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Chapter 05 – Grants Post-Award

Volume X - Grants Management

Date Approved: December 10, 2024

Financial Documents

Volume X - Grants Management

Chapter 05 – Grants Post-Award

Questions concerning this policy chapter should be directed to:

0501 Overview

This chapter establishes the Department of Veterans Affairs’ (VA) policies regarding the Federal financial assistance post-award phase and responsibilities for Grants Program Offices (GPOs).

Key items covered in this chapter include:

  • GPOs will be aware of public policy requirements, communicate them to recipients, and apply them, as appropriate;
  • GPOs will monitor recipients’ program performance and financial management post-award;
  • GPOs will apply cost principles to determine cost allowability;
  • GPOs will be responsible for the review and response to amendment requests of the approved project and/or budget; and
  • GPOs will take necessary actions, collectively termed “remediation”, in the event of recipient noncompliance with award terms and conditions.

0502 Revisions

Section Revision Requesting Office Reason for Change Effective Date
Various Reformatted to new policy template and completed a 5-year review. OFP Reorganized chapter layout. December 2024
Various Ensured accuracy of 2 C.F.R. citations and reorganized policy to align with Subpart D. OFP In previous versions the citations to 2 C.F.R. Part 200 were broad and not specific. December 2024
Various Updated grants post-award activities throughout. OFP OMB released revisions to Title 2 of the C.F.R. for Federal grants. December 2024
Appendix A Appendix A removed to be reviewed for inclusion in the Grants Management Practice Guide. OFP Appendices are now included in GMS Practice Guide. December 2024
Appendix A History of policy revisions. OFP Aligns with current formatting. December 2024

For a complete list of previous policy revisions, see Appendix A.

0503 Definitions

2 C.F.R. Part 200 –Federal Government grants regulations, which are maintained by Office of Management and Budget (OMB). These regulations apply to all Federal grant programs, unless exempted by authorizing statute, public law, or other Federally binding enactment.

Cognizant Agency for Audit – Federal agency designated to carry out the responsibilities described in 2 C.F.R. § 200.513(a). A list of Federal agency Single Audit contacts can be found on the Federal Audit Clearinghouse (FAC) website. The cognizant agency for audit is not necessarily the same as the cognizant agency for indirect costs.

Cognizant Agency for Indirect Costs – Federal agency responsible for reviewing, negotiating, and approving cost allocation plans or indirect cost proposals on behalf of all Federal agencies. The cognizant agency for indirect cost is not necessarily the same as the cognizant agency for audit. A list of cognizant agencies for indirect costs can be found in 2 C.F.R. Part 200 Appendix III, IV, V, and VII.

Cost-sharing or Matching – The portion of project costs not paid by Federal funds or contributions (unless otherwise authorized by Federal statute). Matching refers to required levels of cost share that must be provided.

Direct Cost – A cost that can be identified specifically with a particular final cost objective such as a federal award, or that can be directly assigned to such activities with a high degree of accuracy.

Disallowed Costs – Charges to a Federal award that the Federal agency or pass-through entity determines to be unallowable, in accordance with the applicable Federal statutes, regulations, 2 C.F.R. Part 200, or the terms and conditions of the Federal award.

Equipment – Tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost that equals or exceeds the lesser of the capitalization level established by the recipient or subrecipient for financial statement purposes, or $10,000 per 2 C.F.R. § 200.1.

Grant Agreement (or grant) –A legal instrument of financial assistance between a Federal agency and a recipient or between a pass-through entity and a subrecipient, consistent with 31 U.S.C. §§ 6302, 6304.

Grant File – An electronic or paper file maintained by the Grant Program Office (GPO) that contains all relevant records relating to the grant, beginning with program initiation through closeout of individual awards, the decisions made, and actions taken in between.

Indirect Cost – A cost that is incurred for a common or joint purpose benefitting more than one cost objective and is not easily assignable to the Federal award.

Monitoring – The process by which VA reviews and measures programmatic and financial performance over the grant period. It is also used to verify that funds are spent as mandated by legislation, post-award requirements, and regulations.

Performance Goal – A measurable target level of performance expressed as a tangible, measurable objective, against which actual achievement can be compared.

Program Income – Gross income earned by the recipient that is directly generated by a supported activity or earned as a result of the Federal award during the period of performance.

Real Property – Land, including land improvements, structures, and appurtenances thereto, and legal interests in land, including fee interest, licenses, rights of way, and easements. Real property excludes moveable machinery and equipment.

