98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB6015

 

Introduced , by Rep. Patricia R. Bellock

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Creates the Grant Accountability and Transparency Act. Provides that the purpose of the Act is to establish uniform administrative requirements, cost principles, and audit requirements for State and federal pass-through awards to non-federal entities. Provides that, on or before July 1, 2015, the Governor's Office of Management and Budget shall by rule adopt the federal Uniform Guidance regarding federal grant awards. Provides for the following: (1) the adoption of federal rules applicable to grants; (2) conflicts of interest; (3) mandatory disclosures; (4) supplemental rules; (5) applicability of the Act; (6) State grant-making agency responsibilities; (7) responsibilities of the centralized grants management unit; (8) audit requirements; (9) State agency implementation; (10) exceptions to the Act; and (11) an annual report. Repeals the Act 5 years after the effective date of the Act. Provides that on and after July 1, 2015, in the event of a conflict between the Grant Funds Recovery Act and the provisions of the Act, the Act shall prevail. Makes a corresponding change in the Grant Funds Recovery Act. Further amends the Grant Funds Recovery Act and extends the date of repeal for the Illinois Single Audit Commission to December 31, 2014 (now April 1, 2014). Amends the Illinois Administrative Procedure Act. Provides that the Governor's Office of Management and Budget may adopt emergency rules to implement the provisions of the Grant Accountability and Transparency Act. Amends the Governor's Office of Management and Budget Act. Provides for the creation of the centralized grants management unit within the Office and requires the Office to adopt rules under the Grant Accountability and Transparency Act. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning finance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the Grant
5Accountability and Transparency Act.
 
6    Section 5. Legislative intent.
7    (a) This Act, which is the product of the work of the
8Illinois Single Audit Commission, created by Public Act 98-47,
9is intended to comply with the General Assembly's directives to
10(1) develop a coordinated, non-redundant process for the
11provision of effective and efficient oversight of the selection
12and monitoring of grant recipients, thereby ensuring quality
13programs and limiting fraud, waste, and abuse, and (2) define
14the purpose, scope, applicability, and responsibilities in the
15life cycle of a grant.
16    (b) This Act is intended to increase the accountability and
17transparency in the use of grant funds from whatever source and
18to reduce administrative burdens on both State agencies and
19grantees by adopting federal guidance and regulations
20applicable to such grant funds; specifically, the Uniform
21Administrative Requirements, Cost Principles, and Audit
22Requirements for Federal Awards ("Uniform Guidance"), codified
23at 2 CFR 200.

 

 

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1    (c) This Act is consistent with the State's focus on
2improving performance and outcomes while ensuring transparency
3and the financial integrity of taxpayer dollars through such
4initiatives as the Management Improvement Initiative Committee
5created by Section 1-37a of the Department of Human Services
6Act, the State prioritized goals created under Section 50-25 of
7the State Budget Law (also known as "Budgeting for Results"),
8and the Grant Information Collection Act.
9    (d) This Act is not intended to affect the provisions of
10the Illinois State Auditing Act and does not address the
11external audit function of the Auditor General.
 
12    Section 10. Purpose. The purpose of this Act is to
13establish uniform administrative requirements, cost
14principles, and audit requirements for State and federal
15pass-through awards to non-federal entities. State awarding
16agencies shall not impose additional or inconsistent
17requirements, except as provided in 2 CFR 200.102 or as
18directed by the Governor's Office of Management and Budget,
19unless specifically required by State or federal statute or
20Executive Order.
21    This Act and the rules adopted under this Act provide the
22basis for a systematic and periodic collection and uniform
23submission to the Governor's Office of Management and Budget of
24information of all State and federal financial assistance
25programs by State grant-making agencies. This Act also

 

 

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1establishes policies related to the delivery of this
2information to the public, including through the use of
3electronic media.
 
4    Section 15. Definitions. As used in this Act:
5    "Allowable cost" means a cost allowable to a project if:
6        (1) the costs are reasonable and necessary for the
7    performance of the award;
8        (2) the costs are allocable to the specific project;
9        (3) the costs are treated consistently in like
10    circumstances to both federally-financed and other
11    activities of the non-federal entity;
12        (4) the costs conform to any limitations of the cost
13    principles or the sponsored agreement;
14        (5) the costs are accorded consistent treatment; a cost
15    may not be assigned to a State or federal award as a direct
16    cost if any other cost incurred for the same purpose in
17    like circumstances has been allocated to the award as an
18    indirect cost;
19        (6) the costs are determined to be in accordance with
20    generally accepted accounting principles;
21        (7) the costs are not included as a cost or used to
22    meet cost-sharing or matching requirements of any other
23    program in either the current or prior period; and
24        (8) the costs are adequately documented.
25    "Auditee" means any non-federal entity that expends State

 

 

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1or federal awards that must be audited.
2    "Auditor" means an auditor who is a public accountant or a
3federal, State, or local government audit organization that
4meets the general standards specified in generally-accepted
5government auditing standards. "Auditor" does not include
6internal auditors of nonprofit organizations.
7    "Auditor General" means the Auditor General of the State of
8Illinois.
9    "Award" means financial assistance that provides support
10or stimulation to accomplish a public purpose. "Awards" include
11grants and other agreements in the form of money, or property
12in lieu of money, by the State or federal government to an
13eligible recipient. "Award" does not include: technical
14assistance that provides services instead of money; other
15assistance in the form of loans, loan guarantees, interest
16subsidies, or insurance; direct payments of any kind to
17individuals; or contracts that must be entered into and
18administered under State or federal procurement laws and
19regulations.
20    "Budget" means the financial plan for the project or
21program that the awarding agency or pass-through entity
22approves during the award process or in subsequent amendments
23to the award. It may include the State or federal and
24non-federal share or only the State or federal share, as
25determined by the awarding agency or pass-through entity.
26    "Catalog of Federal Domestic Assistance" or "CFDA" means a

 

 

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1database that helps the federal government track all programs
2it has domestically funded.
3    "Catalog of Federal Domestic Assistance number" or "CFDA
4number" means the number assigned to a federal program in the
5CFDA.
6    "Catalog of State Financial Assistance" means the single,
7authoritative, statewide, comprehensive source document of
8State financial assistance program information.
9    "Catalog of State Financial Assistance Number" means the
10number assigned to a State program in the Catalog of State
11Financial Assistance. The first 3 digits represent the State
12agency number and the last 4 digits represent the program.
13    "Cluster of programs" means a grouping of closely related
14programs that share common compliance requirements. The types
15of clusters of programs are research and development, student
16financial aid, and other clusters. A "cluster of programs"
17shall be considered as one program for determining major
18programs and, with the exception of research and development,
19whether a program-specific audit may be elected.
20    "Cognizant agency for audit" means the federal agency
21designated to carry out the responsibilities described in 2 CFR
22200.513(a).
23    "Contract" means a legal instrument by which a non-federal
24entity purchases property or services needed to carry out the
25project or program under an award. "Contract" does not include
26a legal instrument, even if the non-federal entity considers it

 

 

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1a contract, when the substance of the transaction meets the
2definition of an award or subaward.
3    "Contractor" means an entity that receives a contract.
4    "Cooperative agreement" means a legal instrument of
5financial assistance between an awarding agency or
6pass-through entity and a non-federal entity that:
7        (1) is used to enter into a relationship with the
8    principal purpose of transferring anything of value from
9    the awarding agency or pass-through entity to the
10    non-federal entity to carry out a public purpose authorized
11    by law, but is not used to acquire property or services for
12    the awarding agency's or pass-through entity's direct
13    benefit or use; and
14        (2) is distinguished from a grant in that it provides
15    for substantial involvement between the awarding agency or
16    pass-through entity and the non-federal entity in carrying
17    out the activity contemplated by the award.
18    "Cooperative agreement" does not include a cooperative
19research and development agreement, nor an agreement that
20provides only direct cash assistance to an individual, a
21subsidy, a loan, a loan guarantee, or insurance.
22    "Corrective action" means action taken by the auditee that
23(i) corrects identified deficiencies, (ii) produces
24recommended improvements, or (iii) demonstrates that audit
25findings are either invalid or do not warrant auditee action.
26    "Cost objective" means a program, function, activity,

 

 

