Award Monitoring Update National Science Foundation Advisory Committee for Business and Operations October 22, 2003 Mary Santonastasso, Director, Division of Grants and Agreements

Award Monitoring Update  Context Governmentwide focus on increased oversight NSF’s changing award portfolio and increasing budget NSF’s Financial Statement Audit

Award Monitoring Update  FY 2002 Award Monitoring NSF identified award administration as a Management and Performance Challenge Developed and completed a Pilot Program designed to augment NSF’s existing award management and oversight activities by increasing on-site monitoring to insure that federal funds are appropriately expended and well managed.

Award Monitoring Update  The Pilot Program: Set forth a strategic framework for assessing and managing awardee risks and assets Assessed risk factors across award universe (31, 774) – Financial, Administrative, Programmatic, Organizational

Award Monitoring Update Risk Factors:  Type of Awardee Institution  Dollar Value  Cost Sharing Activity  Complexity – type of award and special conditions  Property  Programmatic Concerns

Award Monitoring Update  The Pilot Program (Contd.) Higher risk awards trigger review of institutional practices Focused on financial and administrative monitoring Organization’s policies and practices examined and limited transactional testing performed Tested standard tools and protocols for post award monitoring Piloted 15 institutions in FY 02

Award Monitoring Update  FY 2003 Award Monitoring NSF established a formal Award Monitoring and Business Assistance Program (AMBAP) in BFA Conducted on-site monitoring visits to 32 awardee institutions with 1, 351 active awards representing over $700 million

Award Monitoring Update Purpose of the Review: To provide Business and Managerial Assistance to the NSF Awardee Community by evaluating the effectiveness and efficiency of the policies and procedures that the awardee institution has in place to manage federal funds.

Award Monitoring Update  Examples of Review Areas Internal Controls - Accounting Procedures - Procurement Procedures - Property and Equipment - Travel Procedures

Award Monitoring Update An accounting system review  Conducting limited transactional testing of expenditures reported on the FCTR  Cost sharing and documentation for claimed cost sharing  Time and effort reporting system and completed effort reports  Consultant services and sub recipient monitoring

Award Monitoring Update Observations from FY 2003 monitoring visits: Some institutions had adequate systems Other institutions had areas requiring improvement, for example:  Lack of written or consolidated policies and procedures, e.g., accounting manuals  Cost-sharing issues, e.g., allowability  Time and effort reporting not in compliance with OMB requirements

Award Monitoring Update Need for A-133 audits Assistance needed to establish indirect cost rates Need for clarification of NSF specific requirements, e.g., participant support and consultant rates

Award Monitoring Update  FY 2004 Award Monitoring Continue and refine award monitoring site visits Continue to partner with program staff in on- site visits to institutions and on reverse site visits at NSF with particular focus for new initiatives and new awardees Identify and share “best practices” with the awardee community

Advice Needed From the Committee How do we manage the burden on the Awardee Community? Are our proposed structural changes on target?