Supply – All tangible personal property, other than those defined as equipment, with a per-unit cost of less than $10,000 (or the current threshold stated at 2 C.F.R. § 200.1).  

Termination – The action a Federal agency or pass-through entity takes to discontinue a Federal award, in whole or in part, at any time before the planned end date of the period of performance. A lack of available funds is not a termination.

0504 Roles and Responsibilities

Approving Official is the individual with the authority or delegated authority to make funding decisions or obligate funds on behalf of the Federal Government for a given program.

Grant Program Office (GPO) is the organization responsible for programmatic administration of a particular grant program.

0505 Policies

050501 General Policies

  1. In accordance with 2 C.F.R. § 200.300(a), Grant Program Offices (GPOs) must manage and administer the Federal award in a manner to ensure that Federal funding is expended and associated programs are implemented in full accordance with the U.S. Constitution, applicable Federal statutes and regulations, and public policy requirements.
  2. GPOs must communicate all relevant public policy requirements to their recipients and incorporate them either directly or by reference in the terms and conditions of the Federal award.
  3. GPOs will determine how performance progress is measured, which may differ by program. GPOs will measure the recipient’s performance to show achievement of program goals and objectives, share lessons learned, improve program outcomes, and foster the adoption of promising practices, in accordance with 2 C.F.R. § 200.301.

050502 Performance and Financial Monitoring and Reporting

  1. In accordance with 2 C.F.R. § 200.329(b), Grant Program Offices (GPOs) must require reporting on program performance. As appropriate, the recipient must relate financial data and project or program accomplishments to performance goals and objectives of the Federal award. Non-construction performance reports will contain brief information on the following:
    • A comparison of actual accomplishments to the objectives of the Federal award for the reporting period;
    • Explanations as to why established goals or objectives were not met, if applicable, and
    • Additional information or rationale that may be necessary (e.g., analysis and explanation of cost overruns or higher-than-expected unit costs).
  2. GPOs will monitor and report program performance and financial activities post-award in accordance with 2 C.F.R. § 200.328-330. Recipient program and financial performance is required to be reported to GPOs no less than annually. GPOs may use the recipient’s risk level to determine the reporting cadence (e.g., quarterly, semiannually, annually). Recipients must report at the interval required by the GPO and adhere to the following parameters:
    • Reports submitted annually must be due no later than 90 calendar days after the reporting period.
    • Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period.
    • Final performance reports must be due no later than 120 calendar days after the conclusion of the period of performance.
  3. GPOs must use Office of Management and Budget (OMB) approved common information collections when requesting financial and performance reporting information. GPOs are responsible for collection of the recipient’s financial data and accomplishments toward performance goals and objectives of the Federal award, per 2 C.F.R. § 200.329(b).
  4. GPOs will monitor recipients post-award to identify potential problems and areas where technical assistance may be necessary. Monitoring may vary from a review of required reports to a more hands-on approach that involves site visits and other types of interactions.
  5. GPOs may elect to periodically conduct post-award reviews of OMB-designated repositories containing Government-wide data as part of monitoring to ensure ongoing eligibility. GPOs may determine the frequency that is most effective for the program (i.e., monthly, quarterly, annually). GPOs may review information for recipients and financial integrity information for recipients available on the Department of the Treasury “Do Not Pay” portal. This portal provides access to multiple databases including the System for Award Management (SAM) Exclusion List, Treasury Offset Program (TOP), Death Master File (DMF), and List of Excluded Individuals and Entities (LEIE). It is the GPO’s responsibility to establish procedures on how and when these checks are conducted.
  6. GPOs may tailor their overall approach to monitoring recipients, based upon the recipient’s risk level, the governing statutory or regulatory requirements for the program, whether the award instrument is a grant or cooperative agreement, and other factors that may indicate the need for a particular type or degree of monitoring.
  7. GPOs will ensure that each grant is subject to appropriate routine monitoring, to include a review of performance reports, related audits, and other required reports. Routine monitoring will take place on an ongoing basis but will be documented at least annually or more frequently, as appropriate, based on information gained from Office of the Inspector General (OIG) or Government Accountability Office (GAO) reports or other program-wide assessments. The results will be included in the grant file.
  8. Monitoring shall include a review of transaction-specific financial reporting, reporting of program performance of Federal award activities, and reporting on real property. These activities may be conducted in a coordinated approach of oversight of recipient performance.
  9. Routine and formal monitoring activities will assess:
    • Recipient progress in achieving the objectives of the award;
    • Any unobligated balances accumulated and whether spending is appropriate to the project’s schedule;
    • Whether changes are anticipated that will require action by the GPO;
    • Whether there are actual or potential compliance issues that may have an impact on the project(s) being funded;
    • Adequacy of recipient’s internal controls and systems to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, including specific terms such as the Build America Buy America Act requirements, Public Law 117-58, and 2 C.F.R. Part 184;
    • The reporting of program income earned, and funds expended on the Federal Financial Report (FFR) SF-425 form;
    • The accountability for Federal or grant-generated resources, such as program income, Federally owned property, or property acquired or generated under the award (e.g., data and inventions); and
    • As applicable, organizational actions to support research integrity and appropriate treatment of human subjects and patient information.
  10. Grant recipients are responsible for managing the day-to­day operations of grant-supported activities using their established controls and policies, ensuring compliance with applicable Federal requirements, and validating that performance expectations are being met. However, GPOs should have a system in place to review recipient compliance with applicable requirements, to include confirmation that:
    1. The recipient’s financial management system is sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and
    2. The recipient’s financial management system provides the identification of all Federal awards received and expended; accurate, current, and complete disclosure of the financial results of each Federal award; records that adequately identify the source and application of funds for Federally funded activities; effective control over and accountability for all funds, property, and other assets; comparison of expenditures with budget amounts for each Federal award; and written procedures to implement these requirements and for determining allowability of costs.

