Contracts and Subawards

Contracts: Procurement and Monitoring

• Policies or procedures for purchasing, procurement, and contract management.
• Provide a complete list of health center contracts that support the HRSA-approved scope of project, including contracts for health center clinical services or other goods and services (for example, tech support, janitorial, payroll). Specifically, include all active contracts and all contracts that had a period of performance that ended less than 3 years ago. In the list, include all of the following information for each contract:
  • Whether the health center uses federal award funds to pay in whole or in part for the contract (not applicable to look-alikes);
  • Contractor/contract organization;
  • Value of the contract (if there is a federal share, state the federal share amount);
  • Brief description of the goods or services provided;
  • Period of performance/timeframe (for example, ongoing contractual relationship, specific duration); and
  • Whether the contract supports substantive programmatic work.¹

• Based on the list of contracts that support the HRSA-approved scope of project:
  • Five contracts AND related supporting procurement documentation for actions that use federal award funds. Choose the contracts that use the largest amounts of federal award funds.
    
    Note: Use the same sample of contracts/agreements for the review of both Contracts and Subawards and Conflict of Interest. The sampling methodologies for Contracts and Subawards are different from Required and Additional Health Services, Clinical Staffing, and Sliding Fee Discount Program, even though they may result in some overlap in the contracts/agreements reviewed.
  • Sample of five contracts that do NOT use federal award funds.
• From the sample of selected contractors: Two to three reports or records of the contractor’s health center-related activities. For example, monthly invoices or billing reports, data on patients served or visits provided.
• Documentation of HRSA prior approval for any contracts for the performance of substantive programmatic work (i.e., contracting with a single entity for the majority of health care providers) under the federal award.

Subawards: Monitoring and Management

ONLY APPLICABLE FOR AWARDEES WITH AT LEAST ONE SUBRECIPIENT

NOT APPLICABLE TO LOOK-ALIKES

• Most recent annual audit and management letter.
• Policies or procedures for subrecipient monitoring.
• All subrecipient agreements (if updated since last application submission to HRSA) that support the awardee’s HRSA-approved Health Center Program scope of project.

  Note: Per 45 CFR 75.351(c), “In determining whether an agreement between a pass-through entity [(Health Center Program awardee)] and another non-federal entity casts the latter as a subrecipient or a contractor, the substance of the relationship is more important than the form of the agreement. All of the characteristics listed above [(see 45 CFR 75.351(a) and (b))] may not be present in all cases, and the pass-through entity [(Health Center Program awardee)] must use judgment in classifying each agreement as a subaward or a procurement contract.”

• Documentation of HRSA prior approval of subrecipient arrangements.

Note: For a health center with five or fewer subrecipients, provide the following documentation from all subrecipients. For a health center with more than five subrecipients, provide the documentation from the five subrecipients that receive the largest amounts of Health Center Program subaward funds.

• Sample of financial and performance reports from within the current period of performance from the subrecipient, including the subrecipient’s annual audit.
• Documentation of subrecipient monitoring by the health center through audits, on-site reviews, and other means, that occurred during the current period of performance.
• If there have been subrecipient deficiencies identified by the health center through its monitoring process: Documentation ensuring that the subrecipient took corrective action.
• The following documentation used by the health center to confirm subrecipient compliance:
  • Subrecipient articles of incorporation, bylaws (either for the subrecipient’s board or the co-applicant board of a public agency subrecipient), or other corporate documents (for example, co-applicant agreement);
  • Subrecipient sliding fee discount program (SFDP) policy;
    • If the subrecipient board-approved SFDP policy does not state a specific amount for each nominal charge or how each nominal charge is determined: Other documentation (for example, subrecipient board minutes, subrecipient reports) of subrecipient board involvement in setting the amount of each nominal charge;
  • Current subrecipient board roster or completed Form 6A indicating current board member characteristics as follows:
    • For all board members: patient status, area of expertise, and percentage income from the healthcare industry; and
    • For patient board members: gender, race, and ethnicity;
  • Subrecipient billing records from within the past 24 months to confirm the patient status of subrecipient board members; and
  • Subrecipient’s portion of Uniform Data System (UDS) data for an overview of subrecipient patient population demographic factors (race, ethnicity, and gender).

