Grant Management

MnDOT Policy #FM020
Revised: November 30, 2022

Please go to the MnDOT Org Chart to find specific contact information: Org Chart.

Responsible Senior Officer: Deputy Commissioner/Chief Administrative Officer
Policy Owner: Director, Office of Financial Management
Policy Contact: Agency Grant Supervisor, Office of Financial Management

Policy statement

The Minnesota Department of Transportation must protect and promote public trust, confidence, and achieve the program objectives in all grant programs it administers.

All grants are subject to the MnDOT Contract Management Policy and Contract Management Procedures. In addition, when applying for, receiving, using, awarding, administering, monitoring, and closing out grants, MnDOT must:

Comply with all applicable state and federal laws, rules, regulations, and policies, including:

2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards;
Minnesota Department of Administration Office of Grants Management statewide grant management policies; and
Minnesota Management and Budget (MMB) Capital Grants manual and statewide financial policies and procedures;

Interpret and disseminate federal and state requirements and agency internal controls and minimum control activities.
Follow the Agency Grants Management Manual, as applicable.

Reason for policy

MnDOT uses grants as one of its methods to achieve its mission. MnDOT’s legal rights and responsibilities and the public’s trust and confidence in MnDOT are significantly affected by the way MnDOT applies for, receives, uses, solicits for, awards, administers, monitors, and closes out grants. This policy establishes minimum control activities applicable to all MnDOT grant programs and grant agreements to ensure integrity, accountability, and mitigate legal and financial risks.

The Code of Federal Regulations, 2 CFR 200, along with the Minnesota Department of Administration Statewide Grant Management policies, the Minnesota Management and Budget Capital Grants Manual, and statewide financial policies and procedures, prescribe requirements for grants and grant administration. MnDOT’s Grant Management Policy and Agency Grants Management Manual ensure compliance with state and federal laws, rules, regulations, and policies.

Applicability

All MnDOT employees must comply with MnDOT policies.

Key stakeholders with responsibilities under this policy include:

Office of Financial Management Director/Controller
Office of Financial Management Grants Unit (OFMGU)
Office Directors (ODs)
Office of Chief Counsel (OCC)
Offices and Districts
Office of Audit
Office of Administration Business Operations

Definitions

Agency-level

Items listed as “agency-level” or for the “agency” means a requirement or internal control that applies to more than one program. OFMGU is responsible for making or obtaining a decision on minimum control activities that are required to be used by all program offices as defined by the roles and responsibilities.

Bonding (or Bond) Grant

A grant that is funded with the proceeds of General Obligation or Trunk Highway bond sales. These grants have constitutional restrictions that limit the use of funds to improvements of a capital nature, require that the facility or property be owned by a state agency or political subdivision of the state, and require that a public program be provided in the facility or operated on the property.

Contractor

Generic reference to the other party (or parties) to a MnDOT contract.

Control Activities

Policies, procedures, techniques, and mechanisms that enforce the directives of management to achieve the entity’s objectives and address related risks. Examples of control activities include authorization and approval, reconciliations, and separation of duties.

Encumbrance

The commitment of a portion or all of an allotment in order to meet an obligation that is expected to be incurred to pay for goods or services received by the state or to pay a grant.

Grant

An agreement between a grantor and a grantee when the principal purpose of the relationship is to transfer cash or something of value to the grantee who will administer a public program or deliver a public service. A grant includes competitive, legislatively mandated, formula, single and sole source, and capital grants.

Grant Contract

A grant contract is a written instrument or electronic document defining a legal relationship between a grantor and a grantee when the principal purpose of the relationship is to transfer cash or something of value to the grantee to support a public purpose authorized by law.

Grantee

An entity that receives a grant from MnDOT. Note: The term “grantee” is used broadly throughout the policy and is intended to be used interchangeably with “subrecipient” when federal funds are passed through MnDOT. See also definition of subrecipient.

Internal Controls

The activities, plans, policies, training, and efforts of MnDOT staff working together to provide reasonable assurance that the agency’s strategic priorities are being met. Good internal controls encourage efficiency, comply with laws, regulations, and policies, and seek to eliminate fraud, waste, and abuse.

Minimum Control Activities

Minimum Control Activities are the activities that every grant-making or grant-channeling division or office must perform in order to safeguard public funds, minimize the likelihood of waste, fraud, or abuse and ensure programs are administered in compliance with applicable federal and state laws. Examples of minimum control activities include authorization and approval, reconciliations, and separation of duties. These are defined by the requirements the agency must follow for compliance purposes (federal, state, MnDOT-specific policies, accounting standards, technical standards for IT systems, etc.) These may include procedures as mandated by OFMGU as a required agency standard. OFMGU will consult with divisions and program offices on effective, proven procedures that go beyond statutory mandates.

Non-Federal Entity

A state, local government, Indian tribe, institution of higher education (IHE), or non-profit organization that carries out a Federal Award as a recipient or subrecipient.

