Ryan White Care Act: Improvements Needed in Oversight of Grantees
Released: 2012-07-11T00:00:00

Letter

Background

Under the CARE Act, Part A and Part B grantees are awarded grants to provide a range of services—both medical and support—to uninsured and underinsured clients with HIV/AIDS. In fiscal year 2011, most CARE Act funding was distributed to grantees either as base or supplemental grants. Base grants are distributed by formula, which includes a grantee’s share of living HIV/AIDS cases. Supplemental grants are generally awarded through a competitive process based on the demonstration of severe need and other criteria. Part A provides for grants to EMAs and TGAs. EMA and TGA funding is primarily provided through three categories of grants: (1) formula grants, (2) supplemental grants, and (3) Minority AIDS Initiative (MAI) grants. Part B provides for grants to states, the District of Columbia, and U.S. territories and associated jurisdictions. These grants include (1) formula grants, (2) supplemental grants, (3) ADAP formula grants, (4) ADAP supplemental grants, (5) MAI grants, and (6) supplemental grants for states with “emerging communities”. Part A and Part B grantees apply for funding annually.

The PO is the HRSA official responsible for working with grantees in overseeing the programmatic and technical aspects of the Part A and Part B grants. Within HRSA, POs in the HIV/AIDS Bureau’s (HAB) Division of Service Systems are responsible for the oversight of Part A and Part B grantees. POs are supervised by HAB Division of Service Systems branch chiefs, who are responsible for ensuring that POs are meeting their oversight responsibilities. The PO works with the HRSA Office of Financial Assistance Management’s grants management specialists (GMS). GMSs are responsible for providing nonprogrammatic administrative assistance to grantees, including assistance in interpreting provisions of grants administration, law, regulation and policy. These provisions include how grantees can draw down grant funds and how grantees are to administer and close out grants. GMSs are supervised by Grants Management Officers. Additionally, within the Office of Federal Assistance Management, staff in the Division of Financial Integrity (DFI) provide TA and advice to the POs and GMSs.

HRSA POs conduct their oversight of Part A and Part B grantees in accordance with regulations and guidance. HHS grants management regulations and guidance govern all HHS grants, including CARE Act grants. The regulations and guidance provide for the creation of agency and program-specific guidance. Where HRSA has not created specific guidance, POs and GMS follow the overarching HHS regulation and guidance. Therefore, POs follow HHS regulations and guidance and any additional HRSA-specific grants management guidance when it is available. HRSA officials told us POs are to follow the Division of Service System Operations Manual (HRSA Operations Manual), which provides guidance and protocols specifically for PO oversight of CARE Act Part A and Part B grantees. The HRSA Operations Manual was first provided to Because the us in August 2011 and updated in December 2011.updated HRSA Operations Manual was not in existence during the majority of the period covered by our review, we primarily refer to HHS grants management regulations and guidance in our evaluation of HRSA’s oversight. HRSA’s grantee oversight includes several elements, described below.

Routine Monitoring

HRSA POs are responsible for overseeing the Part A and Part B programs by conducting routine monitoring of grantees’ performance and compliance with statutory requirements, regulations, and guidance. Routine monitoring includes regularly scheduled monitoring calls, reviews of grantee reports, and the provision of TA to grantees. HHS guidance indicates that monitoring activities are to be documented. This guidance also indicates that the documentation is to include information about the type of follow-up actions recommended or taken. We found that POs were assigned an average of six Part A and Part B grantees to oversee at a time. If during the course of routine monitoring a PO finds that a grantee has not met its program or financial requirements, the PO is responsible for determining, in consultation with his or her branch chief, whether a grantee requires more intensive monitoring including a special condition of award, such as restrictive drawdown. The PO is responsible for monitoring any of these special conditions put in place. POs are HRSA’s primary contact with Part A and Part B grantees, and they are to communicate with their assigned grantees at least monthly. In addition to a scheduled routine monitoring conference call with grantee management, POs are to respond to interim grantee e-mails and calls and to provide guidance and TA as needed.

As part of routine monitoring, POs are also responsible for reviewing reports filed by grantees to fulfill HRSA’s annual reporting requirements. These reports are intended to help HRSA identify grantee problems with program implementation and ensure grantees’ compliance with federal statutes, regulations, and guidelines. In fiscal year 2012, Part A grantees are required to submit 11 different reports while Part B grantees are required to submit 16 reports. The reports contain important programmatic and financial information such as descriptions of funded services, annual expenditures, and grantee accomplishments and challenges in meeting program goals. POs are to provide feedback to grantees based on their review of these reports and provide written requests for changes to reports which are submitted through EHB. The PO and GMS are also responsible for reviewing grantee reports to ensure that grantees are spending funds in accordance with the grant terms and conditions and POs and GMSs are to coordinate in their review of grantees’ reports. Grantee reporting requirements are listed in appendix I.

When a PO identifies a problem during routine monitoring the PO is to provide TA to help the grantee understand the changes needed to address the problem. TA is a targeted means of addressing a particular issue or problem and is provided to ensure that program implementation reflects the most recent requirements. The overall intent of TA is to assist the grantee in improving its capacity, effectiveness, and efficiency. A PO may provide the TA by phone, email, on-site or at grantee conferences. POs may provide the TA or assist grantees in obtaining TA from HRSA consultants.

Site Visits

In addition to their overall routine monitoring responsibilities, POs are to participate in site visits for Part A and Part B grantees. Site visits are intended to provide the PO with an opportunity to review the program, and may act as a TA session for the grantee. HRSA guidance states that site visits should be viewed as an opportunity to expand on information grantees have provided in their CARE Act grant application, responses to reporting requirements, and conference calls. During a site visit, the PO may meet with grantee and service provider staff to obtain feedback on how the program is functioning, visit various locations at which service providers deliver services, and review grantee and service provider program documentation. For the Part A and Part B programs, HRSA does not have written guidance describing its policy for the selection of grantees to visit; however, agency officials told us that they prioritize site visits based on two elements—grantees without a recent site visit and grantees with problems. In addition, a federal course which HRSA has offered to all of its employees for several years and requires all new POs to take indicates that agencies should determine which grantees to visit based on an analysis of risk, which includes a consideration of grant funding level as an indicator of potential risk, among other things.

When planning a site visit, POs are to provide advance notice in writing to the grantee of the intended site visit along with a copy of the site visit agenda and the tool the PO will be using to evaluate the grantee. The tool addresses the priorities listed below during the site visit. If the site visit will involve the review of a priority item in which the PO does not have specialized training, such as clinical quality management, the PO can consider bringing one or more HRSA consultants for the visit.