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1award, organizational subdivision, contract, or work unit for
2which cost data is desired and for which provision is made to
3accumulate and measure the cost of processes, products, jobs,
4and capital projects. A "cost objective" may be a major
5function of the non-federal entity, a particular service or
6project, an award, or an indirect cost activity.
7    "Cost sharing" means the portion of project costs not paid
8by State or federal funds, unless otherwise authorized by
9statute.
10    "Development" is the systematic use of knowledge and
11understanding gained from research directed toward the
12production of useful materials, devices, systems, or methods,
13including design and development of prototypes and processes.
14    "Data Universal Numbering System number" means the 9-digit
15number established and assigned by Dun and Bradstreet, Inc. to
16uniquely identify entities and, under federal law, is required
17for non-federal entities to apply for, receive, and report on a
18federal award.
19    "Direct costs" means costs that can be identified
20specifically with a particular final cost objective, such as a
21State or federal or federal pass-through award or a particular
22sponsored project, an instructional activity, or any other
23institutional activity, or that can be directly assigned to
24such activities relatively easily with a high degree of
25accuracy.
26    "Equipment" means tangible personal property (including

 

 

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1information technology systems) having a useful life of more
2than one year and a per-unit acquisition cost that equals or
3exceeds the lesser of the capitalization level established by
4the non-federal entity for financial statement purposes, or
5$5,000.
6    "Executive branch" means that branch of State government
7that is under the jurisdiction of the Governor.
8    "Federal agency" has the meaning provided for "agency"
9under 5 U.S.C. 551(1) together with the meaning provided for
10"agency" by 5 U.S.C. 552(f).
11    "Federal award" means:
12        (1) the federal financial assistance that a
13    non-federal entity receives directly from a federal
14    awarding agency or indirectly from a pass-through entity;
15        (2) the cost-reimbursement contract under the Federal
16    Acquisition Regulations that a non-federal entity receives
17    directly from a federal awarding agency or indirectly from
18    a pass-through entity; or
19        (3) the instrument setting forth the terms and
20    conditions when the instrument is the grant agreement,
21    cooperative agreement, other agreement for assistance
22    covered in paragraph (b) of 20 CFR 200.40, or the
23    cost-reimbursement contract awarded under the Federal
24    Acquisition Regulations.
25    "Federal award" does not include other contracts that a
26federal agency uses to buy goods or services from a contractor

 

 

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1or a contract to operate federal government owned,
2contractor-operated facilities.
3    "Federal awarding agency" means the federal agency that
4provides a federal award directly to a non-federal entity.
5    "Federal interest" means, for purposes of 2 CFR 200.329 or
6when used in connection with the acquisition or improvement of
7real property, equipment, or supplies under a federal award,
8the dollar amount that is the product of the federal share of
9total project costs and current fair market value of the
10property, improvements, or both, to the extent the costs of
11acquiring or improving the property were included as project
12costs.
13    "Federal program" means any of the following:
14        (1) All federal awards which are assigned a single
15    number in the CFDA.
16        (2) When no CFDA number is assigned, all federal awards
17    to non-federal entities from the same agency made for the
18    same purpose should be combined and considered one program.
19        (3) Notwithstanding paragraphs (1) and (2) of this
20    definition, a cluster of programs. The types of clusters of
21    programs are:
22            (A) research and development;
23            (B) student financial aid; and
24            (C) "other clusters", as described in the
25        definition of "cluster of programs".
26    "Federal share" means the portion of the total project

 

 

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1costs that are paid by federal funds.
2    "Final cost objective" means a cost objective which has
3allocated to it both direct and indirect costs and, in the
4non-federal entity's accumulation system, is one of the final
5accumulation points, such as a particular award, internal
6project, or other direct activity of a non-federal entity.
7    "Financial assistance" means the following:
8        (1) For grants and cooperative agreements, "financial
9    assistance" means assistance that non-federal entities
10    receive or administer in the form of:
11            (A) grants;
12            (B) cooperative agreements;
13            (C) non-cash contributions or donations of
14        property, including donated surplus property;
15            (D) direct appropriations;
16            (E) food commodities; and
17            (F) other financial assistance, except assistance
18        listed in paragraph (2) of this definition.
19        (2) "Financial assistance" includes assistance that
20    non-federal entities receive or administer in the form of
21    loans, loan guarantees, interest subsidies, and insurance.
22        (3) "Financial assistance" does not include amounts
23    received as reimbursement for services rendered to
24    individuals.
25    "Fixed amount awards" means a type of grant agreement under
26which the awarding agency or pass-through entity provides a

 

 

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1specific level of support without regard to actual costs
2incurred under the award. "Fixed amount awards" reduce some of
3the administrative burden and record-keeping requirements for
4both the non-federal entity and awarding agency or pass-through
5entity. Accountability is based primarily on performance and
6results.
7    "Foreign public entity" means:
8        (1) a foreign government or foreign governmental
9    entity;
10        (2) a public international organization that is
11    entitled to enjoy privileges, exemptions, and immunities
12    as an international organization under the International
13    Organizations Immunities Act (22 U.S.C. 288-288f);
14        (3) an entity owned, in whole or in part, or controlled
15    by a foreign government; or
16        (4) any other entity consisting wholly or partially of
17    one or more foreign governments or foreign governmental
18    entities.
19    "Foreign organization" means an entity that is:
20        (1) a public or private organization located in a
21    country other than the United States and its territories
22    that are subject to the laws of the country in which it is
23    located, irrespective of the citizenship of project staff
24    or place of performance;
25        (2) a private nongovernmental organization located in
26    a country other than the United States that solicits and

 

 

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1    receives cash contributions from the general public;
2        (3) a charitable organization located in a country
3    other than the United States that is nonprofit and tax
4    exempt under the laws of its country of domicile and
5    operation, but is not a university, college, accredited
6    degree-granting institution of education, private
7    foundation, hospital, organization engaged exclusively in
8    research or scientific activities, church, synagogue,
9    mosque, or other similar entity organized primarily for
10    religious purposes; or
11        (4) an organization located in a country other than the
12    United States not recognized as a Foreign Public Entity.
13    "Generally Accepted Accounting Principles" has the meaning
14provided in accounting standards issued by the Government
15Accounting Standards Board and the Financial Accounting
16Standards Board.
17    "Generally Accepted Government Auditing Standards" means
18generally accepted government auditing standards issued by the
19Comptroller General of the United States that are applicable to
20financial audits.
21    "Grant agreement" means a legal instrument of financial
22assistance between an awarding agency or pass-through entity
23and a non-federal entity that:
24        (1) is used to enter into a relationship, the principal
25    purpose of which is to transfer anything of value from the
26    awarding agency or pass-through entity to the non-federal

 

 

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1    entity to carry out a public purpose authorized by law and
2    not to acquire property or services for the awarding agency
3    or pass-through entity's direct benefit or use; and
4        (2) is distinguished from a cooperative agreement in
5    that it does not provide for substantial involvement
6    between the awarding agency or pass-through entity and the
7    non-federal entity in carrying out the activity
8    contemplated by the award.
9    "Grant agreement" does not include an agreement that
10provides only direct cash assistance to an individual, a
11subsidy, a loan, a loan guarantee, or insurance.
12    "Grant application" means a specified form that is
13completed by a non-federal entity in connection with a request
14for a specific funding opportunity or a request for financial
15support of a project or activity.
16    "Hospital" means a facility licensed as a hospital under
17the law of any state or a facility operated as a hospital by
18the United States, a state, or a subdivision of a state.
19    "Illinois Debarred and Suspended List" means the list
20maintained by the Governor's Office of Management and Budget
21that contains the names of those individuals and entities that
22are ineligible, either temporarily or permanently, from
23receiving an award of grant funds from the State.
24    "Indian tribe" (or "federally recognized Indian tribe")
25means any Indian tribe, band, nation, or other organized group
26or community, including any Alaska Native village or regional

 

 

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1or village corporation as defined in or established pursuant to
2the federal Alaska Native Claims Settlement Act (43 U.S.C.
31601, et seq.) that is recognized as eligible for the special
4programs and services provided by the United States to Indians
5because of their status as Indians under 25 U.S.C. 450b(e), as
6set forth in the annually published Bureau of Indian Affairs
7list of Indian Entities Recognized and Eligible to Receive
8Services.
9    "Indirect cost" means those costs incurred for a common or
10joint purpose benefitting more than one cost objective and not
11readily assignable to the cost objectives specifically
12benefitted without effort disproportionate to the results
13achieved.
14    "Inspector General" means the Office of the Executive
15Inspector General for Executive branch agencies.
16    "Institutions of Higher Education" has the meaning
17provided under 20 U.S.C. 1001.
18    "Loan" means a federal loan or loan guarantee received or
19administered by a non-federal entity. "Loan" does not include a
20"program income" as defined in 2 CFR 200.80.
21    "Loan guarantee" means any State or federal government
22guarantee, insurance, or other pledge with respect to the
23payment of all or a part of the principal or interest on any
24debt obligation of a non-federal borrower to a non-federal
25lender, but does not include the insurance of deposits, shares,
26or other withdrawable accounts in financial institutions.

