TRANSCRIPTU.S. Department of Education Webinar

Recovery Act Technical Assistance Web Conference SeriesSubrecipient Monitoring

August 25, 2010

David Downey: Hello everybody. This is David Downey and welcome to the U.S. Department of Education's Recovery Act Technical Assistance Web Conference. Glad to have you with us today. Today's session focuses on the very important topic of "Subrecipient Monitoring." Presenting with me today is my colleague from the Department's Risk Management Service, Dan Christiansen. And joining us by telephone we are pleased to have Charlotte Stevens, Director of the Division of Education Finance at the Louisiana Department of Education and Jennifer Morgan, the Title I and Title II Senior Consultant for the Colorado Department of Ed. Welcome to you both.

Now, in addition to these good folks, we are joined by a distinguished panel of individuals who will be helping us answer questions during the Q&A portion today and we are so glad for their time as well. Now along with your questions that we are going to be asking for, ladies and gentlemen, your feedback is equally important. We want to encourage you to complete an evaluation following today's webcast and tell us just what you think and maybe how we can do a little bit better job in the future for you. Now, the link to the evaluation may be found through our website ed.gov in the Recovery Act Web Conference section.

Now, with that said, let's do just a little bit of housekeeping if we could, and little bit of our sound check. Now, before we get into today's topic, we want to make sure that everyone can fully participate in this conversation. To that end, we encourage you to submit your questions early and often. Take a moment to locate the "Ask a Question" box on your webinar screen. Whenever a question comes to mind, just type it in the box and hit the button labeled "Submit Question." This will place your question in the queue to be answered during the Q&A segment. You don't need to wait to receive a response from us before you send another question. Just keep sending those questions in as they come to mind.

Now, if your slide view is too small, just click on the "Enlarge Slides" button. If you would like to download these slides either to take notes or for future use, you can do that by clicking the "Download Slides" button as well. Now, if you experience any technical difficulties with the site during the webcast, you can use the "Ask a Question" feature for that as well. Just submit your question and an ON24 representative will get in touch with you as quickly as possible. That sounds good? All right.

Let's begin with an overview of our agenda. During our 90 minutes today together, it's our goal that you will leave this webinar with the ideas and tools you need to improve both the effectiveness and the efficiency of your monitoring activities. As you can see with our agenda, we will first define or maybe better put, rather explain what activities encompass monitoring subrecipients as well as the regulatory background outlining the

grantees responsibilities and requirements. From here, we'll turn our attention to discussing the best practices that you can incorporate into your own monitoring plans. I think that you will find that the best practices identified in this program are ones you could utilize regardless of the number of subrecipients who are charged with monitoring. They also take into account the need to maximize the financial resources that your organization allocates for the monitoring activities as well. We understand that that's very important to you.

We will also highlight additional monitoring requirements under the Recovery Act, including some preliminary Recovery Act related findings made by the Department's Office of Inspector General and the GAO, that's the U.S. Government Accountability Office. We will also touch upon a few things the states are doing to oversee this new source of funding. Now representing our colleagues among the State Education Agencies or SEAs, Charlotte Stevens will tell us about the Louisiana's use of a financial risk assessment to identify school districts that present higher levels of financial risk and Jennifer Morgan will be discussing Colorado's use of a web-based system to monitor their subrecipients and track progress on corrective actions.

Now, with that said, let's go in and talk just a little bit about our monitoring. We want to talk in generalized terms about this topic and the critical importance of this administrative function. Just as all the Federal awarding agencies, like the Department of Education, are required to monitor their grantees, so too are the grantees required to monitor their subrecipients. Together, we are ensuring that these dollars, the people's dollars, your tax dollars, my tax dollars are used with the stated purpose of their respective programs and at accordance with all of the applicable Federal and State regulations, rules and guidelines.

With the passing of the American Recovery and Reinvestment Act, subrecipient monitoring has come under even greater scrutiny and for good reason. Already the vast majority of the funding the Department disseminates is through its formula grant programs, where the dollars are passed through the states to the appropriate entities. Now, the Recovery Act, sometimes referred to by the acronym of ARRA, has made almost $100 billion in additional funds to our country for educational purposes. While increased funding can grow and improve the educational opportunities of all of our nation’s students, it also heightens the awareness and need for proper stewardship and greater accountability of the people's money throughout the life of the award. And that's a phrase I want to really emphasize here when I say that it's not just a catchphrase. It is the people's money, and we take that very seriously here and I know you do as well. We want to make sure that we get the biggest bang for the buck as it were. And I know you are going to join us in that effort.

The challenge then is for all of us to ensure that we are doing everything we can to maintain or better yet improve the level of oversight of Federal programs in this historic and truly unprecedented era of increased financial investment. Therefore our monitoring plans must be comprehensive in approach. Now I don't have to tell any of the experienced staff participating in this session that monitoring is so much more than conducting the site

visits, however helpful those experiences are for all parties. And to those new staff or new subrecipients listening, you should understand that every interaction with the awarding or administering agency is a monitoring opportunity.

Above all, we must view monitoring like an ongoing conversation between the grantee and the subrecipient. Such a continuous dialog enables the grantee to determine if any areas of non-compliance or shortcomings and programmatic performance exist and how to address them. Conversely, this regular contact also enables the grantee to see where and how the subrecipients are doing a good job and possibly producing results that other organizations could very well replicate. Don't ever view monitoring as just a series of separate distinct events. Your monitoring plan should encompass all actions taken throughout the life of a grant award. From drafting the grant agreement during the award review, attending project director meetings and conferences, reviewing the annual reports and communicating with the grantees through general correspondence, emails, telephone calls, certainly those all-too-important, but at times all-too-infrequent, site visits and of course the following up actions taken to address any audit findings. All of that is monitoring.

Now if we were to continue comparing monitoring to an open and frank discussion between the parties, we have to remember communication is a two-way street. Part of good monitoring is also, in my view, modeling correct protocol and procedure. An example of that is always signing the regulation or rule that supports the conclusion. With that said, let's look at regulations governing the grantees’ responsibility to monitor subrecipients.

Now as you can see, an OMB Circular A-133 clearly mandates that all recipients must monitor their recipients' use of Federal dollars. A pass-through entity shall monitor the activities of subrecipients as necessary to ensure that the Federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and the performance goals are achieved in compliance and getting the job done, that's what we are saying folks. Now the Office of Management and Budget A-133 Circular sets forth auditing standards for Federal audits under the Single Audit Act, which provides the most straight forward description of a grantee's monitoring duties.

Now here we will move on to the next slide. We can find a comparable or supporting language of the OMB Circular A-133 and 34 CFR Parts 74.51 and Part 80.40. These sections are included in as part of the Education Department General Administrative Regulations affectionately referred to in these parts as EDGAR. Now Part 74 applies to institutions of higher education, hospitals and non-profits, while Part 80 applies to state, local and Indian tribal government. Both sections, though, require grantees to monitor the day-to-day operations of subawardees and subrecipients.

It should be noted, of course, that neither citations are specific examples of what constitutes monitoring included. The Federal Single Audit Act however does provide us with a little bit more detail and let's look at that now. Now, this piece of legislation does

specifically mention site visits and limited scope audits or through the broad-and-far-reaching phrase of other means, kind of a catch-all phrase. Now as methods to monitor your subrecipients, it also specifically requires subrecipients to make records and financial statements available to auditors.