According to HRSA guidance, POs are to focus on the following priorities during the grantee site visit (listed below in order of highest to lowest priority): assure grantee compliance with CARE Act provisions and HRSA guidance by reviewing compliance with the basic funding requirements, such as the presence of an adequate plan for the use of grant funds and administrative, program, and financial requirements; assure basic functioning of the Part A and Part B programs by reviewing, for example, the grantee’s ability to disburse funds to service providers in a timely fashion and the grantee’s ability to conduct program and financial monitoring of service providers; assure access to care by reviewing the grantee’s clinical quality management processes and the grantee’s assessment of unmet need for HIV/AIDS services in their jurisdiction; assure coordinated systems of care by reviewing the grantee’s efforts to coordinate with other CARE Act programs, HIV counseling, testing and prevention programs in their area, and other programs that provide access to HIV/AIDS treatment including Medicaid and Medicare; and document and report the impact of the grantees’ use of CARE Act funds including any program innovations and/or program successes.

Upon arrival at the site visit location, the PO is to meet with the grantee leadership and the Part A or Part B program staff. During the initial meeting, the PO is to review the intent of the visit and the site visit agenda. This meeting is also an opportunity for the grantee to provide an update on the status of the program and the delivery of services. During the site visit, the PO is to take notes on the priorities listed above, and be prepared to conduct an exit conference with the grantee leadership and program staff to explain both preliminary positive and problem findings. The PO is to prepare a site visit report to document his findings and recommended corrective actions. Additionally, recommendations are to be provided for follow-up TA if appropriate and any special action steps that the PO will take to help the grantee address the site visit findings. HRSA guidance updated during our review states that the site visit report is to be provided to the grantee within 30 days of the visit.

Single Audits

Part A and Part B grantees are subject to the requirements of the Single Audit Act, as amended, and the act’s implementing OMB guidance. These provisions require grantees that expend $500,000 or more in federal awards in a fiscal year to have a single audit for that year conducted by an independent auditor. HRSA’s Division of Financial Integrity (DFI) reviews grantees’ single audit reports with findings related to CARE Act programs along with corrective action plans provided by the grantee in response to any audit findings.HRSA to use single audits as a tool to monitor Part A and Part B grantee compliance with program and financial requirements.

Restrictive Drawdown

In accordance with federal regulations, HRSA may impose special restrictive conditions on a grantee’s award if HRSA determines that the grantee violated program or financial requirements, or has insufficient management systems or practices to ensure stewardship of grant funds or achievement of award objectives. These issues may be identified through routine monitoring activities, site visits, or single audits. One such condition is called restrictive drawdown. Restrictive drawdown requires that prior to spending any grant funds, grantees must submit a request for funds for HRSA review by the 20th of each month, for the upcoming month, or no less than 10 days before the grantee intends to expend the funds. With each request, the grantee must submit supporting documentation including all grantee invoices, and other financial documents related to the request. Upon PO review and approval of the request and related documentation, HRSA is to make CARE Act funds available to the grantee. In December 2011, during the course of our review, HRSA created agency-specific guidance that specified the reasons Part A and Part B grantees might be placed on restrictive drawdown, how a grantee is to be notified of this special condition, and under what conditions a grantee can be removed from restrictive drawdown. However, this guidance was not in place during the period covered by our review.

National Monitoring Standards for Grantee Monitoring of Service Providers

Federal regulations require grantees to oversee their service providers. In April 2011 HRSA compiled existing requirements into a comprehensive document called the National Monitoring Standards.designed to help Part A and Part B grantees meet federal requirements for program and financial management, and to improve program efficiency. Prior to HRSA’s issuance of the standards, guidance on how to ensure grantee compliance with program requirements and how to monitor service providers was found in multiple sources. HRSA expects the standards to provide direction to grantees for monitoring their own compliance with CARE Act program and financial requirements and the performance of their service providers.

HRSA officials told us that the national monitoring standards were developed in response to two HHS Office of Inspector General reports that identified the need for a specific standard regarding the frequency and nature of grantee monitoring of service providers and a clear PO role in monitoring grantee oversight of service providers.were compiled by HRSA with assistance from a national team of financial and program experts and a working group of Part A and Part B grantees. According to HRSA, the working group provided feedback on drafts of the standards. Additionally, according to HRSA, the standards were presented to all Part A and Part B grantees in a 2010 Grantee Meeting. Grantees were notified of their obligation to comply with these standards in fiscal year 2011.

Grantee Files

HRSA maintains three different grantee files to assist in its provision of oversight, monitoring, and TA to Part A and Part B grantees and there is a different record retention period for each of these three files. Single audit reports and related financial documentation are maintained in hard copy audit files by HRSA’s DFI. HRSA’s record management program requires these files to be kept onsite at HRSA for at least 2 years after the final close of the audit or upon resolution of any adverse audit findings. The files are then to be sent to the Federal Records Centers to be maintained for an additional 4 years.official grantee reports in response to CARE Act grantee reporting requirements listed in appendix I. It is maintained electronically by the HRSA Division of Grants Management Operations and the Division of Service Systems and documents in EHB are accessed by POs and other grants management staff as part of their routine monitoring responsibilities. Currently, HRSA maintains the EHB for 6 years, but is The EHB includes the NOA and working to finalize a record retention period. Additionally, PO files, which include the only documentation of routine monitoring, site visits, and TA, and duplicate copies of the required grantee reports that are also found in EHB, are maintained in hard copy by the PO. During the course of our review, HRSA officials told us that HRSA’s record management program requires these files to be maintained for the current and previous grant year, after which they were to be destroyed. The December 2011 update to HRSA’s Operations Manual now suggests that POs should maintain copies of site visit reports for at least 5 years, and that any documents related to issues under investigation not be discarded. However, this change does not apply to other key documentation in PO files, such as regularly scheduled conference calls and copies of relevant e-mails.

HRSA Does Not Consistently Follow Guidance on Oversight of Grantees and Faces Other Challenges

HRSA does not consistently follow HHS or its own guidance for grantee oversight when monitoring CARE Act grantees. A lack of records and frequent changes in PO assignments further challenge HRSA’s ability to oversee grantees and to assist them with program implementation.

HRSA Does Not Consistently Follow Applicable Guidance for Grantee Oversight

HRSA did not consistently follow guidance for documenting routine monitoring, prioritizing grantee site visits, reviewing annual single audit findings, or clearly communicating with grantees about the restrictive drawdown process.

POs do not consistently document routine monitoring or follow up on that monitoring to help grantees address problems. HHS guidance indicates that monitoring activities performed in order to evaluate grantees’ programmatic performance, including any discussions with grantees, should be documented. This guidance also indicates that documentation of monitoring actions is to include information about the type of follow-up actions recommended or taken. However, we found that most of the PO files that we reviewed did not contain documentation of routine monitoring calls—of the 25 PO files for grantees in our sample, only 4 PO files contained documentation of monitoring calls at least quarterly in the 2010 grant files we reviewed, and only 8 contained documentation of quarterly calls in the 2011 grant files. Though most of the files we reviewed contained documentation of e-mails between POs and grantees indicating that communication was taking place, HRSA POs are to conduct and document regularly scheduled calls. Despite the lack of documentation in PO files, most grantees we interviewed reported having regular communication, via phone or e-mail, with their POs. Seventeen of the 25 grantees confirmed that their PO conducted regularly scheduled conference calls, and 7 noted that these calls included a set agenda.