050503 Cost Principles

  1. In accordance with 2 C.F.R. 200 Subpart E, costs must meet basic cost principles to be permissible under Federal awards. GPOs must ensure that costs are allowable, reasonable, and allocable.
  2. GPOs will exercise stewardship over funds awarded by limiting actual cost reimbursement to expenditures and amounts that comply with statutory, regulatory, cost principle, and policy requirements, including indirect costs, and amounts for time periods consistent with negotiated indirect rate agreements.
  3. The total amount awarded (direct and indirect costs, where applicable) is the ceiling of the amount payable to a recipient. GPOs are not obligated to make additional awards or provide additional funding for indirect costs or other purposes.
  4. When determining if a cost is allowable, GPOs must assess if the cost is reasonable. A cost is considered reasonable if it does not exceed an amount that a prudent person would incur under the circumstances.
  5. GPOs must consider the following when determining if a cost is reasonable:
    • Whether the cost is ordinary and necessary for the operation or performance of the award;
    • If the cost follows typical restraints, such 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 costs for the geographic area;
    • Whether the individuals responsible for incurring the costs acted responsibly in its stewardship over the Federal grant; and
    • Whether the recipient is following established practices regarding the cost or if it has significantly deviated from past practice.
  6. GPOs must review costs to determine if they are allocable.
  7. In accordance with 2 C.F.R. § 200.405, a cost is allocable if the cost is incurred specifically for the Federal award, benefits both the Federal award and the work of the recipient proportionally, is necessary to the overall operation of the recipient and is assignable to the Federal award.

050504 Direct and Indirect Costs

  1. GPOs may consider activities conducted by recipients that result in direct and indirect charges as a necessary and appropriate part of the grant, provided that the costs are allowable, allocable, and reasonable.
  2. GPOs will be aware of the allowability requirements of statutes, regulations, and the applicable cost principles provided in 2 C.F.R. § 200.413.
  3. The share of indirect costs allowed for a Federal award is either a fixed rate as specified in statute or regulations, or a specific recipient organizational rate negotiated with their cognizant agency and reflected in a formal rate agreement.
  4. If the recipient submits indirect costs for reimbursement, they are required to have an indirect cost rate that has been approved by their cognizant agency. If a rate is not in effect, GPOs will allow the de minimis rate of up to 15%, as allowed in 2 C.F.R. § 200.414(f), unless a lower rate is prescribed in the statute.
  5. The de minimis rate does not require documentation to justify its use and may be used indefinitely. Once elected, the recipient or subrecipient must use the de minimis rate for all Federal awards until the recipient or subrecipient chooses to receive a negotiated rate.
  6. GPOs must include in the Notice of Funding Opportunity (NOFO) the policies relating to indirect cost rate reimbursement or cost sharing. Each applicant that seeks to establish an indirect cost rate must submit an indirect cost rate proposal to its cognizant agency for consideration. As appropriate, GPOs should incorporate discussions of these policies and guidance into outreach activities for potential applicants prior to the posting of a NOFO. In addition, the indirect cost rate (including the de minimis rate) must be contained in the award information.

