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 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 Areas to Monitor Develop Written Monitoring Plan Educate Sub-grantees Fine-tune Process Conduct Monitoring

22 Types of Monitoring MODERATE RISK SUB GRANTEES RISK RATING: ADEQUATE HIGH RISK SUB GRANTEES RISK RATING: POOR LOW RISK SUB GRANTEES RISK RATING: EXCELLENT REPORT REVIEWPHONE INTERVIEWON 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

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