Most grantees said they had received feedback at least once from a PO on a required report, but eight noted that such feedback was uncommon. Grantees submit numerous reports throughout the year containing important programmatic and financial information. HHS guidance states that monitoring is to include a review of reports, and that review of reports may help officials identify performance or financial issues that require follow-up. Further, HRSA POs are to review and provide feedback and guidance to grantees on program and fiscal reports. However, seven grantees said that feedback on reports was not specific or timely. Only four grantees told us that they received PO comments on their reports during monthly monitoring calls, though HRSA states that reporting requirements are to be discussed during routine calls, which are intended to provide POs with an opportunity to provide such feedback. While a lack of feedback might indicate that a PO had no concerns about a grantee’s reports, POs may be missing opportunities to use the information provided in reports to better communicate with grantees about their compliance with program requirements and help grantees make improvements. Seven grantees stated that they would appreciate receiving more feedback on the reports they submit to ensure they were meeting HRSA’s standards.

Some grantees told us that TA was not helpful because POs sometimes provide conflicting or delayed guidance. TA is a key step toward addressing grantee challenges with program implementation identified during routine monitoring. Though eight grantees described occasions when they received helpful TA from HRSA staff or contractors, eight noted that PO responses to their questions were sometimes delayed or inconsistent with past verbal guidance provided by their current or a past PO, making it difficult for them to understand what changes were needed. For example, one grantee told us it takes an excessive amount of time for their PO to answer their questions, and another said that PO responsiveness varied.

Further, four of the 25 grantees said they were told that HRSA could not provide needed TA due to budget constraints, forcing the grantees to seek TA from other sources or using their own administrative funds. Three of those grantees told us that they hired TA providers using their administrative funds, but one added that the TA cost $30,000 out of their limited administrative budget, which they noted might not be an option for many grantees. The CARE Act requires that grantees spend no more than 10 percent of their grant on administrative activities, which include TA and service provider monitoring activities. Three other grantees told us they turned to NASTAD for TA when HRSA could not provide it or when PO responses to their questions were delayed. Some grantees noted that HRSA had provided assistance through national TA calls and webinars, and one added that calls and webinars were a useful substitute for on-site TA when travel funds are limited. One grantee explained that they received helpful TA from their PO by phone after a planned TA visit by the PO was cancelled by HRSA due to constrained travel funds.

We found that 6 of the 25 grantee files we reviewed from 2010 and just 2 of the 25 files from 2011 contained documentation of TA reports and that few files contained documentation of PO discussions of corrective actions with grantees. HHS guidance states that monitoring activities and any resulting follow-up on identified performance issues must be documented, and issues are to be addressed as soon as possible by providing TA and ensuring grantees take needed corrective actions. Three grantees told us that PO follow-up on TA was vague or delayed, though two grantees told us that their POs did conduct follow-up on TA in monthly conference calls. Two grantees told us that though they informed HRSA in writing of their proposed action steps in response to TA recommendations, HRSA did not provide feedback on their proposed corrective actions. Another grantee said that they were unable to address site visit findings due to a lack of timely TA related to the findings.

Some grantees said that their need for TA was exacerbated by the lack of a current program manual. For example, one grantee explained that a manual would help them with matters such as grantee reports. HRSA officials confirmed that the most recent Part A and Part B manuals were issued in 2006, and stated that these printed manuals were not updated to reflect the 2009 CARE Act reauthorization. While HRSA officials stated that policies and procedures had been made available on the CARE Act website, they acknowledged that information for grantees is not available in the form of a comprehensive program manual similar to the printed manual that was last provided in 2006. Seven grantees noted that more written guidance, including an up-to-date electronic program manual, would help them with many of their routine questions or TA needs, which often revolve around questions about CARE Act program requirements. Two grantees added that such written guidance would be especially beneficial for new grantee staff or newer grantees. Further, one of the service providers we spoke with stated that it did not find the HRSA website to be helpful because links were not always kept up to date. The Comptroller General of the United States’ Domestic Working Group found that establishing departmentwide policies and procedures on an internet site is beneficial to grantees because it allows grantees to find detailed HRSA officials said that they recently information in a single location.issued a survey to obtain feedback from grantees about HRSA’s program operations and processes, including the frequency and timeliness of PO communication with grantees and their satisfaction with TA provided by HRSA through conference calls, the HRSA website, and HRSA contractors. They said that they plan to use the results of this survey to improve their interactions with grantees.

HRSA did not follow its own policies for selecting the grantees it visited from 2008 through 2011, and varied in its timeliness for providing site visit follow-up. According to HRSA officials, the agency cannot visit all of its 111 Part A and Part B grantees each year due to staff and budget constraints. Therefore, it is necessary for HRSA to be strategic in selecting which grantees to visit in any given year. HRSA does not have written guidance describing its policy for the selection of grantees to visit; however, agency officials told us that they prioritize site visits based on two elements—grantees without a recent site visit and grantees with problems. In addition, the Monitoring Grants and Cooperative Agreements for Federal Personnel manual, which accompanies a federal course which HRSA has offered to its employees for several years and requires all new POs to take suggests that agencies should determine which grantees to visit based on an analysis of risk, which may include the two elements HRSA told us it uses, as well as a consideration of grant funding level, among other things. However, our review of HRSA site visit data suggests that HRSA did not consistently select the grantees it visited based on these three elements.

First, HRSA did not prioritize site visits based on the amount of time that had passed since a grantee’s last visit. Specifically, although many HRSA POs we spoke with said that site visits were a valuable and effective form of oversight, we found that 44 percent of all Part A and Part B grantees did not receive a site visit from 2008 through 2011. In addition, 6 of the 25 grantees we interviewed told us that there had been a significant amount of time between HRSA site visits they had received or since their most recent site visit, ranging from 5 to 12 years. One of these grantees said that its first HRSA site visit after 12 years led to the grantee being placed on restrictive drawdown. Grantee officials said that they believed that if HRSA had not waited 12 years to conduct a site visit there would have been far fewer findings because they would have been making necessary adjustments with each periodic site visit. An additional indication that HRSA does not consider time since last visit when scheduling site visits is the fact that HRSA does not maintain a centralized list of site visits that have been conducted. In order to provide data on their site visits for the purpose of our review, HRSA extracted data from travel records. Without centralized site visit data, HRSA would not be able to readily track this element when determining which grantees to visit Second, HRSA did not always appear to prioritize site visits based on a grantee’s history of problems. Based on HRSA data, we found that 30 percent of all Part A and Part B grantees with a history of problems did not receive a single HRSA site visit from 2008 through 2011. In addition, only three of the nine Part A and Part B grantees with the most HRSA site visits from 2008 through 2011 had been placed on restrictive drawdown. While HRSA visited these grantees three or more times, other grantees that were placed on restrictive drawdown received two or fewer HRSA site visits during these 4 years. Although HRSA officials told us that restrictive drawdown is not the only indication of grantee problems, they said they impose it when the grantee has a history of serious problems. We found that some grantees with numerous site visits had not been placed on restrictive drawdown, while other grantees with fewer site visits had. In fact, two grantees that were placed on restrictive drawdown in 2011 did not have a HRSA site visit at any time from 2008 through 2011.

