TANF-ACF-PI-2007-03 (Pre-award Costs for Potential Tribal TANF Grantees)
Indian Tribes who submitted Temporary Assistance for Needy Families (TANF) plans or amendments, States, and other interested parties.
Pre-award Costs for Potential Tribal TANF Grantees.
Old OMB Circular A-87, codified now at 2 CFR Part 225, and the Cost Principles for State, Local and Indian Tribal Governments.
This Program Instruction addresses whether TANF funds can be used for pre-award costs for potential Tribal TANF grantees.
2 CFR Part 225, defines pre-award costs as those incurred prior to the effective date of the award directly pursuant to the negotiation and in anticipation of the award where such costs are necessary to comply with the proposed delivery schedule or period of performance. Such costs are allowable only to the extent that they would have been allowable if incurred after the date of the award and only with the written approval of the awarding agency. We have been asked whether or not expenses associated with planning to operate a TANF program prior to the approval of the plan qualify as pre-award costs and thus can be paid retroactively with TANF funds once the plan is approved. This Program Instruction responds to this question.
Planning expenses associated with the development of an acceptable TANF plan prior to the approval of such a plan cannot be retroactively charged against the TANF grant. Such costs need to be covered by other non-federal Tribal funds. This is because:
- Section 412 of the Social Security Act, entitled Direct Funding and Administration by Indian Tribes, does not contain any language or reference to pre-award planning grants.
- The statutory funding method for tribal grantees of TANF as contained in section 412, whereby federal funds are deducted from the State block grant based upon 1994 caseload and expenditure data, excludes the possibility of pre-award grants.
- Since the passage of PRWORA, we have consistently held the position that pre-award funding is not available to potential grantees.
- Presently all Tribal TANF grantees have successfully negotiated a TANF plan without the need of a pre-award.
- It is generally recognized that tribes planning to operate a TANF program have the need to expend a substantial portion of funds on basic administrative operations—e.g., data reporting, case management, service delivery, and oversight systems; given this fundamental need, expending limited TANF funds for pre-award activities is imprudent.
Use of TANF funds for pre-award planning will result in a determination that a TANF misuse of funds penalty has occurred.
Inquiries and comments should be directed to the appropriate Administration for Children and Families (ACF) Regional TANF Program Manager.
Office of Family Assistance