Source: https://oig.justice.gov/reports/plus/a0705/findings.htm
Timestamp: 2018-01-22 20:27:17
Document Index: 476612720

Matched Legal Cases: ['art 1', 'ART 1', 'art 2', 'ART 2', 'art 3', 'ART 3', 'art 4', 'ART 4', 'art 5', 'ART 5', '§66', '§66', '§66', '§ 66', '§66']

I. TIMELINESS OF GRANT CLOSEOUT
DOJ has substantially failed to ensure that grants were closed in a timely manner, within 6 months after the grant end date as required by federal regulation and agency policy. We reviewed 44,197 closed grants totaling $17.61 billion, of which only 13 percent were closed within 6 months after the grant end date. We also identified a backlog of 12,505 expired grants more than 6 months past the grant end date that had not been closed, of which 67 percent had been expired for more than 2 years. Grant closeout is the final point of accountability. If grants are not closed in a timely manner, non-compliant grantees may not be identified until years after the grant end date. Our review of 37 non compliant grantees revealed that the grantees were awarded 129 additional grants, totaling $106.04 million, during the period of non compliance.
Timely grant closeout is an essential program management practice to identify grantees that have failed to comply with all grant requirements, and provide assistance to grantees prior to awarding subsequent grants. Further, timely grant closeout is also an essential financial management practice to identify any excess and unallowable funds that the awarding agency must ensure are returned by the grantee. Timely grant closeout also ensures that any unused funds are deobligated and thereby available to provide DOJ with additional resources needed to fund other programs, or returned to the federal government’s general fund. 18
As part of the closeout process, the awarding agencies are required to ensure that grantees have complied with the programmatic and financial requirements of the grant. If it is determined during the grant closeout process that a grantee has failed to comply with all programmatic and financial requirements of the grant, it is the responsibility of the awarding agencies to provide timely assistance to the grantee to ensure grant requirements are met.
Additionally, timely closeout is important because, according to federal regulations, grantees are only required to maintain financial records, supporting documents, statistical records, and all other records pertinent to the grant for a period of 3 years from the date that the final financial report was submitted. If grants are not closed in a timely manner, it may be years before the DOJ awarding agency identifies grantees who have failed to comply with programmatic and financial grant requirements at which time the grantee may no longer be required to maintain the records necessary to resolve any compliance issues. An awarding agency can close a grant administratively if the grantee fails to provide the required documents, is no longer a valid operating entity, is non-responsive, or fails to cooperate.
Grant Closeout Policy
OJP and OVW policy require that grants be closed within 6 months after the grant end date. According to the COPS Closeout Policy and Procedures Manual, dated August 31, 2004, absent an authorized no-cost extension of time, timely and accurate closing of grants should begin following the end date and within a reasonable amount of time as determined by COPS. Since COPS policy does not have a specific timeframe in which expired grants should be closed, we also applied the 6-month timeframe in our analysis of COPS grants.
As stated in the Introduction of this report, the timely closeout of expired grants has been a long-standing problem within DOJ. As a result, t o determine whether DOJ is closing expired grants in a timely manner, we requested a list of all expired grants that had not been closed from COPS, OJP, and OVW, as well as, a list of all grants closed during FYs 1999 through 200 5. Our review included 60,933 expired COPS, OJP, and OVW grants totaling $25.02 billion. These grants consisted of 44,197 grants totaling $17.61 billion that were closed during October 1997 through December 2005, and 16,736 expired grants totaling $7.41 billion that had not been closed as of December 2005. The details of our universe related to COPS, OJP, and OVW is shown in Table 2.
TABLE 2. EXPIRED DOJ GRANTS UNIVERSE (Dollars in Billions)
No. of Closed Grants
No. of Expired Grants Not Closed
Funding for Closed Grants
Funding for Expired Grants Not Closed
TOTAL FUNDING19
Source: COPS, OJP, and OVW lists of closed and expired grants
For each grant in our universe, we identified the grants that had been closed. For closed grants, we reviewed the closeout date to determine whether the grant was closed within 6 months of the grant expiration. Our analysis of the timeliness of COPS, OJP, and OVW grant closeout processes follows.
Based on our review of the 44,197 closed grants totaling $17.61 billion, we found that:
only 5,664 grants (13 percent) were closed in a timely manner, within 6 months after the grant end date,
22,875 grants (52 percent) were not closed until more than 2 years after the grant end date, and
4,096 grants (9 percent) were not closed until more than 5 years after the grant end date.
The following sections include the results of our analysis of the closed grants as it pertains to COPS, OJP, and OVW.
Our audit included 12,840 closed COPS grants totaling $2.98 billion. We found that only 135 grants (1 percent) were closed within 6 months after the grant end date. As shown in Table 3, COPS failed to close 12,705 grants (99 percent) within 6 months after the grant end date.
TABLE 3. ANALYSIS OF CLOSED COPS GRANTS
NO. OF MONTHS TO
Source: COPS list of closed grants
We also found that 10,629 COPS grants (83 percent) were not closed until more than 2 years after the grant end date and 1,063 COPS grants (8 percent) were not closed until more than 5 years after the grant end date. We determined that on average, these grants had been expired for more than 3 years before they were closed out by COPS.
As shown in Table 4, we also analyzed the closed COPS grants to determine whether there has been any improvement in the timeliness of grant closeout from 1998 through 2005.
TABLE 4. ANALYSIS OF CLOSED COPS GRANTS BY YEAR
AVG. NO. OF YEARS
PAST END DATE
As noted above, COPS has shown some improvement in the timeliness of its grant closeout process. On average, the grants closed in 1998 had been expired for less than 1 year before they were closed out; conversely, the grants closed in 2003 had been expired on average for 4 years before they were closed. Since 2003 it appears that COPS has improved the timeliness of its grant closeout, because the grants closed in 2005 had only been expired on average for 2.8 years, 1.2 years less than the grants closed in 2003. Although COPS has improved the timeliness of its grant closeout, significant improvements are still needed to ensure that COPS grants are closed within 6 months after the grant end date.
Our audit included 30,488 closed OJP grants totaling $13.92 billion. We found that only 5,419 grants (18 percent) were closed within 6 months after the grant end date as required by OJP policy. As shown in Table 5, OJP failed to close 25,069 grants (82 percent) within 6 months after the grant end date.
TABLE 5. ANALYSIS OF CLOSED OJP GRANTS
Source: OJP list of closed grants
We also found that 11,957 OJP grants (39 percent) were not closed until more than 2 years after the grant end date and 2,986 OJP grants (10 percent) were not closed until more than 5 years after the grant end date. We determined that on average, these grants had been expired for more than 2 years before they were closed out by OJP.
