2 session objectives increase participant understanding of effective financial monitoring based upon...

2

Session Objectives

Increase participant understanding of effective financial monitoring based upon risk assessments of sub-grantees

Increase participant knowledge of sub-grantees risk assessment using appropriate practices, procedures and controls

Discuss and review elements of implementing risk-assessed monitoring strategies

3

Topics of Discussion

What is Risk Assessment?

Risk Factors

Risk Assessments

Tools & Resources

4

Group Brainstorming Session

What types of factors should be considered in assessing grantee risks?

What are some tools and techniques that can be used to conduct a grantee risk assessment?

Who needs to conduct risk assessments and who should be assessed?

What are the consequences of failing to assess risk?

5

What is Risk Assessment?

Risk assessment is the result of calculated efforts to ensure that those receiving federal and/or state grants are using the funds received in accordance with the applicable laws and regulations

6

Risk Assessment

Establish policies and procedures Develop a risk assessment methodology

Perform and document risk assessment

Reassess the methodology in subsequent years

7

Risk Assessment

Utilize a “wholistic” approach to incorporate programmatic and financial information.

Use objective data to assess a grantee. Use knowledge of all staff members to

gather information on a grantee. Review and compare grantees in a

comprehensive and consistent manner.

8

Risk Assessment Methodology

Consider your capacity to address all issues identified

Capacity considerations include: Staff Size Number of Grantees to support Resources available Number of programs in Portfolio Distance between programs Multi-site programs

9

Comprehensive Approach to Risk Assessment

Risk assessment should not only be performed on site. You may obtain information about a grantee from several sources, for instance: General Assessment Questionnaire Progress reports Program Budget Financial Reports (Periodic Expense Reports,

Reimbursement Requests and Financial Status Reports)

Telephone and email correspondence

10

Strategy for Determining Risk Level

Define risk for each group based on consistent characteristics, possibly using a scoring method.

Develop assessment based on risk levels if plan should be for an entire project period.• High risk Grantees – Intensive reviews

and on-site presence.• Moderate risk – Some on-site interaction

and more intensive desk review• Low risk – Little on-site interaction and

desk review.

11

Establish Policies and Procedures

What information will be used to measure risk?

Self-Assessment General questionnaires Sample documents Past Performance

Risk assessment process Worksheets Assessment forms Self-assessment

Reassessments and updates of methodology, policies and procedures

12

Risk Factors

Areas to be assessed • Financial• Administration• Member Records• Type of grantee/awards• Prior audits/reports

13

Financial Risk Factors

Type of accounting system Timeliness of financial reports Accuracy of reports submitted Experience level of staff managing federal funds Experience level of staff managing CNCS grants Dollar amount of award/total expenditures Historical Findings/Questioned Costs Viability of meeting match requirements

14

Administration Risk Factors

Written policies and procedures Timeliness of progress reports Accuracy of progress reports Staff turnover Cooperation/response to

Correspondence History

15

Administration Risk Factors

Size of grant compared to total host agency budget

Age of organization (Year of Incorporation) Part of a national/regional organization

16

AmeriCorps Member Records Risk Factors

Member turnover Member recruitment History Full time vs. part time vs. fellows vs.

Education Award only

17

Type of Grantee/Award Risk Factors

Type of sub-award (Senior Corps, AmeriCorps, Learn and Serve, Education award only)

Form of sub-award (cost-reimbursement, fixed price)

Size of award Complexity of award requirements New or continuing grantee Past history of performance

18

Prior Audit Reports Risk Factors

A-133• Material weaknesses and reportable conditions• Questioned costs• Corrective actions plans

Prior Internal Reviews• Desk review findings• Financial capability assessments• On-site review findings• Corrective action plans

19

Tools & Resources

How to document your assessment

Risk-Based Monitoring Summary

Types of Monitoring

Set monitor for each level

20

How to document your assessment

Grantee worksheet• Create a Master document• Summarize risk assessment• Summarize the type of monitoring to be

performed and Timetable for Monitoring Individual grantee assessment

• Risk assessment in the various categories• Documentation of all risk areas

21

Risk-Based Monitoring Summary

Develop Monitoring

Strategy

Determine Areasto Monitor

Develop Written Monitoring Plan

Educate Sub-grantees Fine-tune Process Conduct Monitoring

22

Types of Monitoring

MODERATE RISKSUB GRANTEESRISK RATING: ADEQUATE

HIGH RISKSUB GRANTEES

RISK RATING: POOR

LOW RISKSUB GRANTEESRISK RATING: EXCELLENT

REPORT REVIEW PHONE INTERVIEW ON SITE VISIT

23

Set monitor for each level

For Example: High risk– Annual on-site reviews, technical

assistance as necessary, specific follow-up based on individual needs.

Moderate risk – One required on-site review during grant period with annual desk reviews.

Low risk – At least one on-site review or desk review during grant period.

24

Review of Various Tools

25

Brainstorm of monitoring for each level

High risk

Moderate risk

Low risk

26