Sneak Preview: DOS Urged To Include Disclosure Provision

March 4, 2016 | By Jerry Ashworth | Post a Comment

xsass_bookshot(The following was excerpted from a recent article in the Single Audit Information Service.) After two audits of a jointly administered program, Operation Inherent Resolve, under the Department of State (DOS) and the Broadcasting Board of Governors (BBG), the DOS Office of Inspector General (OIG) determined that both DOS and BBG should specifically include the disclosures provision, cited at §200.113 in the Office of Management and Budget’s (OMB’s) uniform grant guidance, not only in that program’s award agreements, but in all standard departmental guidance and award agreements.

Operation Inherent Resolve is a program under the Department of Defense (DoD) to conduct targeted airstrikes in Iraq and Syria against the Islamic State of Iraq and Syria (ISIS), also known as the Islamic State of Iraq and the Levant (ISIL). DOS and BBG manage one component relating to humanitarian support under this larger DoD effort. When multiple federal agencies jointly manage a federal program, such as Operation Inherent Resolve, there is added complexity to grant compliance requirements.

According to §200.113, “The nonfederal entity or applicant for a federal award must disclose, in a timely manner, in writing to the federal awarding agency or pass-through entity all violations of federal criminal law involving fraud, bribery or gratuity violations potentially affecting the federal award.” Therefore, federal agencies must monitor applicant and recipient disclosures, and include this requirement in their award terms and conditions. Failure of nonfederal entities to make required disclosures can result in enforcement actions by federal agencies, described as remedies (§200.338) in the uniform guidance.

One of the audits specifically focused on the DOS administration of Operation Inherent Resolve. DOS adopted the uniform guidance, with a few exceptions, into its regulations at 2 C.F.R. Part 600. It uses Form DS-1909, which contains a general section entitled “Agreement,” in which recipients must sign and agree to comply with all department requirements. This form states that, “The recipient agrees to execute the work in accordance with the notice of award, the approved application incorporated herein by reference or as attached, and 2 C.F.R. Part 200 and 600, including any subsequent revisions.” In addition, the agreement states that the recipient signing the award “acknowledges that it will comply with federal regulations, the terms and conditions, and any special award conditions associated with the award.”

The mandatory disclosure provision is not expressly referred to or cited in this language, the OIG found. In addition, the State Department’s “Standard Terms and Conditions” for federal awards does not specifically refer to the mandatory disclosure requirement in §200.113.

“OIG believes Form DS-1909 should expressly reference the disclosure requirement in §200.113 to ensure that grantees are aware of this provision when they accept a federal assistance award,” the OIG said. “Placing award recipients on notice of the requirement to report violations of federal criminal law could enhance detection and investigation of fraud, bribery and gratuity violations related to such awards.”

(The full version of this story has now been made available to all for a limited time on Thompson’s Grants Compliance Expert site.)


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