3050 Compliance with Contractor Responsibilities and Sanctions

Georgia State Seal

Georgia Division of Aging Services
Administrative Manual

Chapter:

3000 Area Agency on Aging (AAA) Administration

Effective Date:

M\09/07/2023

Section Title:

Compliance with Contractor Responsibilities and Sanctions

Reviewed or Updated in:

MT 2024-01

Section Number:

3050

Previous Update:

MT 2014-02

Summary Statement

Area Agencies shall comply with all Contractor Responsibilities as required by Federal law and regulation, state law and regulation, and policies of the Department of Human Services and the Division of Aging Services, as applicable and as updated. The Division of Aging Services shall impose Sanctions as necessary.

Scope and Background

This manual section outlines the general policies and procedures to be used by the Division of Aging Services (DAS) in assessing compliance by Area Agencies on Aging (AAA), and their subcontractors, with requirements and responsibilities and developing appropriate performance-based rewards or sanctions, relative to contract compliance status.

The AAAs shall convey the requirement and application of these policies to their subcontractors through appropriate contract language. The AAAs must monitor for compliance by their subcontractors and will be held responsible for enforcement upon their subcontractors. Should there be findings of non-compliance with the terms of a contract which governs the use of monies appropriated under that contract, DAS may take such actions, described in this section, as may be legally available and appropriate to the circumstances.

This section outlines the potential sanctions which can be levied for non-compliance with contract terms and conditions, Division policies, and applicable laws and regulations.

Definitions

Definitions for terms used in this section shall have the following meanings, unless the context clearly indicates otherwise.

Sanction – a punitive or coercive measure or action resulting from failure to comply with a law, rule, policy, or other requirement.

Levels of Sanctions – depending upon the nature, extent, and/or repetitive nature of the infraction, a sanction will be categorized by defined Level. Note that more than one Sanction of a lower level will then elevate to the next higher Level of Sanction.

Corrective action plan – plan submitted to DAS for review by a AAA after notification of a sanction wherein the AAA identifies the actions to be taken to correct the deficiencies or non-compliance which caused the Sanction, including a timeline. DAS will notify the AAA if the Corrective Action Plan is deemed acceptable.

Administrative payments- Payments for general administration of an Area Agency on Aging, including any indirect cost recovery.

Certified- When used in conjunction with performance measure testing, describes having obtained acceptable results, within parameters established by the Division, for data tested.

Discretionary funds- Any funds issued by the Division that are not awarded based on a general funding formula or not awarded to all Area Agencies by the Division.

Extension- An approved request, submitted to the Division on or before the original due date, to submit required reports or other required information, later than the established due date,
and granted at the discretion of the Division for good cause shown.

Preventative Measures

Preventive measure activities or approaches, developed to ensure achievement of desired program outcomes and provide fiscal accountability, include technical assistance, procedural issuances and policy manual issuances, timely and effective program and fiscal monitoring, performance measure testing, and quality reviews.

Technical assistance is always available to any AAA by request, but also may be recommended by the State Agency as is determined by performance and outcome-based data measure, specifically by a decline in such measures. Specified Division staff with appropriate programmatic, technical and/or administrative expertise will provide technical assistance for administrative, programmatic, and fiscal issues. Training is included as a preventive measure, to the extent that resources are available to arrange for and provide such training.

Manual issuances provide clarification and interpretation of federal and state requirements and are performance-driven and outcome-based. They may relate to both programmatic and
fiscal issues.

Program and Fiscal Monitoring assistance by the State Agency may include site visits, desk reviews and analysis of both financial and program outcomes to help identify potential weaknesses before such weaknesses result in sub-standard performance or questioned costs. Monitoring may result in recommendations that provide practical solutions that can be used to take immediate corrective action.

Performance measure testing is conducted to determine the accuracy (including completeness) of data submitted to the Division and to assess the quality of the controls in place to ensure the consistency of accurate and well-documented data.

