In my last post: Seven Ways to Improve Grant Management Part I, I shared ways to improve federal grant management with you.

These suggestions from various Office of the Inspectors General (OIG) on how to improve the management of your grant.

In this second part of our series, I expand on their suggestions by looking at monitoring, performance measurements, and more!

With these “Final Four,” the OIG provides great “real world” advice on ways to improve the grant management process.

Here are more of my favorite suggestions from the OIG to improve grant management:

#4 Monitoring is More Than Audit Reports

For a long time, grant recipients and even funding agencies viewed monitoring as checking off a box that the audit report was received.

In addition, the OIG reinforces that this limited governance approach to monitoring is woefully inadequate to reduce the risk of waste, fraud, and abuse of taxpayer dollars.

Here is their list of monitoring improvements for grant recipients and funding agencies:

Include a list of “red flag” indicators to identify high-risk grantees and subawardees, for example:

• Watch for lapses in internal controls, such as inadequate separation of cash-related duties, inadequate financial management systems, and prior grant mismanagement
• Increase site visits and review of financial and progress reports for accuracy, completeness, and alignment with project goals.
• Start site visits earlier in the grant period of performance to catch potential problems sooner.
• Review and question budgeted vs. actual expenditures on the line level to see how funds are being spent.
• Ask high-risk grant managers for supporting documentation so reported expenditures and performance can be verified.
• Ensure the subrecipient monitoring is happening to an adequate degree at state agencies and other pass-through agencies.
• Verify that subaward documents are made available to the public as required to increase transparency.
• Provide clear communication and guidance for handling instances of alleged misuse of grant funds, including reporting to the OIG as appropriate.

#5 Performance Measurements

The concept of performance measurements for federal grants has stirred many controversies, particularly among the research community.

(After all, if you knew the outcome, it wouldn’t be research!)

But this fundamental shift in thinking is here to stay, so grant recipients need to prepare for this performance-driven environment amount funding agencies.

Here are some of the OIG recommendations for funding agencies around this sensitive topic:

• Tighten up the circumstances and policies around retroactive approval for violations of requirements and conditions. (The current process is encouraging non-compliance by grant recipients.)
• Assist grant recipients in determining what information must be collected to assess program performance. (For example, an outcome-based measurement, like the number of people served, may better assess if the program is meeting its objectives.)
• Improve documentation standards to respond in writing to grant recipient requests. (This drives accountability for both funding agencies and grantees to move away from verbal, undocumented approvals for a course of action.)

Finally, funding agencies need to spend additional care with the review of the narrative program reports to ensure the stated objectives for the grants are addressed.

This performance-based review should identify sooner when grantees are at increased risk of failing to meet their stated objectives and goals.

#6 The Well-trained Workforce is a Priority

The OIG came right out and said it!

“Key grantee officials (such as the person submitting Financial Status Reports) should be required to take annual grant administration training that covers financial and programmatic requirements and fraud awareness.”

And still, to this day, the vast majority of grant managers have received little or no grant-specific training.

(Let alone ANNUAL grant administration training!)

Wow, even funding agency grant administrators should be taking annual training!

Therefore, it shouldn’t come as a surprise that periodic training reinforces the administrative, financial, and programmatic requirements for their funding agency.

This training should include such things as:

• Grant fraud awareness
• Risk assessment training
• Fraud prevention techniques
• Employees’ obligations when they identify indicators of misuse or fraud

Finally, the OIG calls for multiple approaches to grant management training, including:

• More online training programs
• Additional tests to ensure the recipient understands the basic requirements
• Expanding opportunities for the grant administrators to discuss common questions and problem areas with grantees
• Sharing best practices to ensure consistent treatment by both granting agencies and grant recipients

#7 Communication is a Two-Party System

Effective communication requires the active participation of both sides of any issue or conversation.

The OIG cites numerous examples of funding agencies’ program managers who are either non-responsive or not available to answer questions from grant recipients.

In a similar vein, many grant recipients view the program managers as people to avoid or worse, keep “in the dark!”

Remember, as more and more accountability shifts to grant recipients with 2 CFR Part 200, you can improve the odds of successful grant management.

Start by viewing the funding agency as a partner to improve communication on Federal awards.

Both agencies and grant recipients should encourage and evaluate feedback from stakeholders to determine if communication is happening successfully.

Finally, the OIG recommends expanding the use of other communication tools such as blogs, RSS feeds, and wiki applications.

Twitter anyone?

Check Out the First Three….

Check out the first three suggestions in Seven Ways to Improve Grant Management Part I.

In Part I, you’ll discover hints on proposal development, pre-award risk and integrity assessments, and internal control tips.