Department of Health and Human Services Should Improve Policies and Practices on Grant-Related Income

GGD-84-20: Published: Feb 10, 1984. Publicly Released: Feb 10, 1984.

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GAO reviewed federal agencies' and grantees' practices and policies for reporting and disposing of federal grant-related income.

GAO found that a number of federal agencies, including the Department of Health and Human Services (HHS), have not established regulations conforming to the Office of Management and Budget's (OMB) grant-related income standards or were not adequately implementing their grant-related income regulations. As a result, OMB objectives for utilizing program revenues to increase program size or to decrease program costs are not always being met.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: HHS amended departmentwide regulations to incorporate this recommendation.

    Recommendation: The Secretary of Health and Human Services should direct the Office of the Assistant Secretary for Management and Budget to amend HHS departmentwide regulations on grant-related income to provide that: (1) income under all options be spent before federal funds unless the granting agency authorizes deferral to a later period; (2) all types of grant-related income, including sales proceeds and interest, be reported; (3) when the deductive option is used, grant budgets not be allowed to increase merely because unexpected program income was generated; and (4) interest earned on the federal share of funds not pending disbursement for program purposes be returned.

    Agency Affected: Department of Health and Human Services

  2. Status: Closed - Implemented

    Comments: HHS reported that it reviewed and revised its regulations as recommended.

    Recommendation: The Secretary of Health and Human Services should direct the Office of the Assistant Secretary for Management and Budget and the Office of Human Development Services (OHDS) to review and, where appropriate, revise their regulations and policies on the options available to grantees for using program income to ensure that they reflect statutory requirements and to clarify them to remove internal conflicts.

    Agency Affected: Department of Health and Human Services

  3. Status: Closed - Implemented

    Comments: OHDS and PHS amended the forms and instructions requiring the reporting of all grant-related income.

    Recommendation: The Secretary of Health and Human Services should direct the Public Health Service (PHS) and OHDS, in concert with the Office of the Assistant Secretary for Management and Budget, to revise their financial reporting forms to provide for reporting on the source, amount, and disposition of all grant-related income.

    Agency Affected: Department of Health and Human Services

  4. Status: Closed - Implemented

    Comments: OHDS and PHS reported that grantees were reminded of their responsibilities to return interest.

    Recommendation: The Secretary of Health and Human Services should direct PHS and OHDS to enforce their regulations requiring nonstate grantees to return interest earned on advanced federal funds.

    Agency Affected: Department of Health and Human Services

 

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