§300ff–31a Timeframe for obligation and expenditure of grant funds

Summary

Starting in fiscal year 2007, grant money given to a State under sections 300ff–28(a)(1) or 300ff–28(a)(2)(F), or under sections 300ff–29a or 300ff–30, must be obligated by the State within one year from the date the money first becomes available to the State. That one-year period is called the “grant year.” If certain awards (those under 300ff–28(a)(2)(F)(ii), or awards under 300ff–29a or 300ff–30) still have money left unspent at the end of the grant year, the Secretary will cancel the unspent balance, require the State to return any amounts already paid out, and then reallocate those funds as extra amounts for grants under section 300ff–29a for the next appropriate fiscal year (subject to the rule in 300ff–28(a)(2)(H)). For some other awards (under 300ff–28(a)(1) or 300ff–28(a)(2)(F)(i)), the State can apply in writing before the grant year ends for a waiver to keep unspent funds. The application must say how the State plans to spend the money, and the Secretary must approve the waiver. If approved, the State gets one extra year (a “carryover year”) to spend the funds. If the money is still unspent after that carryover year, the Secretary cancels it, requires return, and reallocates it like above. When a balance is found unspent, the Secretary will reduce the State’s next-year grant by that amount (minus any approved waiver amount) and use the reduced money for extra 300ff–29a grants, with certain limits under 300ff–28(a)(2)(H). Drug rebate funds for ADAP are not counted as part of a grant award, and a State may ask the Secretary to treat rebate spending as reducing its unspent balance to avoid penalties. Instead of canceling funds, the Secretary may also choose to cut future grant payments by the unspent amount and let the State use the balance for those future grants; that reduced amount is then made available for 300ff–29a grants and the Secretary still keeps the waiver and other authorities described above.