The health center has written procurement procedures that comply with federal procurement standards, including a process for ensuring that all procurement costs directly attributable to the federal award are allowable, consistent with federal cost principles.²

Site Visit Team Methodology

• Review the health center’s policies or procedures for purchasing, procurement, and contract management.
• Interview health center staff involved in contract procurement and monitoring.

Site Visit Findings

2. Does the health center have written policies or procedures for procurement?

   Response is either: Yes or No

   If No, an explanation is required.

3. Do these policies or procedures, at a minimum, ensure that all procurements directly attributable to the federal award will:
   • Be conducted using full and open competition;³ and
   • Only include allowable costs, consistent with federal cost principles? For example, do the procedures contain relevant references or citations to 45 CFR Part 75 Subpart E: Cost Principles.

   Response is: Yes, No, or Not Applicable

   If No, an explanation is required.

NOT APPLICABLE FOR LOOK-ALIKES 

The health center has records for procurement actions paid for in whole or in part under the federal award that include the rationale for method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. This would include documentation related to noncompetitive procurements.

Site Visit Team Methodology

• Review the complete list of contracts.
• Review the five contracts that use the largest amounts of federal award funds AND the related supporting procurement documentation.  

  Note: Use the same sample of contracts/agreements for the review of both Contracts and Subawards and Conflict of Interest. The sampling methodologies for Contracts and Subawards are different from Required and Additional Health Services, Clinical Staffing, and Sliding Fee Discount Program, even though they may result in some overlap in the contracts/agreements reviewed.

Site Visit Findings

4. Does the health center have any:
   • 4.1 Active contracts paid for in whole or in part with federal award funds?

     Response is: Yes, No, or Not Applicable

   • 4.2 Contracts that had a period of performance which ended less than 3 years ago and that were paid for in whole or in part with federal award funds?

     Response is: Yes, No, or Not Applicable

5. Based on the review of the sample of contracts, is there supporting documentation of the procurement process that addresses the following:
   • 5.1 Rationale for the procurement method?

     Response is: Yes, No, or Not Applicable

   • 5.2 Selection of contract type?

     Response is: Yes, No, or Not Applicable

   • 5.3 Contractor selection or rejection?

     Response is: Yes, No, or Not Applicable

   • 5.4 Basis for the contract price?

     Response is: Yes, No, or Not Applicable

   If No was selected for any of the above, an explanation is required.

NOT APPLICABLE FOR LOOK-ALIKES 

The health center retains final contracts and related procurement records, consistent with federal document maintenance requirements, for procurement actions paid for in whole or in part under the federal award.⁴

Site Visit Team Methodology

• Review the five contracts AND related supporting procurement documentation for actions that use federal award funds.

• Note: Use the same sample of contracts/agreements for the review of both Contracts and Subawards and Conflict of Interest. The sampling methodologies for Contracts and Subawards are different from Required and Additional Health Services, Clinical Staffing, and Sliding Fee Discount Program, even though they may result in some overlap in the contracts/agreements reviewed.

Site Visit Findings

6. Did the health center provide final executed contracts that were awarded within the past 3 years?

   Response is: Yes, No, or Not Applicable

   If No, an explanation is required.

The health center has access to contractor records and reports related to health center activities in order to ensure that all activities and reporting requirements are being carried out in accordance with the provisions and timelines of the related contract (for example, performance goals are achieved, Uniform Data System (UDS) data are submitted by appropriate deadlines, funds are used for authorized purposes).

Site Visit Team Methodology

• Review two to three reports or records (for example, monthly invoices or billing reports, data run of patients served, visits provided) from the sample of selected contractors.

Site Visit Findings

7. Based on the review of the sample, does the health center have access to records and reports as necessary to oversee contractor performance?

   Response is either: Yes or No

   If No, an explanation is required.

If the health center has arrangements with a contractor to perform substantive programmatic work,⁵ the health center requested and received prior approval from HRSA as documented by:

• An approved competing continuation/renewal of designation application or other competitive application, which included such an arrangement; or
• An approved post-award request for such arrangements submitted within the project period (for example, change in scope).