Now, moving on, even more detailed guidance can be found in Section M of the OMB A-133 Compliance Supplement. It states that pass-through entities are responsible for monitoring subrecipients during the award and provides for a few examples. These methods include the review of the subrecipients’ financial and performance reports, again performing those site visits to review programmatic and financial records and to observe operations. Now, having regular contact with the subrecipient whether it be, again, through the telephone conversations, email or as we've seen in several states, instant messaging and again by any other means appropriate or necessary. The compliance supplement also provides auditors with a standard in evaluating the effectiveness of a grantee's monitoring efforts, reasonable assurance standard. Now, monitoring efforts must provide a reasonable assurance that a subrecipient administers Federal funds in compliance with laws and regulations and that performance goals are achieved. They go hand in hand, and a little bit of a cliché, but something I've shared with grantees over the years in speaking to folks like yourselves, compliance and technical assistance they are one in the same. The greatest level of technical assistance or customer services that I can provide you or that we at the Department of Education can provide is to ensure that you are in compliance with all of those rules and regs.

Now, moving on a little bit more with the compliance supplement, the compliance supplement was updated shortly after passage of the Recovery Act and several additional Recovery Act-related monitoring requirements were added that you really need to know about. Now these additional provisions require grantees to inform first-tier subrecipients to register in the Central Contractor Registry and to obtain a DUNS number, that's a DUN and Bradstreet Data Universal Numbering System. Now, grantees must also ensure that this information is current through random checks. Additionally, the compliance supplement advises auditors to test whether a grantee checks to make sure a subrecipient is currently registered in the CCR before making a subaward. Now, for any subrecipients out there that might have some questions about how to go through this process, one place to find step-by-step procedures on the Central Contractor Registry is the website at grants.gov. They have a wonderful, again, step-by-step process of how you can register with that. So I'd encourage you, if that's something you need, to visit grants.gov a little bit later on in the day or perhaps little bit later on in the week.

Now some additional requirements that we want you to be mindful of. Grantees should also carefully review the program statute to determine whether there are any additional program-specific monitoring requirements. In other words, read the fine print. Please review the award agreements which may contain additional monitoring assurances the grantee must sign before receiving an award, the assurances you may have to sign to meet program specific statutes or general assurances contained in the General Education Provisions Act also known as GEPA. The assurances in GEPA include a promise to

monitor subrecipients, provide any necessary technical assistance, and of course correct any deficiencies identified through your monitoring activities.

Now, with that said, this covers virtually all the Federal laws and regulations concerning subrecipient monitoring that apply across the Department's programs. There are a couple of questions at this point that we would ask that you ask yourself. First, why do you have to monitor subrecipients? Well, very honestly, it's the law. But more than just that, monitoring helps ensure that our tax dollars are being utilized to the fullest to meet this nation's needs within the framework of all of the applicable rules, regulations and guidance. Yes, it's the law, it's also kind of really, without sounding too cliché, your civic duty.

Now, the second question is how do grantees have to monitor? And the answer to that is how the grantee chooses. As you can see from the outlining of these regulations, Federal law regulations are extremely flexible, allowing grantees a wide berth in carrying out their monitoring duties as they see fit.

Now, this brings us to our third question on the slide. How should you monitor, or, what does good monitoring look like? Well, Federal regulations mention several methods of monitoring, but no one method is required. So long as there is a reasonable assurance that standard again, the compliance and performance requirements are met. And as we continue this presentation, understand that the Department of Education is fully aware that what works for one grantee may not necessarily work for another. We'll discuss several best practices of subrecipient monitoring, but keep in mind these are suggestions and recommendations, but not Department requirements. It's kind of a pick and choose what is going to fit best for your needs and adopt those because I think you are going to hear some very useful things in the coming minutes.

Now, let's turn things over to Dan, who will tell us about some of these best practices for monitoring subrecipients. And again, you may want to incorporate them into your own programs.

Dan Christiansen: Alright. Thank you, David. As David said, this brings us to the second part of today's webinar, "Best Practices in Subrecipient Monitoring." Now, monitoring occurs throughout the life cycle of a grant award and contains many different components. We will touch on a few today beginning with the monitoring plan. Next, we will discuss using a risk-based monitoring approach to determine when and how you monitor your subrecipients. Finally, we will discuss monitoring challenges presented by the Recovery Act and discuss a few methods states are using to address these challenges.

The first best practice, reviewing and revising your monitoring plan, serves as an appropriate starting point to today's discussion. You may have received audit findings related to subrecipient monitoring. Even if you haven't, the Department strongly encourages all grantees to periodically review their monitoring policies and procedures. This is especially important for programs receiving Recovery Act funding.

Now, your monitoring plan should be in writing, widely disseminated and understood throughout your organization and available to auditors and Federal program officials. Like many grantees have already done, it's a good practice to post your monitoring plan on your website to provide access to staff, subrecipients and auditors.

Grantees should ensure that monitoring plans are comprehensive, meaning the plan should document all of your monitoring activities from pre-award activities to closeout and everything in between. Among other things, your plan should include the methods you use to monitor subrecipients. This will include phone conversations, self assessments, desk reviews and onsite visits. It should also include a monitoring schedule for the year, which could be based on a multi-year strategy. Your plan should also contain a monitoring checklist, which specifies all requirements that the subrecipient must meet. Using a risk-based approach, your monitoring plan will include the factors you weigh to determine when you will monitor subrecipients and what monitoring methods to use. This can be done by performing a risk assessment, which we will discuss later on in the webinar.

As part of revising monitoring plans, grantees should pay special attention to updating program monitoring checklists. Checklists may apply to one or several federal programs. A monitoring checklist is a list of all requirements a subrecipient must meet to ensure that's in compliance with the program's rules and regulations. This includes all Federal program specific requirements, all applicable administrative requirements contained in EDGAR, and any government-wide policies. Grantees may also include state and local requirements as part of the review.

A program monitoring checklist should set forth each requirement in plain language and provide a citation to the relevant law or regulation. The checklist may list questions to ask subrecipients or types of documentation needed to verify compliance. Using a monitoring checklist promotes thoroughness and consistency in your monitoring efforts, and may also help identify areas of non-compliance before they are identified by either your independent auditor or the Department of Education. This will help you take timely corrective actions and prevent Federal audit and monitoring findings related to a subrecipient’s lack of compliance.

Periodically, grantees should review Federal program requirements and stay up-to-date on rule changes that may require revision of a monitoring checklist. Grantees should also identify requirements that cut across the Department's programs, such as EDGAR’s cash management or procurement requirements. This can help prevent your various program offices from performing redundant monitoring activities thereby saving you resources.

Requirements should also be reviewed to identify the most cost effective method of verifying compliance. Now, you may be reviewing information during site visits that can just as easily and effectively be reviewed as part of a desk audit. Checklists can then be adapted depending on the type of review whether it's onsite, a desk audit or a self assessment. The Department's program offices also use monitoring checklists to assess whether grantees are in compliance with Federal laws and regulations. Grantees are

encouraged to review Federal monitoring checklists and other grantees’ checklists. Many of these documents can be found on ed.gov or on State Education Agency homepages.

Having a written monitoring plan in place will help you avoid audit and monitoring findings. Your monitoring plan and efforts are scrutinized by auditors as part of your annual A-133 audit, and by the Department's monitoring teams. A-133 auditors are required to test whether grantees sufficiently monitor Federal programs to provide a reasonable assurance of compliance. In the A-133 compliance supplement, OMB suggests the auditors review your subrecipient monitoring policies and procedures in order to gain an understanding of the scope, frequency and the timeliness of your monitoring activities.

The Department's monitoring teams will also review your subrecipient monitoring plans, including your plans to track Recovery Act funds. For example, the Department's Student Achievement and School Accountability Programs or SASA includes subrecipient monitoring as a key indicator in reviewing state administration of Title I and Title III programs. SASA reviews state monitoring cycles, policies and procedures, data collection instruments, evidence of communication with the LEA, high-risk identification processes and corrective action and follow-up documentation. SASA also now reviews state procedures for monitoring programs and activities funded under the Recovery Act.

