Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

INSPECTOR GENERAL 

MARCH 2004 

OEI-02-01-00641 

The Ryan White CARE Act 

Title I and Title II Grantees’ 

Monitoring of Subgrantees 
OFFICE OF INSPECTOR GENERAL


http://www.oig.hhs.gov/ 

The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as amended, 

is to protect the integrity of the Department of Health and Human Services (HHS) programs, as well as 

the health and welfare of beneficiaries served by those programs. This statutory mission is carried out 

through a nationwide network of audits, investigations, and inspections conducted by the following 

operating components: 

Office of Audit Services 

The OIG's Office of Audit Services (OAS) provides all auditing services for HHS, either by conducting 

audits with its own audit resources or by overseeing audit work done by others. Audits examine the 

performance of HHS programs and/or its grantees and contractors in carrying out their respective 

responsibilities and are intended to provide independent assessments of HHS programs and operations in 

order to reduce waste, abuse, and mismanagement and to promote economy and efficiency throughout the 

Department. 

Office of Evaluation and Inspections 

The OIG's Office of Evaluation and Inspections (OEI) conducts short-term management and program 

evaluations (called inspections) that focus on issues of concern to the Department, the Congress, and the 

public. The findings and recommendations contained in the inspections reports generate rapid, accurate, 

and up-to-date information on the efficiency, vulnerability, and effectiveness of departmental programs. 

Office of Investigations 

The OIG's Office of Investigations (OI) conducts criminal, civil, and administrative investigations of 

allegations of wrongdoing in HHS programs or to HHS beneficiaries and of unjust enrichment by 

providers. The investigative efforts of OI lead to criminal convictions, administrative sanctions, or civil 

monetary penalties. The OI also oversees State Medicaid fraud control units which investigate and 

prosecute fraud and patient abuse in the Medicaid program. 

Office of Counsel to the Inspector General 

The Office of Counsel to the Inspector General (OCIG) provides general legal services to OIG, rendering 

advice and opinions on HHS programs and operations and providing all legal support in OIG’s internal 

operations. The OCIG imposes program exclusions and civil monetary penalties on health care providers 

and litigates those actions within the Department. The OCIG also represents OIG in the global settlement 

of cases arising under the Civil False Claims Act, develops and monitors corporate integrity agreements, 

develops model compliance plans, renders advisory opinions on OIG sanctions to the health care 

community, and issues fraud alerts and other industry guidance. 
EXECUTIVE SUMMARY 

OBJECTIVE 

To assess the Ryan White CARE Act Title I and Title II grantees’ monitoring of subgrantees. 

BACKGROUND 

The Senate Finance Committee asked the Office of Inspector General (OIG) to review the 

Health Resources and Services Administration’s (HRSA) oversight of Ryan White 

Comprehensive AIDS Resources Emergency (CARE) Act Title I and Title II grantees and 

grantees’ oversight of their subgrantees. Hereinafter these grantees are referred to as Title I 

and Title II grantees. As part of this request, the Committee asked OIG to also initiate audits of 

select grantees and subgrantees. 

The CARE Act provides funding to develop, organize, coordinate, and operate effective and 

cost-efficient health care and support services to medically underserved individuals and families 

affected by HIV/AIDS. Title I and Title II are the largest programs and are the focus of this 

inspection. Title I provides emergency relief grants to eligible metropolitan areas for 

community-based HIV-related services, and Title II provides grants to States, the District of 

Columbia, and territories to improve the quality, availability, and organization of health care and 

support services. These services are provided directly through health department programs 

and through contracts with for-profit and non-profit subgrantees who apply for and receive 

funds directly from the grantees. 

To assess Title I and Title II grantees’ monitoring of subgrantees, we reviewed documents for 

fiscal year 2000 for 5 subgrantees from 20 Title I and Title II grantees, for a total of 100 

subgrantees. We also interviewed the 17 project officers responsible for these grantees, HRSA 

program officials, and the 20 grantees that represent 38 percent of all Title I funds and 41 

percent of all Title II funds. This report is a companion report to Monitoring of Ryan White 

CARE Act Title I and Title II Grantees, OEI-02-01-00640. 

FINDINGS 

Grantees’ monitoring of subgrantees is limited 

Fifteen of the 20 selected grantees did not have comprehensive documentation to demonstrate 

that they are monitoring their subgrantees systematically. These grantees did 

Grantee Monitoring of Subgrantees i OEI-02-01-00641 
not have each of the three key documents (a contract or formal agreement, a program report, 

and a fiscal report) needed to monitor for all 5 of their subgrantees in fiscal year (FY) 2000. 

Further, not all grantees had each of these documents for all five subgrantees. Twelve grantees 

had a program report, 9 grantees had a fiscal report, 13 grantees had a contract or formal 

agreement, and 4 grantees had a site visit report for all 5 of their subgrantees. 

Nevertheless, grantees are aware of some subgrantee problems 

Despite limited monitoring, grantees have identified some problems that their subgrantees are 

facing. Based on our document review, the 20 selected grantees had evidence of issues for 78 

of the 100 subgrantees. Ten of these subgrantees had audits that included findings. A total of 

19 subgrantees had corrective action plans that address a specific issue. Despite identifying 

subgrantee issues, grantees emphasize that they do not have serious concerns with any of their 

current subgrantees. 