050505 Disallowed Costs

  1. GPOs may disallow a cost if it does not meet the cost principles, grant terms and conditions, or based on audit findings, a review of reports, etc.
  2. Disallowed costs must be refunded (with interest) to the Federal Government in accordance with instructions from the GPO that determined the costs are unallowable. GPOs should refer to their program regulations to determine if the process to recover or recapture funds is outlined. If so, GPOs shall follow those procedures unless Federal statute or regulation directs otherwise.
  3. When costs are disallowed, they are to be repaid from the recipient’s non-Federal funds and returned to the payment system of the Federal agency. Returns should follow instructions provided by the Federal agency. Generally, the repayment should be by Automated Clearing House (ACH) or offset (e.g., the GPO reducing the equivalent amount from an active or future grant award) but may be accomplished by other legally available means. When offset is employed, the recipient will use non-Federal funds to maintain the required level of effort under the grant being offset.
  4. When offset is used, GPOs will ensure that the funds used to restore the amount of offset are devoted to the program, derived from non-Federal funds, are treated as Federal funds for purposes of the applicable cost principles, and are reconciled promptly. Expenditure of funds used to restore the amount offset must also comply with the terms and conditions of the award.

050506 Program Income

  1. Recipients are encouraged to earn program income, when appropriate, to defray program costs. Program income must be used for the original purpose of the award.
  2. GPOs shall specify in the Grant Agreement whether program income is allowable and which program income use option applies for an award. If no program income method is specified in a Grant Agreement, prior approval is required to use the addition or cost sharing methods, unless the recipient is an institute of higher education or a nonprofit research institution. For more information see 2 C.F.R. § 200.307.
  3. There are three ways in which program income can be used:
    1. Deduction– Program income is deducted from the total allowable costs, reducing the overall total amount of the Federal award.
    2. Addition– Program income is added to the total allowable costs, increasing the overall total amount of the Federal award.
    3. Cost Sharing– Program income is used to meet the Federal award’s cost sharing requirement. If no program income method is specified in the Federal award, prior approval is required to use the cost sharing method.
  4. Regardless of the method, program income may be used only for eligible costs, in accordance with the governing statute, program regulations, and the terms and conditions of the award. Program income is subject to 2 C.F.R. Part 200 unless the GPO indicates otherwise.
  5. Recipients are allowed to retain up to $500 per year of interest earned on Federal funds to use for administrative expenses. Any additional interest earned on Federal funds must be returned annually to the Department of Health and Human Services Payment Management System (PMS) through either the ACH network or a Fedwire Funds Service payment. All interest in excess of $500 per year must be returned to PMS regardless of whether the recipient was paid through PMS.

050507 Property Standards

  1. GPOs will record property that is acquired, developed, modified, improved, or constructed in whole or in part, as an allowable direct cost to VA grants or for which Federal financial participation is claimed.
  2. GPOs shall consult 2 C.F.R. § 200.310-316 on property standards set forth by OMB. Allowability of costs for particular types of property and related expenditures will be based on the governing statute and/or regulations, including applicable cost principles, and the terms and conditions of individual awards.
  3. Title to property, equipment, or supplies acquired or improved by recipients will vest in the recipient upon acquisition.
    1. Real property shall be used for the originally authorized purpose as long as needed for that purpose, during which time the recipient must not dispose of or encumber its title or other interests.
    2. The recipient must notify the GPO when real property is no longer needed for the originally authorized purpose and request disposition instructions.
  4. Title to Federally owned property remains vested in the Government. The recipient must submit an annual inventory listing of Federally owned property in its custody to the GPO. Upon completion of the Federal award or when the property is no longer needed, the recipient must report the property to the GPO for further Federal agency instruction. If the GPO has no further need for the property, then it must declare the property as excess and report it for disposal unless the GPO has authority to dispose of the property by alternative means.
  5. The recipient is responsible for adhering to management requirements for equipment outlined in 2 C.F.R. § 200.313(d)(1-5). When conducting monitoring activities, GPOs should have a process to ensure recipient compliance with these requirements.
  6. When the equipment is no longer needed for the original project or program, the recipient shall request disposition instructions from the GPO. GPOs must provide disposition instructions within 120 days of the recipient’s request and specify one of the disposition methods outlined in 2 C.F.R. § 200.311(d)(1-3).
  7. GPOs must provide disposition instructions, otherwise equipment with a current per-unit fair market value in excess of $10,000 (per unit) may be retained by the recipient or sold. The GPO is entitled to a portion of the sale, as outlined in 2 C.F.R. § 200.313(e)(2).
  8. Equipment with a current fair market value of less than $10,000 per unit (as stated at 2 C.F.R. § 200.313(e)(1)) may be retained, sold, or otherwise disposed of with no further responsibility to the GPO.
  9. Similarly, with respect to supplies, if there is an inventory of unused supplies exceeding $10,000 in aggregate value (as stated at 2 C.F.R. § 200.314(a)) at the end of the period of performance, and the supplies are not needed for any other Federal award, the recipient may retain the supplies for use on other activities or sell them. However, the recipient must compensate the GPO for its share. The amount of compensation must be computed as directed in 2 C.F.R. § 200.314(a).
  10. When included in the terms and conditions of an award, GPOs may permit the recipient to retain unused supplies with no further obligation to the Federal Government unless prohibited by Federal statute or regulation.

