In accordance with 20 CFR 683.410, 2 CFR part 200, and MN OGM Policy08-10, DEED conducts programmatic, fiscal, and administrative compliance monitoring of Federal and State awarded workforce development grantees. Monitoring reviews are conducted by DEED program monitors to measure progress, ensure federal and state funds are used responsibly, identify areas of non-compliance, and offer technical assistance.
The purpose of monitoring and oversight is to:
- Assess compliance with applicable federal and state laws and regulations.
- Assess whether grantee/sub-recipient programs have achieved intended results.
- Assess the capacity of grantee internal control systems.
- Ensure resources are used efficiently and effectively for authorized purposes and are protected from fraud, waste, and abuse.
- Determine expenditures have been appropriately applied per cost categories and are within cost limitations.
- Determine compliance with nondiscrimination, disability, and equal opportunity requirements of federal and state law.
- Identify system-wide issues requiring policy or program review and resolution.
- Identify promising practices and share with other workforce development partners.
- Identify technical assistance needs.
Frequency of Monitoring Reviews
Compliance reviews for federal grant recipients are completed on an annual basis.
Compliance reviews for state grant recipients with grants over $50,000 are completed once during the grant period unless the grant exceeds $250,000, in which case an annual grant performance review is conducted per MN OGM Policy 08-10.
Scope of Monitoring Reviews
Compliance monitoring encompasses a review of programmatic, financial, and administrative activities. Monitoring maybe conducted onsite or by a desk review (virtual).
Program Monitoring. The program review includes, but is not limited to, the evaluation of grantee and sub-recipient program services provided to eligible individuals pursuant to the grantee work plan, related federal and state requirements, state policies and guidance, and Uniform Guidance. If the grantee awards grant funds to subgrantees and/or contractors, the program review will include a review of the subcontracts as well as a review of the grantee's monitoring of subrecipients/subawards. See below for more specific subgrantee monitoring requirements.
DEED reviews program participant records to:
- Ensure only eligible participants are enrolled and applicable eligibility documentation is collected and properly recorded.
- Ensure participant records include pertinent forms and data.
- Confirm appropriate and adequate case notes are documented ensuring continuity from time of application through completion of services.
- Verify all relevant participant data and services are accurately and expediently recorded within Workforce One (WF1).
- Ensure implementation of services are in accordance with the grantee's workplan.
Financial and Administrative Management. The financial and administrative management review includes, but is not limited to, the evaluation of the grantee's and sub-grantee's administrative and financial policies and practices according to applicable federal and state legislation. A financial reconciliation is another key component of the review. This includes a review of the grantee's Financial Status Report (FSR)/Request for Reimbursement Report (RPR) and a sampling of source documents, which are compared with the grantee's general ledger to ensure they align and are correct.
Subgrantee Monitoring Requirements
Grantees are required to monitor their subgrantees as codified in 2 CFR 200.329 (a), 20 CFR 683.410 (a) and in accordance with MN OGM Policy 08-10. This requirement is incorporated into DEED's grant terms and conditions regardless of funding source. The terms and conditions of Federal and State awards apply to the subawards by virtue of grant and cooperative agreements and/or general application. DEED grantees are responsible for ensuring that subawards comply with Federal and State laws, statutes, and program guidance. During monitoring, grantees are required to provide the program monitor with evidence of a subgrant monitoring plan/schedule, a monitoring guide, a sample financial reconciliation, and a monitoring report. Federal grantees with subrecipients must monitor their subgrantees annually. State grantees with subgrantees receiving funding over $50,000 must be monitored once during the grant period and annually for subgrants over $250,000.
Monitoring Procedure
DEED's Employment and Training Programs Division's monitoring procedure includes: 1) Notification& Document Request; 2) Document Review; 3) Schedule Monitoring Visit; 4) Monitoring Visit; and 5) Monitoring Report and Follow-up.
1) Notification & Document Request
Notification of pending compliance review will be given approximately 30 days prior to each monitoring visit. The notification will specify fiscal and program documents that the grantee/subrecipient must send to the program monitor to complete the review. It will include a monitoring guide that must be completed electronically by the grantee and returned to the program monitor by the specified deadline.
The program monitor will also provide the grantee with a list of participant IDs for the file review that will be reviewed within Workforce One (WF1). Participant source documents not uploaded by the grantee within Workforce One (WF1) will be requested by the monitor via a secure email or secure file share.
2) Document Review
In preparation for the monitoring visit, the program monitor will review the following (including, but not limited to): grantee's financial audit reports; completed program and fiscal monitoring guides; progress reports; risk assessments, appropriate Financial Status Reports(FSRs) or Reimbursement Requests (RPRs), cash balances, cost allocation plans, indirect rate plans, etc.; annual assessments as required; previous corrective action(s); workplan; budget; subrecipient contracts; Equal Opportunity guide; Workforce One (WF1) program reports; program performance outcomes, etc.
3) Schedule Monitoring Visit
The program monitor will work with each grantee to schedule a suitable date and time for the monitoring visit entrance and exit meetings as well as to determine appropriate grantee staff involvement.
4) Monitoring Visit
Components of a monitoring visit include an entrance and an exit meeting (as needed), which may also include:
- Discussion of state and/or federal statutory compliance, policies and procedures, and governance.
- Summary of items reviewed (monitoring guide, fiscal and program documents, policies, and participant file review).
- Completion of a financial reconciliation (as needed).
- Review of program performance goals/outcomes.
- Discussion of grantee challenges and questions (as needed).
- Discussion of areas of concern and findings that require action, recommended changes, budget modifications, subrecipient contracts, and sharing of best practices, etc.
