Getting a grant is a victory, but it’s not the finish line. After you get the grant, a new set of work comes in to play for managing the grant. FEMA has released the following advisory on what FEMA grantees need to know about grant monitoring:
What is financial monitoring?
Financial monitoring is an onsite or desk-based integrity review conducted to verify that grantees are in compliance with the grant terms and conditions; to substantiate grantees’ financial progress by reviewing invoices and receipts to ensure that funds are being expended appropriately; to review financial reports (SF-425s); to ensure grantees have adequate internal controls, policies, and procedures to effectively manage FEMA grants; and to determine if grantees are in need of technical assistance to aid with managing their grants.
How are grantees selected for financial monitoring?
DHS/FEMA uses a monitoring assessment tool to select grantees for financial monitoring. Core indicators, such as program type, award amounts, spending patterns, timeliness in responding to FEMA requests, and prior financial monitoring findings are used to determine if desk review monitoring is necessary. For grantees that are not chosen for financial monitoring using the monitoring tool assessment, FEMA may deem it necessary to conduct a financial monitoring review for one of the following reasons:
- Grantee requests technical assistance;
- Stakeholders request grantee monitoring;
- Issues exist with prior financial or programmatic reviews; or
- Grants Management Specialists recommend grantee for monitoring review.
How often are grantees selected for monitoring review?
Grantees may be selected for financial monitoring review once every two years during the period of performance. Additional monitoring, such as an onsite visit, may be recommended to ensure accuracy of records, verify compliance with grant terms and conditions, and assist grantees with improving administrative efficiencies and enhancing programmatic efficiencies.
What information are grantees required to submit for financial monitoring review?
A Pre-Desk Review Letter is sent to grantees that are selected for financial monitoring review. The Pre-Desk Review Letter provides the grantee with insight on focus areas used to adequately conduct desk reviews. Documents requested in the Pre-Desk Review Letter include but are not limited to the following:
- Copy of most recent audit report;
- General ledger(s)/accounting spreadsheet(s);
- Receipt(s) for expenditures;
- Financial policies and procedures;
- Personnel records; and
- Procurement policies and procedures.
Grants Management Specialists (GMS) review the documentation submitted for review and contact grantees if additional information is needed to assist with completing the financial review. All desk review documentation should be forwarded to the GMS conducting the review.
What should grantees do if a Corrective Action Plan (CAP) or recommendation is received as a result of the monitoring review?
After reviewing the documentation submitted for review, GMS prepare financial monitoring reports that highlight concerns identified during the review. Subsequently, a Post-Desk Review Letter is sent, via e-mail, to grantees. Post-Desk Review Letters outline specific issues as identified during the financial review.