Site Visit Team Methodology

• Review the complete list of contracts, including those that support substantive programmatic work.
• Interview key management or other health center staff involved in procurement or contract oversight.
• Review the health center’s documentation of HRSA’s approval of each contracting arrangement for substantive programmatic work.

Site Visit Findings

8. Based on the list of contracts reviewed and interviews with health center staff, does this health center currently contract with a single entity for the majority of health care providers (i.e., substantive programmatic work)?

   Response is either: Yes or No

9. IF YES: Did the health center provide documentation of prior approval by HRSA (i.e., the arrangement was included in a HRSA-approved application or was approved by HRSA through a post-award request)?

   Note: Only select “Not Applicable” if this is a Look-Alike Initial Designation Site Visit.

   Response is: Yes, No, or Not Applicable

   If No, an explanation is required.

The health center’s contracts that support the HRSA-approved scope of project include provisions that address the following:

• The specific activities or services to be performed or goods to be provided;
• Mechanisms for the health center to monitor contractor performance; and
• Requirements for the contractor to provide data necessary to meet the recipient’s applicable federal financial and programmatic reporting requirements, as well as provisions addressing record retention and access, audit, and property management.⁶

Site Visit Team Methodology

• Review the entire sample of contracts (both those that use and those that do not use federal award funds) that support the HRSA-approved Health Center Program scope of project.

Site Visit Findings

10. Does the health center have one or more contracts to provide health center services or for other goods and services that support the HRSA-approved scope of project?

    Response is either: Yes or No

11. IF YES: Based on the sample of contracts reviewed, do these contracts contain provisions that address the following areas:
    • 11.1 Specific activities or services performed or goods provided by the contractor?

      Response is: Yes, No, or Not Applicable

    • 11.2 How the health center will monitor contract or performance?

      Response is: Yes, No, or Not Applicable

    • 11.3 Requirements for contractor data reporting, including reporting frequency?

      Response is: Yes, No, or Not Applicable

    • 11.4 Provisions for record retention and access, audit, and property management?

      Response is: Yes, No or Not Applicable

    If No was selected for any of the above, an explanation is required.

If the health center has made a subaward,⁷ the health center requested and received prior approval from HRSA as documented by:

• An approved competing continuation/renewal of designation application or other competitive application, which included the subrecipient arrangement; or
• An approved post-award request for such subrecipient arrangements submitted within the project period (for example, change in scope).

Site Visit Team Methodology

• Review Form 8: Health Center Agreements.
• Review the most recent annual audit and management letters to determine if subrecipients were identified in the audit report, including the amount of the subawards.
• Review all subrecipient agreements that support the awardee’s HRSA-approved Health Center Program scope of project.
• Review the health center’s documentation of HRSA’s prior approval of each subrecipient arrangement.

Site Visit Findings

12. Did the health center make any subawards (new or continuing) during the current period of performance?

    Response is: Yes, No, or Not Applicable

13. Did the health center provide documentation of prior approval by HRSA of the subrecipient arrangement (i.e., arrangement was included in the last HRSA-approved Service Area Competition (SAC) application or was approved by HRSA through a post-award request)?

    Response is: Yes, No, or Not Applicable

    If No, an explanation is required.

The health center’s subaward(s) that supports the HRSA-approved scope of project includes provisions that address the following:

• The specific portion of the HRSA-approved scope of project to be performed by the subrecipient;
• The applicability of all Health Center Program requirements to the subrecipient;
• The applicability to the subrecipient of any distinct statutory, regulatory, and policy requirements of other federal programs associated with their HRSA-approved scope of project;⁸
• Mechanisms for the health center to monitor subrecipient compliance and performance;
• Requirements for the subrecipient to provide data necessary to meet the health center’s applicable federal financial and programmatic reporting requirements, as well as provisions addressing record retention and access, audit, and property management;⁹ and
• Requirements that all costs paid for by the federal subaward are allowable consistent with federal cost principles.¹⁰

Site Visit Team Methodology

• Review all subrecipient agreements that support the HRSA-approved Health Center Program scope of project.

