Administration of federal assistance in the United States

In the United States, federal assistance, also known as federal aid, federal benefits, or federal funds, is defined as any federal program, project, service, or activity provided by the federal government that directly assists domestic governments, organizations, or individuals in the areas of education, health, public safety, public welfare, and public works, among others.

Recipients

A recipient of federal awards or funds is defined as any non-federal entity that receives federal assistance and is part of, or located within, the United States and its territories and possessions. Recipients are grouped into six main categories, as established by the GSA:[8]

Every program is designed with a specific recipient in mind. Certain programs have restrictions on who may receive the assistance because of the nature of its activity or service.[8] Examples include infrastructure programs and grants, which are usually restricted to States, local governments, and U.S. territories—because these are usually the only entities that administer public roads, bridges, etc. Another example is health-related research grants, which individuals are eligible for as long as they satisfy certain criteria, such as that they have a professional or scientific degree, three years of research experience, and are a citizen of the United States.[9]

Pass-through entities and sub-recipients

The federal government allows certain entities mentioned above to act as a Pass-through entity that provides the federal assistance to another recipient. The Pass-through entity is still considered a recipient, but the assistance assigned to it may be "passed on" or "passed-through it" to another recipient. The entity that receives the assistance from a pass-through entity is a sub-recipient.[10][11] This is allowed because certain federal programs may not have the organizational structure to provide assistance directly to the final recipient and requires support from other entities.

For example, crime-prevention federal programs may be assigned to a State Attorney General's Office (AGO) (considered a State government). This State office may decide to assign part of its federal grant through sub-grants (also known as sub-awards)[10] to cities and counties within the State (considered local governments) for crime-prevention activities such as neighborhood watch programs or supplying new equipment to police forces. The original recipient, the AGO, has become a Pass-through entity and the cities and counties have become "sub-recipients", all the while the assistance is still serving the federal program's purpose to prevent crime.

Sub-recipients may in turn pass on the assistance to another sub-recipient to serve the purpose required by the federal program, for example if the cities mentioned above pass on part of their assistance to nonprofit organizations dedicated to patrolling neighborhoods at night. Therefore, a recipient may be considered a pass-through entity and a sub-recipient at the same time.[citation needed]

Certain programs may require the original recipient to pass on the assistance to sub-recipients (i.e., the federal program requires that the assistance be provided to nonprofit neighborhood watch organizations, and the assistance passes recipient through recipient until it reaches them), while others may require that the recipient not pass on the assistance (i.e., State must use the assistance entirely on its own). Some programs award assistance to a pass-through entity who is neither the direct applicant nor the ultimate beneficiary, such as the Pell Grant program where students apply and receive the aid but it is the university's responsibility to receive and administer the applications and disburse the aid.[9]

Pass-through entities and sub-recipients are equally responsible for the management of federal aid received. The federal government monitors the federal aid provided to any recipient and requires all pass-through entities to monitor the aid they pass on. Noncompliance of a federal regulation on the part of the sub-recipient may also be attributed to the pass-through entity because it is still responsible for the funds it passed on.[citation needed]

Catalog of Federal Domestic Assistance

The Catalog of Federal Domestic Assistance (CFDA) logo.

The task of organizing and categorizing federal assistance programs into a uniform and standardized system has been assigned to the U.S. General Services Administration (GSA) since 1984.[12] There were precursor catalogs to this one, focusing on particular topics and maintained by other groups, such as the US office of education https://archive.org/details/ERIC_ED067776/page/n17/mode/2up pub. 1972 pg. iii . The GSA achieves these tasks by maintaining the Federal assistance information database, which incorporates all federal agency programs that provide grants and awards to recipients. The Office of Management and Budget assists the GSA in maintaining the database by serving as an intermediary agent between the Federal agencies and GSA.[citation needed]

In addition to these tasks, the Federal Program Information Act requires the GSA to provide federal assistance information to the general public through the Catalog of Federal Domestic Assistance (CFDA), a free register, which incorporates both federal agency and federal program information. This register acts both as a directory and as a dictionary, facilitating both recipients and the general public in finding information of a specific program.

Currently, programs in the Catalog are being classified by the GSA into 15 types of assistance, which are then sub-classified into seven financial types of assistance and eight non-financial types of assistance:[8]

Financial type assistance

• Formula Grants (A) – Includes allocations of money to States or their subdivisions in accordance with distribution formulas prescribed by law or administrative regulation, for activities of a continuing nature not confined to a specific project. Examples of this type of assistance include transportation and infrastructure grants designated by Congress, such as the Community Development Block Grant (CDBG).[8]
• Project Grants (B) – Includes funding of specific projects for fixed or known periods. Project grants can include fellowships, scholarships, research grants, training grants, traineeships, experimental and demonstration grants, evaluation grants, planning grants, technical assistance grants, survey grants, and construction grants.[8]
• Direct Payments for Specified Use (C) – Includes financial assistance from the Federal government provided directly to individuals, private firms, and other private institutions to encourage or subsidize a particular activity by conditioning the receipt of the assistance on a particular performance by the recipient. One example of this type of assistance is the Section 8 Housing Choice Voucher program.[8]
• Direct Payments with Unrestricted Use (D) – Includes financial assistance from the Federal government provided directly to beneficiaries who satisfy Federal eligibility requirements with no restrictions being imposed on the recipient as to how the money is spent. Included are payments under retirement, pension, and compensatory programs.[8]
• Direct Loans (E) – Includes financial assistance provided through the lending of Federal monies for a specific period of time, with a reasonable expectation of repayment, of which may or may not require the payment of interest.[8]
• Guaranteed/Insured Loans (F) – Includes programs in which the Federal government makes an arrangement to indemnify a lender against part or all of any defaults by those responsible for repayment of loans.[8]
• Insurance (G)– Includes financial assistance provided to assure reimbursement for losses sustained under specified conditions. Coverage may be provided directly by the Federal government or through private companies, and may or may not involve the payment of premiums.[8]

