FEDERAL/STATE GRANTS FREQUENTLY ASKED QUESTIONS (FAQ’s)

Q. What is a federal grant?
A. A federal grant is an award of financial assistance from a federal agency to a recipient to carry out a public purpose of support or stimulation authorized by a law of the United States.

Q. What is a state grant?
A. A state grant is an award of financial assistance from a state agency to a recipient to carry out a public purpose of support authorized by a law of that state.

Q. What are the benefits of using federal grants?
A. Grants are a beneficial way for a state or local government to obtain funding to support projects that exceed existing budgetary capability and therefore can be used to satisfy the gap between an agencies operational resources and needs.

Q. What is a discretionary grant?
A. Also known as a competitive grant, a discretionary grant (or cooperative agreement) is a grant for which the federal awarding agency generally may select the recipient from among all eligible recipients, may decide to make or not make an award based on the programmatic, technical, or scientific content of an application, and can decide the amount of funding to be awarded.

Q. What is a formula grant?
A. Allocations of federal funding to states, territories, or local units of government determined by distribution formulas in the authorizing legislation and regulations. To receive a formula grant, the entity must meet all the eligibility criteria for the program, which are pre-determined and not open to discretionary funding decisions. Formula grants typically fund activities of a continuing nature and may not be confined to a specific project. This type of grant may also be referred to as a mandatory grant.

Q. What is a direct grant?
A. A direct grant means that the recipient receives the money directly from the federal government, with no intermediary in between. These grants are beneficial as there is no additional red tape to wade through – just a single application and subsequent agreement with the federal government.

Q. What is a pass-through entity?
A. Pass-through entity means a non-Federal entity that provides a subaward to a subrecipient to carry out part of a Federal program.

Q. What is a pass-through grant?
A. A pass-through grant is first given to the state by the federal government, which in turn distributes the funds to local applicants. This essentially means that applicants have fewer competitors for the grants, just the other organizations or possible recipients in their state, and applicants simply have to make a trip to their state awarding agencies for in-person clarification, appearances, or any other communications that would benefit from personal contact.

Q. What is a Notice of Funding Opportunity (NOFO)?
A. A NOFO is a published announcement for a new grant that is open for application. The NOFO, in brief, provides a program description, overview, objectives and priorities; authorizing authority for the program; federal award information; and eligibility information. Some grants also use the term “Funding Opportunity Announcement (FOA)” commonly used for discretionary grants.

Q. What is a Funding Opportunity Announcement (FOA)?
A. A publicly available document by which a federal agency makes known its intentions to award discretionary grants or cooperative agreements, usually as a result of competition for funds. Funding opportunity announcements may be known as program announcements, notices of funding availability, solicitations, or other names depending on the agency and type of program.

Q. Who is eligible to apply for a federal grant?
A. Eligible applicants are typically defined in the NOFO and grant guidance. Typically, States are the only eligible applicants for most large federal programs. However, there are direct grants that allow for application by specific discipline agencies (i.e., law enforcement, fire, EMS agencies).

Q. What is defined as State?
A. For purposes of most federal grants, State is defined as any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and any agency or instrumentality thereof exclusive of local governments.

Q. What is defined as a local government?
A. Any unit of government within a state, including a: (a) County; (b) Borough; (c) Municipality; (d) City; (e) Town; (f) Township; (g) Parish; (h) Local public authority, including any public housing agency under the United States Housing Act of 1937; (i) Special district; (j) School district; (k) Intrastate district; (l) Council of governments, whether or not incorporated as a nonprofit corporation under state law; and (m) Any other agency or instrumentality of a multi-, regional, or intra-state or local government.

Q. What is a needs assessment?
A. A needs assessment is a systematic process for determining and addressing needs. Or “gaps” between the current condition and desired conditions or “wants”. The discrepancy between the current condition and wanted condition must be measured to appropriately identify the need.

Q. What is an Award?
A. Financial assistance that provides support or stimulation to accomplish a public purpose. Awards include grants and other agreements in the form of money or property in lieu of money, by the federal government to an eligible recipient.

Q. What is a Federal Awarding Agency?
A. The Federal agency that provides a Federal award directly to a non-Federal entity. Alternative term: Grant-Making Agency or Grantor, which is a user registered on behalf of their federal grant-making agency to post funding opportunities or manage submissions to these funding opportunities. If a State is giving an award to an entity, the State is considered the Awarding Agency.

Q. What is a Recipient?
A. A non-Federal entity that receives a Federal award directly from a Federal awarding agency to carry out an activity under a Federal program. The term recipient does not include subrecipients. Alternative name: Grantee.

Q. What is a Subaward?
A. An award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Federal award received by the pass-through entity.

Q. What is a Subrecipient?
A. A non-Federal entity that receives a subaward from a pass-through entity to carry out part of a Federal program; but does not include an individual that is a beneficiary of such program. A subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agency. Alternative name: Subgrantee.

Q. What are “obligations?”
A. When referred to by a federal awarding agency, obligation means funds awarded to a recipient. When used in connection with a non-Federal entity’s utilization of funds under a Federal award, generally, obligation means orders placed for property and services, contracts and subawards made, and similar transactions during a given period that require payment by the non-Federal entity during the same or a future period. However, when referred to by a state awarding agency, obligation can also mean funds awarded to a subrecipient.

Q. What is a de-obligation of funds?
A. An agency’s cancellation or downward adjustment of previously awarded funds based on recipient/subrecipients cost savings or inability to expend all or any part of awarded funds.

Q. What is a re-obligation of funds?
A. De-obligated funds may be re-obligated within the availability of time remaining in the Period of Performance (PoP) of the federal grant.

Q. What is a program period?
A. The period established in the award document during which awarding agency sponsorship begins and ends. Alternative name: Performance Period.

Q. How is project cost defined?
A. Total allowable costs incurred under a Federal award and all required cost sharing and voluntary committed cost sharing, including third-party contributions.

Q. What is cost sharing or matching?
A. The portion of project costs not paid by federal funds (unless otherwise authorized by federal statute. The cost share or match must be within the scope and purpose of the grant.

Q. What is In-Kind Contributions?
A. In-kind contributions must meet the following:
1. Must be necessary and reasonable to accomplish the projects objectives
2. Cannot be from a federal source
3. Cannot be derived from program income
4. Cannot be used to match another federal grant
5. Must apply to the cost sharing requirement of the grant
In-kind contributions must be documented and verifiable in the recipient/subrecipients records. Records must be maintained to support how the value of the in-kind contribution was determined.

Q. What is eligible/allowable costs?
A. Each federal grant will specifically define what costs are eligible/allowable for the program.

Q. What is an ineligible/unallowable cost?
A. Each federal grant will specifically define what costs are ineligible/unallowable for the program.

Q. What is Third-Party In-Kind Contributions?
A. Third-party in-kind contributions means the value of non-cash contributions (i.e., property or services) that- (a) Benefit a federally assisted project or program; and (b) Are contributed by non-Federal third parties, without charge, to a non-Federal entity under a Federal award. The third-party in-kind contribution must be within the scope and purpose of the grant.

Q. What is the Emergency Management Assistance Compact (EMAC)?
A. EMAC is a mutual aid agreement between states and territories of the United States. It enables states to share resources during natural and man-made disasters, including terrorism. EMAC requires consideration of inter- and intrastate interoperability for all equipment purchased using U.S. Department of Homeland Security grants.

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