050508 Grant Adjustments

  1. Under the provisions of 2 C.F.R. § 200.308-309 and § 200.329, recipients may revise grant budgets and program plans but must request prior approval from the GPO and report deviations from budget, end dates, project scope, or objectives.
  2. Recipients should be provided the maximum flexibility allowable to make changes in program plans, dates, and/or budgets consistent with governing statutory, regulatory, and policy requirements.
  3. When requesting a budget revision, the recipient must use the same format for budget information that was used in the application unless the GPO approves an alternate format.
  4. GPOs should only require the level of documentation needed to make a prospective judgment as to allowability and appropriateness for the given project/recipient.
  5. GPOs may rely on governing statutes, program regulations, grants administration regulations at 2 C.F.R. § 200.308, § 200.309, and § 200.407 (and the cost principles incorporated by reference therein), and, as appropriate, the other terms and conditions of the award when reviewing the budget revision.
  6. GPOs must review the revision request and notify the recipient whether the budget revisions have been approved within 30 calendar days from the date of receipt of the request. If the revision is still under consideration at the end of 30 calendar days, the GPO must inform the recipient in writing of the date when the recipient may expect the decision.
  7. For non-construction awards, recipients must request GPO approval for the following revisions:
    1. Change in the scope or objective of the project or program, even if there is no associated budget revision.
    2. Change in key personnel listed in the application.
    3. A 25% or greater reduction in the level of effort dedicated to the project by the project director or principal investigator or an absence from the project for more than three months.
    4. The inclusion of costs that require prior approval as listed in 2 C.F.R. § 200.407, unless waived by the GPO.
    5. The transfer of funds from participant support costs to other categories.
    6. Subawarding, transferring, or contracting out of any work, unless described and approved in the application. This does not apply to the acquisition of supplies, materials, equipment, or general support services.
    7. Changes in the total approved cost-sharing amount.
    8. A need for additional Federal funds to complete the project. If approved, the Federal agency must ensure that adequate funds are available to avoid a violation of the Antideficiency Act.
    9. A need for additional time to complete the project.
  8. For construction awards, recipients must request GPO approval for the following revisions:
    1. Change in the scope or objective of the project or program.
    2. A need for additional Federal funds to complete the project.
    3. Inclusion of specific costs for which prior written approval requirements may be imposed consistent with cost principles listed in 2 C.F.R. Part 200 Subpart E.
    4. A waiver or any deviation from the requirements of the Build America, Buy America Act.
    5. A need for additional time to complete the project.
  9. GPOs may, at their discretion, waive other cost-related and administrative prior written approvals within subparts D and E of 2 C.F.R. Part 200. For example, a GPO may authorize a recipient to:
    1. Incur pre-award costs up to 90 calendar days before the award. Expenses more than 90 calendar days pre-award require prior approval of the GPO.
    2. Initiate a no-cost extension of up to one year, as long as it is not prohibited by the award terms and conditions, requires no additional funds, and does not involve any changes to the approved scope and objectives of the project. For one-time extensions, the recipient must notify the GPO in writing with the supporting reasons and revised period of performance at least 10 calendar days before the end of the period of performance specified in the Federal award. This one-time extension must not be used merely for the purpose of using unobligated balances.
    3. Carry unobligated balances to subsequent budget periods.
    4. Obtain certain waivers without prior approval. This is only for Federal awards supporting research. GPOs shall refer to 2 C.F.R. § 200.308(h) for specifics.
  10. GPOs may restrict budget revisions in which the Federal share of the project exceeds the simplified acquisition threshold, and the total amount of the transfer exceeds 10% of the total grant budget.
  11. GPOs cannot approve any revision that proposes to use funds in a manner inconsistent with the appropriation from which an award was made.

