Managing Public Grants
Noncompliance and Termination16
Noncompliance refers to an organization's inability to fulfill the terms and conditions of their award. To avoid noncompliance, it is critical that grantees submit all required reports completely and on time. Open and consistent communication with Federal staff is also essential, especially if extenuating or adverse circumstances arise. The Federal awarding agency has discretion over noncompliance remedies, which are discussed below.
Noncompliance Remedies
If a recipient materially fails to comply with the terms and conditions of an award, whether stated in a Federal statute, regulation, assurance, application or notice of award, the Federal awarding agency may (in addition to imposing special conditions) take one or more of the following actions, as appropriate in the circumstances.
- Temporarily withhold cash payments pending correction of the deficiency by the recipient or more severe enforcement action by the Federal awarding agency.
- Disallow (deny both use of funds and any applicable cost sharing credit for) all or part of the cost of the activity or action not in compliance.
- Wholly or partly suspend or terminate the current award.
- Withhold further awards for the project or program.
- Take other remedies that may be legally available.
Termination
The Federal awarding agency has discretion over noncompliance remedies. Awards may be terminated in whole or in part (only if one of the following conditions applies):
- By the Federal awarding agency, if a recipient materially fails to comply with the terms and conditions of an award.
- By the Federal awarding agency with the consent of the recipient, in which case the two parties shall agree upon the termination conditions, including the effective date and, in the case of partial termination, the portion to be terminated.
- By the recipient, upon sending to the Federal awarding agency written notification setting forth the reasons for such termination, the effective date, and, in the case of partial termination, the portion to be terminated. However, if the Federal awarding agency determines in the case of partial termination that the reduced or modified portion of the grant will not accomplish the purposes for which the grant was made, it may terminate the grant in its entirety.
- By the Federal awarding agency, if deemed in the best interest of the Federal government.
If costs are allowed under an award, the closeout responsibilities of the recipient, including those for property management as applicable, are considered in the termination of the award, and provision is made for continuing responsibilities of the recipient after termination, as appropriate.
Hearings and Appeals
In taking an enforcement action, the awarding agency will provide the recipient an opportunity for hearing, appeal or other administrative proceeding to which the recipient is entitled under any statute or regulation applicable to the action involved.
The Health and Human Services Departmental Appeals Board is the independent office established in the Office of the Secretary with delegated authority from the Secretary to review and decide certain disputes between recipients of HHS funds and HHS awarding agencies under 45 CFR part 16 and to perform other review, adjudication and mediation services as assigned.