Ever wish you had a FAQ guide to identify the major areas of grant monitoring risk?
As a Grant Management Professional you probably know that you have responsibility for monitoring subrecipients to ensure the federal grant funds are spent appropriately.
But what exactly does that look like?
Here are seven areas of monitoring help you start the conversation and assess your risk as the primary grant recipient:
Area #1: Is This Your First Grant Management Rodeo?
As the primary recipient of the grant, you need to know how much experience your subawardee has with federal grants.
• How many subawards have you managed in the last five years?
• How much experience has your staff had working with this program?
• Has there been high staff turnover or reorganization associated with this program?
• What procedures and policies do you have in place for managing federal funds?
Area #2: Ever Been In Trouble with the Law?
Grant recipients must make sure federal funds are not flowing to people or organizations that are suspended or debarred.
It starts with questions like these:
• Have you, your staff or your organization ever been suspended or debarred?
• Have the organization staff been jailed, placed under criminal investigation, or convicted of a felony?
• Has the organization had a lawsuit filed against it?
Area #3: Are You Staying in Touch With the Prime Recipient?
Some of the ways that grantees fulfill their monitoring requirements is to perform site visits and review sub-recipient’s audit reports-particularly A-133 Audit findings.
Here are some things to ask:
• How long has it been since an on-site monitoring visit?
• How long since your last audit was completed?
• Where there audit findings?
Area Four: How Do You Keep Federal Funds Straight?
Grant recipients and subrecipients must have systems in place to identify the inflows and outflows of federal funds by program.
To determine if your subawardee is in compliance, start here:
• What financial management system are you using to track and record program costs?
• How does your accounting system track expenditures and receipts of the various programs?
• How do you track the time spent on program?
• Does your organization have an approved indirect cost rate agreement and is it up-to-date?
Area Five: Is Financial Oversight Pretty Loosey-Goosey?
If someone was running off to Fiji with Federal funds (or hosting extravagant GSA Las Vegas conferences-complete with mind-readers) would you know it?
A good place to start is to learn what internal control systems are in place.
• Who reviews variations between the project budget and the actual spending?
• Is the grant spending a large percentage of the organization’s total budget?
• Is there a lot of discretion for spending on the part of program managers, direct employees or senior staff?
Area Six: Is the Sub-grantee Financially Stable?
Subrecipient monitoring includes making sure the subgrantee is financially stable enough to complete their scope of work.
Here are some areas to check on:
• Has an agency ever placed restrictions or special financial conditions on your subawards?
• Have you had an insufficient fund balance after meeting your obligations on a program?
• Has an agency or authority placed your organization under a special financial condition such as a “watch-list” or “high-risk” status?
• Do financial reports indicate cash flow issues?
Area Seven: Are You Focused On the Program Objectives?
Finally, the grantee is responsible to monitor that the program objectives are met by the subawardee for their scope of work.
• Has the organization met their measurable achievement objectives for the program?
• Has the organization met its reporting requirements in a timely manner to both the primary grantee and the Federal government?
• What is the sub-recipient’s process for notification if things are not going as expected?
Adequate subrecipient monitoring is generally requires a joint effort across various personnel within the primary grant recipient’s organization.
For grantees it is important to note that monitoring includes both the actual risk assessment and documentation of the results of that process.
It’s not done until the results are documented.
Don’t forget the paperwork.
Lucy Morgan CPA, MBA
CEO, Compliance Warrior
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