E-005 Lineup-Corrective Action Plans and Suspension and Debarment for Grants - with Lucy Morgan CPA
### Quick Episode Summary Grant Talks Podcast [#005]
*Intro ***.41***
* Review of Episodes #002 and #003 with Amanda Day GPC ***:45***
* Getting Started-What are Suspension and Debarment? ***3:10***
* When Do You Check for Suspension and Debarment? ***5:18***
* What is a Corrective Action Plan? ***8:44***
* Corrective Action Plans are to Prevent a Repeat (Near) Disaster ***11:47***
* What to Do When Good Grants Go Bad ***12:39***
* Better Grant Management Means Fewer Audit Findings ***13:28***
* Writing a Corrective Action Plan-Five-step Process***14:70***
* Grant Talks Line-up Episodes #006 and #007 with Johna Rodgers- “My Boss is Going to Hell or Jail” ***20:13***
* The Last Word with Lucy Morgan CPA***21:56***
*Outro Audio GrantTalks Podcast with Lucy M. Morgan CPA ***23:35***
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- Listen to Lucy’s Welcome Message in Episode 001
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Introduction with Lucy Morgan CPA
Intro: 00:04
Welcome to the Grant Talks podcast with Lucy Morgan. Lucy is the CEO and Director of MyFedTrainer.com, a leading provider of grant management training and templates for federal grant recipients. This show is for grant professionals looking to gain confidence managing their grants. In an age of increasing complexity, you'll hear from leading professionals on the best practices surrounding grants, what's involved in successfully managing the grants lifecycle and how to make sure your grants are managed correctly. Now here's your host, Lucy Morgan.
Lucy Morgan CPA 00:41
Welcome to the GrantTalks podcast.
I’m your host Lucy Morgan
Lucy Morgan CPA 00:45
Review of Episodes #002 and #003 with Amanda Day GPC
Imagine this.
You’ve just started a new job.
Your new boss, maybe they take you to lunch work, introduces you around to all the folks in the office, and you’re thinking, “so far, so good!”
You are just getting settled in and this parade starts…this parade of people bringing you boxes.
And they say “We’re so glad you’re here!”
And finally, someone says “We’re so glad you're because we still have those five findings from the Office of Inspector General to clean up.
Yikes!
That was the experience of our last podcast guest Amanda Day, GPC in the episodes #002 and #003 of the Grant Talks podcast.
In this episode, I want to expand on some of the concepts that Amanda and I discussed in episode #002 and episode #003, specifically the concept of:
- Suspension and debarment
- Corrective Action Plans or (CAP)
Now if you are in federal grants, you’ll want to listen to the intricate requirements for suspension and debarment.
And it’s no surprise that I am talking about corrective action plans in this episode as well.
That’s because audit findings around suspension and debarment are one of the most common types of audit findings for federal grant recipients.
In fact, they even have their own “letter” assigned to them in the Federal Audit Clearinghouse in the list of common findings.
And I’ll get to that in a sec, but let me also tell you what else is in this episode.
At the end, I’m going to share a “sneak-peak” into what’s coming up in the future episodes with Johna Rodgers, GPC with her presentation at a recent NGMA conference called “My Boss is Going to Hell or Jail.”
So, thanks again for checking out the GrantTalks.com podcast!
I want to let you know that your feedback is welcome and you can always contact me at [email protected]
And you can find all the past and future episodes on GrantTalks.com.
Oh, and if you’d like to hear about my personal journey into grants, I hope you will tune into episode #004 as I discuss how I became, I call it an “accidental grant manager” as well as covering some hot topics issues with federal grants and how the rules around non-competitive practices are evolving for grant recipients.
And if you are a grant consultant or grant writer you’ll want to tune into episode #004.
So, thanks for tuning in!
Let’s get started on suspension and debarment.
Getting Started-What is Suspension and Debarment?
Lucy Morgan CPA: 03:10
OK, I promised that we would dig deeper into the concept of suspension and debarment for federal grants.
The first thing I want to talk about is “What is suspension and debarment?”
Think of it this way: Suspension is a temporary withdrawal of federal support.
This is typically pending some corrective action plan or there’s been some other type of problem that the federal government and the grant recipient are working through to resolve.
I call this kind of like “breaking up.”
Now, debarment is a more permanent arrangement.
I call that kind of like “divorce.”
Debarment says either we couldn’t make it work out or the feds are putting in place a permanent or for a period of years prohibition on us getting any federal dollars flowing to us.
So, why does it matter so much?
Well, when you get a federal grant or a federal contract, you can’t let any dollars flow to a suspended or debarred party.
When a party is suspended or debarred, they are called an “excluded” party. (I’ve got the little air quotes thing going there.)
