RWTMA includes provisions related to unobligated balances, client-level data, and ADAPs. RWTMA includes provisions to encourage grantees to obligate their grant funds in the year in which they were awarded. RWTMA provides that Part A and Part B grant funds are available for obligation for a one-year period beginning on the date funds first become available (referred to as the grant year for the award). RWTMA requires HRSA to cancel the unobligated balance of grant awards at the end of a grant year and to require grantees to return any amounts from such balances that have been disbursed to them. However, in the case of base grants, a grantee may submit a request to carry over the unobligated balance prior to the end of the grant year. If HRSA approves the request, the unobligated balance that is approved for carryover (carryover funds) is available to the grantee for expenditure for a one-year period beginning upon the expiration of the grant year (referred to as a carryover year). Under the RWTMA unobligated balance provisions, HRSA is required to cancel any unexpended balance of carryover funds at the end of the carryover year. HRSA must make the canceled balances from the grant awards (that is, funds that were not eligible or approved for carryover and carryover funds that remain after the carryover year) available as supplemental grants for the first fiscal year beginning after the fiscal year in which HRSA obtains the information necessary for determining the balance available. Part A grantees with greater than 2 percent of their base grant awards unobligated at the end of the grant year and Part B grantees with greater than 2 percent of their Part B and ADAP base awards unobligated at the end of the grant year incur a penalty. RWTMA requires HRSA to reduce the amount of those grants by the same amount as the unobligated balance for the first fiscal year beginning after the fiscal year in which HRSA obtains the information necessary for determining the unobligated balance. The grant funds that become available as a result of these reductions are also to be made available as supplemental grants. RWTMA’s authorization of appropriations for base and supplemental grants under Parts A and B provided that amounts appropriated for a fiscal year would be available for obligation until the end of the second succeeding fiscal year. Further, under appropriations acts enacted since RWTMA, funds for grants under Parts A and B, to which the unobligated balance provisions apply, are available for obligation for a 3-year period. In fiscal year 2007, for example, funds were made available for obligation until September 30, 2009—the end of the 2009 federal fiscal year. Thus, as HRSA recognized in its guidance regarding the unobligated balance provisions, the initial obligation of funds, cancellation of unobligated balances, return of amounts disbursed to grantees, and the recompetition and redistribution of supplemental grants would need to occur within the 3-year window. In order to implement the RWTMA unobligated balance provisions, HRSA created a multistep process for grantees and issued a policy notice to grantees explaining this process. HRSA’s process for implementing the unobligated balance provisions in grant year 2007 included five steps. First, a grantee wishing to carry over funds was required to submit a carryover request to HRSA with an estimated unobligated balance of base grant funds 60 days prior to the end of the grant year. In addition to the estimated unobligated balance, the initial carryover request also had to contain a viable plan and detailed budget for the use of the funds, and a description of the grantee’s capacity to utilize the funds within one-grant year. Part A grantees had to submit their initial carryover request to HRSA by January 1, 2008. Part B grantees had to submit their initial carryover request to HRSA by February 1, 2008. The second step of the 2007 grant year process was the evaluation of the initial carryover requests. HRSA authorized grantees that obtained approval before the end of the 2007 grant year to carryover 50 percent of the amount they requested in this initial carryover request. To authorize the use of the carryover funds, HRSA issued these grantees a notice of grant award that explained to the grantees that HRSA had effectively transferred the carryover funds from their grant year 2007 account into their grant year 2008 account, though balances remained, in effect, available to the grantees for obligation until the end of grant year 2007. HRSA officials explained that they did not authorize the full amount of the initial carryover request because they believed it was possible that the grantees that requested waivers would incur obligations greater than anticipated in the 60-day estimate. HRSA officials stated that they wanted to authorize the carryover of a portion of the unobligated balance so that grantees with approved carryover requests would have a longer period of time to obligate the carried over funds. For step three of HRSA’s 2007 grant year unobligated balance process, grantees were required by HRSA to submit a Financial Status Report (FSR) 90 days after the end of the grant year. The FSR contains, among other things, a grantee’s actual unobligated balance. For Part A grantees, FSRs were due on June 1, 2008. For Part B grantees, FSRs were due on June 30, 2008. HRSA can extend the deadlines for grantees for submission of their FSRs and granted extensions for 30 to 180 days. For step four of the process, although not required by HRSA for grant year 2007, grantees could submit a final carryover request based on their actual unobligated balances. Those grantees that had their initial carryover requests approved and had been authorized by HRSA to carry over 50 percent of their unobligated balances at that time, could apply for the remaining funds (the difference between the 50 percent they had already been authorized to carry over by HRSA and their actual unobligated balance). HRSA then authorized the use of the additional amount of carryover funds by issuing a notice of grant award. For step five of this process, grantees with unobligated balances of greater than 2 percent of their grant year 2007 Part A, Part B, and ADAP base grants were assessed a penalty. This penalty was a corresponding reduction in grant year 2009 funds. In addition, Part A and B grantees with unobligated balances of greater than 2 percent for grant year 2007 were ineligible to receive supplemental grants in grant year 2009. For Part A grantees this meant that they were not eligible to receive grant year 2009 Part A supplemental grants. For Part B base grantees this resulted in ineligibility to receive grant year 2009 Part B supplemental grants. For Part B ADAP grantees, an unobligated balance of greater than 2 percent does not result in ineligibility for ADAP supplemental grants. Instead, ineligibility for the ADAP supplemental grant occurs when a grantee has not obligated at least 75 percent of its ADAP grant award within 120 days of the award. Figure 1 shows a timeline for Part A and B grant distribution and the distribution and the unobligated balance provisions. unobligated balance provisions. HRSA cancelled and recovered $13,764,295 in combined grant year 2007 Part B base and supplemental unobligated balances from 16 Part B grantees with unobligated balances of greater than 2 percent. In addition, these 16 grantees’ grant year 2009 awards were reduced by a total of $19,677,483 as a penalty for incurring an unobligated balance of greater than 2 percent in grant year 2007. Of this, $4,441,865 was from Part B base grants and $15,235,618 was from ADAP base grants. Prior to RWTMA, HRSA used the Ryan White HIV/AIDS Program Data Report (RDR) to collect information on CARE Act services from grantees and their service providers. However, RDR was unable to collect client- level data with unique identifying information. Consequently, there was no way of knowing if the clients counted as being served by one provider were also included in the counts of those being served by other providers. Therefore, totaling the number of clients receiving services across providers could result in clients being counted more than once. Additionally, the lack of client-level data meant that HRSA was unable to assess the quality of care given to clients or sufficiently account for the use of CARE Act funds. HRSA now collects client-level data to help ensure accountability of CARE Act funds. A client-level data collection and reporting system contains information unique to each client receiving CARE Act-funded services, such as their socio-demographic characteristics, the services provided, and each client’s current health status. Because the system collects client- specific information rather than only aggregate-level data, HRSA can obtain a more accurate measure of the number of clients being served than was available using RDR. Each ADAP is given broad authority under the CARE Act to design its own program. The scope of an ADAP’s coverage—who and what is covered—is determined by each ADAP’s program design, which includes criteria such as the number and types of drugs it will provide to its clients, and the income levels to qualify for services. However, RWTMA required that each grantee establish an ADAP formulary that covers all core classes of antiretroviral medications. ADAP grants totaled approximately $821 million in fiscal year 2009.