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    Default Grant for previous purchase???

    I am curious about something. Is it possible to Apply for and win a grant to pay for something you already have? The reason I am is asking is because I think a local department may have done this. They asked for a grant and won it a few weeks ago, but the problem is they had the item and paid for it like a year and a half ago.

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    The answer to that question will depend on what their intent was. If they were trying for a second piece of equipment to equip another piece of apparatus, then applying for it and winning the grant is no problem.

    If their intent was to recieve a grant to reimburse the prior purchase, the answer is no. A department can not purchase and recieve equipment prior to the award.

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    OK, so what they obviously did was wrong. Any idea on how to report fraud?

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    How is this obvious that it is fraud?

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    It's not, but worth getting some answers. The question is: are they still buying something with the grant funds? Since we don't know what the "thing in question" is, I'll use a TIC since it's a short word.

    Basically the litmus test is what they do now. If they do not buy another TIC, claim that they were forced to buy one last year, so the grant is now paying them back, then it's fraud. If they pocket the money, fudge paperwork for the audit to cover the prior purchase, then it's fraud. If they claimed in their application narrative that they didn't have one, then it's fraud also.

    If they applied for a 2nd TIC because of a need for one (2nd station, busy single station, etc), then there's no fraud.

    We'd need to know more specifics. You don't want to go dropping dimes with no basis, but you definitely want to report fraud now rather than later. At least if things are caught now, then the money can popssibly go back in the pot. If it's caught at audit time, the equipment and money it represents goes away, no chance for the next person in line to get it.

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    What would be more of a fraud would be when a company applies for an apparatus grant saying they have no money to buy a new tanker when they already have a contract with some Florida truck manufacturer to buy a rescue pumper.

    But that might be a total fabrication and not something that really happened with a neighboring company. (TIC)
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    I don't want to name the specifics here for fear of someone figuring out what I am talking about. So I will also use a TIC as the peice of equipment.

    This department had a TIC that was very old and outdated and needed to be replaced about a year and a half ago. They went ahead and purchased the TIC and have used it ever since. When it was time to write the last grant they decided that they have everything they needed but didn't want to NOT apply for a grant. Someone decided they should ask for a TIC and if they won it they would just be reimbursing the department for what they needed last year.

    The dept then wins the grant a few weeks ago. They already have the TIC they bought last year and they only operate one station so they don't need another one. They decide that it would be nice to take this extra money and purchase something else with it like computers for the station.

    I don't know how they plan on fabricating the paperwork to show that the TIC was purchased now, but knowing the chief of this dept, nothing would suprise me. Sounds like fraud to me. I am not just trying to claim fraud because of some personal grudge or anything. I want to turn it in because I beleive this is just very immoral and wrong and things like this jepordize the program for everyone.

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    Webster's dictionary defines fraud as: "A deliberate deception practiced so as to secure unfair or unlawful gain."

    Based on your info if this isn't fraud, I don't know what is. What's worse is that the department appears to be acting in a fraudulant manner, but they are greedy as well. There are departments complaining about others winning multiple grants, but here's a department that has no needs and still files a grant application.

    There's definately no ethics or morals on the chief's part. No one should condone this type of activity and it should be dealt with, not just for the departments that may be losing out on funding, but for the integrity of the program. If you move forward with fraud charges, you best have indisputable evidence to prove they are causing fraud. I would not rely on hearsay evidence. You know the circumstances better than any of us on the forums.

    Good luck.
    Last edited by onebugle; 11-19-2005 at 07:26 PM.

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    Well, if they were awarded for a 2nd "fraud TIC", and bought computers instead, then they are going to have to forge paperwork to get past the audit. Because they will be audited. Everyone will be. And then things will be handled then, and some may go to jail, but if not, the computers and TIC will be going away into DHS's possession. And the department barred from ever applying for federal monies in any program.

    If you have information that needs to go to the FPS for the area, give it to them and let them handle it. That's their job. As onebugle said, fraud hurts everyone. If enough is allowed to happen, the program goes away and no one wants that.