This brings us to our next best practice, "Using a Risk-Based Monitoring Approach." Like most grantees, you probably don't have enough resources or staff available to monitor subrecipients or programs as frequently or as thoroughly as you would like. Risk-based monitoring is the process used by many of the Department's grantees to address this issue. This is done by identifying subrecipients that are most likely to have problems in meeting the goals of a program, fail to meet Federal fiscal or programmatic requirements or otherwise present a greater risk to the Federal interest because of the sheer size of the subrecipient’s grant portfolio. By identifying these greatest concentrations in risk, a grantee can adjust its monitoring plan to focus attention and resources on subrecipients and programs that require more intensive monitoring.

So how might you go about incorporating a risk-based approach into your overall monitoring plan? It's likely that your organization already considers certain risks formally or informally in your planning. Given the amount of attention auditors and the Department pay to your monitoring plan, it's important to clearly set forth this process. Risk analysis performed by grantees can be broken down into four primary parts, which we'll go through in further detail.

The first step is to identify appropriate risk factors or indicators, and assign each of these indicators a value or weight. Second, evaluate your subrecipients and programs against these indicators and then rank them in order by risk. Third, perform a resource assessment, identify available monitoring resources and staff and weigh them against your monitoring needs. And finally, adjust your monitoring plan and schedule to address any identified areas of heightened risk while taking into account limitations on resources.

So, what is a risk indicator? A risk indicator can be any factor that increases the potential harm to the Federal interest or the likelihood that a subrecipient will not comply with program requirements or meet performance goals. A risk indicator may be based on internal factors such as staff turnover or a past history of non-compliance or based on external factors outside of subrecipients' control, such as the total amount of Federal dollars awarded to a subrecipient.

So, what are a few indicators that you might consider when evaluating risk? Well, the A-133 compliance supplement lists several factors that, according to the OMB, may affect the nature, timing and extent of your monitoring efforts. Auditors look for the presence of these factors when assessing the adequacy of subrecipient monitoring plans. So it's a good place to start when trying to determine what factors to weigh when you assess risk.

The first three factors affect the risk associated with the program. First, there is program complexity. Complex program requirements such as matching or maintenance of effort are difficult to comply with. The more complex the program requirements, the harder it is for a subrecipient to stay in compliance and the greater the risk. Second, the percentage of a program award that's passed through. Awards that are mostly passed through to subrecipients instead of being expended by a grantee present a greater risk to the Federal interest. Now, why is this? The funds are now another level removed from the funding source, the Department. The Department consequently is now relying on an additional level of monitoring by the grantee.

The third factor, award amount. The bigger the award, the greater the risk to the Federal interest. This factor also applies to subrecipient risk, the larger a subrecipient’s grant portfolio, the greater the risk it poses. This is true even if a subrecipient has a good track record for compliance and program performance. Consequently, it makes sense to focus monitoring on large programs and subrecipients with large grant portfolios.

The other four risk factors listed in the compliance supplement relate to subrecipients. First, new subrecipients will need to be monitored more closely. They may lack experience with Federal programs. Also the grantee will have less information about their prior performance. On the other hand, the subrecipient that has administered Federal programs successfully over a number of years may require less frequent or less intensive methods of monitoring.

Second, a subrecipient with a history of non-compliance will require closer monitoring. Findings of non-compliance may arise from an A-133 or other type of audit, through Federal program monitoring or through your own monitoring efforts. These findings may identify systemic risks that affect the subrecipient’s implementation of all Federal programs, such as its procurement practices, or it may identify risks associated with a specific Federal program.

Third, new personnel. High staff turnover in critical positions may adversely affect the administration of an award. So this risk factor should affect how you go about monitoring a subrecipient. Finally, a subrecipient who has recently implemented new or substantially

changed systems, such as a new financial management system, may also pose a greater risk to the Federal interest. This is a good time to stress once again that these are suggested not required risk indicators. Grantees are free to choose what risks are appropriate to weigh when determining risk. This makes sense. Risks will vary among grantees. However, it is important to keep in mind that auditors and the Department will look to see if your monitoring system incorporates some sort of risk-based approach.

This slide provides the list of additional risk indicators used by some of the Department's grantees. These include the size of a subrecipient's portfolio, the extent to which it meets performance or academic goals, academic performance, timeliness of grant applications and reports, financial stability, new management systems, stakeholder complaints, the type of entity and the distance of the subrecipient to the grantee's main office.

After identifying risk indicators, the next step is to perform a risk assessment, evaluate your subrecipients and programs against the set of selected risk indicators and then rank them based on relative risk. You may also decide that the presence of a certain risk factor alone, such as severe financial difficulties, warrants placing a subrecipient into a higher risk category. To keep up with changes, a risk assessment should be performed at least annually and include any new subrecipient or program, including programs funded under the Recovery Act.

Additionally, grantees should periodically review and update the indicators used to evaluate subrecipient risk and the weight assigned to each indicator. Based on the number and complexity of risk factors, this process may be time consuming. However, data analysis and automation can reduce the amount of resources and staff hours dedicated to performing a risk assessment.

Currently, several of the Department's grantees analyze risk through computer-based automated systems that collect and maintain data on a variety of risk indicators. Systems can analyze and assign weight to these indicators and in turn provide grantees with real-time snapshots of grant risk.

In addition to risk, the frequency and scope of your monitoring will be equally influenced by the amount of resources at your disposal. In conjunction with the risk assessment, grantees should conduct a resource assessment to determine the amount and types of resources needed to perform monitoring activities. This should then be weighed against what resources are actually available to the grantee. If you perform a resource assessment and find that your monitoring resources do not stretch far enough to cover your plan, you may be able to secure additional resources, or hire or assign additional staff to perform monitoring activities. However, if these options are not available, you'll need to adjust your monitoring plan based on risk and what resources you have available. This is important so that you don't maintain a monitoring plan that you do not have the resources to implement.

Department grantees have used several methods to address resource limitations. Some have supplemented monitoring teams with staff from other parts of their organization

such as legal or accounting staff, some have trained school based staff to contribute to monitoring efforts. Some grantees have outsourced monitoring activities to contractors. For instance, a grantee that finds it lacks sufficient staff with financial expertise to monitor compliance of fiscal requirements could hire an accounting firm or other contractor to carry out this task.

By performing these assessments, a grantee should have a good idea of where the greatest risks lie amongst its subrecipients and programs. The final step is to account for the results of the risk and resource assessment in the monitoring plan. As part of the risk assessment, many of the Department's grantees group their subrecipients and programs by risk level, such as low, medium and high risk. The frequency and scope of monitoring activities are then based in part on a subrecipient’s risk level. For instance, a grantee may choose to perform an annual onsite review of a subrecipient with a heightened risk level while performing onsite visits to lower risk subrecipients with less frequency, or a grantee may perform less intensive monitoring activities for low-risk subrecipients such as desk audits or self assessments.

As part of your monitoring plan, you should have a schedule that sets forth the frequency and scope of your monitoring. Your monitoring schedule should be adjusted to account for resources and risk. The greater the risk, the greater the frequency and depth of monitoring. Although a risk-based monitoring approach will allow you to vary the frequency with which your subrecipients undergo a comprehensive monitoring visit, you are still expected to perform an onsite review of subrecipients and programs with low risk levels on occasion. You may also choose to perform random visits to a predetermined number of subrecipients each cycle regardless of risk level to address this issue.

A risk assessment also identifies areas in which your subrecipients may require additional training or technical assistance. This should be incorporated in your monitoring plan. For instance, a grantee may schedule training on Federal administrative requirements for new grantees or for new or recently changed programs or provide training based on monitoring findings.

