Security Surveillance

Grants
Monitoring

2 CFR Part 200, also called the Uniform Guidance, lays out a number of requirements related to the use, management, and oversight of federal grant funds. Among them is the duty of grant recipients, such as state agencies, to monitor those funds. They're also obligated to monitor their subrecipients--schools, non-profits, local government agencies and more.

But what, exactly, is grant monitoring? Odds are, it isn't what you think.

When money flows directly from the federal government to a non-Federal recipient (for example, a state agency such as the Utah Department of Education, or a municipal government like the Los Angeles City Council), the non-Federal entity is responsible for oversight of the operations of the Federal award-supported activities.
 
Specifically, "The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the non-Federal entity must cover each program, function or activity. See also § 200.332." (§ 200.329(a)) 

Did You
Know?

Auditing and monitoring are not the same thing.

For pass-through agencies, requiring simple financial auditing isn’t enough. Even ensuring that Single Audits (formerly called A-133 audits) are conducted doesn't fulfill the legal requirement to monitor Federally funded programs. Failing to monitor subrecipients, poor internal controls, insufficient documentation, and improperly conducted risk assessments are common findings of watchdog agencies.

So what's the difference, and how does knowing protect your organization?

Learn More About Monitoring
Oversight Requirements

According to § 200.332 of the Uniform Guidance, any entity that meets the definition of a pass-through entity must:

(1)
Ensure that every subaward is clearly identified to the subrecipient as a subaward.

(2) Provide subrecipients with specific information (detailed in § 200.332) at the time of the subaward, and if any of these data elements change, in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward.

(3) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward, for purposes of determining the appropriate subrecipient monitoring.

(4) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in § 200.208.

(5) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved.

(6) Verify that every subrecipient is audited when required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501 (currently $750,000).

 

(7) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records.

 

(8) Consider taking enforcement action against noncompliant subrecipients as described in § 200.339 and in program regulations.

Monitoring Tools

The Uniform Guidance may require monitoring to include certain components, but it's open-ended on the subject of what monitoring programs can look like, including scheduling, what tools you use, and what standards you use to measure program performance. This gives organizations the freedom to design monitoring initiatives that meet their unique needs and help capture important information to guide program improvement.