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    Default Grant for Previous Purchase

    If the company got the grant and part of it was to pay off debt on a pre-purchased piece of apparatus, such as paying on and reducing a tax-exempt lease, this would be legal, if it is specified in the application that this was the intent and then applied as granted. Some grants do let you do this and in fact it is a good way to finance. Thus, you are getting a grant for pre-purchased apparatus/equipment.

    However, if the company said the grant was for a new TIC, or to pay down the debt on the TIC and they bought computers, other equipment, bunker gear or threw a "kegger" . . . they're in deep "doo-doo" at audit time, as they should be.

    It may be that this company got the grant to pay down the debt/301-lease for the new TIC (and also for new computers and other equip) and if awarded for same, this is then quite ethical, proper, legal, and smart financing. It was not specified what type of grant was acquired, whether it was through their state, county, DHS-AFG or otherwise and RFPs very, even those at DHS/FEMA/AFG/SAFER

    If you have any questions about financing, whether it be grants, tax-exempt leases or other forms of funding, visit http://VFD-Funding.com or drop me a line.

    Will Griffin

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    If the company got the grant and part of it was to pay off debt on a pre-purchased piece of apparatus, such as paying on and reducing a tax-exempt lease, this would be legal, if it is specified in the application that this was the intent and then applied as granted. Some grants do let you do this and in fact it is a good way to finance. Thus, you are getting a grant for pre-purchased apparatus/equipment.
    Some grants do, but this one doesn't. From the PG:
    (5) Pre-award Costs: Generally, grantees cannot use grant funds to pay for products and services contracted for, or purchased prior to, the effective date of the grant. However, expenses incurred after the application deadline but prior to award may be eligible for reimbursement if the expenses were justified, unavoidable, consistent with the grant’s scope of work, and specifically approved by us. We will consider requests for reimbursement for pre-award costs on a case-by-case basis.
    (6) Pre-application Costs: Expenses, obligations, commitments, or contracts incurred or entered into prior to the application deadline are not eligible to be included as a grant expense with the exception of grant preparation costs [see (7) below].

    As stated earlier the company bought the TIC well before the application period opened and closed, so the TIC is not eligible under these two clauses by any stretch. And as it states, you need DHS APPROVAL prior to purchasing anything that you applied for, and it had to have been bought after the application period closed. They have only approved these purchases for equipment damaged while used, and mainly only for basic equipment: PPE, SCBA, hose, tools. And only for what was damaged, not for the entire purchase.

    It is also not accurate that you can use other federal funds to pay for prior debts, same that you cannot use other state or federal funds to use as matching on any other federal grant. This is the reason we tell people to read the guidance documents for themselves. You are the people responsible for your own applications, regardless of what Will, myself, Kurt, Alana, or anyone else here says. Hence the reason most of us post the quotes from the Guidance Docs to answer the questions.

    - Brian

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    Quote Originally Posted by BC79er
    Some grants do, but this one doesn't. From the PG:
    (5) Pre-award Costs: Generally, grantees cannot use grant funds to pay for products and services contracted for, or purchased prior to, the effective date of the grant. However, expenses incurred after the application deadline but prior to award may be eligible for reimbursement if the expenses were justified, unavoidable, consistent with the grant’s scope of work, and specifically approved by us. We will consider requests for reimbursement for pre-award costs on a case-by-case basis.
    (6) Pre-application Costs: Expenses, obligations, commitments, or contracts incurred or entered into prior to the application deadline are not eligible to be included as a grant expense with the exception of grant preparation costs [see (7) below].

    As stated earlier the company bought the TIC well before the application period opened and closed, so the TIC is not eligible under these two clauses by any stretch. And as it states, you need DHS APPROVAL prior to purchasing anything that you applied for, and it had to have been bought after the application period closed. They have only approved these purchases for equipment damaged while used, and mainly only for basic equipment: PPE, SCBA, hose, tools. And only for what was damaged, not for the entire purchase.

