Sec.17a-306-39. Close-out procedures

This section describes the right of the Connecticut Department on Aging in suspending, terminating or closing out grants, and the handling of all assets and records.

(a) Connecticut Department on Aging Right to Suspend or Terminate a Grant or Contract

(1) General

By suspension, the Connecticut Department on Aging means temporary withdrawal of the grantee's authority to obligate grant funds pending corrective action by the grantee/contractor or a decision to terminate the grant/contract. By termination, the Connecticut Department on Aging means permanent withdrawal of the grantee's/contractor's authority to obligate previously awarded grant or contract funds before that authority would otherwise expire. It also means the voluntary relinquishment of that authority by the grantee. In the case of contractors, contractors may not voluntarily relinquish a contract without the right of the Connecticut Department on Aging to reprocure the goods or services and charge the original contractor for any additional costs the Connecticut Department on Aging incurs by virtue of the Contractor's decision to withdraw from the contract.

(2) Suspension

When a grantee or contractor has failed to comply with a material requirement in the terms and conditions of the grant or contract, the Connecticut Department on Aging shall, upon reasonable notice to the grantee or contractor, suspend the grant or contract in whole or in part. The notice of suspension will state the reasons for the suspension, any corrective action required, and the effective date. Suspensions ordered by the Connecticut Department on Aging shall remain in effect until the grantee or contractor has taken satisfactory corrective action, or has presented satisfactory evidence that such corrective action will be taken, or until termination of the grant or contract.

Typical of matters that could be the basis of a suspension are inadequacies in a grantee's or contractor's financial management system, delays in completing the annual audit, failure to adequately monitor or follow up its subgrantees, excessive delays in disbursing funds to a subrecipient, thereby undermining its ability to perform, and similar temporary problems.

(3) Termination

The Connecticut Department on Aging may terminate any grant or contract in whole or in part at any time before the time of expiration, in accordance with the provisions of the contract relating to termination, or whenever it determines that the grantee or contractor has materially failed to comply with the terms and conditions of the grant or contract. The Connecticut Department on Aging will promptly notify the grantee or contractor in writing of the determination and the reasons for the termination, together with the effective date.

Termination on other grounds can include: by mutual consent of the grantee or contractor and the Connecticut Department on Aging, or by notice from the grantee or contractor, setting forth the reasons and effective date of the termination. Matters over which the Connecticut Department on Aging will consider the basis for a cancellation include:

(A) actual or potential for loss of life or limb;

(B) substantial and continued non-performance by the grantee or contractor for reasons within its control;

(C) inability or unwillingness by the grantee or contractor to fill key managerial positions, thereby undermining the capacity of the agency to meet its responsibilities under the grant;

(D) actual or significant potential loss of material amounts of funds thereby indicating the absence of an adequate structure of internal control;

(E) repeated suspensions for the same or similar deficiencies, etc.

In taking into consideration whether or not to terminate a grant or contract for other than life-safety reasons, the record the Connecticut Department on Aging compiles in notifying the grantee or contractor in writing of material deficiencies, adequate opportunity given for improvement and technical assistance offered, and the responsiveness and effectiveness of the grantee's or contractor's corrective actions will weigh heavily in the decision to terminate or not terminate.

(b) Follow-Up Actions to Grant or Subgrant Close-Out or Termination

(1) The provisions of Title 45 Code of Federal Regulations Subpart 74.111 shall be adhered to with regard to a grant or subgrant closeout. That is, in closing out grants, the following shall be observed:

(A) Upon request, the Connecticut Department on Aging shall promptly pay the grantee for all allowable reimbursable costs not covered by previous payments.

(B) The grantee shall immediately refund or otherwise dispose of, in accordance with instructions from the Connecticut Department on Aging, any unobligated balance of cash advanced to the grantee.

(C) The grantee shall submit, within 90 days of the date of expiration or termination, all financial, performance and other reports required by the terms of the grant. The Connecticut Department on Aging may extend the due date for any report upon receiving a justified request from the grantee.

(D) The Connecticut Department on Aging shall make a settlement for any upward or downward adjustment of the Federal share of costs, to the extent called for by the terms of the grant.

(c) Record Retention Requirements

(1) Title 45 of the Code of Federal Regulations Subpart 74.21 (a) requires that records shall be maintained for three years from the date the Connecticut Department on Aging submits to the U.S. Department of Health and Human Services its final expenditures report for the funding period.

(2) In the case of contractors and subcontractors under grants and subgrants, there should be a three-year record retention requirement from the date when final payment is made and all other pending matters are closed. Grantees and subgrantees of the Connecticut Department on Aging should include a provision in contracts under grants and subgrants for the three-year record retention period and for access to the contractor's records by the Connecticut Department on Aging, the Auditors of Public Accounts and the U.S. Government. This provision must also state that, if an audit, litigation, or other action involving the records is started before the end of the three-year period, the records must be retained until all issues arising from the action are resolved or until the end of the three-year period, whichever is later.

(3) In the case of personnel and related records, these must be treated in accordance with Schedule I Personnel Records: State Agencies issued by the Department of Public Records Administration, Connecticut State Library.

(Effective November 8, 1991)