CNCS Has a Process for Assessing Grants Annually to Prioritize Various Monitoring Activities

CNCS program and grant officers are responsible for implementing the  agency’s grant monitoring process, which includes activities from the time  before the grant award is made to when the grant is closed out, as shown  in figure 2. To illustrate CNCS’s process, we reviewed CNCS grant data for fiscal  year 2015 (the most recent complete fiscal year of data available at the  time of our review). As shown in figure 3, CNCS  rated about 14 percent of these grants overall as high-priority for  monitoring, with some variation across the agency’s grant programs. Most compliance visits were conducted with Senior Corps  and VISTA grants (programs with the highest number of grants). CNCS’s Process Is Not Fully Aligned with Internal Controls for Risk Assessment, Control Activities, and Monitoring

CNCS’s grant monitoring process includes efforts to identify and mitigate  risks but does not fully align with relevant internal control principles for  risk assessment, control activities, and monitoring (see fig. 4). This is largely because the scoring  model is designed to support CNCS’s monitoring policy by identifying  grants due for a monitoring visit, rather than for specifically assessing risk  and using this risk information to drive prioritization of monitoring  activities. For example, this indicator includes open compliance findings,  improper payment findings, and the potential for financial management  problems. One indicator—”multiple awards”—was checked for nearly  half the grants assessed. Without establishing and implementing a policy to ensure that all grants  are assessed for potential vulnerabilities in the current year, CNCS may  not be using its monitoring resources most effectively, focusing on the  highest-risk grants. CNCS Conducts Limited Monitoring of Grantee Oversight of Subrecipients

CNCS conducts limited monitoring of grantees’ oversight of their  subrecipients, despite the large amount of grant dollars involved and  evidence indicating that subrecipient oversight is a key risk area. CNCS’s Monitoring Capacity Needs Are Unclear Because It Has Not Conducted Strategic Workforce Planning

CNCS has not conducted the strategic workforce planning necessary to  determine whether it has the capacity—including both people and  resources—to effectively monitor grantees’ compliance with grant  program requirements. Without such a planning process, CNCS’s efforts to address  gaps in staffing due to attrition have been ad hoc and reactive. According to the CNCS OIG, as a result of this attrition, as  well as the departure of key OCRO staff members at the beginning of  fiscal year 2016, this office had few, if any, staff members with  sufficient training or experience in grant monitoring and improper  payment assessments, among other responsibilities. In addition, we found that the planned monitoring workloads and  responsibilities of program and grant officers varied across the agency,  and that CNCS had not evaluated whether these differences reflect an  appropriate deployment of resources to monitor grantees effectively. In the absence of a strategic  workforce planning process that fully incorporates and is consistent with  key principles for effective strategic workforce planning, CNCS’s efforts to  address gaps in staffing and to deploy program and grant officers where  they are most needed may continue to be ad hoc and reactive. Recommendations for Executive Action

To improve CNCS’s efforts to move toward a risk-based process for  monitoring grants and to improve its capacity for monitoring grantee  compliance, we are making the following six recommendations to the  Chief Executive Officer of the Corporation for National and Community  Service:  1. 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. 2. 4. 5. Agency Comments

We provided CNCS a draft of this report for review and comment.
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.

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.
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.

What GAO Recommends

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.