HRSA does not always require grantees to report how they monitor subgrantees, 

and HRSA does not systematically monitor grantee oversight of subgrantees 

HRSA requires grantees to describe how they monitor their subgrantees in the grant 

application. However, HRSA does not require grantees to provide monitoring information in all 

instances. For example, HRSA does not require monitoring information for Title II grantees if 

the information has not changed since the last application. Further, HRSA does not appear to 

use the information that Title I or Title II grantees provide in order to monitor grantees’ 

oversight of subgrantees. Further, one HRSA official notes that they do not see monitoring 

grantees’ oversight of their subgrantees as part of HRSA’s responsibility, and that relying on the 

signed assurances from grantees is adequate. 

RECOMMENDATIONS 

The findings are based on documents from 100 subgrantees from 20 grantees. These 20 

grantees receive 38 percent of all Title I funds and 41 percent of all Title II funds. The 

inconsistencies in monitoring that we found with the grantees reviewed suggest that Title I and 

Title II grantees’ monitoring of subgrantees needs to be strengthened. We are aware that since 

this inspection was conducted, HRSA has consolidated its grants management offices, 

relocated most Title II monitoring responsibilities from regional offices to headquarters, and 

redefined the Office of Field Operations as the Office of Performance Review. These changes 

may better position the agency to address the following recommendations. Specifically, we 

recommend that HRSA: 

• Set standards for grantees’ monitoring of subgrantees that, at a minimum, require a 

contract or formal agreement, a program report, and a fiscal report, and some 

consideration of regular site visits 

Grantee Monitoring of Subgrantees ii OEI-02-01-00641 
• Require grantees to report how they monitor their subgrantees in accordance with these 

standards as part of every application 

• Increase efforts to monitor grantees’ oversight of subgrantees, including using 

information grantees report to HRSA regarding subgrantee activities 

Agency Comments 

We received comments on our draft report from HRSA. The full text of these comments can 

be found in Attachment D. HRSA concurs with all but one of our recommendations, and adds 

that significant administrative changes have occurred since this inspection was conducted. 

These changes may better position the agency to address the grantee monitoring activities 

discussed in this report. 

HRSA did not fully concur with the original OIG recommendation as it appeared in our draft 

report and required grantees to report how they monitor their subgrantees as a part of every 

annual application. In its comments to the Inspector General, HRSA reports that starting with 

the fiscal year 2004 grant guidance, they will require Title II grantees to submit a 

comprehensive application every other year instead of annually. As such, we have reworded 

this recommendation to reflect this new policy, and now recommend that HRSA require 

grantees to report subgrantee monitoring information in every application. 

Grantee Monitoring of Subgrantees iii OEI-02-01-00641 
TABLE OF CONTENTS 

EXECUTIVE SUMMARY ................................................ i

INTRODUCTION ....................................................... 1

FINDINGS ............................................................ 7

Grantees’ monitoring of subgrantees is limited ............................. 7

Grantees are aware of some subgrantee problems .......................... 10

HRSA does not always require grantees to report how they monitor

subgrantees, and HRSA does not systematically monitor grantee oversight of

subgrantees ...................................................... 11

RECOMMENDATIONS ................................................ 12

APPENDICES ....................................................... 13

Appendix A: HRSA/HAB Organizational Structure ........................ 13

Appendix B: OIG Grants Oversight Framework .......................... 14

Appendix C: Grantee Monitoring Documents 

Provided for Sampled Grantees ....................................... 15

Appendix D: Agency Comments ...................................... 18

ACKNOWLEDGMENTS ............................................... 24

Grantee Monitoring of Subgrantees iv OEI-02-01-00641 
INTRODUCTION 

OBJECTIVE 

To assess the Ryan White CARE Act Title I and Title II grantees’ monitoring of subgrantees. 

BACKGROUND 

In a letter dated August 2001, the Senate Finance Committee asked the Office of Inspector 

General (OIG) to review the Health Resources and Services Administration’s (HRSA’s) 

oversight of Ryan White Comprehensive AIDS Resources Emergency (CARE) Act grantees 

and grantees’ oversight of their subgrantees. News accounts have highlighted several instances 

of questionable spending by grantees and subgrantees that are now subject to Federal and 

State investigations. As a result, the Committee is concerned that HRSA does not appear to 

exert clear and consistent oversight over its CARE Act grantees, nor require, or otherwise 

monitor, grantees’ oversight of their subgrantees. 

As part of this request, the Committee asked OIG to also initiate audits of select grantees and 

subgrantees. The purpose of these audits is to evaluate grantees’ administration of Title I and 

Title II grant funds and their oversight of subgrantees, and to assess subgrantees’ fiscal 

capability and performance. 

The following report focuses on the Title I and Title II grantees’ monitoring of subgrantees. It is 

a companion report to Monitoring of Ryan White CARE Act Title I and Title II Grantees 

OEI-02-01-00640, which focuses on how HRSA monitors Title I and Title II grantees’ 

programmatic performance. We organized these reports in this way, as opposed to by Title, to 

better respond to the Senate Finance Committee’s two-part request, and because the overall 

findings apply to both Title I and Title II. 