Third, some of the grantees that HRSA visited most during these 4 years had relatively small grant awards, indicating fewer people being served by that grantee, which suggests that the agency did not prioritize site visits based on grant funding level. For instance, the Virgin Islands received approximately $1 million in 2011 CARE Act Part B funding, based on an estimated 568 living HIV/AIDS cases at the end of 2009, but HRSA conducted six site visits there over 4 years. In contrast, California received the second largest 2011 grant award, approximately $150 million, based on an estimated 117,869 living HIV/AIDS cases at the end of 2009, but HRSA did not conduct any site visits there over the 4 years. See table 1 for the Part A and Part B grantees with the most HRSA site visits and their 2011 grant award and estimated HIV/AIDS cases, and see appendix II for a complete listing of this information for all Part A and Part B grantees. HRSA officials explained that the Virgin Islands had been placed on restrictive drawdown and had a history of severe problems that included both fiscal and administrative issues and problems with service delivery. However, other Part B grantees, with significantly larger grant awards, and a history of problems during the period covered by our review did not receive a HRSA site visit. Furthermore, the District of Columbia, which received approximately $21 million in 2011 CARE Act Part B funding based on an estimated 17,250 living HIV/AIDS cases at the end of 2009, had a history of problems and would require HRSA to spend little in travel funds to conduct site visits, but received only one visit over the 4 years. HRSA officials stated that there is no direct correlation between the amount of grant funding and the size of a grantee’s problems. However, because the Part A and Part B grant awards are based on the number of reported living HIV/AIDS cases in each metropolitan area or state, the grantees with larger awards serve more affected people.

Furthermore, HRSA often was not timely in providing site visit follow-up to grantees. HHS guidance states that agencies are to document in writing site visit reports to grantees as soon as possible after completion of the visit. At the time of our file review, HRSA did not have guidance for POs specifying time frames with which to provide site visit reports. Our file review for grant years 2010 and 2011 found that 12 of the PO files for the 13 grantees that received site visits that occurred during that time period contained a copy of the site visit report. However, many of the grantees we interviewed that had a HRSA site visit during the period of our review said that it took HRSA a long time to provide the site visit report. Specifically, 15 of the 25 grantees we interviewed told us they had a HRSA site visit from 2008 through 2011. Eight of those 15 grantees said that it took over 30 days to receive the site visit report; it took HRSA 4 months or longer to provide 6 of those grantees with the site visit report. In a December 2011 update to its Operations Manual, which was not in place during the majority of the period covered by our review, HRSA specified that POs are to provide site visit reports to grantees within 30 days of the visit.

Some POs we interviewed said that they were not always aware of grantees’ single audit findings or corrective actions developed in response to audit findings. According to HHS guidance, HRSA is to review annual single audit reports as part of its grantee oversight, and may use annual single audit information in decisions about implementing special award conditions such as restrictive drawdowns. Though DFI is the HRSA division primarily responsible for helping to ensure that grantees take appropriate corrective actions in response to single audit findings, POs, within HAB, are responsible for providing overall monitoring of grantees’ compliance with program requirements. We have found in past work that audits may provide important information on grantee performance and can serve as an accountability mechanism to help determine whether grantees used funds in accordance with program rules and regulations.enhanced by the timely review of single audit findings.

For this reason, PO monitoring could be However, some POs told us that DFI does not consistently share information about single audit findings and corrective actions. Though POs are able to access a summary of a grantee’s HRSA-related single audit findings in EHB, the EHB summary does not specify whether the findings are related to CARE Act programs in particular, which might make it difficult for POs to determine whether the audit contains information pertinent to their monitoring efforts without explanation from DFI. DFI officials told us they may contact POs or other HRSA staff to help review and ensure the adequacy of grantee corrective actions, but according to POs they do not always do so. Given their knowledge of grantees through routine monitoring activities, POs could provide DFI with valuable input regarding grantees’ corrective actions. However, one PO told us that DFI did not notify her when the grantees in her portfolio had audit findings, and another told us that DFI did not consistently share grantee corrective action plans in response to audit findings with her, though DFI might on occasion alert her if there was an issue with a grantee audit. One PO reported that she was recently consulted by DFI to provide input into a grantee’s audit findings, but added that this was the first time such consultation had occurred. HRSA officials said that they have enhanced the ways in which DFI communicates audit information to POs through EHB by including citations about audit findings specific to CARE Act programs along with grantee corrective actions designed to address the findings. HRSA officials said that they began doing this as of April 30, 2012.

The lack of consistent communication about single audit findings across HRSA divisions limits opportunities for POs to incorporate single audit information into their monitoring and help HRSA ensure that grantees take timely and effective corrective actions, as required. This is especially important given that HRSA may on occasion use single audit findings as a basis for implementing restrictive drawdowns, which require POs to work with grantees in reviewing financial information as part of grantees’ drawdown requests, even if the restrictive drawdown was recommended by DFI. In addition, opportunities for POs to help grantees implement timely corrective actions may also be affected by the lengthy time frames of the single audit process. For example, DFI officials told us that a grantee may be cited for a repeat finding in an audit before they have had time to correct the finding from the prior year’s audit. We previously reported that in the Single Audit process it could take 15 months or more from the end of the fiscal year in which an audit finding is initially identified before a grantee’s corrective action plan is approved by the responsible federal agency.opportunity to correct audit findings and POs may not have the Thus, in some cases, grantees may not have the opportunity to help ensure that the grantee corrects audit findings before the following year’s audit is conducted.

Though single audits may contain information important to PO monitoring of grantees such as an assessment of how grantees are monitoring their service providers or whether the grantee is properly documenting client eligibility, some grantees told us that neither POs nor other HRSA staff generally communicate with them about single audits. Six grantees said that they did not recollect having any communication with HRSA about audit findings, though five others noted they had discussed audit findings with HRSA staff on at least one occasion, including one who said they discussed their annual single audit with HRSA staff during a site visit. Three POs told us that grantees sometimes initiate communication about their single audits. For example, one PO said that although she generally does not get involved with the audits or receive information from DFI, she had been contacted by one of her grantees regarding an audit finding, and therefore reviewed the proposed corrective actions as part of her routine monitoring.

