A.
ADOPTION OF FEDERAL OMB CIRCULARS AND COMMON RULE
Administrative requirements and cost principles applicable to
Federal funds are adopted as being applicable to Department funded
agreements.
1.
Applicability
The Department will apply the following federal
administrative requirements and cost principles to the following
entities:
(a)
Nonprofit
Entity
(i) Office of Management and
Budget (OMB) Circular A-110, "Uniform Administrative Requirements for Grants
and Agreements with Institutions of Higher Education, Hospitals and Other
Non-Profit Organizations".
(ii)
Office of Management and Budget (OMB) Circular A-122, "Cost Principles for Non-
Profit Organizations".
(b)
Educational Entity
(i) Office of Management and Budget (OMB)
Circular A-110, "Uniform Administrative Requirements for Grants and Agreements
with Institutions of Higher Education, Hospitals and Other Non-Profit
Organizations".
(ii) Office of
Management and Budget (OMB) Circular A-21, "Cost Principles for Educational
Institutions".
(c)
Public Entity
(i) Office of
Management and Budget (OMB) Circular A-102 (Common Rule), "Grants and
Cooperative Agreements with State and Local Governments"
(ii) Office of Management and Budget (OMB)
Circular A-87, "Cost Principles for State and Local Governments".
(d)
For-Profit Entity
(i) Office of Management and Budget (OMB)
Circular A-102 (Common Rule), "Grants and Cooperative Agreements with State and
Local Governments".
(ii) Office of
Management and Budget (OMB) Circular A-87, "Cost Principles for State and Local
Governments"
B.
COMPLIANCE REQUIREMENTS
Community agencies receiving agreement funding shall follow
the more restrictive of the applicable program regulations, Federal circulars,
MAAP, and the agreement award.
1.
Agreement Compliance
(a) In
addition to the administrative requirements and cost principles, the Department
has identified in the "Agreement Compliance Section" of the agreement award
specific compliance categories that reference specific agreement conditions
that could lead to material non-compliance:
Bonding Requirement
Budget Compliance
Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Cash Management
Davis-Bacon Act
Eligibility
Equipment and Real Property Management
Matching Level of Effort , Earmarking
Period of Availability of Federal and State
Funds
Procurement and Suspension and Debarment
Program Income
Real Property Acquisition/Relocation
Assistance
Reporting
Subrecipient Monitoring
Special Tests And Provisions
These areas of compliance, as applicable, must be
specifically referenced in each agreement with the community agency.
C.
ADMINISTRATIVE REQUIREMENTS
1.
Contractual Process(a) Community
agencies enter into agreements with the Department to provide goods and/or
services.
(b) All agreements with
the Department include the agreement number, the agreement terms, the scope of
goods and/or services to be provided, compliance requirements, method of
payment, agreement budget, method of settlement, pro forma settlement, the
types of reports due to the Department and the due dates of any required
reports.
(c) All agreements are
administered by a Department agreement administrator.
(d) The Department agreement administrator is
responsible for administering the agreement during the agreement period. This
includes approval authority for all payments made to the community agency,
approval authority to any budget or budget revisions submitted to the
Department by the community agency, agreement settlements and liquidation of
all outstanding balances due to or from the Department.
(e) Review and approval of community agency
submissions by the Department does not relieve the community agency from being
audited according to MAAP and federal regulations in cases where this approval
may be counter to MAAP and federal regulations.
2.
Pro Forma
(a) The agreement must include a pro forma
that clearly identifies the steps necessary to reach an accurate
settlement.
(b) Community agencies
entering into Department agreements must follow the cost sharing methodology
described in the agreement and as reflected in the pro forma included in the
agreement document except as detailed in (c) below.
(c) Community agencies are required to follow
applicable federal circulars, program regulations and MAAP restrictions, even
if those restrictions are not expressly set forth in the pro forma. For
example, bad debt will always be eliminated against expense as an unallowable
expense, even if the pro forma did not show bad debt being eliminated. If
during the settlement process the community agency notes that the pro forma did
not accurately reflect the restrictions imposed by federal circulars, program
regulations and MAAP restrictions, the final settlement to the Department must
be based on the actual restrictions even though not consistent with the
agreement pro forma.
3.
Revisions of Budgets and Program Plans
The community agency shall request prior written approval for
budget revisions whenever one or more of the following conditions occur:
(a) The total expenses in personnel and all
other category exceed the budgeted amount for that category by at least ten
percent or $10,000, whichever is greater,
(b) The total expenses per subcontract vary
from the budgeted amount by at least 10% or $1,000, whichever is
greater.
(c) The total expenses in
the equipment category exceed the budgeted amount by at least 10% or $1,000,
whichever is greater,
(d) The total
agency commitment differs from the budgeted amount,
The community agency must request a budget revision at least
thirty (30) days prior to the agreement termination date. If revision approval
is not granted in writing prior to the date of the required final report, all
costs that exceed the budget thresholds shall be deemed questioned costs. In
addition, any variance, if any, between the actual agency commitment and the
budgeted amount shall be adjusted on the agreement settlement form prior to
cost sharing.
4.
Cost Sharing Settlements
The Department enters into agreements where the Department
participates in programs with multiple funding sources. Below are Department
cost sharing principles to be followed in the budgeting and settlement
process:
(a) Unrestricted revenues
shall be specifically identified as such in the agreement budget. These amounts
are comprised of revenues such as private client fees and the community
agency's commitment to the program. The agency's stated commitment to the
program shall be included in the final settlement whether or not the community
agency transferred these funds to the program. In addition, revenues that have
been designated to the program by such sources as local governments, United Way
or other private organizations or individuals will be identified as such in the
agreement budget and treated as unrestricted revenue for cost sharing purposes.