The CARE Act 

The CARE Act (Pub. L. 101-381) was passed in 1990, and reauthorized in 1996 

(as Pub. L. 104-146) and in 2000 (as Pub. L. 106-345). The legislation provides funding to 

States and other public and nonprofit entities to develop, organize, coordinate, and operate 

effective and cost-efficient health care and support services to medically underserved 

individuals and families affected by HIV/AIDS. The CARE Act distributes resources to 

various entities under four Titles and Part F. Title I and Title II are the largest programs and are 

the focus of this inspection. 

Grantee Monitoring of Subgrantees 1 OEI-02-01-00641 
Title I 

Title I provides emergency relief grants to eligible metropolitan areas disproportionately 

affected by the HIV/AIDS epidemic. The Title I grantee is the Mayor or chief elected official. 

This official typically designates administrative authority for the CARE Act to the city or county 

health department, which may also be called the grantee. The grantee designates a planning 

council that is responsible for prioritizing the allocation of funds and makes awards to 

subgrantees according to the planning council’s decisions. Subgrantees may include hospitals, 

community-based organizations, hospices, ambulatory care facilities, community health centers, 

migrant health centers, homeless health centers, and substance abuse treatment and mental 

health programs. 

Title I funding includes formula and supplemental components. Formula grants are awarded on 

the estimated number of people living with AIDS in the eligible metropolitan area over the most 

recent 10-year period. Supplemental grants are awarded competitively based on a 

demonstration of severe need and other criteria. In fiscal year (FY) 2001, 51 eligible 

metropolitan areas in 21 States, Puerto Rico, and the District of Columbia were awarded $604 

million in formula and supplemental funds. 

Title II 

Title II provides grants to States, the District of Columbia, and the territories to improve the 

quality, availability, and organization of health care and support services for individuals and 

families with HIV/AIDS. The grantee for Title II is the Governor, and the administrative agency 

is the State Department of Health, which may also be the grantee. States distribute Title II 

funds to subgrantees, which are typically public or non-profit providers and community-based 

organizations. The grantee distributes funds either directly or through consortia that are 

responsible for prioritizing Title II funds in their area. In FY 2001, the States, the District of 

Columbia, and the territories were awarded $845 million in Title II grants. 

A portion of each State’s Title II funds must be used to establish an AIDS Drug Assistance 

Program (ADAP) to provide medications to low-income individuals with HIV/AIDS and their 

families. In FY 2001, the ADAP portion of the Title II award totaled $571 million. 

Federal Oversight 

The HIV/AIDS Bureau in HRSA is responsible for implementing Title I and Title II. Prior to 

December 2002, these programs were managed differently. The Bureau’s Division of Service 

Systems was responsible for monitoring and oversight of Title I grantees and ADAP. The 

Office of Field Operations, which included the 10 regional offices, was responsible for Title II 

grantees as well as other grants (see Figure 1 and Appendix A). 

Grantee Monitoring of Subgrantees 2 OEI-02-01-00641 
Figure 1: Monitoring Responsibilities 

(Regional Responsibility Italicized) 

CARE Act Program 

Responsibility Title I Title II Title II ADAP 

Program Monitoring Division of 

Service Systems -

Project Officer 

Office of Field 

Operations -

Project Officer 

Division of Service 

Systems -

Representative 

Fiscal Monitoring Division of Service Systems - Grants Management Officer 

In January 2003, HRSA announced that the Bureau’s Division of Service Systems would be 

responsible for both Title I and Title II. The Office of Field Operations, which had 

responsibility for Title II grantees, became the Office of Performance Review, and now serves 

as the focal point for reviewing and enhancing performance of HRSA-supported programs. 

Monitoring Requirements 

Federal regulations and guidelines describe grantees’ responsibilities for overseeing the activities 

of their subgrantees. The OMB Circular A-133 sets forth responsibilities for pass-through 

entities, including grantees. Recipients of Federal grants funds are required to: “Monitor the 

activities of subrecipients as necessary to ensure that Federal awards are used for authorized 

purposes in compliance with laws, regulations, and the provisions of contracts or grant 

agreements and that performance goals are achieved.” 

Program Monitoring. According to 45 CFR § 92.40, grantees must monitor grant and 

subgrant-supported activities to assure compliance with applicable Federal requirements and 

that performance goals are being achieved. Performance reports contain a comparison of 

actual accomplishments to the objectives established for the period, cost per unit, if helpful, and 

reasons for slippage if established goals are not met. Reports must also contain additional 

information including, when appropriate, analysis and explanation of cost overruns or high unit 

costs. 

Fiscal Monitoring. According to 45 CFR § 92.20, grantees and subgrantees must maintain 

records that adequately identify the source and application of funds provided for financiallyassisted activities. These records must contain information pertaining to grant or subgrant 

awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays or 

expenditures, and income. 

Federal regulations also require that accounting records be supported by such source 

documentation as cancelled checks, paid bills, payrolls, time and attendance records, and 

contract and subcontract award documents. Also, the awarding agency may review the 

Grantee Monitoring of Subgrantees 3 OEI-02-01-00641 
adequacy of the financial management system of any applicant for financial assistance as part of 

a preaward review or at any time subsequent to the award. 

