(a) Before final selection as a potential grantee, the Department
conducts a review of the available records to assess the organization's
overall responsibility to administer Federal funds. As part of this
review, the Department may consider any information that has come to
its attention and will consider the organization's history with regard
to the management of other grants, including DOL grants. The failure to
meet any one responsibility test, except for those listed in paragraphs
(a)(1) and (a)(2) of this section, does not establish that the
organization is not responsible unless the failure is substantial or
persistent (for two or more consecutive years). The responsibility
tests include:
(1) The organization's efforts to recover debts (for which three
demand letters have been sent) established by final agency action have
been unsuccessful, or that there has been failure to comply with an
approved repayment plan;
(2) Established fraud or criminal activity of a significant nature
within the organization.
(3) Serious administrative deficiencies identified by the
Department, such as failure to maintain a financial management system
as required by Federal regulations;
(4) Willful obstruction of the audit process;
(5) Failure to provide services to applicants as agreed to in a
current or recent grant or to meet applicable performance standards;
(6) Failure to correct deficiencies brought to the grantee's
attention in writing as a result of monitoring activities, reviews,
assessments, or other activities;
(7) Failure to return a grant closeout package or outstanding
advances within 90 days of the grant expiration date or receipt of
closeout package, whichever is later, unless an extension has been
requested and granted; final billings reflecting serious cost category
or total budget cost overrun;
(8) Failure to submit required reports;
(9) Failure to properly report and dispose of government property
as instructed by DOL;
(10) Failure to have maintained effective cash management or cost
controls resulting in excess cash on hand;
(11) Failure to ensure that a subrecipient complies with its OMB
Circular A-133 audit requirements specified at Sec. 667.200(b);
(12) Failure to audit a subrecipient within the required period;
(13) Final disallowed costs in excess of five percent of the grant
or contract award if, in the judgement of the grant officer, the
disallowances are egregious findings and;
(14) Failure to establish a mechanism to resolve a subrecipient's
audit in a timely fashion.
(b) This responsibility review is independent of the competitive
process. Applicants which are determined to be not responsible will not
be selected as potential grantees irrespective of their standing in the
competition.