HRSA often did not communicate or document the reasons for implementing a restrictive drawdown. Only 2 of the 11 grantees from our sample of 25 that were on restrictive drawdown said that HRSA communicated the reasons they were placed on restrictive drawdown. In five cases, the grantee said they only learned about the restrictive drawdown upon receiving a new NOA, without prior warning or explanation from their PO or other HRSA staff. Though the issuance of a new NOA is the official means of notifying the grantee of the new condition on their grant award, NOAs do not enumerate the reasons for the restrictive drawdown. Though HRSA officials stated that grantees were notified verbally or in some cases by e-mail about their restrictive drawdown status, we found that the PO files for many of the 11 grantees in our sample that were on restrictive drawdown did not contain documentation of the reasons the restrictive drawdown was imposed. Federal regulations state that when an agency implements a condition on a grantee award such as a restrictive drawdown, it is to notify the grantee of the nature of the condition and the reason it is being imposed, and HHS guidance states that the agency is to document the reasons for use of the condition in the grant file. According to HRSA, 6 of the 52 Part A grantees and 13 of the 59 Part B grantees were on restrictive drawdown from 2008 through 2011.

HRSA also has not consistently provided grantees placed on restrictive drawdown with instructions about how to meet the conditions for drawing down funds. HHS guidance states that the agency is to explain the nature of, and requirements for meeting, the conditions of the restrictive drawdown. However, 5 of the 11 sampled grantees that were on restrictive drawdown told us that HRSA did not provide clear instructions at the time the restriction was imposed for submitting drawdown requests or the supporting documentation they were required to submit with each request. Four grantees said that when they were first put on restrictive drawdown, they had to repeatedly submit their drawdown requests to their PO before clear expectations were established. One grantee said that they believed that HRSA was “making up the rules about restrictive drawdown as they went along,” and another stated that they received no guidance or written instruction specifying the documentation required as part of a drawdown request, which caused delays in the processing of their requests.

Further, HRSA has not consistently provided grantees with guidance on the types of corrective actions needed, including time frames for making the required changes, in order to have the restrictive drawdown removed. Federal regulations state that needed corrective actions and timelines are to be explained to the grantee at the time a restrictive drawdown is implemented. Most of the grantees in our sample said that they were not given a written set of action steps or specific corrective actions needed in order to have the restrictive drawdown removed. For example, one grantee told us that although they are willing to do what is needed to have the restriction removed, HRSA has not provided them with a set of requirements and timelines either verbally or in writing. Another grantee said that HRSA did not offer training to the grantee on the requirements for its restrictive drawdown until over a year after the condition was imposed. A third grantee stated that though after the restrictive drawdown process they made a change that will help them hold their service providers more accountable, the process would have been more beneficial had they been given a clear picture of the end goals at the outset.

HRSA officials said that when a restrictive drawdown is lifted, the grantee is to be notified through a new NOA which is signed by the GMO. HRSA’s recently issued guidance states that the agency will revisit a grantee’s restrictive drawdown status once the grantee completes steps such as submitting documentation of compliance with corrective actions, completing recommended TA, and implementing a corrective action plan developed as part of a site visit. However, HRSA has lifted the restrictive drawdown condition for only two of the grantees in our sample since this guidance was in place, and it is unclear whether HRSA provided grantees with a clear plan for the removal of the condition even upon completion of recommended TA or corrective actions. One grantee explained that each time they made the changes requested by HRSA, they were given a new set of requirements to meet. For example, according to a TA report by HRSA consultants about 1 month after the restrictive drawdown was implemented, the grantee had taken important steps to address its financial challenges. Further, documents provided by the grantee indicate that following the consultant TA report, the PO indicated he would recommend that the grantee be removed from restrictive drawdown. However, despite documenting its ongoing work to address its financial challenges, the grantee was told more than a month later that further steps would be required before the condition would be removed, and the grantee remained on restrictive drawdown for approximately 4 more months. The grantee stated that they were not clearly told what they could do to have the condition removed despite repeated requests for that information, and that the costs to the program of remaining on restrictive drawdown interfered with the possible benefits.

HRSA officials said that HRSA is revising the restrictive drawdown language to be included in the NOA to include the reasons for the restriction, needed corrective actions, and the type of documentation required for the drawdown requests to be processed, and would begin using this updated language on NOAs for grantees placed on restrictive drawdown after May 1, 2012. HRSA officials said that grantees are to be informed in writing of all conditions on their awards and how to proceed in order to have the conditions removed. They said that, where that is not occurring, they will work to ensure that it does.

We found that HRSA did not always provide grantees with additional TA or time to correct deficiencies before placing them on restrictive drawdown. HHS guidance states that an agency will generally afford the grantee an opportunity to correct any deficiencies before imposing conditions such as restrictive drawdown. Two grantees told us they were placed on restrictive drawdown after a site visit, but one noted that they were not given an opportunity to address the site visit findings before being placed on restrictive drawdown. The grantee stated that they submitted a corrective action plan in response to site visit findings approximately 2 months after receiving the site visit report, but according to HRSA the grantee was placed on restrictive drawdown right after the plan was submitted, suggesting the grantee did not have an opportunity to implement the corrective action plan before the condition was put in place.

HRSA has stated that the restrictive drawdown process is a means of doing more intensive monitoring of grantees experiencing problems with program implementation, financial management, or other administrative issues. Two of the grantees in our sample told us that they had more frequent communication with their PO during monitoring calls or through e-mails after restrictive drawdown was implemented. In some cases, however, the restrictive drawdown process may have exacerbated a grantee’s existing challenges. For example, one grantee said they were told that they were put on restrictive drawdown because they had an unobligated balance that resulted from not spending funds at a quick enough pace. However, the grantee told us that, in part due to a lack of clear instructions from HRSA, the restrictive drawdown process caused further delays in their ability to spend grant funds and therefore aggravated the unobligated balance problem. In another case, a HRSA financial TA consultant reported that the restrictive drawdown itself was causing delays in a grantee’s ability to spend its grant funds, which the consultant feared might lead to a finding in the grantee’s next single audit.

