Notice Number: NOT-HS-16-012
Release Date: April 4, 2016
Agency for Healthcare Research and Quality (AHRQ)
This Notice informs AHRQ grantees of instructions for processing FFRs for grant awards that were transitioned to subaccounts in the Payment Management System (PMS) through a non-competing continuation award. When this was done, the original single project period/competitive segment was broken into two shorter competitive segments and the award issued in FY2014 became the final year of the first competitive segment and required final Federal Financial Report (FFR) expenditure data.
Guide Notice NOT-HS-15-009 referenced above, advised AHRQ grantees that AHRQ would not be transferring unexpended funds from pooled accounts to subaccounts and requested that AHRQ grant recipients awarded under expanded authorities fully draw down all funds in the PMS pooled account before drawing down funds from the PMS subaccount. AHRQ has discovered that grantees may experience situations where their FFRs appear to have a negative unobligated balance (U/B) since AHRQ did not transfer the unobligated balances from pooled accounts to the subsequent subaccounts (see example below).
AHRQ has become aware of a potential FFR reporting problem resultant of the decision not to transfer unobligated balances from pooled accounts to subaccounts due to the limitations of the PMS for transferring unexpended funds. To rectify this issue, AHRQ is implementing the following solution:
Awards with Expanded Authority: AHRQ non-competing continuation awards with expanded authority that were converted from a pooled account to a subaccount upon the issuance of a non-competing award in FY 2015 may encounter scenarios where they expend more funds (in an allowable manner) than their FFR will show as authorized in a reporting period, thus creating an alleged negative unobligated balance.
Grant number R01 HS012345-03 was issued on 3/1/2015 for $500,000. The issuance of the 03-year award transitioned this project to a subaccount by creating a new document in the Payment Management System (PMS) (RHS012345B).
The 01 and 02 year awards were awarded as follows and reside in Document RHS012345A in PMS:
R01 HS 012345-01 was issued for $500,000
R01 HS 012345-02 was issued for $500,000
The total authorized amount is $1,000,000.
The FFR data for years 01 and 02 is as follows:
R01 HS 012345-01 Cumulative Authorized $500,000
Total Federal Share of Expenditures $400,000
Total Unobligated Balance $100,000
R01 HS 012345-02 Cumulative Authorized $1,000,000
Total Federal Share of Expenditures $925,000
Total Unobligated Balance $75,000
With the award of the 03-year on 03/01/2015, a subaccount was created (RHS012345B), and the balances of the PMS accounts were as follows:
RHS012345A $75,000 (unobligated balance from the 02 year)
RHS012345B $500,000 (funding for the 03 year)
Since award R01 HS 012345-03 was issued under expanded authorities the grantee was
allowed to spend the $75,000 unobligated balance from the 02 year (assuming there are no restrictions) in the 03-year in addition to the $500,000 authorized for the 03-year. At the end of the 03 year budget period, the grantee had fully expended the 02 year unobligated balance and the 03 year awarded funding for total expenditures of $575,000. It withdrew $75,000 from the RHS012345A account and $500,000 from the RHS012345B account, resulting in the following balances as of 06/01/2015:
When the grantee goes to report the financial information on the 03-year FFR, the FFR will automatically state $500,000 on line D. Total Federal Funds Authorized.
If the grantee were to state $575,000 on line G. Total Federal Share, then line H. Unobligated Balance of Federal Funds would be -$75,000.
When a grantee has expended more funds than were authorized on its FY2015 non-competing award due to the use of non-restricted unobligated funds drawn from its pooled account, AHRQ asks that grantees only state the authorized amount of funds (the amount stated on line D.) as the expended amount (line G). In this example the grantee would not enter $75,000 in the Unexpended Balance from Prior Project Period data field at the top of the FFR.
AHRQ also requests that grantees provide a remark (Line 12.) detailing the total amount of their expenditures and explain how the total was derived. For example, using the scenario above, the remark could read "Total expenditures were $575,000. The 02-year had a remaining balance of $75,000 that was not transferred to RHS012345B due to the transition to subaccounts. The U/B of $75,000 was also spent." AHRQ will review the remark and ensure that the total expenditure amount is allowable given the prior unobligated balance from the pooled account and review whether there were any restrictions that may prevent the unobligated balance from being spent.
We anticipate that grantee compliance with the FFR reporting instructions described above will ensure that FFRs do not show negative unobligated balances while also ensuring that all obligated funding is available to the grantee and is expended in a manner that facilitates timely closeout.