1. Welcome State directors & your staff members
Beverly will welcome everyone after breakfast and say all the appropriate things she says so well.

2. Data Recognition Corporation Michael Johnson
Breakfast
Data Recognition Corporation Michael Johnson
Beverly will thank Michael Johnson of DRC and introduce him to say a few words.

3. Dr. Johan Uvin, OCTAE Assistant Secretary
Beverly will introduce the Assistant Secretary

4. Agenda Overview Design Team:
NAEPDC: Sheryl Hart (AZ) & Sandy Crist (MS) PD Co-Chairs plus Susan Fish (OR), Jennifer Foster (IL), Marcia Hess (WY)
DAEL: Cheryl Keenan, Chris Coro, Heidi Silver-Pacuilla , Karla Ver Bryck Block
NOVA: Michelle Murray
Beverly: For a brief overview of the agenda, first I would like to thank the NTI design team.

5. Agenda Overview NTI Design
Five sessions, one on each of five priorities from the August meeting
Present options for operationalizing from which you can chose
Provide time to discuss the pros and cons with your colleagues
Provide time to plan for implementation.
Beverly or Sheryl: The designed the NTI around five priority topics from the August meeting. The format for each first presents options for operationaizing that component followed by time to discuss the advantages and disadvantages of the options and plan how you might implement back home.
Beverly: Our first session focuses on how to plan, develop, implement and evaluate a WIOA compllant local program competion. Sheryl and Sandy will start it off.

6. Session # 1: Compliant WIOA Competitions
Sheryl Hart (AZ) and Sandy Crist (MS)
NTI Design Team: Susan Fish (OR), Jennifer Foster (IL), Marcia Hess (WY)
Checklist Background
NAEPDC solicited timelines and checklists from our members
OCTAE provided Monitoring Instrument Module 3 Funding Local Grants
Blended those into one document, sent it out to everyone, got feedback and produced this next iteration
Sheryl or Sandy: We again want to thank the Design Team, especially our NAEPDC colleagues.
Many of you were interested in how to plan and organize the competition at the August meeting. We felt the best way to meet our needs was to develop a checklist of all the possible components, compliance and best practices. In September we solicited timelines and checklist from you. After meeting with OCTAE they provided the monitoring instrument for funding local grants which gave us those compliance items. We blended them all into one document, sent to you weeks ago, got your feedback and produced the iteration you got last week.

7. Session # 1: Compliant WIOA Competitions
We include a column for the date in case you wanted to use it to plan. We included all the components we could find and coded them under “type” as C for compliance of P for good practice. WARNING: the compliance components need to be in your plan. The Good Practice items are optional. If they fit our state, use them. If not, hit “delete.” The Activities and Strategy options are ideas we have collected to get you thinking about how you could respond to each component. We added the last three columns for use in the workgroups after this session.

8. Session # 1: Compliant WIOA Competitions
The Checklist
Planning
Designing your competition process
Developing your funding formula
Designing how to prepare local WIB review
Policy Development
RFP Materials
Proposal Review Process
Setting Up New Programs
The components fell out into five categories (read the slide)
As you saw, for each component there may be a number of subcomponents as well as strategies or activities to address each component
Even though there is a lot of information in these 13 pages, you may want to add others and drop out some to fit your state.

9. Session # 1: Compliant WIOA Competitions
Pre-NTI Homework
In your last week asking you to
Note additions or corrections
Rate each component as “comfortable” or “uncomfortable”
Identify the components for which you wish samples
We preferred not to just hand out such a complex document here at the NTI so last week we sent you the latest version of the checklist along with a worksheet asking you to read over the revised checklist, not any additions or corrections, rate each component and sub component as to whether you were comfortable managing that one or uncomfortable. Lastly we asked you to identify the components you would like to have samples. Next week we will solicit samples from you and we hope you will share them. Our goal is to set up a webpage using the check list as a table of contents and link samples to each component for which we can collect samples.

10. Workgroup Review the Checklist and Karla’s document
Share ideas about “comfortable” and “uncomfortable” items
Identify samples you would like
Reflect and plan your RFP
Karla is going to share other considerations from the OMB and other required sources. Then we are going to break into the workgroups – there is a workgroup assignment sheet in your packet. A member of our design team will be in each workgroup to record your ideas and needs. We will ask you to review the checklist and karla’s document. Share ideas about which components your are comfortable with (AND MAY BE WILLING TO SHARE SAMPLES), what you are uncomfortable with, what you would like samples of and take some time to reflect and plan your rfp and talk over options with your colleagues.