Pass-through Entity

A non-federal entity that provides a sub-award to a subrecipient to carry out part of a federal program.

Post Award Phase

The phase of the grant lifecycle which includes implementing the grant, performing reconciliations, monitoring, and reporting financial and performance progress during the period of performance.

Pre-Award Audit

An audit conducted by, or on behalf of, MnDOT to verify financial information supplied by a consulting firm, grantee, or subrecipient. Upon completion, the audit results are provided to MnDOT’s contracting officer for use during contract negotiations.

Pre-Award Phase

The pre-award phase includes announcing opportunities, reviewing applications, determining the contractor vs. grantee relationships, completing risk assessments, notifying the grantee of subaward, and drafting and executing grant agreements.

Pre-award Risk Assessment

The identification, analysis and management of risks or threats that could negatively affect the grant and prevent it from achieving its goals and objectives.

Program-level

Items listed as “program-level” or for the “program office” means a requirement or internal control that applies solely to a program and no other program in the agency. The program office is responsible for making or obtaining a decision on control activities that add to but do not replace any agency-level internal controls.

Program/Project Manager

Includes any position in which an employee is actively managing a grant contract during any part of the grant lifecycle.

Recipient

A non-federal entity that receives a federal award directly from a federal awarding agency to carry out an activity under a federal program. Recipient does not include “subrecipient.”

Request for Proposal (RFP)/Solicitation

A request for proposal or grant solicitation is a document that notifies grant seekers of a competitive grant opportunity and includes information on grant requirements, selection criteria, timelines, and process. Grant applications are solicited and reviewed by the agency for applicants which closely meet the selection criteria to be awarded funds.

Subrecipient

An entity that enters into a grant agreement with MnDOT, whereby that entity agrees to carry out all or part of a federal award. The term “grantee” is used broadly throughout the policy, and it is intended to be used interchangeably with “subrecipient” when federal funds are passed through MnDOT.

USDOT Operating Administration

Operating Administration means any of the parts of the Federal US Department of Transportation (USDOT) including the Federal Aviation Administration (FAA), Federal Highway Administration (FHWA), Federal Transit Administration (FTA), and Federal Railroad Administration (FRA), for example.

Responsibilities

Office of Financial Management Director/Controller

Ensure agency internal procedures are current and accurate.
Ensure all agency-level internal controls and minimum control activities are accurate and effective in mitigating identified risks.
Ensure design, development, accuracy, and/or administration of agency-level reporting.
Certify to the CFO whether the agency-level controls are sufficient to mitigate risk and that office directors have certified the internal controls are in place and aligned with agency standards. This includes the Control System Assessment Tool (CSAT).
Review the policy every two years, or sooner, as necessary, to ensure the policy remains up to date.
Ensure agency procedures/manual/forms/other documents, and training associated with the policy remain current.
Monitor state, federal, agency, or other requirements that apply to the policy or procedures.
Consult with the Office of Chief Counsel to ensure the policy and procedures remain compliant with all state, federal, agency, or other requirements
Ensure that necessary approvals by state or federal agencies are obtained before changes to the policy or procedures are implemented.
Work with the MnDOT policy coordinator to revise the policy and/or confirm its accuracy.
Communicate policy revisions, reviews, and retirements to stakeholders.
Communicate the results of Subrecipient Monitoring/Management Decision reviews completed by the Office of Audit on behalf of the agency.
Work with Office of Audit Director on submittal of the CSAT and other internal controls reporting.

Office of Financial Management Budget & Grants Unit (OFMGU)

In coordination with Office of Chief Counsel (OCC), program offices, and Office of Audit when appropriate, evaluate ongoing and new grant requirements to determine agency impacts, risks, and correct level for control activities (agency- or program-level). Example: MnDOT received the Department of Administration Office of Grant Management (OGM) Technical Policy Revision update: Policy 08-01 Conflict of Interest Policy for State Grant-Making which applies to all state grants; thus, program office engagement would be at the point of implementation of new OGM forms.
In coordination with the Program Office and OCC, communicate with Minnesota Management & Budget (MMB) as necessary on issues involving bond grants. Monitor for financial compliance with the MMB Capital Grants Manual, MMB Commissioner’s Order for Bond-Financed Property, and other MMB directives.
Determine which agency internal controls are needed to mitigate the identified risks.
Develop and implement identified agency internal controls.
In coordination with OCC, develop agency-level minimum control activities to meet the agency internal controls.
Consult with associated program offices on final development and implementation of the agency-level minimum control activities and provide feedback on how the input influenced the decision. Example: When OGM policy or 2 CFR 200 requires an agency template, collaboration with the program offices will determine if additional provisions should be added.
Ensure agency compliance on minimum control activities.
Ensure program offices that receive and use grant funding understand requirements.
Collaborate with OCC and associated program offices to identify minimum control activities required for Federal USDOT Operating Administration requirements or any other pertinent program-specific state requirements. This includes bond funds.
Determine, draft, approve, and deliver or coordinate all agency-level training and include input from program offices, when appropriate.
Act as liaison with MMB, the Office of the Legislative Auditor (OLA), and the Department of Administration (ADM) regarding grant administration and invite program offices when engaging in grant discussions specific to program offices.
Identify and collaborate with OCC and associated Program Offices to identify and manage risks.