In other words, they are excluded from getting any federal dollars.
Now it’s important to note that the term “party” can mean different things to different people.
When we are talking about suspension and debarment, you can be suspended or debarred as an organization.
- You guys screwed up and you are debarred as an organization.
You can be suspended or debarred as an individual.
- Let’s say, for example, you just hired a new Principal Investigator or program director and you did not realize that they were suspended or debarred from their last position for research fraud. All the wages that you pay to them could be disallowed.
You can also be suspended or debarred on an individual award.
- In other words, you have 9 awards and they’re all going great, but you have this one problem child and things have moved to the point of suspension or debarment on just that one award.
When you spend federal money, you have a duty to make sure you don’t give out any federal dollars to a suspended or debarred party.
When Do You Check for Suspension and Debarment?
Lucy Morgan CPA: 05:18
So how do you make sure you aren’t going to get into trouble with this?
The federal government lays out the requirements for this in the Uniform Guidance under 2 CFR Part § 200.212 Suspension and debarment.
But here’s the thing.
That does not give you a lot of rules.
In fact, most of the rules on suspension and debarment are actually off in a different set of regulations called: 2 CFR Part 180.
And in there, they give you the following guidance:
You have to check for suspension and debarment at very specific times in the grant lifecycle.
Those times are:
- Before you open the bids (because what would be the point of inviting someone to bid that can’t give the work to).
- You also have to check before you give out the work. That’s when you’ve made that decision. (Again, what would be the point of giving someone the work if they can’t be paid with federal funds?)
- And then if they do such a good job that you want to give them some new work, you have to check before you award any new work.
So, you might be asking yourself, “Do I have to check every little type of transaction, like when we fill up the truck with gas at the 7-11 store?
And the truth is the rules can be a bit complicated in 2 CFR Part 180, but in general, if you are buying goods or services you have to check for transactions over $25,000.
And that is widely interpreted to be per year.
Now you can see some of the inherent problems in that.
What if they get a $15,000 contract and six months later you give them another $15,000 contract, but you aren’t checking because it’s less than $25,000, you could run into problems with that.
And if you have a subrecipient getting a subaward, you have to check regardless of the amount.
100% of subawardees, subrecipients have to be checked for suspension and debarment.
OK, now you might be asking, “Lucy where do we check?”
And the answer to that is something called SAM.gov.
SAM.gov has taken over for what used to be called the EPLS which is the Excluded Parties List System. So out on SAM.gov, you go in the advanced search box and you look for “exclusions”. The term exclusion is synonymous with excluded parties.
And excluded parties mean they’ve been suspended or debarred.
Here’s what you hope to find when you type in that DUNS number or the name of that organization, or the name of the individual, is “No records found.”
That means they are not in the database of excluded parties.
(And if you are interested, I’ve included a nice little suspension and debarment infographic on GrantTalks.com for those of you who would like to download that if you are listening in, maybe on iTunes or you are just listening into the podcast.)
One last thing…
And this is what gets grant recipients into trouble!
Make sure you document who you looked up and when you looked them up.
Now in SAM.gov you now can download a little .pdf of the search and that make it easy-peezy to document that you checked.
Now don’t leave that on your laptop or desktop because that could crash a year from now, right? Put that documentation on out somewhere on a shared drive that gets backed up so you don’t have an audit finding for missing or inadequate documentation around suspension or debarment.
So, while I’m talking about audit findings…
What is a Corrective Action Plan?
Lucy Morgan CPA 8:44
In our last couple of podcast episodes with Amanda Day, episodes #002 and #003, I also talked about corrective action plans.
And after talking about the requirements and issues with suspension and debarment I also want to share some tips on how to write a corrective action plan.
Well, you might be wondering “What is a Corrective Action Plan or a CAP?”
Most corrective action plans in the world of grants happen because either you’ve got an audit finding or there is some issue with the program that the funder wants fixed.
And they can happen on the federal grant side, but they can also happen in non-federal grants. In fact, they can happen for a whole host of reasons. It might be health and safety issues, environmental issues, all kinds of different things describe why you might need a corrective action plan.
And they typically go something like this:
We’re sorry!
We did it wrong.
We’ll never do it that way again.
And the reason that we won’t, is because we are going to train people on the RIGHT way to do it.
So, let me give you an example of an incident that was in the news in 2018.
And let me ask you:
What if you were certain the world was coming to an end, only it wasn’t?
If you remember, back in 2018, there was a major scary incident that happened in Hawaii where a Hawaiian missile alert was sent in error.
People got the message this message on their phones and elsewhere that said “This is not a drill” “The missiles are coming!”
There was just one big problem. This was a drill and not a real emergency!