As shown in Table 6, we also analyzed the closed OJP grants to determine whether there has been any improvement in the timeliness of grant closeout from 1998 through 2005.
TABLE 6. ANALYSIS OF CLOSED OJP GRANTS BY YEAR
30,28920
As shown above, OJP has made some recent improvement in the timeliness of its grant closeout. On average, the grants closed in 1998 had been expired for 1.3 years before they were closed out; conversely, the grants closed in 2004 had been expired on average for 2.6 years before they were closed out. Since 2004 it appears that OJP has significantly improved the timeliness of its grant closeout, because the grants closed in 2005 had only been expired on average for 1.5 years, 1.1 years less than the grants closed in 2004. Although OJP has improved the timeliness of its grant closeout, significant improvements are still needed to ensure that OJP grants are closed within 6 months after the grant end date.
Our audit included 869 closed OVW grants totaling $712.98 million. We found that only 110 grants (13 percent) were closed within 6 months after the grant end date. As shown in Table 7, OVW failed to close 759 grants (87 percent) within 6 months after the grant end date.
TABLE 7. ANALYSIS OF CLOSED OVW GRANTS
Source: OVW list of closed grants
We also found that 289 OVW grants (33 percent) were not closed until more than 2 years after the grant end date and 47 OVW grants (5 percent) were not closed until more than 5 years after the grant end date. We determined that on average, these grants had been expired for more than 1.5 years before they were closed out by OVW.
As shown in Table 8, we also analyzed the closed OVW grants to determine whether there has been any improvement in the timeliness of the grant closeout process from 1998 through 2005.
TABLE 8. ANALYSIS OF CLOSED OVW GRANTS BY YEAR
As shown above, OVW has shown recent improvement in the timeliness of its grant closeout process. The grant closed in 1998 had been expired for less than 6 months before it was closed out; conversely, the grants closed in 2004 had been expired on average for 2.2 years before they were closed out. Since 2004 it appears that OVW has improved the timeliness of its grant closeout, because the grants closed in 2005 had only been expired on average for 1.3 years, 0.9 years less than the grants closed in 2004. Although OVW has improved the timeliness of its grant closeout, significant improvements are still needed to ensure that OVW grants are closed within 6 months after the grant end date.
Priority of Grant Closeout
Although, COPS, OJP, and OVW have made improvements in the timeliness of grant closeout, significant improvements are still needed to ensure that grants are closed within 6 months after the grant end date. Nonetheless, it appears that since 2002 grant closeout has become a greater priority within DOJ. As shown in Chart 1, the number of grants closed each year greatly increased in 2002.
CHART 1. NUMBER OF DOJ GRANTS CLOSED BETWEEN FYS 1998 AND 2005
Source: COPS, OJP, and OVW lists of closed grants between 1998 and 2005
of the 12,840 COPS grants that had been closed, only 810 grants (6 percent) were closed between 1998 and 2001, while 12,030 (94 percent) were closed between 2002 and 2005;
of the 30,289 OJP grants that had been closed, only 3,126 grants (10 percent) were closed between 1998 and 2001, while 27,163 (90 percent) were closed between 2002 and 2005; and
of the 868 OVW grants that had been closed, 53 grants (6 percent) were closed between 1998 and 2001, while 815 (94 percent) were closed between 2002 and 2005.
Despite the fact that COPS, OJP, and OVW have made improvements in the timeliness of grant closeout and the number of grants closed each year, we found that a significant backlog of expired grants still exists.
Expired Grants That Have Not Been Closed
Based on our review of the 16,736 expired DOJ grants totaling $7.40 billion that had not been closed, we found that:
12,505 grants (75 percent) were more than 6 months past the grant end date,
8,359 grants (50 percent) were more than 2 years past the grant end date, and
2,443 grants (15 percent) were more than 5 years past the grant end date.
The following sections include the results of our analysis of the expired COPS, OJP and OVW grants that have not been closed.
Our audit included 10,603 expired COPS grants totaling $3.49 billion that had not been closed. As shown in Table 9, we found that COPS failed to close a total of 9,489 grants, despite the fact that the grants were more than 6 months past the grant end date.
EXPIRED COPS GRANTS THAT HAVE NOT BEEN CLOSED
We also found that 6,861 COPS grants (72 percent) had been expired more than 2 years but had not been closed, and 2,318 COPS grants (24 percent) had been expired more than 5 years but had not been closed. We determined that on average these grants had been expired for more than 3.5 years without being closed by COPS.
Our audit included 5,452 expired OJP grants totaling $3.31 billion that had not been closed. As shown in Table 10, we found that OJP failed to close a total of 2,646 grants, despite the fact that the grants were more than 6 months past the grant end date.
EXPIRED OJP GRANTS THAT HAVE NOT BEEN CLOSED
We also found that 1,424 OJP grants (54 percent) had been expired more than 2 years but had not been closed, and 110 OJP grants (4 percent) had been expired more than 5 years but had not been closed. We determined that on average these grants had been expired for more than 2 years without being closed by OJP.
Our audit included 681 expired OVW grants totaling $603.51 million that had not been closed. As shown in Table 11, we found that OVW failed to close a total of 370 grants, despite the fact that the grants were more than 6 months past the grant end date.
EXPIRED OVW GRANTS THAT HAVE NOT BEEN CLOSED
We also found that 74 OVW grants (20 percent) had been expired more than 2 years but had not been closed, and 15 OVW grants (4 percent) had been expired more than 5 years but had not been closed. We determined that on average these grants had been expired for more than 1.5 years without being closed by OVW.
Expired Grants Backlog
To determine the reasons for the delay in the closeout process, we selected a judgmental sample of 30 COPS, OJP, and OVW grants (for a total sample of 90 grants) that had been expired for more than 6 months but had not been closed. If the delay in the closeout process was due to grantee non-compliance, such as not submitting final financial and progress reports, we attempted to determine whether COPS, OJP, and OVW had awarded additional grants to the grantee during the period of non‑compliance. Based on our review, we found the following:
COPS indicated that for 20 of the 30 (67 percent) expired grants sampled, the grantee was not compliant with grant requirements. However, between FY 2000 and FY 2006, 10 of the 20 grantees (50 percent) were awarded 39 additional grants totaling $18,786,104 during the period of non-compliance.
OJP indicated that for 15 of the 30 expired grants sampled, which were awarded to 14 grantees, the grantee was not compliant with grant requirements. However, between FY 2000 and FY 2006, the 14 grantees (100 percent) were awarded 83additional grants totaling $71,781,836 during the period of non‑compliance.
