Administration of federal assistance in the United States

Last updated

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

Contents

The assistance, which can reach to over $400 billion annually, [1] is provided and administered by federal government agencies, such as the U.S. Department of Housing and Urban Development and the U.S. Department of Health and Human Services, through special programs to recipients.

Definition

The term assistance (or benefits) is defined by the federal government as: [2]

The transfer of money, property, services, or anything of value, the principal purpose of which is to accomplish a public purpose of support or stimulation authorized by Federal statute,…and includes, but is not limited to, grants, loans, loan guarantees, scholarships, mortgage loans, insurance…, property, technical assistance, counseling, statistical, and other expert information; and service activities of regulatory agencies.

Federal assistance programs

To provide federal assistance in an organized manner, the federal government offers assistance through federal agencies. It is the agency's responsibility to adequately provide assistance, as well as manage, account, and monitor the responsible use of federal funds used for that assistance. The agencies then supply the assistance to beneficiaries (known as recipients, see below), such as States, hospitals, poverty-stricken families, etc., through hundreds of individual programs. These programs are defined by the federal government as: "any function of a Federal agency that provides assistance or benefits for: (1) a State or States, territorial possession, county, city, other political subdivision, grouping, or instrumentality thereof; (2) any domestic profit or nonprofit corporation or institution; or (3) an individual; other than an agency of the Federal government". [2]

Therefore, programs (or "functions") can refer to any number of activities or services provided by agencies, such as building a bridge, providing food or medicine vouchers to the poor, or providing counseling to violence victims. Programs are assigned to offices within a federal agency and may include administrative personnel who work directly or indirectly with the program.

Each program is created with a specific purpose and has unique operations and activities, (i.e., no program is made for the same purpose and to operate the same way as a previously existing program) and it is assigned an official name to differentiate it from other programs. A program may be called by a different term than its official name by the general public, by an entity, or even by law or regulation—such as by the type of activity or service it engages, by a specific project name (e.g., the Big Dig tunnel project), or any other similar term. This type of name, title or term given to a program is called the "popular name". [3] However, the official name of program is standardized within the federal government so that federal agencies can maintain better accountability of their assigned assistance. [2] [3]

For example, an individual who receives rent assistance payments through the Section 8 Housing Choice Voucher program might not know the exact official name of the program, and may simply call it the "rent subsidizing" program, due to its type of activity or service. However, there are many other federal rent subsidizing programs, which require standard program names to differentiate them. In this case, programs such as Supportive Housing for the Elderly (Sec. 202), which is a project-based rental assistance program exclusively for the elderly and Section 8 Housing Assistance Payments Program-Special Allocations, a rent assistance program usually tied to public housing projects, also engage in the activity of rent subsidizing. [4]

Examples of federal assistance programs

Federal grants and awards

Programs administer assistance by "granting" or "awarding" a portion of the assistance to recipients. These are called Federal grants or awards. Recipients must first apply for the award directly to the federal agency that administers the program. The agency must then determine the amount of assistance to be awarded and notifies the recipient of the award. To be official, an award requires a contract or grant agreements between the agency and the recipient that details the use of the award and restrictions and limitations.

Federal awards may specify a time period during which the recipient may use the assistance. This is called the Period of Availability of Federal Funds. [5] Most grants have a term of one year (although some may have a longer lifespan, even indefinitely), and the recipient must use the assistance within that timeframe. This is done because federal assistance is tied to the federal government's budget process, and any funds not used by a recipient within the specified time limit is reverted to other uses.

As a condition of receiving Federal awards or grants, recipients must agree to comply with the applicable laws and regulations related to the program and its agency, as well as any provisions included in the contracts and grant agreements entered between the recipient and the agency. [6] Failure to do so may lead to sanctions, including fines and penalties, exclusion or suspension from participating in federal assistance programs and activities, and/or criminal charges. Most federal program regulations for which agencies and recipients must always comply are compiled in the Code of Federal Regulations, with summaries and guidance for these regulations contained in OMB Circular letters.[ citation needed ]

Types of federal grants

Given the enormous size of federal assistance provided, the Federal government has designed different types of grants, each with its own unique way of awarding and/or operating:

Recipients

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

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

Pass-through entities and sub-recipients

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

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

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

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

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

Catalog of Federal Domestic Assistance

The Catalog of Federal Domestic Assistance (CFDA) logo. Cfda.jpg
The Catalog of Federal Domestic Assistance (CFDA) logo.

