Internal controls are fundamental to every government’s ability to detect and prevent internal & external fraud. Previously in this series, we wrote that the war on government fraud starts with the five components of internal control known as the Committee of Sponsoring Organization (COSO) framework. This article continues the discussion by highlighting another critical area in which every government should apply this framework: grants and program management. This article presents part two of this topic.

As stated in part one of the grants & program management blog, Governments need a robust internal control system for the management of grants to meet six objectives:

1. The monies expended reach the appropriate recipients and are spent in accordance with applicable laws and regulations.
2. Everyone understands their rights, requirements and responsibilities under the grant and correctly discharge their responsibilities.
3. The purposes of the grant are met.
4. Audit findings are promptly resolved.
5. Reporting required is completed accurately and on time.
6. The government complies with cost allocation plans where applicable and any federal, state, or local laws.

Red Flags

The following document identifies even more red flags of grant & program management fraud, to continue the list from part one of this article. For each red flag, preemptive measures are listed to assist you in combating the potential for fraud.

Recommended Resources

These online tools can help a government win the war against fraud in grants and program management:

• “AGA Risk Assessment Monitoring Tool” (Link) – This risk assessment tool provides pass-through entities with a method for assessing subrecipient risk across federal granting and monitoring authorities.
• “AGA’s Subrecipient Monitoring and Self-Assessment Tool” (Link) – A guide to provide a consistent approach for pass-through entities to monitor a grant subrecipient’s compliance with federal administrative requirements.
• “Civil Rights Compliance Checklist Issued by the US Department of Justice” (Link)
• “Guide to Improving Program Performance and Accountability Through Cooperative Audit Resolution and Oversight (CAROI)” (Link) – Provides government officials with a concrete tool to improve programs and to deal with fiscal and programmatic challenges.
• “List of Individuals/Entities Excluded (LEIE) from Federal Health Care Programs” (Link)
• “National Association of State Controllers (NACS) Controls Questionnaire for Buy American Act” (Link)
• “National Association of State Controllers (NACS) Controls Questionnaires for a Drug Free Workplace” (Link)
• “Office of the State Controller, State of Maine Self-Assessment Tools” (Link) – These tools include checklists for documenting the governments control environment and risk assessment including those for grant compliance.
• “System of Award Management (SAM)” (Link) – The source of information on grant programs, including the database to search for parties excluded from receiving federal contracts and federal financial assistance.