OVW indicated that for 2 of the 30 (7 percent) expired grants sampled the grantee was not compliant with grant requirements. However, between FY 2000 and FY 2006, 1 of the 2 grantees was awarded 7 additional grants totaling $15,468,237 during the period of non‑compliance.
Since COPS, OJP, and OVW failed to close out grants in a timely manner, it took on average between 1.8 and 3.3 years before the DOJ awarding agency determined whether the grantee complied with all necessary programmatic and financial requirements of the grant. As a result, non-compliant grantees included in our sample were awarded a total of 129 additional grants totaling $106.04 million.
Agency Estimate of Current Status of Backlog
Since our review of expired grants was as of December 2005, we met with representatives from COPS, OJP, and OVW to determine the current status of the expired grants backlog, and estimated timeframes for eliminating the backlog. Based on our meetings with the DOJ awarding agency officials, we determined the following:
COPS estimates that it currently has a backlog of 5,200 expired grants that have not been closed, which they hope to eliminate by the end of calendar year (CY) 2007.
OJP estimates that it currently has a backlog of 2,700 expired grants that have not been closed, which they hope to eliminate by the end of CY 2006.
OVW estimates that it currently has a backlog of 484 expired grants that have not been closed, which they hope to eliminate by the end of CY 2006.
OIG Analysis of Backlog
We analyzed the backlog of expired grants that had not been closed to determine if it was increasing or decreasing. As shown in Chart 2, the backlog of expired DOJ grants that had not been closed increased by 1,592 grants between FYs 2000 and 2005.
CHART 2. ANALYSIS OF EXPIRED DOJ GRANTS BACKLOG
Source: OIG analysis of expired COPS, OJP, and OVW grants as of FY 2005 and grants awarded between FYs 2000 and 2005
However, the overall backlog of expired grants that have not been closed has decreased by 7,584 grants between FYs 2003 and 2005.
As shown in Chart 3, the backlog of expired COPS grants that had not been closed increased by 2,791 grants between FYs 2000 and 2005.
CHART 3. ANALYSIS OF EXPIRED COPS GRANTS BACKLOG
Source: OIG analysis of expired COPS grants as of FY 2005 and grants awarded between FYs 2000 and 2005
However, the COPS backlog of expired grants that have not been closed has decreased by 3,010 grants between FYs 2003 and 2005.
As shown in Chart 4, the backlog of expired OJP grants that had not been closed decreased by 1,728 grants between FYs 2000 and 2005.
CHART 4. ANALYSIS OF EXPIRED OJP GRANTS BACKLOG
Source: OIG analysis of expired OJP grants as of FY 2005 and grants awarded between FYs 2000 and 2005
However, the OJP backlog of expired grants that have not been closed has decreased by 4,812 grants between FYs 2003 and 2005.
As shown in Chart 5, the backlog of expired OVW grants that had not been closed increased by 529 grants between FYs 2000 and 2005.
CHART 5. ANALYSIS OF EXPIRED OVW GRANTS BACKLOG
Source: OIG analysis of expired OVW grants as of FY 2005 and grants awarded between FYs 2000 and 2005
Additionally, the OVW backlog of expired grants that have not been closed has increased by 238 grants between FYs 2003 and 2005.
While the overall backlog of expired grants that have not been closed increased between FYs 2000 and 2005, the COPS and OJP backlog has decrease since FY 2003. On the other hand, the OVW backlog continues to increase.
Current Closeout Practices
COPS, OJP, and OVW have taken several actions to improve the closeout process and improve the timeliness of grant closeout.
According to COPS, prior to 1998 only a small number of grants were closed. As a result, in 1998 COPS established the Grant Closeout Team within its Grants Administration Division. In 2000, the first formal COPS Closeout Policy and Procedures Manual was developed by the Grant Closeout Team, which was updated in 2002 and 2004. The Closeout Team currently consists of 10 federal employees and 5 contract employees. Only two of the federal employees work exclusively on closeouts; all others serve on a part‑time basis, as they are also responsible for team and state grant advising responsibilities. However, according to COPS, there have been occasions when nearly every member of the COPS Grants Administration Division has been assigned to assist with closeout-related work.
Additionally, COPS created an Expired Grants Project in November 2004 in response to a reportable condition identified during its 2004 financial statement audit to financially close out as many grants as possible. The Expired Grants Project included 1,021 grants of which 425 (42 percent) had been closed at the time of our review.
COPS also developed new closeout policies and procedures to ensure that its grants are closed in accordance with federal guidelines.22 In March 2005, COPS implemented the following expired grant policy and procedures:
COPS Management System database queries are run on a quarterly basis to determine which grants have expired and are ready for closeout.
On a quarterly basis the COPS Finance Division also identifies which grants have expired and are ready for closeout through review of the grantees’ final financial report. An expired grants list is then developed and forwarded to the COPS Grants Administration Division for final determination.
As the final step in the closeout process, the COPS Finance Division completes a financial review of each grant. The purpose of the financial closeout review is to: (1) verify the approved federal share of costs based on the completed grant program costs; (2) account for non‑federal share amounts; (3) determine unobligated amounts under the grant; and (4) determine and make payment available for unliquidated balances owed to the grantee. In this process, the COPS Finance Division ensures that the grantee has submitted a final financial report and that the financial records are reconciled according to federal guidelines.
COPS Finance Division verifies and reconciles the information reported on the final financial report against the programmatic checklist, which certifies full or partial completion of the project. If necessary, grantees are contacted to verify financial information reported.
In addition to checking the required local match of program costs, the final financial report is reconciled to the grant expenditures, disbursements, and obligations.
If the COPS Finance Division’s reconciliation of the final financial report and payment history determines that the grantee has been underpaid the grantee is allowed to draw down the remaining allowable funds. Otherwise, the COPS Finance Division deobligates the grant’s unobligated balance.
The COPS Finance Division also ensures that the grantee’s final financial report is entered into the accounting system and placed in the financial file.
Although we acknowledge these efforts to improve the grant closeout process, we have identified weaknesses in the current COPS policies and practices. For example, COPS policy appears to be reactive rather than proactive in that queries are run on a quarterly basis to determine which grants have expired and are ready for closeout. As a result, grants may be expired for up to 90 days before they are identified by COPS as ready for closeout. In our judgment, COPS should be monitoring the grant end dates to determine which grants will be expiring during the next quarter, rather than waiting until after the grants have expired.
Additionally, we noted that COPS policy does not include timeframes for when specific actions should be completed, including a timeframe for when grants should be closed. In our judgment, COPS policy should ensure that grants are closed within 6 months after the grant end date, and that specific timeframes are established for each task to ensure that grants are closed within the 6 month period.