Now, you should keep your plan realistic and focused. To illustrate, let's assume a state education agency's plan requires a subrecipient classified as a significant risk to undergo an annual onsite monitoring visit. The SEA's risk assessment classified 50 subrecipients as significant risks. Given the level of monitoring resources however, the SEA only performs 30 onsite reviews that year. As a result, the SEA's A-133 auditor reports the subrecipient monitoring finding because the SEA was unable to perform all planned visits. This is a very common finding and is most often due to staff or funding limits. This finding may come with a recommendation to increase monitoring resources, a solution that is often outside the grantee’s control. This hypothetical illustrates the importance of assessing available resources as part of risk-based monitoring and tying monitoring activities to your budget. The audit finding may have been avoided if the grantee had adjusted its monitoring plan to account for its resources. A proper analysis of your budget will help you adjust your monitoring schedule so that you can implement it fully. By performing a budget analysis prior to the fiscal year, you will gain a better

understanding of what monitoring methods your resources will allow you to use and you will be able to better allocate monitoring resources to subrecipients who need to be watched the most.

Returning to the hypothetical, the SEA should have performed a resource assessment to determine its capacity for performing onsite visits. As a result of the resource assessment, the grantee may have adjusted its onsite monitoring schedule so that its 30 riskiest subrecipients were monitored annually while lower risk entities were monitored with less frequency.

The next portion of today's webinar will deal with monitoring subrecipient uses of Recovery Act funds. While the Department has encouraged grantees to expend Recovery Act funds quickly, they must still be spent with an unprecedented level of transparency and accountability. We will go over some new challenges this creates and methods states are using to address them as well as some guidance the Department has for Recovery Act grantees.

It's important to stress that uses of Recovery Act funds are undergoing an unprecedented level of scrutiny. As you've seen this past year, A-133 auditors are required to review your subrecipient monitoring efforts for Recovery Act programs. As part of their review, auditors must determine whether grantees have appropriate internal controls in place to ensure Recovery Act expenditures are allowable. Auditors must also consider whether additional controls are necessary to ensure that these funds are separately identified and tracked and that Federal reporting and subrecipient monitoring requirements are met. Grantees are encouraged to perform tests to determine whether internal controls over these compliance areas meet Recovery Act standards. Several states have done this internally or contracted with third parties to perform this assessment, which has helped to identify areas that require action on the part of the grantee.

Auditors have been instructed to consider all Federal programs with expenditures of Recovery Act awards to be high risk under the OMB A-133 Circular. Consequently, these programs will be more closely reviewed for compliance. You may find that Recovery Act expenditures cause a number of subrecipients to expend more than the $500,000 Single Year Audit spending threshold for the first time. Grantees are required to ensure that all subrecipients exceeding this threshold undergo a Single Year Audit. Grantees are encouraged to check to see if subrecipients have submitted a Single Year Audit in the past several years since they will likely exceed the spending threshold with additional Recovery Act funds.

Grantees may also require subrecipients claiming to fall below the spending threshold to affirm this and submit a list of all Federal expenditures to ensure that it is not required to undergo a Single Year Audit. This is especially important given OMB guidance issued in March of this year, which prohibits Federal agencies from granting filing extensions to grantees for Single Year Audits for fiscal years 2009 through the year 2011.

Most states have developed separate monitoring plans for State Fiscal Stabilization Funds, or SFSF, and Recovery Act programs with funds allocated through existing programs such as Title I Part A. Consequently, we are going to discuss these monitoring plans separately. As many of you work at the state level, you are likely aware that states were required to develop written monitoring plans for stabilization funds and submit these plans to the Department for review in March. The Department is currently reviewing and providing feedback to states on these plans, but it has advised states to move forward with their monitoring efforts in the meantime.

Generally, the state plans have followed the guidance emailed to the states in August of last year in which the Department advised states on their responsibilities to monitor subrecipients under the stabilization fund. The email advised states to develop a comprehensive monitoring plan and protocol to review grant and sub grant supported activities. The protocol should include a schedule, policies and procedures, data collection instruments, monitoring reports and feedback to subrecipients, and evidence of a process to verify that subrecipients have implemented corrective actions.

Recently, the Department has laid out its plan to evaluate states’ administration and oversight of stabilization programs. The Department will conduct either a desk or onsite review of stabilization spending in each state annually with half of the states receiving an onsite review each year. The Department will be reviewing state stabilization monitoring plans to ensure that policies and procedures are in place, including the schedule and feedback and follow-up procedures. Additionally, the Department will review each state's process for prioritizing entities to be monitored. Now, most states are using a risk-based approach for determining monitoring priorities. The review will also include an assessment of the state's allocation and uses of stabilization funds, fiscal oversight policies and procedures, maintenance of effort, progress in the four education reform areas, and compliance with 1512 reporting requirements.

With respect to Recovery Act programs allocated through existing Department programs such as Title I, states mostly provided oversight of these funds by modifying existing monitoring plans. Now, this is a logical and efficient method of monitoring these Recovery Act programs. However, in their audit work under the Recovery Act, both the Department's Office of Inspector General, or OIG, and the U.S. Government Accountability Office, or GAO, have identified several issues with using this method.

One challenge identified by the GAO involves states’ use of prior monitoring schedules to monitor Recovery Act funds. In its most recent Recovery Act report to Congress, the GAO found that a grantee performed onsite reviews pursuant to its existing monitoring schedule. As a result, several low risk grantees underwent onsite reviews of that cycle, while LEAs spending large amounts of Recovery Act funds were not reviewed. To tackle this problem, many states have performed a risk assessment using the size of Recovery Act awards made to LEAs as a factor to determine the monitoring schedule. By doing this, states have been able to concentrate greater oversight on subrecipients expending large amounts of Recovery Act funds. States have monitored subrecipients with lower risk levels through desk reviews, telephone surveys, and often through self-evaluations or

assessments. Most grantees use their general follow-up procedures to address any identified findings to often expedite corrective actions to ensure compliance.

Another challenge lies in the additional cost-cutting and program requirements added by the Recovery Act. The Department’s OIG has found that several states have not sufficiently adjusted existing monitoring systems to ensure compliance with all new Recovery Act requirements such as new reporting and maintenance of effort requirements. Grantees are strongly encouraged to review Recovery Act legislation and all Department and OMB guidance to ensure that all new requirements are addressed in the monitoring plan. This will likely require revising or adding new indicators to your monitoring checklists.

On a related note, both the GAO and OIG found that states have not adjusted existing monitoring systems to fully account for Recovery Act fiscal requirements. The OIG found that several states did not review supporting documentation or verify expenditures prior to making payments. Grantees should update monitoring plans to incorporate procedures to ensure Recovery Act expenditures are tracked separately from regular funds and to verify that subrecipients’ expenditures are supported, allowable, and in line with approved budgets prior to drawdown. The GAO report noted several practices being used by states to ensure that expenditures are allowable. Several states used approved subrecipient applications to determine that funding requests are for approved purposes. Other states review spending data throughout the year and require frequent, even monthly, financial reports from LEAs, which contain information on the amount and the type of Recovery Act expenditures.

One state requires LEAs to submit requests for payment that are above an established expenditure threshold. Expenditure requests below this amount are randomly sampled and reviewed for allowability. The sampling methodology has been put in place by a number of states to routinely review expenditures for Recovery Act programs. States should also routinely monitor expenditures to ensure that funds are spent within the period of availability. For example, states can monitor an LEA's expenditures for each Recovery Act program administered by the LEA. If the state finds that the LEA has not spent funds at a reasonable rate, the state may send a notice to the LEA to remind it of the period of availability and the need to implement programs according to the planned budget.

Finally, the GAO noted that several states relied solely on single audits to identify fiscal issues. The GAO stated that reliance on a single audit is not sufficient to timely identify problems that might arise regarding the LEA's use of funds and ensure the ARRA funds are spent in accordance with both ARRA requirements as well as the plans of the LEAs. Although A-133 audits are a useful tool to identify issues of non-compliance in need of corrective action, grantees should use audit reports only as one component of their fiscal monitoring efforts.

Now, this wraps up this portion of the presentation. I want to thank everyone for listening. I will now turn it back to David to introduce our next presenters.

