"Post-Award Monitoring and Compliance"
P tA d M it i C li NSF Post Award Monitoring & Compliance NSF Regional Grants Conference 23, March 22 – March 23 2010 Cleveland, Ohio Hosted by: Case Western Reserve University 0 Division of Institution & Award Support y Cost Analysis & Audit Resolution Branch Carol Orlando, Team Lead for Cost Analysis and Indirect Cost Rates Robyn Daniels, Grant & Contract Cost Analyst 1 Discussion Points Portfolio Monitoring Overview Risk Assessment Monitoring Activities g g Monitoring Coverage Tracking and Feedback Looking Forward 2 Spurred by increased funding to support research in science, engineering, and education, NSF’s award portfolio has been g g increasing over the past decade Standard Grants $23.8 billion in total award funding Type of Award Instrument Continuing Grants 39,777 active awards <1% Cooperative Agreements 1% – Standard and continuing grants 2% Other Awards Fellowships – Cooperative agreements – Graduate research fellowships – Other awards 45% 52% 2,238 awardees – Universities / 4-year colleges – Non-profit organizations Type of Awardee Organization Universities / 4-year – For-profit organizations Colleges Non-profit Institutions – Community colleges 7% 1% – Other awardees 28% For-profit Institutions Community Colleges Other Awardees 49% 15% Award information as of September 30, 2009 3 NSF has transformed its post-award monitoring approach to meet evolving oversight needs g g Evolution of NSF Post-Award Monitoring Processes 2002 2003 2004 2005 2006 2007 2008 2009 Formalized monitoring • Developed post-award • Instituted Desk Review • Covered over 90% of the program: monitoring policies and program award portfolio through • Piloted Site Visit procedures • Expanded resources for advanced monitoring procedures • Created the Division of post-award monitoring activities • Developed basic Risk Institution and Award • Continued to integrate Assessment Model Support (DIAS) to align baseline and advanced corporate systems with monitoring activities business practices • Emphasized post-award • Refined Risk • Revised Risk Developed risk mitigation monitoring Assessment Model Assessment Model to strategy for ARRA • Increased business • Documented Baseline an institution-based funding: i t to d assistance t awardees d Advanced and Ad d approach h Incorporated ARRA- • I t d ARRA Monitoring approach • Formalized monitoring related risk factor into • Refined Business follow-up procedures risk assessment model System Review (BSR) • Deployed customer • Developed enhanced Procedures for large feedback survey monitoring activities: facilities • No post-award recipient report reviews, monitoring findings in supplemental desk financial statement audit reviews, and enhanced report for the first time site visits and BSRs since 2001 4 NSF has developed a risk-based portfolio monitoring strategy that integrates post-award monitoring activities and focuses limited g g resources on institutions administering higher risk awards The portfolio monitoring strategy contains three key components – Risk Assessment – Enables NSF to focus limited advanced monitoring resources on awardees managing higher risk awards Comprehensive Monitoring Activities – S C h i M it i A ti iti l Supplements l l t largely automated baseline activities with focused advanced monitoring activities to provide broad coverage of the award portfolio. These activities are designed to mitigate the risk of non compliance with f d l and NSF award administration requirements federal d d d i i t ti i t Tracking Monitoring Results and Gathering Feedback – Feedback Enables NSF to better target business assistance activities and to make continuous improvements to the risk assessment model and monitoring procedures 5 NSF conducts an annual risk assessment of the awards and awardee institutions within its award portfolio to determine p monitoring priority for each awardee Risk Adjustment Awardee Risk NSF Criteria Categories Award Portfolio Risk-Based Award Category A Ranking ~7% of Awardees Risk Points ≥ 32 Risk-based Total Obligation > $500K Awardee Ranking 39,777 Awards 2,238 Awardees 11 2 3 Category B ~23% of Awardees Ranked by risk Ranked by risk 16-32 Risk Points Total Obligation > $500K g points points Category C ~70% of Awardees NSF not Cognizant Risk Points < 16 or Risk Adjustment Screens Total Obligation < $500K 1. Institutional factors 2. Prior monitoring activities and Prioritize monitoring based on: results - Highest risk points 3. Award administration and - Highest dollars program feedback - Number of awards From Awards To Awardees 6 By focusing on the 31% of the awardees administering higher risk awards, awards NSF can target advanced monitoring activities on 94% of the funding Category C 1,535 awardees Category B $1.4 billion 541 awardees 3,645 3 645 awards Awardees in Categories A & B $5.1 billion administer 94% of NSF’s 11,074 awards award obligations Category A 162 awardees $17.2 billion 25,058 awards 7 Discussion Points Portfolio Monitoring Overview Risk Assessment Monitoring Activities g g Monitoring Coverage Tracking and Feedback Looking Forward 8 NSF has developed an integrated set of monitoring activities that provide broad coverage of its award portfolio g ocused and targeted Site Advanced Visits BSRs Monitoring Desk Reviews Federal Financial Report (FFR) creasingly fo