 

 

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1    "Local government" has the meaning provided for the term
2"units of local government" under Section 1 of Article VII of
3the Illinois Constitution and includes school districts.
4    "Major program" means a federal program determined by the
5auditor to be a major program in accordance with 2 CFR 200.518
6or a program identified as a major program by a federal
7awarding agency or pass-through entity in accordance with 2 CFR
8200.503(e).
9    "Non-federal entity" means a state, local government,
10Indian tribe, institution of higher education, or
11organization, whether nonprofit or for-profit, that carries
12out a State or federal award as a recipient or subrecipient.
13    "Nonprofit organization" means any corporation, trust,
14association, cooperative, or other organization, not including
15institutions of higher education, that:
16        (1) is operated primarily for scientific, educational,
17    service, charitable, or similar purposes in the public
18    interest;
19        (2) is not organized primarily for profit; and
20        (3) uses net proceeds to maintain, improve, or expand
21    the operations of the organization.
22    "Obligations", when used in connection with a non-federal
23entity's utilization of funds under an award, means orders
24placed for property and services, contracts and subawards made,
25and similar transactions during a given period that require
26payment by the non-federal entity during the same or a future

 

 

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1period.
2    "Office of Management and Budget" means the Office of
3Management and Budget of the Executive Office of the President.
4    "Other clusters" has the meaning provided by the federal
5Office of Management and Budget in the compliance supplement or
6has the meaning as it is designated by a state for federal
7awards the state provides to its subrecipients that meet the
8definition of a cluster of programs. When designating an "other
9cluster", a state must identify the federal awards included in
10the cluster and advise the subrecipients of compliance
11requirements applicable to the cluster.
12    "Oversight agency for audit" means the federal awarding
13agency that provides the predominant amount of funding directly
14to a non-federal entity not assigned a cognizant agency for
15audit. When there is no direct funding, the awarding agency
16that is the predominant source of pass-through funding must
17assume the oversight responsibilities. The duties of the
18oversight agency for audit and the process for any
19reassignments are described in 2 CFR 200.513(b).
20    "Pass-through entity" means a non-federal entity that
21provides a subaward to a subrecipient to carry out part of a
22program.
23    "Property" means real property or personal property.
24    "Project cost" means total allowable costs incurred under
25an award and all required cost sharing and voluntary committed
26cost sharing, including third-party contributions.

 

 

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1    "Recipient" means a non-federal entity that receives an
2award directly from an awarding agency to carry out an activity
3under a program. "Recipient" does not include subrecipients.
4    "Research and Development" means all research activities,
5both basic and applied, and all development activities that are
6performed by non-federal entities.
7    "Single Audit Act" means the federal Single Audit Act
8Amendments of 1996 (31 U.S.C. 7501-7507).
9    "State agency" means an Executive branch agency.
10    "State award" means the financial assistance that a
11non-federal entity receives from the State and that is funded
12with either State funds or federal funds; in the latter case,
13the State is acting as a pass-through entity.
14    "State awarding agency" means a State agency that provides
15an award to a non-federal entity.
16    "State grant-making agency" has the same meaning as "State
17awarding agency".
18    "State interest" means the acquisition or improvement of
19real property, equipment, or supplies under a State award, the
20dollar amount that is the product of the State share of the
21total project costs and current fair market value of the
22property, improvements, or both, to the extent the costs of
23acquiring or improving the property were included as project
24costs.
25    "State program" means any of the following:
26        (1) All State awards which are assigned a single number

 

 

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1    in the Catalog of State Financial Assistance.
2        (2) When no Catalog of State Financial Assistance
3    number is assigned, all State awards to non-federal
4    entities from the same agency made for the same purpose are
5    considered one program.
6        (3) A cluster of programs as defined in this Section.
7    "State share" means the portion of the total project costs
8that are paid by State funds.
9    "Student Financial Aid" means federal awards under those
10programs of general student assistance, such as those
11authorized by Title IV of the Higher Education Act of 1965, as
12amended (20 U.S.C. 1070-1099d), that are administered by the
13United States Department of Education and similar programs
14provided by other federal agencies. "Student Financial Aid"
15does not include federal awards under programs that provide
16fellowships or similar federal awards to students on a
17competitive basis or for specified studies or research.
18    "Subaward" means an award provided by a pass-through entity
19to a subrecipient for the subrecipient to carry out part of a
20federal award received by the pass-through entity. "Subaward"
21does not include payments to a contractor or payments to an
22individual that is a beneficiary of a federal program. A
23"subaward" may be provided through any form of legal agreement,
24including an agreement that the pass-through entity considers a
25contract.
26    "Subrecipient" means a non-federal entity that receives a

 

 

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1subaward from a pass-through entity to carry out part of a
2federal program. "Subrecipient" does not include an individual
3that is a beneficiary of such program. A "subrecipient" may
4also be a recipient of other federal awards directly from a
5federal awarding agency.
6    "Suspension" means a post-award action by the State or
7federal agency or pass-through entity that temporarily
8withdraws the State or federal agency's or pass-through
9entity's financial assistance sponsorship under an award,
10pending corrective action by the recipient or subrecipient or
11pending a decision to terminate the award.
12    "Uniform Administrative Requirements, Costs Principles,
13and Audit Requirements for Federal Awards" means those rules
14applicable to grants contained in 2 CFR 200.
15    "Voluntary committed cost sharing" means cost sharing
16specifically pledged on a voluntary basis in the proposal's
17budget or the award on the part of the non-federal entity and
18that becomes a binding requirement of the award.
 
19    Section 20. Adoption of federal rules applicable to grants.
20    (a) On or before July 1, 2015, the Governor's Office of
21Management and Budget shall by rule adopt the Uniform Guidance
22at 2 CFR 200 and apply those rules to all State and federal
23awards on and after July 1, 2015. The rules shall include the
24following:
25        (1) Administrative requirements. In accordance with

 

 

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1    Subparts B through D of 2 CFR 200, the Governor's Office of
2    Management and Budget shall by rule set forth the uniform
3    administrative requirements for grant and cooperative
4    agreements, including the requirements for the management
5    by State awarding agencies of federal grant programs before
6    State and federal pass-through awards have been made and
7    requirements that State awarding agencies may impose on
8    non-federal entities in State and federal pass-through
9    awards.
10        (2) Cost principles. In accordance with Subpart E of 2
11    CFR 200, the Governor's Office of Management and Budget
12    shall by rule establish principles for determining the
13    allowable costs incurred by non-federal entities under
14    State and federal pass-through awards. The principles are
15    intended for cost determination, but are not intended to
16    identify the circumstances or dictate the extent of State
17    or federal pass-through participation in financing a
18    particular program or project. The principles shall
19    provide that State and federal awards bear their fair share
20    of cost recognized under these principles, except where
21    restricted or prohibited by State or federal law.
22        (3) Audit and single audit requirements and audit
23    follow-up. In accordance with Subpart F of 2 CFR 200 and
24    the federal Single Audit Act Amendments of 1996, the
25    Governor's Office of Management and Budget shall by rule
26    set forth standards to obtain consistency and uniformity

 

 

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1    among State and federal pass-through awarding agencies for
2    the audit of non-federal entities expending State and
3    federal awards. These provisions shall also set forth the
4    policies and procedures for State and federal pass-through
5    entities when using the results of these audits.
6        The provisions of this item (3) do not apply to
7    for-profit subrecipients because for-profit subrecipients
8    are not subject to the requirements of OMB Circular A-133,
9    Audits of States, Local and Non-Profit Organizations.
10    Audits of for-profit subrecipients must be conducted
11    pursuant to a Program Audit Guide issued by the Federal
12    awarding agency. If a Program Audit Guide is not available,
13    the State awarding agency must prepare a Program Audit
14    Guide in accordance with the OMB Circular A-133 Compliance
15    Supplement. For-profit entities are subject to all other
16    general administrative requirements and cost principles
17    applicable to grants.
18    (b) This Act addresses only State and federal pass-through
19auditing functions and does not address the external audit
20function of the Auditor General.
21    (c) The State grant-making agency is responsible for
22establishing requirements, as necessary, to ensure compliance
23by for-profit subrecipients subject to approval by the
24Governor's Office of Management and Budget. The agreement with
25the for-profit subrecipient shall describe the applicable
26compliance requirements and the for-profit subrecipient's

 

 

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1compliance responsibility. Methods to ensure compliance for
2State and federal pass-through awards made to for-profit
3subrecipients shall include pre-award, audits, monitoring
4during the agreement, and post-award audits.
 
