Grants Management and Risk Assessment

 

The intent of the Risk Assessment report is to ensure that entities have an opportunity to annually review key data points related to their fiscal and program practices.  The Montana Department of Education’s goal, in compliance with CFR §200.332(b), is to provide meaningful information that assists entities to assess healthy conversations around fiscal process and improvements.  

Under CFR 200.332(b) the Uniform Grant Guidance describes the requirements of a pass-through entity (OPI) to complete a Risk Assessment on their sub-recipients. The guidance allows OPI the authority to develop a risk assessment to meet the state’s needs. In addition, it allows OPI the flexibility to develop gran specific risk assessments and address various grant requirements.

Risk Assessment Framework

Risk Assessment Frequently Asked Questions:

What is a Risk Assessment?

The Montana Office of Public Instruction (OPI) monitors a risk assessment process to ensure that entities who receive federal funds have an opportunity to annually review key data points related to their fiscal and program practices. While ensuring compliance with CFR §200.332(b), this framework provides a transparent process that gives meaningful feedback to sub-recipients to promote helpful conversations around fiscal processes and improvements.

The framework uses a formula of risk data analysis to determine overall low, medium, or high- risk determinations for sub-recipients of federal funds. The OPI will provide scores to all districts, while providing essential support for any identified as high-risk, with helpful information for any identified as medium risk.

Why must Montana Office of Public Instruction conduct a Risk Assessment and who receives a Risk Assessment?

In compliance with 2 CFR 200.332(b), the OPI assesses subrecipients to identify those at greater risk of noncompliance with federal laws, regulations and grant award provisions. OPI uses the risk assessment when evaluating the entity’s applications for competitive and continuing federal formula awards to determine whether specific conditions and/or additional monitoring will be applied to the entity’s federal awards. 

Under CFR §200.332(b) the Uniform Grant Guidance describes the requirements of a pass-through entity (OPI) to complete a Risk Assessment on sub-recipients. The guidance permits OPI the authority to develop a risk assessment to meet the state’s needs. 

All subgrantees that receive funds through OPI as a pass-through agency are subject to a Risk Assessment.
 

The Purpose of the Risk Assessment

The purpose of this assessment framework is to outline a process that is three-fold:

  • To create a mechanism for determining and subgrantees who are at risk of not meeting federal program requirements. 
  • To use the results from this mechanism to identify high-risk sub-recipients.
  • To put the high-risk sub-recipients into corrective action and support improvement fiscal practices.

What are the Risk Indicators and Risk Factors?

The OPI uses a formula to determine risk level of sub-recipients receiving federal funds. This formula is based on information from all federal programs that a school district participates in using the following criteria:

  • Program Assurances (y)
  • Adhering to program timelines and due dates
  • Drawing-down funds regularly
  • Meeting program assurances as outlined in federal applications
  • Fiscal performance (completing third-party audits) (z)
  • Academic performance (x)

The formula: x + 3y + 3z = r (risk)
Scale:  19-21 = high risk, 12-18 = medium risk, 7-11= low risk

Program and fiscal grant managers submit a 1, 2, 3 rating based on their program rubrics and the sub-recipient’s performance for their individual program assurances. These are then calculated to a 1, 2, 3 for program assurance which is then put into the formula for calculation of overall risk, with the fiscal audit and academic performance data points

What is a Risk Score and how is it calculated?

What is a Risk Score?

The Risk Assessment uses points that are a total accumulation based on the analysis of risk factors within the risk indicators. Higher Points represent greater risk. A risk score is the total of the individual sub-scores calculated for each of the six risk indicators: Program Risk Determination, Program Assurance, Fiscal Program Performance, Reporting Timeliness, Academic Performance, and Finance Fiscal Audits. 

How is it calculated? 

The sub-score for 4 risk indicators (Program Risk Determination, Program Assurance, Fiscal Program Performance, and Reporting Timeliness) is calculated by summing the total points divided by the 20 Federal Programs.  The scores are computed using a weighted scale to ensure equality regardless of the school size or the amount of federal program awards allocated. The two final risk indicators, Academic Performance and Finance Fiscal Audit, are calculated as a single sub-score based on having only one risk factor.  

The subtotal risk factor values from each of the six risk indicators were combined into the categories low, medium, and high.  

The total risk factor values were computed using a weighted scale to ensure equality regardless of the school size and/or the amount of federal program awards allocated.   

The final scoring value determines level of risk for each LEA. 

Low Risk = 0-14 

Medium Risk =15-22  

High Risk=23 and above

What is a risk level and what does It mean for an entity? 

The risk level is the conversion of the risk score into Low, Medium, and High categories. The Risk Level is individually calculated for each entity to ensure an accurate depiction of potential risk. The ultimate intent is to ensure transparency and accountability which will reduce and mitigate potential vulnerabilities. Montana Office of Public Education (OPI) will use these results to provide technical support and drive healthy conversation around performance improvement.

The OPI may apply special conditions, restrictions, or monitoring procedures to federal competitive and formula grants that are awarded to high-risk subgrantees. Such special conditions and restrictions will correspond to the risk condition that exists for a particular subgrantee and may include: (2 CFR §200.207)

 

  1. Payment on a reimbursement, rather than an advance basis;
  2. Withholding authority to proceed to the next phase until receipt of evidence of acceptable performance within a given funding period;
  3. Additional financial and/or program reports with more detail;

  1. Additional project monitoring;
  2. Requiring the subgrantee to obtain additional technical or management assistance; and/or
  3. Requiring additional prior approvals.

Prior to imposing special conditions or restrictions, the OPI will notify the subgrantee in writing of: (2 CFR §200.207)

  1. The nature of the special conditions/restrictions;
  2. The reason(s) for imposing special conditions/restrictions;
  3. Corrective actions which must be taken before the special conditions or restrictions will be removed and the time allowed for completing the corrective actions; and
  4. The method whereby a subgrantee may request reconsideration of the conditions/restrictions imposed.

What does the Montana OPI’s State and Federal Handbook say about Grants Management and Risk Assessments? 

 

What is the High Risk Appeal Process?

In section 600, under, High-Risk Appeal Process in the Montana State and Federal Handbook it states, Schools have the right to appeal a high-risk designation if they feel the designation was made in error or if they feel they have corrected the issues which led to the High-Risk designation. 
Please see the specifics in the handbook starting on page 92. 
 

 


OPI Staff are here to help:

Carrie Kouba, Senior Manager for Improvement and Engagement, 406-444-0467

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