- Recommendations and/or technical assistance (when appropriate).
5) Monitoring Report & Follow-up
A report will be issued by the monitor in approximately forty-five (45) days from the completion of the monitoring visit and emailed to the grantee. See definitions for report terminology such as areas of concern, findings, corrective actions, and corrective action plan.
Corrective Actions
When corrective actions are issued, the grantee is required to provide a response addressing each finding noted in the monitoring report within 30 calendar days. The corrective action plan, when required, shall include the action(s) the grantee will take to correct the problem and estimated date the finding will be resolved. In the event it is not possible to resolve findings identified during monitoring, a request may be made to DEED for technical assistance.
Resolution or Completion
The monitoring review is complete if corrective action is not required or once the corrective action is satisfied per notification by DEED.
Repeat Issues Identified in Monitoring Reviews
Areas of Concern and/or Findings found in two or more consecutive monitoring reviews, may result in one or more of the following:
- Areas of Concern escalated to Findings
- Issuance of additional Corrective Actions which may include DEED training and technical assistance of grantee staff
- Sanctions
State of Minnesota Legislatively Made/Named Grants
Legislatively Mandated Grants (Direct Appropriations, Adult Career Pathways, Minnesota Family Resiliency Partnership, etc.) are subject to the same level of oversight and monitoring as that which is applied to other state grants, while respecting and maintaining the legislative intent. Requirements include submission of a grant work plan and budget per MN Office of Grants Management policy (OGM) 08-11.
Definitions
Areas of Concern – Administrative, management, or programmatic practices that are not specific compliance violations, but may negatively impact a program and/or could lead to a finding in the future if not addressed.
Cash Balances – A cash balance is the amount of advance grant funds the grantee currently has available. Monitors review the fiscal records of cash advance grantees to verify cash balances are disbursed within three to four business days and that no excessive cash is on hand. (Applies to grantees who submit FSRs)
Compliance Review -An ongoing and annual examination to ensure Employment and Training Program (ETP) grantee, sub-recipient or contractor complies with applicable Federal and State laws, regulations, contracts, grant terms and conditions, state policies, and local procedures related to WIOA, including 2 CFR part 200 and MN OGM Policy 08-10. This includes appropriate reviews of performance and resolution of audit findings that involve the entity under review.
Contractor - A non-federal entity that receives a contract for the purpose of providing goods and services. Common characteristics of a contractor include:
- Provides the goods and services within normal business operations.
- Provides similar goods or services to many different purchasers.
- Normally operates in a competitive environment.
- Provides goods or services that are ancillary to the operation of a federal or state program.
Corrective Action – A corrective action is an action taken by the grantee or sub-recipient to correct and/or eliminate an identified grant deficiency.
Corrective Action Plan - A plan imposed by DEED that requires a grantee or sub-recipient to take actions within a specified timeframe designed to correct specific instances of noncompliance.
Desk Review (Virtual) – A desk review is conducted by email, phone, and MS Teams.
Disallowed costs - Disallowed costs are charges to a grant award that are determined to not be allowed, in accordance with the applicable federal statutes, state statutes, regulations, grant guidance, or the terms and conditions of the grant award.
Financial Reconciliation - A financial reconciliation is a key component of the monitoring review of DEED's Employment and Training Program (ETP) grants. It includes a review of a grantee's FSR/RPR, which is compared with the grantee's General and Detailed Ledgers to verify that the requested source documents are correct and in agreement. The reconciliation confirms that the transactions in the general ledger are consistent, accurate, and complete.
Finding – A finding is a violation of a specific compliance requirement contained in federal or state law, regulations, or policies, Request for Proposals (RFP), Uniform Guidance, the grant terms and conditions, ETA guidance, Training and Employment Guidance Letters (TEGLs), and/or the grant agreement, which requires a corrective action. Findings may result in questioned costs and/or disallowed costs.
Grantee – An organization awarded a federal or state workforce development grant by DEED.
Monitoring Guide – The monitoring guide is a document that is completed by DEED grantees at the inception of a compliance review and sent to the DEED Program Monitor. The purpose of this monitoring guide is to assist in determining whether the grantee and, if applicable, its subrecipient(s) is/are conducting their grant in accordance with the approved work plan, federal, and state policies and requirements.
Non-compliance – See "Finding" definition above.
On-site Review - On-site monitoring conducted in-person at the grantee's location of business, which may include visiting participant work sites, employer locations, and/or other service locations.
Promising Practice - An approach to service delivery or process that is identified as being a unique or effective practice that offers increased services to customers or greater efficiency and effectiveness in service delivery or administration.
Questioned Cost - A cost that is questioned by the monitor as being unallowable, un-allocable, or unreasonable. Questioned costs are expenditures that:
- Resulted in a violation or possible violation of a statute, regulation, or the terms and conditions of a federal or state award.
- At the time of the monitoring visit, were not supported by adequate documentation (un-allocable).
- Appear unreasonable and do not reflect the actions a prudent person would take in that circumstance (unreasonable).
Subrecipient/Subgrantee - A non-federal entity that receives a subaward for the purpose of carrying out part of a federal or state award.
Second- and Third-Year Monitoring Reviews – Grant performance reviews that are conducted during the second and third years of a multi-year grant period. A desk review of the previous monitoring guide, report, program outcomes, expenditures, and Workforce One data will be completed.
Technical Assistance – Technical assistance includes targeted support to an organization with a need or problem, which may include the clarification of DEED and/or grantee contract requirements at the time of the monitoring visit. If more in-depth support is needed by the grantee, program monitors will refer the grantee to the program coordinators for assistance.