Application and Grant Award Process

Application and Grant Award Process Narrative

This narrative focuses on the grant application and grant renewal process. Agencies and other organizations will find this information useful when considering applying for a Head Start or Early Head Start grant.

Overview of Requirements
Clarifying Definitions
Narrative
Audit Requirements
Related Links
Related DABs

Overview of Requirements

The federal government provides assistance in many forms, financial and otherwise. A Federal grant may be defined as a form of assistance authorized by law. A Federal agency (the grantor) transfers something of value to a party (the grantee) for a public purpose to be carried out without substantial involvement of the Federal government. The something of value is usually money, but may also include property. The Administration for Children and Families (ACF) issues a variety of grants to state or local governments, Indian tribal organizations, nonprofit and for-profit organizations and private individuals. However, Head Start and Early Head Start (EHS) grants are awarded only to local governments, Indian tribal organizations, school districts, nonprofit organizations and for-profit organizations.

The 10 ACF Regional Offices award grants for Head Start and EHS programs within their assigned states except for certain programs. American Indian and Alaska Native and Migrant and Seasonal programs receive their funding from the American Indian and Alaska Native Program Branch and the Migrant and Seasonal Programs Branch located in ACF headquarters. These branches are known as the American Indian and Alaska Native (AIAN) and the Migrant and Seasonal Head Start (MSHS) Regional Offices respectively. A list of the Regional Offices with assigned states is available. (http://www.acf.hhs.gov/programs/oro/regions/acf_regions.html)

All organizations must submit a competitive application on a one-time basis for a Head Start or EHS grant. If successful, the organization then submits what is known as a non-competitive continuation application for subsequent budget periods in the designated project period. Head Start programs have an indefinite project period. Therefore, once the grant is awarded, the organization will continue as the grantee agency unless they decide they no longer want the grant (relinquishment) or are terminated for cause. In these cases, the funds are still available for the service area and will be awarded through competition.

Initially EHS grants had a defined project period of five years. Grants that have a defined project period must be re-competed at the end of the project period regardless of how successfully the grantee agency operated the program. ACF is now designating the project period for all new and re-competed EHS grants as indefinite. Refunding for these EHS grants will follow the procedures for non-competitive continuation grants. If a grantee agency is funded for Head Start and EHS from a single office, the funds will be placed on one Financial Assistance Award (FAA) and will have the same budget period.

At certain times, funds are available for expanding Head Start and EHS services. These funds are awarded through the competitive process to existing grantee agencies for expanding their programs. A portion of the funds may be reserved for unserved area. Existing grantee agencies or new organizations can compete for these funds. The announcement regarding these funds is usually published in the Federal Register. The list of competitive grant announcements along with forms and information is available in the Grant Opportunities section of the Administration for Children and Families web site. (http://www.acf.hhs.gov/grants)

The Federal requirements for Head Start and EHS grants are found in:

45 CFR Part 74 (Uniform Administrative Requirements for Awards and Subawards to Institutions of Higher Education, Hospitals, Other Nonprofit Organizations, and Commercial Organizations; and Certain Grants and Agreements with States, Local Governments and Indian Tribal Governments) (45 CFR 74 SUBPART B)
45 CFR Part 92 (Department Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments (Common Rule)). (45 CFR 92 SUBPART B)
2 CFR 220 (Cost Principles for Educational Institutions)
2 CFR 225 (Cost Principles for State, Local, and Indian Tribal Governments, Appendix B, Selected Items of Cost)
2 CFR 230 (Cost Principles for Non-Profit Organizations, Appendix B, Selected Items of Cost)
OMB Circular A-133 Compliance Supplement

Clarifying Definitions

ACF is the Administration for Children and Families within the U.S. Department of Health and Human Services.

Award means financial assistance that provides support or stimulation to accomplish a public purpose. Awards include grants and other agreements in the form of money or property in lieu of money by the federal government to an eligible recipient.

Budget means the budget plan of an organization's Head Start and/or EHS program. The budget plan is the financial expression of the program as approved during the award process.

Budget period is the period of time (usually 12 months) into which the project period is divided for budget or funding purposes.

Competitive applications are those submitted in response to announcements that require competition among applicants. These announcements include expansion funds, new projects, replacement grantees and some special initiatives or projects.

Delegate agency is a local public agency or a nonprofit or for-profit organization to which a grantee has delegated all or part of its responsibility for operating a Head Start Program.

Equipment is any article of tangible, non-expendable personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit.

Financial Assistance Award (FAA) is the official award document used in ACF discretionary programs. The FAA also is called a Notice of Grant Award.

Funding period is the period of time when federal funding is available for obligation by the recipient.