11. Risk and Subaward Competitions under the Uniform Guidance
Session #1
Karla Ver Bryck Block
DAEL ● OCTAE
U.S. Department of Education
During this class, we will briefly discuss the Uniform Guidance, then go to general concepts of risk, risk assessments, and risk-based monitoring and other requirements for pass-through entities.

12. Purpose and Use of this Presentation
The Department of Education is providing this presentation to help its grantees understand the contents of the Uniform Guidance and should be viewed after or alongside of the regulations. It is not a substitute for reading the regulations. To get the most out of this presentation, view this as a notes page. The notes section of each slide provides information to supplement the points on the slide. To change to notes page: Go to View and click on Notes Page.
The Uniform Guidance, which is title 2 of the Code of Federal Regulations (CFR) Part 200, has also been called the omni-circular and the supercircular. The full name is the Uniform Administrative Requirements, Cost Principles, and Audit Requirements. We refer to it as either the Uniform Guidance or 2 CFR Part 200, throughout this presentation.
The Uniform Guidance is found at:
Additional resources for grantees are found at:

13. Learning Outcomes
Understand Uniform Guidance requirements on AEFLA competitions
Understand concepts of risk and risk-based monitoring
Understand the risk requirements in 2 CFR Part 200
Be able to find the relevant regulations in 2 CFR Part 200
Apply this knowledge in your job

14. Uniform Guidance
Title 2 of the Code of Federal Regulations, Part 200 (2 CFR Part 200)
Accepted by the Department of Education in 2 CFR Part 3474
2 CFR Part 200 was adopted by Department of Education (the Department) on December 19, 2014 at 2 CFR Part 3474, as its regulations for administering all grants, with one exception and one clarification. The clarification is that we will continue to use high risk designations when awarding grants. The exception concerns the process the Department will follow in granting exceptions from the requirements of the Uniform Guidance.
Exceptions is an important point because it explains why there seem to be so many differences in implementation when this guidance was supposed to bring consistency across the Federal government. The Department has only one exception; while some Departments have a large number of exceptions.

15. When did 2 CFR Part 200 start?
Uniform Guidance (2 CFR Part 200) applies to:
New and Continuation grants awarded on or after December 26, 2014
Former regulations (EDGAR Part 74 or 80 and OMB circulars) apply to:
Grants awarded prior to December 26, 2014
See the Presentation for Grantees and the Department’s FAQs for more information on implementation dates.

16. Definitions: Pass-through entities
A non-Federal entity that provides a subaward to a subrecipient to carry out part of a Federal program (§200.74).
At ED:
State-Administered Formula Grants: SEAs, other grantees which make subawards
According to 2 CFR Part 200, Subpart D, risk assessments and risk based monitoring must be conducted by pass-through entities.
Many State-administered formula programs involve pass-through entities to get money to local educational agencies (e.g., Title I, Title II, IDEA).
Some discretionary programs involve pass-through entities (Early Learning Challenge, i3), but most do not.  There must be an explicit authority to subgrant either in statute or in the Federal Register (as per EDGAR ).

17. Definitions: Subrecipient and Contractor
A pass-through entity must determine the relationship and the applicable requirements:
Subrecipient means a non-Federal entity that receives a subaward from a pass-through entity to carry out part of a Federal program (§200.93).
Contractor means an entity that receives a contract as defined in Contract (§200.23).
§ explains the roles of subrecipients and contractors
Subawarding is not to be confused with group/partner grants or standard contractual arrangements. As explained in slide 7, however, subgranting is only allowed if authorized by statute or announced in the Federal Register.

18. Understanding Risk

19. What is Risk? (GAO – The Green Book)
Risk is the possibility that an event will occur and adversely affect the achievement of objectives.
The Green Book can be found at:

20. What is Risk Management? (GAO)
Risk management can be described as the continuous process of assessing risks, reducing the potential that an adverse event will occur, and putting steps in place to deal with any event that does occur.
In a 2005 report ( GAO said (see context of slide)
It’s managing to reduce the likelihood that an event will have an adverse affect on a project’s goals.
NOT just fraud prevention
NOT just reacting to a catastrophe
NOT just about financial issues
It addresses performance and fiscal compliance.
Risk is about events that may or may not happen; risk management is planning for uncertainty.
For example, you buy a home computer. The risks include damage to the hardware (crashed system) and malware attacks which damage your files or allow someone to steal your identity.
To manage those risks, you have a back up system, such as an external drive or cloud space to keep duplicates, and virus protection software. You also download patches as they become available. Then you monitor your backups and your virus to ensure they are effective. It’s a continuous process.

