§ 143C-6-23. State grant funds: administration; oversight and reporting requirements.
§ 143C‑6‑23. State grant funds: administration; oversight and reporting requirements.
(a) Definitions. Thefollowing definitions apply in this section:
(1) "Grant"and "grant funds" means State funds disbursed as a grant by a Stateagency; however, the terms do not include any payment made by the Medicaidprogram, the State Health Plan for Teachers and State Employees, or othersimilar medical programs.
(2) "Grantee"means a non‑State entity that receives State funds as a grant from aState agency but does not include any non‑State entity subject to theaudit and other reporting requirements of the Local Government Commission.
(3) "Subgrantee"means a non‑State entity that receives State funds as a grant from agrantee or from another subgrantee but does not include any non‑Stateentity subject to the audit and other reporting requirements of the LocalGovernment Commission.
(b) Conflict ofInterest Policy. Every grantee shall file with the State agency disbursingfunds to the grantee a copy of that grantee's policy addressing conflicts ofinterest that may arise involving the grantee's management employees and themembers of its board of directors or other governing body. The policy shalladdress situations in which any of these individuals may directly or indirectlybenefit, except as the grantee's employees or members of its board or othergoverning body, from the grantee's disbursing of State funds, and shall includeactions to be taken by the grantee or the individual, or both, to avoidconflicts of interest and the appearance of impropriety. The policy shall befiled before the disbursing State agency may disburse the grant funds.
(c) No Overdue TaxDebts. Every grantee shall file with the State agency or departmentdisbursing funds to the grantee a written statement completed by that grantee'sboard of directors or other governing body stating that the grantee does nothave any overdue tax debts, as defined by G.S. 105‑243.1, at the federal,State, or local level. The written statement shall be made under oath and shallbe filed before the disbursing State agency or department may disburse thegrant funds. A person who makes a false statement in violation of thissubsection is guilty of a criminal offense punishable as provided by G.S. 143C‑10‑1.
(d) Office of StateBudget Rules Must Require Uniform Administration of State Grants. The Officeof State Budget and Management shall adopt rules to ensure the uniformadministration of State grants by all grantor State agencies and grantees orsubgrantees. The Office of State Budget and Management shall consult with theOffice of the State Auditor and the Attorney General in establishing the rulesrequired by this subsection. The rules shall establish policies and proceduresfor disbursements of State grants and for State agency oversight, monitoring,and evaluation of grantees and subgrantees. The policies and procedures shall:
(1) Ensure that thepurpose and reporting requirements of each grant are specified to the grantee.
(2) Ensure that granteesspecify the purpose and reporting requirements for grants made to subgrantees.
(3) Ensure that Statefunds are spent in accordance with the purposes for which they were granted.
(4) Hold the granteesand subgrantees accountable for the legal and appropriate expenditure of grantfunds.
(5) Provide for adequateoversight and monitoring to prevent the misuse of grant funds.
(6) Establish mandatoryperiodic reporting requirements for grantees and subgrantees, including methodsof reporting, to provide financial and program performance information. Themandatory periodic reporting requirements shall require grantees andsubgrantees to file with the State Auditor copies of reports and statementsthat are filed with State agencies pursuant to this subsection. Compliance withthe mandatory periodic reporting requirements of this subdivision shall notrequire grantees and subgrantees to file with the State Auditor the informationdescribed in subsections (b) and (c) of this section.
(7) Require grantees andsubgrantees to maintain reports, records, and other information to properlyaccount for the expenditure of all grant funds and to make such reports,records, and other information available to the grantor State agency foroversight, monitoring, and evaluation purposes.
(8) Require grantees andsubgrantees to ensure that work papers in the possession of their auditors areavailable to the State Auditor for the purposes set out in subsection (i) ofthis section.
(9) Require grantees tobe responsible for managing and monitoring each project, program, or activitysupported by grant funds and each subgrantee project, program, or activitysupported by grant funds.
(10) Provide proceduresfor the suspension of further disbursements or use of grant funds fornoncompliance with these rules or other inappropriate use of the funds.
(11) Provide proceduresfor use in appropriate circumstances for reinstatement of disbursements thathave been suspended for noncompliance with these rules or other inappropriateuse of grant funds.
(12) Provide proceduresfor the recovery and return to the grantor State agency of unexpended grantfunds from a grantee or subgrantee if the grantee or subgrantee is unable tofulfill the purposes of the grant.
(e) Rules Are Subjectto the Administrative Procedure Act. Notwithstanding the provisions of G.S.150B‑2(8a)b. rules adopted pursuant to subsection (d) of this section aresubject to the provisions of Chapter 150B of the General Statutes.
(f) Suspension andRecovery of Funds to Grant Recipients for Noncompliance. The Office of StateBudget and Management, after consultation with the administering State agency,shall have the power to suspend disbursement of grant funds to grantees orsubgrantees, to prevent further use of grant funds already disbursed, and torecover grant funds already disbursed for noncompliance with rules adoptedpursuant to subsection (d) of this section. If the grant funds are a pass‑throughof funds granted by an agency of the United States, then the Office of StateBudget and Management must consult with the granting agency of the UnitedStates and the State agency that is the recipient of the pass‑throughfunds prior to taking the actions authorized by this subsection.
(g) Audit Oversight. TheState Auditor has audit oversight, with respect to grant funds received by thegrantee or subgrantee, pursuant to Article 5A of Chapter 147 of the GeneralStatutes, of every grantee or subgrantee that receives, uses, or expends grantfunds. A grantee or subgrantee must, upon request, furnish to the State Auditorfor audit all books, records, and other information necessary for the StateAuditor to account fully for the use and expenditure of grant funds received bythe grantee or subgrantee. The grantee or subgrantee must furnish any additionalfinancial or budgetary information requested by the State Auditor, includingaudit work papers in the possession of any auditor of a grantee or subgranteedirectly related to the use and expenditure of grant funds.
(h) Report on GrantRecipients That Failed to Comply. Not later than May 1, 2007, and by May 1 ofevery succeeding year, the Office of State Budget and Management shall reportto the Joint Legislative Commission on Governmental Operations and the FiscalResearch Division on all grantees or subgrantees that failed to comply withthis section with respect to grant funds received in the prior fiscal year.
(i) State Agencies toSubmit Grant List to Auditor. No later than October 1 of each year, eachState agency shall submit a list to the State Auditor, in the format prescribedby the State Auditor, of every grantee to which the agency disbursed grantfunds in the prior fiscal year. The list shall include the amount disbursed toeach grantee and other information as required by the State Auditor to complywith the requirements of this section. (2006‑203, s. 3; 2007‑323, s. 28.22A(o);2007‑345, s. 12.)