Rebecca Vermillion Shawver, MPA, GPC
The Evolution of Evaluation: Part 3
In Part 1, I provided an overview of the evolution of evaluation taking place at the federal level under the new Uniform Grant Guidance. Specifically, I shared with you the vastly differing philosophy that federal auditors and program officers now have—specifically, an intensified emphasis on accountability of both performance indicators and fiscal accountability. Additionally, I shared with you components of the new risk assessments that all grant applicants will undergo prior to the award of any grant funds.
In Part 2, I covered the expanding duties of grant recipient organizations and the critical connection between evaluation plans and program logic charts. I even provided you with three examples of different program logic charts that will help you get started if you haven’t used one before.
In this last part, I will cover common risk factors that could increase the likelihood of your organization being audited, common grant myths not to believe, and the top audit findings that you need to avoid. So let’s get started!
Grant Myths Not to Believe
I’ve been in the grant field for more than twenty years. I think I’ve probably heard just about every ridiculous myth that is floating around. But it still amazes me how many new grant writers fall into the trap of believing that what appears to be too good is actually true.
At this time, I want to address five myths that could get any of us in trouble—especially since the implementation of the new Uniform Grant Guidance.
Myth #1—If I’m friendly with my federal program officer, I will be allowed to change/reduce my deliverables.
No program officer is going to let you reduce your promised outcomes no matter how nice you are! Federal agencies are being more closely scrutinized by Congress than ever before and are themselves being held to their promises of positive program impacts. So if you promised to recruit and serve a minimum of five hundred students in an afterschool program, you willnot be allowed to slip by with even 499.
I know of a particular case where an applicant for a Department of Labor grant promised to train a specific number of healthcare professions. The grantee fell short of its target projection. Did the DOL let it slide because it did a good job with the program overall? No, it didn’t.
What it did give the organization was a six-month no-cost extension during which the grantee had to train the additional health professionals. The organization didn’t receive any additional funds (and it was out of grant monies at that point). It simply had to find other funds to cover the expense of training the additional workers. Only after it had served its targeted number of workers did the DOL allow it to submit a closeout report.
Myth #2—My required reports aren’t actually read, so I don’t need to worry about their accuracy or completeness.
Again, this is simply not true. And even though I remember the long-ago days when you could get away with submitting a “quick and dirty” report based on estimates, you can’t do that anymore. Each and every report that you submit must be complete and entirely accurate. If they aren’t, you will undoubtedly receive a phone call from your program officer asking you to redo the report and explain why there were errors.
Additionally, submitting erroneous or late reports will be held against you in future assessments conducted by the funding agencies before any new award of grant funds. You really don’t want to risk getting on their bad list. It’s much simpler to simply submit timely and accurate reports.
Myth #3—I can spend some of my leftover grant funds on unauthorized but program-related expenses because my program officer will never notice.
I know that many people have been accustomed to using “leftover” monies for their pet projects, new equipment, or next year’s program supplies. But trust me when I say that you won’t get away with it any longer. If your program officer doesn’t catch you, a federal program auditor just might.
Remember, the feds are focusing intensively on what you achieved with the funds they gave you. Providing funds designated for another program or for a time period beyond your grant end date does not contribute to achieving your funded goals and outcomes. And if caught, you will be forced to pay the money back and have it on your record come pre-award assessment time for any future awards.
Myth #4—Internal controls are just words on paper. No one really needs to follow them.
Sadly, I think that this is the most believable myth—but don’t fall for it. Federal program auditors, as well as your organization’s own external auditor, will be focusing on what safeguards and procedures you have in place to protect grant funds from being misused.
They will be looking for more than just your words on paper. They will be reviewing how you are implementing your procedures, if there are checks and balances in place, and how successful you have been in preventing any missteps. Remember, one of the primary reasons the feds revised the Uniform Grant Guidance was to reduce waste, fraud, and abuse of federal taxpayer monies.
Myth #5—Eventually, the U.S. Congress will grow tired of overseeing the results of grant-funded programs and lighten up on federal funding agencies.
