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 – 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:

  1. Upload their single audit
  2. Self-identify any audit findings
  3. 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:

  1. Audit Findings
  2. Cumulative Amount of Sub-awards
  3. Financial Management System
  4. Subrecipient Experience Managing Grants
  5. Subrecipient Staff Experience Managing Grants
  6. 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.