Effective post-award risk management should be thought of as an iterative process – something you return to time and again to refine considering new data or new lessons learned. A good post-award risk assessment and monitoring strategy is the result of thoughtful examination or reexamination of your internal processes that allow you to assess risk in real-time.
These processes can be deployed more efficiently and in a more standardized way with a grants management system (GMS). You must have a clear understanding of your grants ecosystem to be able to effectively set up the right conditions to assess post-award risk, and to ensure your system is configured to give you the right data at the right time. The information below information will provide you with some practical tips to make sure you are getting the most from your GMS when it comes to post-award risk assessment.
Assess at the right level
The database structure in your GMS must allow you to relate awards to entities and awards to programs. This is critical to assess and monitor risk at various levels throughout the life of the award. This relationship will also allow you to roll up the data for reporting in your GMS enabling real-time monitoring and transparency in the present, and more streamlined audits in the future.
Before you can input that information into your GMS, however, you must be sure you have the relevant information for the level you are looking at/working within. There are various levels you'll want to consider assessing risk at, such as the program level, the entity (recipient, subrecipient, etc.) level, or at the award level. Risk assessment at all these different levels is valuable, but your organization should prioritize the levels you feel you will get the most value from.
Some of the data you may want to consider for each level is as follows.
Program-level data to consider:
- What is the total number and dollar amount of all open awards?
- Are there new projects or areas of focus for the program?
- How many applications are there, and what is the average amount requested?
- How many new grantees are there as opposed to grantees we have a history of working with before?
- What is the total number of low-risk vs. high-risk grantees?
- How many subawards need to be monitored?
- Do they have subrecipients that meet the criteria for the Single Audit?
Entity-level data to consider:
- What are the number and total dollar amount of open awards?
- How many other awards do they have in USASpending.gov?
- Is the grantee/subrecipient new or high-risk?
- Is the entity in question also managing any subawards?
- Are there special conditions for monitoring?
- What are their recent audit results, and past performance?
- Are they included on the Excluded Party List? What is the status of their SAM.gov EUI number, or their SAM.gov registration?
- Are there any audit findings or monitoring results that should be considered?
Award-level data to consider:
- What is the planned spend versus actual spend?
- How much progress is there against award objectives?
- What is the number of award modification requests?
- What are the recent audit results (OIG, GAO, and Single Audit)?
- Are there annual desk reviews and onsite visit results?
The GMS also must have a way of managing entities and their relationships with one another in addition to the ability to associate entities with an award. Your GMS should be able to register and validate who they are so you can use that information across the organization for everyone working in the system who needs access to it.
Determine the right criteria and quantify appropriately
Once you have considered the relevant risk factors at each level, you should determine a scoring method for assessing that risk. This will be specific to your organization.
Risk monitoring tools should be included as part of performance monitoring in your GMS, and this should all be captured as data in the system. One obvious risk assessment data point that can be monitored with a GMS is planned spend versus actual spend. This would require a detailed planned budget that consists of allowable expenditure categories, eligible match, and eligible indirect costs. It would require the ability to capture expense actuals reported by your recipients and/or subrecipients in real time.
Once you have identified the criteria above and configured your system to capture all of this as data, you can use the information to quickly determine their risk in a single category as it relates to planned versus actual spend. Outside of that single category, you can also use this data to monitor patterns in payment requests, expenditures, and budgeted versus actual costs for things like actual costs for personnel, match, and priority spending information.
Some other uses of this data could be to look for patterns in draw and requests. For example, recurring payment requests of the exact same amount can be a red flag for fraud or abuse in some cases. Do you notice any unusual patterns in your requests for reimbursements? Your chosen technology should drive the creation of an audit trail for all amendment and payment requests so you can easily report on them as well as stay on track with milestones and timelines used for performance monitoring.
Overall, your GMS should have the ability to quantify the data you have captured and roll it up into your automated rules engines, or tools that help automatically calculate / use the risk criteria you've defined, to highlight awards at risk. Further, Your GMS’s capabilities should allow you to monitor risk levels in real time throughout the post-award phase to closeout so if adjustments need to be made, you have the data in front of you to help you proceed.
Post-award risk assessment is complicated, but getting help with it shouldn’t be. Grants Management Software can help you refine and streamline your grant processes so you can concentrate on your outcomes. You can even use certain types of grant funding to help offset the cost.
If you have any questions while you’re getting started, or are looking for more resources, don’t hesitate to reach out. We’re here to help.
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