David Downey: Well, thanks Dan. I know everyone has benefited from that. It was a very thorough overview of some best practices. I am taking notes and I hope the folks out there listening to us are as well.

Now let's hear from our good friend from the Louisiana Department of Education, Charlotte Stevens, who can tell us a little bit about a financial risk assessment tool that they have. Charlotte, how are you?

Charlotte Stevens: I am well. How are you?

David Downey: We're great here. Thanks for being a part of the show.

Charlotte Stevens: You're welcome. Good afternoon. I want to take a few minutes this afternoon to tell you about a fiscal risk assessment that we've developed here at the department, we actually call it a financial risk assessment. And the origin is that about five years ago, an Act was passed in our state that allows with the combined agreement of the legislative auditor, our state treasurer and our attorney general to require districts to appoint a fiscal administrator if their finances are in such a state to be determined financially at risk. So, what that led -- that genesis led us to having to define what financially at risk was.

So we developed this assessment that we do annually for all of our districts -- all of our subrecipients, so our districts as well our charter schools, and we look at two basic areas. So the assessment is divided into two areas, one being external factors, which is Part 1, the second being financial factors, which is Part 2. So what we are calling the external factors are those things that the school districts and our recipients may not necessarily have total control over. So we are looking at things such as trends in student enrollment for example. So we'll look at a five-year trend on what the public student enrollment is doing because we know that what their enrollment -- what's happening with their enrollment is tied to their state funding dollars, which is a large part of their fiscal capabilities. We also look at -- in Louisiana, we have some areas that are very heavily -- the population, we have lots of non-public schools in some areas of the state. So we're looking at trends also in private school enrollment. If population as a whole is remaining pretty standard and non-public enrollment is growing, that's something we want our districts to be looking at, because it's going to be impacting their financial abilities.

We look at sales and property tax collections over a five-year trend. We're looking at things like how much a district may be spending in per pupil expenditures in relation to the state as a whole and we're looking at scores and seeing if there is any -- the testing scores if there is any correlation there. We also look at things like future obligations. So, in Louisiana, we're looking at the age of our teacher workforce for example, how close are -- what percentage is close to retirement.

David Downey: Charlotte, I am sorry to stop you there for a moment, but we've got of couple of calls, would you mind speaking up just a little bit?

Charlotte Stevens: Sure.

David Downey: Appreciate that. Thank you so much. Sorry to interrupt.

Charlotte Stevens: No problem. So we're also looking at future obligations of our workforce to determine what kind of obligations may be out there in the future regarding any required retirement contributions or health contributions. And then one of the things we looked at -- we're looking at also is the credentials of the Chief Business Officer in our school districts. And as a result of this risk assessment, we actually instituted a few years ago some additional requirements for our business managers. We want them to either be CPAs or we want them to have another certification through the School Board Association. So those are the external factors that while the districts may not be able to impact those directly, we do want them to be looking at them and to be aware of them. And we're looking at those issues -- those items as well to determine whether they could possibly create fiscal issues for them now or in the future.

Our second area is really we're looking at more of financial risk. So we have five levels. First level, we are calling -- we call just good business practices. How does the district do as far as getting things done on a timely basis and your financial report due to us, the general fund budget reporting due to us, and then what is their audit opinion just on compliance over the -- just their general purpose financial statements.

Level two, we're also looking at consecutive audit findings in this area as well as any indications of fraud. Level two, we're looking more at fiscal management. So we're looking at Questioned Costs, have there been Questioned Costs in A-133 Single Audit reporting and then we take into consideration also program monitoring findings and fiscal monitoring findings.

Level three, we are looking at the overall auditing outcomes from -- first is the overall general opinion of A-133 audit of the Single Audit. We are also looking at just their opinion on the federal program section and then also what the audit has to say about a district's compliance with various laws and regulations relative to federal programs.

In level four, we are looking at their budgets and their fund balances. We are looking at things like deficit spending. Do we see a general fund deficit or do we see deficit spending, trends of deficit spending over time that could tell us that there are some financial risks there. And we also look at general fund revenues as a percent of -- the general fund balance as a percent of their general fund revenues, so that helps us to look forward a bit to see if we think they are going to have to practice some deficit spending in the future.

And then level five, we just call major events. So these are things like a new school system, either a new school system or new charter we will look at more closely and we will provide some guidance to them about best practices. And then we look at things we would call major events. So here we -- obviously we have experienced Katrina in the last

five years or so. So events like that that are very devastating to an entire area or region, we want to look at those districts that are in those localities, and we want to see how they are working to recover from those activities and what that's doing to them from a fiscal risk perspective. And then of course we are going to look at anybody who in their audit they were expressed as there being a growing concern, whether they could in fact continue as a growing concern.

So those are the items we look at. And then at the end of the day as we sort through all of those items, we are going to classify our districts -- all those that were monitored we are going to classify into three different areas. So either there will be no action taken because we have looked at all of the data and we feel like those districts financially are not at risk and we can move forward. We will possibly classify them as monitor, which means that there may be some items that we want to look at, but overall we don't have a high level of concern but we want to pick out those few areas that were of concern to us and we are going to have some conversation with the school districts about how they are going to do some corrections to those, and give them some technical assistance as needed.

And then finally, we will have a category that we call dialog. And those are the districts and recipients that we are going to spend a lot more time with. We are going to ask for corrective action plans on those items that are of concern to us and we will in fact -- sometimes that dialog will take place with department staff. If we feel like the concerns are of a magnitude that that's not sufficient, we will and have called those recipients to come in to talk with our State Board of Elementary and Secondary Education. We generally ask, when they come in, to bring their Chief Fiscal Officer, their School Superintendent or Director of the Charter School and the Director of their Board or President of their School Board to come in and speak with our Board. And then it's just an open conversation about what's happening in their district, where the areas of concern are and what their plans are for correction in the future.

And then we do use this information as we go out and do our -- plan our fiscal monitoring, and we have this information available to share with our school districts as well. Through this process, we do a lot of our internal control work. When we look at the audit information that we are receiving, one of the things we are looking at is whether there are deficiencies in their internal controls. And so this gives us an opportunity to really address those items there in this process to talk about best practices, to give technical assistance as needed. And so at the end of the day, for this year we have about 18 districts for example this year that were in the dialog category, and about 50 in monitor, and we had about 60 or so that we needed no action on. So this is an ongoing process. We have refined it over the years as we have seen that we needed to add an item or revise it and our districts we do give them some opportunity to see the data, we have a template and we do publish this information on our web site. So we do give our districts an opportunity to see the data prior to releasing it so that they can give us some input about information that we may not have or something that's erroneous in our data and it has been -- it's been a work-in-progress and it has been beneficial to us.

So I appreciate you taking the time to listen. And if you have any questions later, I think we have a way to address that.

David Downey: Well, thank you so much. What a wonderful overview of what you all are doing in Louisiana right now. And for our listeners, a number of individuals are requesting web links for the state materials and we will publish these with the webinar archive. So this will be available – archived/taped so you can come back and you will get a chance to review the presentations, and you'd also have access to the materials that are being discussed here. Thanks again, Charlotte.

And now we are going to move to Jennifer Morgan, who is going to share with us a little bit about the web-based system to monitor their subrecipients in Colorado. Jennifer, are you there? Hello Jennifer.

Jennifer Morgan: David, can you hear me?

David Downey: I sure can. Welcome.

Jennifer Morgan: Hello. Thank you very much and I appreciate the opportunity to present on our Web-based monitoring system.

David Downey: Well it’s our pleasure; we look forward to hearing about it.