HRSA’s Lack of Records and Changes in PO Assignments Further Challenge Its Oversight of CARE Act Grantees

HRSA’s lack of records and frequent staff changes in PO assignments further challenge the agency’s oversight of grantees. HRSA officials told us that records of grantee oversight are located across three types of the agency’s files— HRSA’s EHB, which includes official NOAs and required reports, annual single audit reports, and PO files, which include monitoring documentation, such as notes from routine calls and TA, and site visit reports—not just those documents available electronically in HRSA’s EHB. Therefore, we consider all three of these files together to be a complete record of grantee oversight. While conducting our file review, we found that this complete oversight record was only maintained for the current and previous grant years because, prior to that, consistent with its records management program, HRSA destroyed documentation of grantee monitoring only available in the paper PO files. At the time of our file review midway through the 2011 grant year, all three grantee files were only available for the first half of grant year 2011 and grant year 2010, which was only approximately a year and a half of documentation. Therefore, HRSA’s ability to correct previously noted problems with grantee performance could be limited because easily accessible documentation of such problems was not maintained. In fact, a HRSA official told us that he believed that one grantee with a history of problems should be placed on restrictive drawdown. However, HRSA did not take this step because they had destroyed the site visit reports containing findings that would have supported placement on restrictive drawdown. In a December 2011 update to HRSA’s Operations Manual, which was not in place during the majority of our review, HRSA specified that POs are to maintain copies of site visit reports for at least 5 years, and any documents related to issues under investigation for as long as necessary. However, this change does not apply to other key documentation in PO files, such as regularly scheduled conference calls and copies of relevant emails.

Furthermore, frequent PO changes in monitoring assignments could compound the challenges created by HRSA’s lack of long-standing documentation and possibly limit HRSA’s institutional memory for a given grantee. Specifically, according to HRSA data, from 2008 through 2011, 93 of the 111 Part A and Part B grantees had at least two or three different POs and 2 grantees had four different POs during this time.

HRSA’s frequent changes in PO assignments could leave a recently transitioned PO and his new grantee at a disadvantage. For example, during our file review, we found that one of the grantees in our sample, a grantee with a history of problems that had been placed on restrictive drawdown, was missing documentation of monitoring calls for the 2010 grant year. That grantee’s current PO began monitoring the grantee near the beginning of the 2011 grant year and she explained that she did not receive documentation of any monitoring calls that had occurred under the previous PO.

Some of the grantees we interviewed said that frequent PO changes resulted in variation in HRSA oversight. Eight of the 25 grantees we spoke with expressed concern about changes in their POs and 13 described the variation in PO monitoring styles that grantees had to adjust to when a new PO was assigned. For example, 1 grantee that had three POs from 2008 through 2011 told us that the PO changes resulted in delayed responses from HRSA and contradictory information being provided by different POs, which created confusion for the grantee and delays in funding distribution to service providers. Conversely, a grantee that had one PO during this time period told us that having a knowledgeable PO who serves for a long period of time creates better management of the grant because the PO develops important institutional memory about the grantee and its program.

HRSA Recently Issued National Standards for Grantee Monitoring of Service Providers, but HRSA’s Implementation Created Challenges for Grantees

Federal regulations require grantees to oversee service providers and, in April 2011, HRSA issued the National Monitoring Standards, a compilation of requirements for grantee monitoring of service providers. Some grantees said that their implementation of the standards was hindered by insufficient HRSA assistance and the annual site visit requirement.

Grantees Monitor Service Providers and HRSA Recently Issued National Standards

Federal regulations require grantees to oversee service providers. HRSA told us that grantees are required to report to HRSA on their approach to service provider monitoring activities in annual grant applications. HRSA also verifies this information through grantee site visits and a review of a list of service providers, which grantees are required to submit annually. The number of service providers for Part A and Part B grantees ranges greatly. For example, Nebraska had only 3 service providers in 2011, whereas New York had 83 providers. Grantees we interviewed said they use a variety of tools to monitor their service providers, including frequent phone and e-mail communication, monthly service provider meetings, site visits, training, or reviews of financial and program reports. Specifically, most of the 25 grantees we interviewed told us that they are in at least monthly, if not daily, communication with their service providers. In addition, all but four grantees conduct service provider site visits at least annually. Of the four grantees that were not conducting site visits annually, two large states conducted site visits every 2 years, with one of those states visiting service providers with performance issues more frequently; one midsize state conducted site visits every 3 years; and one small state had not conducted site visits in many years. However, all but one of these grantees were in the process of beginning annual site visits at the time of our interview.

In April 2011, HRSA issued the National Monitoring Standards, which it describes as a compilation of existing requirements for grantee monitoring of Part A and Part B service providers. The standards include 133 requirements for Part A grantees and 154 requirements for Part B grantees. These standards describe program and financial requirements, program-only requirements, and financial-only requirements. (See table 2.)

According to HRSA, these standards consist of preexisting requirements for program and financial management, monitoring, and reporting that are based on federal statutes, regulations, and program guidance and consolidates these requirements into one location to assist grantees. Table 3 provides examples of the standards.

More than half of the 25 grantees from our sample said that they found the training and/or TA HRSA has provided on the National Monitoring Standards to be insufficient because it has not answered all of their questions about HRSA’s expectations for how they should implement the standards. According to HRSA officials, HRSA has offered two webinars, a national TA call, and workshops at an all-grantees meeting to assist grantees. Some grantees told us HRSA also discussed the standards during a recent administrative meeting. Further, 5 of the 10 POs we interviewed told us they had discussed implementation of the standards with grantees during routine monitoring. Five grantees told us they had asked for more in-depth TA on the standards but had not received it. One grantee, however, did receive additional TA by phone from a HRSA branch chief targeted to all Part A and Part B providers in the grantee’s state. Although HRSA stated that it would provide sample tools to demonstrate how grantees could best meet certain standards, several grantees indicated that HRSA had not done so. According to most grantees, inadequate training, TA, or both makes it more difficult to understand HRSA’s expectations and be assured that they are adequately implementing the standards, which they were required to put into practice immediately upon their release in April 2011. HRSA officials said that they believe that the webinars, conference call, and presentations they have made at grantee meetings have provided grantees with useful assistance in implementing the standards. They further noted that the standards do not represent new requirements and therefore should have been familiar to grantees. However, in its survey of grantees, discussed earlier in this report, HRSA asked grantees about their training needs and any additional information needs they might have regarding a variety of issues, including the standards.

Seven grantees expressed particular concern about the annual site visit requirement outlined in the standards, which two of them noted is especially challenging for grantees with a large number of providers across a large geographic area or in states with limited staff resources. Two of those grantees said that the new standard would require them to change site visit processes that had proven effective over time. They told us that they conduct routine site visits based on an assessment of risk; if they determine through regular monitoring that a provider has more performance issues than other providers, they will prioritize a site visit to that provider or visit that provider more frequently. They said that the requirement to visit every service provider annually, regardless of their performance, will not allow them to continue with this approach. One grantee with approximately 140 service providers told us that meeting the annual site visit requirement would be impossible given the grantee’s large number of providers and limited staff and administrative resources. One grantee told us the administrative burden of this requirement is exacerbated by the chart review requirements which will require grantees to spend more time reviewing provider documents on site, while sacrificing other monitoring activities focused on the quality of provider services. Two grantees noted that the annual site visit standard is more stringent than HRSA’s own standard for site visits to grantees, and that HRSA therefore may not have a good sense of the time and resources required to conduct annual site visits of all service providers. Despite these concerns, several grantees told us they are taking steps to comply with the requirement.

