Grants Management Reform Updates and Agency Insights – What to Expect in Fiscal Year 2014

1. Grants Management Reform Updates and Agency Insights – What to Expect in Fiscal Year 2014 November 13, 2013

2. Effective Management of Federal Grant Dollars: Council On Financial Assistance Reform (COFAR) Priorities for FY13-15 AGA November 13, 2013 The Council on Financial Assistance Reform was established in 2011 as a governance body to provide policy level leadership for the Federal grants community. For more information please visit cfo.gov/cofar.

3. Increase in Federal Grants Activity In Billions of $ $600B $200B $91B $24B $7B The Catalog of Federal Domestic Assistance lists more than 2,000 Federal grant programs

4. COFAR Priorities: Strong Controls Yield Better Outcomes Alignment with Procurement Community (Spending Transparency) Alignment with Performance Community (Evidence) Better Outcomes for Grants Alignment with GATB (Spending Transparency) Alignment with CIO Community (Systems)

5. Scope of Grants Circular Reform

6. Summary of Public Comments • 360 comments received: • State, local, tribal governments, universities, nonprofits, CPA firms, Federal agencies, OIGs, GAO, members of congress, individuals • Broad public support and enthusiasm, momentum for completion • Key issues need to be reviewed and refined prior to completion • Target publication this winter.

7. Grants Data Standardization

8. Federal Spending Transparency

9. Federal Spending TransparencyDHS’ Historical Results (Through 3rd Quarter 2013)

10. Workforce Development

11. Strong Program Oversight: Audit Resolution

12. Cooperative Audit Resolution: Pennsylvania • Covered 119 findings on Department of Education programs from 7 years of Single Audits (1990-1996); these findings included $108 million in questioned costs • CAROI team included representatives from 7 offices in the Department of Education (including the OIG) and 8 Pennsylvania State agencies (including the Governor’s Office and the State Auditor) • The 6 month process resolved and closed all 119 audit findings and drastically reduced the amount of repeat audit findings in the subsequent Single Audit • “As the Comptroller for Pennsylvania, I was directly involved with establishing the CAROI process in the Commonwealth. It was one of the most productive and satisfying experiences in my 25 years as a state government official. The establishment of this process provided a solid foundation for effective and successful future collaboration among all levels of government.” • Harvey C. Eckert, Retired Comptroller, Commonwealth of Pennsylvania, Feb. 1, 2010 • Resource – AGA CAROI Guide: http://www.agacgfm.org/AGA/ToolsResources/documents/CAROI.pdf

13. Next Steps: Engage With COFAR For More Information Visit: CFO.gov/COFAR Send Questions To COFAR@omb.eop.gov

14. Grants Management Reform Updates and Agency Insights: What to Expect in Fiscal Year 2014 November 13, 2013 Gloria Jarmon, HHS Deputy Inspector General for Audit Services

15. Changes Ahead: Hot Topics • Accountability for Grant Costs • Single Audit Threshold Change • Audit Challenges • Program Challenges • Other Developments

16. Accountability: what’s below the surface isn’t always what you think.

17. Accountability for Grant Costs • Using estimates to claim labor costs • Charging computers as supplies • Allocating contingency funds • Applying cost principles throughout the grant lifecycle

18. Single Audit Threshold Change • Increases from $500K to $750K • Challenges ahead for both audit and • program staff

19. Threshold Increase: Audit Challenges Small reduction in dollars covered (1%, or $3.9B) Significant reduction in number of grantees audited (14%, or 6,300 fewer)

20. Threshold Increase: Program Oversight Challenges • Potentially reduces the number of major programs subject to audit • Shifts oversight burden to agency program managers and pass-through entities • Increases need for agencies/grantors to provide oversight lost through threshold increase

21. Audit Coordinator and Sampling Questions • Lack of clarity in single audit coordinator responsibilities • Statistical Sampling of Quality Control Reviews, or IG-risk based approach?

22. Other Developments • Audit submissions to FAC • Report package and audit report publicly accessible • PII Certifications?

23. Questions?

24. Grants Management Reform Updates and Agency Insights – What to Expect in Fiscal Year 2014 MerrilOliver, CGMS, Deputy Director, State of Maryland Governor’s Grants Office

25. National Science Foundation Dale Bell, Deputy Division Director, National Science Foundation, Division of Institution and Award Support

26. NSF in a Nutshell • Discipline-based structure • Cross-disciplinary mechanisms • Use of Rotators/IPAs • National Science Board Independent Agency Supports basic research & education Uses grant mechanism Low overhead; highly automated

27. NSF Award Portfolio $27.8 billion in total award funding 43,769 active awards • Standard and continuing grants • Cooperative agreements • Graduate research fellowships • Other awards Awardee Institution Types • Universities / 4-year colleges • Non-profit organizations • For-profit organizations • Community colleges • Other awardees

