Financial Analysis Management Assessment Pilot

 

 

November 16, 2015

Dear Center Directors,

I am writing to share information regarding an initiative that NIST MEP is launching in conjunction with the overall, ongoing effort to refresh the MEP System in accordance with Administration and Departmental objectives. The Financial Analysis Management Assessment is being piloted as what I envision to be the first of many resources offered at no cost to Centers throughout the System.

Specifically, this initiative will provide Centers with access to a no-cost comprehensive and constructive review of policies and procedures in accordance with numerous governing financial requirements and industry guidelines[1]. We are looking to identify up to 10 Centers to participate in the pilot.  

[1] Additional Guidelines/Policies to be Covered in the Financial Assessment:

• The Department of Commerce Financial Assistance Standard Terms and Conditions
• NIST MEP Operating Plan Guidelines
• 2 CFR 200: OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
• OMB Circular A-133 Compliance Supplement
• Government Accountability Office (GAO) Standards for Internal Control in the Federal Government
• DCAA Internal Control Matrix for Control Environment and Overall Accounting Controls

While we know this extra financial assessment will require your time and attention, there are several benefits including:

• Assisting MEP Centers in reducing risk by ensuring the integrity of their financial administration systems.
• Demonstrating the capacity of the MEP System to self-manage and proactively address the concerns of our stakeholders.
• Advancing MEP Program goals and priorities (e.g., permanent cost share resetting, increasing funding to the Centers) by bolstering the integrity of the System.
• Providing input for an upcoming, comprehensive process review at NIST MEP to assess the adequacy of current programmatic oversight and to assist in:
  • Implementing improved procedures, while eliminating duplication of effort and reporting burdens on Centers, to the extent possible.
  • Providing additional procedures and protocols to aid MEP Centers in identifying and correcting financial administration vulnerabilities based on the outcome of recent DOC OIG audit findings.
  • Evaluating the sufficiency of current programmatic audit requirements.

BACKGROUND:
The House Subcommittee on Commerce, Justice, Science, and Related Agencies approved funding for this purpose with a requirement that NIST report back in late Winter 2016 with our findings under an initial set of approximately 10 reviews. This effort corresponds with the “Develop Capabilities” Goal in the NIST MEP Strategic Plan – specifically, developing MEP’s capabilities as a learning organization and high performance system. This initiative is part of the process to continue administrative reforms at Headquarters and across the System and will also serve to bolster our ability to promote learning on cooperative agreement administration best practices.

As we looked across the Federal Government for distinctive practices employed in this area, I had to look only to my experience at the Small Business Administration (SBA) as the Associate Administrator of the Office of Small Business Development Centers (SBDCs). The SBDCs have as part of their statute a financial review process with a similar intent that allowed the program office to work with the grant holders to support them in effectively conducting financial management of their grant agreements. This process is effective in helping the SBDCs to function efficiently across their massive network of nearly 885 sub-awardees among the 63 grant holders.

Over the last few years, NIST has worked on streamlining many processes to innovate the cooperative agreement process. As a result, the timeliness of funding to the Centers has improved significantly. We believe that we have reduced the level of effort required by Centers to complete the cooperative agreement renewal process. However, continuous improvement is our goal and we know that Centers have important perspective, input, and suggestions as to how NIST can continue to optimize our cooperative agreement oversight processes. The Centers that participate in this initiative will have a strong voice and an important role in shaping the future direction of our processes at the Program level and in helping us to provide the entire System with (1) information and knowledge to reduce risk and (2) best practices for sound cooperative agreement oversight.

NEXT STEPS:

Planning for this initiative is proceeding and we will be selecting and initiating visits with up to 10 Centers beginning in November 2015. The reviews will be completed by the end of January 2016. For the purpose of the pilot project, up to 10 Centers will be able to participate. NIST MEP is offering Centers the opportunity to request participation in the first round. In my experience with SBA and the SBDC review process, during any given year, about 95% of the SBDCs had no issues identified with the financial management of their grants. However, the main reason for lapses in proper financial management resulted due to changes in personnel. For this reason, I would especially encourage new Center Operators or Centers with changes in personnel over the last few years to consider participating in order to ensure that they have all necessary procedures and controls in place for continued success.

Please reach out to Mellissa Ayala, mayala@nist.gov or (301) 975-5771, with any questions you might have or to express interest in this initiative.

Thanks!

 

Carroll Thomas

PS- If I don’t get a chance to connect with you before Thanksgiving I hope you and your family have a peaceful, restful and joyful Thanksgiving!