Title III Administrative and Financial Requirements Policy #9: AAA Contracts and Grant Agreements with Service Providers
This content is part of a public comment period. For more information, refer to Minnesota Board on Aging – State Plan on Aging.
Note: We updated content on this page on April 17, 2025. Changed content is indicated with [add] and [delete].
Authority Reference | Minnesota Office of Grants Management Policies 08-04 & 08-12 45 CFR 1321.59(d) & 1321.71(e) 2 CFR 200 Subpart D |
Operating Category | Title III Administrative and Financial Requirements |
Policy
1. Each AAA must enter into contracts and/or grant agreements with service providers in order to ensure the provision of Title III-funded services within its PSA. Service providers may be regional or local public entities, nonprofit agencies, or for-profit organizations.
A. Grant agreements and contracts with a for-profit organization are subject to prior approval of the MBA. To enter into a grant or contract with a for-profit organization, the AAA must allow sufficient time for [add] MBA to review and approve the AAA establishing a grant or contract with the for-profit organization [end add] [delete] a review of the grant agreement or contract [end delete] by the Program Operations Committee and vote of the full MBA. This typically occurs during the annual Area Plan review and approval process.
2. The contract or grant agreement must, with narrow exceptions, be awarded after a competitive procurement process has been conducted consistent with Title III Administrative and Financial Requirements Policy #7: Procurement Requirements and Sole Source.
3. Contracts and grant agreements must be fully executed prior to when service providers begin to provide services and/or prior to when the AAA may make an advance payment to the service provider.
4. Contracts and grant agreements must only fund activities that are approved as part of the Area Plan approval process or a subsequent review/approval process conducted by the MBA.
5. Consistent with federal requirements [add] at 45 CFR 1321.59(d) [end add], [add] AAAs “may not delegate to another agency the authority to award or administer funds under this part”. While [end add] [delete] AAAs may not delegate authority for [end delete] service providers [add] may [end add] [delete] to [end delete] enter into subcontracts with other organizations that will also provide direct services to recipients of OAA-funded services [add], the AAA must both approve these subcontracts or subgrants in advance of their execution and retain administrative responsibilities and oversight of these agreements [end add]. [delete] Each service provider must enter into its own contract or grant agreement with the AAA. [end delete]
[add] A. This policy allows a service provider to respond to a competitive request for proposals process and name other service providers as subcontractors or subgrantees in their responses. A service provider including names of proposed subcontractors or subgrantees as part of their response must indicate whether the proposed subcontracted organization is a for-profit organization. The disclosure of this information facilitates the ability of AAAs to approve the award as required under federal rules and allows the MBA to approve work with for-profit organizations in advance.
B. The AAA must review any subcontracts or subgrants between service providers prior to their execution and ensure their terms are compliant with state and federal law. For example, these subcontracts or subgrants must be in place prior to initiation or services and may not be longer than five years in duration.
C. Because the AAA may not delegate administrative responsibilities, the AAA itself must conduct all aspects of administration and monitoring that AAAs are required to perform for all service providers (which vary according to the dollar value of agreements as noted in related policies, including the following):
a. Conducting a pre-award risk assessment for subcontracts or subgrants that are $50,000 and greater;
b. Conducting site visits;
c. Paying invoices;
d. Managing financial reconciliation processes where applicable;
e. Reviewing service provider data for completion and accuracy;
f. Closing out grant and contract awards; and
g. Writing provider evaluations.
MBA will provide more detailed implementation guidance in a separate, forthcoming document.
D. Within the context of Title III, service providers wishing to serve in an intermediary capacity may do the following:
a. Cultivate relationships with smaller and/or culturally-specific community-based organizations;
b. Respond to AAA requests for proposals and include other service providers in their responses;
c. Provide direct service to individuals with greatest social need and greatest economic need who are not receiving the same service from subcontracted service providers;
d. Provide outreach to prioritized populations with greatest social need and greatest economic needs;
e. Perform client intake and completion of NAPIS forms on behalf of subcontracted service providers;
f. Gather and/or aggregate data reported by subcontracted service providers for submission to the AAA;
g. Assist with educating subcontracted service providers about their responsibilities in management of federal funds;
h. Assist subcontracted service providers with organizing documents for pre-award risk assessments where applicable;
i. Assist with strategies and solicitation process for voluntary contributions (and/or cost sharing where applicable).
-i. All contributions, whether voluntary or cost sharing must be made directly to the subcontracted service provider and not to the intermediary service provider);
j. Prescreen requests for payment to ensure they include necessary information and align with program income requirements; [end add]
[add] E [end add] [delete] A [end delete]. Service providers may [add] also [end add] enter into subcontracts with other organizations using Title III funds for purchasing food, commodities, supplies, equipment, or other activities necessary to provide services.