Office Directors

Interpret and communicate the relevant USDOT Operating Administration’s specific grant requirements and state-level program requirements for their associated programs; if not delegated within the office, the office director must approve final interpretation. Collaborate with MMB, OCC, and OFMGU when appropriate.
Consult with OCC/OFM as requested to support the development of grant-related policies and agency-wide internal controls.
Consult with OCC/OFM as needed regarding program-specific requirements.
Ensure internal controls activities are implemented within the office. Ensure program office staff are informed of roles and responsibilities.
Review and approve all program-level risk assessments and responses associated with grant administration within the office. This includes the Control System Assessment Tool (CSAT).
Determine program-specific training and ensure program office staff complete all required training.
Ensure program-specific procedures are up-to-date and accurate.
Ensure all agency and program-specific requirements are implemented and followed.
Ensure all program-specific internal controls or customized agency level controls are correct and aligned with federal, state, and agency requirements.
Ensure design, development, accuracy and/or administration of program-level reporting.
Consult with OCC to identify appropriate levels of delegation of authority.
Identify and collaborate with OFMGU and OCC to manage emerging risks.
Affirm to the Controller the internal control structure as required by the agency. This affirmation states the program office is implementing the agency internal controls and any office specific internal controls. This includes the applicable sections of the CSAT required by MMB.

Office of Chief Counsel (OCC)

Collaborate with OFMGU and associated offices to evaluate new requirements and determine agency impacts, risks, and correct level for control activities to be developed (agency-level or program-level).
In coordination with the Program Office and the Office of Financial Management Director/Controller, communicate with MMB on issues involving bond grants. Advise Program Offices on compliance with the MMB Capital Grants Manual, MMB Commissioner’s Order for Bond-Financed Property, and other MMB directives.
Provide consultation on internal control requirements in coordination with the Office of Audit and the Office of Financial Management.
Advise program offices on US DOT Operating Administrations’ and state program-specific grant requirements.
Interpret federal and state requirements and determine how they apply within the agency as applicable and in collaboration with program offices.
Collaborate with OFMGU to identify minimum control activities.
Provide consultation to OFMGU on the feedback received from program offices regarding final development and implementation of agency-level minimum control activities. Collaborate with OFMGU and program offices to identify minimum control activities required for USDOT Operating Administration requirements and program-specific federal requirements.
Provide final approval of all grant agreements for form, content, proper signatures, and compliance with Contract Management Policy.
Provide consultation on agency-wide legal risks when applicable and programmatic risks when requested. This includes the CSAT.
Deliver general contract training, including the Contract Management Policy.
Identify and collaborate with OFMGU and associated program offices to identify and manage risks.

Program Office

In coordination with OCC and the Office of Financial Management Director/Controller, communicate with MMB on issues involving bond grants. Comply with the MMB Capital Grants Manual, MMB Commissioner’s Order for Bond-Financed Property, and other MMB directives.
Provide feedback on the analysis, alternatives, and/or decisions for the final development and implementation of agency-level minimum control activities for OFMGU’s consideration.
Implement agency-level minimum control activities.
Document, maintain, and implement program-level control activities that are consistent with, and not less stringent than, agency-level minimum control activities. This includes preparation for the CSAT.
Implement program-specific standards.
Act as liaison between MnDOT and the USDOT Operating Administrations or state agencies regarding program specific state and federal requirements, as applicable.
Act as liaison between MnDOT and the Grantees.
Deliver agency-wide training and materials to internal staff in collaboration with OFMGU. This may include third party training such as state and federal agencies, etc.
Guide Grantees in requirements.
Collaborate with OFMGU and OCC to implement interim regulatory changes.
Actively learn and comply with all areas of grant administration.
Implement pre-award risk assessments recommendations.
Request pre-award audit and submit required information to the Office of Audit. Respond/address requests for additional information to complete the audit request.
Request post-award audit and submit required information to the Office of Audit. Respond/address requests for additional information to complete the audit request.
Ensure the internal controls are aligned with state and federal requirements as well as all agency policies and standards.

Office of Audit

Complete pre-award audits for program offices.
Complete post-award audits for program offices.
Provide management consultation and advise on risk, internal controls, and audit matters when requested.
Provide feedback regarding the effectiveness of internal controls and compliance with applicable state and federal regulations and statewide and agency policies and procedures.
Coordinate the completion of the annual CSAT and submit to MMB.

Office of Administration Business Operations

Create encumbrances as requested by program offices.
Encumber grant agreements to align with grant agreement terms as directed by the OFM budget and program office.
Work with program offices to resolve issues and pay invoices.
Ensure the encumbrance is certified, accurately recorded, and signed by the assigned buyer.