28. Category A ~7% of Awardees Risk Points ≥ 32 Total Obligation > $500K Category B ~23% of Awardees 16-32 Risk Points Total Obligation > $500K 2 3 1 Category C ~70% of Awardees NSF not Cognizant Risk Points < 16 or Total Obligation < $500K Annual Risk Assessment Risk Adjustment Criteria Awardee Risk Categories NSF Award Portfolio Risk-Based Award Ranking Risk-based Awardee Ranking 1 3,197 Awardees Ranked by risk points 42,192 Awards Ranked by risk points • Risk Adjustment Screens • Institutional factors • Prior monitoring activities and results • Award administration and program feedback Prioritize monitoring on: - Highest risk points - Highest dollars - Number of awards From Awards To Awardees

29. BSRs Site Visits Desk Reviews Federal Financial Report (FFR) Transaction Testing Grants and Agreements Monitoring Automated Report Screening Oversight and Monitoring Advanced Monitoring Increasingly focused and targeted Baseline Monitoring Percentage of Portfolio Category A Category B * Category C * Category B selected for advanced monitoring on resource-available basis

30. Project Monitoring • Research Performance Progress Reports (RPPR) submitted in Research.gov • Fully rolled out in March 2013 • Annual, interim and final reports • Structured data collection allows for deeper dives on data provided by awardees

31. Merit Review Pilot Activities Pilot activities maintain the integrity of the NSF merit review process. Some pilot activities include: Asynchronous Panels Preliminary Proposals Mechanism Design

32. Collaborative Audit Resolution In 2011, NSF Management and NSF OIG established the Stewardship Collaborative to strengthen NSF oversight Joint Audit Resolution Policy Joint training Audit resolution checklist Audit templates on transaction detail

33. Key Resources Proposal & Award Policies & Procedures Guide Fiscal Year 2014 Budget Request NSF Strategic Plan for Fiscal Years 2011-2016 NSB Report on Merit Review NSF Cost Analysis and Audit Resolution www.nsf.gov/publications/pub_summ.jsp?ods_key=papp www.nsf.gov/about/budget/fy2014/index.jsp www.nsf.gov/news/strategicplan/nsfstrategicplan_2011_2016.pdf www.nsf.gov/nsb/publications/pub_summ.jsp?ods_key=nsb1333 http://www.nsf.gov/bfa/dias/caar/index.jsp

34. Intergovernmental Partnership---A Shared Mission Helena sims, director of Intergovernmental Programs, AGA

35. Pioneers: 1. One who ventures into unknown or unclaimed territory to settle. 2. One who opens up new areas of thought, research, or development.

36. Intergovernmental Partnership Pioneers October 7, 2007 “What are we signing up for and where are we going?” Who – State Controllers, Federal CFO’s, Auditors, Program Folks What came of the work/exploration of the Partnership?

37. Exploration Results: Intergovernmental Partnership’s Tool Kits and Guides CooperativeAuditResolution and Oversight Initiative Candidate Assessment ToolKit for Grants Managers Making Better Decisions – Leveraging Government Resources in Challenging Financial Times Visit www.agacgfm.org/tools Contact Helena Sims: hsims@agacgfm.org; 850.668.0625 Risk Assessment Monitoring ToolKit Financial and Administrative Monitoring ToolKit Fraud Prevention ToolKit

38. Intergovernmental Partnership Shared Mission Pioneering---What’s Next? Coordinating Resources—Federal, State, and Local for Improved Performance Coordinating Oversight Data Analytics Pilots

39. “Shared Mission” Principles---Charting A Course for Furthering Intergovernmental Partnerships • START A CONVERSATION • IDENTIFY COMMON GROUND • AGREE ON GROUND RULES • CREATE A SHARED STRATEGIC PLAN AND PURPOSE • CONSOLIDATE RESOURCES AND TAKE SHARED ACTION • EVALUATE PROGRESS • CONTINUE CONVERSATION

40. A Wise Man Once Said: • “IF NOT US, WHOM? IF NOT NOW, WHEN? • THE TIME IS NOW AND IT’S UP TO US.” • IF WE ADOPT THIS PREMISE-- • VISION: 5 YEARS FROM NOW, INTERGOVERNMENTAL PARTNERSHIPS ARE NOT ONLY LOOKED AT AS A MODEL OF SHARED MISSIONS, BUT ARE PART OF THE SYSTEMS, STRATEGIES, AND STRUCTURES THAT DEFINE HOW GOVERNMENT CAN WORK BETTER.

41. “Beware of an idea whose time has come.” Emerson

42. Grants Management Reform Updates and Agency Insights – What to Expect in Fiscal Year 2014 November 13, 2013