Grants Compliance from an Agency Perspective

1. Grants Compliance from an Agency Perspective Governor's Grants Office Higher Education Conference Bowie State University May 22, 2012

2. Ask Early, Ask Often Jeremy Leffler Outreach Specialist, Policy Office Division of Institution & Award Support Office of Budget, Finance & Award Management jleffler@nsf.gov; 703.292.8075 Email general policy questions to: policy@nsf.gov

3. NSF Organizational Chart Office of Cyberinfrastructure Office of Diversity & Inclusion National Science Board (NSB) Director Deputy Director Office of the General Counsel Office of Integrative Activities Office of International Science & Engineering Office of the Inspector General (OIG) Office of Legislative & Public Affairs Office of Polar Programs Biological Sciences (BIO) Computer & Information Science & Engineering (CISE) Engineering (ENG) Geosciences (GEO) Mathematical & Physical Sciences (MPS) Social, Behavioral & Economic Sciences (SBE) Education & Human Resources (EHR) Budget, Finance & Award Management (BFA) Information & Resource Management (IRM)

4. Office of Budget Finance & Award Management (BFA) Office of Budget, Finance & Award Management Division of Institution & Award Support Division of Grants & Agreements Division of Acquisition & Cooperative Support Division of Financial Management Budget Division Systems Office Policy Office Cost Analysis Policy Clearance Outreach

5. Accountability & Transparency • Drivers • Current Landscape • Desired Outcomes

6. History and Timeline

7. COFAR – Goals • Minimize risks of waste, fraud, and abuse of Federal funds • Minimize administrative burden for recipients and agencies

8. COFAR – Organization • OMB Comptroller (Co-Chair) • Eight Federal agencies • Department of Agriculture • Department of Education • Department of Energy • Department of Health & Human Services (Co-Chair) • Department of Homeland Security • Department of Housing & Urban Development • Department of Labor • Department of Transportation • Rotating agency • National Science Foundation

9. OMB – Federal Register Notice • Published in February with comments due April 30, 2012. • Requesting public comment on reform ideas • Reforms highlighted focus on three areas: • Reforms to audit requirements; • Reforms to cost principles; • Reforms to administrative requirements.

10. Award Monitoring and Business Assistance at NSF

11. NSF Award Portfolio • $25.5 billion in total award funding • 42,192 active awards • Standard and continuing grants • Cooperative agreements • Graduate research fellowships • Other awards • 3,197 awardees • Universities / 4-year colleges • Non-profit organizations • For-profit organizations • Community colleges • Other awardees Award information as of July 2, 2010

12. Risk-based portfolio monitoring strategy The portfolio monitoring strategy contains three key components • Risk Assessment • Comprehensive Monitoring Activities • Tracking Monitoring Results and Gathering Feedback RiskAssessment MonitoringActivities Feedback

13. 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 NSF 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 based on: - Highest risk points - Highest dollars - Number of awards From Awards To Awardees

14. NSF Monitoring Activities BSRs Site Visits Desk Reviews Federal Financial Report (FFR) Transaction Testing Grants and Agreements Monitoring Automated Report Screening 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

15. Award Monitoring: Site Visit Targeted Review Areas • ARRA Review • Consultants • Cost Sharing • Final Project Reports • Fringe Benefits • Indirect Costs • Participant Support Costs • Procurement • Program or Award-Related Income • Property and Equipment • Special Terms & Conditions • Subawards and Subrecipient Monitoring • Time and Effort Records • Travel

16. Top Compliance Issues Identified in NSF Business Assistance Program • Time and Effort • Written policies and procedures • Time and effort documentation system • Inclusion of administrative support labor costs as direct charges to NSF awards

17. Top Compliance Issues Identified in NSF Business Assistance Program • Subawards and Subrecipient Monitoring • Inadequate pre-award documentation; • Missing subaward agreement; • Judgmental nature of adequate monitoring

18. Top Compliance Issues Identified in NSF Business Assistance Program • Participant Support Costs • Failure to properly document that funds have only been expended for these budgeted costs; • Lack of written policies and procedures for documentation; • Failure to document attendance of participants; • Not tracking costs in separate accounts

19. Keys to Success for Awardees • Know the requirements (award letter, award terms and conditions, OMB Circulars) • Good accounting practices – accumulation and segregation of costs • Focus on the objectives of the project/program • Document approvals and conversations between awardee and NSF • Ask Early and Ask Often!

20. Ask Early and Ask Often! • Policy Office • policy@nsf.gov • 703.292.8243 • Cost Analysis & Audit Resolution • bfadiascaar@nsf.gov • 703.292.8243