21. Risk Management Risk Assessment Risk-Based Risk Mitigation Monitoring
The risk management cycle is a framework for continuous discovery, analysis, action, and improvement.
Risk assessment considers the relevance, importance, incidence, and manageability of risk related to subrecipient performance and financial operations.
Risk mitigation is taking appropriate action to address potential problems, including imposing the appropriate types and levels of requirements and provides appropriate types of monitoring and levels of technical assistance.
Monitoring is the process followed to assess how well a grant is being implemented, achieving program objectives, and complying with requirements, terms and conditions.
Throughout the entire cycle, every decision at every step must be documented.

22. Key Concepts and Changes in the Uniform Guidance
Risk and Monitoring
Key Concepts and Changes in the Uniform Guidance
Indicates a new requirement or change to existing requirement for pass-through entities.

23. Parallels: ED and Pass-through entities
Whether an ED program office or pass-through entity, the following concepts are the same. The practices and tools, however, may differ.
Risk Assessment,
Risk Mitigation, and
Risk-based Monitoring.
Like pass-through entities, the Department has requirements for risk assessment, mitigation, and monitoring to reduce risk. This presentation focusses on what the pass-through entities should and must do.
Note that in the Uniform Guidance “must” means that statement is required; while “should” and “may” are not requirements, but suggestions.

24. Overview (2 CFR 200.331) Grantees, as pass-through entities, must:
Assess risk of subrecipients. (§ (b))
Monitor to ensure the subaward is used appropriately and in compliance with the award and all associated regulations. The monitoring plan should be based on the results of the risk assessment. (§ (d))
The risk assessment and monitoring should address both financial and programmatic considerations.
The Uniform Guidance does not specify when a risk assessment must be completed. A grantee can complete a risk assessment before making a subgrant if it chooses, but it is not required. A grantee may find it prudent to do so for certain programs or certain subawards; for example, to identify situations where specific conditions are needed.
There is a tendency to think about risk and control environments to be matters of fiscal compliance.  And, while that is important, there is also a risk that programs will fail to accomplish their programmatic goals. Therefore, risk and monitoring must look at successful programmatic implementation in addition to fiscal compliance.

25. Where are the Requirements?
Topic
Pass-through entities
Award Notification
§ (a)
Risk Assessment
§ (b)
Specific Conditions
§ *
High-Risk Designation §
Monitoring
§ (d)-(e)
Subpart F*
Non-Compliance
§ *
*Section references these sections for requirements.
Here is a quick reference for key items in the Uniform Guidance relevant to subaward management.

26. Pass-Through Risk Review (§200.331(b))
Items that may be part of the pass-through entity’s review:
Prior experience with same or similar subawards
Results of previous audits
Whether new or substantially changed personnel or systems
Extent and results of Federal awarding agency monitoring
The Uniform Guidance does not specify how to conduct an assessment or what must be included. However, ED recommends that pass-through entities develop a framework for review, as many SEAs have already done, to ensure greater consistency in the reviews. The Uniform Guidance suggests the items on the slide be part of the review.
Remember to include both programmatic and financial criteria in your risk review.

27. Risk Rubric Risk Rubric highlights Risk indicators Risk categories
Scoring mechanism
Risk designation levels
A risk rubric is not required, but is a method grantees can use to consistently assess risk.
It identifies the risk indicators, typically those specific to an organization. Program-wide risks would apply to all subgrantees and can be addressed through general training and technical assistance.
It identifies categories of risk; for example, financial, programmatic, and compliance risks.
It provides a scoring mechanism which weights the most important risks and measures and individual entity’s risk.
The designation levels takes the score and identifies whether that is high, medium, or low risk.
All of these elements of the rubric should be developed by the pass-through entity. Neither the Department nor the Uniform Guidance provides guidance on how to measure or designate risk.

28. Specific Conditions (§200.207)
If deemed appropriate based on the risk assessment, specific conditions (e.g., increased reporting, reimbursement plan) may be placed on:
A subaward from a pass-through entity (§ (c) refers to (§ ))
In addition, a high-risk designation can be added to a subaward, as per §
Based on the assessment of risk, a pass-through entity may determine that specific conditions should be placed on a subaward to mitigate risk.
§ Specific conditions, (b) These additional Federal award conditions may include items such as the following:
(1) Requiring payments as reimbursements rather than advance payments;
(2) Withholding authority to proceed to the next phase until receipt of evidence of acceptable performance within a given period of performance;
(3) Requiring additional, more detailed financial reports;
(4) Requiring additional project monitoring;
(5) Requiring the non-Federal entity to obtain technical or management assistance; or
(6) Establishing additional prior approvals.

