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Circular 05-03


DEPARTMENT OF HEALTH AND HUMAN SERVICES
Indian Health Service
Rockville, Maryland

Refer to: DGO/OMS

INDIAN HEALTH SERVICE CIRCULAR NO. 2005-03

Effective Date:  06/13/2005

GRANTS PROGRAMS CARRYOVER FUNDS POLICY

  1. PURPOSE.  The purpose of this circular is to establish Indian Health Service (IHS) grants programs carryover funds policy.

    NOTE:  Tribal management grants and Tribal self-governance planning/negotiation grants are awarded under the authority of the Indian Self-Determination and Education Assistance Act (ISDEAA), Public Law (P.L.) 93-638, as amended, and are not subject to this circular and/or the Department of Health and Human Services (HHS) grants policy carryover requirements.

  2. REFERENCES

    1. Indian Self-Determination and Education Assistance Act, P.L. 93-638

    2. Public Health Service Act, Title III, Section 330C

    3. Public Health Service Act, Section 301(a)

    4. 42 Code of Federal Regulations, Part 136

    5. 45 Code of Federal Regulations, Part 74 and 92

    6. Public Health Service Grants Policy Statement, Revised April 1994

  3. BACKGROUND.  Generally the IHS awards two types of grants, "discretionary IHS competitive grants" and "statutorily mandated grants."

    1. Discretionary IHS Competitive Grants.  Discretionary IHS competitive grants are defined as grants established by the IHS pursuant to IHS discretionary authority without any statutory directive.  Tribes or Tribal organizations operating health programs pursuant to Title V of the ISDEAA receive IHS discretionary grant funds as Tribal shares.  However, after Tribal shares have been distributed, the Agency has the discretion to award on a competitive basis any remaining funds pursuant to an Notice of Grant Award (NGA) to Tribes or Tribal organizations and Urban Indian Health Programs.

    2. Statutorily Mandated Grants.  Statutorily mandated grants are defined as grants specifically designated in a statute for a defined purpose.  Statutorily mandated grants are not awarded as Tribal shares but are awarded pursuant to an NGA on the same basis as discretionary IHS competitive grants, subject to the exceptions at 42 Code of Federal Regulations (CFR), Part 137, Subpart F.  All other provisions of the HHS grants policy apply to statutorily mandated grants, including the HHS policy on carryover requirements.

  4. DEFINITIONS.

    1. Carryover Balance.  The carryover balance is the unobligated funds from a previous funding period under a grant authorized for use to cover allowable costs in a current funding period.  Obligated, but unliquidated, funds are not considered carryover.

    2. Unliquidated Obligation.

      1. For reports prepared on a cash basis, the unliquidated obligation is the amount of the obligations incurred by the recipient that has not been paid.

      2. For reports prepared on an accrued expenditure basis, the unliquidated obligation is the amount of obligations incurred by the recipient for which an outlay has not been recorded.

    3. Unobligated Balance.  The unobligated balance is the portion of the funds authorized by the Federal agency that has not been obligated by the recipient.

  5. POLICY.  All carryover funds must be used to support the originally approved objectives and goals of the project.  Grantees have the authority to carry over all IHS unobligated grant funds remaining at the end of a budget period with the exception of funds that are restricted in an NGA.  Each grantee is required to submit the Financial Status Report (FSR), Standard Form 269, within 90 days after the budget period expires.  If:

    1. Carryover Balance is 25 Percent or Less.  If the grantee reports in the FSR a balance of unobligated funds that is 25 percent or less of the total amount awarded, the grantee is not required to submit a justification for the balance.

    2. Carryover Balance Exceeds 25 Percent.  If the grantee reports in the FSR a balance of unobligated funds that exceeds 25 percent of the total amount awarded, the grantee must request prior approval from the Grants Management Officer (GMO) to carryover the funds.

  6. REQUIREMENTS

    1. Prior Approval.  Grantees must obtain prior approval for all carryover requests that exceed 25 percent of the total amount awarded.

    2. Denial.  The IHS reserves the right to deny a carryover request when it exceeds 25 percent of the total amount awarded, as appropriate.