In September 2005, OJP issued Grant Closeout: Business Improvement Recommendations, Final Version, based on an analysis of its grant closeout process to determine opportunities to reduce the number of expired grants that require closeout and improve the closeout process, which it identified as “burdensome and problematic.”23 Specifically, in its analysis OJP identified numerous areas of concern related to its grant closeout process. For example, inconsistencies exist between OJP and DOJ Closeout Guidelines. In addition to the implemented and proposed revisions to the policies and procedures already in place regarding its grant closeout process, the Business Improvement Recommendations report also included long-term recommendations that OJP plans to implement in the future. See Appendix III for a full list of the concerns and recommendations identified by OJP related to its grant closeout process.
In order to address some of these concerns, OJP implemented or revised many of the policies and procedures already in place regarding its grant closeout process. Specifically, OJP plans to make the following changes to its Grant Managers Manual related to grant closeout:
The due date for the final financial report will be changed from 120 days to 90 days in compliance with 28 C.F.R. §66.41.
The responsibility for the grant closeout process will be moved to the Office of the Assistant Attorney General. The Office of the Assistant Attorney General’s closeout responsibilities will include: (a) administering and enforcing uniform grant closeout policies within OJP, (b) resolving conflicts or disputes pertaining to the grant closeout process, and (c) monitoring and tracking performance of program and support offices related to grant closeout.
The timelines for the grant closeout process will be adjusted to ensure that grants are closed within 6 months of the grant end date. This will correct the confusion related to grant closeout included in OC Policy Statement No. 4031.1B.
Additionally, in April 2006, the OC reorganized in order to streamline and standardize the closeout process. As a result of the reorganization, the OC consolidated its five existing divisions into two new divisions, which they expect will help to eliminate the “disjointed closeout processing steps of the past.”
While OVW is a designated Office, Boards, and Divisions (OBD) within DOJ, it receives all grant related financial services from the OC and therefore follows the financial closeout policies and procedures established by the OC. As a result, the policies and procedures implemented in response to the OJP Business Improvement Recommendations report will directly impact OVW’s closeout process. In addition, a financial analyst from the OC has been detailed to OVW. This analyst participated in the project that resulted in the Business Improvement Recommendations report and has worked closely with OVW program managers on implementing the closeout policies and procedures.
According to an OVW official, over the past few years the closeout process has evolved and been streamlined. This official also stated that:
OVW has provided better training and has coordinated with its program staff responsible for grant closeout.
OVW has put a great deal of emphasis on processing and monitoring of grant closeouts.
In the past OVW did not do a very good job of monitoring grants sent to the OC for financial closeout. However, OVW has been better at tracking communications with the OC to ensure that the OC does its part to officially close out all grants submitted.
Program assistants are focusing more closely on grant closeout and assisting the program managers with the closeout process.
Overall, DOJ substantially failed to ensure that grants were closed in a timely manner, within 6 months after the grant end date. Specifically:
We reviewed 44,197 closed grants totaling $17.61 billion, of which only 13 percent were closed within 6 months after the grant end date.
We identified a backlog of 12,505 expired grants more than 6 months past the grant end date that had not been closed, of which 67 percent had been expired for more than 2 years.
On average, it took between 1.8 and 3.3 years before the DOJ awarding agency determined that grantees had failed to comply with programmatic and financial requirements of the grant.
Thirty-seven non-compliant grantees were awarded 129 additional grants totaling $106.04 million, during the period of non-compliance.
Since 2002, grant closeout has become a greater priority within DOJ and COPS, OJP, and OVW have recently made improvements in the timeliness of grant closeout. However, we have identified weaknesses in the current COPS policy. COPS policy does not include timeframes for when specific actions should be completed, including a timeframe for when grants should be closed.
The timely closeout of grants is an essential financial management practice to identify any excess and unallowable funds that should be returned by the grantee, as well as unused funds that should be deobligated and put to better use. The financial issues related to DOJ’s failure to close out grants in a timely manner are detailed in Findings II and III of this report. However, it should be noted that as a result of DOJ’s failure to close grants timely, we identified questioned costs and funds to be put to better use totaling over $726 million, representing funds that could have been used to provide DOJ with additional resources needed to fund other programs or returned to the federal government’s general fund. About 71 percent of the dollar-related findings occurred more than 6 months after the grant end date. Therefore, in our opinion, the majority of the dollar‑related findings would most likely not have occurred if COPS, OJP, and OVW closed grants in a timely manner.
Revise and fully implement grant closeout policies and procedures to ensure that expired grants are closed within 6 months after the end date.
Ensure that grant closeout policies and procedures include timeframes within which specific actions should be completed, including a requirement that grants must be closed within 6 months after the grant end date.
Fully implement the revisions to the grant closeout policies and procedures based on the recommendations included in the Business Improvement Recommendations report to ensure that expired grants are closed within 6 months after the end date.
We recommend that OVW:
II. DRAWDOWNS ON EXPIRED GRANTS
COPS, OJP, and OVW are not ensuring that grant funds are drawn down within 90 days after the grant end date as required by federal and agency regulations. We reviewed 60,933 expired grants totaling $25.02 billion, and identified questioned costs totaling $554.19 million related to drawdowns that occurred more than 90 days after the grant end date. Through additional testing, we identified unallowable costs for expenditures obligated after the grant end date totaling $142.74 million and unsupported drawdowns totaling $46.52 million.
As part of the closeout process COPS, OJP, and OVW review the final financial report to determine whether: (1) drawdowns are supported by the expenditures reported and that excess funds were not drawn down, (2) reported expenditures exceed drawdowns indicating that the grantee failed to draw down allowable funds within the 90-day liquidation period, and (3) reported expenditures are less than the award amount indicating that the remaining funds should have been deobligated and regranted or returned to the federal government’s general fund, thus reducing the national debt.
Federal regulations require that grantees must draw down all allowable grant funds within 90 days after the grant end date. According to 28 C.F.R. §66.50(b), within 90 days after the expiration of the grant, the grantee must submit the final request for payment (drawdown).24 At the request of the grantee, the DOJ awarding agency may extend this period. Additionally, unless an extension is authorized, any grant funds not drawn down within the 90‑day period should revert back to the DOJ awarding agency to be regranted or returned to the general fund. During the period included in our audit, COPS, OJP, and OVW had the following requirements related to grant drawdowns.25
COPS Grant Owner’s Manuals – Each of the COPS Grant Owner's Manuals requires that grant funds must be obligated before the end of the grant period. The manuals also require that grantees request reimbursement for obligated funds within 90 days after the end of the grant period.
