State agencies are required to develop and maintain a monitoring plan for each state grant they administer, per 09 NCAC 03M .0401. Agencies must submit their plan(s) to OSBM for approval, except for those that fall under the oversight of the NC Pandemic Recovery Office (NCPRO).
NCPRO issues separate monitoring guidance to state agencies for programs funded by the following:
1. Coronavirus Relief Funds,
2. The Governors Emergency Education Relief program,
3. Emergency Rental Assistance,
4. Homeowners Assistance Fund,
5. State Fiscal Recovery Fund,
6. Economic Development Administration ARPA State Travel, Tourism and Outdoor Recreation Grant, and
7. Economic Development Administration ARPA Statewide Planning Grant
Agencies should submit monitoring plans for all other grant programs, regardless of funding source, to OSBM.
Agencies must submit the monitoring plan whenever a state assistance program is established. If substantive changes are made to the grant program and its monitoring plan, agencies can submit a replacement plan.
Monitoring plans should include the seven sections below. Click the + next to each section title to read a description of that section of the plan. OSBM will evaluate agency plans based on a point scale for each of the seven elements, as spelled out in the Guidance document.
The monitoring plan should define which program(s) the plan covers. Some agencies may have multiple programs that operate in a similar manner and/or are awarded to a common set of recipients while others will not. In these cases, the agency may want to develop a single plan that covers a group of programs. Agencies are encouraged to standardize monitoring approaches and policies across programs to the extent possible.
Education and technical assistance occur during the life of the grant.
Education can be one-on-one instructions, live group events, or web-based information. Education is typically a one-time event. Whereas technical assistance is targeted to address a specific issue or problem a recipient is have with appropriate conformance of a specific grant requirement.
Before issuing public funds, it is appropriate to education recipients on their responsibilities to conform with applicable laws and rules; contract requirements; allowable use of public funds; reporting requirements, achievement of performance goals. It is also important to education recipients on their responsibilities as it related to subrecipients monitoring responsibilities.
Technical assistance may involve multiple contacts and interactions over an extended period to ensure the recipient has the skills and / or knowledge conform to the requirements of the contract.
Agencies must adopt a risk-based approach to reviewing applicants and monitoring recipients. The program monitoring plan should define the framework that will be used to conduct risk assessments. The plan should define risk categories (see below for example). These risk scores will inform the monitoring activities that need to be performed and enable agencies to target monitoring resources more effectively towards the highest risk recipients. Risk assessments should be completed prior to or just after award and updated, at a minimum, annually.
Below are examples of some risk categories:
- Financial stability
- Audit history
- Quality of management systems and staff
- Past performance
- Size/complexity of award
- Percent of funding being sub-awarded
Agencies may also want to consider adding questions to the award application to help identify various risks. Some examples are:
- Do you have written accounting procedures?
- What data will you collect to measure your progress in meeting the performance measures?
The monitoring procedures should identify the specific financial and performance monitoring activities that will be required for each designated risk level. Examples of performance monitoring
activities include desk review, site visits, performance reports, financial reports, etc. The plan should identify the frequency at which specific activities will occur (e.g. site visit semi-annually for high-
risk recipients), document procedures (5 points), and communication methods. Agencies may also want to develop monitoring tools or checklists to facilitate consistent implementation of the defined
It is also recommended for higher risk recipients, that agencies apply specific conditions or additional requirements in their monitoring plans. Recipients should be notified of these additional requirements or specific conditions. Some examples include:
- Requiring additional, more detailed financial reports
- Requiring additional project monitoring
- Providing technical assistance
- Requiring on-site reviews or site visits done earlier in the award period
In addition to monitoring procedures for recipients, agencies are encouraged to develop procedures to ensure that subrecipients are following the award guidelines. These may be requirements for the passthrough entity (recipient) to implement. The following are examples of different procedures agencies could adopt:
- Recipient’s monitoring of subrecipient in management system, record retainment
- Recipient’s monitoring of subrecipient’s internal controls
- Subrecipient agreements
- Process for having subrecipient submit progress and financial reports
When monitoring procedures identify noncompliance, the agency must take actions. Agencies should develop procedures for dealing with issues of noncompliance, including following the North Carolina Administrative Code (09 NCAC 03M .0801).
Monitoring plan should include what action will be taken (10 points) and the timing of those actions for addressing noncompliance (10 points). Procedures should include:
- Formal communication to recipient the noncompliance issues
- Specify a timeframe for issuing the communicate once noncompliance is identified (e.g.within XX days of identify noncompliance, the recipient will be notified)
- Allowing 60 days (09 NCAC 03M .0801(d)) for the recipient or subrecipient to take corrective action to address the noncompliance
- Provide technical assistance during the 60-day period
- When to notify OSBM for placement on the suspension list
- Actions to suspend recipient’s payment
- When to notify the State Bureau of Investigation for possible criminal misuse of State property
- How to retrieve unexpended funds
For awards with defined end dates, agencies should develop closeout procedures. This will assist the recipient to meet all the financial requirements. Closeout procedures should address submission of final performance and financial reports and return any unused public funds. Agencies can also use lessons learned through monitoring to inform risk assessments and decisions in the next award cycle, and to facilitate continuous improvement of the monitoring program.