Site Visit Findings

14. Do all of the health center’s subrecipient agreements include provisions that address the following:
    • 14.1 The portion of the health center project (i.e., sites and services) carried out by the subrecipient and how? 

      Response is: Yes, No, or Not Applicable

    • 14.2 The applicability of all Health Center Program requirements to the subrecipient

      Response is: Yes, No, or Not Applicable

    • 14.3 The applicability of other distinct statutory, regulatory, and policy requirements of associated programs and benefits to the subrecipient? For example, requirements that apply if the subrecipient participates in the 340B Drug Pricing Program. 

      Response is: Yes, No, or Not Applicable

    • 14.4 Mechanisms for the health center to monitor subrecipient compliance and performance?

      Response is: Yes, No, or Not Applicable

    • 14.5 Data the subrecipient must collect and report back to the awardee (for example, UDS data)?

      Response is: Yes, No or Not Applicable

    • 14.6 Record retention and access, audit, and property management?

      Response is: Yes, No, or Not Applicable

    • 14.7 Requirements that all costs paid for under the subaward are consistent with federal cost principles?

      Response is: Yes, No, or Not Applicable

    If No was selected for any of the above, an explanation is required.

The health center monitors the activities of its subrecipient to ensure that the subaward is used for authorized purposes and that the subrecipient maintains compliance with all applicable requirements specified in the federal award (including those found in section 330 of the PHS Act, implementing program regulations and grants regulations in 45 CFR Part 75). Specifically, the health center’s monitoring of the subrecipient includes:

• Reviewing financial and performance reports required by the health center in order to ensure performance goals are achieved, UDS data are submitted by appropriate deadlines, and funds are used for authorized purposes;
• Ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the subaward that may be identified through audits, on-site reviews, and other means; and
• Issuing a management decision for audit findings pertaining to the subaward.¹¹

Site Visit Team Methodology

• Review all subrecipient agreements that support the awardee’s HRSA-approved Health Center Program scope of project. 
• Review the policies or procedures for subrecipient monitoring.
• Interview health center staff who provide oversight of subrecipient activities.

For the remaining methodology: For a health center with five or fewer subrecipients, review the documentation from all subrecipients. For a health center with more than five subrecipients, review the documentation from the five subrecipients that receive the largest amounts of Health Center Program subaward funds.

• Review the documentation from within the current period of performance of subrecipient monitoring by the health center. If there have been subrecipient deficiencies, review the documentation ensuring that the subrecipient took corrective action.
• Review the sample of financial and performance reports received from the subrecipient, including the subrecipient’s annual audit.
• Review the following documentation used by the health center to confirm subrecipient compliance:  
  • Subrecipient articles of incorporation, bylaws (either for the subrecipient’s board or the co-applicant board of a public agency subrecipient), or other corporate documents (for example, co-applicant agreement); 
  • Subrecipient sliding fee discount program (SFDP) policy;
    • If the subrecipient board-approved SFDP policy does not state a specific amount of each nominal charge or how each nominal charge is determined, review other documentation (for example, subrecipient board minutes, subrecipient reports) of subrecipient board involvement in setting the amount of each nominal charge;
  • Current subrecipient board roster or completed Form 6A indicating current board member characteristics as follows: 
    • For all board members: patient status, area of expertise, and percentage income from the health care industry; and
    • For patient board members: gender, race, and ethnicity.
  • Subrecipient billing records from within the past 24 months to confirm the patient status of subrecipient board members; and
  • Subrecipient’s portion of UDS data for an overview of subrecipient patient population demographic factors (race, ethnicity, and gender).

Notes:

• Self-attestation by the subrecipient is not sufficient to confirm compliance.
• The health center awardee is responsible for ensuring that the subrecipient meets all the Health Center Program requirements applicable to the health center awardee’s federal award. For example: A health center awardee receives a 330(e) award and has a subrecipient that receives a 330(h) award directly from HRSA. The health center awardee would ensure the subrecipient meets all 330(e) requirements.