Awarding and Monitoring Subawards Under Federal Grants, a training manual used by 

Federal grants personnel, further suggests three documents that the grantee may use to monitor 

subgrantee progress: the contract (also called the subaward document), the progress report, 

and the financial report. Specifically, it states: 

• The subaward document forms a baseline for assessing subrecipient performance and 

compliance (Chapter 5.1) 

• The program report is the primary means of communication between the subrecipient 

and the pass-through entity program staff. The progress report’s main function is to 

explain the subrecipient’s progress (or lack thereof) toward achieving the goals 

established in the approved application (Chapter 6.3.1) 

• The financial report should always be read in conjunction with progress reports 

covering the same period to ensure the two match up (Chapter 6.3.2) 

This manual also includes site visits as a mechanism that agencies can use to monitor 

subrecipients. Specifically, site visits determine compliance or noncompliance with the terms 

and conditions of the grant award, verify information received in reports, and provide an 

opportunity to counsel the subrecipient in ways to remedy deficiencies (Chapter 6.2). 

OIG Oversight Framework 

As part of its focus on grants oversight, OIG has developed an oversight framework that 

establishes monitoring fundamentals for Federal grants (see Appendix B). This framework is 

based on the Grants Administration Manual and Awarding and Monitoring Subawards 

Under Federal Grants. The framework focuses on four areas: (1) requirements developed 

by the operating division that address program and financial progress; (2) reports generated by 

the grantee that are collected by the operating division; (3) review and verification of report 

information; and (4) enforcement authority used by the operating division to address identified 

issues. We used this framework to assess HRSA’s oversight of the Title I and Title II grantees. 

METHODOLOGY and ANALYSIS 

To assess Title I and Title II grantees’ monitoring of subgrantees, we compared how grantees 

are monitoring their subgrantees to the training manual guidelines, Federal requirements, and our 

oversight framework. We present our findings for Title I and Title II together, because grantees 

from both Titles are expected to monitor their subgrantees similarly, and because the general 

findings apply to both Titles. We highlight differences between Title I and Title II, when 

appropriate. Note that for the purposes of this report, we use the term subgrantees to refer to 

all sub-awardees of a grantee. 

Grantee Monitoring of Subgrantees 4 OEI-02-01-00641 
We collected information about how Title I and Title II grantees monitor subgrantees from 

several data sources: (1) a review of documents of 100 subgrantees from 20 grantees, (2) 

interviews with these 20 grantees, (3) interviews with the 17 project officers who are 

responsible for these grantees, and (4) interviews with HRSA program officials. 

Selection of Grantees 

This inspection is based on 10 Title I and 10 Title II grantees. We selected these grantees 

based on several factors. Specifically, we ranked each grantee according to funding level and 

grant longevity, and selected 5 grantees that were in the upper 10 and 5 in the lower 10 for 

each factor and from each Title. Further, we aimed to select at least one grantee from each 

area where HRSA has a regional office. We also included an eligible metropolitan area and its 

corresponding State for half of the grantees, and we made an effort to minimize our overlap 

with the grantees that were selected by the Office of Audit Services. We did not select the 

grantees based on their performance. In total, the 20 selected grantees represent 38 percent of 

Title I funds and 41 percent of Title II funds. They include the following: 

Title I 

Los Angeles, CA

Atlanta, GA

Minneapolis, MN

Philadelphia, PA

New York, NY

Kansas City, MO

West Palm Beach, FL

Norfolk, VA

Seattle, WA

Las Vegas, NV

Title II 

California 

Georgia 

Minnesota 

Pennsylvania 

New York 

Alabama 

Massachusetts 

New Mexico 

South Carolina 

Utah 

To select the 100 subgrantees, we asked each grantee for a list of all of their subgrantees. We 

then selected 5 subgrantees from each grantee for a total of 100 subgrantees. When possible, 

we selected two subgrantees that had been identified by the grantee as having a concern or a 

corrective action plan in place. We also took into consideration that Title II grantees may rely 

on consortia to monitor subgrantees. In these cases, we selected two of the grantees’ consortia 

and selected a total of five subgrantees from them. 

Document Review 

We reviewed key documents to assess grantees’ monitoring of subgrantees. To do this, we 

requested documentation for FY 2000 from each grantee or consortium for the 5 selected 

subgrantees. We specifically requested copies of any contracts or formal agreements, program 

reports, fiscal reports, site visit reports, audits, and any other 

Grantee Monitoring of Subgrantees 5 OEI-02-01-00641 
documentation used to monitor subgrantees. We also asked for any existing corrective action 

plans. We reviewed these documents using a structured instrument and analyzed them using a 

statistical analysis software program (SAS). 

Interviews 

We conducted interviews with the 20 selected Title I and Title II grantees. We asked each 

grantee about how they monitor their subgrantees, and how they identify and address 

subgrantee issues. We conducted interviews with consortia when the grantee relied on them to 

monitor subgrantees. These interviews were completed between March and May 2002. 

