Department of Health and Human Services

Office of Inspector General -- AUDIT

EXECUTIVE SUMMARY:

The audit objective was to determine whether the Health Resources and Services Administration (HRSA) complied with applicable requirements and used its offset authority in managing unobligated funds provided by Title II of the Ryan White Comprehensive AIDS Resources Emergency (CARE) Act. 

During grant years 1999–2002, HRSA did not fully comply with applicable requirements for managing unobligated Title II funds. Contrary to the CARE Act, HRSA did not recoup Title II funds from States that had not obligated at least 75 percent of their grant awards within 120 days and reallot those funds to other States in proportion to their original grants. Contrary to Department of Health and Human Services (HHS) policy, HRSA authorized States to carry over unobligated Title II funds beyond one budget period. In addition, HRSA did not use the offset authority provided by the CARE Act and HHS grants policy to manage States’ unobligated balances. 

OIG recommended that HRSA (1) monitor the States’ compliance with the CARE Act requirement to obligate 75 percent of the grant award within 120 days and, for States that do not meet this requirement, recoup the unobligated portion of the 75 percent of the grant award and reallot such funds to other States in proportion to their original grants; (2) comply with the current carryover policy; (3) examine the reasons for some States’ large unobligated balances; and (4) analyze each State’s unobligated balance from the preceding grant year in light of relevant factors to determine whether the balance should be deobligated or carried over and, if carried over, determine whether the amount should be an addition to the State’s full amount of funding approved for the current grant year or an offset to the State’s current-year grant award, which would provide additional funding for other States’ unmet program needs. HRSA generally disagreed with the findings.