Talk about yikes! That’s pretty scary stuff.
So, you might ask yourself “What happened?”
And “How did this happen?”
And “How can we prevent it from happening again?”
That’s what a corrective action plan is all about.
In an Associated Press (AP) article titled “Hawaii man devastated about sending missile alert, they cited three fundamental process failures at the Hawaiian Emergency Management Agency (HEMA). These factors contributed to what I’m going to call a debacle!
- First of all, the agency had a vague checklist for missile alerts. They let workers interpret the steps, each deciding it meant something different to each one and they should follow them inconsistently.
- Number two, there was no requirement for a second person to sign off on missile alerts before they were sent. So, one person could go “You know, today I think maybe we’ll send out this missile alert.”
- And finally, there was no training or process about how to correct a false warning.
In other words, procedures were lacking or poorly written, the process had poor checks and balances and people received very little training on the right way to do things. (It’s kind of sounds like grants in some ways where people don’t get a lot of training on what’s the right way to do things.)
These three factors allowed this traumatic event to start and continue for 38 excruciating minutes.
Corrective Action Plans are to Prevent a Repeat (Near) Disaster
Lucy Morgan CPA 11:47
First of all, thank goodness it was NOT a real attack!
But whenever something bad happens, the follow up after the event typically requires an examination of what went wrong and how to prevent this from happening in the future.
And that document, that review that comes out of this analysis is called a “Corrective Action Plan” or a CAP.
Now the other day on cable TV, I was watching that movie “Deepwater Horizon” about the BP oil spill, and I was thinking “Wow! They must have had one heck of a corrective action plan!” after that as well because they had multiple failures.
So, maybe you see a pattern here?
Sometimes life doesn’t go as expected, and many times the dire circumstances could have been anticipated and even prevented with better processes, with better checks and balances and with a little bit of training.
What to Do When Good Grants Go Bad
Lucy Morgan CPA 12:39
So, if you are a federal grant recipient, you probably know that a lot changed with the implementation of the Uniform Guidance for grants.
You may even have heard me talking about the evolving world of non-competitive practices for grant consultants and grant writers in the Grant Talks episode #004.
Another one of those changes is the federal goal to reduce the number of audit findings.
Now if you aren’t familiar with a “finding” that just means the auditors “found” something.
Well, the federal government wants-no I’m going even to say they EXPECT-grant recipients to do a better job with the federal funds that they are awarded courtesy of the Uniform Guidance.
What worked in the past is not good enough anymore.
They are setting the bar is higher than ever before!
So, let’s look at what that means if you are a federal grant recipient…
Better Grant Management Means Fewer Audit Findings
Lucy Morgan CPA 13:28
The new grant guidance has an emphasis on something called “Cooperative Audit Resolution”
In other words, the funding agencies want to work with you to get problems cleaned up, and steps put in place so they don’t occur in the future.
(Now, just in case you feel like you are the only one who has experienced audit findings or other deficiencies…it’s probably a little more common than you may realize.)
In 2010, I researched the data in the Federal Audit Clearinghouse and found in my sample, nearly one in three grant recipients have some kind of an audit finding.
Now I know that no one wants to think about audit findings and those resulting corrective action plans…
But the reality is that many grant professionals will experience either creating or implementing a corrective action plan during their career.
So how you might be asking yourself, “How do you write a corrective action plan?”
Writing a Corrective Action Plan
Lucy Morgan CPA 14:17
Well, the first thing to understand is what a corrective action plan is NOT.
- A corrective action plan is NOT a magic bullet that will fix problems without having to do any actual work
In other words, the most beautifully written corrective plan is useless if you don’t implement the steps.
So, I hope you get my point!
It’s called an “action” plan because it requires more than writing, it requires ACTION.
All right here, just a sec here, I’m going to get off my soapbox.
So, let’s look as what a corrective action plan IS…
A corrective action plan could be described as like a recipe to “fix it.” (I’ve got the little air quotes going.)
Corrective action plans get created when defects in a process, maybe there’s a lack of oversight or insufficient training affects the administration or management of key tasks.
So, you might be saying right now, “Lucy how do I put together one of these? How do I put together a good corrective action plan or CAP?”
And just like a good corrective action plan, it requires steps.
And there are five primary steps to a corrective action plan.
Step One: Root Cause Analysis
Lucy Morgan CPA 15:23
Step one is you analyze the root cause.
A good corrective action plan starts with an analysis of what happened.
What is the root cause of the identified issues?
- So, what is the exact issue that is causing the problem at hand?
- Are there flaws in our work processes that led to these issues?
- Has this issue occurred before?
- And if it has, why did it happen again? (Maybe you didn’t have a corrective action plan that time.)