    It is also not accurate that you can use other federal funds to pay for prior debts, same that you cannot use other state or federal funds to use as matching on any other federal grant. This is the reason we tell people to read the guidance documents for themselves. You are the people responsible for your own applications, regardless of what Will, myself, Kurt, Alana, or anyone else here says. Hence the reason most of us post the quotes from the Guidance Docs to answer the questions.

    - Brian
    I didn't see where it was specified which grant was used for the TIC purchase and you're right you've got to check the guidelines. If these were the guidelines of this grant, then they are in obvious violation and have some serious problems come audit time. They could bury themselves deeper too, if they have an OMB filing requirement, because the would add to their woes with perjury/fraud.

    Some grants do let you do this and it may be interesting to see how tax-exempt leasing falls under this, because technically, depending on the verbage in the agreement, these 301 leases aren't really classified as debt, but here again this is something that the municipal attorneys do, when they write their opinoin letters on the contracts. Technically the grant could be applied to the lease payments for that year and grant cycle, but here again you've got to disclose that in your application and the answer is always "NO" until you ask.

    It may prove interesting to see what DHS/AFG says about something like this, because there are those circumstances when apparatus cannot be ISO certified, is deemed unsafe, will not roll out of the bay doors, and needs immediate replacement; that you cannot wait until the next grant cycle, thus immediate/emergency leasing for acquisition is necessary...guess this would fall under their "case by case basis".

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    But therein lies the caveat. If you can afford to start paying for the apparatus prior to being awarded for the grant, guess what: you just blew your local funding issue argument away.

    And again, no, the grants cannot be used to fund lease payments at any point in time, especially not on something bought prior to the application period/award. Lease payments are long term rent, and award monies must be used to PURCHASE something, not rent it. So if you have to rent a truck until you hear an award decision, they will not reimburse you for the rental if you are awarded. They will not approve a pre-purchase on a vehicle for the same reason. If you buy another truck prior to hearing about the award, they will pull your app. (ISO certified has nothing to do with whether or not a truck can be used BTW, ISO doesn't certify trucks, that's NFPA.)

    They only put in this prepurchase clause to handle equipment that gets damaged in use such as PPE & SCBA, and in those cases you can only buy what gets damaged, not the whole order. Because again, if you can afford to buy everything in the application before being awarded, you obviously have no local funding issues that are preventing you from purchasing the equipment. Actions speak louder than words, that's why if you have a 10 truck fleet less than 5 years old, you can't argue that you can't afford new PPE. Since you bought all of those trucks, you obviously didn't put much of a priority on PPE locally, so the program won't either.

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    Default use of funds

    BC - very well put - as are the words of others also. if true - it is a shame that some are trying to "pull a fast one". This is what gives the media the ammo for the exposes they love to write.

    nuff said - me - coming from the streets of Brooklyn NY - I would "drop a dime" on them in a minute - and not leave my name of course!!!!!

    to BC, KB, and Dixie and all others - Best wishes for a safe a happy holiday!!!!

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    Hey, Tony...I was in Brooklyn just this Sun/Monday! I LOVED it! And, guess what? When I drop a dime, I ALWAYS leave my name with DHS. I don't want them guessing if I am a crack shot, jealous neighboring FD...LOL.

    BTW, I ate at a pretty nice little Italian restaurant over in Brooklyn. My cousin's boyfriend lives over there. It was nice. I liked the City. Visited the FDNY 74 Upper West Side (near Central Park) while I was there, briefly. They're close to my cousin's. Had to get some souvenier's for my Chief. Great guys. I loved all the NY guys I met. (Oh, I LOVED Jimmy's Corner - over in Times Square!)

    Had been in Boston before that to meet my cousin and drive down to visit a few FD's I work with. I did go by and see the Firehouse Boston guys...that was alot of fun!

    Thanks for the Holiday wishes. Same to you - eat lots of good food, and plenty of beverages of your choice! Have a great Holiday!

    PS: Let me add, Brian, as Tony said, again, as always, you are right on the money. People seem to always want the short cut, in today's society. Want to find LOOPHOLES. Well, that's unethical. You and I both know people have probably tried all that. I hate that it's been posted in here, to plant ideas like that in some poor idiot's head, now, that may wouldn't have thought to try it!
    Last edited by dixiechicknc; 11-23-2005 at 08:12 PM.

