Grants Compliance from an Agency Perspective

Governor's Grants Office

Higher Education ConferenceBowie State University

May 22, 2012

Ask Early, Ask Often

• Jeremy Leffler– Outreach Specialist, Policy Office

– Division of Institution & Award Support

– Office of Budget, Finance & Award Management

– jleffler@nsf.gov; 703.292.8075

– Email general policy questions to: policy@nsf.gov

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Engineering(CISE)

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(BIO)

Office of theInspector General

(OIG)

DirectorDeputy Director

National Science Board(NSB)

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Social, Behavioral

& EconomicSciences

(SBE)

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Resources(EHR)

Budget, Finance & Award

Management(BFA)

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(IRM)

NSF Organizational Chart

Office of Budget Finance & Award Management (BFA)

Office of Budget, Finance & Award Management

Office of Budget, Finance & Award Management

Division of Institution & Award SupportDivision of Institution & Award Support

PolicyPolicy ClearanceClearance OutreachOutreach

Division of Grants & AgreementsDivision of Grants & AgreementsDivision of Acquisition & Cooperative Support

Division of Acquisition & Cooperative SupportDivision of Financial ManagementDivision of Financial ManagementBudget DivisionBudget Division

Policy OfficePolicy OfficeSystems OfficeSystems Office Cost AnalysisCost Analysis

Accountability & Transparency

• Drivers

• Current Landscape

• Desired Outcomes

History and Timeline

COFAR – Goals• Minimize risks of waste, fraud, and abuse

of Federal funds

• Minimize administrative burden for recipients and agencies

COFAR – Organization• OMB Comptroller (Co-Chair)• Eight Federal agencies

– Department of Agriculture– Department of Education– Department of Energy– Department of Health & Human Services (Co-Chair)– Department of Homeland Security– Department of Housing & Urban Development– Department of Labor– Department of Transportation

• Rotating agency– National Science Foundation

OMB – Federal Register Notice• Published in February with comments due

April 30, 2012.

• Requesting public comment on reform ideas

• Reforms highlighted focus on three areas:– Reforms to audit requirements;– Reforms to cost principles;– Reforms to administrative requirements.

Award Monitoring and Business Assistance at NSF

NSF Award Portfolio• $25.5 billion in total

award funding

• 42,192 active awards– Standard and continuing

grants

– Cooperative agreements

– Graduate research fellowships

– Other awards

• 3,197 awardees– Universities / 4-year

colleges

– Non-profit organizations

– For-profit organizations

– Community colleges

– Other awardees

Award information as of July 2, 2010

Risk-based portfolio monitoring strategy

The portfolio monitoring strategy contains three key components

•Risk Assessment

•Comprehensive Monitoring Activities

•Tracking Monitoring Results and Gathering Feedback

Ris

kA

sses

smen

t Monitorin

gA

ctivities

Feedback

From Awards To Awardees

Risk-based Awardee Ranking

Prioritize monitoring based on: - Highest risk points - Highest dollars - Number of awards

Risk-Based Award Ranking

Category A~7% of AwardeesRisk Points ≥ 32Total Obligation > $500K

42,192 AwardsRanked by risk points

Category B~23% of Awardees

16-32 Risk Points

Total Obligation > $500K

Category C~70% of Awardees

NSF not Cognizant

Risk Points < 16 or

Total Obligation < $500K

3,197 Awardees Ranked by risk points

1

Risk Adjustment Screens1. Institutional factors2. Prior monitoring activities

and results3. Award administration and

program feedback

Risk Adjustment Criteria

Awardee Risk Categories

NSFAward

Portfolio

NSF Annual Risk Assessment

1 2 3

NSF Monitoring Activities

Desk Reviews

Federal Financial Report (FFR) Transaction Testing

Grants and Agreements Monitoring

Automated Report Screening

SiteVisits BSRs

Percentage of Portfolio

AdvancedMonitoring

BaselineMonitoring

Incr

easi

ng

ly f

ocu

sed

an

d t

arg

eted

Category

B *

Category A

* Category B selected for advanced monitoring on resource-available basis

Category C

Award Monitoring: Site Visit Targeted Review Areas• ARRA Review• Consultants• Cost Sharing• Final Project Reports• Fringe Benefits• Indirect Costs• Participant Support Costs• Procurement• Program or Award-Related Income• Property and Equipment• Special Terms & Conditions• Subawards and Subrecipient Monitoring• Time and Effort Records• Travel

Top Compliance Issues Identified in NSF Business Assistance Program

• Time and Effort– Written policies and procedures– Time and effort documentation

system– Inclusion of administrative support

labor costs as direct charges to NSF awards

Top Compliance Issues Identified in NSF Business Assistance Program

• Subawards and Subrecipient Monitoring– Inadequate pre-award

documentation;– Missing subaward agreement;– Judgmental nature of adequate

monitoring

Top Compliance Issues Identified in NSF Business Assistance Program

• Participant Support Costs– Failure to properly document that funds

have only been expended for these budgeted costs;

– Lack of written policies and procedures for documentation;

– Failure to document attendance of participants;

– Not tracking costs in separate accounts

Keys to Success for Awardees

• Know the requirements (award letter, award terms and conditions, OMB Circulars)

• Good accounting practices – accumulation and segregation of costs

• Focus on the objectives of the project/program

• Document approvals and conversations between awardee and NSF

• Ask Early and Ask Often!

Ask Early and Ask Often!

• Policy Office– policy@nsf.gov – 703.292.8243

• Cost Analysis & Audit Resolution– bfadiascaar@nsf.gov – 703.292.8243