    3. Financial Status Report.  An approved FSR, must be on file in awarding office.

  7. PROCEDURES.  In an effort to streamline the prior-approval process, the awarding office will no longer approve carryover requests at the time of the non-competing continuation award without a FSR from the prior budget period on file.  The grantee should submit a carryover request and justification to the awarding office simultaneously with the annual FSR that is submitted 90 days after the budget period expires.  The GMO will review actual balances that are available for carryover once the FSR is submitted to the awarding office.

    While this is not encouraged, if the grantee chooses to submit the carryover request/budget in the non-competing continuation application, the grantee must submit it as a separate budget along with a justification that pertains only to the carryover request.  (NOTE: Carryover funds and current year funds from the continuation application should not be commingled when the grantee submits the request.)  Also, a revised itemized budget will be necessary to reflect the actual carryover balance once the FSR is submitted.

  8. RESPONSIBILITIES.

    1. Awarding Office.  The awarding office:

      1. will no longer approve carryover requests at the time of the non-competing continuation award without an approved FSR on file;

      2. has the discretion to request additional justification, as part of the GMO review, including a revised budget that must provide details on how the balance will be spent if it is not clearly reflected in the non-competing continuation application; and

      3. will issue a revised NGA to reflect the carryover amount for all balances that exceed 25 percent of the total amount awarded.

    2. Grantee.  If the grantee elects to carryover unobligated balances that are less than 25 percent of the total amount awarded he/she must notify the IHS GMO.  The notification must include the amount to be carried over in the FSR under the "Remarks" section.

      1. In accordance with 45 CFR Part 74, grantees are required to submit the FSR within 90 days after the budget period expires.

      2. If the grantee reports in the FSR a balance of unobligated funds that is 25 percent of the total amount awarded or less, the grantee is not required to submit justification for the balance.

      3. If the grantee reports in the FSR a balance of unobligated funds that exceed 25 percent of the total amount awarded, the grantee must request prior approval from the GMO to carry over the funds.

    3. Grants Management Officer.  The GMO:

      1. will review actual balances that are available for carryover to the grantee once the FSR has been received and approved by the awarding office;

      2. may request additional information from the grantee, including a revised budget that provides details on how the carryover balance will be spent, as a part of the review; and

      3. in conjunction with the program official, will review a description of the circumstances that resulted in the large balance, as provided by the grantee in the non-competing continuation application, to ensure that the funds are necessary to complete the project.

    4. Program.  The GMO and the program staff must identify whether program performance issues are linked to large carryover balances by assessing whether or not the grantee is on target with meeting the overall goals and objectives of the project.

      1. If it is determined that there are no concerns with program performance but the grantee's carryover balance remains in excess of 25 percent of the total amount awarded, the grantee risks having to provide the awarding office with a quarterly itemized budget (which must include a justification) on the carryover funds to reflect how the carryover funds will continually be expended until the balance does not exceed 25 percent of the total amount awarded.

      2. If the excessive balance is caused by concerns with program performance, apart from a situation caused by a delayed start (e.g., slow recruitment), the grantee must explain, in accordance with 45CFR, Part 74 and 92, why the established goals were not met.

    5. Corrective Action Plan.  If a corrective action plan (CAP) is needed to improve program performance, the CAP must be designed to assist the grantee with achieving the project's goals and objectives.  The grantee, program official, and GMO will coordinate an acceptable CAP.  The grantee risks having future-year support restricted until the CAP requirements are completed, at which time the restriction will be rescinded, and the funds will become available to the grantee for use.

      A revised NGA will be issued by the awarding office to reflect the carryover amount for all balances that exceed 25 percent of the total amount awarded.  However, the awarding office will no longer approve carryover requests at the time of the non-competing continuation award without there being a FSR from the prior reporting period on file.  Carryover requests issued at the time of the award are based on estimated unobligated balances.  Once the FSR is submitted to the awarding office, the balances are subject to change, which may alter the actual amount that is available for carryover.  Therefore, once the FSR has been received and approved by the awarding office, the GMO will review the actual balances that are available for carryover to the grantee.

  9. SUPERSEDURE.  This circular supersedes the “carry-over instructions," found in the last paragraph on page 8-14, Part 5, Chapter 19, Section 8G(1), Indian Health Manual.

  10. EFFECTIVE DATE.  This circular becomes effective on the date of signature.

/Charles W. Grim. D.D.S./
Charles W. Grim, D.D.S., M.H.S.A.
Assistant Surgeon General
Director, Indian Health Service


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