NB_440_19_28 - NB 440-19-28 PGM - Conservation Innovation Grants Matching Funds Audits
NB 440-19-28 PGM - Conservation Innovation Grants Matching Funds Audits
National Bulletin: 440-19-28 Date: September 23, 2019
Subject: PGM – Conservation Innovation Grants Matching Funds Audits


Action Required by.  October 30, 2019
 
Purpose.  To inform States of the new Conservation Innovation Grants (CIG) matching funds verification auditing process.
 
Expiration Date.  December 31, 2019
 
Background.   In 2018, the USDA Office of Inspector General (OIG) released an audit report analyzing NRCS controls over CIG. Recommendation four in the report requires NRCS to establish policies and procedures to verify grantee and third-party matching contributions obtained and used as part of CIG projects. This bulletin provides guidance and actions required by NRCS States to carry out CIG matching funds audits. 
 

Explanation.  CIG grantees are required to match federal funding granted by NRCS at least 1:1. These matching funds can be any combination of cash and in-kind contributions. To date, NRCS has only required grantees to report on matching funds expenditures on their SF-425 financial reports, and also has required grantees to maintain auditable documentation of matching funds expenditures.

 
OIG sampled both national and state CIG projects and found that grantees were not always maintaining auditable records (see attachment B for guidance on auditable records). As a result, OIG required NRCS to develop policy and procedures to ensure that matching funds were being expended consistent with commitments in grantees’ grant agreements.

 
National CIG staff has worked with the Farm Production and Conservation (FPAC) Business Center to develop the procedures outlined below, which will also be included in an upcoming CIG manual update.
1) At the national level, 5 percent of active national projects will be audited each year for matching funds documentation. In October of each year, National CIG staff will select a subset of national projects for auditing based on an internal risk review. Staff will request matching funds documentation from the grantees. Once the documentation is collected, National CIG staff will submit a ServiceNow ticket with the documentation attached for the Grants and Agreements Division at the Business Center to audit. After the audit is completed, Business Center staff will work with National CIG staff to transmit the results to the grantees and address any needed remedial action. The full cycle of these audits will not take longer than a single fiscal year.
2) At the state level, most States do not have enough active projects to be able to sample 5 percent of projects. Therefore, each year every State with active CIG projects must audit a single project, but not the same project more than once, informed by an internal risk review. If States award two or less projects per year for back-to-back competition years, or do not hold a competition in a year following award of two or less projects, they are permitted to select a single project for auditing once during those two years.
The process for selecting the project to audit should be based on a risk review and relative ranking of existing projects using the questions in Attachment A. If projects are ranked equally after risk review, one project should be randomly selected from a State’s active projects. As with the national process, State CIG staff must request matching funds documentation (auditable records—see Attachment B) from the selected grantee. Once the documentation is collected, State CIG staff will submit a Service Now ticket with the documentation attached for the Grants and Agreements Division at the Business Center to audit. After the audit is completed, Business Center staff will work with State CIG staff to transmit the results to the grantee and address any needed remedial action.

All States that have one or more active CIG projects must initiate a matching funds audit of a single State CIG project, consistent with the process outlined above by October 30, 2019.

States must report on their matching funds audit activities as part of their annual CIG reporting cycle, which is initiated by a national bulletin in September each year. The first audit reports are due in October 2020.  

 
Contact.  Submit questions about this bulletin to the CIG inbox at nrcscig@usda.gov.
 
 


 /s/

JIMMY BRAMBLETT
Deputy Chief for Programs
   
      

      

 

 Attachment A

 Attachment B     

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