Same Old Money Problems at CNCS, Part II


The second report in two weeks about financial management problems at the Corporation for National and Community Service, the parent agency of AmeriCorps, has been issued by the agency’s Office of Inspector General; this one is about the lack of scrutiny given new grantees’ financial expertise.

Primarily, the audit found, the agency relies on the grantees’ own assessment of their financial abilities – as reported on a Financial Management Survey each must complete – but provide little or no follow-up assistance, even to those groups that say they do not have the capabilities to comply with all the federal management regulations.

In addition, the audit found it was unclear if CNCS personnel had even looked at the most of those required Financial Management Surveys. And though the surveys were supposed to be part of a grantee’s record, those forms could not be located for 15 percent of the grantees they reviewed.

The audit was performed on a sample of grantees from 2006, including 13 new grantees.

Just as the special evaluation of the 2008 budget process – requested by the House Appropriations subcommittee that oversees the agency and released earlier this month – found many of the same profound management deficiencies that had been identified five years earlier, the latest audit identified as continuing problems many of the same ones that were found in a similar audit more than a decade ago.

In the new audit, the Office of the Inspector General concluded: “The Corporation may award grant funds to organizations that cannot track the source and application of funds or determine whether they were used for authorized purposes.”

 CNCS officials did not return telephone requests for comment today.

In a response included as part of the audit, Rocco Gaudio, deputy financial officer for grants and field financial management, and Peg Rosenberry, director of grants management, said the current survey is being replaced with “more extensive systems survey starting with the 2010 grant cycle” that will require grantees to submit documentation to back up whatever level of financial management they claim  before receiving their grants.

Gaudio and Rosenberry also said they expect to have a new online financial management course developed by March 31, 2010.

The audit was begun under former Inspector General Gerald Walpin, who was fired in June by President Barack Obama, and submitted by Stuart Axenfeld, assistant inspector general for audit.

A recurrent recommendation of the audit was that new grantees who need it receive training in financial management, time keeping and record keeping before they are awarded grant money.  But in each case, the corporation’s formal response was that any problems would be picked up during contacts or audits during the first year of the grant.  In response, the auditors found that first-year audits are rarely performed.

The audit also found:

*Risk assessments of each grantee often were not consistent with risk indicators.

*Incorrect levels of indirect expenses applied to the grant without any approval.

*Nearly one-third of new grantees did not have written policies and procedures for grant management.

*More than half of the grantees charged costs to grants that were not allowable or were not supported by adequate documentation.

*Time and attendance were not recorded using timesheets that met Office of Management and Budget requirements.






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