5    Section 25. Conflicts of interest. The Governor's Office of
6Management and Budget shall adopt rules regarding conflict of
7interest policies for awards. A non-federal entity must
8disclose in writing any potential conflict of interest to the
9Governor's Office of Management and Budget or the pass-through
10entity in accordance with applicable awarding agency policy.
 
11    Section 30. Mandatory disclosures. The Governor's Office
12of Management and Budget shall by rule require that the
13applicant for an award disclose, in a timely manner and in
14writing to the pass-through entity, all violations of State or
15federal criminal law involving fraud, bribery, or gratuity
16violations potentially affecting the award. Failure to make the
17required disclosures may result in any of the following
18remedies:
19        (1) The temporary withholding of cash payments pending
20    correction of the deficiency by the awarding agency or
21    non-federal entity or more severe enforcement action by the
22    pass-through entity.
23        (2) Disallowance of (that is, denial of both use of
24    funds and any applicable matching credit for) all or part

 

 

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1    of the cost of the activity or action not in compliance.
2        (3) Whole or partial suspension or termination of the
3    award.
4        (4) Initiation of suspension or debarment proceedings
5    as authorized under rules adopted by the Governor's Office
6    of Management and Budget under subsection (a) of Section 20
7    of this Act and awarding agency regulations (or, in the
8    case of a pass-through entity, recommendation that such a
9    proceeding be initiated by the awarding agency).
10        (5) Withholding further awards for the project or
11    program.
12        (6) Taking other remedies that may be legally
13    available.
 
14    Section 35. Supplemental rules. On or before December 31,
152015, the Governor's Office of Management and Budget shall
16adopt supplemental rules pertaining to the following:
17        (1) Criteria to define mandatory formula-based grants
18    and discretionary grants.
19        (2) The award of one-year grants for new applicants.
20        (3) The award of competitive grants in 3-year terms
21    (one-year initial terms with the option to renew for up to
22    2 additional years) to coincide with the federal award.
23        (4) The issuance of grants, including:
24            (A) public notice of announcements of funding
25        opportunities;

 

 

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1            (B) the development of uniform grant applications;
2            (C) state agency review of merit of proposals and
3        risk posed by applicants;
4            (D) specific conditions for individual recipients
5        (requiring the use of a fiscal agent and additional
6        corrective conditions);
7            (E) certifications and representations;
8            (F) pre-award costs;
9            (G) performance measures and Budgeting for Results
10        requirements; and
11            (H) for mandatory formula grants, the merit of the
12        proposal and the risk posed should result in additional
13        reporting, monitoring, or measures such as
14        reimbursement-basis only.
15        (5) The development of uniform budget requirements,
16    which shall include:
17            (A) mandatory submission of budgets as part of the
18        grant application process;
19            (B) mandatory requirements regarding contents of
20        the budget including, at a minimum, common detail line
21        items specified under guidelines issued by the
22        Governor's Office of Management and Budget;
23            (C) a requirement that the budget allow
24        flexibility to add lines describing costs that are
25        common for the services provided as outlined in the
26        grant application;

 

 

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1            (D) a requirement that the budget include
2        information necessary for analyzing cost and
3        performance for use in the Budgeting for Results
4        initiative; and
5            (E) caps on the amount of salaries that may be
6        charged to grants based on the limitations imposed by
7        Federal agencies.
8        (6) The development of pre-qualification requirements
9    for applicants, including the fiscal condition of the
10    organization and the provision of the following
11    information:
12            (A) organization name;
13            (B) Federal Employee Identification Number;
14            (C) Data Universal Numbering System (DUNS) number;
15            (D) fiscal condition;
16            (E) whether the applicant is in good standing with
17        the Secretary of State;
18            (F) past performance in administering grants;
19            (G) whether the applicant is or has ever been on
20        the Debarred and Suspended List maintained by the
21        Governor's Office of Management and Budget;
22            (H) whether the applicant is or has ever been on
23        the Federal Excluded Parties List; and
24            (I) whether the applicant is or has ever been on
25        the Sanctioned Party List maintained by the Illinois
26        Department of Healthcare and Family Services.

 

 

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1    Nothing in this Act affects the provisions of the Fiscal
2Control and Internal Auditing Act nor the requirement that the
3management of each State agency is responsible for maintaining
4effective internal controls under that Act.
 
5    Section 40. Applicability.
6    (a) The requirements established under this Act apply to
7State grant-making agencies that make State and federal
8pass-through awards to non-federal entities. These
9requirements apply to all costs related to State and federal
10pass-through awards.
11    (b) The terms and conditions of State, federal, and
12pass-through awards apply to subawards and subrecipients
13unless a particular Section of this Act or the terms and
14conditions of the State or federal award specifically indicate
15otherwise. Non-federal entities shall comply with requirements
16of this Act regardless of whether the non-federal entity is a
17recipient or subrecipient of a State or federal pass-through
18award. Pass-through entities shall comply with the
19requirements set forth under the Governor's Office of
20Management and Budget rules adopted under subsection (a) of
21Section 20 of this Act, but not to any requirements in this Act
22directed towards State or federal awarding agencies, unless the
23requirements of the State or federal awards indicate otherwise.
24    When a non-federal entity is awarded a cost-reimbursement
25contract, only 2 CFR 200.330 through 200.332 are incorporated

 

 

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1by reference into the contract. However, when the Cost
2Accounting Standards are applicable to the contract, they take
3precedence over the requirements of this Act unless they are in
4conflict with Subpart F of 2 CFR 200. In addition, costs that
5are made unallowable under 10 U.S.C. 2324(e) and 41 U.S.C.
64304(a), as described in the Federal Acquisition Regulations,
7subpart 31.2 and subpart 31.603, are always unallowable. For
8requirements other than those covered in Subpart D of 2 CFR
9200.330 through 200.332, the terms of the contract and the
10Federal Acquisition Regulations apply.
11    With the exception of Subpart F of 2 CFR 200, which is
12required by the Single Audit Act, in any circumstances where
13the provisions of federal statutes or regulations differ from
14the provisions of this Act, the provision of the federal
15statutes or regulations govern. This includes, for agreements
16with Indian tribes, the provisions of the Indian
17Self-Determination and Education and Assistance Act, as
18amended, 25 U.S.C. 450-458ddd-2.
19    (c) State grant-making agencies may apply subparts A
20through E of 2 CFR 200 to for-profit entities, foreign public
21entities, or foreign organizations, except where the awarding
22agency determines that the application of these subparts would
23be inconsistent with the international obligations of the
24United States or the statute or regulations of a foreign
25government.
26    (d) Except for 2 CFR 200.202 and 200.330 through 200.332,

 

 

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1the requirements in Subparts C, D, and E of 2 CFR 200 do not
2apply to the following programs:
3        (1) The block grant awards authorized by the Omnibus
4    Budget Reconciliation Act of 1981 (including Community
5    Services; Preventive Health and Health Services; Alcohol,
6    Drug Abuse, and Mental Health Services; Maternal and Child
7    Health Services; Social Services; Low-Income Home Energy
8    Assistance; States' Program of Community Development Block
9    Grant Awards for Small Cities; and Elementary and Secondary
10    Education, other than programs administered by the
11    Secretary of Education under Title V, Subtitle D, Chapter
12    2, Section 583 - the Secretary's discretionary award
13    program) and both the Alcohol and Drug Abuse Treatment and
14    Rehabilitation Block Grant Award (42 U.S.C. 300x-21 to
15    300x-35 and 42 U.S.C. 300x-51 to 300x-64) and the Mental
16    Health Service for the Homeless Block Grant Award (42
17    U.S.C. 300x to 300x-9) under the Public Health Services
18    Act.
19        (2) Federal awards to local education agencies under 20
20    U.S.C. 7702 through 7703b (portions of the Impact Aid
21    program).
22        (3) Payments under the Department of Veterans Affairs'
23    State Home Per Diem Program (38 U.S.C. 1741).
24        (4) Federal awards authorized under the Child Care and
25    Development Block Grant Act of 1990, as amended, including
26    the following:

