60 new police officers with Federal funds. Under this scenario, there is no supplanting violation because the State used the Federal funds to supplement (rather than to supplant) the hiring of the new police officers

Supplanting: State funds are appropriated to hire 50 new police officers, and Federal funds are awarded to hire 60 new police officers. At the end of the year, the State has hired 60 new police officers with Federal funds and none with State funds. Under this scenario, it may be considered a supplanting violation because the State used the Federal funds to supplant (rather than to supplement) the hiring of new police officers.

Date Created: March 21, 2022