NB_440_21_1 - NB 440-21-1 PGM – FY 2021 Conservation Innovation Grants Matching Funds Audits
NB 440-21-1 PGM – FY 2021 Conservation Innovation Grants Matching Funds Audits
National Bulletin: 440-21-1 Date: October 8, 2020
Subject: PGM – FY 2021 Conservation Innovation Grants Matching Funds Audits


 
Purpose.  To provide guidance to States on the annual Conservation Innovation Grants (CIG) matching funds verification auditing process and requirement to initiate a matching funds audit of a single State CIG project in fiscal year 2021.   
 
Expiration Date.  September 30, 2021
 
Background.  In 2018, the USDA Office of Inspector General (OIG) released an audit report analyzing NRCS controls over CIG. Recommendation four in the report required 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 State offices to carry out CIG matching funds audits.
 

Explanation.  CIG Classic grants require grantees to match NRCS funding by at least 50 percent of total project cost, and CIG On-Farm Trial grants require a 25-percent match of Federal dollars awarded. These matching funds can be any combination of cash and in-kind contributions. NRCS also requires grantees to report matching funds expenditures on their semiannual Standard Form (SF)-425, “Federal Financial Report,” and to maintain auditable documentation of matching funds expenditures.

OIG sampled both national and State CIG projects and found that grantees did not consistently maintain 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’ agreements.

CIG matching funds verification audits must be carried out using the guidance below.

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 staff will, based on an internal risk review, select a subset of national projects for auditing. 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 FBC to audit. Once the audit is completed, FBC 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. Organizations that successfully pass their audit should generally not be audited again within the same 5-year period.

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 fewer projects per year for back-to-back competition years, or do not hold a competition in a year following award of two or fewer projects, they may select a single project for auditing once during those 2 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 submits a ServiceNow ticket with the documentation attached for the Grants and Agreements Division at the FBC to audit. Once the audit is completed, FBC staff will work with State CIG staff to transmit the results to the grantee and address any needed remedial action.

States should initiate their fiscal year 2021 audits as soon as possible with the understanding that audits must be completed by September 30, 2021.

 

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

 
 

 /s/

JIMMY BRAMBLETT
Deputy Chief for Programs

   
 
 

Attachment A - CIG Risk Review Questionnaire
Attachment B - Guidance on Auditable Records   

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