OJP Financial Guide – The OJP Financial Guide requires that block, formula, and discretionary funds that have been properly obligated by the end of the grant period should be liquidated (expended) within 90 days from the end of the grant period. Any funds not liquidated at the end of the 90‑day period will lapse and revert to the DOJ awarding agency, unless a grant adjustment notice extending the liquidation period has been approved. The OJP Financial Guide also requires grantees to request final payment for reimbursement of expenditures incurred prior to the grant expiration date in conjunction with the submission of the final financial report, which according to 28 C.F.R. §66.50(b) is due within 90 days after the grant end date.26
Prior OIG reviews have found that DOJ failed to ensure that grantees draw down allowable funds within the 90-day liquidation period and that any remaining grant funds were deobligated and regranted, or returned to the general fund in a timely manner. Based on our current review, we determined that this continues to be a problem for COPS, OJP, and OVW.
We found that the current practices of COPS, OJP, and OVW do not conform to federal regulations and their own policies. In fact, we found that a common practice of COPS, OJP, and OVW was to contact grantees and instruct them to draw down any remaining funds even though the 90-day liquidation period had passed. The DOJ awarding agencies spend a significant amount of time following up with grantees to ensure that funds are drawn down before the grant is closed. This practice not only violates federal regulations, it is also one of the factors contributing to the failure to close grants in a timely manner.
Because current practices of COPS, OJP, and OVW disregard federal regulations related to the grant liquidation period, we found that grantees were allowed to draw down funds totaling $554,192,410 more than 90 days past the grant end date, for which the grantee had not requested or received an extension of time to draw down funds.27 We are questioning this amount as unallowable because federal regulations and component policy prohibit drawdowns more than 90 days past the grant end date. Additionally, pursuant to the federal regulations, in the absence of an extension, this funding should have reverted back to the DOJ awarding agency and been made available for other purposes. The details of our questioned costs related to COPS, OJP, and OVW is shown in Table 12.
DRAWDOWNS OCCURRING 90 DAYS PAST THE GRANT END DATE (Dollars in Millions)
Source: COPS, OJP, and OVW list of expired grants and grant payment histories
As shown in Table 12, we determined that:
For 5,177 grants, COPS allowed grantees to make 8,796 drawdowns totaling $226,856,849 that were more than 90 days past the grant end date; as a result, we are questioning this amount. It should be noted that 4,343 drawdowns totaling $106,779,142 occurred more than 1 year after the grant expired.
For 3,336 grants, OJP allowed grantees to make 5,368 drawdowns totaling $290,055,575 that were more than 90 days past the grant end date; as a result, we are questioning this amount. It should be noted that 1,429 drawdowns totaling $100,392,960 occurred more than 1 year after the grant expired.
For 404 grants, OVW allowed grantees to make 779 drawdowns totaling $37,279,986 that were more than 90 days past the grant end date; as a result, we are questioning this amount. It should be noted that 250 drawdowns totaling $11,871,512 occurred more than 1 year after the grant expired.
We also identified questioned costs totaling $529,043 related to 21 grants for which the drawdowns exceeded the total award. These grants included 6 COPS grants with drawdowns in excess of the award amount totaling $45,688, 14 OJP with drawdowns in excess of the award amount totaling $442,108, and 1 OVW grant with drawdowns in excess of the award amount totaling $41,247. In our judgment, the grants payment system should include a control to prevent grantees from drawing down funds in excess of the award amount.
In order to determine if COPS, OJP, and OVW had a justification for allowing grantees to draw down funds more than 90 days past the grant end date, we selected a sample of 30 COPS, OJP, and OVW grants (for a total sample of 90 grants) for which grantees were allowed to make drawdowns more than 90 days past the grant end date. We requested that COPS, OJP, and OVW provide any information that might explain why grant drawdowns occurred more than 90 days after the expiration of the grant, such as an extension of the grant liquidation.
Based on our review, we determined that only two grant extensions were issued extending the liquidation period. However, the extensions related to these grants were not awarded until between 1 and 2.5 years after the grant had originally expired. Additionally, for one of the grants for which an extension was approved, the grantee continued to draw down funds for an additional year after the end of the extended grant period. In our judgment, COPS, OJP, and OVW failed to provide valid reasons for allowing these grantees to draw down funds more than 90 days past the grant end date. Instead, COPS, OJP, and OVW provided the final or most recent financial report in an attempt to show that the federal share of costs reported by the grantee supported the grant drawdowns. However, our review of the financial reports for the 90 sampled grants revealed that:
COPS, OJP, and OVW did not provide the necessary information to determine whether the drawdowns that occurred 90 days past the grant end date were based on reported grant expenditures for 14 percent of the sampled grants.28
Grantees reported costs for periods that occurred after the grant end date for 53 percent of the sampled grants. This prohibited practice indicates that $6.09 million in unallowable costs may have been included in the drawdowns after the end of the liquidation period.
The expenditures reported on the financial reports provided did not support the total drawdowns for 9 percent of the sampled grants, indicating that $116,950 in unsupported costs may have been included in the drawdowns after the end of the liquidation period.
The financial reports provided were filed between 1 and 1,350 days after the last drawdown for 28 percent of the sampled grants. As a result, the DOJ awarding agency did not have a final financial report to use in determining whether the late drawdowns were supported.
Costs Charged After the Liquidation Period
Based on our review of the financial reports for the 90 grants in our sample, we developed concerns that drawdowns occurring after the end of the 90‑day liquidation period may include unallowable or unsupported costs. As a result, we selected an additional sample of 66 grants with drawdowns totaling $75.90 million that occurred more than 90 days past the grant end date. We conducted expenditure testing at the grantee’s location to determine whether the costs associated with these drawdowns were properly charged to the grant in accordance with applicable laws, regulations, guidelines, and terms and conditions of the grant.29
We found that the grantees had not maintained any records for 9 grants with drawdowns totaling $14.39 million that occurred more than 90 days past the grant end date. For one of these grants, with drawdowns totaling $367,570 that occurred more than 90 days past the grant end date, the record retention period had not yet expired. Therefore, we consider these drawdowns unsupported. For the remaining 8 grants, the grantee was no longer required to maintain the grant records. As a result, we did not consider these drawdowns unsupported, but we were unable to determine if the drawdowns included unallowable or unsupported costs. Because grant closeouts are not being accomplished timely, we are concerned that, in some instances, the grantee may no longer be required to maintain the grant records when the DOJ awarding agency begins the closeout process.
