Assessing Risk from the Grant Maker and Applicant Perspective

Implementing effective risk management practices is crucial for pass-through entities in adhering to the requirements outlined in the Uniform Guidance (2 CFR Part 200). As intermediaries between federal grantors and subrecipients, these entities play a vital role in ensuring funds are allocated responsibly and projects achieve their intended outcomes. By establishing robust processes for assessing, monitoring, and supporting subrecipients, pass-through entities not only mitigate risks but also enhance overall program effectiveness. This proactive approach fosters compliance and accountability as well as strengthening the partnership between grant makers and recipients, ultimately leading to greater success in grant programs.

Pass-through entities can implement the risk management requirements outlined in the Uniform Guidance (2 CFR Part 200.332) by following these key strategies:

During the Application Phase:

• Assess Subrecipient Risk [200.332(c)]: Conduct a thorough risk assessment of potential subrecipients before awarding funds. This involves evaluating their financial stability, past performance, and compliance history. A standardized risk assessment tool, such as that provided by the AGA, can help streamline this process.

During the Award Phase:

• Utilize Special Conditions [200.332(d)]: When entering into grant agreements with subrecipients, include specific terms related to risk management such as reporting requirements, performance metrics, and compliance obligations.

During the Post-Award Phase:

• Risk-Based Subrecipient Monitoring [200.332(e)]: Based on the subrecipient’s risk level determined by your assessment, implement ongoing monitoring processes to track their performance and compliance with the grant terms and conditions. This may include regular financial reviews, progress reports, desk audits, and site visits.
• Provide Technical Assistance: Offer support and resources to subrecipients to help them understand and meet the requirements of the Uniform Guidance. This can include training sessions, workshops, or written materials.
• Foster Communication: Establish open lines of communication with subrecipients to facilitate early identification of potential issues and encourage collaborative problem-solving.

How applicants can position themselves as desirable award recipients

In the competitive landscape of grant funding, positioning oneself as a desirable recipient involves demonstrating not only the potential impact of the proposed project but also a commitment to responsible planning and risk management. Grantors seek assurance that their investments will yield positive outcomes while minimizing uncertainties. To effectively convey this assurance, applicants can adopt a strategic approach that encompasses clear project goals, robust methodologies, and comprehensive risk management plans. By aligning their proposals with the grantor’s mission and showcasing their organizational capacity, applicants can enhance their appeal and instill confidence in their ability to execute successful projects.

Applicants Can:

• Ensure they have documented internal controls, policies, and procedures to manage grant funding.
• If you are not qualified, submit a joint application or sub to a successful partner for your application/project.
• Describe your successful track record of managing previous grants (federal, state, or non-profit).
• If you have a previous audit with findings, provide documentation on steps taken for your corrective action plan.

To learn more about the dedicated resources we have and gain valuable insights on grants management, please visit our Center for Grant Excellence page.

If you need help implementing effective risk management practices or just do not know where to begin – let’s chat and see where we can help.

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