Site Visit Findings

15. Does the health center have a process for monitoring the activities of the subrecipient during the current period of performance? Specifically, does the process ensure that the subrecipient maintains compliance with all Health Center Program requirements and all other applicable requirements specified in the federal award, including implementing any corrective actions?  

    Response is: Yes, No, or Not Applicable

    If Yes OR No, an explanation is required describing the health center’s monitoring methods.

16. Does the health center have a specific process for receiving and reviewing financial and performance reports (including the subrecipient’s annual audit) during each period of performance that addresses the following areas: 
    • 16.1 Achievement of performance goals?

      Response is: Yes, No, or Not Applicable

    • 16.2 Submission of UDS data by appropriate deadlines?

      Response is: Yes, No, or Not Applicable

    • 16.3 Use of funds for authorized purposes?

      Response is: Yes, No, or Not Applicable

    If No was selected for any of the above, an explanation is required.

17. Did the health center receive and review the following reports from the subrecipient during the current period of performance:
    • 17.1 Financial reports, including the subrecipient’s audit?

      Response is: Yes, No, or Not Applicable

    • 17.2 Performance reports, including submission of data for the health center’s UDS reporting?

      Response is: Yes, No, or Not Applicable

    If No was selected for either of the above, an explanation is required, including specifying which reports the health center did not receive or review.

18. Did the health center identify any deficiencies with the subrecipient’s financial or performance reporting during the current period of performance, including any deficiencies in the subrecipient’s annual audit?

    Response is: Yes, No, or Not Applicable

19. IF YES: Is there documentation that the health center ensured the subrecipient took timely corrective action on the identified deficiencies?

    Response is: Yes, No, or Not Applicable

    If No, an explanation is required specifying what deficiencies remain.

20. Did the health center provide documentation demonstrating that each subrecipient is currently compliant with the following Board Composition requirements: 

    Note: Select “No” if the health center is unable to provide documentation that verifies that the subrecipient is in compliance OR if the documentation provided does not demonstrate subrecipient compliance.

    • 20.1 The subrecipient’s board is currently composed of at least 9 and no more than 25 members?

      Response is: Yes, No, or Not Applicable

    • 20.2 At at least 51 percent of subrecipient board members are classified by the subrecipient as patients?

      Note: Select “Not Applicable” only if the awardee has approved the subrecipient’s request for a waiver of patient majority board composition requirements. A waiver is only available if the health center awardee receives an award under section 330(g), 330(h) and/or 330(i) and does not receive an award under section 330(e).

      Response is: Yes, No, or Not Applicable

    • 20.3 Each subrecipient patient board member has received at least one in-scope service at an in-scope service site within the past 24 months that generated a health center visit?

      Note: Select “Not Applicable” only if the awardee has approved the subrecipient’s request for a waiver of patient majority board composition requirements. A waiver is only available if the health center awardee receives an award under section 330(g), 330(h) and/or 330(i) and does not receive an award under section 330(e).

      Response is: Yes, No, or Not Applicable

    • 20.4 Patient board members as a group are representative of the subrecipient’s patient population in terms of race, ethnicity, and gender consistent with the demographics reported in the health center’s UDS report?

      Note: Select “Not Applicable” only if the awardee has approved the subrecipient’s request for a waiver of patient majority board composition requirements. A waiver is only available if the health center awardee receives an award under section 330(g), 330(h) and/or 330(i) and does not receive an award under section 330(e).

      Response is: Yes, No, or Not Applicable

    If No OR Not Applicable is selected for any of the above, an explanation is required.

21. Did the health center provide documentation demonstrating that each subrecipient is currently compliant with the following Board Authority requirements:

    Note: Select “No” if the health center is unable to provide documentation that verifies that the subrecipient is in compliance OR if the documentation provided does not demonstrate subrecipient compliance.

    If No is selected for any of the above, an explanation is required.

    • 21.1 Holding monthly meetings?

      Response is: Yes, No, or Not Applicable

    • 21.2 Approving the selection and termination or dismissal of the subrecipient’s Project Director/CEO?

      Response is: Yes, No, or Not Applicable

    • 21.3 Approving the subrecipient’s health center project annual budget and applications?