Based on our review, we found that the drawdowns included unallowable costs totaling $5.7 million for expenditures obligated after the grant end date or paid after the end of the 90-day liquidation period. We also identified unsupported drawdowns totaling $574,940. Additionally, for drawdown totaling $13.04 million we were unable to determine if the drawdowns included unallowable or unsupported costs because the accounting records or supporting documentation was no longer available. Table 13 illustrates the unallowable and unsupported costs identified for each grantee included in our on-site reviews, as well as the drawdown for which we were unable to determine the allowability of the costs included. It should be noted that we did not question the unallowable and unsupported costs identified during our on-site reviews. The sample of 66 grants with drawdowns totaling $75.90 million that occurred more than 90 days past the grant end date, were already included in the question costs totaling $554.19 million that we previously identified in this finding.
TABLE 13. ANALYSIS OF ON‑SITE REVIEWS
TOTAL UNALLOWABLE COSTS
TOTAL DOLLAR-RELATED FINDINGS
$10,661,742
2,273,441
$1,524,781
CATAHOULA PARISH SHERIFF’S DEPARTMENT (LA)
D.C. JUSTICE GRANTS ADMINISTRATION
$ 5,700,80430
$574,94031
$13,036,79532
$19,312,540
The results of our on-site reviews support our concern that drawdowns occurring after the end of the 90‑day liquidation period include unallowable and unsupported costs. From our sample, we found that 8 percent of the grant funds drawn down by the grantees more than 90 days past the grant end date were for unallowable costs, 1 percent were for unsupported costs, and we were unable to determine the allowability of 17 percent of the costs included in the drawdowns.
Current Drawdown Practices
In response to prior OIG audit reports, COPS, OJP, and OVW have developed or proposed the following closeout policies and procedures to address the fact that grantees are drawing down funds more than 90 days after the grant end date.
COPS Expired Grant Policy and Procedures Memorandum, dated March 31, 2005 - According to the memorandum, after the grant has been expired for 90 days, the COPS Finance Division will proceed with the deobligation of any remaining funds on those grants which have not received an extension within the required period. The COPS Finance Division will have an additional 90 days to process the deobligation after receipt of the final financial report.
Eligible Reimbursements to Grantees Memorandum, dated May 4, 2006 - This memorandum reflects the decision by the COPS Executive Management Team to allow certain grantees, on a temporary basis, to be paid for documented, unliquidated obligations beyond the 90-day period following the grant expiration date until the expired grants backlog is eliminated.
Although we acknowledge these efforts to ensure that grantees draw down allowable funds within the 90-day liquidation period, we have identified weaknesses in COPS’s current policy. In our judgment, there is a contradiction between the two COPS memoranda noted above. The COPS Expired Grant Policy and Procedures Memorandum requires that any remaining funds will be deobligated after the grant has been expired for 90 days unless an extension of the liquidation period is obtained within the required timeframe. Conversely, the Eligible Reimbursements to Grantees Memorandum allows certain grantees, on a temporary basis, to be paid for documented, unliquidated obligations beyond the 90-day period.
Additionally, the Eligible Reimbursements to Grantees Memorandum states the practice of allowing grantees to draw down unliquidated obligations beyond the 90-day period will continue until there is no longer an expired grants backlog. However, this practice is one of the factors contributing to the expired grants backlog since the federal awarding agencies spend a significant amount of time following up with grantees to ensure that “allowable” funds are drawn down after the end of the 90‑day liquidation period prior to closing the grant. As a result, in our judgment, COPS should immediately discontinue the practice of allowing grantees to draw down unliquidated obligations beyond the 90‑day period.
In response to the OIG’s March 2005 audit report, OJP stated that it would “incorporate procedures into its grant monitoring and closeout policies and procedures to ensure that grantees are not allowed to draw down funds more than 90 days after the grant end date and that all remaining funds on grants that have been expired more than 90 days are deobligated.” However, OJP has not yet updated its policy and procedures to ensure that grantees are not allowed to draw down funds more than 90 days past the grant end date.
Additionally, OVW stated that, “Although OVW has become an independent Office/Bureau/Division within the Department of Justice, we are still contracting with OJP OC for financial management services.” However, as stated above, OJP has not yet updated its policy and procedures to ensure that grantees are not allowed to draw down funds more than 90 days past the grant end date.
We also found that COPS, OJP, and OVW grantees can continue to draw down funds indefinitely after the grant end date as long as the grantee continues to submit financial reports. Although the grant payment system automatically prevents grantees from drawing down funds if a financial report is not submitted within 45 days after the end of the fiscal quarter, once a financial report is submitted the grantee is considered to be “current” and can continue to draw down funds. Since there is no control in the current grant payment system that recognizes that the grant has expired as long as grantees submit a financial report prior to drawing down funds, the system will not prevent them from drawing down funds after the grant end date. In fact, when COPS, OJP, and OVW contact grantees to draw down remaining funds even though the 90‑day liquidation period may have passed, they instructed them to submit a financial report so that the grant payment system recognized them as being current, thus allowing them to continue to draw down funds.
Pursuant to all relevant criteria, grantees are required to draw down grant funds for allowable costs within 90 days after the end of the grant, unless the grantee requests and receives an extension of time to draw down funds. Any funds remaining after the end of the liquidation period are required to be deobligated and regranted or returned to the general fund, within 180 days after the grant end date. In our judgment, the simple solution would be to modify OJP’s grant payment system so that grantees are automatically prevented from drawing down funds more that 90 days past the grant end date unless they receive an extension.33 Currently, the grant payment system automatically freezes grant funds if a grantee fails to submit a financial report within 45 days after the end of the quarter but does not include a similar control to prevent grantees from drawing down funds after the 90-day grant liquidation period has expired. Further, the granting agencies should ensure that grants are closed and remaining funds are deobligated with 180 days after the end of the grant.
We proposed the following solution to prevent grantees from drawing down funds after the end of the 90‑day liquidation period.
The grant payment system should be modified to ensure that grantees cannot draw down funds more than 90 days past the grant end date, at which time the final financial report should have been submitted.
If a grantee attempts to draw down funds more than 90 days past the grant end date the system would automatically reject the request.
Once the reimbursement request is rejected, the grantee would be required to contact the DOJ awarding agency to request an extension of the liquidation period.
If an extension request is received, the DOJ awarding agency would be able to review the final financial report to determine if the federal share of outlays reported exceeded the drawdowns.
If the DOJ awarding agency identifies any unliquidated obligations, then it would have the option of approving the extension of the liquidation period. The extension should not exceed 180 days past the original grant expiration date, since the grants should be closed and remaining funds deobligated within 180 days after the end of the grant period.
If the grantee has not submitted a final financial report, the DOJ awarding agency should require that it be submitted before considering an extension of the liquidation period.
