Preparing Your Organization to Receive a Federal Award
PART 1
If your organization is about to receive ARPA funding and you are nervous about where to start, keep reading.
The first place to begin is to understand your organizational risk. You can understand some of the risks to you by thinking through how Federal awarding agencies and/or your pass-through agency (state, county, etc.) see you. Both of those agency types are required to assess the risk of giving you federal money. They’ll make an assessment based on the following
How large is your ARPA award? The larger the award, the increased the risk. If it’s more than $750k, and you may possibly spend $750k in any one of your fiscal years, your risk is increased further because you will need extra scrutiny through a required Single Audit. If there are questioned costs—i.e. costs determined unallowed by governing regulations or unsupported by backup documentation—you may have to pay them back.
How experienced is your organization and your staff with managing federal awards? Less experience means more risk.
If your organization’s budget is small, you are riskier to your funding agency.
When you think about your financial systems, do you have a small number of people doing the large majority of the different financial tasks? The more concentrated your system is, the more risky it is seen by auditors and monitoring agencies.
Have you had a lot of recent turnover in key administrative staff? That can increase risk.
If you have pending lawsuits or bad publicity, this can be seen as risky for your funding agency.
The bottom line is this: the riskier you are to your funding agency, the more scrutiny both they and your auditors (if required) will be when they review your work. More scrutiny means more opportunities to find errors, omissions, and inadequate supporting documentation.
It’s a little bit frightening, yes? In the next post, I’ll show you how you can use your ARPA funds to mitigate these risks because not only do you want to do the award well, you want to make sure the public and your funding agenc(ies) feel the same way about your efforts.