NASTAD has written that the standards will require some grantees to largely restructure current monitoring systems and force them to focus on administrative reviews rather than an assessment of the quality of services being delivered by service providers, and that the standards are inconsistent with the National HIV/AIDS Strategy’s goal of streamlining grant administration and reporting requirements. NASTAD has further noted that the annual site visit requirement will be especially difficult for grantees during a time when grantees are experiencing reductions in funding and staff, and that the requirement will force grantees to dedicate limited staff resources toward monitoring activities rather than service delivery. According to NASTAD, grantees may also find it difficult to conduct all required provider monitoring activities using only the 10 percent of their CARE Act grant allowed for administrative costs. Many grantees also told us that the standards increase the administrative burden on their programs. HRSA responded to NASTAD that grantees should review their current use of administrative resources to ensure they are efficiently using resources to meet all of the monitoring standards, which are simply meant to provide clarity about existing requirements. In light of grantees’ ongoing concerns, however, NASTAD has recommended that HRSA explore alternatives to the annual site visit requirement, including requiring a site visit every 2 years instead of annually. In response to NASTAD’s recommendations, HRSA has stated that annual provider site visits are a programmatic requirement developed based on federal regulations permitting HRSA to set the frequency of monitoring activities, including site visits. HRSA also stated that the site visit requirement, which is consistent for all Part A and Part B grantees, is based on HHS OIG recommendations that HRSA set standards for grantee monitoring of service providers that include some consideration of regular site visits. NASTAD has written that because HRSA has authority to set the frequency of monitoring activities, it should consider alternatives to the annual site visit requirement.

In response to grantee concerns about the standards, HRSA officials have stated that TA may be requested through individual POs, and that it will provide future webinars focused on common grantee concerns, including the annual site visit requirement and eligibility documentation. HRSA officials further told us that they are encouraging collaboration between Part A and Part B grantees to jointly conduct site visits of providers that are funded by both Parts A and B to ease the burden of the site visit requirement. At least one larger grantee told us they will take advantage of that opportunity for collaboration. Some grantees stated that the standards are a helpful tool, and a few noted that the standards will help them better communicate with their service providers.

Conclusions

Effective oversight of CARE Act grantees and service providers is critical to the CARE Act’s mission of providing help for uninsured or underinsured individuals and families affected by HIV/AIDS. However, our findings show that deficiencies in HRSA’s oversight may compromise its ability to ensure that this program is meeting its objectives or that CARE Act funds are being spent properly. Even though HHS and HRSA guidance exists regarding the documentation and follow-up of the key elements of grantee oversight including routine monitoring, the provision of TA, site visits, and restrictive drawdown, HRSA project officers are not always following these guidelines. If a grantee is struggling, the lack of systematic provision and documentation of assistance to improve the grantee’s performance, and not retaining such documentation over time, present a great challenge to ensuring that such problems do not recur. Many HRSA POs we spoke with said that site visits are a valuable and effective oversight tool. However, in visiting some grantees multiple times while not visiting others, seemingly without regard to the size of the grantee or presence of problems, HRSA demonstrated a lack of a strategic, risk- based approach for selecting grantees for site visits. Another challenge is the lack of an updated and electronically available comprehensive program manual for grantees. Grantees said that such a manual would likely decrease their need to consult with POs over relatively routine issues. Currently, grantees must frequently seek assistance from POs because there is not a current and complete source of written information that is readily available to guide their efforts. While HRSA’s compilation of 133 Part A and 154 Part B monitoring standards does provide grantees with an exhaustive set of guidelines for ensuring that their service providers are meeting program requirements, our findings on HRSA’s own oversight of grantees provide evidence of how important training and follow-up are to ensure that these requirements are consistently followed. HRSA has provided training to assist grantees in carrying out the standards, but grantees said that they wanted more guidance and training. Among the issues about which HRSA surveyed its grantees, was the additional information its grantees needed regarding the standards.

Recommendations for Executive Action

In order to improve HRSA’s oversight of Part A and Part B grantees, we recommend that the Administrator of HRSA:

Ensure that the agency is implementing the key elements of grantee oversight consistent with HHS and HRSA guidance, including routine monitoring, the provision of technical assistance, site visits, and restrictive drawdown.

Assess and revise its record retention management program so that complete grantee files are available for a period of time that HRSA determines will satisfy all of the agency’s grantee oversight needs.

Develop a strategic, risk-based approach for selecting grantees for site visits that better targets the use of available resources to ensure that HRSA visits grantees at regular and timely intervals.

Update and maintain a program manual for grantees.

Use the results of HRSA’s survey of grantees to identify grantees’ training needs to allow them to comply with the National Monitoring Standards.

Agency Comments and Our Evaluation

We provided a draft of this report to HHS for its review, and HHS provided written comments (see app III). HHS concurred with all five of our recommendations and indicated that HRSA will work to fully implement the recommendations to improve oversight of Parts A and B of the CARE Act program. HHS also offered some specific comments in response to the report conclusions. HHS acknowledged that PO led site visits, monitoring calls, single audit reports, and the imposition of restrictive drawdown are central to HRSA’s routine monitoring, but added that the agency’s overall oversight strategy is a multilayered approach that involves review of items such as required grantee reports used for postaward monitoring, site visits, monitoring calls, review of audit reports, and the provision of technical assistance on all of these issues. Our analysis included these elements, as well as a discussion of ways in which these elements intersect. We interviewed HRSA and grantee staff on these tools and describe in this report grantees’ observations on HRSA’s provision of technical assistance and feedback on the large number of reports that they must routinely provide to HRSA. Findings in this report include a detailed discussion of issues in Ryan White program oversight including both the execution and documentation of the elements listed above.

HHS also acknowledged that HRSA’s documentation of grantee monitoring should be strengthened, noting that during the period of GAO’s review, HRSA did not maintain all documentation of oversight in one centralized file. HHS stated that HRSA has instituted a new quality improvement process, which strengthens both documentation standards and communication with grantees. HHS said that this would be done through an expansion of the use of the EHB as the primary centralized location for documentation of oversight and monitoring, including site visit reports. HHS said that this process will also include regular PO meetings to provide training, and improvements in HRSA’s records management practices. These steps appear to be consistent with the goals of our recommendations. In follow-up to its comments, HRSA provided additional information on the agency’s planned information technology development efforts to improve and expand the functionality of EHB between September 2012 and mid-2013.