Under this process, grantees would not be allowed to draw down funds more than 90 days past the grant end date without requesting and receiving an extension in compliance with 28 C.F.R. § 66.50(b). In addition, the process would also ensure that the final financial reports are submitted and reviewed in a timely manner, so that the granting agencies can determine whether drawdowns were supported. At the same time, the awarding agencies must also ensure that grants are closed within 180 days and remaining funds are deobligated. This would ensure that:
If the DOJ awarding agency grants an extension of the liquidation period, the extension will not be granted for more than 180 days after the grant end date;
The review and timing of drawdowns would occur during the period for which the grantee is required to maintain the grant records; and
Remaining grant funds are deobligated in a timely manner so that the funds can be regranted or returned to the general fund.
We discussed our proposal with COPS, OJP, and OVW officials, and they agreed with our proposed solution. However, COPS and OVW officials were not sure if the grant payment system could be modified to automatically prevent grantees from drawing down funds more than 90 days past the grant end date since the grant payment system is administered by the OC. When we discussed this possibility with OC officials, they stated that it would be difficult to modify the current system to prevent drawdowns more than 90 days past the grant end date. However, OC officials stated that DOJ is planning to implement a new grant payment system by 2009 and acknowledged that an automatic freeze on any remaining funds more than 90 days past the grant end date would be a “good” control in the new grant payment system.
As a part of grant closeout the awarding agency is required to identify any excess and unallowable funds and ensure that these funds are returned by the grantee. Any funds returned by the grantee should be deobligated and used to provide DOJ with additional resources needed to fund other programs, or returned to the general fund.
However, we found that the current practices of COPS, OJP, and OVW do not conform to federal regulations and their own policy. In fact, we found that COPS, OJP, and OVW allowed grantees to draw down funds from 8,917 expired grants totaling $554.19 million more than 90 days past the grant end date. We are questioning this amount as unallowable because federal regulations and component policy prohibit drawdowns more than 90 days past the grant end date.
In addition, we are concerned that drawdowns occurring after the end of the 90‑day liquidation period may include unallowable or unsupported costs. From a sample of grantees for which on-site review were conducted, we consider our concern to be valid. Specifically, for our sample we found that 33 percent of the grant funds drawn down by these grantees were for unallowable expenditures totaling over $142.74 million. These funds were obligated after the grant end date.34 Additionally, 11 percent of the grant funds drawn down by these grantees were for unsupported costs totaling over $46.52 million.
In our judgment, the best solution to the problems related to drawdowns identified in our report would be to modify the grant payment system so that grantees are automatically prevented from drawing down funds more than 90 days past the grant end date. Further, the granting agencies should ensure that grants are closed and remaining funds are deobligated with 180 days after the end of the grant.
We discussed our proposed solution with COPS, OJP, and OVW officials and they agreed with our recommendation. However, OC officials stated that it would be difficult to modify the current system to prevent drawdowns more than 90 days past the grant end date. OC officials also stated that DOJ is planning to implement a new grant payment system by 2009.
Work with the Office of Justice Programs Office of the Comptroller to add a control to the current grant payment system that will prohibit grantees from drawing down funds after the end of the 90‑day liquidation period.
Remedy the $226,856,849 in questioned costs related to drawdowns occurring more than 90 days past the grant end date.
Work with the Office of Justice Programs Office of the Comptroller to ensure that the current grant payment system includes a control to prohibit negative award balances, e.g., total payments in excess of the net award amount.
Remedy the questioned costs totaling $45,688 related to grants for which the drawdowns exceeded the total award amount.
Ensure that grantees are not allowed to draw down funds for unallowable expenditures obligated after the grant end date.35
Immediately discontinue the practice of allowing grantees to draw down unliquidated obligations beyond the 90-day liquidation period without an extension.
Ensure that the current grant payment system includes a control to prohibit grantees from drawing down funds after the end of the 90‑day liquidation period.
Work with the Office of Justice Programs Office of the Comptroller to ensure that the current grant payment system includes a control to prohibit grantees from drawing down funds after the end of the 90‑day liquidation period.
Remedy the $37,279,986 in questioned costs related to drawdowns occurring more than 90 days past the grant end date.
Work with the OC to ensure that the current grant payment system includes a control to prohibit negative award balances, e.g., total payments in excess of the net award amount.
Remedy the questioned costs totaling $41,247 related to grants for which the drawdowns exceeded the total award amount.
III. FUNDS REMAINING ON EXPIRED GRANTS
COPS, OJP, and OVW are not ensuring that remaining grant funds are deobligated after the end of the 90-day liquidation period. As a result, we identified funds totaling $172.28 million that had not been deobligated and put to better use. The funds put to better use included $163.96 million in unused funds for expired grants that had not been closed and were more than 90 days past the grant end date, and $8.32 million in unused funds for grants that had been reported as closed.
Pursuant to federal regulations and DOJ policy, grant funds must be drawn down within 90 days after the end of the grant period. Additionally, unless an extension of time to draw down funds is requested by the grantee and authorized, any grant funds not drawn down within the 90‑day liquidation period should revert back to the DOJ awarding agency to be regranted or returned to the general fund. As part of the closeout process COPS, OJP, and OVW are required to review the grant drawdowns to identify any unused funds and deobligate these funds within 180 days after the expiration of the grant. Based on our review of 60,933 expired and closed grants, we identified $172.28 million in unused grant funds that had not been drawn down within 90 days after the grant end date, for which the grantees had not requested or received an extension of the liquidation period.36 These funds should have reverted back to the DOJ awarding agency and been made available for other purposes. Failure to close out grants in a timely manner and deobligated remaining grants funds within 180 days after the expiration of the grant has resulted in COPS, OJP, and OVW having millions of dollars in unused grant funds reported in their accounting systems for years. However, because of the delay in the grant closeout process, the DOJ awarding agencies did not know the amount of unused funds in their accounting systems that should have been deobligated.
Funds Remaining on Expired Grants
As shown in Table 14, we identified funds totaling $163,955,084 associated with 3,350 expired grants that had not been closed and were more than 90 days past the grant end date, for which the grantees had not requested or received an extension of the time in which to draw down funds. However, COPS, OJP, OVW, had not deobligated these funds and put them to better use.
TABLE 14. UNUSED GRANT FUNDS FOR EXPIRED GRANTS 90 DAYS PAST THE GRANT END DATE (Dollars in Millions)
UNUSED GRANT FUNDING
Source: COPS, OJP, and OVW list of expired grants and the grant payment histories
2,205 COPS grants more than 90 days past the grant end date with remaining grant funds totaling $88,587,211; as a result, these funds should be deobligated and put to better use.
857 OJP grants more than 90 days past the grant end date with remaining grant funds totaling $61,082,443; as a result, these funds should be deobligated and put to better use.
