Does your organization receive federal grants? If so, did you know that you are required to establish and maintain internal controls to ensure that you are following the provisions of the grant? Most of the time organizations are concerned with having proper internal controls over their routine accounting related functions, but having internal controls over compliance requirements of federal grants can be just as important.
What are you required to do? According to OMB Circular A-133 (which governs the administration of federal awards), organizations are required to:
“Maintain internal control over Federal programs that provides reasonable assurance that the auditee is managing Federal awards in compliance with laws, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its Federal programs.”
To ensure that you have the proper controls in place, it is a good idea to perform an assessment of each of the compliance requirements that affect your federal grants. Here are a few questions you can ask yourself and others involved with the administration of the grant:
“How do we know that case managers who are carrying out the program are fully informed of the provisions of the grant?”
“What process do we have that would prevent an unallowable cost from being charged to the grant?
“How do we know that participants in the program are eligible to receive services? Does anyone verify eligibility after the initial assessment?”
“How do we make certain that we have paid for allowable costs before we request reimbursement from the grantor?”
“How do we communicate changes involving the grant to those personnel who need to know?”
“Do we routinely check the “Excluded Parties Listing System” to ensure that we are not doing business with any vendors that have been suspended or debarred?”
“What process do we have in place to make sure that all reports were filed accurately and timely?”
After doing this assessment, you may find that your internal controls need to be strengthened. If you need assistance with this, please give us a call.
Tags: compliance, Federal Awards, Internal Controls, segregation of duties, Single Audit

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