All unrestricted revenues are to be cost shared in the final settlement with
the Department.
(b) Restricted
revenue (revenue designated for a specific purpose) must be eliminated against
program expenses dollar for dollar prior to cost sharing.
(c) Revenue from other federal and state
funding sources that are not considered agreement revenue must be eliminated
against program expense dollar for dollar prior to cost sharing.
(d) Program income such as client fees
(program) must be eliminated against program expenses dollar for dollar prior
to cost sharing. Client fees (private) must be made available for cost sharing,
unless specifically restricted against identified expenses in the budgeting
process.
(e) All MaineCare revenue,
whether fee for service, unit based or cost settled, must be eliminated dollar
for dollar against expense prior to cost sharing.
(f) An agency must eliminate all in-kind
revenue and expenses prior to cost sharing. In-kind revenue and expenses are
third party non-cash transactions that add benefits to a program.
(g) An agency must eliminate all subcontract
revenues and related expenses prior to cost sharing.
(h) If an agreement award has multiple pro
formas, a final settlement must be prepared consistent to the pro
formas.
(i) The final financial
report (agreement closeout report) must include the total Department agreement
amount less any subcontract amount as available revenue for settlement
purposes.
5.
Liquidation of Outstanding Balances
Community agencies must liquidate any outstanding balance due
the Department within ninety days after termination of an agreement (Note: The
agreement can be more restrictive and require payment prior to the ninety
days). If reimbursement is not made timely, the Department may charge interest
based on the U.S. Treasury, Cash Management Improvement Act (CMIA).
6.
Examination
Process
(a) The Division of Audit may
elect to perform a Department examination of Tier 1 community agencies' ACR(s)
as submitted to the Department.
(b)
The Division of Audit will perform a desk review for Tier 1 A-133 and Tier 2
community agencies to determine compliance with the agreement, MAAP, and
Federal Circular A-133 requirements, if applicable.
(c) The Division of Audit shall prepare an
examination report of community agencies selected for Department examination.
The results will be communicated to the community agency and the
Department.
(d) Upon receipt of the
Department examination report, the community agency has sixty (60) days to
either accept or appeal. Acceptance shall include a corrective action plan
responsive to all recommendations and full payment of any balances due. Failure
to comply within the allotted time may result in sanctions being applied by the
Department as described in Section .02 G.
(e) Periodically, the Division of Audit may
elect to perform a quality control review of IPA's workpapers
D.
DEPARTMENT
APPEALS, RESOLUTIONS AND SANCTIONS
1.
Appeals Procedures
Step a - Director of Audit - Maine DHHS and
Maine DOT
A community agency may appeal, in writing, the findings of a
Department examination by submitting a letter of appeal in writing within sixty
(60) days after receiving the report from the Department. The appeal letter
must identify the issues being appealed and include the specific supporting
documentation. It must be addressed to the Director of the Division of Audit at
the Maine DHHS or to the Director of the Office of Audit at the Maine
DOT.
The Director or the Director's designee will initiate a
review of the audit appeal and will, as needed, consult with program management
responsible for the affected agreements, agreement administrators, and other
applicable and appropriate staff.
The Director or the Director's designee will issue a written
decision on the appeal and the full basis of the decision to the community
agency no later than sixty (60) days following the receipt of the appeal
letter, unless both parties agree to an extension. The letter may be co-signed
by other DHHS staff as applicable.
Step b - Agency appeal of Director of
Division/Office of Audit Decision
1.
Maine DHHS
If the community agency wishes to proceed further in its
appeal, it may appeal to the DHHS Office of Administrative Hearings by
submitting a notice of appeal in writing within sixty (60) days of receiving
the decision from the Director of the Division of Audit. The issue(s) on appeal
will be limited to what was raised at the Step a appeal. The hearing will be an
Order of Reference appeal hearing. The hearing officer will issue a recommended
decision to the Commissioner, who will issue a final decision.
2.
Maine DOT
If the community agency wishes to proceed in its appeal, it
may appeal to the Commissioner of Maine DOT within sixty (60) days of receiving
the decision from the Director of the Office of Audit. The issue(s) on appeal
will be limited to what was raised at the Step a appeal. The DOT Commissioner
will issue the final decision.
Step c - Judicial appeal - Maine DHHS and Maine
DOT
The community agency may appeal the DHHS or DOT Commissioner
final decision by filing an appeal with the Maine Superior Court pursuant to
the Maine Rules of Civil Procedure, Rule 80C and 5 M. R.S.A.§ 11001,
et seq.
2.
Resolution of Appeals
When the community agency chooses not to further pursue its
appeal, or the appeal process has been exhausted, or the Department and
community agency reach agreement, a letter will be sent by the Department
confirming the terms of the settlement or clarifying the terms of the
Commissioner's final decision.
The community agency must within thirty (30) days of receipt
of the letter, as applicable;
(a) Make
full payment of any balance due;
(b) If full payment cannot be made for good
cause, the agency will make arrangement for a repayment plan acceptable to the
Department.
(c) The agency will
also submit a corrective action plan acceptable to the Department regarding any
findings noted in the examination report.
3.
Sanctions
(a) Failure to comply with Section .04 D. 2.
above, may result in sanctions being applied by the Department as described in
Section .02 G.
(b) The Department
may refer the matter over to the Attorney General or to a collection
agency.