We also conducted interviews with the 17 project officers who were responsible for monitoring 

the 20 selected grantees. In total, at the time the inspection was conducted, there were 12 Title 

I project officers and 30 Title II project officers.1 Eight of these project officers that we 

interviewed were from Title I, and nine were from Title II. These project officers were 

responsible for monitoring a total of 38 of all 51 Title I grantees and 21 of all 54 Title II 

grantees. In our interviews, we asked project officers how they monitor their grantees and 

subgrantees, and how they identify and address any issues. We conducted these interviews in 

April 2002. 

Finally, we interviewed key program officials at the HIV/AIDS Bureau and at the former Office 

of Field Operations. These interviews provided mostly background information about Title I 

and Title II and how the programs are administered. We conducted these interviews in 

December 2001. 

Standards 

We conducted this inspection in accordance with the Quality Standards for Inspections 

issued by the President’s Council on Integrity and Efficiency. 

1

 These numbers are based on the information provided by the HIV/AIDS Bureau as of November 2001. 

Grantee Monitoring of Subgrantees 6 OEI-02-01-00641
FINDINGS 

Grantees’ monitoring of subgrantees is limited 

We found that 15 of the 20 selected grantees did not have comprehensive documentation to 

demonstrate that they are monitoring their subgrantees systematically. We determined that 

three key documents, a contract or formal agreement, a program report, and a fiscal report 

would provide minimum monitoring information. These grantees did not have all three 

documents needed to monitor their five selected subgrantees, and two of these grantees did not 

have all three documents for any of their five subgrantees. Grantees did not have these 3 

documents for a total of 41 of the 100 subgrantees that we reviewed (see Appendix C). 

Program reports. Not all grantees had program reports for each of their subgrantees. 

Specifically, 2 of the 20 grantees did not have a program report for any of their 5 subgrantees 

that we reviewed (see Figure 2). Another six grantees did not have such documentation for 

between one and four of their subgrantees. In total, program reports were missing for 23 of the 

100 subgrantees. Program reports commonly included goals and objectives, client 

demographics, client and service utilization data, and program narratives. Without a program 

report, the grantee cannot monitor the extent to which subgrantees have met program goals and 

objectives, nor can the grantee detect problems early. 

Figure 2: Grantees that Did Not Have Program Reports 

Number of Subgrantees Missing Reports 

Five Four Three Two One 

Number of grantees that did not 

have all program reports (n=20) 2 1 1 2 2 

Source: OEI Documentation Review, 2002 

Even though not all had program reports for their subgrantees, all 20 selected grantees report 

that they require their subgrantees or consortia to submit program reports at least quarterly. 

Grantees commonly report that they use program reports to track subgrantees’ progress 

toward meeting goals and objectives. They also reconcile program reports with the 

subgrantees’ fiscal reports and assess whether the subgrantee is performing at the level stated in 

their contract. Three mention using program reports to assess technical assistance needs, and 

one adds that they use them to gather information on barriers and accomplishments. 

In addition, grantees report that they require subgrantees to submit data on client characteristics 

and services rendered. Grantees then compile the data for the Annual 

Grantee Monitoring of Subgrantees 7 OEI-02-01-00641 
Administrative Report that they are required to submit to HRSA. Not all grantees report using 

the data to monitor subgrantees. Fifteen of 20 grantees use the data to help make funding 

decisions or to track clients and services. Grantees do not typically provide the data to their 

subgrantees to help them gauge their own performance. 

Fiscal reports. Not all grantees had fiscal reports for each of their subgrantees (see Figure 3). 

Eleven grantees did not have a fiscal report, invoices, or vouchers for between one and four of 

their subgrantees. In total, fiscal reports were missing for 20 of the 100 subgrantees. Fiscal 

reports most commonly included spreadsheets that matched expenditures with proposed 

budgets as well as invoices and vouchers. Without the subgrantee fiscal reports, the grantee 

cannot track whether expenditures are consistent with performance and correspond to the 

approved agreement. 

Figure 3: Grantees that Did Not Have Fiscal Reports 

Number of Subgrantees Missing Reports 

Five Four Three Two One 

Number of grantees that did not 

have all fiscal reports (n=20) 0 1 1 4 5 

Source: OEI Documentation Review, 2002 

Even though grantees could not supply fiscal reports for each of their subgrantees, all 20 of the 

grantees report that they require their subgrantees to submit fiscal reports and/or invoices. 

Sixteen of the 20 grantees require subgrantees to submit fiscal reports along with the 

accompanying invoices. The remaining four grantees require subgrantees to submit either 

invoices or a fiscal report. Most grantees (16) require fiscal reports on a monthly basis or 

quarterly basis. They use these reports to track subgrantees’ fiscal performance by matching 

their expenditures to the proposed budgets that they submit at the start of the grant cycle. 

Grantees also use fiscal reports to monitor overspending and underspending, and whether funds 

are being distributed in a timely manner. 

Formal agreements. Not all grantees had a contract or formal agreement for each of their 

five subgrantees that we reviewed (see Figure 4). Seven grantees did not have a contract or 

agreement for between one and four of their subgrantees. In total, grantees did not have such 

documentation for 14 of the 100 subgrantees. Of the grantees with documentation, 80 of the 

100 subgrantees had a contract, contract renewal, or contract amendment, and 6 had a notice 

of award or memo of understanding. Without a contract or formal agreement, the grantee 

cannot ensure that the subgrantee is meeting program requirements. 