 

 

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1            (A) Child Care and Development Block Grant (42
2        U.S.C. 9858).
3            (B) Child Care Mandatory and Matching Funds of the
4        Child Care and Development Fund (42 U.S.C. 9858).
5    (e) Except for the 2 CFR 200.202 requirement to provide
6public notice of federal financial assistance programs, the
7guidance in Subpart C Pre-federal Award Requirements and
8Contents of Federal Awards does not apply to the following
9programs:
10        (1) Entitlement federal awards to carry out the
11    following programs of the Social Security Act:
12            (A) Temporary Assistance to Needy Families (Title
13        IV-A of the Social Security Act, 42 U.S.C. 601-619);
14            (B) Child Support Enforcement and Establishment of
15        Paternity (Title IV-D of the Social Security Act, 42
16        U.S.C. 651-669b);
17            (C) Foster Care and Adoption Assistance (Title
18        IV-E of the Act, 42 U.S.C. 670-679c);
19            (D) Aid to the Aged, Blind, and Disabled (Titles I,
20        X, XIV, and XVI- AABD of the Act, as amended); and
21            (E) Medical Assistance (Medicaid) (42 U.S.C.
22        1396-1396w-5), not including the State Medicaid Fraud
23        Control program authorized by Section 1903(a)(6)(B) of
24        the Social Security Act (42 U.S.C. 1396b(a)(6)(B)).
25        (2) A federal award for an experimental, pilot, or
26    demonstration project that is also supported by a federal

 

 

HB6015- 30 -LRB098 20606 OMW 57037 b

1    award listed in paragraph (1) of subsection (e) of this
2    Section.
3        (3) Federal awards under subsection 412(e) of the
4    Immigration and Nationality Act of 1965 and Section 501(a)
5    of the Refugee Education Assistance Act of 1980 for cash
6    assistance, medical assistance, and supplemental security
7    income benefits to refugees and entrants and the
8    administrative costs of providing the assistance and
9    benefits under 8 U.S.C. 1522(e).
10        (4) Entitlement awards under the following programs of
11    The National School Lunch Act:
12            (A) National School Lunch Program (42 U.S.C.
13        1753);
14            (B) Commodity Assistance (42 U.S.C. 1755);
15            (C) Special Meal Assistance (42 U.S.C. 1759a);
16            (D) Summer Food Service Program for Children (42
17        U.S.C. 1761); and
18            (E) Child and Adult Care Food Program (42 U.S.C.
19        1766).
20        (5) Entitlement awards under the following programs of
21    The Child Nutrition Act of 1966:
22            (A) Special Milk Program (42 U.S.C. 1772);
23            (B) School Breakfast Program (42 U.S.C. 1773); and
24            (C) State Administrative Expenses (42 U.S.C.
25        Section 1776).
26        (6) Entitlement awards for State Administrative

 

 

HB6015- 31 -LRB098 20606 OMW 57037 b

1    Expenses under The Food and Nutrition Act of 2008 (7 U.S.C.
2    2025).
3        (7) Non-discretionary federal awards under the
4    following non-entitlement programs:
5            (A) Special Supplemental Nutrition Program for
6        Women, Infants and Children under the Child Nutrition
7        Act of 1966 (42 U.S.C. 1786);
8            (B) The Emergency Food Assistance Programs
9        (Emergency Food Assistance Act of 1983) (7 U.S.C.
10        7501); and
11            (C) Commodity Supplemental Food Program (7 U.S.C.
12        Section 612c).
 
13    Section 45. State grant-making agency responsibilities.
14The specific requirements and responsibilities of State
15grant-making agencies and non-federal entities are set forth in
16this Act. State agencies making State awards to non-federal
17entities must adopt by rule the language in 2 CFR 200, Subpart
18C through Subpart F unless different provisions are required by
19law or are approved by the Governor's Office of Management and
20Budget.
 
21    Section 50. The Governor's Office of Management and Budget
22responsibilities.
23    (a) The Governor's Office of Management and Budget shall
24review State grant-making agency rules and the implementation

 

 

HB6015- 32 -LRB098 20606 OMW 57037 b

1of this Act and shall provide interpretations of policy
2requirements and assistance to ensure effective and efficient
3implementation. Any exceptions shall be subject to approval by
4the Governor's Office of Management and Budget. Exceptions
5shall only be made in particular cases where adequate
6justification is presented.
7    (b) On or before July 1, 2014, the Governor's Office of
8Management and Budget shall establish a centralized grants
9management unit within the Governor's Office of Management and
10Budget. The centralized division shall be funded with a portion
11of the administrative funds provided under existing and future
12State and federal grants.
 
13    Section 55. Responsibilities of centralized grants
14management unit. The centralized grants management unit within
15the Governor's Office of Management and Budget shall be
16responsible for:
17        (1) The development of minimum requirements applicable
18    to the staff of grant applicants to manage and execute
19    grant awards for programmatic and administrative purposes,
20    including grant management specialists with:
21            (A) general and technical competencies;
22            (B) programmatic expertise;
23            (C) fiscal expertise and systems necessary to
24        adequately account for the source and application of
25        grant funds for each program; and

 

 

HB6015- 33 -LRB098 20606 OMW 57037 b

1            (D) knowledge of compliance requirements.
2        (2) The development of minimum training requirements,
3    including annual training requirements.
4        (3) Accurate, current, and complete disclosure of the
5    financial results of each funded award, as set forth in the
6    financial monitoring and reporting section of 2 CFR 200.
7        (4) Development of criteria for requiring the
8    retention of a fiscal agent and for becoming a fiscal
9    agent.
10        (5) Development of disclosure requirements in the
11    grant application pertaining to:
12            (A) related-party status between grantees and
13        grant-making agencies;
14            (B) past employment of applicant officers and
15        grant managers;
16            (C) disclosure of current or past employment of
17        members of immediate family; and
18            (D) disclosure of senior management of grantee
19        organization and their relationships with contracted
20        vendors.
21        (6) Implementation of rules prohibiting a grantee from
22    charging any cost allocable to a particular award or cost
23    objective to other State or federal awards to overcome fund
24    deficiencies, to avoid restrictions imposed by law or terms
25    of the Federal awards, or for other reasons.
26        (7) Implementation of rules prohibiting a non-federal

 

 

HB6015- 34 -LRB098 20606 OMW 57037 b

1    entity from earning or keeping any profit resulting from
2    State or federal financial assistance, unless prior
3    approval has been obtained from the Governor's Office of
4    Management and Budget and is expressly authorized by the
5    terms and conditions of the award.
6        (8) Maintenance of an Illinois Debarred and Suspended
7    List that contains the names of those individuals and
8    entities that are ineligible, either temporarily or
9    permanently, to receive an award of grant funds from the
10    State.
 
11    Section 60. Audit requirements.
12    (a) The standards set forth in the Governor's Office of
13Management and Budget rules adopted in accordance with Subpart
14F of 2 CFR 200 and any other standards that apply directly to
15federal agencies shall apply to audits of fiscal years
16beginning on or after December 26, 2015.
17    (b) Books and records must be available for review or audit
18by appropriate officials of the pass-through entity, and the
19agency, the Auditor General, the Inspector General,
20appropriate officials of the agency, and the federal Government
21Accountability Office.
22    (c) The Governor's Office of Management and Budget shall
23adopt rules for audits of grants from a pass-through entity
24that are not subject to the Single Audit Act because the amount
25of the federal award is less than $750,000 or the subrecipient

 

 

HB6015- 35 -LRB098 20606 OMW 57037 b

1is an exempt entity.
2    (d) This Act does not affect the provisions of the Illinois
3State Auditing Act and does not address the external audit
4function of the Auditor General.
 
5    Section 65. Review date. The Governor's Office of
6Management and Budget shall review this Act at least once every
75 years after December 26, 2014 in conjunction with the federal
8review of the Uniform Administrative Requirements, Cost
9Principles, and Audit Requirements for Federal Awards as
10required by 2 CFR 200.109 in order to determine whether any
11existing rules need to be revised or new rules adopted.
 