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

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

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

Financial type assistance

Non-financial type assistance

CFDA number

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

Monitoring activities

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

Notes

  1. United States Office of Management and Budget; Office of Federal Financial Management, The Single Audit Archived 2007-06-21 at the Wayback Machine
  2. 1 2 3 2006 CFDA Archived November 18, 2016, at the Wayback Machine ; "Introduction And How To Use This Catalog"; pg. I, par. 6-8
  3. 1 2 3 2006 CFDA Archived November 18, 2016, at the Wayback Machine ; "Introduction And How To Use This Catalog: Organization of this Catalog"; pg. VIII, par. 7; "Program Title, Number and Popular Name"
  4. OMB A-133: Compliance Supplement Archived 2010-06-08 at the Wayback Machine , Part 4, pg. 4-14.182-1: "Supportive Housing for the Elderly (Sec. 202)" (CFDA 14.157), pg. 4-14.157-1 & "Section 8 Housing Assistance Payments Program-Special Allocations (CFDA 14.195)
  5. OMB A-133: Compliance Supplement Archived 2010-06-08 at the Wayback Machine ; Part III, pg. 3-H-1, Period of Availability of Federal Funds, par. 1
  6. OMB A-133: Compliance Supplement Archived 2010-06-08 at the Wayback Machine ; Part I, pg. 1-6, par. 5
  7. Jonathan Weisman (March 27, 2006). "Proposals Call For Disclosure of Ties to Lobbyists". Washington Post. Retrieved April 23, 2010.
  8. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2006 CFDA Archived November 18, 2016, at the Wayback Machine ; "Introduction And How To Use This Catalog"; pg. III; Types of Assistance
  9. 1 2 2006 CFDA Archived November 18, 2016, at the Wayback Machine ; "Introduction And How To Use This Catalog: Organization of this Catalog"; pg. IX; "Eligibility Requirements: Applicant Eligibility"
  10. 1 2 U.S. State Department Grant Terminology Archived 2007-04-23 at the Wayback Machine
  11. U.S. DOJ Glossary of Terms Archived 2006-12-12 at the Wayback Machine
  12. 2006 CFDA; "Introduction And How To Use This Catalog"; pg. I, par. 2
  13. Understanding Single Audits
  14. OMB A-133: Compliance Supplement Archived 2010-06-08 at the Wayback Machine ; Part III, pg. 3-M-1: Sub-recipient Monitoring
  15. The Single Audit Act: Audits of States, Local Governments and Non-Profit Organizations; AICPA Audit Committee Toolkit: Non-profit Organizations; American Institute of Certified Public Accountants

Related Research Articles

In the United States, federal grants are economic aid issued by the United States government out of the general federal revenue. A federal grant is an award of financial assistance from a federal agency to a recipient to carry out a public purpose of support or stimulation authorized by a law of the United States.

General Services Administration United States government agency

The General Services Administration (GSA) is an independent agency of the United States government established in 1949 to help manage and support the basic functioning of federal agencies. GSA supplies products and communications for U.S. government offices, provides transportation and office space to federal employees, and develops government-wide cost-minimizing policies and other management tasks.

Food and Nutrition Service U.S. federal anti-hunger agency

The Food and Nutrition Service (FNS) is an agency of the United States Department of Agriculture (USDA). The FNS is the federal agency responsible for administering the nation’s domestic nutrition assistance programs. The service helps to address the issue of hunger in the United States.

