Improving Grant Systems for Upcoming Legislation

Presentation for Grant Professionals Association

November, 2015

by

Adam Roth, CEO StreamLink Software

Culture change in DC?

Digital Accountability and Transparency Act

Act (Not a Typo)

May 2014

Data Act Signed

Into Law

May 2015

Initial Set of

Data Standards

August 2015

Recipient Pilot – Begins

To be Defined

May 2017

Data Act

Implementation

Date

DATA Act Timeline

What The DATA Act Means for Recipients

What it Means for Recipients….

Standardizing all Data and Getting it in a Machine Readable Format

What it Means for Recipients….

Recipients Need to Enhance Transparency of their own Ecosystem Reducing Risk of Federal Transparency and Accountability Structures

What it Means for Recipients….

Forces Systemization of Process for both Financial and Performance Reporting a Requirement of the Data Act

Where are We?

57 Data Elements

Primarily driven off of FFATA reporting elements (all but 8) :

More to Come????

http://fedspendingtransparency.github.io/dataelements/

HHS CDER Library – 4500 Federal Grant Data Elements

What’s Next?

Pilots

• Internal federal reporting pilot (Treasury)

• Recipient reporting pilot (HHS)

Recipient Reporting Pilot

• Scope?

• Timing?

• Who?

What Does The UGG Mean for

Recipients?

New UGG Requirements - Recipients

Performance for Accountability

Auditors are here! What did we do last year on that grant?

New UGG Requirements - Recipients

Standard Business Processes & Data

Typical Grant Management

Grants Office

Department / Programs Sub-Recipient

Sub-Department Staff Department Staff

Federal Agency Foundations

NIH HHS DOL Any Fund Foundation

Standardized System for Grants

Federal Agency

NIH HHS DOL

Grants Office

Department / Programs Sub-Recipient

Sub-Department Staff Department Staff

Foundations

Any Fund Foundation

New UGG Requirements - Recipients

Consistent & Transparent Treatment of Costs (SUBS!!!!)

Where are We?

Audit challenges/implications

• Identifying which rules are applicable

• Testing compliance requirements (effective now!)

• Other audit-related considerations

22

Uniform Grant Guidance Effective Dates

23

Federal Agencies

By 12/26/2014

Non-federal agencies

New awards and funding increments made AFTER 12/26/2014

Audit requirement (Subpart F) start with 12/31/2015 year ends

Funding increments

“Where the Federal agency considers funding

increments to be an opportunity to modify the terms and

conditions of the federal award” (COFAR)

Potential issues for auditors and for administrators:

• Funding increments received but no modification to

terms and conditions were made. Does that mean

UGG does not apply?

• Fund increments received with no mention by federal

agency of UGG applicability. Does that mean UGG

does not apply?

24

Effective Dates –Incremental funding

Sub-Awards Dates of UGG Application

• Sub-awards made after 12/26/2014 do not necessarily

have to comply with the UGG

• To determine effective date for sub-awards, need to look

back to the effective date of the federal award from

which the sub-award is made

25

Allowable costs

• Changes in allowable costs due to moving from the various cost circulars to the UGG

• New/revised steps:

• De minimis indirect cost rate

• Improper payments focus

• Time and effort testing

26

www.ecfr.gov

Cash Management

• Need to understand the payment method or system a non-Federal entity uses

• New/revised steps

• Program income

• Unearned revenue

• Written procedures to implement 200.305

27

Period of Performance

• Previously called “Period of Availability”

• Focused steps depending upon when performance period begins

• Beings during audit period

• Ends during audit period

28

Subrecipient Monitoring

• Audit steps more focused and standard• Sub-award documents

• Monitoring

• Required audits obtained

29

What’s Next?

31

Current Rules New Rules

• Single audit

threshold

• Low risk

auditee

• $500,000

• Unmodified opinion on

basic FS in accordance

with GAAP

• Unmodified SEFA opinion

• No material weaknesses

at the basic FS level or

federal programs

• No material non

compliance

• No questioned costs that

exceed 5%

• Timely filing with the

clearing house

• $750,000

• Financial statement opinion

could be on the basis of

accounting required by state law

• Unmodified SEFA opinion

• No material weaknesses at the

basic FS level or federal

programs

• No modified opinion on

compliance

• No questioned costs that exceed

5%

• Timely filing with the clearing

house

• No going concern opinion

Major program selection (effective starting with 12/31/2015 year ends)

Major program selection (effective starting with 12/31/2015 year ends)

Current Rules New Rules

• Coveragerequirements

• Type A threshold

• Risk assessment for Type As (2 year lookback)

• Low risk 25% and no low risk 50%

• $300,000

• Sig deficiency OR material weakness

• Noncompliance condition reported

• Low risk 20% and not low risk 40%

• $750,000

• Material weakness• Modified opinion• Questioned costs over

5%

Additional Items

• Procurement Requirements if Extended

• Federal Government Distributing Pay for Performance Grants

• More Detail on Procedures

• Review of Process

Implementing The Right System

Traditional Technology Options

Existing solutions in the marketplace• ERP & Financial applications/modules

• Customized CRM products

• Repositioned Workflow tools

• Feature Specific Grant Management solutions

• Even combinations of the above

These solutions are inadequate• Business Applications are focused on the organization, not the

grant itself

• The cost to update, customize, and maintain is not justifiable

• Do not allow for the movement of data

Purpose-Built Grant Management Systems

• Centralized

• Effective at tracking complex grants

• Track program performance

• Highly automated

• Standardized data

• Easily generate reports

The lifecycle “data” pipe drives compliance

Grant Systems ValueOrganizational Capacity and Accountability

Drive Accountability

• Ownership assigned to individuals responsible for performance

• Roll up data at all levels to assess performance

Create Transparency

• Visibility into the performance on the entire grant lifecycle, from award to lead recipient and ultimately sub-recipient

Build Capacity

• Automate offline and manual processes used to capture detail performance data and generate reports

• Integrate with HR & Financial systems to streamline efforts

• Increase revenue

Grant Systems Value (cont.)Ensure Compliance & Mitigate Risks

DATA Act

• Standardizing all data

• Machine-readable out-of-the-box

• Enhanced transparency, improving accountability

• Systemized process for financial AND performance reporting

OMB Uniform Grant Guidance

• Performance for accountability

• Standard business processes

• Government funds tracking

• Consistent and transparent treatment of costs

Treasury “Do Not Pay” Initiative

• Mitigates consequences of compliance risk

• Facilitates projection of cash flow

Summary

When evaluating or advising on a Grants Management solution, the system must…

• Manage the entire grant lifecycle

• Manage the Financial & Programmatic performance information as “machine readable” data

• Capture data at all levels (funder, lead recipient, sub recipient)

• Manage draw down effectively and mitigate financial risk by facilitating the projection of cash flow

• The ability to integrate with an ERP, Financial, State, & Federal systems to provide a comprehensive solution

• Ensure compliance with the UGG, Data Act, and Treasury “Do Not Pay” Initiative

Questions?

……Thank You!Adam Roth CEO

Adam Roth founded StreamLink Software in 2008

after recognizing the need while running a

nonprofit for more than a decade. Adam’s vision is

to develop affordable automation tools for nonprofit

and public sector entities to solve the issues he

encountered using scalable SaaS solutions.