6. With the exception of Nutrition services, AAAs may use either a contract or grant agreement as a vehicle for creating an agreement with a service provider to provide services. [add] AAAs may not require a minimum threshold for services (for example, a minimum number of meals to be provided annually) as a condition of eligibility to be a Title III service provider. [end add] Agreements for Nutrition services must be structured as contracts. Either type of agreement is subject to the same monitoring requirements.
7. The grant or contract agreement must conform to the following requirements:
A. Cite the AAA’s authority to enter into contracts or grant agreements and the Older Americans Act.
B. Specify the scope and timeline for the work, the grantee’s or contractor’s duties in carrying out the grant or contract, and details about the disbursement of grant payments or payment for services provided according to contractual terms.
C. Contain standard contract language and assurances, including clauses regarding liability, data practices and intellectual property, contracting and bidding requirements that include use of targeted vendors, Worker’s Compensation, and provisions concerning federal funds as applicable.
D. As applicable, per Minnesota Statutes, section 16B.981 and OGM Policy 08-06, include additional conditions or requirements such as a risk mitigation plan or implementation of other internal controls to protect the interests of the State and federal government.
E. Incorporate requirements such as work plan and budget into the contract or grant agreement by reference and as an addendum so that a grantee or contractor can easily locate and understand the information.
F. Include the name and phone number of the AAA’s and grantee’s or contractor’s Authorized Representative and, if appropriate, project manager.
G. Due to state monitoring requirements, contracts and grant agreements may not be structured as fixed amount subawards under 2 CFR 200.201(b)(1).
8. Changes to fully executed grant agreements or contracts must be made through amendments. An amendment is an addition, deletion, or change to a fully executed contract or grant agreement.
A. When a modification to a contract or grant agreement results in a change to the total obligation, compensation, expiration date, or duties associated with the agreement, those changes must be made through an amendment.
B. Contracts or grant agreements may be amended only when the purpose of the amendment is similar to the original purpose and when the contractor or grantee duties are within the scope of the original request for proposal, notice of grant opportunity, or grant application.
C. Contract and grant agreement attachments, exhibits, and approved grant application materials with corresponding grant award notices may also be revised as part of a contract or grant agreement amendment.
D. Successor Agencies and Changes in Ownership
9. A contract or grant agreement, plus any amendments to it, must not exceed five years.
Procedures
1. AAAs must identify the service providers with which they intend to enter into grant agreements or contracts, the services they will provide, and a budget including these services as part of the Area Plan development and submission process. The MBA will issue annual Area Plan instructions and provide additional detail in that guidance.
2. If an AAA wishes to enter into a grant agreement or a contract with a for-profit entity, the AAA must identify the organization as such in its proposed Area Plan or through a waiver request.
3. When the MBA’s Program Operations Committee (POC) reviews whether an AAA may proceed in entering into a grant agreement or contract with a for-profit entity, the POC will consider the following:
A. Whether the unit cost or cost to the AAA reflects only allowable direct and indirect cost as defined in 45 CFR Part 75, Subpart E.
B. Whether its terms require audits of the for-profit entity using standards found in 45 CFR Part 75, Subpart F.
C. Whether the for-profit entity will follow all provisions of 45 CFR 75.215 and the Older Americans Act, Sections 306 (a)(13) and 212.
4. Following review and approval of the AAA’s Area Plan and negotiation of any final issues, the MBA and AAA will enter into a grant agreement between the MBA and the AAA. The MBA will make every reasonable effort to have this agreement fully executed by December 15 of each year.
5. After the execution of the grant agreement between the MBA and the AAA, the AAA may execute its contracts and grant agreements with service providers. Pending action from the MBA to have agreements with AAAs fully executed, AAAs will make every reasonable effort to have grant agreements or contracts fully executed with service providers by January 1.
A. Direct service grant agreements and contracts normally begin on January 1 for a maximum period of 12 months. Grant agreements and contracts may be extended or renewed for up to one-year increments for a total of five years.
B. Direct service grant agreements and contracts not beginning January 1 must, in any case, end no later than December 31. Renewals of grant agreements and contracts normally begin on January 1.
6. Contracts and grant agreements, as well as amendments to contracts and grant agreements, including attachments and exhibits related to work plans and budgets, must be uploaded into Grant Utility within 14 [add] calendar [end add] days of when they are executed. MBA uses these documents as a reference source to evaluate payment requests and will not issue either an advance payment or reimbursement without having access to the contact or grant agreement.
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