Well, in this currently tumultuous political environment, no one can guarantee that Congress won’t move on to other issues. But I feel confident that whichever party wins control of the White House and Congress, the politicians will not soon forget their role in allocating funds—thus they will likely continue to demand accountability of federal agencies for every dollar that they award. So don’t be fooled into believing that intense assessments and evaluations will be a quickly passing trend.
Lastly, I want to remind you that if you are caught using federal grant funds incorrectly, the ramifications can be far reaching. Your organization could be subjected to:
- Increased monitoring and auditing
- Mandated corrective actions
- Special conditions attached to future grant awards
- Repayment of disallowed expenditures or even the full amount awarded
- Termination of your grant award or contract
- Possible debarment or suspension of eligibility for any and all federal funds
Factors that May Put You at Risk of an Audit
I have often been asked, what exactly puts an organization at greater risk of a program audit? Well, honestly, I know of no official list that confirms what will lead to an audit. But I’m going to offer you an educated guess.
A program officer learning of internal strife within a funded organization is going to begin looking very carefully for signs that conflicts could negatively impact the funded program. So as the saying goes, “What happens in Vegas, stays in Vegas.” So pure and simple, don’t complain about internal issues when talking to your program officer.
Attempting to change projected outcomes
As I’ve discussed previously, the federal government is no longer going to allow a grant recipient (or subrecipient) to change its projected deliverables. So don’t ask—it can only bring new problems your way.
Frequent turnover of key personnel
If your program is consistently losing key personnel, your program officer could wonder what is going wrong. While employee turnover is not uncommon, it should be explained—especially if it happens in the middle of a multiyear contract.
Lack of upper management commitment
As unbelievable as it may sound, I have heard of an agency’s administrator calling a program officer to talk about the performance of its grant-funded program while questioning its value for its clientele. This type of communication would be a huge red flag conveying to your program officer that upper management is not committed to the success of your program—and will surely result in closer scrutiny.
Failure to follow your implementation plan
Your program officer noting that you are not following your implementation plan will again send up warning signals. Questions such as: Did you include staff in the development of the program? Are you committed to your design plan? And, ultimately: Will you achieve your projected outcomes and deliverables?
Don’t make your program officers worry about your ultimate success. If there are legitimate reasons for altering your implementation plan, call your program officer and share your plans and the reasons for them.
Failure to accurately report program and benchmark indicators
Anytime you report inaccurate data, you risk getting caught, being considered inept, or hiding something. None of these choices is going to build faith in your commitment to veracity. But it’s not just about accuracy. You must also be consistent when reporting your outcomes. If there are reasons for any inconsistency, explain them. Leave no doubt as to the validity of your reports.
Failure to comply with stated timeline
If you promised that your program would start by August 15, ensure that it does. And not only should you start it on time, you need to have the promised number of clientele participating in program services.
Problems with budgetary issues are typically warning signs that program officers will not ignore. Some of the most common errors that could trigger an audit include the following:
- Cash drawdowns inconsistent with projected or actual expenditures
- Multiple budget transfers (especially to personnel or supply categories)
- Funds not being spent in proportion to outcomes achieved and time periods covered
- Excessive carry-over funds from one year to the next
- Expending large sums of grant funds in the final quarter of award (especially on supplies or equipment)
Top Audit Findings
After an internet review of the top audit findings listed by the Federal Audit Clearinghouse, U.S. Department of Education, and New York Department of Criminal Justice, I put together what seem to be the most common findings among these three agencies.
- Allowable costs aren’t properly justified
- Incomplete or late reporting
- Subrecipient monitoring is sparse and/or inadequate
- Cash management procedures are inadequate or not being followed
- Participant eligibility is not documented
- Incomplete participant files
- Lack of participant frequency and/or services are recorded
- Procurement procedures are inadequate or not being followed
- Equipment management is inadequate
- Time and effort documentation issues
- Required signatures missing
- Inaccurate work hours recorded
- Unallowable activities have been charged to the grant
- Matching funds are not fully documented
- Nonexpenditure of full grant award funds
Now, after having read this three-part series of articles, I hope that you are confident that the evolution of evaluation is going to benefit you and your organization, as well as your community at large. As grantees, we are responsible for the good stewardship of taxpayer dollars. And what better way to be good stewards than to document our programs’ performance and evaluate our findings to ensure that we are doing the best that we can with the funds that we spend?