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2.1 Application Process

Financial Analysis

DOJ will complete a financial review of the grant application to ensure that recipients are financially capable and have the financial integrity to administer Federal funds. As part of this review, each grant-making component will take all of the following steps:

  • Perform a cost analysis of the project (may not be applicable to some formula programs).
    • Obtain cost breakdowns, verify cost data, evaluate specific elements of cost, and examine data to determine the necessity, reasonableness, allowability, allocability, and appropriateness of the proposed cost.
  • Review the current indirect cost rates approved by DOJ or rates approved by other Federal agencies.
    • If the indirect cost rate has expired, the rate must be negotiated with the cognizant Federal agency. A current negotiated cost rate may be extended for up to four years. Once the cognizant agency has approved the extension, the rate must be used for the entire agreed-upon time period. No further negotiations regarding indirect cost rates may occur until the extension has expired. At the end of the extension period a new indirect cost rate must be negotiated. Subsequent one-time extensions for up to four years are permitted if a renegotiation is completed between each extension request.
    • Non-Federal entities that have never received a negotiated indirect cost rate, except for those non-Federal entities described in Appendix VII to 2 C.F.R. Part 200—States and Local Government and Indian Tribe Indirect Cost Proposals, may elect to negotiate a rate or, if eligible, charge a de minimis rate of 10% of modified total direct costs (MTDC) which may be used indefinitely.
  • Determine the adequacy of the accounting system and operations to ensure that Federal funds, if awarded, will be expended in a reasonable manner.
    • Non-Federal entities that have not received an award within the past 3 years may require an additional financial review.
  • Review the status of any Federal debt that the applicant may have to ensure the debt is not delinquent, and other prescreening information, including checking SAM to ensure the organization is not suspended or debarred from receiving Federal funds.