Jennifer Morgan: Okay, great. Well, in the 2009-2010 school year, Colorado began using the C-FIRS Tracker System for both desk review and onsite monitoring activities, all activities specifically pertaining to federal requirements associated with all LEAs receiving ESEA funds. So just to give a brief overview, the C-FIRS Tracker System is basically a Web-based tool designed specifically to streamline program monitoring. The tracker system was developed by Southwest Comprehensive Center at WestEd, and WestEd currently supports this implementation of the system and provide us with periodic updates based on feedback from the states that are using the system. So for the 2010-2011 school year, I believe that there are six states using the monitoring feature including Arizona, California, New Mexico, Utah, Nevada and of course Colorado. What's great about this is that each state, I believe, is able to use their version of the tracker system and they will specifically meet the needs of that state.

As far as Colorado goes, our program monitoring feature and tracker has really given our office the ability to shift from the traditional paper-based onsite reviews to an online environment. So it's fast, it's convenient, it helps us monitor compliance, and it also has a feature of archiving the electronic evidentiary documents. So for everything in 2009-2010, I can go back to a specific LEA and review the documents that they uploaded and review our compliance findings, and that helps as we move into monitoring or other types of reviews in our office.

So just a little bit about how we structured the tracker system to work for our office. We have organized our monitoring system into three desk review cycles, so these are

collected in October, January, and April, and then we also conduct approximately 30 onsite reviews each school year. So, all of these individual collections are called instruments. For example, we have an October instrument, a January instrument, an April instrument, and an onsite instrument. So within each instrument is a set of indicators that each LEA must respond to. Because of the variation in LEAs throughout Colorado, the tracker system has a feature that customizes each instrument to set the LEA's unique set of circumstances. So for example, if we are monitoring documents pertaining to the administration of Supplemental Educational Services and if no LEAs have schools on School Improvement Year Two, the tracker system will in essence weed out all of the Supplemental Educational Services indicators for the LEAs that are not required to provide SES. This is great from our end. We are not having to do indicators that maybe an LEA may not need to respond to and LEAs are not bogged down, in fact each instrument is customized to set the requirements that they must respond to.

With regard to the onsite instrument, the tracker system really allows our program consultants to spend significantly less time in the LEAs that we are monitoring. So LEAs are required to upload evidence approximately 30 days prior to our onsite visit, and this gives the program consultants that amount of time to review evidence and perhaps ask for even more evidence for clarification or just anything that will help us examine those federal requirements before we are actually on the onsite visit. So this allows us to focus on our interviews of LEA personnel. And when we go into the onsite, we are already much more informed. We can also -- we will be taking our computers and update the system as we are completing the interviews, and so it really helps to streamline that process.

Another helpful feature that I wanted to touch on is the comments section. So, on both the LEA and SEA side, users can leave comments and it's almost like an email dialog going back and forth, but again it's all contained within that instrument. So we can see the comments maybe or questions that the LEA has and we can reference our corrective actions, but basically it just keeps that all in one place. So -- and one nice thing about that is it's going to enable us to collect data to provide reference for our office on any areas that we may need to provide technical assistance. So if 75% of LEAs are out of compliance on one of the indicators, then we definitely know this is an area where we need to provide more support to our LEAs. And the tracker system really has helped us identify these patterns more quickly and effectively.

And one thing I did want to mention too is from the LEA standpoint, it has taken a year of transition to train the LEAs on how to use the system, but the feedback that we have received for the most part is that the system is extremely user friendly and they like being able to just upload a piece of evidence, it's very similar to attaching a Word document or Excel file to an email. So you are basically just browsing through your files and uploading those pieces of evidence. So it's been just a great transition and it's been extremely helpful in both the desk review and from an onsite standpoint.

David Downey: Jennifer, thank you so much. That was very enlightening -- both of our presenters from the state. We appreciate your time and look forward to maybe hearing a little bit more from you perhaps during the Q&A portion.

Now, ladies and gentlemen, next is the question-and-answer portion of our presentation. And I know we were going through the questions fast and furiously here getting ready to do them. Now the first question of the day is actually going to go back to you, the audience, in the form of a poll survey, which asks us this. Do you feel that your programs are appropriately monitored? And you've got, it looks like, five options there to go through. Now, we are going to leave the poll question up on the screen so that it will give you plenty of time to make the decision that is appropriate for you. Near the conclusion of our session today, we are going to look at the results. But with that said, so you will be seeing the poll question up while we go through the questions. Now you won't be able to see the questions that we will be reading here during the session, but you will have a chance to see those written questions that we get to in the archived form.

Now I should also advise you that sometimes it might take us a moment in the studio here to identify which of our experts is going to answer the question. So don't worry if there is a momentary pause of dead air. We haven't left you. We promise. We're just having a little bit of jump ball situation. Now you also might hear the word refresh screamed out, too, and that will be from my colleagues here who are going to remind me to make sure I refresh the screen so that we can get to the next questions.

So with that said -- and I would also point out to you this before we go any further, if you have specific questions for Charlotte or Jennifer, if we are unable to get to those during the session, we will do our best to make sure to forward those questions on to them and see about facilitating you getting a response. And if we are unable to get to your question today, there are a couple of things that we would suggest. First, you can email our office Risk Management Service directly and our email address is RMSCommunications@ed.gov and we'll be happy to touch base with you. And also of course for those that are grantees, one of those critical areas or resources that you have are the individuals assigned to administer your grants, that program contact on your grant award notification or comparable document working at the federal or state level who is administering your grants. They are going to know more about your specific program than we are, so we'd invite you to do that.

So with that said, what we want to do then is I want to get over here to the questions if I can. Let's pop that up I believe and make sure where they are, here we go. We are going to go to those two first. All right, we are going to scroll up number 44 here. All right, we’ll click on that. I want to kind of explain to you what I am doing, I am popping the question up, so my lack of 20-20 vision can see the screen and we are going to read this question to you. Pop that up again, thank you, Tina so much. Now question, how many LEAs are in Colorado? Jennifer, if you are on the phone, would you mind sharing the answer for us?

Jennifer Morgan: Sure. Can you hear me?

David Downey: We sure can.

Jennifer Morgan: David, okay, great. We have approximately 178 local education agencies and some of those include BOCES or Boards of Cooperative Educational Services who sometimes they are reporting on behalf of several LEAs.

David Downey: Okay. Thank you so much. And I think if we go back over here and go to the next question and that's going to be number 45, that's just for me for helping me find the questions here, ladies and gentlemen. All right and this was it. I cannot understand what Jennifer is calling the system? So Jennifer, maybe you can talk just a little bit about what you mean when you refer to the system please?

Jennifer Morgan: Yes, yes, absolutely, I apologize. We call it C-FIRS Tracker System in our office and so the C-FIRS is an acronym for the Colorado Federal Integrated Review System.

David Downey: Okay

Jennifer Morgan: And the Tracker, the name Tracker comes from WestEd. And so when we're in our office kind of using the casual term we just call it the tracker system. So basically the name for the Web-based tool that LEAs can log in to -- all they need is an Internet access and they have their own password, password protected log-in. So they are able to log in remotely from anywhere and look in their system.

David Downey: Okay, great. Thank you so much. And let's see, we will go back to the next set of questions, and I'm going to hit the refresh button just in case that helps us here with finding them. Now, a couple of the questions and we want you to make them as, sharing as lengthy as possible, but a couple of them you did filibuster a little bit and then we are going to read through it as best we can. This question is coming from a local education agency. Can you define subrecipients? As an LEA, are there times when we might have a subrecipient or would only SEAs have subrecipients? If I partnered with some other local school districts and we submitted a grant application directly to the Department of Education, would the fiscal agent school be the grantee and the other participating schools be the subrecipients? Thank you. And to our panel. And we are coming up with the answer. It's coming now. Cynthia, please.

Cynthia Brown: Hi. This is Cynthia from the Risk Management Service. I think that the subrecipient for many of our pass-through grants that go by formula to states are in fact school districts, but it doesn't have to be a school district. The real definition here is the direct recipient is the entity that gets the money from the U.S. Department of Education and the subrecipients are any kinds of entities that get funding from that direct grantee.