Stafford Disaster Relief and Emergency Assistance Act US law designed to bring an orderly and systematic means of federal disaster assistance

The Robert T. Stafford Disaster Relief and Emergency Assistance Act is a 1988 United States federal law designed to bring an orderly and systematic means of federal natural disaster assistance for state and local governments in carrying out their responsibilities to aid citizens. Congress' intention was to encourage states and localities to develop comprehensive disaster preparedness plans, prepare for better intergovernmental coordination in the face of a disaster, encourage the use of insurance coverage, and provide federal assistance programs for losses due to a disaster.

The Low Income Home Energy Assistance Program (LIHEAP) is a United States federal social services program first established in 1981 and funded annually through Congressional appropriations. The mission of LIHEAP is to assist low income households, particularly those with the lowest incomes that pay a high proportion of household income for home energy, primarily in meeting their immediate home energy needs. The program, part of the United States Department of Health and Human Services (HHS), is funded by grants appropriated from the federal government.

Fund accounting

Fund accounting is an accounting system for recording resources whose use has been limited by the donor, grant authority, governing agency, or other individuals or organisations or by law. It emphasizes accountability rather than profitability, and is used by Nonprofit organizations and by governments. In this method, a fund consists of a self-balancing set of accounts and each are reported as either unrestricted, temporarily restricted or permanently restricted based on the provider-imposed restrictions.

Categorical grants, also called conditional grants, are grants issued by the United States Congress which may be spent only for narrowly defined purposes. They are the main source of federal aid to state and local governments and can be used only for specified categories of state and local spending, such as education or roads. These grants have been accompanying rules and guidelines that constrain the recipient government in the use of grant funds. Categorical grants are intended to help states improve the overall well-being of their residents, but also empower the federal government to exert more power over the states within a specific policy area.

Nutrition Assistance for Puerto Rico (NAP) —Spanish: Programa de Asistencia Nutricional (PAN) commonly known in Puerto Rican Spanish as Cupones — is a federal assistance nutritional program provided by the United States Department of Agriculture (USDA) solely to Puerto Rico. It provides over $1.5 billion USD in supplemental economic resources to help just over 1 million impoverished residents cope with their nutritional needs. It is based on, though not directly part of, the USDA's national Supplemental Nutrition Assistance Program.

Single Audit

In the United States, the Single Audit, Subpart F of the OMB Uniform Guidance, is a rigorous, organization-wide audit or examination of an entity that expends $750,000 or more of federal assistance received for its operations. Usually performed annually, the Single Audit's objective is to provide assurance to the US federal government as to the management and use of such funds by recipients such as states, cities, universities, non-profit organizations, and Indian Tribes. The audit is typically performed by an independent certified public accountant (CPA) and encompasses both financial and compliance components. The Single Audits must be submitted to the Federal Audit Clearinghouse along with a data collection form, Form SF-SAC.

In the United States, compliance requirements are a series of directives United States federal government agencies established that summarize hundreds of federal laws and regulations applicable to federal assistance. They are currently incorporated into the OMB A-133 Compliance Supplement, which was created by the US Office of Management and Budget (OMB).

The OMB A-133 Compliance Supplement is a large and extensive United States federal government guide created by the Office of Management and Budget (OMB) and used in auditing federal assistance and federal grant programs, as well as their respective recipients. It is considered to be the most important tool of an auditor for a Single Audit.

The Child and Adult Care Food Program (CACFP) is a type of United States federal assistance provided by the United States Department of Agriculture (USDA) to states in order to provide a daily subsidized food service for an estimated 3.3 million children and 120,000 elderly or mentally or physically impaired adults in non-residential, day-care settings. It is a branch within the Policy and Program Development Division of the Child nutrition programs, along with the School Programs Branch, which runs the National School Lunch Program. The program is commonly referred to as the Child Care, Child Care Food, Adult Care, or Adult Care Food Program, and is often operating in conjunction with other child and adult day-care programs, such as the Head Start. Its federal identification number, or CFDA number, is 10.558. Section 17 of the National School Lunch Act, and USDA issues the program regulations under 7 CFR part 226.