12    Section 70. Exceptions. With the exception of the audit
13requirements set forth in 2 CFR 200.102, the Governor's Office
14of Management and Budget may allow exceptions for classes of
15State or federal pass-through awards or non-federal entities
16subject to the requirements of this Act when exceptions are not
17prohibited by State or federal law. However, in the interest of
18maximum uniformity, exceptions from the requirements of this
19Act shall be permitted only in unusual circumstances.
 
20    Section 75. Supersession. On and after July 1, 2015, in the
21event of a conflict with the Grant Funds Recovery Act, the
22provisions of this Act shall control.
 

 

 

HB6015- 36 -LRB098 20606 OMW 57037 b

1    Section 80. Implementation date. The Governor's Office of
2Management and Budget shall adopt all rules required under this
3Act on or before December 31, 2015.
 
4    Section 85. Agency implementation. All State grant-making
5agencies shall implement the rules issued by the Governor's
6Office of Management and Budget on or before July 1, 2016. The
7standards set forth in this Act, which affect administration of
8State and federal pass-through awards issued by State
9grant-making agencies, become effective once implemented by
10State grant-making agencies. State grant-making agencies shall
11implement the policies and procedures applicable to State and
12federal pass-through awards by adopting rules for non-federal
13entities that shall take effect for fiscal years on and after
14December 26, 2015, unless different provisions are required by
15State or federal statute, federal rule, or approved by the
16Governor's Office of Management and Budget.
 
17    Section 90. Annual report. Effective January 1, 2017 and
18each January 1 thereafter, the Governor's Office of Management
19and Budget, in conjunction with the Illinois Single Audit
20Commission, shall submit to the Governor and the General
21Assembly a report that demonstrates the efficiencies, cost
22savings, and reductions in fraud, waste, and abuse as a result
23of the implementation of this Act and the rules adopted by the
24Governor's Office of Management and Budget in accordance with

 

 

HB6015- 37 -LRB098 20606 OMW 57037 b

1the provisions of this Act. The report shall include, but not
2be limited to:
3        (1) the number of entities placed on the Illinois
4    Debarred and Suspended List;
5        (2) any savings realized as a result of the
6    implementation of this Act;
7        (3) any reduction in the number of duplicative audits;
8        (4) the number of persons trained to assist grantees
9    and subrecipients; and
10        (5) the number of grantees and subrecipients to whom a
11    fiscal agent was assigned.
 
12    Section 95. Repeal. This Act is repealed 5 years after the
13effective date of this Act.
 
14    Section 500. The Illinois Administrative Procedure Act is
15amended by changing Section 5-45 as follows:
 
16    (5 ILCS 100/5-45)  (from Ch. 127, par. 1005-45)
17    Sec. 5-45. Emergency rulemaking.
18    (a) "Emergency" means the existence of any situation that
19any agency finds reasonably constitutes a threat to the public
20interest, safety, or welfare.
21    (b) If any agency finds that an emergency exists that
22requires adoption of a rule upon fewer days than is required by
23Section 5-40 and states in writing its reasons for that

 

 

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1finding, the agency may adopt an emergency rule without prior
2notice or hearing upon filing a notice of emergency rulemaking
3with the Secretary of State under Section 5-70. The notice
4shall include the text of the emergency rule and shall be
5published in the Illinois Register. Consent orders or other
6court orders adopting settlements negotiated by an agency may
7be adopted under this Section. Subject to applicable
8constitutional or statutory provisions, an emergency rule
9becomes effective immediately upon filing under Section 5-65 or
10at a stated date less than 10 days thereafter. The agency's
11finding and a statement of the specific reasons for the finding
12shall be filed with the rule. The agency shall take reasonable
13and appropriate measures to make emergency rules known to the
14persons who may be affected by them.
15    (c) An emergency rule may be effective for a period of not
16longer than 150 days, but the agency's authority to adopt an
17identical rule under Section 5-40 is not precluded. No
18emergency rule may be adopted more than once in any 24 month
19period, except that this limitation on the number of emergency
20rules that may be adopted in a 24 month period does not apply
21to (i) emergency rules that make additions to and deletions
22from the Drug Manual under Section 5-5.16 of the Illinois
23Public Aid Code or the generic drug formulary under Section
243.14 of the Illinois Food, Drug and Cosmetic Act, (ii)
25emergency rules adopted by the Pollution Control Board before
26July 1, 1997 to implement portions of the Livestock Management

 

 

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1Facilities Act, (iii) emergency rules adopted by the Illinois
2Department of Public Health under subsections (a) through (i)
3of Section 2 of the Department of Public Health Act when
4necessary to protect the public's health, (iv) emergency rules
5adopted pursuant to subsection (n) of this Section, (v)
6emergency rules adopted pursuant to subsection (o) of this
7Section, or (vi) emergency rules adopted pursuant to subsection
8(c-5) of this Section. Two or more emergency rules having
9substantially the same purpose and effect shall be deemed to be
10a single rule for purposes of this Section.
11    (c-5) To facilitate the maintenance of the program of group
12health benefits provided to annuitants, survivors, and retired
13employees under the State Employees Group Insurance Act of
141971, rules to alter the contributions to be paid by the State,
15annuitants, survivors, retired employees, or any combination
16of those entities, for that program of group health benefits,
17shall be adopted as emergency rules. The adoption of those
18rules shall be considered an emergency and necessary for the
19public interest, safety, and welfare.
20    (d) In order to provide for the expeditious and timely
21implementation of the State's fiscal year 1999 budget,
22emergency rules to implement any provision of Public Act 90-587
23or 90-588 or any other budget initiative for fiscal year 1999
24may be adopted in accordance with this Section by the agency
25charged with administering that provision or initiative,
26except that the 24-month limitation on the adoption of

 

 

HB6015- 40 -LRB098 20606 OMW 57037 b

1emergency rules and the provisions of Sections 5-115 and 5-125
2do not apply to rules adopted under this subsection (d). The
3adoption of emergency rules authorized by this subsection (d)
4shall be deemed to be necessary for the public interest,
5safety, and welfare.
6    (e) In order to provide for the expeditious and timely
7implementation of the State's fiscal year 2000 budget,
8emergency rules to implement any provision of this amendatory
9Act of the 91st General Assembly or any other budget initiative
10for fiscal year 2000 may be adopted in accordance with this
11Section by the agency charged with administering that provision
12or initiative, except that the 24-month limitation on the
13adoption of emergency rules and the provisions of Sections
145-115 and 5-125 do not apply to rules adopted under this
15subsection (e). The adoption of emergency rules authorized by
16this subsection (e) shall be deemed to be necessary for the
17public interest, safety, and welfare.
18    (f) In order to provide for the expeditious and timely
19implementation of the State's fiscal year 2001 budget,
20emergency rules to implement any provision of this amendatory
21Act of the 91st General Assembly or any other budget initiative
22for fiscal year 2001 may be adopted in accordance with this
23Section by the agency charged with administering that provision
24or initiative, except that the 24-month limitation on the
25adoption of emergency rules and the provisions of Sections
265-115 and 5-125 do not apply to rules adopted under this

 

 

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1subsection (f). The adoption of emergency rules authorized by
2this subsection (f) shall be deemed to be necessary for the
3public interest, safety, and welfare.
4    (g) In order to provide for the expeditious and timely
5implementation of the State's fiscal year 2002 budget,
6emergency rules to implement any provision of this amendatory
7Act of the 92nd General Assembly or any other budget initiative
8for fiscal year 2002 may be adopted in accordance with this
9Section by the agency charged with administering that provision
10or initiative, except that the 24-month limitation on the
11adoption of emergency rules and the provisions of Sections
125-115 and 5-125 do not apply to rules adopted under this
13subsection (g). The adoption of emergency rules authorized by
14this subsection (g) shall be deemed to be necessary for the
15public interest, safety, and welfare.
16    (h) In order to provide for the expeditious and timely
17implementation of the State's fiscal year 2003 budget,
18emergency rules to implement any provision of this amendatory
19Act of the 92nd General Assembly or any other budget initiative
20for fiscal year 2003 may be adopted in accordance with this
21Section by the agency charged with administering that provision
22or initiative, except that the 24-month limitation on the
23adoption of emergency rules and the provisions of Sections
245-115 and 5-125 do not apply to rules adopted under this
25subsection (h). The adoption of emergency rules authorized by
26this subsection (h) shall be deemed to be necessary for the