Quality reviews include the routine evaluation of essential quality indicators and certification systems and will be enhanced with timely and relevant training and technical assistance to help develop and maintain the knowledge, skills and abilities required across all program lines.

Contractor Responsibilities

Contractors are responsible for compliance with the terms of the contract. ‘Contractor' is used generally in this section to refer to both Area Agencies and their subcontractors. Area
Agencies will substitute “the AAA” for “the Division” in applying these requirements to subcontractors.

Contractors will:

  • Comply, as applicable, with all governing documents;

  • Comply with the requirements of approved contracts or plans;

  • Meet the administrative and service requirements established by DHS/DAS, including, but not limited to, all budget documents and required reporting in a timely, complete and accurate manner, consistent with policies in MAN 5600, Chapters 2000 and 3000

  • Respond to requests by the Division for specific correction such as but not limited to results from:

    • The area plan or area plan amendment review;

    • Program and fiscal reviews, monitoring, and/or assessments;

    • Investigation and response to complaints; or

    • Erroneous or incomplete information on program performance or financial reports.

  • Respond to or comply with corrective action plans as requested or required by the Division.

Sanctions

Administrative violations shall result in disciplinary and/or corrective actions as specified in this section, unless the violation occurred as a result of an act of God or action by the
DHS/DAS.

DAS is responsible for documenting violations. Higher levels of administrative sanctions will be applied for non-compliance issues deemed most serious, and for continued noncompliance, including failure to take appropriate corrective action, for less serious issues.

The Division may apply sanctions which can be both progressive and/or cumulative in nature.

Each violation that may qualify as a sanction will be categorized as determined by the Department to fall into one of the following levels. The Department will take into account the willfulness of the action, what the AAA knew or should have known, and other circumstances surrounding the infraction in determination of which level of sanction to impose.

Level One Sanction: The sanction that the Division may impose as a response to a contractual breach and/or failure to comply with Division policies and procedures and specific state and federal requirements.

Violations which may result in the imposition of Level One sanctions include, but are not limited to, the following:

  • Failure to satisfactorily resolve an identified contractual breach within specified time frames;

  • Failure to submit a required report by the due date or date of approved extension;

  • Failure to submit required reports accurately and completely, if identified by the Department (not to exceed two instances in one fiscal year), and not corrected within five workdays following notification;

  • Failure, on the third occurrence, to submit required reports accurately and completely, if identified by the Department, whether or not a violation notice was previously issued;

  • Failure to submit timely an acceptable corrective action plan for findings of program and fiscal monitoring within forty-five (45) calendar days;

  • Failure to conduct an appropriate audit review process for required provider audits;

  • Failure to resolve deficiencies noted in an audit review within timeframes established by contract.

Level One Sanctions may result in one or more of the following actions:

  • Requiring the development, submission, and implementation of an acceptable corrective action plan to address identified weaknesses, contractual breaches, and/or non-compliance;

  • Submission of additional and/or more detailed financial and/or performance reports;

  • Designation as a high-risk contractor, requiring additional monitoring visits;

  • Repayment of disallowed costs; and

  • Requiring directed amendments to current area plans or subcontract proposals.

Level Two Sanction: The sanction that the Division may impose as a response to a severe problem and the potential negative impact that such a problem may have on a contractor agency’s region or on the State.

Violations which may result in the imposition of Level Two sanctions include, but are not limited to, the following:

  • Failure to rectify any level one sanction within the timeframe established for corrective action;

  • Failure to complete in a timely manner any corrective actions provided in any corrective action plan;

  • Failure to submit in a timely manner a Single Audit, in accordance with OMB Circular A-133, to the Department;

  • Failure to be certified as having had accurate data following performance measure testing;

  • Failure to conduct on-site monitoring of providers as required;

  • Failure to issue letters of findings within thirty (30) calendar days following on-site monitoring or quality assurance review (QAR) of service providers; and

  • Failure to assure contractor’s resolution of deficiencies found during service provider’s monitoring/quality assurance review within the timeframes established in the corrective action plan.

