Grants Management: Monitoring Efforts by Corporation for National and Community Service Could Be Improved
What GAO Found
The Corporation for National and Community Service (CNCS) assesses its grants before the beginning of each fiscal year and prioritizes its grant monitoring based on the scoring of certain indicators, such as potential performance or financial problems and the length of time since the last compliance visit. For fiscal year 2015, CNCS identified about 2,200 grants for assessment and prioritized 16.4 percent for compliance visits and 5.4 percent for other types of visits and financial reviews. In addition, each year CNCS selects a sample of grant records to review for improper payments.
CNCS's process for grant monitoring is not fully aligned with the internal controls for identifying, analyzing, and responding to risks (see fig.). Specifically, because CNCS's assessment process does not include all grants, risks may go unidentified. Further, the assessment process uses a scoring model of 19 indicators to analyze and prioritize grants for monitoring visits rather than to identify the highest-risk grants. For example, multiple financial risks are grouped together under one indicator, including for improper payments, and a grant found to have such risks would not be scored as high priority for monitoring based on this indicator alone. In addition, while nearly half of CNCS grant dollars are passed through to other organizations (referred to as subrecipients) and evidence indicates that subrecipient oversight is a key risk area, CNCS's monitoring of grantees' oversight of subrecipients is limited, leaving the agency's response to risk vulnerable in this area.
Areas for Improvement in CNCS's Grant Monitoring Process
CNCS has not conducted the strategic workforce planning necessary to determine whether it has the people and resources to effectively monitor grantees' compliance with grant program requirements, as key principles for effective strategic workforce planning suggest. CNCS's workforce management activities to address vacancies have been largely ad-hoc, including vacancies in a key office responsible for grant monitoring, at senior levels across the agency, and among program and grant officers. Some of these vacancies reduced the number of fiscal year 2015 monitoring activities conducted. Further, program and grant officers' workloads varied across the agency, and CNCS has not evaluated whether staff have been deployed where they are most needed. Officials said they had not developed a strategic workforce planning process because of limited resources. Without such a process, CNCS's efforts to address workforce challenges may continue to be ad hoc and reactive.
Why GAO Did This Study
Created in 1993, CNCS distributes about $750 million in grants annually to volunteer and national service programs for needs ranging from disaster recovery to improving education. A 2014 CNCS Office of Inspector General (OIG) report cited problems with grant management. GAO was asked to review CNCS's efforts to improve its grant monitoring.
This report examines (1) CNCS's process for grant monitoring; (2) the extent that this process aligns with relevant internal controls for identifying, analyzing, and responding to risk; and (3) the extent that CNCS has the capacity necessary to monitor grantees' compliance with grant requirements. GAO reviewed agency documents for fiscal years 2015 and 2016; analyzed fiscal year 2015 assessment and monitoring data (the most recent complete year of data available); interviewed agency officials and a nongeneralizable sample of program and grant officers who had experience with grants with negative outcomes, such as greater-than-expected monitoring needs or audit findings; and held discussion groups with a small nongeneralizable number of grantees attending two 2016 training conferences.
GAO is making six recommendations to CNCS, including to ensure that all grants are assessed for risk and that its scoring model prioritizes risk; to review its monitoring protocols; and to develop a strategic workforce planning process. CNCS and CNCS OIG provided technical comments, which were incorporated as appropriate.
Recommendations for Executive Action
|AmeriCorps||To improve CNCS's efforts to move toward a risk-based process for monitoring grants and to improve its capacity for monitoring grantee compliance, the Chief Executive Officer of the Corporation for National and Community Service should ensure that CNCS completes its efforts to benchmark its assessment criteria and scoring process to further develop a risk-based approach to grant monitoring and that information from this effort is used to (a) score the indicators so that the riskiest grants get the highest scores; (b) revise the assessment indicators to meaningfully cover all identifiable risks, including fraud and improper payments; and (c) document decisions on how indicators are selected and weighted.||
CNCS has been working since September 2018 to review and update its risk assessment process. According to CNCS officials, the agency completed a benchmarking exercise to gather best practices from more than 20 entities, including federal agencies with similar grant profile characteristics and relevant grant making nonprofit organizations. It also convened technical review panels, made up of agency staff, to gather input on portfolio risks. As of July 2021, CNCS's revised risk assessment process includes 79 indicators to assess risks, including fraud and improper payments, using internal and external data sources. Information on the indicators, including the rationale for each, is compiled in its Risk Assessment Guide. CNCS's scoring methodology weights the indicators so that those rated higher risk have more of an impact on the overall risk score. The scoring methodology also calculates risk scores for entities with multiple CNCS grants and for individual grants, as well as for each risk category (i.e., compliance, financial, programmatic, operational, and fraud risks). This methodology can provide information needed to target monitoring activities.