050509 Remedies for Recipient Noncompliance

  1. Per 2 C.F.R. § 200.339, GPOs will address recipient noncompliance with the U.S. Constitution, Federal statutes, regulations, or the terms and conditions of an award. Addressing noncompliance is an extension of the monitoring process, and as part of the process, GPOs will review both the programmatic and administrative aspects of recipient performance and compliance.
  2. Based on documented findings of the monitoring process, including timely review of reports and site visits, the recipient should be advised of problems noted and be given the opportunity to correct them, as appropriate.
  3. Remedies for noncompliance vary in their significance and severity. GPOs may use remedies singularly or in combination and may escalate them in severity based on the demonstrated unwillingness or inability of the recipient to take corrective action.
  4. Remediation should be consistent with the type, duration, and significance of the recipient’s noncompliance and with the objective the GPO wants to achieve. In all cases, the welfare and benefit to the Veteran should be considered when implementing remediation.
  5. In response to recipient noncompliance, GPOs may impose additional grant conditions, as described in 2 C.F.R. § 200.208, which include:
    • Requiring payments as reimbursements rather than advance payment;
    • Withholding authority to proceed to the next phase of a project until receipt of acceptable performance;
    • Requiring additional or more detailed financial reports;
    • Requiring additional project monitoring;
    • Requiring the recipient to obtain technical assistance or management support; or
    • Establishing additional prior approvals.
  6. Prior to imposing additional grant conditions, GPOs must notify the recipient regarding:
    • The nature of the specific condition(s);
    • The reason why the specific condition(s) is being imposed;
    • The action needed to remove the specific condition(s);
    • The time allotted for completing the actions; and
    • The method for requesting GPO reconsideration of the specific condition(s).
  7. GPOs must promptly remove any specific condition(s) imposed once the recipient completes the actions required to satisfy them.
  8. If the GPO determines that noncompliance cannot be remedied by imposing additional conditions, the GPO may take one or more of the following actions, as appropriate:
    • Temporarily withhold payments until the recipient takes corrective action;
    • Disallow all or part of the cost of the activity or action not in compliance;
    • Suspend or terminate the award in whole or in part;
    • Initiate suspension or debarment proceedings as authorized in 2 C.F.R. 200 Part 180 and VA regulations;
    • Withhold further awards (new or continuation) for the project or program; and
    • Pursue other legally available remedies.

050510 Award Suspension

  1. GPOs may suspend an award as a means of obtaining compliance if other lesser actions have failed, or the public health or welfare is threatened. In general, there is no single triggering event that mandates that GPOs take a particular remedy; however, there may be instances in which suspension is the most appropriate first course of action and is necessary to protect the interests of the Government and the public.
  2. Suspension is a serious action, and in the event the deficiency is not corrected, GPOs should be prepared to proceed with termination of the award.
  3. If a GPO determines that a suspension may be lifted and performance may resume, the award can be amended to add special conditions or a high-risk designation.
  4. If a GPO determines that it is not appropriate to lift the suspension (e.g., it is not possible for the recipient to take corrective actions), the GPO should proceed with taking necessary steps to terminate the award, resulting in the cessation of funding.