Grantee agency means the entity receiving financial assistance from ACF that is legally responsible for carrying out the Head Start program.

Grants Officer is the individual designated to serve as the ACF official responsible for the business aspects of particular grants.

High-risk defines an organization whose management practices raise serious questions about its ability to assure proper programmatic use and financial stewardship of Head Start/EHS funds.

Noncompetitive continuation applications are those submitted by existing grantee agencies to continue Head Start services without competition from other applicants.

Obligations mean the amounts of orders placed, contracts awarded, services received and similar transactions during the budget period that require payment during that period or a future period.

Prior approval means written approval by an authorized ACF official in advance of the action or expenditure.

Project period is the total time for which a Head Start or EHS grant has been approved. A project period may consist of one or more budget periods.

Renovations are changes to the interior arrangements or other physical characteristics of an existing facility or installed equipment so that it may be more effectively used for the project. Renovation may include work referred to as alterations, improvements, conversion, rehabilitation, remodeling or modernization.

Responsible HHS Official means the official who is authorized to make the grant or financial assistance to operate a Head Start program, or such official's designee.

Supplemental applications are those submitted by existing grantee agencies to request additional financial support or for major program changes. The additional financial support may be for expansion of existing services, cost of living adjustments, quality increases, equipment or renovations.

Total approved costs means the sum of all costs of the Head Start Program approved in a given budget period as indicated on the FAA. Total approved costs consist of the federal share plus any approved non-Federal Share.

Narrative

Application Process

The ACF uses three types of applications for Head Start and EHS: competitive, noncompetitive continuation and supplemental applications. The Application for Federal Assistance forms (SF-424) and instructions are available from the appropriate ACF program office. The forms also are available in our Standard Forms section.

Under an OMB policy directive published in the Federal Register on June 27, 2003, all federal grant applicants (including those applying for Head Start and Early Head Start grants) are required to include their Dun and Bradstreet Data Universal Numbering System (DUNS) number. A DUNS number is required for every application for a new award or renewal/continuation of an award submitted on or after October 1, 2003. If your agency does not already have this number, one can be obtained at no cost by calling the toll-free DUNS Number Request line at 1-866-705-5711 or by visiting www.dnb.com. The DUNS number allows the federal government to identify entities receiving awards and their business relationships.

Competitive Applications

Competitive applications are submitted for new projects, expansion, special initiatives or in response to an announcement for a replacement grantee. The announcements describe the program, the amount of funds available and the eligibility requirements. Filing instructions such as where to obtain the application forms and deadlines, also are contained in the announcement. The announcement may be made through a notice in the Federal Register, mailing of individual letters, notices in local newspapers and other suitable forms of public notice. Prospective applicants also can obtain the information from the appropriate ACF office.

Head Start and Early Head Start are covered under Executive Order 12372 - Intergovernmental Review of Federal Programs and 45 CFR 100 -Intergovernmental Review of Department of Health and Human Services Programs and Activities. Grantee agencies in states that participate in this process should contact their state Single Points of Contact (SPOC) for instructions. ACF offices have the list of states that participate and the information also is available from the Office of Management and Budget (http://www.whitehouse.gov/omb). This process does not cover tribal governments.

Supplemental Applications

Existing grantee agencies use the supplemental application process during the approved budget period for a variety of reasons. The funding for Cost of Living Adjustments (COLA) or Quality Inprovement increases (QI) may not have been available at the time the noncompetitive continuation application was funded. Grantee agencies may need additional funds for one-time expenditures for equipment or other program improvements. Also, ACF may make additional funds available on a noncompetitive basis for special initiatives.

When requesting additional funding, the grantee agency must explain the reason for the request and justify the need for additional funding. The application must indicate if the request is for a permanent funding increase or one-time funds. The COLA and QI funding is a permanent funding increase as the amount is added to the next noncompetitive continuation grant. The application must include the SF-424A and B forms and policy council approval of the request. The budget and budget justification need only include the items for which additional funds are requested. Grantee agencies do not need to submit the Line-Item Budget for Head Start and EHS.

Supplemental applications also are used to make major program changes even though there may be no increase or decrease in funding. The section on major program changes in the "Post Award Changes" narrative identifies what ACF considers major program changes.

Grantee agencies do not need to submit supplemental applications when transferring funds within the budget unless the transfer is for items that require prior approval or the grantee agency wants to use one-time funds for purposes other than those approved in the original request. Transfers within the total approved budget must be used for allowable costs.

Grantee agencies in states that participate in the Executive Order 12372 process should contact their state SPOC regarding supplemental applications. Some states only review the noncompetitive continuation and competitive applications.

Processing of Grant Applications

During the pre-award process, ACF uses different policies and procedures for competitive, noncompetitive continuation and supplemental applications as described later on in this section. However, once the award is approved the notification to all grantee agencies is the same.