Transaction Testing Baseline Grants and Agreements Monitoring Monitoring Inc Automated Report Screening Percentage of Portfolio Category Category Category A B* C * Category B selected for advanced monitoring on resource-available basis 9 Baseline monitoring activities incorporate day-to-day award administration with automated monitoring to provide broad g coverage of the entire award portfolio B li Monitoring ti iti Baseline M it i activities are: – Largely streamlined or automated – Designed to identify exceptions and potential issues that require immediate research, resolution, or further scrutiny through advanced monitoring – Focused on one or more awards rather than the awardee institution’s grant management systems g Baseline Monitoring activities consist of: – Automated financial report screening – Grants and Agreements Officer award administration – FFR transaction testing 10 Advanced monitoring focuses on award administration practices of selected awardees managing higher risk g g g awards Advanced monitoring consists of: environment – Desk Reviews – Assess general management environment, review selected accounting and financial management policies and procedures and verify financial information submitted by awardees – Site Visits - Conduct onsite review of selected higher risk award administration areas and follow up on desk review results as needed – BSRs – Combine desk and onsite reviews of large facility business systems to determine whether the operation of those facilities meet NSF’s expectations for business and administrative management Advanced Monitoring activities are: – Designed to develop reasonable assurance that awardees possess adequate policies, processes, processes and systems to properly manage federal awards – Focused on grant administration and accounting practices rather than technical or programmatic achievement p (p g – Intended to provide value-added business assistance (programmatic and technical assistance is provided by NSF’s program directorates) 11 Desk Reviews enable NSF to gain insights into awardees’ core award administration policies, procedures, and practices Core Functional Review Areas General Management Survey Accounting and Financial Management Review FFR Reconciliation 12 Site Visits enable NSF to focus on selected, higher risk aspects of an institution’s award management practices g Targeted Review Areas C lt t Consultants Cost Sharing Final Project Reports g Fringe Benefits Indirect Costs Participant Support Costs Procurement Program or Award-Related Income Property and Equipment Special Terms and Conditions Subawards and Subrecipient Monitoring Time and Effort Records Travel 13 Discussion Points Portfolio Monitoring Overview Risk Assessment Monitoring Activities g g Monitoring Coverage Tracking and Feedback Looking Forward 14 NSF increases the impact of its monitoring efforts through collaboration among departments responsible for monitoring and g g other awardee-related activities Site Audit Visits BSRs Indirect Cost Resolution Rate Negotiation Desk Reviews FFR Transaction Testing Grants and Agreements Monitoring Automated Report Screening Business Program Assistance Monitoring Outreach 15 Over the past five years, NSF’s advanced monitoring activities have covered 94% of all funds awarded 16 Over the past five years, NSF’s advanced monitoring activities have covered the 24% of awardees that manage 94% of all funds awarded Portfolio Coverage 31,895 Awards 11 BSRs $19,376,000,000 tivities onitoring Act 70 OIG Audits dvanced Mo 140 AMBAP Site Visits Ad AMBAP Desk Reviews 389 Reviews Completed NOTE: Some awardees have participated in multiple advanced monitoring activities; e.g. a desk review and a site visit. 17 NSF tracks the results of its monitoring efforts and gathers feedback to improve its monitoring processes and business g assistance efforts Process Improvements Adjust risk assessment methodology to reflect monitoring priorities Update monitoring procedures to efficiently focus on topical issues Identify award administration trends to better focus business assistance 18 In FY 2010, NSF will augment its post-award monitoring tool kit to provide additional monitoring oversight for ARRA-funded awards g g g ARRA Award Monitoring Review of ARRA-funded recipient reports Enhanced Desk Reviews Enhanced Site Visits Enhanced BSRs 19 Looking to the future, NSF will continue to strengthen the effectiveness of its monitoring system g y g Challenges Growing and Diversified Portfolio of Awards Maintain comprehensive coverage Further integrate p g g post-award monitoring activities Enhance management systems to better track monitoring data Develop knowledge base of lessons learned Share best practices with other agencies 20 Keys to Success for Awardees Know requirements (award letter, award terms and conditions, OMB Circulars) Good accounting practices – accumulation & segregation of costs Focus on the objectives of the project/program Document approvals and conversations between the awardee and NSF 21 g Where can I get information on-line? General : http://www.nsf.gov Division of Institution & Award Support : http://www.nsf.gov/bfa/dias/index.jsp http://www.nsf.gov/bfa/dias/caar/index.jsp Cost Analysis & Audit Resolution: http://www nsf gov/bfa/dias/caar/index jsp Policy Office : http://www.nsf.gov/bfa/dias/policy/index.jsp 22