HHS commented on statements by grantees we interviewed that indicated that HRSA could not provide needed TA due to budget constraints, forcing the four grantees to seek TA from other sources, using their own administrative funds. HHS described a wide array of TA and training services that HRSA provides to grantees. HHS also provided information on the extent of grantees’ use of some of these services and HRSA’s financial resources devoted to providing these services. HHS acknowledged in this discussion that, due to competing demands for HRSA’s TA, HRSA does, at times, recommend grantees utilize their CARE Act funding for TA. In its comments relevant to TA, HHS also noted our mention of the fact that three grantees had to turn to NASTAD for TA when HRSA could not provide it or when PO responses to their questions were delayed. HHS noted that HRSA has had a partnership with NASTAD in place since 1998 to provide TA to grantees. However, as we note in our report, the TA to be provided by NASTAD under this partnership is for the purpose of assisting Part B grantees with their ADAP. While several Part B grantees told us that they receive important assistance from NASTAD, there is no similar cooperative agreement in place or HRSA-recognized organization to provide TA to Part A grantees.

HHS also commented on our finding that HRSA did not prioritize site visits strategically. HHS stated that there can be indications of grantee problems beyond those that we included in our site visit analysis, which we acknowledged in the report. Many of the additional indicators of grantee problems HHS listed in its comments, such as fiscal and administrative challenges, are also issues that can cause grantees to receive annual single audit findings or to be placed on restrictive drawdown, the two indicators we used in our analysis. HHS then provided extensive detail on the issues in Puerto Rico and the Virgin Islands that led to grantees in those jurisdictions receiving significantly more site visits than other grantees that had received substantially more funding. In our discussion of HRSA’s site visits, we make the point that the size of the grant did not appear to play a major role in HRSA’s decisions about which grantees to visit, including among grantees experiencing problems. Many POs we spoke with said that site visits were a valuable and effective form of oversight. Because HRSA cannot visit all of its grantees each year, it must work to ensure that it uses this valuable tool in such a way as to gain as much benefit as possible. The Monitoring Grants and Cooperative Agreements for Federal Personnel manual that we refer to in the report and HHS cites in its comments lists several grant characteristics that should be considered in selecting projects for on-site monitoring. “Cost and Total Support” is the first issue listed in the manual. In our discussion, we did not question the presence of serious issues in Puerto Rico and the Virgin Islands. Our point is that even among grantees experiencing problems, jurisdictions with much larger grants, such as the District of Columbia, were not similarly prioritized for site visits, even though a site visit to the District of Columbia would be of low cost to the agency.

HHS commented on the prevalence of HIV/AIDS in the Caribbean as a justification for its numerous site visits, but we note that the size of Part A and B CARE Act grants is based upon the number of HIV cases that exist in the jurisdiction being served by the CARE Act grantee, thereby serving as a proxy for the prevalence of the disease in that area. Data on HRSA’s website indicate that CARE Act programs served 146 clients in the Virgin Islands in 2008, while serving 16,203 in the District of Columbia during the same period. HRSA’s pattern of site visits indicates that the agency visited some grantees with smaller grants far more often than other grantees with much larger grants, and thus a much higher prevalence of disease, that also experienced challenges in administering their grants. In its comments, HHS describes numerous elements of HRSA’s routine monitoring and several instances of TA directed to the District of Columbia. Nonetheless, it received one HRSA site visit during the period covered by our review as compared to the Virgin Islands, which received six HRSA site visits, as well as routine monitoring and TA. The District of Columbia’s grant was approximately $21 million while the Virgin Islands’ grant was $1.2 million. This suggests that HRSA did not consider the size of the grant in deciding which grantees to visit. While the size of the grant would not be the only consideration in a strategic approach to scheduling site visits, it should be a major consideration.

HHS’s comments also addressed the issue of PO’s awareness of single audit findings. HHS described how, under HRSA’s process during the time covered by our review, POs were to be informed about single audit findings. HHS described an enhancement to HRSA’s process for ensuring that POs are provided with a more detailed description of single audit findings and corrective actions taken to address the findings. HHS said that this improved process was put in place as of April 30, 2012, which was after the period covered by our review.

In its comments, HHS also describes improvements to HRSA’s documentation of and communication with grantees about the restrictive drawdown process, issues which we already discuss in our report. If fully implemented, these improvements have the potential to remedy many of the issues we identified in our report.

In acknowledging our findings on HRSA’s records retention practices, HHS said that HRSA was required to retain records according to schedules approved by the National Archives and Records Administration (NARA). However, it further noted that HRSA has engaged in a review of its records management practices. HHS said that, in December 2011, during the course of our review, HRSA formed a workgroup on records management with program and grant staff across the agency to streamline various retention schedules for program and grant record retention practices. HHS said that HRSA will be providing additional training and updated policies for the HAB POs and grants management specialists on the contents of the official grant file. HHS said that HRSA would seek approval for any changes to HRSA’s record retention policies.

In commenting on our discussion of the difficulty some grantees expressed about meeting the requirement for an annual visit of their service providers, HHS noted that HRSA is working with a small number of grantees to provide flexibility in meeting the requirement, but did not describe what that flexibility would entail. In discussions near the end of our review, HRSA officials said that this would not include excusing grantees from the requirement that they visit all of their service providers annually, but could involve leveraging the efforts of other CARE Act grantees.

HHS concluded its general comments on the report by again noting that the department concurred with all five of our recommendations. HHS further commented that HHS is already in the process of planning or implementing many of our recommendations. In its comments, HHS provided considerable detail on actions HRSA plans to take or has already taken to implement our recommendations. The actions HHS describes are generally responsive to our recommendations. However, because these actions follow the conclusion of our review or are to be implemented in the future, and sometimes without a designated time frame, we are unable to evaluate them specifically.

HHS also provided technical comments, which we incorporated as appropriate.

As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies of this report to the Administrator of HRSA and the appropriate congressional committees. In addition, the report is available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at (202) 512-7114 or crossem@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix IV.

Appendix I: Reporting Requirements for Part A and Part B Grantees

Appendix I: Reporting Requirements for Part A and Part B Grantees The Minority AIDS Initiative Annual Report for Part A grantees is due on January 31, 2012, which is in federal fiscal year 2013.

Appendix II: HRSA Site Visits of Part A and Part B Grantees

Caguas, P.R., Dutchess County, NY, Santa Rosa, CA, and Vineland-Millville-Bridgeton, NJ lost their classification as TGAs before the 2011 grant year, which began March 1, 2011, so the award amount is from grant year 2010 and the estimated living HIV/AIDS cases are as of December 31, 2008.

HRSA officials explained that when HRSA staff made trips to Puerto Rico that included stops at one or multiple Part A grantees and/or the Part B grantee. For example, a March 2009 trip to Puerto Rico included a site visit to the Part B grantee, to the San Juan Part A grantee, and to the Caguas Part A grantee. From 2008 through 2011, HRSA made 12 separate trips to Puerto Rico.

Appendix III: Comments from the Department of Health and Human Services

Appendix IV: GAO Contact and Staff Acknowledgments

GAO Contact

Acknowledgments

In addition to the contact named above, key contributors to this report were Tom Conahan, Assistant Director; Romonda Bumpus; Cathleen Hamann; Kathryn Richter; Sara Rudow; and Jennifer Whitworth.