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1 1 (February 21, 2025)

handle is hein.crs/govesof0001 and id is 1 raw text is: Congressional Research Service nforming the legislative debate since 1914 February 21, 2025 Understanding Federal Agency Grant Disbursement, Payment Processes, and Freezes This In Focus describes how federal agencies administer grant program funding, including the statutory authorities, regulatory provisions, and grant program guidance that informs the grant payment disbursement process. It also discusses the process by which federal grant recipients request payments under a grant award, federal agency freezes of payment systems, and factors that may affect the disbursement timeline for both new and existing grant awards. Federal Grant Funding Process There are several steps in the grant funding process. These include the appropriation of funding by Congress, apportionment of those funds by the Office of Management and Budget (OMB) to federal agencies, allocation of funds by federal agencies to specific programs or purposes, and the obligation of funds to individual grant awards. Step 1: Appropriations The initial step of grant funding occurs when Congress appropriates funding to congressionally authorized grant programs through enactment of appropriation bills. The appropriation may include provisions that specify the use of the funds and the amount of time for which the funding is available for obligation. The authority for a federal agency to administer grant program funding, as well as provisions relating to program administration provisions (i.e., eligible recipients and eligible use of the funds) is often contained in separate program-specific authorizing legislation. In the absence of a current authorizing statute for a grant program, the appropriation of funding for the program provides authority to the federal agency to administer the grant program. Step 2: Apport onment Once Congress has appropriated funds to federal agencies for specific purposes, OMB apportions funds to each agency and specifies the timeframe during which those funds are available for obligation. OMB also ensures consistency with statutory requirements. Step 3: Allotment Once the federal agency receives the apportioned funds, the agency allots funding among grant programs and makes decisions about grant applications that may result in awards being made to grant recipients. In some cases, the apportioned funding is split among several different grant programs by the federal agency. The process for awarding funds generally begins after those funds have been allotted. Step 4: Oblgation The process for awarding grant funds varies by program. In most cases, the federal agency will publish a Notice of Funding Opportunity (NOFO) in the Federal Register, select projects for further review, and obligate funding to successful grant applicants. The information contained in a NOFO varies by grant program. In general, a NOFO includes: * reference to the authorization for the program; * how much funding is available; * grant program goals; * eligible applicants; * eligible use of the funds; * application requirements; * application review and scoring criteria; * performance and financial reporting requirements; and * additional terms and conditions attached to the funding. Once the NOFO is published, the federal agency typically begins accepting grant program applications. During the preaward process, these applications are reviewed to assess the eligibility both of the applicant and the use of funds proposed in the grant application to ensure the proposed project is in compliance with the program's statutory and regulatory requirements. Once a selected grant application is deemed to have met all of the eligibility requirements, the federal agency awards funds through obligation. When Are Grant Funds Obligated? According to 31 U.S.C. §1501, an obligation is recorded when there is documentary evidence of: (a)(5) a grant or subsidy payable - (A) from appropriations made for payment of or contributions to, amounts required to be paid in specific amounts fixed by law or under formulas prescribed by law; (B) under an agreement authorized by law; or (C) under plans approved consistent with and authorized by law. As noted by GAO, an obligation is some action that creates a legal liability or definite commitment on the part of the government. Generally, grant funding is considered obligated when a grant agreement or cooperative agreement 0

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