Grantee Monitoring of Subgrantees 8 OEI-02-01-00641 
Figure 4: Grantees that Did Not Have Contracts or Formal Agreements 

Number of Subgrantees Missing 

Reports 

Five Four Three Two One 

Number of grantees that did not 

have all contracts (n=20) 0 1 1 2 3 

Source: OEI Documentation Review, 2002 

Even though not all grantees had a contract or formal agreement for all five of their subgrantees, 

grantees commonly report that they use the contract to monitor subgrantees’ program and fiscal 

performance. They mention matching expenditures to proposed budgets included in the contract 

agreement. They also report using the contract to ensure that subgrantees are adhering to the 

required administrative caps, that subgrantees are serving only eligible clients, and that 

subgrantees are meeting the payer of last resort requirements. 

Site visits. In addition to three key documents necessary for subgrantee monitoring, we also 

determined whether grantees conducted site visits of subgrantees. We found that not all 

grantees had site visit reports for each of the five subgrantees that we reviewed (see Figure 5). 

Three of the 20 grantees did not have a site visit report documenting that they visited any of their 

5 subgrantees. Another 13 grantees could not document site visits for between 1 and 4 of their 

subgrantees. In total, grantees did not have site visit reports for 42 of the 100 subgrantees. 

Without a routine site visit and the accompanying documentation, the grantee cannot verify the 

program and fiscal information submitted by the subgrantee during the grant cycle. 

Further, our review of the site visit reports that grantees submitted shows that grantees conduct a 

wide range of activities on-site. Grantees may review subgrantees’ records, including financial 

statements and program objectives, conduct chart reviews and/or desk audits, meet with 

directors and program staff and/or clients, hold discussions with grantees about barriers and 

accomplishments, or assess technical assistance needs. 

Figure 5: Grantees that Did Not Have Site Visit Reports 

Number of Subgrantees Missing 

Reports 

Five Four Three Two One 

Number of grantees that did not 

have all site visit reports (n=20) 3 3 1 3 6 

Source: OEI Documentation Review, 2002 

Grantee Monitoring of Subgrantees 9 OEI-02-01-00641 
When questioned about site visits of subgrantees, 15 of the 20 selected grantees report that 

they conduct site visits at least annually. Several note that they aim to do this, but that it is 

difficult. As one grantee notes, they were only able to visit agencies with problems last year, 

not the “great job” agencies. Thirteen of the 20 grantees report that they review client records 

and fiscal records on-site to monitor subgrantees. Additionally, 17 grantees report that they 

conduct non-routine site visits of grantees. They use these visits to attend meetings, assess 

technical assistance needs, respond to grantees’ concerns, and follow up on any issues. 

Close Contact. We found that all 20 grantees believe that their monitoring of subgrantees is 

effective. They attribute their effectiveness to having strong relationships and close contact with 

their subgrantees. Ten grantees report meeting with subgrantees and/or consumers at least 

quarterly. One grantee noted that the community is relatively small, and subgrantees do not 

hesitate to call. Another two grantees commented that they are very involved and consult with 

their subgrantees on a daily basis. 

Nevertheless, grantees are aware of some subgrantee problems 

Despite limited monitoring, grantees have identified some problems that their subgrantees are 

facing. Based on our review of the documents, the 20 selected grantees had evidence of issues 

for 78 of the 100 subgrantees. We are not able to determine whether grantees had evidence of 

all problems that subgrantees were facing, but we do know that when grantees were monitoring 

they were aware of and documented some issues. 

Specifically, grantees had corrective action plans that address specific issues for 19 of the 100 

selected subgrantees. Grantees had audits that included findings for 10 of the 100 subgrantees. 

Grantees had program, fiscal, and site visit reports that highlighted issues for other subgrantees. 

Examples of the issues that were identified include inadequate staffing, late submission of 

required documents, failure to maintain accounting records on a current basis, and failure to tag 

fixed assets with a unique identification number that allows them to be tracked by auditors. 

Issues that generated a corrective action plan included reallocation of funds following client 

complaints, missing signatures, and triple-billing for services. 

Despite identifying subgrantee issues, grantees emphasize that they do not have serious 

concerns with any of their current subgrantees. When asked about whether they have had any 

serious issues with any of their subgrantees, grantees note that only eight of all their current 

subgrantees have ever had a serious issue. Additionally, four grantees report ever having 

suspected any of their subgrantees of misuse. This misuse includes insufficient documentation, 

payment for inappropriate services, poorly tracking personnel time, and a double set of books. 

All four took action in response, and two resulted in funds being reimbursed. 

Grantees also appear to rarely have taken action against subgrantees that are not meeting 

program requirements. Our document review shows that 1 grantee terminated a subcontract 

with only 1 of the 100 selected subgrantees in FY 2000 for failing to submit required 

documentation. When asked if they had ever taken any enforcement actions 

Grantee Monitoring of Subgrantees 10 OEI-02-01-00641 
against a grantee, five grantees report terminating subgrantee contracts for failing to meet 

contract goals. Three grantees report having drawn down the amount a subgrantee can expend 

each month as a means of corrective action. Six have withheld payment or disallowed payment 

as a means of ensuring compliance. Other actions that have been taken include terminating the 

executive director, increasing the frequency of site visits, and moving a subgrantee from unitcost payment to reimbursement. 