Level Two Sanctions may result in one or more of the following actions:

  • Imposition of one or more Level One Sanctions;

  • Restrictions on ability to draw down contractor/Area Agency administrative funds, including suspension or termination of area planning funding, with notice of such action to the agency director, the agency director’s superior (if applicable), and the agency’s board chairperson, or comparable agency official;

  • Prohibition of participation in discretionary funds application process;

  • Imposition of required technical assistance

Level Three Sanction: The sanction that the Division may impose with a severe and/or continued failure to comply with contractual requirements, Division policies and procedures, and/or state and/or federal laws may affect service delivery and/or contractor agency financial stability.

Violations which may result in the imposition of Level Three sanctions include, but are not limited to, the following:

  • Failure to rectify any Level One sanction within ninety (90) calendar days following the timeframe established for corrective action;

  • Failure to rectify any Level Two sanction within the timeframe established for corrective action;

  • Failure to appropriately act upon reported or identified threats to the health and safety of program participants, within established timeframes, as follows:

    • Immediately, or on the next business day, when an immediate threat to life and safety of participants is reported or identified;

    • Within seventy-two (72) work hours, when there is some risk to health or safety, which is considered not to be life threatening;

    • Within seven (7) work days for all other reports or risks identified.

  • Failure to appropriately report and respond to allegations of abuse, neglect and/or exploitation, and/or allegations of fraud or ethics code violations; Refer to MAN 5300, Section 200, General and Individual Services requirements, regarding mandatory reporting of suspected abuse, neglect, or exploitation of participants. Provider staff is considered to be mandated reports as defined in O.C.G.A 30-4, Protection of Disabled Adults and Elder Persons. AAAs which provide direct services, including case management, will be subject to mandated reporting.

  • Failure to have tested data certified as accurate two times out of any four consecutive performance measure tests; and

  • Occurrence of four or more Level One violations or three or more Level Two violations within the same fiscal year.

Level Three Sanctions may result in one or more of the following actions:

  • Imposition of one or more Level One and/or Level Two sanctions;

  • Prohibition or limitation of the provision of direct services by the Area Agency;

  • Prohibition of or limitation on the use of specific service providers/vendors;

  • Imposition of the requirement that reimbursement payments made to Area Agency/contractor for the remainder of the fiscal year shall only be made following submission of bills paid or other documentation to show that bills for which reimbursement is sought have been paid

Level Four Sanction: The sanction that the Division may impose where a severe and/or continued failure to comply with contractual requirements, Division policies and procedures, and/or state and/or federal laws continue to go uncorrected.

Violation which may result in the imposition of Level Four sanctions include, but are not limited to, the following:

  • Failure to rectify any Level One sanction within 180 calendar days following the timeframe established for corrective action;

  • Failure to rectify any Level Two sanction within 90 calendar days following the timeframe established for corrective action; and

  • Failure to rectify any Level Three sanction within the timeframe established for corrective action.

Level Four Sanctions may result in one or more of the following actions:

  • Imposition of one or more Level One, Two or Three sanctions;

  • Withdrawal of designation and/or cancellation of the Area Agency or provider contract.

Notice of Pending Action

DAS is responsible for providing adequate and timely notice of pending actions, including sanctions, according to the following guidelines.

The date of notice shall be the date the notice is sent to the contractor via email.

All notices of violations will be sent by the following methods:

  • Email for all notices; and

  • Letter by postal mail for violations subject to a Level One and Level Two sanction or, for violations subject to a Level Three and Level Four sanction, by postal mail, return receipt requested, or by commercial delivery services with signature of receipt required.I

All notices will be addressed to:

  • The agency’s/contractor’s Executive Director or designated representative;

  • The Director of the Area Agency on Aging; and

  • The agency’s/contractor’s Board Chair or comparable agency official.