 

 

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1public interest, safety, and welfare.
2    (i) In order to provide for the expeditious and timely
3implementation of the State's fiscal year 2004 budget,
4emergency rules to implement any provision of this amendatory
5Act of the 93rd General Assembly or any other budget initiative
6for fiscal year 2004 may be adopted in accordance with this
7Section by the agency charged with administering that provision
8or initiative, except that the 24-month limitation on the
9adoption of emergency rules and the provisions of Sections
105-115 and 5-125 do not apply to rules adopted under this
11subsection (i). The adoption of emergency rules authorized by
12this subsection (i) shall be deemed to be necessary for the
13public interest, safety, and welfare.
14    (j) In order to provide for the expeditious and timely
15implementation of the provisions of the State's fiscal year
162005 budget as provided under the Fiscal Year 2005 Budget
17Implementation (Human Services) Act, emergency rules to
18implement any provision of the Fiscal Year 2005 Budget
19Implementation (Human Services) Act may be adopted in
20accordance with this Section by the agency charged with
21administering that provision, except that the 24-month
22limitation on the adoption of emergency rules and the
23provisions of Sections 5-115 and 5-125 do not apply to rules
24adopted under this subsection (j). The Department of Public Aid
25may also adopt rules under this subsection (j) necessary to
26administer the Illinois Public Aid Code and the Children's

 

 

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1Health Insurance Program Act. The adoption of emergency rules
2authorized by this subsection (j) shall be deemed to be
3necessary for the public interest, safety, and welfare.
4    (k) In order to provide for the expeditious and timely
5implementation of the provisions of the State's fiscal year
62006 budget, emergency rules to implement any provision of this
7amendatory Act of the 94th General Assembly or any other budget
8initiative for fiscal year 2006 may be adopted in accordance
9with this Section by the agency charged with administering that
10provision or initiative, except that the 24-month limitation on
11the adoption of emergency rules and the provisions of Sections
125-115 and 5-125 do not apply to rules adopted under this
13subsection (k). The Department of Healthcare and Family
14Services may also adopt rules under this subsection (k)
15necessary to administer the Illinois Public Aid Code, the
16Senior Citizens and Disabled Persons Property Tax Relief Act,
17the Senior Citizens and Disabled Persons Prescription Drug
18Discount Program Act (now the Illinois Prescription Drug
19Discount Program Act), and the Children's Health Insurance
20Program Act. The adoption of emergency rules authorized by this
21subsection (k) shall be deemed to be necessary for the public
22interest, safety, and welfare.
23    (l) In order to provide for the expeditious and timely
24implementation of the provisions of the State's fiscal year
252007 budget, the Department of Healthcare and Family Services
26may adopt emergency rules during fiscal year 2007, including

 

 

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1rules effective July 1, 2007, in accordance with this
2subsection to the extent necessary to administer the
3Department's responsibilities with respect to amendments to
4the State plans and Illinois waivers approved by the federal
5Centers for Medicare and Medicaid Services necessitated by the
6requirements of Title XIX and Title XXI of the federal Social
7Security Act. The adoption of emergency rules authorized by
8this subsection (l) shall be deemed to be necessary for the
9public interest, safety, and welfare.
10    (m) In order to provide for the expeditious and timely
11implementation of the provisions of the State's fiscal year
122008 budget, the Department of Healthcare and Family Services
13may adopt emergency rules during fiscal year 2008, including
14rules effective July 1, 2008, in accordance with this
15subsection to the extent necessary to administer the
16Department's responsibilities with respect to amendments to
17the State plans and Illinois waivers approved by the federal
18Centers for Medicare and Medicaid Services necessitated by the
19requirements of Title XIX and Title XXI of the federal Social
20Security Act. The adoption of emergency rules authorized by
21this subsection (m) shall be deemed to be necessary for the
22public interest, safety, and welfare.
23    (n) In order to provide for the expeditious and timely
24implementation of the provisions of the State's fiscal year
252010 budget, emergency rules to implement any provision of this
26amendatory Act of the 96th General Assembly or any other budget

 

 

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1initiative authorized by the 96th General Assembly for fiscal
2year 2010 may be adopted in accordance with this Section by the
3agency charged with administering that provision or
4initiative. The adoption of emergency rules authorized by this
5subsection (n) shall be deemed to be necessary for the public
6interest, safety, and welfare. The rulemaking authority
7granted in this subsection (n) shall apply only to rules
8promulgated during Fiscal Year 2010.
9    (o) In order to provide for the expeditious and timely
10implementation of the provisions of the State's fiscal year
112011 budget, emergency rules to implement any provision of this
12amendatory Act of the 96th General Assembly or any other budget
13initiative authorized by the 96th General Assembly for fiscal
14year 2011 may be adopted in accordance with this Section by the
15agency charged with administering that provision or
16initiative. The adoption of emergency rules authorized by this
17subsection (o) is deemed to be necessary for the public
18interest, safety, and welfare. The rulemaking authority
19granted in this subsection (o) applies only to rules
20promulgated on or after the effective date of this amendatory
21Act of the 96th General Assembly through June 30, 2011.
22    (p) In order to provide for the expeditious and timely
23implementation of the provisions of Public Act 97-689,
24emergency rules to implement any provision of Public Act 97-689
25may be adopted in accordance with this subsection (p) by the
26agency charged with administering that provision or

 

 

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1initiative. The 150-day limitation of the effective period of
2emergency rules does not apply to rules adopted under this
3subsection (p), and the effective period may continue through
4June 30, 2013. The 24-month limitation on the adoption of
5emergency rules does not apply to rules adopted under this
6subsection (p). The adoption of emergency rules authorized by
7this subsection (p) is deemed to be necessary for the public
8interest, safety, and welfare.
9    (q) In order to provide for the expeditious and timely
10implementation of the provisions of Articles 7, 8, 9, 11, and
1112 of this amendatory Act of the 98th General Assembly,
12emergency rules to implement any provision of Articles 7, 8, 9,
1311, and 12 of this amendatory Act of the 98th General Assembly
14may be adopted in accordance with this subsection (q) by the
15agency charged with administering that provision or
16initiative. The 24-month limitation on the adoption of
17emergency rules does not apply to rules adopted under this
18subsection (q). The adoption of emergency rules authorized by
19this subsection (q) is deemed to be necessary for the public
20interest, safety, and welfare.
21    (r) In order to provide for the expeditious and timely
22implementation of the Grant Accountability and Transparency
23Act, the Governor's Office of Management and Budget may adopt
24emergency rules to implement the provisions of that Act for a
25period of one year after the effective date of this amendatory
26Act of the 98th General Assembly. Should changes to the rules

 

 

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1be required by the review mandated by Section 65 of the Grant
2Accountability and Transparency Act, the Governor's Office of
3Management and Budget may adopt such peremptory rules as are
4necessary to comply with changes to corresponding federal
5rules. All other rules that the Governor's Office of Management
6and Budget deems necessary to adopt in connection with the
7Grant Accountability and Transparency Act must proceed through
8the ordinary rule-making process. The adoption of emergency
9rules authorized by this subsection (r) shall be deemed to be
10necessary for the public interest, safety, and welfare.
11(Source: P.A. 97-689, eff. 6-14-12; 97-695, eff. 7-1-12;
1298-104, eff. 7-22-13; 98-463, eff. 8-16-13.)
 
13    Section 505. The Governor's Office of Management and Budget
14Act is amended by changing Section 2 and by adding Sections
152.8, 2.9, and 2.10 as follows:
 
16    (20 ILCS 3005/2)  (from Ch. 127, par. 412)
17    Sec. 2. There is created in the executive office of the
18Governor an Office to be known as the Governor's Office of
19Management and Budget. The Office shall be headed by a
20Director, who shall be appointed by the Governor. The functions
21of the Office shall be as prescribed in Sections 2.1 through
222.10 2.7 of this Act.
23(Source: P.A. 93-25, eff. 6-20-03.)
 

 

 

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1    (20 ILCS 3005/2.8 new)
2    Sec. 2.8. Pursuant to the Grant Accountability and
3Transparency Act, to create, on or before July 1, 2014, a
4centralized grants management unit within the Office. The
5centralized grants management unit shall report directly to the
6Director of the Governor's Office of Management and Budget.
 