Non-financial type assistance

• Sale, Exchange, or Donation of Property and Goods (H) – Includes programs that provide for the sale, exchange, or donation of Federal real property, personal property, commodities, and other goods including land, buildings, equipment, food and drugs.[8]
• Use of Property, Facilities, and Equipment (I) – Includes programs that provide for the loan of, use of, or access to Federal facilities or property wherein the federally owned facilities or property do not remain in the possession of the recipient of the assistance.[8]
• Provision of Specialized Services (J) – Includes programs that provide Federal personnel directly to perform certain tasks for the benefit of communities or individuals. These services may be performed in conjunction with non-federal personnel, but they involve more than consultation, advice, or counseling. Examples include the legal representation provided by the "Protection of Voting Rights" and the 'Civil Rights of Institutionalized Persons" programs.[8]
• Advisory Services and Counseling (K) – Includes programs that provide Federal specialists to consult, advise, or counsel communities or individuals to include conferences, workshops, or personal contacts.[8]
• Dissemination of Technical Information (L) – Includes programs that provide for the publication and distribution of information or data of a specialized or technical nature frequently through clearinghouses or libraries.[8]
• Training (M)– Includes programs that provide instructional activities conducted directly by a Federal agency for individuals not employed by the Federal government.[8]
• Investigation of Complaints (N) – Includes federal administrative agency activities that are initiated in response to requests to examine or investigate violations of Federal statutes, policies, or procedures.[8]
• Federal Employment (O) – Includes programs that reflect the Government-wide responsibilities of the Office of Personnel Management in the recruitment and hiring of Federal civilian agency personnel.[8]

CFDA number

To help potential recipients locate a federal program, the General Services Administration assigns a two-digit number unique to each federal agency authorized to provide assistance, and a three digit number to each federal assistance program within that agency. With these designations, a federal assistance program is identified by the combination of both numbers, which in turn creates a five digit number divided by a dot (55.555).[3] The two digit numbers assigned to federal agencies are:

Monitoring activities

Due to the extensive amount of assistance the federal government provides, federal agencies rely on numerous monitoring activities performed by themselves, pass-through entities, and external sources. The most common monitoring procedure is the Single Audit. This is an annual examination of a recipient's operations and records that determines whether or not the recipient complied with laws and regulations applicable to the assistance they received. Additionally, Federal agencies routinely visit recipients and inspect their records and statements to check for situations of noncompliance with laws and regulations, and require periodic financial and performance reports that detail recipient operations. Federal agencies also require pass-through entities to perform similar procedures to their sub-recipients, since they are responsible for the assistance they pass on.[13][14][15]

Notes

1. ^ United States Office of Management and Budget; Office of Federal Financial Management, The Single Audit Archived 2007-06-21 at the Wayback Machine
2. ^ a b c 2006 CFDA Archived November 18, 2016, at the Wayback Machine; "Introduction And How To Use This Catalog"; pg. I, par. 6-8
3. ^ a b c 2006 CFDA Archived November 18, 2016, at the Wayback Machine; "Introduction And How To Use This Catalog: Organization of this Catalog"; pg. VIII, par. 7; "Program Title, Number and Popular Name"
4. ^ OMB A-133: Compliance Supplement Archived 2009-06-21 at the Wayback Machine, Part 4, pg. 4-14.182-1: "Supportive Housing for the Elderly (Sec. 202)" (CFDA 14.157), pg. 4-14.157-1 & "Section 8 Housing Assistance Payments Program-Special Allocations (CFDA 14.195)
5. ^ OMB A-133: Compliance Supplement Archived 2009-06-21 at the Wayback Machine; Part III, pg. 3-H-1, Period of Availability of Federal Funds, par. 1
6. ^ OMB A-133: Compliance Supplement Archived 2009-06-21 at the Wayback Machine; Part I, pg. 1-6, par. 5
7. ^ Jonathan Weisman (March 27, 2006). "Proposals Call For Disclosure of Ties to Lobbyists". Washington Post. Retrieved April 23, 2010.
8. 2006 CFDA Archived November 18, 2016, at the Wayback Machine; "Introduction And How To Use This Catalog"; pg. III; Types of Assistance
9. ^ a b 2006 CFDA Archived November 18, 2016, at the Wayback Machine; "Introduction And How To Use This Catalog: Organization of this Catalog"; pg. IX; "Eligibility Requirements: Applicant Eligibility"
10. ^ a b U.S. State Department Grant Terminology Archived 2007-04-23 at the Wayback Machine
11. ^ U.S. DOJ Glossary of Terms Archived 2006-12-12 at the Wayback Machine
12. ^ 2006 CFDA; "Introduction And How To Use This Catalog"; pg. I, par. 2
13. ^ Understanding Single Audits
14. ^ OMB A-133: Compliance Supplement Archived 2009-06-21 at the Wayback Machine; Part III, pg. 3-M-1: Sub-recipient Monitoring
15. ^ The Single Audit Act: Audits of States, Local Governments and Non-Profit Organizations; AICPA Audit Committee Toolkit: Non-profit Organizations; American Institute of Certified Public Accountants

References

Secondary sources

• Rhett D. Harrell (May 4, 2006), Local Government and Single Audits 2006, CCH (Wolters Kluwer), ISBN 0-8080-9023-2

OMB Circulars

The following is a list of circular letters issued by the U.S. Office of Management and Budget that provide significant information and guidance for Federal agencies, recipients, auditors, and the general public over the use and management of federal funds, operations of federal assistance programs, and agencies' and recipients' compliance with laws and regulations imposed by the federal government:

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