7-Micro Grant Supplanting Guidance 2026.docx

Compliance Guidance: Prohibition of Funding Supplantation The Delaware Opioid Settlement Commission (DOSC) issues this guidance to ensure all settlement funds are used in strict accordance with national agreements, which mandate that resources expand and sustain meaningful, forward-looking responses to the opioid crisis. Specifically, this guidance prohibits “supplantation”—the inappropriate replacement of existing funding with settlement dollars.

What is Supplantation?

The DOSC defines supplantation in the context of Opioid Settlement Funds as:

To deliberately replace or reduce existing federal, state, or locally allocated funds with Opioid Settlement Funds. Opioid Settlement Funds are to be used to create, maintain, and/or expand program activities. Settlement Funds are not meant to be used to replace or reduce existing federal, state, or local funds that have already been appropriated or allocated for the same purpose.

Supplementing, Not Supplanting, Abatement Efforts:

The DOSC mandates that settlement funds be utilized to create, maintain, or expand effective programming. In accordance with national settlement agreements, supplantation—the replacement of existing funding with settlement dollars—is strictly prohibited and does not qualify as an “Approved Purpose.”

Framework for Approved Use:

Settlement funds are the direct result of litigation against manufacturers, distributors, and retailers that contributed to the opioid crisis. To ensure these resources drive meaningful change, all expenditures must align with the “Approved Purposes” outlined in Exhibit E of the national agreements and the Opioid Abatement & Remediation Strategies (OARS) document.

The core objective is to ensure that these resources result in a measurable increase in services rather than simply shifting the financial burden of existing programs Identifying Inappropriate Supplantation:

To ensure compliance and maximize public health impact, it is essential to distinguish between expanding a service and inappropriately replacing its current funding source. Please refer to the examples on the following page to help identify what inappropriate supplantation looks like in practice.

Inappropriate Supplantation (Prohibited):

· Offsetting Existing Budgets: A county facing a budget shortfall re-allocates $20,000 previously designated for a co-responder program to its animal shelter, then uses $20,000 in Opioid Settlement Funds to fill the resulting gap in the co-responder budget.

· Backfilling Funding Cuts: A city reduces its behavioral health department's budget by $500,000 and subsequently uses $500,000 in settlement funds to restore the department to its original funding level.

· Substituting Previously Approved Expenses: A state substitutes settlement dollars for tax funds previously earmarked for peer workforce development, allowing the unexpended tax revenue to be diverted to road repairs.

Appropriate Non-Supplantation (Permissible):

· Sustaining Programs After Temporary Funding Expires: A public health department utilized short-term American Rescue Plan Act (ARPA) funds for care coordinators. Once the ARPA funds are fully exhausted, the department transitions the program to Opioid Settlement Funds to maintain service.

· Expanding Service Capacity: A city-funded harm reduction team operates three days a week due to budget constraints. The city uses settlement funds to expand operations to five days a week; in this case, settlement funds specifically cover the costs for the two additional days of service.

· Maintaining Programs After Grant Expiration: A county-run Medication-Assisted Treatment (MAT) program was funded through a state grant. When the grant expires and no other local or state funds are available, the county utilizes settlement funds to maintain the evidence-based program and prevent a lapse in care.

Supplantation Quick Reference: Guiding Questions Use the following chart to determine if a proposed project meets the non-supplantation requirements set forth by the DOSC.

Certification of Non-Supplantation:

By submitting an application for Opioid Settlement Funds, the authorized representative of the applicant organization or subdivision hereby certifies the following:

1. Compliance with Guidance: I have read and understand the DOSC guidance regarding the prohibition of supplantation.

2. Supplemental Use of Funds: I certify that the funds requested will be used to create, maintain, or expand evidence-based opioid abatement and remediation programs.

3. No Replacement of Existing Funds: I certify that these settlement dollars will not be used to replace or displace existing local, state, or federal funding that has been previously appropriated or budgeted for the same purpose.

4. Requirement for Transparency: I acknowledge that any identified instance of intentional supplantation may result in the immediate suspension of funding, a requirement for repayment, and potential disqualification from future grant cycles.

5. Documentation: The applicant agrees to maintain and provide, upon request, documentation (such as prior budget years) to verify that settlement funds are being used to supplement current resource levels.

Authorized Signature: ________________________________________

Printed Name and Title: _______________________________________

Organization/Subdivision: ______________________________________

Date: _______________________________________________________ image.png