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Senate of Pennsylvania
Session of 2021 - 2022 Regular Session


Posted: January 19, 2021 12:32 PM
From: Senator Kristin Phillips-Hill
To: All Senate members
Subject: Ensuring Effective Use of State Grants
In the near future, I will introduce legislation that will require Commonwealth-awarded grants to contain strong and detailed provisions to ensure taxpayer funds are committed only to projects with clearly delineated grantee commitments and obligations, and provide claw-back authority for recapturing surplus / excess taxpayer provided funds.

In November of 2017, the Office of the Auditor General issued the results of an audit of a $10 million dollar state grant from Department of Economic and Community Development. Among the audit findings were the absences of a claw-back provision in the agreement requiring the Commonwealth to be the payer of last resort, and provisions that state money must be used only after all privately raised funds have been expended. In fact, this audit found a surplus of $2.5 million dollars, none of which was refunded to taxpayers.

The audit concluded that state agencies need to improve their exercise of due diligence in the awarding and monitoring of state grants, and recoupment of taxpayer dollars in the case of a surplus of funds.

My legislation implements several of the Auditor General’s recommended reforms, including:
  • State funds are to be used only after all other sources of funding are exhausted.
  • State grant funds used to contract for services or products costing in excess of $10,000 shall be competitively bid.
  • If the total sum of funds received from all (state, federal and private) project funding sources exceeds the total cost projected in the application for the state grant, surplus funds received up to the amount provided by the state shall first be returned to the state to repay the Commonwealth grant funds, with interest.

In addition, this legislation will ensure:
  • For state grants, submissions must include written documentation to ensure that due diligence has been performed by the entity requesting Commonwealth funds to include a search for other funding sources.
  • Commonwealth grant applications for projects which seek additional funds from private or non-state sources must list those funding sources, and detail the specific sub-project or category to which the Commonwealth grant funds will be applied.
  • A rigorous on-going monitoring program must be specified in the grant language to include frequent verification of compliance at regular intervals during the duration of the grant to ensure all commitments are being met by the awardee.
  • No state grant funds may be used to award bonuses to any person or other entity.
  • Close-out audits of Commonwealth grants must be performed with precision and rigor.
These measures will help ensure our taxpayer dollars are spent prudently and responsibly on worthy projects and surplus funds are recouped.

Please join me in co-sponsoring this important piece of legislation.

Introduced as SB250