Grants management is a detailed process that involves the administration and oversight of federal funds provided to various entities to support public services and stimulate economic growth. Safeguarding compliance and effectively using these funds is paramount to achieving the intended outcomes of grant programs. This involves adhering to federal regulations, maintaining transparency, and implementing robust internal controls to prevent misuse of funds.1
The increasing volume and complexity of federal grants have added new challenges to grants management. Since fiscal year 2020, federal grants have exceeded $1 trillion annually, driven by significant legislative initiatives such as the Infrastructure Investment and Jobs Act and the Inflation Reduction Act of 2022 (IRA).2 This surge in funding necessitates more rigorous oversight and support mechanisms to make certain that grant recipients and subrecipients can manage these funds efficiently and effectively.
In this article, we will explore how subrecipient monitoring and technical assistance are essential components of effective grants management.
Understanding Subrecipient Monitoring
Subrecipient monitoring is a critical process in grants management that involves an assessment as to whether subawards are used for authorized purposes, comply with federal statutes and regulations, and achieve performance goals. This process includes risk assessments, regular reporting, and site visits to verify compliance and performance.3
Key Components of Subrecipient Monitoring
- Risk Assessment: Pass-through entities must evaluate each subrecipient’s risk of non-compliance with federal statutes, regulations, and the terms and conditions of the subaward. This assessment helps determine the appropriate level of monitoring needed. Factors considered include the subrecipient’s prior experience with similar awards, results of previous audits, and the extent to which the subaward has been audited as a major program.
- Regular Reporting and Documentation: Subrecipients are required to submit regular financial and performance reports. These reports help pass-through entities track the progress and financial status of the subaward. Documentation must be maintained to support the financial and performance reports, helping ensure transparency and accountability.
- Site Visits and Audits: Site visits are conducted to review the subrecipient’s operations, verify compliance with the subaward terms, and assess the adequacy of internal controls. Audits, including Single Audits, are performed to assess if the subrecipients have complied with federal requirements and that financial statements are accurate.4
Effective subrecipient monitoring considers whether the items monitored comply with federal regulations. It helps to identify and mitigate potential risks through initiative-taking assessments, and boosts accountability and transparency by verifying the appropriate use of funds and maintaining thorough documentation. However, according to the AGA and Guidehouse – The State of Federal Grants Management Report5 , several significant challenges impact the effectiveness of subrecipient monitoring. These challenges, noted below, include capacity gaps, complex compliance requirements, communication barriers, and technological limitations.
- Capacity Gaps
- Resource Constraints: Many recipients lack the necessary resources and skilled personnel to effectively manage and monitor subawards. This can lead to inadequate oversight and increased risk of noncompliance. According to the U.S. Government Accountability Office (GAO), 58% of recipients reported lacking skilled resources or capacity to execute grant awards.
- Workload Management: The increasing volume of federal grants has exacerbated the workload for grant professionals, making it difficult to allocate sufficient time and resources to monitor subrecipients. In fiscal year 2022, federal aid to tribal, state, local, and territorial governments—primarily through grants—was $1.2 trillion.6
- Complex Compliance Requirements
- Regulatory Complexity: The complexity of federal regulations, such as the Uniform Guidance (2 CFR Part 200)7 , poses a significant challenge for both grantors and recipients. Understanding and adhering to these regulations requires substantial effort and expertise. More than 69% of grantors indicated they struggle primarily with 2 CFR Part 200.8
- Frequent Updates: Continuous updates and changes to federal regulations add to the difficulty of maintaining compliance. Grantors and recipients must stay informed about these changes and adjust their processes accordingly.
- Communication Barriers
- Delayed Responses: Recipients often experience delays in receiving responses from grantors regarding technical determinations and changes. This can hinder their ability to comply with requirements and meet performance goals. The AGA report9 noted that recipients reported slow responses from grantors when seeking assistance.
- Inconsistent Guidance: Inconsistent or unclear guidance from grantors can lead to confusion and misinterpretation of requirements. This inconsistency can result in noncompliance and inefficiencies in managing subawards.
- Technological Limitations
- Antiquated Systems: Many grantors and recipients rely on outdated technology systems that are not equipped to manage the complexities of modern grants management. These systems lack the functionality needed for efficient monitoring and data sharing. The AGA report stated that approximately 36% of grantors and 71% of recipients utilize simple or non-technical technology.
- Data Management: Effective subrecipient monitoring requires robust data management capabilities. However, many organizations struggle with data quality, integration, and accessibility, which impedes their ability to make informed decisions.
- Duplicative Reporting
- Administrative Burden: Recipients often face the burden of duplicative reporting, where they must submit the same information to multiple agencies in slightly different formats. This redundancy increases administrative workload and can lead to errors. The AGA report found that 75% of recipients complained about duplicative reporting.10
- Lack of Standardization: The lack of standardized reporting requirements across federal programs contributes to duplicative reporting. Standardization efforts are needed to streamline reporting processes and reduce the burden on recipients.
- Risk Management
- Risk Assessment Challenges: Conducting thorough subrecipient risk assessments is essential to effective monitoring. However, many organizations lack the tools and methodologies to perform these assessments accurately and efficiently.
- Mitigating Risks: Identifying and mitigating risks associated with subawards requires continuous monitoring and initiative-taking management. Limited resources and capacity constraints make it challenging to implement effective risk mitigation strategies.