David Downey: Fine. So if you applied -- the question here. If you applied as a local educational agency directly to the Department of Education as a discretionary grantee, you would be the grantee. If there were other school districts that you were working with,

that could be a partnership relationship and they would not be known as subrecipients or it could be through like maybe as a contractual relationship depending on how your application was structured. But if you submitted a grant directly to us, you would be the grantee.

Cynthia Brown: And if you have any questions regarding the proper relationship, please call your program officer because it can vary by program.

David Downey: All right.

Deborah Morrow: This is Deb Morrow from the IDEA program. And if you want to look at the definition of subrecipient and subrecipients and grantee and subgrantee, they are defined in EDGAR. I believe they are in Part 76 where the definitions of those terms are. And once you have received a subgrant from the grantee, which particularly for the IDEA grant and as Cynthia said for many of our Department grants, are the states. Once we have issued the grant awards and those grantees or the states have issued their subgrants to the eligible local educational agencies or other public agencies that are eligible to receive them, those subgrants cannot be further subgranted. You can contract, you can have interagency agreements, you can have many mechanisms allowed by law to flow federal funds to vendors or contractors, but you cannot further subgrant a subgrant under the EDGAR rules.

David Downey: Great clarification there. And the next question we have is will the federal government also be monitoring the grantee and if they are monitoring the subgrantee?

Rebecca Walawender: This is Rebecca Walawender from the Office of Special Education Programs. And just to be really clear, subrecipient monitoring that we're talking about is an activity that the prime recipient or the entity that first receives the money from the federal government will do to the entity that then receives that money. So the federal government is not monitoring subrecipients. The prime recipients -- so if we are using the case of most federal -- most education formula grants, we are talking about SEAs -- then the subrecipient will then be the LEA, so it's the sub -- it's the SEA that has the responsibility for monitoring the LEA. The federal government isn't coming into the LEA to monitor, generally as a part of this process.

Cynthia Brown: However, the second part of that is -- the federal government, when we monitor the states, we will make sure that this state is monitoring the local.

David Downey: All right. Thank you all. So we are going to refresh the screen. I'll go back up to the next question here, ladies and gentlemen, and got one here and there is another Colorado. Does the Colorado state auditor review your subrecipient monitoring files and work with you on the improvement of the process? Jennifer, are you still there.

Jennifer Morgan: Yes, I am. Yes, I do believe that that process is happening. As far as I know, we were giving monitoring findings of several of our LEAs to our auditor and so we are working back and forth with them so that we can improve that process.

David Downey: Thank you so much. You are working overtime today for us.

Jennifer Morgan: That's great. I'm happy to help.

David Downey: We're happy to have you here. All right, let's go to the next question and it's refreshing now, all right and we want to go here, all right, thank you. Thank you. Now, the next one is, is the monitoring plan supposed to be done by the institution e.g. the university or at the level of the individual grant? Is the monitoring plan supposed to be done by the institution or at the level of the individual grant?

Now this of course we are talking about the subrecipient monitoring where again generally speaking it's going to be the state of the grantee and as the recipient of the funds and they are passing those dollars down to the subrecipient, which could be the school districts, the LEAs, or other entities. So it is possible, any other thoughts or comments there?

All right and, as Tina reminded me, I am short changing some of you who wrote in first, we are going to make sure to get down to the bottom of the list here, we'll scroll down and make sure we get to your questions next and let's see, the one here is the next one I believe it is. What is the name of the system used in Colorado for monitoring purposes? What were the other states using the system? Thank you. And Jennifer, could you remind us again the name of that system.

Jennifer Morgan: Absolutely. We call it the C-FIRS Tracker System. C-FIRS and that acronym is for the Colorado Federal Integrated Review System.

David Downey: And that's something that again is on your website so that individuals who have an interest in it could go to that website and view it at their leisure. Correct?

Jennifer Morgan: Absolutely, yes.

David Downey: All right. And we certainly invite you to do that. It sounds like it sparked a lot of interest.

Jennifer Morgan: That's great.

David Downey: All right. And what were the other states using the system. Now, Charlotte, you had a different kind of risk monitoring tool, but would you mind telling -- giving us that name and telling us if that's also available online?

Charlotte Stevens: Our tool we actually have developed in-house, and right now it's part of -- and we just call it a fiscal risk assessment -- it's currently just part of an Access database and we are working to move it to something that's more automated.

David Downey: Okay.

Charlotte Stevens: But the template and the definitions and the factors are all available on our websites.

David Downey: And, which is great, because of those factors being on the website, everybody knows what the playing field is, the subrecipients know what they need to be doing, everyone knows exactly how things are being tracked and monitored. Right?

Charlotte Stevens: Correct.

David Downey: Excellent. Let's go back to the next question. Yes please.

Rebecca Walawender: Dave, can I ask a question?

David Downey: Please go ahead.

Rebecca Walawender: This is the Rebecca Walawender from OSEP and I just wanted to ask a question from Jennifer -- for Jennifer. Jennifer, is the Colorado system something that Colorado purchased or is that available through the comprehensive center, we have a lot of questions that are kind of getting to that question?

Jennifer Morgan: Okay. Yes, it is available through the Southwest Comprehensive Center. I don't actually -- I am not aware of the exact way that -- if we purchased or received the system. So that would be something that I could give you the name and the phone number of our contact at WestEd if that would be helpful for you guys and then you guys could contact him directly to work out any of those details. Would that be helpful?

David Downey: I think that will be. Maybe we can do that offline.

Rebecca Walawender: No problem.

Jennifer Morgan: Okay.

David Downey: We will add it to the resource list as well. Now the next question is for Charlotte Stevens. Charlotte, what is your state's Division of Education and Finance onsite monitoring staff i.e. how many staff do the fiscal monitoring itself?

Charlotte Stevens: Actually we have a couple of different things going. The staff that performs this fiscal risk assessment, there is actually a staff of about three folks and they also handle our state funding formula and kind of auxiliary information that's related to

this exercise and to our state funding. But I also have a federal audit staff of three folks that do the actual desk audit and the site audits and are doing some of those things. And then we have a program staff that does some program monitoring. But in my division, I have staff of three federal auditors and an audit manager and I have then these other three folks that do some other kinds of work that take on the fiscal risk assessment.

David Downey: All right. And one that is a great question that came up earlier to Jennifer. Let me ask you about this too real quick. How many school districts are in the great state of Louisiana?

Charlotte Stevens: We have for receipt of federal funds, we have about 145, which includes our charters, our traditional LEAs and then a couple of others like our recovery school district is in there, and then we have a special school district. So there are about three or four other non-traditional LEAs or charters in there.

David Downey: Okay. That kind of gives us a sense of the numbers that you all are working through. Thank you so much.

Charlotte Stevens: You are welcome.

David Downey: All right. Now the next question is, this will be the next one here, it is, as it comes up on the screen. Here it is. What is the cost of the grantee for the Web-based system? Jennifer, what can you share about that with us?

Jennifer Morgan: I actually don't know the details of the cost of the Web-based system. It was already here prior to the time when I was hired with the Department.

David Downey: Okay.

Jennifer Morgan: And so, I came in as it already existed, I was not involved in any of those details.

David Downey: Got you, okay.

Jennifer Morgan: I am sorry.

David Downey: No, no worries on that, but again I do invite everyone, it's grabbing a lot of interest here, so I invite everyone to visit your website [the Colorado Department of Education website], get some more hints, and get a sense of what all goes into it. Now let's go to the next question. I am going to refresh again making sure to get to the bottom of the screen so I get the first questions that were asked first and make sure we are here and: Where do we get a monitoring checklist? Dan, what do you say?