050511 Award Termination

  1. Termination is the most serious of the remedies that GPOs may implement. In general, there is no single triggering event that mandates that GPOs take a particular action; however, there may be instances in which termination is the most appropriate first course of action and is necessary to protect the interests of the Government and the public.
  2. GPOs must clearly and unambiguously specify all termination provisions in the terms and conditions of the Federal award.
  3. In accordance with 2 C.F.R. § 200.340, GPOs may elect to terminate the entire award or part of the award for failure to comply with the terms and conditions of the Federal award or if an award no longer advances the program goals or VA priorities.
  4. GPOs may also elect to terminate an award in part or in its entirety with the consent of the recipient (i.e., a termination by mutual agreement or termination at the request of the recipient). In these cases, the two parties must agree upon the termination conditions to include the effective date, and in the case of partial termination, the portion to be terminated.
  5. GPOs should make every effort to close a terminated award as promptly as possible. In addition, the final costs of the terminated award(s) may be negotiated if incurred prior to the termination and expressly authorized in the notice of termination. Final costs must be allowable and align with 2 C.F.R. § 200.343.
  6. When VA terminates the Federal award prior to the end of the period of performance due to the recipient’s material failure to comply with the terms and conditions of the Federal award, the Federal agency must report the termination in SAM.gov. A Federal agency must use the Contractor Performance Assessment Reporting System (CPARS) to enter information in SAM.gov. GPOs shall consult 2 C.F.R. § 200.340(c)(1-3) for additional details on reporting an award termination.
  7. When an award is terminated in part or in its entirety, VA and recipient remain responsible for compliance with requirements associated with closeout (2 C.F.R. § 200.344) and post-closeout adjustments (2 C.F.R. § 200.345).
  8. When a GPO does not award continuation funding, the reason for withholding the funds will determine whether the action is considered enforcement or termination.

050512 Notification of Termination Requirement

  1. In accordance with 2 C.F.R. § 200.341, VA must provide written notice of termination to the recipient. The written notice of termination should include the reasons for termination, the effective date, and the portion of the Federal award to be terminated, if applicable.
  2. If the reason for termination is due to the recipient’s material failure to comply with a Federal award, the notification of termination must state that:
    1. The termination decision will be reported in SAM.gov.
    2. The information will be available in SAM.gov for five years from the date of termination, and then archived.
    3. Federal agencies considering an award to the recipient that is expected to exceed the simplified acquisition threshold must consider the information when assessing whether the recipient is qualified to receive an award.
    4. The recipient may comment on any information in SAM.gov about the recipient for future consideration by Federal agencies. The recipient may submit comments in SAM.gov.
    5. Federal agencies should consider the recipient’s comments when determining qualifications for future awards.
  3. GPOs will sign the final letter advising the recipient of the intent to terminate.
  4. Upon termination of the Federal award, VA must provide the information to USAspending.gov as required by the Federal Funding Accountability and Transparency Act (FFATA). In addition, VA must update or notify any other relevant Government-wide systems or entities of any indications of poor performance as required by 41 U.S.C. § 2313 and 31 U.S.C. § 3321.

050513 Opportunities to Object, Hearings, and Appeals

  1. In accordance with 2 C.F.R. § 200.342, VA must maintain written procedures for processing objections, hearings, and appeals.
  2. Upon initiating any remedy for noncompliance, GPOs must provide the recipient an opportunity to object and provide information and documentation challenging the action. GPOs must comply with any requirements for hearings, appeals, or other administrative proceedings to which the recipient is entitled under any statute or regulation applicable to the action involved.

050514 Documentation Requirements

  1. GPOs must maintain records according to guidance issued by the National Archives and Records Administration (NARA), as applicable.
  2. GPOs shall create and maintain grant files that allow for a third party (e.g., auditor or another reviewer) to trace all activities, beginning with program initiation through closeout of individual awards, the decisions made, and actions taken in between.
  3. Award recipients must retain all records pertinent to a Federal award for three years from the date of submission of their final financial report. For awards that are renewed quarterly or annually, records must be kept for three years from the date of the submission of their quarterly or annual financial report, respectively.
  4. GPOs may not impose any other record requirements on recipients, unless it meets one of the exceptions outlined in 2 C.F.R. § 200.334(a) through (f).
  5. If a GPO determines that the recipient’s records possess long-term retention value, then it must request transfer of the records to its custody or make arrangements with the recipient to retain the records for joint use.
  6. Whenever practicable, files will be collected, transmitted, and stored electronically in open and machine-readable formats, rather than in closed formats or on paper. However, GPOs must provide or accept paper versions upon request.
  7. In accordance with 2 C.F.R. § 200.338, GPOs may not place restrictions on the recipient that limit public access to the records of the recipient pertinent to a Federal Award (except for personally identifiable information or other sensitive information).
  8. GPOs will adopt their own requirements and procedures for file management; however, an official file (preferably electronic) will be created for each award and as applicable, contain the following types of documentation:
    1. Pre-award information such as application documentation, budget worksheets and narratives, applicable grants.gov forms (e.g., SF-424A or SF-424C), assurances, memos, and applicable policies and procedures.
    2. Award information such as the official award package for each recipient, to include approved and signed application documents, terms and conditions, and notices of award.
    3. Post-award information such as performance progress reports, monitoring documentation, amendments and approved deviations, correspondence, and other relevant information. Documents should be maintained throughout the life of the grant and added to the file as actions occur.
    4. Closeout information which may include final reports showing the goals of the award achieved and that funds were used for their intended purpose.
  9. GPOs may also find it valuable to include an organizational profile for each recipient within each grant-specific file. This profile may include:
    1. Organizational identifying information (e.g., legal name, taxpayer identification number, and name of authorized official);
    2. Documentation of indirect cost rate, as applicable;
    3. Status of 2 C.F.R. 200 Subpart F audit requirements, audit report receipt, and disposition;
    4. Status of required assurances and certifications; and
    5. Compliance with various reporting requirements.

