Grant Monitoring
Department of Education Could Improve Its Processes with Greater Focus on Assessing Risks, Acquiring Financial Skills, and Sharing Information
GAO-10-57, Nov 19, 2009
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The Department of Education (Education) awards about $45 billion in grants each year to school districts, states, and other entities. In addition, the American Recovery and Reinvestment Act of 2009 provided an additional $97 billion in grant funding. In a series of reports from 2002 to 2009, Education's Inspector General cited a number of grantees for failing to comply with financial and programmatic requirements of their grant agreements. GAO was asked to determine: (1) what progress Education has made in implementing a risk-based approach to grant monitoring, (2) to what extent Education's program offices have the expertise necessary to monitor grantees' compliance with grant program requirements, and (3) to what extent information is shared and used within Education to ensure the effectiveness of grant monitoring. To do this, GAO reviewed agency documentation related to Education's internal controls and interviewed senior Education officials and staff in 12 of the 34 offices that monitor grants.
In October 2006, Education began to look at ways to improve the efficiency and effectiveness of the department's grant management processes; in particular, it sought ways to more effectively monitor its grants after they were made. In 2007, Education created the Risk Management Service (RMS) to work with all components of the department to ensure that each office has an effective risk management strategy in place. Effective monitoring protocols and tools based on accepted control standards are key to ensuring that waste, fraud, and abuse are not overlooked and program funds are being spent appropriately. Such tools include identifying the nature and extent of grantee risks and managing those risks, having skilled staff to oversee grantees to ensure they are using sound financial practices and meeting program objectives and requirements, and using and sharing information about grantees throughout the organization. Our review of Education's current grant monitoring processes and controls found that it: (1)Has made uneven progress in implementing a department-wide, risk-based approach to grant monitoring. Education has not disseminated department-wide guidance on grantee risk assessment, but it has planned some new efforts in this area. In the absence of guidance on a department-wide risk assessment strategy, individual program offices have developed their own strategies for assessing and managing risk that vary in rigor. (2) Has limited financial expertise and training, hindering effective monitoring of grantees' compliance with financial requirements. Education has monitoring tools that aid in reviewing basic financial compliance, but the lack of staff expertise limits the ability to probe more deeply into grantees' use of funds. (3) Lacks a systematic means of sharing information on grantees and promising practices in grant monitoring throughout the department. These shortcomings can lead to weaknesses in program implementation that ultimately result in failure to effectively serve the students, parents, teachers, and administrators those programs were designed to help.
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Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
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Recommendations for Executive Action
Recommendation: In order to better target grant monitoring and ensure that monitoring staff have the knowledge and information that would help them focus their monitoring efforts, the Secretary of Education should develop department-wide guidance on risk assessment, continue effodevelop new grantee risk assessment tools that can be implemented department-wide, and work with the program offices to ensure these tools are implemented.
Agency Affected: Department of Education
Status: Open
Comments: Education reported that the Department is deepening its risk-based approach to grant-monitoring in keeping with GAO's recommendations. The Department is developing two sets of automated tools, one to assist grant managers in assessing grantees - risks in the areas of financial and grants management compliance, and the other to improve access to the reports and findings of grantee audits. Officials expected to complete development of the first generation of these tools by July 1, 2010. The tools would be implemented department-wide by December 2010. Additional internal agency guidance on risk assessment will be developed concurrently with these procedures, to be completed by December 2010. In order for GAO to close this recommendation, these tools will need to be readily accessible by all Department program office staff involved in grant monitoring and implementation of their use in all program offices will need to be clearly evident.
Recommendation: In order to better target grant monitoring and ensure that monitoring staff have the knowledge and information that would help them focus their monitoring efforts, the Secretary of Education should implement a strategy to ensure each program office has staff with sufficient financial monitoring expertise to conduct or assist other program specialists in conducting financial compliance reviews. This could include proceeding with plans for enhanced financial training analso assessing options such as using dedicated staff or contractors to conduct grantee financial reviews.
Agency Affected: Department of Education
Status: Open
Comments: Education reported that the Department is exploring the establishment of a dedicated group of financial monitoring experts. The Department expects to complete the analysis of options by September 30, 2010, and implement appropriate actions by March 2011. The Department also expects to provide training on financial monitoring and the Department's new risk assessment tools with program staff, the depth of which will be designed to complement other resources the agency uses to provide financial monitoring. In order for GAO to close this recommendation, the Department needs to have implemented and be executing a strategy to provide all program offices with staff or other resources with financial monitoring expertise
Recommendation: In order to better target grant monitoring and ensure that monitoring staff have the knowledge and information that would help them focus their monitoring efforts, the Secretary of Education should develop an easily accessible mechanism for sharing information across aoffices about grantees' past and present performance, and an accessibleforum for sharing promising practices in grant monitoring to ensure all program offices are able to effectively and efficiently perform all of their duties and responsibilities.
Agency Affected: Department of Education
Status: Open
Comments: Education reported that program offices are working to improve coordination of monitoring efforts, and a forum has been developed for ongoing discussion of monitoring strategies. The Department is evaluating methods for improving information sharing between program offices through shared electronic access to monitoring findings. The Department expects to complete planning for this mechanism by September 30, 2010 and to implement a more effective information sharing procedure by March 2011. Continued efforts are needed to complete the development and implementation this mechanism across program offices. In order for GAO to close this recommendation, an easily accessible mechanism for sharing information across program offices about grantee performance, and an accessible form for sharing promising grant monitoring practices should be available to any and all program office staff involved in grant monitoring.