Subrecipient Monitoring and
Common Findings By USDE
Kristen Tosh Cowan, Esquire
ktoshcowan@bruman.com
Brustein & Manasevit, PLLC
Tiffany R. Winters, Esquire
twinters@bruman.com
Spring Forum 2011
Checklist of Grantee Responsibilities
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Identify and provide information about federal awards
Inform subrecipients about compliance requirements
Monitor subrecipient activities
Ensure subrecipients have single audits, if required
Provide technical advice and training
Issue management decisions within six months on subrecipient
single audit findings and ensure corrective action occurs
 Consider whether pass-through entity records must be adjusted as
a result of subrecipient audits
 Require subrecipients to permit its auditors access to their
records for monitoring and audit purposes
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Checklist of Subrecipient Responsibilities
 Administer the grant from award to closeout
 Develop internal policies and system to ensure effective
management of federal funds and compliance
 Ensure organization has compliant grants management systems
 Establish a budget of costs required to perform the program and
method for monitoring budget against actual expenditures
 Keep updated on policy/legal changes
 Request prior approvals when necessary
 Prepare all required reports in a timely manner
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Model System:
• AGA Partnership for Intergovernmental Management and
Accountability
• Financial and Administrative Monitoring Tool
• Risk Assessment Monitoring Tool
• http://agacgfm.org/intergovernmental/ resources.aspx
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WHO and HOW OFTEN to monitor?
• Do Risk Assessment – Where is state’s greatest risk of
noncompliance?
• AGA “Risk Assessment Monitoring Tool”
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Methods for Monitoring
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Review (NOT Solely Rely) Single Audits
Arrange for Limited Scope Audits
Schedule Site Visits
Review Subrecipient Reports
Require Prior Approval for Certain Activities
Require 3rd Party Evaluators
Follow Subrecipient Coverage in the News
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When are On-site Visits Appropriate?
 Programs with complex compliance requirements
 High dollar programs
 New programs
 Prior monitoring or audit findings
 High profile programs
 Inexperienced subrecipients/staff
 Request onsite visit
 Sites not visited recently
 Risk Factors
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Risk Factors:
• General
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Entity new to operating federal funds
New program for entity
High staff turnover or reorganization
Experience of staff
Untimely submission of applications, fiscal reporting, drawdowns,
etc.
• Have other entities alerted SEA of potential risks?
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Risk Factors
• Legal
• Any lawsuits
• Suspended or debarred
• Staff jailed, convictions, criminal investigations
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Risk Factors
• Monitoring/Audits
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When was last on-site monitoring visit
Any findings in prior visit
More than one year since Single Audit
Any special conditions put on awards
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Risk Factors
• Fiscal Assessment
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Size of the grant
Frequent untimely drawdowns
Significant carryover
Return of (lapsed) unspent funds
Difficulty with matching/Maintenance of Effort (MOE) in past
Cash flow problems
Time and effort records for all employees paid with federal funds
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WHAT to monitor?
• Program requirements – NOT ENOUGH
• Single Audits – NOT ENOUGH
• AGA “Financial and Administrative Monitoring Tool”
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AGA Tool
• Administration
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Internal controls
Accounting
Cash management
Audit resolution
Record Retention and Access
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AGA Tool
• Program (specific to program)
• Eligible beneficiaries
• Adequate plans
• Allowable costs
• Program Fiscal (specific to program)
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Budget Formation and Administration
Matching/supplanting/MOE
Comparability
Set asides
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AGA Tool
• Cross-Cutting/Fiscal
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Payroll/Time Distribution
Procurement
Indirect Costs
Property Management
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Document!
• Have written procedures explaining monitoring process and
substance
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Monitoring Follow-Up
• Grantees should use monitoring results to identify:
• Recurring problems unique to one program
• Opportunities to better monitor funds
• Recurring problems with individual subrecipients
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Monitoring Follow-Up
• Subrecipients should use monitoring results to identify:
• Recurring problems that affect several programs that need to be corrected
• Effective methods to administer subawards and comply with program
requirements that can be applied to other subawards
• Program-specific problems that may require a change
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Office of Inspector General
FY 2011 Work Plan
Management Challenge:
Implementation of New Programs/Statutory Changes
•Recipient and Subrecipient Use of
Recovery Act Funds to Meet Program
Objectives
• Oversight of SFSF
•Centers for Independent Living Controls
over Recovery Act Funds*
•Race To The Top Grant Monitoring Process
•Guaranty Agency Health
•Discretionary Grant Monitoring Process for
i3 Funds
•Job Retention at Loan Servicers
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Office of Inspector General
FY2011 Work Plan
Management Challenge:
Oversight and Monitoring
• FSA Oversight of Schools Participating in
Direct Loan Program
•Proprietary Schools’ Participation in SFA
Programs
•Approval of Proprietary School Change of
Ownership
•TEACH Grants Program
•ECASLA Servicer Compliance*
•ECASLA Custodian Billings and Financial
Transactions*
•Distance Education Programs Requirements
and Monitoring
•State Award and Monitoring of SIG
•State Monitoring of IDEA, Part B MOE
•Effectiveness of the Competitive Award
Process for ESEA Programs
•Potentially Overlapping High School
Programs
•Discretionary Grant Results
•Oversight of Charter Schools
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Office of Inspector General FY2011 Work
Plan
Management Challenge:
Oversight and Monitoring, cont.
• 21st Century CLC Process to Identify and
Monitor High Risk/At Risk Grantees*
•Federal Real Property Assistance Program
•Title IV Additional Servicers Contracts
•Suspension and Debarment Functions for
Grantees
• Management of the EDUCATE Contract
•Audit Resolution Process*
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Office of Inspector General FY2011 Work
Plan
Management Challenge:
Data Quality and Reporting
•Use and Accuracy of Performance Data
Collected and Reported in EDFacts
•Department Data Quality Processes for
Recovery Act Recipient Reporting
•Department Performance and
Accountability Planning and Reporting
Process
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Office of Inspector General FY2011 Work
Plan
Management Challenge:
Information Technology Security
•System Security Controls over Education
Department Centralized Automated
Processing System
•System Security Controls Over EDUCATE
•Security Controls Over External FSA Data
Centers
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information and does not constitute legal advice or a legal
service. This presentation does not create a client-lawyer
relationship with Brustein & Manasevit, PLLC and, therefore,
carries none of the protections under the D.C. Rules of
Professional Conduct. Attendance at this presentation, a later
review of any printed or electronic materials, or any follow-up
questions or communications arising out of this presentation
with any attorney at Brustein & Manasevit, PLLC does not
create an attorney-client relationship with Brustein &
Manasevit, PLLC. You should not take any action based upon
any information in this presentation without first consulting
legal counsel familiar with your particular circumstances.
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