HRSA does not always require grantees to report how they monitor

subgrantees, and HRSA does not systematically monitor grantee

oversight of subgrantees 

HRSA allows Title I and Title II grantees to establish their own standards for how they monitor 

their subgrantees, provided they adhere to Federal requirements. Grantees are required to 

describe how they monitor their subgrantees in the Title-specific grant application. Grantees 

are also required to submit signed assurances as part of the application, and HRSA relies on 

these assurances to ensure grantees are adhering to application guidelines. 

However, HRSA does not require grantees to provide monitoring information in all instances. 

In FY 2002 Title I guidance, HRSA required grantees to describe their monitoring of 

subgrantees in order to apply for the supplemental portion of the grant only. In FY 2002 Title 

II guidance, HRSA required grantees to describe their fiscal and program monitoring only if 

the information has changed since their last submission. 

HRSA requires different information from Title I and Title II grantees on their monitoring of 

subgrantees. In the FY 2002 Title I application, HRSA asked grantees to describe the 

frequency of and protocols for site visits, reporting, and corrective actions for both the program 

and fiscal monitoring of their subgrantees. In the Title II application, HRSA asked grantees to 

describe the frequency of required fiscal reports and their contents, and the frequency of site 

visits. Grantees were also asked to provide information describing the process of initiating 

corrective actions and addressing audit findings. Regarding their program monitoring, the 

guidance asked grantees to “describe the State’s/territory’s requirements for reporting and 

monitoring rates of utilization of funds by contractor/subcontractors, including how the 

State/territory takes action if contractors or consortia are in noncompliance with programmatic 

and fiscal reporting.” 

Further, HRSA does not appear to use the information that Title I or Title II grantees provide in 

order to monitor grantees’ oversight of subgrantees. As detailed in the companion report, 

Monitoring of Ryan White CARE Act Title I and Title II Grantees, OEI-02-01-00640, 

project officers report that they do not typically focus on grantees’ monitoring of subgrantees. 

This is also confirmed by the grantees that we interviewed. Further, one HRSA official notes 

that they do not see monitoring grantees’ oversight of their subgrantees as part of HRSA’s 

responsibility, and that relying on the signed assurances from grantees is adequate. 

Grantee Monitoring of Subgrantees 11 OEI-02-01-00641 
RECOMMENDATIONS 

The findings are based on documents from 100 subgrantees from 20 grantees. These 20 

grantees receive 38 percent of all Title I funds and 41 percent of all Title II funds. The 

inconsistencies in monitoring that we found with the grantees reviewed suggest that Title I and 

Title II grantees’ monitoring of subgrantees needs to be strengthened. We are aware that since 

this inspection was conducted, HRSA has consolidated its grants management offices, 

relocated most Title II monitoring responsibilities from regional offices to headquarters, and 

redefined the Office of Field Operations as the Office of Performance Review. These changes 

may better position the agency to address the following recommendations. Specifically, we 

recommend that HRSA: 

• Set standards for grantees’ monitoring of subgrantees that, at a minimum, require a 

contract or formal agreement, a program report, and a fiscal report, and some 

consideration of regular site visits 

• Require grantees to report how they monitor their subgrantees in accordance with these 

standards as part of every application 

• Increase efforts to monitor grantees’ oversight of subgrantees, including using 

information grantees report to HRSA regarding subgrantee activities 

Agency Comments 

We received comments on our draft report from HRSA. The full text of these comments can 

be found in Attachment D. HRSA concurs with all but one of our recommendations, and adds 

that significant administrative changes have occurred since this inspection was conducted. 

These changes may better position the agency to address the grantee monitoring activities 

discussed in this report. 

HRSA did not fully concur with the original OIG recommendation as it appeared in our draft 

report and required grantees to report how they monitor their subgrantees as a part of every 

annual application. In its comments to the Inspector General, HRSA reports that starting with 

the fiscal year 2004 grant guidance, they will require Title II grantees to submit a 

comprehensive application every other year instead of annually. As such, we have reworded 

this recommendation to reflect this new policy, and now OIG recommends that HRSA require 

grantees to report subgrantee monitoring information in every application. 

Grantee Monitoring of Subgrantees 12 OEI-02-01-00641 
Appendix A 

HRSA/HAB ORGANIZATIONAL STRUCTURE

HRSA STAFF OFFICES 

Office of Communications 

Office of Equal Opportunity and Civil Rights 

Office of Management and Program Support 

Office of Legislation 

Office of Planning and Evaluation 

Office of Information Technology 

Office of Performance Review* 

Office of Minority Health 

Officer of Rural Health Policy 

Office of Special Programs 

Office of Financial Policy and Oversight 

Office of International Health Affairs 

*formerly Office of Field Operations 

Bureau of 

Primary Health 

Care 

Bureau of 

Health 

HIV/AIDS 

Bureau 

Maternal and Child 

Health Bureau 

Office of Program Support 

Office of Policy and Program 

Development 

Office of Science and 

Epidemiology 

Office for the Advancement 

of Telehealth 

Administrator 

Division of Service 

Systems 

Division of Community Based 

Programs 

Division of Training and 

Technical Assistance 

Grantee Monitoring of Subgrantees 13 OEI-02-01-00641 
Appendix B 

OIG Grants Oversight Framework 

Requirements 

• What performance and financial requirements have the Operating Division developed 

for the grantee? 