The HOME Investment Partnerships Program (HOME) is a type of United States federal assistance provided by the U.S. Department of Housing and Urban Development (HUD) to States in order to provide decent and affordable housing, particularly housing for low- and very low-income Americans. It is the largest Federal block grant to States and local governments designed exclusively to create affordable housing for low-income families, providing approximately US$2 billion each year.

The Federal Audit Clearinghouse (FAC) is an office within the United States federal government. In compliance with the U.S. Office of Management and Budget (OMB) Circular A-133 Revised, the FAC is in charge of receiving, processing and distributing to U.S. federal agencies the Single Audit reporting packages of thousands of recipients of federal assistance. OMB designated the U.S. Census Bureau to serve as the Federal Audit Clearinghouse. It operates and maintains an online database of Single Audit information submitted by recipients going back to 1997.

The National Historic Preservation Act of 1966 (NHPA) envisioned a funding source to provide states with matching funds to implement the Act. The Act was to be implemented through partnerships with states, Indian Tribes, Native Hawaiians, local governments, nonprofit organizations, and the private sector. It brought forth state programs to implement much of the Act; a National Register of Historic Places encompassing a wide range of sites and structures deemed historic; partnerships at all levels of government; incentives; assistance; and reviews. The NHPA endorsed the use of federal financial support for the national preservation program and called for two basic categories of assistance, both of which provide funding, rather than technical assistance, for historic preservation projects and to individuals for the preservation of properties listed in the National Register of Historic Places. Since enactment in 1966, repeated efforts to fund the HPF was realized after a 10-year campaign when consistent funding was authorized on September 28, 1976, through Public Law 94-422. The law amended the National Historic Preservation Act to establish a funding source known as the Historic Preservation Fund for a historic preservation grant program to provide assistance to non-federal entities.

Texas Department of Housing and Community Affairs

The Texas Department of Housing and Community Affairs (TDHCA) is the state's lead agency responsible for homeownership, affordable rental housing, community and energy assistance programs, and colonia activities serving primarily low income Texans. The Manufactured Housing Division of TDHCA regulates the manufactured housing industry in Texas. The Department annually administers more than $400 million through for-profit, nonprofit, and local government partnerships to deliver local housing and community-based opportunities and assistance to Texans in need. The department is headquartered at 221 East 11th Street in Austin.

Digital Accountability and Transparency Act of 2013

The Digital Accountability and Transparency Act of 2013 aims to make information on federal expenditures more easily available, accessible, and transparent. The bill would change reporting requirements about financial data and start a pilot program to research best practices. The bill was introduced in the House during the 113th United States Congress.

Digital Accountability and Transparency Act of 2014

The Digital Accountability and Transparency Act of 2014 is a law that aims to make information on federal expenditures more easily accessible and transparent. The law requires the U.S. Department of the Treasury to establish common standards for financial data provided by all government agencies and to expand the amount of data that agencies must provide to the government website, USASpending. The goal of the law is to improve the ability of Americans to track and understand how the government is spending their tax dollars.

Transportation, Housing and Urban Development, and Related Agencies Appropriations Act, 2015

The Transportation, Housing and Urban Development, and Related Agencies Appropriations Act, 2015 is an appropriations bill that would provide funding for the United States Department of Transportation and the United States Department of Housing and Urban Development (HUD) for fiscal year 2015.

The Federal Risk and Authorization Management Program (FedRAMP) is a US government-wide program that provides a standardized approach to security assessment, authorization, and continuous monitoring for cloud products and services. In 2011, the Office of Management and Budget (OMB) released a memorandum establishing the Federal Risk and Authorization Program (FedRAMP) “to provide a cost-effective, risk-based approach for the adoption and use of cloud services to Executive departments and agencies”. The General Services Administration (GSA) established the FedRAMP Program Management Office (PMO) in June 2012. The FedRAMP PMO mission is to promote the adoption of secure cloud services across the Federal Government by providing a standardized approach to security and risk assessment. Per the OMB memorandum, any cloud services that hold federal data must be FedRAMP Authorized. FedRAMP prescribes the security requirements and process cloud service providers must follow in order for the government to use their service.

References

Primary sources

Secondary sources

Further reading

OMB Circulars

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