The Division must preserve all email notifications on the j-drive in an appropriately labeled folder. A pdf of the email must be included.

Fraud

All allegations of fraud will be investigated by the Department or other agency(ies) with jurisdiction. Complaints will be referred to the appropriate agency for action. Since payments to contractors are made from both State and Federal funds, submission of false or fraudulent claims, statements, documents, or the concealment of a material fact may be prosecuted as a felony in either Federal or State Court.

The Department/Division will inform the agency/contractor of the exact nature of the complaint and may require the contractor to conduct its own internal investigation.

The Department will document its investigation’s findings and conclusions and inform the contractor and the complainant of the results. If an investigation substantiates fraud, the Department will require the contractor to take corrective action and/or refer the complaint to the Georgia Attorney General’s Office, the United States Attorney General’s Office and other appropriate law enforcement agencies.

Ethics Code

The Department/Division is bound by the Code of Ethics for Government Service and expects all contractors, including area agencies on aging and their sub-contractors to abide by the same. (See Appendix 93-B) Violations of the Ethics Code requirements will be investigated by the Department and referred by the Department to the appropriate law enforcement agency. Ethics violations may result in criminal prosecution and may be pursued based on the provisions of pertinent laws and regulations.

The Department will inform the contractor of the exact nature of the complaint and may require the contractor to conduct its own internal investigation.

The Department will document its investigation’s findings and conclusions and inform the contractor and the complainant of the results. If an investigation indicates there is a substantiated situation in which there is a question of ethics code violations, the Department will require the contractor to take corrective action and/or refer the complaint to appropriate law enforcement agencies.

Refer to Official Code of Georgia Annotated section 45-10-1.

Abuse, Neglect, Exploitation

Abuse, neglect, exploitation, and other violations of client rights will be reported by the Department/Division to the appropriate authorities.

Other Remedies

The Department /Division may take and/or impose other remedies that are legally available based on the circumstances involved.

Procedures for Suspension or Termination of Area Plan Funding

Suspension: Suspension of area plan and funding.

The Division may temporarily suspend state or federal assistance under an approved area plan, pending corrective action by the Area Agency or pending a decision by the Division to terminate the contract.

When conditions warrant, the Division may suspend area plan operations in whole or in part. Such conditions would result from the Area Agency’s failure to comply with contract award stipulations, standards, or conditions.

To suspend area plan operations, the Division shall notify the Area Agency in writing of the action being taken, the reason for such action, and the conditions of the suspension. This notice shall be given at least thirty (30) days prior to the effective date of suspension and shall note the right of the Area Agency to appeal this decision, and the procedures to be followed for such an appeal.

The Division shall grant to any Area Agency whose plan has been suspended, in whole or in part, an opportunity for reconsideration of the decision.

The Division may, at its discretion, allow federal financial participation in necessary and proper costs that the Area Agency could not reasonably avoid during the period of suspension.

In suspending area plan operations, the Division shall determine the amount of unearned Title III funds the agency has on hand. The anticipated length of suspension, the extent of area plan operations suspended and the amount of fund balance on hand will determine whether the Division will require the agency to return the balance.

The Division may, at its discretion, reinstate the suspended area plan operation if it determines that conditions warrant such action.

Federal participation in reinstated area plan operations may resume immediately upon reinstatement, but not for any costs accrued for those area plan operations while they were suspended. The authority to obligate funds resumes upon reinstatement at the previously established matching ratio.

If the suspension of area plan operations continues for three (3) consecutive months in any budget year, federal funding of the area plan operations is automatically suspended.

Termination: Termination of area plan funding

The termination of funding means the cancellation of state or federal assistance, in whole or in part, under a contract at any time prior to the date of completion.

The Division may terminate state or federal support for an area plan prior to the end of an approved budget/fiscal year or project period if:

  • The Area Agency violates the conditions under which the contract was approved;

  • Program performance is inadequate; or

  • Non-federal resources are not available.