• Do grantees receive the performance and financial requirements? 

• Do grantees fully understand the performance and financial requirements? 

Reports 

• Are performance and financial reports received in a timely manner? 

• Are performance and financial reports clearly presented and complete? 

• Are audits completed in a timely fashion? 

• Is the Operating Division sharing reports, as appropriate, with the Department and 

Office of Audit Services? 

Reviews 

• Has the Operating Division designated responsibilities for the grants management and 

program officers? 

• Are performance and financial reports reviewed in a timely fashion? 

• Are there criteria for evaluating performance and financial reports? 

• How is information in performance and financial reports verified? 

• Are site visits conducted on schedule, with standard guidelines? 

• What other contact/ communication is there between grantee and Operating Division? 

Enforcement 

• What enforcement authority does the Operating Division have? 

• Are there standards for addressing identified problems? 

• What actions has the Operating Division taken to address problems with grantees? 

Grantee Monitoring of Subgrantees 14 OEI-02-01-00641 
Appendix C 

Grantee Monitoring Documents Provided 

for Sampled Subgrantees 

X= Documents contained in the subgrantee file maintained by the grantee. 

ID Subgrantee 

Number 

Program Report Fiscal Report Contract/ 

Agreement 

Site Visit Report 

Grantee 1 1 X X X 

2 X X X 

3 X X X 

4 X X X X 

5 X X X X 

Grantee 2 1 X 

2 X X 

3 X X 

4 X X 

5 X X X X 

Grantee 3 1 X X X 

2 X X X 

3 X X X X 

4 X X X X 

5 X X X 

Grantee 4 1 X X X X 

2 X X X X 

3 X X X X 

4 X X X X 

5 X X X X 

Grantee 5 1 X X X X 

2 X X X X 

3 X X X X 

4 X X X 

5 X X X X 

Grantee 6 1 X X X X 

2 X X X X 

3 X X X X 

4 X X X X 

5 X X X 

Grantee Monitoring of Subgrantees 15 OEI-02-01-00641 
ID Subgrantee 

Number 

Program Report Fiscal Report Contract/ 

Agreement 

Site Visit Report 

Grantee 7 1 X X X 

2 X X X 

3 X X X 

4 X X X 

5 X X X 

Grantee 8 1 X X X 

2 X X 

3 X X X 

4 X X X 

5 X X X X 

Grantee 9 1 X X 

2 X X X 

3 X X 

4 X X 

5 X X 

Grantee 10 1 X X X X 

2 X X X X 

3 X X X 

4 X X X 

5 X X X X 

Grantee 11 1 X X 

2 X X X 

3 X X X 

4 

5 

Grantee 12 1 X X X 

2 X X X X 

3 X X X 

4 X X X 

5 X X X 

Grantee 13 1 X 

2 X X 

3 X X 

4 X X X 

5 X X 

Grantee 14 1 X X 

2 X X X X 

3 X X X 

4 X X 

5 X X 

Grantee Monitoring of Subgrantees 16 OEI-02-01-00641 
ID Subgrantee 

Number 

Program Report Fiscal Report Contract/ 

Agreement 

Site Visit Report 

Grantee 15 1 X X X X 

2 X X X X 

3 X X X 

4 X X X X 

5 X 

Grantee 16 1 X X X X 

2 X X X 

3 X X X X 

4 X X X X 

5 X X X X 

Grantee 17 1 X X X X 

2 X X X X 

3 X X X X 

4 X X X 

5 X X X 

Grantee 18 1 X X 

2 X 

3 X X X X 

4 X X X X 

5 X X X 

Grantee 19 1 X X X X 

2 X X X 

3 X X 

4 X X X 

5 X X 

Grantee 20 1 X X 

2 X X 

3 X X 

4 X X X 

5 X X 

Subgrantees that had these 

documents 

77 80 86 58 

Grantee Monitoring of Subgrantees 17 OEI-02-01-00641 
Appendix D 

Agency Comment 

In this appendix, we present the full text of comments from the Health Resources and Services 

Administration (HRSA). 

Grantee Monitoring of Subgrantees 18 OEI-02-01-00641 
Grantee Monitoring of Subgrantees 19 OEI-02-01-00641 
Grantee Monitoring of Subgrantees 
Grantee Monitoring of Subgrantees 21 OEI-02-01-00641 
Grantee Monitoring of Subgrantees 22 OEI-02-01-00641 
Grantee Monitoring of Subgrantees 23 OEI-02-01-00641 
ACKNOWLEDGMENTS 

This report was prepared under the direction of John I. Molnar, Regional Inspector General for 

Evaluation and Inspections in New York, and Jodi D. Nudelman, Assistant Regional Inspector 

General. Other principal Office of Evaluation and Inspections staff who contributed include: 

Vincent Greiber, Project Leader Alan Levine, Program Specialist 

Grantee Monitoring of Subgrantees 24 OEI-02-01-00641