Levels of Noncompliance
There are three levels of noncompliance, each with a progressively increasing level of corrective action. At any level in the noncompliance process, grantees that correct their deficiencies by complying with the established standards may return to a status of compliance. If at any time a grantee receives a noncompliance notification from the Department of Commerce, but the grantee has already submitted a required report, a required deliverable or has corrected the stated deficiency, the grantee should immediately contact the grant manager listed in the Welcome Package to discuss the noncompliance situation.
The first level of noncompliance results in an automatic e-mail or hard-copy letter informing the grantee that a specific deliverable is past due, or another grant requirement has not been met, and that the grantee has fourteen days from the original due date to resolve the issue and avoid the second level of noncompliance. If, following this notice, the grantee submits the required deliverable, or submits documentation of the completion of the previously unresolved grant requirement, Department program staff will review it for sufficiency. If program staff finds the deliverable sufficient, the grant status returns to compliance. If grant deficiencies cannot be resolved, the grantee is escalated to the second level.
The second level of noncompliance begins on day fifteen if the grantee has not met the requirements or is not showing progress toward compliance. On day fifteen, the Department of Commerce sends the grantee a notice that cash and future funding are suspended. The Department grants management system is updated for grantees that have reached the second level, by establishing what is known as a “FEIN Lock”. The FEIN lock prevents the Department from making payments to the grantee. The FEIN lock also prevents the Department from processing any future grants for the noncompliant grantee. As in the first level of noncompliance, grantees have the opportunity to submit the necessary items and/or complete the necessary tasks to achieve the status of compliance. Timely and effective communication between Department program staff and the grantee is critical to ensure a clear understanding of the corrective actions that are necessary. Proper and thorough action by a grantee will help the grantee to regain their status of compliance with the Department and to restore funding. If grant deficiencies are not resolved, the grantee is escalated to the third level of noncompliance.
The third level of noncompliance begins thirty days after the grantee has first been placed in the noncompliant status. In the third level, the grantee will be in Legal referral status and the Office of General Counsel may initiate grant recovery efforts in accordance with Illinois Grant Funds Recovery Act (30 ILCS 705). When a grant reaches level three noncompliance, the entity no longer receives reminders on past due reports for the grant in Legal referral status. However, if the entity has more than one grant, the other grants continue to receive reminders/notifications of grantee noncompliance issues.
At the third level, the Department of Commerce may begin grant funds recovery action as permitted by the Illinois Grant Funds Recovery Act. The Office of General Counsel may initiate the Grant Funds Recovery Process based on the specific circumstances of the case.
In situations where grantee fraud is suspected or evidenced, cases are automatically referred to the Illinois Attorney General’s Office for immediate investigation and potential legal action.
I am a Grantee... what should I do to avoid Noncompliance?
The grantee’s responsibility is to comply with the terms and conditions of the executed Grant Agreement, which also includes the requirements described in the grantee’s Welcome Package. The Grant Agreement as well as the Welcome Package, which includes the Report Deliverable Schedule, is a binding legal contract. Grantees that received grant awards from the Department were selected based on their application. Therefore, grantees should continue to work toward their goals and objectives as stated in the application and incorporated into the Grant Agreement.
It will benefit all grantees to understand the content of their Grant Agreement, including the specific monitoring and reporting requirements and Scope of Work.
Grantees will find it easier to avoid the noncompliance status when they maintain ongoing communication with their assigned grant manager. Grantees should continually reach out to Department staff about any issues or concerns that may arise in meeting the requirements of the grant.
Grantees are required to retain all documentation to support how Department grant funds are spent.
Reporting requirements may vary by grantee, but all grantees will be required to support that funds were spent properly and in accordance with the Grant Agreement.