CSBG ARRA Technical Assisstance: Risk Assessment and Mitigation for CSBG - States
September 23, 2009
Community Services Block Grant (CSBG)
Risk Assessment and Risk Mitigation for CSBG ARRA Funds
Text for Recorded Call for States
Note: The text below is the prepared script for the technical assistance conducted on Wednesday, September 23, 2009. Minor wording changes may have occurred during recording.
- Good afternoon.
- I’m Seth Hassett, Director of the Division of State Assistance in the Office of Community Services.
- I’m Brandy RayNor, Team Lead for Program Operations.
- Thank you for joining us for this follow-up technical assistance conference call focused on risk assessment and risk mitigation for the Community Services Block Grant.
- The purpose of this call is to review questions from the technical assistance call to States that took place on Wednesday, September 9.
- Please note that if you have not already listened to the September 9 call, viewed the accompanying slide presentation, and reviewed Information Memoranda 112, it is recommended that you do so prior to listening to this call.
- In response to the September 9 technical assistance call, OCS received three questions from the field. In addition, we have two general questions based on input from the National Association for State Community Services Programs (or NASCSP) conference.
- We will read each question, followed by a response.
- We’ll begin with Question Number One, which was received from NASCSP.
- There are questions on the sample risk assessment template that some States found confusing. Can adjustments be made to the template?
- The answer to this question is, yes.
- Adjustments can be made to the template.
- The template is provided as a simple example of a tool for certifying that a risk assessment has been conducted.
- IM-112 and IM 113 allow for flexibility on the format for a risk assessment certification. This is particularly important because community action agencies and other eligible entities may already have risk assessment procedures in place that can be utilized, as long as they address the items included in IM-112.
- Other certification formats may be approved by the State, as long as the eligible entities provide the following certification statement signed by the Chief Executive and Board Chairperson:
- “I certify that a risk assessment has been conducted to assure appropriate expenditures of Community Services Block Grant funds received through the American Recovery and Reinvestment Act of 2009. This risk assessment addressed previous audit or monitoring findings within the last three years, a review of existing internal controls, a review of statutory and regulatory compliance, and a review of equipment and property procedures to assure a direct relationship to CSBG services. Where potential risks have been identified, appropriate risk mitigation measures and compensating controls have been identified.”
- We now move to our second question, which is also based on a question received at the NASCSP conference.
- What is signified by the signature of the representative of a CSBG Lead Agency? If the State representative indicates concurrence with the risk assessment from an eligible entity and funds are later spent inappropriately, who is responsible?
- The answer to this question is that responsibility for any inappropriate expenditures will differ based on circumstances.
- However, the most important thing to emphasize about IM 112 and the risk assessment and mitigation process, is that the goal is to prevent inappropriate expenditures and assure compliance with the CSBG Act and Recovery Act requirements.
- IM-112 emphasizes shared accountability for this process, beginning with the leadership and boards of eligible entities, with input from States based on previous monitoring history, and additional analysis taking place at the Federal level.
- The Office of Community Services will be conducting its own analysis of risks, utilizing information available at the Federal level, including information from other Federal programs.
- The expectation is that through multiple levels of review, it will be possible to address concerns early in order to assure appropriate expenditures and minimize negative findings in later reviews.
- IM-112 provides an opportunity for State CSBG Lead Agencies to comment on eligible entity risk assessments based on previous monitoring experience. Comments may also focus on inherent risks associated with ARRA funds as well as areas of necessary technical assistance.
- States are encouraged to use this opportunity to identify any potential risks, either with a specific organization, or Statewide.
- States are encouraged to use this comment process to also provide information on technical assistance needs as appropriate.
- This will help the Office of Community Services to tailor technical assistance to meet specific State challenges to the extent possible with available resources.
- If a State concurs with the eligible entity assessment, it simply means that the State has no information to add, and the State does not have contradictory information.
- For example, if an entity certifies that corrective actions have been instituted for findings from any State monitoring visits—a State concurrence would mean that the State agrees that an acceptable corrective action plan has been instituted.
- Please note that any follow-up related to specific eligible entities will be done in consultation and partnership with State CSBG Lead Agencies.
- We now move to our third question, which was submitted directly by a State office.