|AmeriCorps||To improve CNCS's efforts to move toward a risk-based process for monitoring grants and to improve its capacity for monitoring grantee compliance, the Chief Executive Officer of the Corporation for National and Community Service should establish and implement a policy to ensure that all grants expected to be active in a fiscal year, including those awarded after the annual assessment, are assessed for potential risk.||
CNCS agrees with this recommendation and plans to revise its current assessment policy to ensure that all grants are included in the annual assessment process. In June and September 2017, CNCS ran two additional reports to identify grants made at the end of the fiscal year. Upon confirming the list of active grants, CNCS's Office of the Chief Risk Officer verified that all grants received an assessment or had an approved documented exception on file. CNCS stated that for fiscal year 2018 the agency has adjusted its timeline and will begin the grant risk assessment process in October 2018, to ensure that all grants awarded in fiscal year 2018 will be reviewed and assessed early in the fiscal year to allow adequate time to monitor the grants in fiscal year 2019.
|AmeriCorps||To improve CNCS's efforts to move toward a risk-based process for monitoring grants and to improve its capacity for monitoring grantee compliance, the Chief Executive Officer of the Corporation for National and Community Service should review monitoring protocols, including the level of information collected for oversight of subrecipients' activities such as criminal history checks, and enhance protocols, as appropriate.||
As of July 2021, CNCS officials reported that it has reviewed existing grant monitoring protocols and tools and prioritized improvements to areas that have common deficiencies. In 2019, CNCS created a new centralized monitoring unit, the Office of Monitoring, to conduct monitoring across its grant portfolio. This office uses a uniform monitoring package which includes tools to assess specific areas of a CNCS grant, including a new tool for subrecipient monitoring oversight, as well as financial and operational fitness, and prohibited activities, among others. To improve subrecipient monitoring, CNCS conducted an internal assessment of how the agency monitored grantee oversight of subrecipients. It collected samples of monitoring tools used by prime grantees, and reviewed these tools to help inform the development of its standardized tool. CNCS tested its new subrecipient monitoring oversight tool in 2020. The tool helps CNCS collect evidence of prime grant recipient monitoring activities and outcomes to help the agency determine compliance with federal regulations and prime grantees' policies and procedures.
|AmeriCorps||To improve CNCS's efforts to move toward a risk-based process for monitoring grants and to improve its capacity for monitoring grantee compliance, the Chief Executive Officer of the Corporation for National and Community Service should establish activities to systematically evaluate grant monitoring results.||
: In July 2019, CNCS reported that its new Office of Monitoring would develop a monitoring strategy to align with the agency's planned IT system improvements, and allow for reporting and data to support a systematic evaluation of grant monitoring results. In 2021, the Office of Monitoring launched an online software platform that allows the agency to capture and report data on individual monitoring activities, which can be aggregated across all grants. According to officials, this platform allows CNCS to identify needed improvements to its monitoring tools as well as technical assistance and training needs across the grant portfolio, and it also supports processes to evaluate the effectiveness of the agency's risk-based grant monitoring strategy overall.
|AmeriCorps||To improve CNCS's efforts to move toward a risk-based process for monitoring grants and to improve its capacity for monitoring grantee compliance, the Chief Executive Officer of the Corporation for National and Community Service should develop and document a strategic workforce planning process.||
As of July 2019, CNCS created a Strategic Workforce Planning Guide that describes its approach to workforce planning. The guide will be used to better align the CNCS workforce with its goals and objectives through strategic workforce planning that will take shape in fiscal year 2020.
|AmeriCorps||To improve CNCS's efforts to move toward a risk-based process for monitoring grants and to improve its capacity for monitoring grantee compliance, the Chief Executive Officer of the Corporation for National and Community Service should, as part of CNCS's efforts to develop an employee development program, update critical competencies for grant monitoring, and establish a training planning process linked with agency goals and these competencies.||
CNCS reorganized its structure in 2019 to centralize monitoring activities into a new office, the Office of Monitoring. In creating this office, officials reported that OM leadership consulted with CNCS's Office of Human Capital regarding training needs. In December 2019, OM leadership met with the Director of Workforce Relations to discuss performance planning and competencies related to the monitoring positions to inform the development of individual work plans and individual training plans. OM adopted a standardized staff training curriculum that covers Federal grant requirements, grants management, and CNCS monitoring tools and processes, among other topics. CNCS reported that in October 2021, the agency began a workforce analysis to evaluate the Office of Monitoring's workforce structure and competencies. CNCS officials reported that additional funds received as part of the American Recovery Plan (Pub.L.No.117-2) will allow the agency to develop a 5-year strategic plan, including an agency-wide workforce analysis. To close this recommendation, CNCS will need to determine which competencies are critical for grant monitoring, and show how the competencies are linked with the agency's training planning processes and agency goals.