      Response is: Yes, No, or Not Applicable

    • 21.4 Approving the subrecipient’s health center services?

      Response is: Yes, No, or Not Applicable

    • 21.5 Approving the location and hours of operation of the subrecipient’s health center sites?

      Response is: Yes, No, or Not Applicable

    • 21.6 Evaluating the performance of the subrecipient’s health center project?

      Response is: Yes, No, or Not Applicable

    • 21.7 Establishing or adopting policy related to the operations of the subrecipient’s health center project?

      Response is: Yes, No, or Not Applicable

    • 21.8 Assuring the subrecipient operates in compliance with applicable federal, state, and local laws and regulations?

      Response is: Yes, No, or Not Applicable

      If No is selected for any of the above, an explanation is required.

22. Did the health center provide documentation showing that each subrecipient’s Sliding Fee Discount Program (SFDP) policy includes language or provisions that address all of the following:

    Note: Select “No” if the health center is unable to provide documentation that verifies that the subrecipient is in compliance OR if the documentation provided does not demonstrate subrecipient compliance.

    • 22.1 The policy applies uniformly to all patients?

      Response is: Yes, No, or Not Applicable

    • 22.2 The definitions of income and family (or “household”)? For example, what the subrecipient includes or does not include in the definitions.

      Response is: Yes, No, or Not Applicable

    • 22.3 The methods for assessing patient eligibility based only on income and family size?

      Response is: Yes, No or Not Applicable

    • 22.4 The way each sliding fee discount schedule is structured to ensure charges are adjusted based on ability to pay? For example, the policy addresses that flat fee amounts differ across discount pay classes or that there is a graduated percent of charges for patients with incomes above 100 percent and at or below 200 percent of the Federal Poverty Guidelines (FPG).

      Response is: Yes, No, or Not Applicable

    • 22.5 The setting of any nominal charges for patients with incomes at or below 100 percent of the FPG?

      Note: Select “Not Applicable” if the subrecipient does not charge patients with incomes at or below 100 percent of the FPG.

      Response is: Yes, No, or Not Applicable

    If No was selected for any of the above, an explanation is required.

23. Did the health center provide documentation showing that each subrecipient’s SFDP policy ensures that any charges for patients with incomes at or below 100 percent of the FPG are:
24. Notes:
    • Select “No” if the health center is unable to provide documentation that verifies that the subrecipient is in compliance OR if the documentation provided does not demonstrate subrecipient compliance.
    • Select “Not Applicable” if the health center does not charge patients with incomes at or below 100 percent of the FPG.
    • 23.1 A flat fee?

      Response is: Yes, No, or Not Applicable

    • 23.2 Nominal from the perspective of patients with incomes at or below 100 percent of the FPG? For example, based on input from patient board members, patient surveys, advisory committees, or a review of Medicare and Medicaid co-pay amounts for patients with comparable incomes.

      Response is: Yes, No, or Not Applicable

    • 23.3 Not based on the actual cost of the service?

      Response is: Yes, No, or Not Applicable

    If No was selected for any of the above, an explanation is required.

25. Does the health center have a process that ensures the subrecipient resolves noncompliance with Health Center Program requirements:

    Response is: Yes, No, or Not Applicable

    If Yes OR No, an explanation is required.

    • IF NO: Describe the deficiencies in the health center’s process.
    • IF YES: Describe the health center’s process.
    • IF THE HEALTH CENTER HAS IDENTIFIED SUBRECIPIENT NONCOMPLIANCE: Specify the requirements and how the health center has confirmed or will confirm subrecipient compliance.

The health center retains final subrecipient agreements and related records, consistent with federal document maintenance requirements.¹²

Site Visit Team Methodology

• Review all subrecipient agreements that support the awardee’s HRSA-approved Health Center Program scope of project.
• Review the documentation of subrecipient monitoring.
• Review the sample of financial and performance reports received from the subrecipient.

Site Visit Team Findings

25. Does the health center have final executed subrecipient agreements that were awarded within the past three years as well as related financial and other performance records?

    Response is: Yes, No, or Not Applicable

    If No, an explanation is required.