288 OVW grants more than 90 days past the grant end date with remaining grant funds totaling $14,285,431; as a result, these funds should be deobligated and put to better use.
Of these amounts, 1,044 COPS grants with funds remaining of $29,779,911, 176 OJP grants with funds remaining of $9,126,165, and 51 OVW grants with funds remaining of $2,334,805 have been expired more than 2 years.
Additionally, we identified 309 grants reported as closed with unused funds totaling $8,321,570, which had not been deobligated and put to better use. These grants included 103 COPS grants with funds totaling $4,730,492, 195 OJP grants with funds totaling $3,488,483, and 11 OVW grants with funds totaling $102,595 that should have been deobligated and put to better use prior to closing the grants.
During our follow-up discussions with COPS officials related to funds remaining on grants reported as closed, COPS requested that we provide a list of the grants in question so that they could determine the reasons why the funds had not been deobligated. We provided COPS with a list of the 103 grants reported as closed with funds remaining of $4,730,492. In response, COPS officials stated that the COPS Finance Division reviewed our list and created a new list from which they removed all of the grants with a current “zero balance” indicating that the funds for 53 grants had been deobligated or drawn down subsequent to our review. The new list provided by COPS included 50 grants with funds remaining of $2,091,725. To determine reasons for the differences between our list of 103 grants and the COPS list of 50 grants, we requested the grant payment histories for all 103 grants.
Based on our review of the grant payment histories for the 103 grants reported as closed with funds remaining, we determined that subsequent to our initial analysis:
COPS allowed grantees to draw down $147,862 on grants reported as closed; as a result, we are questioning this amount as unallowable.
COPS deobligated $1,767,859 in funds remaining for 56 grants reported as closed, of which $894,155 for 25 grants was deobligated after the initial list of the 103 grants was provided to COPS.
For 44 grants we identified unused funds totaling $ $ 2,849,825, which COPS had not been deobligated and put to better use.
Ensure that all funds remaining on grants are deobligated within 180 days after the expiration of the grant and regranted, or returned to the general fund.
Deobligate and put to better use the $88,587,211 in remaining funds related to expired grants that are more than 90 days past the grant end date.
Deobligate and put to better use the $ 2,849,825 in remaining funds related to grants that were reported as closed.
Remedy the $147,862 in questioned costs related to drawdowns occurring after the grant was reported as closed.
Deobligate and put to better use the $61,082,443 in remaining funds related to expired grants that are more than 90 days past the grant end date.
Deobligate and put to better use the $3,488,483 in remaining funds related to grants that were reported as closed.
Deobligate and put to better use the $14,285,431 in remaining funds related to expired grants that are more than 90 days past the grant end date.
Deobligate and put to better use the $102,595 in remaining funds related to grants that were reported as closed.
The federal government’s general fund records all revenues and offsetting receipts not earmarked by law for a specific purpose and all spending financed by those revenues and receipts. The legislation authorizing the appropriation for grant programs generally specifies whether or not unused grant funds can be regranted or must be returned to the federal government’s general fund.
Throughout this report, differences in the total amounts are due to rounding, in that the sum of individual numbers reported prior to rounding may differ from the sum of the individual numbers rounded.
It should be noted that 199 of the 30,488 closed OJP grants included in our audit, were closed prior to 1998.
It should be noted that 1 of the 869 closed OVW grants included in our audit was closed prior to 1998.
COPS policy and procedures concerning its grant closeout process are contained in the following: (1) COPS Expired Grants Policy and Procedures, dated March 31, 2005, (2) COPS Closeout Policy Manual, dated August 31, 2004; (3) Grant Closeout Notification Toolkit, and (4) COPS Grant Owner’s manuals.
Office of Justice Programs. Grant Closeout: Business Improvement Recommendations, Final Version, September 15, 2005.
While OVW is a designated OBD within DOJ, it receives all grant-related financial services from the OC and therefore requires grantees to follow the OJP Financial Guide.
28 C.F.R. §66.50(b), requires that within 90 days after the expiration or termination of the grant, the grantee must submit all financial, performance, and other reports required as a condition of the grant. However, the OJP Financial Guide, dated March 2005, requires the final financial report be submitted within 120 days after the grant end date, which contradicts the federal regulations. The OJP has recognized this problem and is planning to update the financial guide to reflect the federal regulations.
A detailed list of the expired grants for which we are questioning costs related to drawdowns occurring more than 90 days after the grant end date will be provided to each component in a separate document.
COPS, OJP, and OVW did not provide any financial reports, including the final financial report, for 14 percent of our sampled grants. Specifically, COPS did not provide financial reports for 2 grants, OJP did not provide financial reports for 6 grants, and OVW did not provide financial reports for 3 grants. As a result, we based our percentages on the 79 grants for which we received a financial report.
We judgmentally selected our sample of grantees based on: (1) the largest-dollar drawdowns occurring more than 1 year after the grant end date, (2) the largest number of grants with drawdowns occurring more than 90 days after the grant end date, and (3) grantees with drawdowns occurring more than 90 days after the grant end date from multiple granting agencies included in our audit.
The unallowable costs consist of grant expenditures obligated after the grant end date or paid more than 90 days after the grant end date. We did not include these costs in our dollar-related findings since they were questioned as drawdowns occurring after the end of the 90‑day grant liquidation period.
The unsupported costs consist of drawdowns in excess of the federal share of grant expenditures per the grantee’s accounting records. We did not include these costs in our dollar-related findings since they were questioned as drawdowns occurring after the end of the 90‑day grant liquidation period.
These costs consist of expenditures that occurred after the grant end date for which the grantee had not maintained the supporting documentation necessary to determine whether the costs were obligated prior to the end of the grant. Since the grantee was no longer required to maintain records for theses grants, we did not consider the costs unsupported.
COPS and OVW both use OJP’s grant payment system.
We found that the grantees had not maintained records for nine grants with drawdowns totaling $36.14 million. As a result, we were unable to review the expenditures for these grants. For seven grants with drawdowns totaling $25.73 million, we determine that the grantee was no longer required to maintain the grant records. However, for two grants with drawdowns totaling $10.41 million the grantee had not maintained records despite the fact that the record retention period had not yet expired.
In our judgment, many of our recommendations would be addressed if the COPS, OJP, and OWV implemented our proposed solution of modifying the grant payment system so that grantees are automatically prevented from drawing down funds more than 90 days past the grant end date. At the same, the awarding agencies would need to ensure that the final financial reports are reviewed in a timely manner and that grants are closed and remaining funds are deobligated with 180 days after the end of the grant.
A detailed list of the expired and closed grants for unused funds that had not been deobligated and put to better use will be provided to each component in a separate document.