MONITORING OF

SUBGRANTEES

MONITORING OF SUBGRANTEES

Session Objectives

To understand key principles for effective monitoring and financial systems

To understand how risk assessment helps determine appropriate monitoring strategy

To review process and details of desk review and site visit monitoring

Assessing Risk for Subgrantees

• Complete risk assessment prior to awarding a new sub-grant

• Continuously consider changes in risk throughout the award period

• Address risk assessment FACTORS related to:

1. Grant Award

2. Organization

3. Financial and Compliance

4. Program Performance

Financial Factors

Financial Factors

Financial Condition

AuditsRecent

Experience

Compliance

Key Principles

• Develop clear subgrant agreements with expectations

• Develop mutual understanding of staff, participant and sponsor needs

• Invest time to train new sub-grantees

• Develop consistent expected level of accountability and required reporting

• Establish standards and requirements for reports , deadlines, and due dates

Keys for Effective Monitoring

Key Principles (Continued)

• Communicate via onsite or telephone meetings

• Consistently and continually distribute & train on

policy guidance, regulations

• Communicate monitoring expectations and level

• Encourage sharing best practices for effective management

Keys for Effective Monitoring

Keys for Effective Financial Management

• Written accounting practices, policies, procedures

• Sufficient internal controls

• Clear audit trail from Accounting System to financial reports (FSR)

• Documented cost allocation plan

• Clear source documentation and retention policies

• Adequate time reporting dcontrols

Keys for Effective Financial Management

1. Regulatory

Requirements

2. Written Policies & Procedures

3. Documentation of Expenses

4. Managing Cash

5. Efficient Accounting System

6. Budget Controls

7. Time & Activity Documentation

8. Matching Requirements & In-kind Contribution

9. Reporting

10.

Internal

Controls

EFFECTIVE

FINANCIAL

MANAGEMENT

Risk Based Approach to Monitoring

Use a risk based approach to determine:

• each new or existing subgrantee’s risk level

• best methods to help mitigate risk for each subgrantee:

- training - technical assistance - monitoring strategies

• most appropriate monitoring and oversight strategies for each subgrantee

Consider the most effective and efficient use of your resources

Tools and Resources

Financial management survey or questionnaire

Audited financial statements

Risk assessment results

Monitoring policy

Reports and Files

Desk review checklists

On-site monitoring tool or instrument

Monitoring Feedback & Follow-Up

Essential elements when monitoring sub-grantees:

Identify and communicate issues, problems, deficiencies in writing

Require corrective action plan and time schedule

Ensure complete and thorough follow-up

Require sub-grantees to report on actions taken

Review sub-grantee documents, files, etc. to ensure required actions were taken

Monitoring Strategies

Desk Review Monitoring

Site Visit Monitoring

Desk Monitoring - In House Review of:

•Financial Status Reports (FSRs) for sub-grantees

•Documents to support reimbursement requests – PER (Periodic Expense Report for

AmeriCorps State) – or grantee forms

• Special information requests: – Policies & procedures, e.g. grievance

procedures– Supporting documentation for specific

expenses or match

•Other Reports, E-Mails, Correspondence, Files

Desk Monitoring – Document Review

Review Documents for:

Accuracy

Timeliness

Expected content and format and meeting requirements

Other relevant issues

Identification of follow-up monitoring needed

Use checklists or other ways to document reviews

Desk Monitoring – A-133 Audit Reports

Develop and track schedule of subgrantee audit due dates

Collect and review when completed

Assess subgrantee’s financial position

Review management letter

Identify findings and issues

Coordinate corrective action plan for CNCS programs and organizational findings (if applicable)

Ensure all relevant findings addressed

Site Visit Monitoring

Pre-Visit Preparation

On-Site Visit Review

Post Visit Phase

Site Visit Monitoring

Pre-Visit Preparation

• Coordinate with both sub-grantee fiscal officer and program director and others as appropriate

• Notify subgrantee in writing of:

–Visitation date(s)

–Purpose of review

–Necessary information you will need (include monitoring tool or instruments

you will use)

Site Visit Monitoring

Pre-Visit Preparation (continued)

• Review materials in grant file:

–Sub-grantee program proposal –Progress and financial reports –Approved budgets

• Examine documents and information from desk reviews: e.g. financial reports, payment requests, audits, etc.

• Develop and distribute site visit agenda

Site Visit Monitoring

On-Site Review

• Conduct entrance meeting with sub-grantee program director, fiscal

officer, and other appropriate officials

• Meet with administrative, fiscal and other staff.

• Review appropriate documents, information and materials (use various monitoring tools and checklists)

• Conduct exit meeting and discuss findings with program director, fiscal officer and other officials as appropriate

Site Visit Review Items - Examples

Personnel and Staffing

Documentation, tracking of program match

Procurement

Financial accounting system

Time and attendance records for staff & members/participants

Member/participant eligibility

Travel

Record Retention

Review management policies &procedures in these areas:

Site Visit Review Items – Examples

Description of financial management system/software

Organization’s accounting manual

Chart of accounts

Samples of source documents and expenditure transactions

Samples of cash and in-kind match source documents

Other policies, procedures, documents, etc. as needed or appropriate

Completion of any Surveys, Self Assessment Tools, etc.

Organizational Charts

Financial Management Policies and Procedures

Latest audits, 990

Position descriptions of key staff

On-Site Monitoring

Site Visit Review Items - Examples

Key Areas to Review on a Site Visit

• Latest FSR and PER amounts (expenses and match) reconcile and track back to financial accounting system

• Staff time sheets or after the fact time records are signed and comply with applicable OMB cost principles Circular

• Source documents (sample 3-5 for expenses and for match) see how they are coded, entered, recorded and reported in the financial accounting system

On-Site Monitoring

Site Visit Review Items - Examples

Key Areas to Review on a Site Visit – (continued)

• Member Files (sample 3 or more) contain appropriate eligibility documentation, criminal background checks, etc.

• Member time sheets (sample 3 or more) are signed by member and supervisor and these times are identical with those entered in WBRS

• Internal controls appear adequate

On-Site Monitoring

Site Visit Monitoring

Post Visit Phase

Prepare report describing findings and recommendations

Distribute to sub-grantee program director and other officials as appropriate

Request corrective action plan, with due dates if needed

Review and approve corrective action plan and dates

Provide training and technical assistance, as requested or appropriate

Site Visit Monitoring

Post Visit Phase

Follow-up on items in corrective action plan ensuring organization has taken required action

Consider appropriate sanctions if the organization fails to implement corrective actions

Ensure that site visit documentation, findings and report are maintained in appropriate files

“Vox audita perit¸ litteras scripta manet: The spoken word vanishes¸ the written

word remains”

- Latin Phrases