- On the Sample Risk Assessment Template - Question #3 the template asks “Does the entity have in place clearly stated and current administrative, fiscal and programmatic policies and operating procedures in accordance with the CSBG Statute?” Where is that specifically located in the CSBG Act?
- The overall intent of question #3 on the risk assessment template is to assure that organizational policies and procedures are reviewed to assure that they are compliant with all statutory requirements outlined in the CSBG Act, not a specific section.
- It is recommended that leadership and staff of CSBG-eligible entities routinely review the requirements of the CSBG Act and any specific changes as a result of the Recovery Act —such as the increase in income eligibility.
- The CSBG Act should be reviewed as a whole. However, some examples of CSBG Act requirements that should be considered in the risk assessment process are the following:
- Income Eligibility – Section 673 (2) of the CSBG Act defines the poverty line and limits funds to 125% of the poverty line. The American Recovery and Reinvestment Act allows States to increase income eligibility to 200% of the Federal poverty line.
- Have these provisions been reviewed in program operational procedures? If the State has increases the income eligibility to 200% of the poverty line, how has this been officially communicated?
- Limitations on Use of Funds – Section 678 F of the CSBG act for the purchase or improvement of land, or the purchase, construction, or permanent improvement (other than low-cost residential weatherization or other energy-related home repairs) of any building or other facility. The act provides a waiver authority for extraordinary circumstances.
- Have all activities been reviewed to assure adherence to this requirement?
- Tripartite Board Requirements - Section 676B outlines requirements for Tripartite boards, including requirements for representation from representatives of low income populations.
- Have procedures been reviewed to assure that boards “fully participate in the development, planning, implementation and evaluation of the program to serve low income communities?
- Participation in the Results Oriented Management and Accountability (ROMA) system --- Section 6769b)(12) requires participation in the ROMA system or an alternate system that meets the requirements of 678E.
- Has this system been reviewed to assure that data can be provided on services delivered, numbers served, and other jobs created or saved?
- We now move to our fourth question, which was provided by a State agency.
- The question reads . . . We have a large eligible entity that does NOT provide any direct services. Do they complete the Risk Assessment form and have their sub-recipients complete the form also? Or does only the eligible entity complete the risk assessment form and submit it to the lead state agency?
- Although a risk assessment and certification is not required from all of an eligible entity’s subrecipient organizations, the eligible entity should implement a process that assesses risks for all CSBG Recovery Act funds within its allocation. This includes assessment of potential risks with funds provided to subrecipient organizations.
- To adequately assess risks and provide assurances for sub-recipients, a best practice would be to first assess controls and procedures built into existing contracts, funding documents, and reporting structures.
- In addition, if a State has a single eligible entity with multiple subrecipients, such as subgrantees that have significant operational flexibility, the entity may require comparable risk assessments and certifications by sub-recipients as a component of its risk assessment process.
- Our fifth question comes from a State Association of Community Action Agencies.
- The question reads . . . .Are State Associations required to complete the Risk Assessment Assurance?
- The answer is No.
- State Associations are not required to complete a risk assessment assurance as outlined in IM-112.
- If a State association receives funds for benefits enrollment coordination activities, this activity should be monitored by the State to assure appropriate internal controls, but is not included in the risk assessment process outlined in IM 112, which emphasizes the role of tripartite boards and leadership of local eligible entities.
- State associations are strongly encouraged to work closely with State CSBG Lead Agencies and to provide technical assistance to eligible entities on risk mitigation efforts to the extent permitted with current resources.
- State associations that receive a CSBG ARRA grant under the discretionary announcement for capacity building and Statewide technical assistance will be expected to participate fully in Recovery Act reporting requirements (including submission of the 1512 reports immediately after notification of grant award) and may be asked to provide additional expenditure information or copies of work products as part of the cooperative agreement with the Federal government.
- Our sixth question is “is it possible to get the written script to accompany the power point presentation? Having the script would be helpful. “
- A written script from the first presentation will be posted on the CSBG website along with the script from this call. We will work to assure that the script is posted within one week of this call.
- This concludes our call.
- Thank you for your participation and thank you for your ongoing work on behalf of children, families, and communities