Dan Christiansen: Well, you can get monitoring checklists -- our program offices post some of them on ed.gov. If you look at specific programs you will find checklists with all of the indicators and specific requirements that our grantees have to comply with. If you

also look at State Education Agency websites, you can also find examples for states at that level as well. So if you just Google or type in any state education agency, a lot of them are posted online, and you can really draw a lot of indicators and incorporate them into your own checklist using those other state plans as well.

David Downey: And take the best from a lot of different checklists to see what's -- what really can meet your needs. Were there any other responses to that question, are we good? Okay. Please?

Deborah Morrow: Just for those administering programs under IDEA, the Office of Special Education Programs is in the process of developing a tool. Like Dan said earlier, there is no right or wrong way to do this. So we are putting something out as technical assistance, but you can look for that in the near future.

David Downey: That's outstanding to hear, thank you. All right. Let's go to the next question here. Refresh that and it's coming up. We have a lot of wonderful questions to get here, hopefully we will able to get through them today. All right. Next, here we go. And it is: Monitoring tools provide enhancement for programs, can we retrieve the actual tools that help improve our current monitoring system? All right. Monitoring tools provide enhancement for programs, can we retrieve the actual tools to help improve our current monitoring system?

I would say that really again from, as Dan had mentioned, there are some from the State Education Agencies and so forth, there are checklists that you can kind of pick and choose from and build your own. I hope that is kind of what we are -- where you were going to with that question. Any other thoughts or comments? Good, we have another person coming up, one of our panelists.

Shevine Holeman: Good afternoon. This is Shevine Holeman from SASA. And we have our monitoring indicators on the Website that will be extremely helpful. You can just go into Title I focus monitoring and there are several indicators by year or by cycle that will help you to start this process.

David Downey: Well, thank you so much for that. Great, let's see. Please come on in.

Rachel Vessey: Hi. This is Rachel Vessey from State Fiscal Stabilization Fund Group and we also have a number of tools posted on our Website. If you Google SFSF monitoring, you should be able to find them or you can get to them through the ed.gov Website. But we've listed all of the tools that we use in monitoring the state as well as their subrecipients, and we actually suggest that our grantees use those to build their own monitoring plan. So that might be another good resource.

David Downey: Okay, excellent. Thank you so much. Make sure I didn't stop any of our panelists here. Okay. Well, I am going to refresh one more time to make sure we get all the right questions and it pops back up here, and all right, now here is one. Can you spell the acronym EDGAR please?

Well, that is the Education Department General Administrative Regulations. Good old, EDGAR. It's available online. We have it in a book form and we've also produced as a CD that you can take with you as well. That is the Education Department General Administrative Regulations.

Unidentified Company Representative: And those are the implementing regulations for GEPA.

David Downey: For GEPA yes. All right, now let's see, that was -- all right the next one pop this one here. Now, for ABE federal grants, I assume the subrecipient monitoring has the same requirements, isn't that correct? This also includes the fiscal part. We are not in an SEA, but an eligible agency, scrolling down here, that's it -- but we are an eligible agency. So, what does our panel think of this one. That ABE probably is Adult Basic Education. Our answer is coming soon.

Cynthia Brown: This is Cynthia Brown, I'm sorry, I needed to get closer to the phone. I am taking ABE to mean Adult Basic Education. You are probably in a governor's office or workforce office administering that for your state. Yes, the subrecipient monitoring will be the same. These are our government-wide guidelines including the fiscal part. So if you are a vocational rehabilitation agency, a health agency, any kind of an agency, the governor's office that gets the grant directly from the federal government, you are the prime recipient, and you are responsible for monitoring those people that -- or agencies that you pass the grants on to execute the purpose of this program.

David Downey: All right. Well, thank you. And to that questioner, you get the award for giving us the acronym that stumped the government. So congratulations on that.

Cynthia Brown: For ABE.

David Downey: For ABE.

Cynthia Brown: I hope I got there. And if that's not the ABE you were talking about, please resubmit your question.

David Downey: That's right.

Cynthia Brown: Thank you.

David Downey: Yeah, resubmit it if we didn't get the acronym correct. All right, now next question. Can monitoring conducted by a contracted technical assistance provider to subgrantees be considered monitoring? And we are looking around and we are convening here, we are huddling.

Unidentified Company Representative: The grantee is ultimately responsible for the monitoring, so they would have to make sure that whatever work the contractor did was

accurate to provide adequate monitoring of its subgrantee. So again, the grantee is ultimately responsible for the monitoring.

David Downey: And so to the fact, but if they chose to contract that out that, as Dan had mentioned in his part of the presentation, that is something that does occur, but the grantee has to make sure that everything is accurate. Now, let's move on to the next question here. The clock is continuing to tick and this one, all right, here it is. How many auditors are involved with subrecipient monitoring process in Colorado. Jennifer, we are going to hit this one back to you.

Jennifer Morgan: Hello. I am actually unsure of the answers to that question. So, do you mean the program consultants who actually conduct the monitoring at the State level?

David Downey: We are not sure. It's how many auditors are involved with subrecipient monitoring, the subrecipient monitoring process in Colorado?

Jennifer Morgan: That might be the amount of program staff that we have here that are working to monitor. And in that case we have -- I would say approximately 10 to 11 program consultants who are involved in that work. That is not their primary job, but it is a part of their job description.

David Downey: Understood, all right, thank you so much for that. And let's see, we are going to refresh again, and let's see. Here is another one. This is a good one. Do you have information on preparing for a site visit?

Rebecca Walawender: This is Rebecca Walawender from the Office of Special Education Programs. Since we're talking about subrecipient monitoring, that question is best addressed to your State Education Agency or whoever you receive the money through, because that would be the entity that would be responsible to monitor the subrecipients.

David Downey: And now typically if your State Education Agency is comparable to the way the Department of Education works, in most cases you will be informed ahead of time and there will be a letter with a list of things that you would need to have. I think the best advice I would give you is to make sure that all of your records are such that it could serve as a roadmap through your project. Now let's see, we will go back and to the next question. So we will hit refresh here and make sure we've got them all, and all right, here we go. Can you provide a link to those documents on ed.gov?

Now, many of the documents that we are talking about will be available once our Webcast is concluded and it will be part of the archived presentation. So from ed.gov, you can go to our Recovery Act section on our Website and that information will be there then. Correct?

Cynthia Brown: And there is a slide at the end of this presentation that has many of the Websites that Dan talked about during the course of his conversation. They are actually linked to the last page of this presentation.

David Downey: That's right. We do have I think a fairly lengthy list of good resources that can benefit you as you are preparing to be monitored or to prepare to monitor. All right, let's see. Well, I think another question here. Refresh. I think we do. I think it is about time and it looks like we are out of questions too. Let's go to our poll and we've had that up for a while, now it's time to see the results. Do you feel that your programs are appropriately monitored? Let's see, please select the poll to review.

Unidentified Company Representative: Click on subrecipient content to the left, under poll title.

David Downey: There we go, now we push for the polls. All right, here we go ladies and gentlemen. Yes, we have 42% say yes, we have the right resources and skills to complete the appropriate monitoring. Well, that sounds good. That's comforting to know after our session. We are excited to hear that. Wherever you fall on this list, please know that there are many of those here in the Department of Education as well as your state education agencies that are ready and willing to work with you to make sure that you are in a position to be successful in this process as subrecipients. We are here to make sure that you succeed and we are also here working closely with the State Education Agencies as well.

It's 3:30 pm now, ladies and gentlemen, so it's really time to wrap things up. Charlotte and Jennifer, I'd like to thank you so much for joining us. Dan, we appreciate your time and certainly our distinguished panel for their insight into this important administrative function of monitoring the subrecipients. For all of us here at the Department of Education and the state departments of education of the great States of Colorado and Louisiana, this is David Downey saying we wish you the best as you are getting back to school and we will see you at the top. So long folks.