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    My guess would be that since FPS monitors this forum quite closely, that someone from the regional office is already looking closely!
    Kurt Bradley
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    Quote Originally Posted by BC79er
    And again, no, the grants cannot be used to fund lease payments at any point in time, especially not on something bought prior to the application period/award. Lease payments are long term rent, and award monies must be used to PURCHASE something, not rent it.
    Brian; have to correct you slightly. Leases are not always long term rentals when it comes to major purchases. Banks like to do municipal leases with a $1.00 or $0.00 buyout for tax purposes. It also leads to lower rates than traditional financing options. It's just another way to finance.

    We did a "lease" on our 2000 pumper and on the new aerialscope we just took delivery of. I also do municipal leases like that on trucks that I bid out at work.
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    Quote Originally Posted by dragonfyre
    Brian; have to correct you slightly. Leases are not always long term rentals when it comes to major purchases. Banks like to do municipal leases with a $1.00 or $0.00 buyout for tax purposes. It also leads to lower rates than traditional financing options. It's just another way to finance.

    We did a "lease" on our 2000 pumper and on the new aerialscope we just took delivery of. I also do municipal leases like that on trucks that I bid out at work.
    A Board I sit on is looking into making a large lease/puchase similar to what you are referring to - where at the end of the lease period, the equipment is the Organization's. However, I do believe what Brian is discussing is that AFG does not allow PRE-purchase of equipment (of which was discussed earlier in this thread) AND the fact that the AFG is for purchase only - not the lease of items.

    While the lease/purchase may be a viable option for FDs that are looking into large purchases of equipment or a vehicle purchase, FDs need to be cautioned that it needs to be an entirely seperate funding discussion from anything whatsoever to do with FEDERAL grants and monies.
    Last edited by dixiechicknc; 11-28-2005 at 09:12 AM.
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    Steve, correct in effect, but not exactly, as Alana said a viable option but not in the grants realm. Despite the $1 buyout at the end, the lease payments are rent, that's how the lease contract is written. The buyout is an option, and of course at that price who wouldn't do it at the end of the term. But prior to that point, the FD has no equity in the vehicle at all. It could not be used as collateral because the FD does not own it, it's a lease, same as when I leased my previous pickup truck. The leasing company is an additional party when it comes to insurance, which is why all I had to do is give it to them when the term was up, especially since it was worth less than the buyout as most leases went since the 0% financing started, it was cheaper to buy new.

    And still, AFG won't fund the lease payment option of purchasing a vehicle because you can't prepay a lease, otherwise it wouldn't be a lease, part of the legal details. The vehicle (or anything funded) has to be purchased, and they certainly won't pay for something done prior to the app period or award.

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    Dixie - if you are ever up this way again - let me know; I'll take you to the Italian places that we Italians go to - just like Mom's house!!!!!!

    don't worry - BC & KB - same offer to you guys!!!!!

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    Thanks Tony. If I do you'll have to protect me from my Italian mother for not visiting and eating her food. I'm sure your mom is the same way. Who says us Italian kids never went on vacation, Mom took me on at least one guilt trip every day. :0 .

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    everyone thinks my hair is thinning but I still have the marks from the back of her hand AND the Wooden spoon!!!

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    Tonya, I'll put up my Lasagna against Mario Balto any day of the week but, I will take you up on that offer. I still need to find good canollis and that NY Delicatessen recipe for "tortellini salad". I will defer to waiting for more balmy weather in your area beofre visiting though, Anchorage, AK was enough cold weather for me for one year. Now, come to Fla and I'll show you how to BBQ any kind of seafood you want and I dare anyone to match my BBQ brisket or my special Bubba's ( that is my pen name for my recipe articles) BBQ Shrimp!
    Kurt Bradley
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    Kurt - anytime....(BC & Dix - same) here is my base email - GIARDINAA@CONED.com

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