0506 Authorities and References

0507 Rescissions

Volume X, Chapter 5 – Grants Post-Award, January 2017.

Appendix A: Previous Revisions Table

SectionRevisionOfficeEffective Date
  050209.03 Suspension or Termination of an Award for Cause.Added the requirement that grant program offices must validate grantees in FAPIIS for potential awards over the Simplified Acquisition Threshold (currently $150,000)    OFP (047G)    January 2017
  0506 DEFINITIONS  Added FAPIIS Definition  OFP (047G)  January 2017
  050201 Reports and RecordsUpdated to address the provisions of the OMB Uniform Grant Guidance at 2 C.F.R. Part 200, and to incorporate references to new guidance where appropriate.    Grants Mgmt    April 2016
  050202 Post- Award MonitoringUpdated to address the provisions of the OMB Uniform Grant Guidance at 2 C.F.R. Part 200, and to incorporate references to new guidance where appropriate.    Grants Mgmt    April 2016
  050203 Cost PoliciesUpdated to address the provisions of the OMB Uniform Grant Guidance at 2 C.F.R. Part 200, and to incorporate references to new guidance where appropriate.    Grants Mgmt    April 2016
  050204 Matching and Cost-SharingUpdated to address the provisions of the OMB Uniform Grant Guidance at 2 C.F.R. Part 200, and to incorporate references to new guidance where appropriate.    Grants Mgmt    April 2016
  050205 Program IncomeUpdated to address the provisions of the OMB Uniform Grant Guidance at 2 C.F.R. Part 200, and to incorporate references to new guidance where appropriate.    Grants Mgmt    April 2016
    050206 PropertiesUpdated to address the provisions of the OMB Uniform Grant Guidance at 2 C.F.R. Part 200, and to incorporate references to new guidance where appropriate. Removed debt instrument provisions, as they are no longer included in the guidance.    Grants Mgmt    April 2016
  050207 Grant AdjustmentsUpdated to address the provisions of the OMB Uniform Grant Guidance at 2 C.F.R. Part 200, and to incorporate references to new guidance where appropriate.    Grants Mgmt    April 2016
050208 Public Policy RequirementsUpdated to address the provisions of the OMB Uniform Grant Guidance at 2 C.F.R. Part 200, and to incorporate references to new guidance where appropriate.    Grants Mgmt    April 2016
050209 Remedies For NoncomplianceUpdated to address the provisions of the OMB Uniform Grant Guidance at 2 C.F.R. Part 200, and to incorporate references to new guidance where appropriate.    Grants Mgmt    April 2016
050209.03 Suspension or Termination of an Award for CauseIncluded the Debarment and Suspension Committee, and information necessary to recommend a grantee for suspension or debarment.  Grants Mgmt  April 2016
0503 Authority and ReferenceRemoved references to superseded guidance and incorporated new guidance at 2 C.F.R. Part 200.  Grants Mgmt  April 2016
  0505 ProceduresUpdated to address the provisions of the OMB Uniform Grant Guidance at 2 C.F.R. Part 200, and to incorporate references to new guidance where appropriate.    Grants Mgmt    April 2016
0506 DefinitionsIncorporated references to new guidance where appropriate.Grants MgmtApril 2016
0507 RescissionsRescinded prior version of this document, effective August 2014.Grants MgmtApril 2016
Appendix AIncorporated references to new guidance where appropriate.Grants MgmtApril 2016

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