Financial Risk Assessment and Subrecipient Monitoring
The Virginia Department of Emergency Management (VDEM) is rolling out a new process to perform subrecipient financial risk assessments for non-compliance with federal grant award requirements. A subrecipient is defined as a state agency, local government, non-profit organization, or tribal government. VDEM, as a recipient of federal funds, is required to do this by the Code of Federal Regulations.
VDEM has built an automated process through our grant management system, VDEM EM Grants – https://www.vdem.emgrants.com. Subrecipients will be required through the Audit Tracking Form to identify whether they expended $750,000 or more in federal funds in their previous fiscal year. This is the threshold for requiring a Single Audit. If the answer is yes, the subrecipient will be required to:
- Upload their single audit
- Self-identify any audit findings
- Fill out a series of questions related to their staffing and financial systems
What will happen after I submit my Audit Tracking Form?
Based on the responses to the questions, and any audit findings – a risk score will be assigned based on the following criteria:
- Audit Findings
- Cumulative Amount of Sub-awards
- Financial Management System
- Subrecipient Experience Managing Grants
- Subrecipient Staff Experience Managing Grants
- Subrecipient Procurement Policy
What will the risk score mean for the subrecipient?
The risk score is a tool, required by the Code of Federal Regulations (2 CFR 200) that will allow VDEM to assess each subrecipients pre-award risk of financial noncompliance. Depending on the risk score, VDEM may provide technical assistance, perform an on-site monitoring visit, or place special terms and conditions on future grant awards to reduce overall risk.
This feature will be rolled out in mid-March. Please bookmark this page for future reference.