7    (20 ILCS 3005/2.9 new)
8    Sec. 2.9. Pursuant to the Grant Accountability and
9Transparency Act, to maintain a list of those individuals and
10entities that are ineligible, either temporarily or
11permanently, to receive an award of grant funds from the State.
 
12    (20 ILCS 3005/2.10 new)
13    Sec. 2.10. To adopt rules on or before December 31, 2015
14necessary to comply with the Grant Accountability and
15Transparency Act.
 
16    (30 ILCS 705/4.2 rep.)
17    Section 510. The Illinois Grant Funds Recovery Act is
18amended by repealing Section 4.2.
 
19    Section 515. The Illinois Grant Funds Recovery Act is
20amended by changing Section 15 and by adding Section 16 as
21follows:
 

 

 

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1    (30 ILCS 705/15)
2    (Section scheduled to be repealed on April 1, 2014)
3    Sec. 15. Illinois Single Audit Commission.
4    (a) There is created the Illinois Single Audit Commission.
5The Commission shall conduct research regarding the practices
6of the federal government in the administration of grants and
7create a report summarizing the Commission's recommendations
8regarding the adoption of uniform standards for the
9administration of grants in this State.
10    (b) The Commission shall be comprised of one representative
11from each of the following grant-making Departments who is an
12expert in grant subject matter, and who shall be appointed by
13the Governor, one of whom shall be designated as Chairperson:
14        (1) Department on Aging;
15        (2) Department of Children and Family Services;
16        (3) Department of Healthcare and Family Services;
17        (4) Department of Human Services;
18        (5) Department of Public Health;
19        (6) Criminal Justice Information Authority;
20        (7) Department of Commerce and Economic Opportunity;
21        (8) Department of Transportation;
22        (9) Illinois State Board of Education;
23        (10) Illinois Student Assistance Commission;
24        (11)Department of Agriculture;
25        (12) Environmental Protection Agency; and
26        (13) Department of Natural Resources.

 

 

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1    In addition, a total of 4 representatives of community
2organizations, providers, or associations may be appointed by
3the Departments listed in subsection (b) as follows: 1 member
4may be appointed by the Departments listed in subparagraphs (1)
5through (6); 1 member may be appointed by the Departments
6listed in subparagraphs (7) and (8); 1 member may be appointed
7by the Departments listed in subparagraphs (9) and (10); and 1
8member may be appointed by the Departments listed in
9subparagraphs (11) through (13).
10    Should any of the Departments listed in subparagraphs (1)
11through (13) of subsection (b) deem that additional
12representation by community organizations, providers, or
13associations is necessary, and the Commission as a whole is in
14concurrence with this decision, the Department or Departments
15may appoint additional members, provided, however, that no more
16than a total of 4 such additional members may be appointed to
17the Commission.
18    The Governor may designate representatives of additional
19Departments with grant-making authority to serve as members of
20the Commission.
21    (c) The Commission shall also include: a representative of
22the Governor's Office of Management and Budget, appointed by
23the Governor; four members of the General Assembly, one from
24the House Democratic Caucus, one from the House Republican
25Caucus, one from the Senate Democratic Caucus, and one from the
26Senate Republican Caucus, all of which shall be appointed by

 

 

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1the Governor; the Co-Chairs of the relevant subcommittees
2within the Management Initiative Improvement Committee
3(provided for under Section 1-37a of the Department of Human
4Services Act) may be included as members of the Commission if
5the Commission deems their inclusion necessary for the
6coordination of its efforts.
7    (d) The recommendations in the Commission's report shall
8focus primarily on developing a coordinated, non-redundant
9process for the provision of effective and efficient oversight
10of the selection and monitoring of grant recipients, ensuring
11quality programs, and limiting fraud, waste, and abuse. The
12report shall define the purpose, scope, applicability, and
13responsibilities in the life cycle of a grant, including the
14period before a grant is awarded, the period when a grant is
15awarded, and the period after a grant is awarded, as set forth
16in subsections (e) through (g) of this Section. To the extent
17feasible, the Commission's report shall include necessary
18statutory and rule changes required to implement any proposed
19actions.
20    (e) The report shall examine and make recommendations for
21the following with regard to a grant before it is awarded:
22        (1) criteria to define mandatory formula-based grants
23    and discretionary grants;
24        (2) whether three-year discretionary grants should
25    exist in a competitive grant environment;
26        (3) the development of uniform grant applications;

 

 

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1        (4) the development of uniform budget requirements;
2        (5) the development of pre-qualification requirements
3    of applicants, including the fiscal condition of the
4    organization;
5        (6) the development of minimum requirements of
6    applicant staff to manage and execute grant awards for
7    programmatic and administrative purposes;
8        (7) the development of criteria for requiring the
9    retention of a fiscal agent and for becoming a fiscal
10    agent; and
11        (8) the development of disclosure requirements
12    pertaining to related party status between grantees and
13    grant-making agencies.
14    (f) The report shall examine and make recommendations for
15the following with regard to a grant at the time it is awarded:
16        (1) the development of uniform grant agreements;
17        (2) the development of uniform reporting requirements,
18    including budget-to-actual quarterly reports;
19        (3) the implementation of uniform monitoring,
20    including on-site fiscal and administrative control
21    reviews on a risk-based approach to determine the required
22    frequency of monitoring;
23        (4) the development of payment methods, including
24    advance and reconcile, capital advances, and
25    reimbursement;
26        (5) the development of administrative requirements;

 

 

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1        (6) the development of allowable cost principles;
2        (7) the development of a conditional exemption
3    process;
4        (8) the development of standardized audit
5    requirements;
6        (9) the development of program performance reporting
7    and budgeting for results;
8        (10) the development of record retention and access
9    requirements; and
10        (11) the development of grant termination and
11    enforcement procedures.
12    (g) The report shall examine and make recommendations for
13the following with regard to a grant after it has been awarded:
14        (1) the development of standardized closeout
15    procedures;
16        (2) the development of standardized audit
17    requirements;
18        (3) the development of subsequent grant adjustments
19    and continuing responsibilities;
20        (4) the development of a uniform method of grant
21    recovery; and
22        (5) the development of an appeals process.
23    (h) The report shall be filed with the General Assembly by
24January 1, 2014.
25    (i) Definitions. As used in this Section:
26        "Departments" means the agencies, boards, and

 

 

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1    commissions listed in subparagraph (b) of this Section,
2    including any additional Departments designated by the
3    Governor.
4        "Grant" means an award of financial assistance, the
5    principal purpose of which is to transfer a thing of value
6    from a federal or state agency to a recipient to carry out
7    a public purpose of support or stimulation authorized by a
8    law of the United States or the State of Illinois. A grant
9    is distinguished from a contract, which is used to acquire
10    property or services for the federal or State government's
11    direct benefit or use as defined in Section 210 of Subpart
12    B of federal Office of Management Board Circular A-133.
13    Notwithstanding subparagraph (b) of Section 2 of this Act,
14    fee-for-service purchase of care agreements are grants for
15    purposes of this Section.
16        Technical terms used in subsections (e) through (g)
17    shall have the same meanings as provided for by their usage
18    or definition in federal Office of Management Board
19    Circular A-110.
20    (j) The Commission shall operate with no direct costs to
21the State. The Office of the Governor shall coordinate with the
22Departments listed under subsection (b) to provide
23administrative support for the Commission.
24    (k) This Section is repealed on December 31 April 1, 2014.
25(Source: P.A. 98-47, eff. 7-1-13.)
 

 

 

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1    (30 ILCS 705/16 new)
2    Sec. 16. Supersession. On and after July 1, 2015, in the
3event of a conflict with the Grant Accountability and
4Transparency Act, the Grant Accountability and Transparency
5Act shall control.
 
6    Section 997. Severability. The provisions of this Act are
7severable under Section 1.31 of the Statute on Statutes.
 
8    Section 999. Effective date. This Act takes effect upon
9becoming law.

 

 

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1 INDEX
2 Statutes amended in order of appearance
3    New Act
4    5 ILCS 100/5-45from Ch. 127, par. 1005-45
5    20 ILCS 3005/2from Ch. 127, par. 412
6    20 ILCS 3005/2.8 new
7    20 ILCS 3005/2.9 new
8    20 ILCS 3005/2.10 new
9    30 ILCS 705/4.2 rep.
10    30 ILCS 705/15
11    30 ILCS 705/16 new