The Department of Justice’s Grant Closeout Process

Audit Report 07-05
December 2006
Office of the Inspector General


Introduction

A strategic objective of the Department of Justice (DOJ) is to improve the crime fighting and criminal justice administration capabilities of state, local, and tribal governments.9 This objective is incorporated in the DOJ Strategic Plan, which includes the goals, objectives, and strategies for achieving its mission. DOJ’s strategies for achieving this objective include:

While the federal government continues to play an important role in crime-fighting, much of the responsibility for crime control and prevention rests with state, local, and tribal governments. DOJ seeks to provide leadership and support to these agencies to develop their capacity to prevent and control crime and administer justice fairly and effectively through various grant, training, technical assistance, and research programs.

Within DOJ, the Office of Community Oriented Policing Services (COPS), Office of Justice Programs (OJP), and Office on Violence Against Women (OVW) are the primary agencies responsible for providing grant funding through an extensive, varied portfolio of criminal and juvenile justice grant programs, training, and technical assistance. In addition to awarding grants, COPS, OJP, and OVW are also responsible for managing and administering the programmatic and financial aspects of the grant once it has been accepted. From October 1, 1999, through March 31, 2006, DOJ awarded 49,151 grants with funds totaling $23.65 billion. The details of the grants awarded related to COPS, OJP, and OVW is shown in Table 1.10

TABLE 1.  DOJ GRANTS AWARDED (Dollars in Billions)
DOJ AWARDING AGENCY NO. OF GRANTS GRANT FUNDING AWARDED

COPS

9,700

$ 3.20

OJP

36,688

18.63

OVW

2,763

1.82

TOTAL

49,151

$23.65

Source: COPS, OJP, and OVW lists of grants awarded

Grant monitoring is a critical management tool to determine whether grantees have implemented the program, achieved the objectives, and properly expended funds. An important aspect of grant monitoring and administration is timely and proper grant closeout because it is the final point of accountability for the grantee. Timely grant closeout is an essential program and financial management practice to identify grantees that have failed to comply with all grant requirements, as well as any excess and unallowable costs charged to the grant, and unused funds that should be deobligated. Therefore, timely grant closeout is necessary to determine whether grant programs are effectively meeting the criminal justice needs of state, local, and tribal governments.

Federal Regulations Regarding Grant Closeout

According to federal regulations, official closeout of a grant should occur when the awarding agency determines that the grantee has completed all applicable administrative actions and work required under the grant.11 Grants should be closed out when the grant has expired (reached the end date) and all open administrative, compliance, legal, and audit issues have been resolved. A federal awarding agency may choose to close a grant administratively if the grantee fails to provide the required documents, is no longer a valid operating entity, is non-responsive, or fails to cooperate. During the period covered by our audit, OJP and OVW policy required grants to be programmatically closed within 6 months after the grant end date. COPS did not have a specific timeframe in which expired grants should be closed.12 However, in our judgment 6 months after the grant end date is a reasonable timeframe for closing out expired grants; therefore, we used the 6-month timeframe in analyzing all grants, including COPS grants.

Additionally, federal regulations require that:

DOJ Top Management Challenges

For the past 6 years, grant management has been identified by the Office of the Inspector General (OIG) as one of DOJ’s top 10 management and performance challenges.16 Specifically, the OIG has reported that grant management continues to be a challenge for the following reasons:

Prior Reviews Regarding Grant Closeout

In March 2005, the OIG issued an audit report on the Administration of Department of Justice Grants Awarded to Native American and Alaska Native Tribal Governments, Report No. 05‑18, that included an evaluation of the effectiveness of the COPS, OJP, and OVW closeout processes for tribal‑specific grant programs. This audit revealed that:

The OIG has issued several other reviews of COPS and OJP’s grant management that include concerns related to grant closeout that are also identified in this audit. Specifically:

Further, the OIG has also conducted audits of individual grants awarded to state, local, and tribal governments that identified weaknesses related to the grant closeout processes followed by COPS and OJP that were similar to those concerns reported in this audit. Specifically, the OIG conducted 22 COPS audits of grants totaling $102.49 million and 12 OJP audits of grants totaling $24.44 million. Based on the results of the individual grant audits, we identified:

Finally, the Government Accountability Office (GAO) has also conducted reviews of OJP’s grant management that included activities related to grant closeout, which addressed concerns similar to those identified in our audit. Specifically:

In sum, prior audit reports identified significant and continuing concerns related to grant closeout within DOJ.

Audit Objectives

Based on the frequency and magnitude of the findings related to grant closeout in the previous reports, and the fact that for the past 6 years grant management has been identified by the OIG as one of DOJ’s top 10 management and performance challenges, we conducted an audit of the COPS, OJP, and OVW closeout processes to determine whether their grant closeout policies and procedures are adequate to ensure that:



Footnotes
  1. Department of Justice Strategic Plan, Fiscal Years 2003 - 2008.

  2. This information is to provide a perspective on the number of grants and amount of grant funding awarded by DOJ and is not our audit universe, which is discussed later in the report.

  3. Policy and regulations concerning the grant closeout process are contained in the following citations: (1) Code of Federal Regulations (C.F.R.), Title 28; (2) OMB Circulars A‑102, A-110, and A-123; and (3) the COPS, OJP, and OVW policies and procedures.

  4. On March 31, 2005, COPS issued a memorandum entitled Expired Grant Policy and Procedures. The purpose of this memorandum was to set forth policy, provide procedural guidance, and delineate responsibilities across the agency for addressing COPS grants prior to and following expiration. However, this policy did not express a specific timeframe in which expired grants should be closed.

  5. According to 28 C.F.R. §66.50 and 28 C.F.R. §70.71, the federal awarding agency may approve extensions when requested by the recipient.

  6. OMB Circular A-129 governs unreturned amounts that become delinquent debts.

  7. According to 28 C.F.R. §66. 42 and 28 C.F.R. §70. 53, the following are exceptions to the record retention and access requirements: (1) if any litigation, claim, or audit is started before the expiration of the 3-year period, the records must be retained until all litigation, claims, or audit findings involving the records have been resolved and final action taken; (2) records for real property and equipment acquired with federal funds must be retained for 3 years after final disposition; (3) when records are transferred to or maintained by the Department, the 3-year retention requirement is not applicable to the recipient; (4) if the indirect cost proposal was submitted for negotiation then the 3-year retention period for its supporting records starts on the date of the submission; (5) if the indirect cost proposal was not submitted for negotiation then the 3-year retention period for the proposal, plan, or other computation and its supporting records starts at the end of the fiscal year (or other accounting period) covered by the proposal.

  8. Since 1998, the OIG has created a list of the top management challenges facing DOJ. Initially, the report was created in response to congressional requests. By statute this list is now required to be included in DOJ ’s annual Performance and Accountability Report.

  9. These findings were also identified in U.S. Department of Justice Annual Financial Statement, Fiscal Year 2003 as Restated, Audit Report No. 05‑36, September 2005; and U.S. Department of Justice Annual Financial Statement, Fiscal Year 2004 as Restated, Audit Report No. 05‑38, September 2005.



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