29. Other Pass-through Requirements
The pass-through entity must provide specific information in the subaward (§ (a)), including but not limited to:
Federal award identification, e.g., DUNS number
Indirect cost rate (restricted rate)
Requirements imposed by the pass-through entity
Requirement to provide access to records for audit
Although we are focusing this class on risk, the second part of the title is subaward management. Your grantees and you should be aware of the requirements for award notification to their subgrantees. See our FAQs for more information.

30. Pass-Through Monitoring Procedures
When monitoring subrecipients, the pass-through entity must (§ (d)):
Review reports required by the pass-through entity
Ensure subrecipient takes appropriate action on deficiencies identified through audits, on-site reviews, and other means
Issue a management decision for single-audit findings pertaining to Federal award
Verify audits of subawards (§ (f))
Threshold for required audits increased to $750,000
The UG also identifies requirements for pass-throughs monitoring their subawards. These are not substantially changed over what was required through the audit requirements in previous years. However, the threshold for audits did increase with the UG.

31. Pass-Through Entity Monitoring Tools
The following tools may be useful, depending upon the risk assessment (§ (e))
Providing subrecipient training and technical assistance
Performing on-site reviews
Arranging for agreed-upon-procedures engagements under § , Audit services [in Cost Principles]
The pass-through entity determines which tools to use based upon its assessment of risk
Tools:
- Providing subrecipient training and technical assistance – based on risk specific to specific entities and to the program.
- Performing on-site reviews (or other types of monitoring such as virtual or desk monitoring), and
- Arranging for agreed-upon-procedures engagements under § , Audit services [in Cost Principles]. The agreed-upon-procedures do not provide auditors’ opinions, but will provide a factual assessment based on the particular parameters identified for the procedrues. Note the list of what parameters that Federal funds can be used to review in § (c)(3) (see below). Other parameters can be used, but not paid with Federal funds.
Also, monitor as per any specific conditions attached to the award.
§ (c) -  
Agreed-Upon-Procedures costs are allowable only if the agreed-upon-procedures engagements are:
(1) Conducted in accordance with GAGAS attestation standards;
(2) Paid for and arranged by the pass-through entity; and
(3) Limited in scope to one or more of the following types of compliance requirements: activities allowed or unallowed; allowable costs/cost principles; eligibility; and reporting.

32. Risk-Based Monitoring Plan
Monitoring Plan highlights
Assessment methodology
Last Fiscal Year (FY) assessment & monitoring activities
Current fiscal year assessment & monitoring strategies
Resource constraints
Although not required, a risk monitoring plan is very useful to ensure efficient use of resources (time and money) and tools in monitoring performance and risk of subgrantees. To develop an effective plan, know your program and your subrecipients.
Risk assessment methodology – What to do when reviewing reports and conducting site/desk/virtual monitoring.
Risk assessment and monitoring activities from previous FY – How did it work and what improvements can be made?
Current FY risk assessment and monitoring strategies – Do you need to make changes to improve the effectiveness of your monitoring?

33. Audit Requirements Single Audit (2 CFR Part 200 Subpart F)
Alternatives to Single Audits
Program specific audit
Agreed-Upon-Procedures
Additional Audits, as requested by Congress or the Federal Government
GAO Audits
OIG General Audits
Pass-through entities must ensure their subgrantees comply with audit requirements. Single audits are required for entities which expend $750,000 in Federal funds in one fiscal year. If the entity receives all Federal funds from only one program, an alternative is a program specific audit, as outlined in subpart F. The non-Federal entity is now required to submit its single audit directly to the Federal Audit Clearinghouse.
Otherwise, if the entity is not required to have an audit (e.g., if the entity receives less than $750,000 in Federal funds), the PTE can include agreed-upon-procedures as an alternative. It is less stringent and powerful than an audit, but it can provide a glimpse into the workings of a smaller entity (see slide 21 notes).
In addition, GAO and OIG perform audits, which can be financial or performance audits. See the audit presentation posted to the technical assistance for grantees at Ed.gov for more information.

34. Continuous Improvement Standard
Evaluate annually the risk management process to identify its strengths and weaknesses and refine ability to reduce risk throughout the grant process
Continuous Improvement is an ongoing process that uses the results of risk identification, assessment, and mitigation to refine and enhance ED’s risk management structure.
Evaluate annually the risk management process to identify its strengths and weaknesses and refine ED’s capability to reduce risk throughout the grant management process.

35. Compliance: Grantees Responsibility for subawards:
Strong Internal Controls for managing subawards
Communication with ED Staff and with subrecipients
Documentation of all activities
Monitoring subawards
Verifying subgrantees are audited, if required

36. Uniform Guidance Resources
Technical Assistance for ED grantees may be found at

37. Session # 1: Compliant WIOA Competitions
(Karla)

39. Click

40. Session # 1: Compliant WIOA Competitions