Tuesday, November 14, 2006

Audit: "Widespread Deficiencies" in CDC HIV Prevention Grants

In September 2005, as America grappled with the devastation of New Orleans brought on by Hurricane Katrina and the incompetence of the Bush administration, the Department of Health and Human Services released an audit titled "Management of HIV/AIDS Prevention Grants by the Centers for Disease Control and Prevention."

This important fiscal audit escaped the AIDS community's attention, and even though the audit came out more than a year ago, attention still must be paid to the findings.

Everyone concerned about AIDS and preventing new HIV infections should be concerned that the audit found very lax oversight on the CDC's part in managing millions and millions of taxpayer dollars. You can read the full HHS audit by clicking here.

More than a year later, I think it's time to ask CDC director Dr. Julie Gerberding what has been done since the audit was released to provide much-needed additional oversight to its HIV/AIDS prevention grants.

Here are selected findings of keen interest to me:

From the executive summary --

During fiscal years (FYs) 1999 through 2003, the period of our audit, the Centers for Disease Control and Prevention (CDC) used more than $2.6 billion of HIV/AIDS prevention funds to award grants for State and local health departments and community-based nonprofit organizations to carry out surveillance, testing, counseling, research, conferences, outcome evaluations, and other related activities. These grants serve as important tools in carrying out CDC's mission of preventing and controlling HIV and AIDS. [...]

The objective of our audit was to determine whether CDC complied with applicable laws, regulations, and departmental policies in managing its HIV/AIDS prevention grants.

During FYs 1999 through 2003, CDC management of HIV/AIDS prevention grants did not always comply with applicable laws, regulations, and departmental policies. We reviewed PGO (Procurement and Grants Office) and Center records related to 15 grants and identified widespread deficiencies throughout the preaward, award, and postaward phases of CDC's grants management operations. For example:

- Preaward Phase: Grant files contained no evidence that CDC staff had performed required cost analyses of applications from any of the 15 grantees to ensure that proposed costs were allowable and reasonable for the work to be performed.

- Award Phase: Awards for 14 of the 15 grants lacked clear, specific objectives providing a basis for assessing grantees' accomplishments, and, in fact, 2 of those 14 grants contained no objectives at all.

- Postaward Phase: CDC awarded continuation grants to 13 organizations even though they had reported few or no accomplishments or had failed to submit required accomplishment reports. [...]

Given the extent and the significance of the deficiencies that we identified with respect to the 15 grants, we concluded that CDC could not be assured that its grants management operations provided appropriate direction and oversight for the activities of grantees under the HIV/AIDS prevention program. [...]

Introduction to the audit --

Our audit covered the period October 1, 1998, through September 30, 2003. Because most HIV/AIDS prevention grants are awarded on a 5-year incremental basis, this audit period allowed us to assess CDC's grants management program throughout the entire grant cycle. [...]

We used a judgmental process to select 15 grants to begin our review of PGO and Center files. We selected the 15 grants by type of grantee, in an attempt to ensure an appropriate mix of State and local health departments and community-based nonprofit organizations, and by the geographic location of the grantee, in an attempt to eliminate any potential variances. [...]

- CDC Did Not Perform Required Cost Analyses of Grant Applications: Grant files contained no evidence that CDC personnel had performed required cost analyses of applications for either new or continuation awards to any of the 15 grantees. Instead, most of CDC's documented "cost analyses" were simple restatements of the proposed budgets with a signature. [...]

CDC's files for the 15 grants in our review showed no evidence of the analysis required above. In fact, records titled as cost analyses on four grants contained, without any explanation, approval for unallowable indirect costs proposed as direct costs.

- CDC Did Not Always Analyze Available Data on Potential Grantees: Grant files contained little or no evidence that CDC staff had reviewed audit reports on organizations applying for HIV/AIDS prevention grants, as required under GPD 3.06, or queried departmental databases to identify auditors' findings and opinions from audits performed in accordance with Office of Management and Budget (OMB) circular A-133.

Files for 11 of the 15 grants did not contain an audit report for any of the five years in our audit period, or any evidence that the reports had been obtained, and none of the files contained audit reports for every year. Further, 14 of the 15 grant files had no evidence that CDC personnel had queried databases that catalogued previous grant awards to identify grantees that had been debarred or placed on special restrictions because of significant operational problems. The 15th file indicated that CDC staff checked the database for 1 of 5 years but contained no evidence that they analyzed the data.

If CDC personnel had reviewed A-133 audit reports found at the Federal Audit Clearinghouse, they would have noted that 8 of the 15 grantees were in weak financial positions or had significant management and/or operating deficiencies. [...]

- CDC Did Not Always Ensure That Grants Were Based on Specific Objectives: Award documents for 14 of the 15 grants in our sample lacked clear, specific objectives that CDC could use as a basis to assess grantees' accomplishments, [as required by law]. In fact, CDC original award documents for 2 of the 14 grants contained no objectives at all because the award documents had not incorporated either CDC's program announcement or the grantees' application for funds.

The objective of one grant, for example, was to evaluate the effectiveness of other grants and to "provide evaluation resources" to assist other grantees in measuring their own effectiveness. However, the grantee could not develop an evaluation protocol acceptable to CDC during the 3-year grant period and was unable to perform an intended study, even though it expended all funds. A grantee official stated that the organizations never understood what CDC wanted it to do. [...]

- CDC Did Not Consistently Require Progress Reports: Two of the 15 grant award documents did not include requirements and deadlines for submission of progress reports that CDC could use to evaluate the grantees' actual progress in meeting the projects' goals and objectives, [as required by law]. [...]

- CDC Awarded Continuation Grants Even Though Grantee Had Not Reported Significant Accomplishments: CDC awarded continuation grants to all of the 13 organizations with multiyear projects even though the grantees had reported little in the way of actual accomplishments or had failed to report their accomplishments on a timely basis. Although [the law], and departmental policies all require agencies to evaluate grantees' accomplishments, CDC's grant files contained no evidence that CDC personnel took any action when grantees submitted reports showing few or no accomplishments or when they submitted reports late or not at all.

- CDC Did Not Require Correction of Grantee Deficiencies: The grant files showed that technical reviewers had noted significant deficiencies in 10 of the 13 organizations applying for continuation grants, but CDC did not require corrective action. The files contained no evidence that CDC personnel asked 5 of the 10 grantees to provide additional information in response to the noted deficiencies. Further, although grant files contained no evidence of any response from four of the five organizations that had been requested to provide additional information, CDC took no additional action.

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