The FAA is the official award document that notifies grantee agencies and others of the award. This document also incorporates the terms and conditions of the award and supports the obligation of funds in the accounting system. The Grants Officer is responsible for preparing, signing and issuing the FAA. The Responsible HHS Official also will sign the FAA. The FAA contains the following:

Assistance type being awarded (Block 2)
Grant number (Block 3)
Budget period funded (Block 8)
Overall project period (Block 9)
Program director (Block 15)
Approved federal share of the budget line items (Block 16)
Non-federal share (Block 17)
Amount of federal funds being awarded by this action (Block 19)
Applicant's EIN number (Block 22)
Client population and other specific requirements (Block 26)

Grantee agencies should review Block 26 carefully to ensure that they are familiar with the requirements and limitations specified. A list of Standard Terms and Conditions will be attached to the initial FAA for the grant period. Additional terms and conditions may be imposed for specific awards, such as the purchase or construction of facilities, special initiatives or a high-risk grantee agency.

Competitive applications

Competitive applications must be submitted to the location identified in the announcement. An application is considered received when it is delivered to the location either through the mail, use of delivery services such as Federal Express, by hand or, when specified, postmarked by the deadline date. The program announcement will specify whether the application must be received or if a postmark is sufficient. Applications delivered to a location other than that specified will not be accepted.

Announcements usually establish screening criterion such as eligibility and the deadline for submission. This criterion is used to determine if the application will be accepted into competition. If selected for competition, the application will be reviewed and scored only on the material received by the deadline. Applicants not meeting the screening criteria will be notified within seven days of that determination.

It is the policy of ACF to seek maximum open and free competition. Each competing application will receive an independent, objective review by at least three qualified individuals against the evaluation criteria published in the program announcement. A panel or panels of non-federal reviewers usually do the review. At times, ACF may use a group of field reviewers in lieu of a panel.

Once the review is completed and the applications are ranked, the Responsible HHS Official approves funding through a formal funding decision process. Funding decisions fall into three categories: Approved, Disapproved and Approved but Unfunded. ACF approves funding based on the rank order of the application. Approval of an application is not a guarantee that the successful applicant will receive the amount of funds requested. ACF reserves the right to negotiate the funding level based on the number of successful applicants and the funds available.

In an effort to keep members of Congress informed, the Congressional Liaison Office (CLO) relays information on ACF awards to the senators and representatives in whose states and districts the projects are awarded. The responsible grants office will provides a copy of the FAA to the CLO and allows the CLO a 72-hour waiting period to notify the appropriate congressional delegation. The FAA will not be mailed to the grantee agency until the waiting period has expired.

The Responsible Program Office will notify applicants that were not approved or approved but unfunded within 30 days of the decision. The notification will include a detailed explanation for the decision or indicate that a detailed explanation will be provided upon request. Unsuccessful applicants also may request a debriefing on their application.

Noncompetitive Continuation Applications

The Grants Officer in the funding ACF Office must receive the application package at least 90 days prior to the beginning date of the next budget period. The Grants Officer will provide copies to the Responsible Program Official for review.

The review by both officials is to assure that satisfactory progress toward goals and objectives is being made and that the grantee agency is in compliance with the terms and conditions and to determine the funding level and budget for the next budget period. The financial review will include a cost analysis in order to determine if the costs are reasonable and allowable.

The grantee agency will be contacted regarding omissions or issues that need clarification. If additional information is required, the grantee agency should submit the requested items in writing. Significant changes may require approval by the person signing the original application and the policy council. The ACF office will advise the grantee agency on this requirement.

Noncompetitive continuation grants will be awarded prior to the beginning date of the next grant period. At the discretion of the funding office, unobligated funds may be carried over into the new budget period. Carryover funds may be used to complete any objective that remains unmet from the prior period.

Supplemental Applications

The process for supplemental applications is very similar to those for noncompetitive continuation applications. If approved, the FAA is amended to increase the funding level and/or to document major program changes.

Audit Requirements

A single audit will be conducted in accordance with Generally Accepted Government Audit standards and will cover the entire operation of the grantee agency. The auditor will determine if the financial statements are presented fairly. Internal controls will be tested and the auditor will determine compliance with laws and regulations for major programs.

If Head Start and/or EHS is a major program, the auditor will use OMB Circular A-133 Compliance Supplement as guidance for determining compliance. The following areas in the Compliance Supplement cover the application and grant award process:

ACF has approved grant funds for capital expenditures
Matching requirement specified on the FAA
Enrollment levels must meet those specified in the FAA

Several other compliance requirements are listed in this document and also will be tested.

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