Sneak Preview: La. Incorrectly Deems Spill Claims as a Donation

July 26, 2012 | By Jerry Ashworth | Post a Comment

(The following was excerpted from an article in the Federal Grants Management Handbook.) When applying for federal grants, states should understand what funds qualify as maintenance-of-effort (MOE), and how third-party funds that are considered “donations” actually qualify as such under MOE and program guidelines.

The Department of Health and Human Services Departmental Appeals Board recently sustained the Administration for Children and Families decision in August 2011 to deny an application by the Louisiana Department of Children and Family Services for an award under the Emergency Contingency Fund (ECF) for the State Temporary Assistance for Needy Families program. DCFS applied for the award based on payments made by British Petroleum in 2010 for claims filed by Louisiana residents affected by the Deepwater Horizon oil spill. DCFS intended to use the BP payments as a donation towards its MOE.

ACF determined that the BP payments could not be classified as a donation to satisfy MOE requirements and therefore the application did not qualify for an award. It also said that DCFS was not entitled to an award because the agency’s claim should have been based on actual expenditures, and because the method it used to estimate claims was not reasonable.

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