- Addressing these challenges requires a concerted effort from both grantors and recipients. Enhancing technical assistance, improving communication, investing in modern technology, and standardizing processes are critical steps toward overcoming these obstacles and helping to ensure the effective management of federal grants.11
The Role of Technical Assistance
Technical assistance refers to the support provided by grantors or experienced grants management professionals to subrecipients to help them effectively manage their grants and comply with federal requirements.12 Based on a 2020 study conducted by the U.S. GAO, technical assistance encompasses a range of programs, activities, and services offered by federal agencies, aimed at enhancing the capabilities of grant recipients and improving their performance in managing grant functions. Technical assistance encompasses the improvement of grant outcomes, grants management, grantee compliance, project monitoring and evaluation, and interactions with individuals.13 This support can take various forms including training, workshops, one-on-one support, and resource development.
Types of Technical Assistance
- Training and Workshops: Grantors often organize training sessions and workshops to educate subrecipients on grants management practices, compliance requirements, and best practices. These sessions help build the capacity of subrecipients to manage their grants effectively.
- One-on-One Support: Personalized support is provided to subrecipients to address specific challenges they may face in managing their grants. This can include assistance with financial management, reporting, and compliance issues.
- Resource Development: Grantors develop and provide various resources, such as guides, toolkits, and templates, to help subrecipients understand and meet federal requirements. These resources serve as valuable references for subrecipients throughout the grant life cycle.
Solutions Through Technical Assistance
- Enhanced Data Management: Implementing standardized data collection tools and using data analytics and reporting software can streamline data management. These tools help maintain consistency and accuracy in data collection, making it easier to integrate and analyze information across different subrecipients. For example, the use of centralized databases and automated reporting systems can significantly reduce the time and effort required for data management.14 In addition, data visualization tools can help grant managers quickly identify trends and areas needing attention.15
- Compliance Support: Regular updates and training on regulatory changes, as well as the development of compliance checklists and guidelines, can help manage adherence to standards. Federal agencies often provide webinars, workshops, and online resources to keep grant recipients informed about the latest regulatory requirements.16 Compliance checklists and guidelines can serve as practical tools for subrecipients to follow, ensuring they meet all necessary standards and avoid potential noncompliance issues.17
- Improved Communication: Establishing clear communication protocols and using collaborative platforms and tools can help to improve coordination and reduce misunderstandings. Effective communication is crucial for successful subrecipient monitoring. Utilizing platforms like Microsoft Teams or Slack can facilitate real-time communication and document sharing, allowing for all parties to be on the same page.18 Regular meetings and updates can also help maintain transparency and promptly address any issues.19
- Resource Optimization: Efficient allocation of resources through strategic planning and access to external expertise and support can mitigate resource constraints. Technical assistance can include access to consultants and experts who can provide specialized knowledge and skills that may not be available in-house.20 Strategic planning tools can help organizations prioritize their resources effectively, ensuring that critical areas receive the necessary attention and support.21 In addition, leveraging partnerships with other organizations can help to provide more resources and support.22
In conclusion, technical assistance plays a pivotal role in overcoming the challenges associated with subrecipient monitoring. By utilizing advanced tools and expert guidance, organizations can help improve compliance, increase data accuracy, and streamline reporting processes. This not only warrants accountability and transparency, but it also fosters a collaborative environment where subrecipients can thrive. As the landscape of grants management continues to evolve, the integration of technical assistance will help navigate complexities and achieve sustainable success.
For more information, please reach out to a professional at Forvis Mazars.
- 1“Grants Management: Observations on Challenges with Access, Use, and Oversight,” gao.gov, May 2, 2023.
- 2“The State of Federal Grants Management – Current and Future Challenges and Trends,” guidehouse.com, 2024.
- 3“Subrecipient Monitoring and Management – Office of Capital Access, U.S. Department of the Treasury,” home.treasury.gov, 2024.
- 4“Subrecipient Monitoring and Management – Office of Capital Access, U.S. Department of the Treasury,” home.treasury.gov, 2024.
- 5“The State of Federal Grants Management – Current and Future Challenges and Trends,” guidehouse.com, 2024.
- 6“Grants Management: Observations on Challenges with Access, Use, and Oversight,” gao.gov, May 2, 2023.
- 7“Part 200 -- Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards,” ecfr.gov, April 22, 2024.
- 8“The State of Federal Grants Management – Current and Future Challenges and Trends,” guidehouse.com, 2024.
- 9“The State of Federal Grants Management – Current and Future Challenges and Trends,” guidehouse.com, 2024.
- 10“The State of Federal Grants Management – Current and Future Challenges and Trends,” guidehouse.com, 2024.
- 11“The State of Federal Grants Management – Current and Future Challenges and Trends,” guidehouse.com, 2024.
- 12“Subrecipient Monitoring and Management – Office of Capital Access, U.S. Department of the Treasury,” home.treasury.gov, 2024.
- 13“Grants Management: Agencies Provided Many Types of Technical Assistance and Applied Recipients' Feedback,” gao.gov, August 11, 2020.
- 14“Section 200.331 – Subrecipient Monitoring and Management,” ecfr.gov, 2024.
- 15“Subrecipient Monitoring and Management – Office of Capital Access, U.S. Department of the Treasury,” home.treasury.gov, 2024.
- 16“Grants Management: Agencies Provided Many Types of Technical Assistance and Applied Recipients' Feedback,” gao.gov, August 11, 2020.
- 17“Section 200.331 – Subrecipient Monitoring and Management,” ecfr.gov, 2024.
- 18“Section 200.331 – Subrecipient Monitoring and Management,” ecfr.gov, 2024.
- 19“Grants Management: Agencies Provided Many Types of Technical Assistance and Applied Recipients' Feedback,” gao.gov, August 11, 2020.
- 20“Section 200.331 – Subrecipient Monitoring and Management,” ecfr.gov, 2024.
- 21“Section 200.331 – Subrecipient Monitoring and Management,” ecfr.gov, 2024.
- 22“Grants Management: Agencies Provided Many Types of Technical Assistance and Applied Recipients' Feedback,” gao.gov, August 11, 2020.