Step Two: Corrective Measures
Lucy Morgan CPA 15:49
Step Two is something called corrective measures.
After you understand the root cause, how this problem happened, the next step is to devise a way so that you can fix the mistakes that were made.
This is typically where you design a series of steps through which correction can start.
For example, what is the very first thing you need to do?
- Maybe we need to re-evaluate that procedure that is unclear to people?
- Maybe you have to identify someone who can conduct training on the right way to do something?
- Or maybe we need stronger checks and balances to make sure that this can’t keep recurring year after year after year?
Step Three: Expected Outcomes
Lucy Morgan CPA 16:33
The step number three is to define what your expected outcomes are.
This is where you make sure the corrective action plan becomes a reality because you think about and you start to “vision” what are the expected outcomes and the key success measures.
In other words, how will you know if the corrective measures that you’ve described are taking place and working or NOT?
Without this critical step, you might find yourself repeating the same audit findings, or the same problem year after year after year.
Now talking about repeat findings, one of the things I see a lot of grant recipients doing is getting a suspension and debarment finding year after year after year.
(And I talked with Amanda Day about that in episodes #002 and #003.)
And as you are thinking about how do we define our outcomes, think about SMART principles.
SMART principles can help you create better-expected outcomes.
Now, if you are new to the SMART principles, they stand for:
- Specific
- Measurable
- Attainable
- Relevant
- Time-bound
Step Four: Implement the Plan
Lucy Morgan CPA 17:38
Step number four is to actually, this is where the rubber meets the road because now you start implementing this plan.
This is where the real work happens.
· Who is going to do what and when will it be done?
This is the place that many corrective action plans fail miserably because this is where real ACTION is required.
So, here are some tips for the implementation phase:
And here’s another little hint-build these into your plan. 😊
· Accomplishments – What accomplishments have we done? What have we done so far? What steps do we still have to accomplish?
· Actions – What actions do we need to take and what’s left to do?
· Responsible Parties – Who are the responsible parties? (If everyone is responsible, no one is responsible.) So, who is doing what?
· Completion Dates – What are the completion dates? When does this need to be done by?
Now you can tell, some of this is laying out a plan and but some of it is also making sure the plan is getting done, and that’s where step five comes in.
Step Five: Monitor for Results
Lucy Morgan CPA 18:39
Step five is where you actually make sure that people are doing it the right way and continuing to do it the right way.
This is the phase, step five, where you actually follow up and monitor for compliance.
Now, of course, completing the corrective action plan is really just the beginning of the plan.
Because you need to continue carefully monitor whatever that problem was to make sure it does not repeat. So, you don’t get that repeat performance of the problem.
Like who wants to be around for that second “fake” missile crisis in Hawaii?
And think of it this way, you also have to recognize that when people are under stress, they often revert to bad habits.
Now, I don’t care if you think about this in your own life, whether we are eating too much or drinking too much…
Maybe having too much chocolate. Well, I’m not sure if there is such a thing as too much chocolate, or if that’s a bad habit. 😊
But there’s the same thing tendency for organizations to fall into bad habits when they are under stress, just like there are for individuals.
So, when an organization is under stress, maybe it’s limited resources, or there’re new employees, who have not yet been trained, it’s pretty easy for things to slip back into that unhealthy pattern of the past.
So, build regular monitoring into your processes not only for corrective actions but really all types of processes will benefit from having robust monitoring to make sure people are still doing it the right way.
This can help you avoid many of the risks of good grants going bad.
Well, I hope this episode has been of help to you!
Let me share what we have coming up in the next couple of episodes.
Grant Talks Line-up: Johna Rodgers- “My Boss is Going to Hell or Jail”
Lucy Morgan CPA: 20:13
Have you ever thought: “My boss is going to hell or jail!”
If that’s ever run through your mind, you’ll enjoy our next two podcast episodes with Johna Rodgers GPC.
For nearly 30 years, Johna Rodgers has helped for-profit and non-profit organizations solve problems of all types and all sizes. That includes 18 years as a full-time grant professional. In all, she’s helped bring in more than $162 million in grants to her employers and clients.
She has a background primarily in federal proposal development and has learned to work with dozens of partners and their conflicting (and there often are conflicting) ideas, missions, and concerns.
In the past five years, she has expanded to corporate and foundation funding as well; in fact, her favorite grant of all times was a very small one, but it did big things for low-income children.
In addition to proposal development, Johna is a GPA Approved Trainer and a Grant Professional Certified (a GPC). She frequently presents at national grant conferences (I know I always love to go to her presentations) and she’s a regular trainer for Grant Writing USA. She makes her home in Bowling Green, Kentucky.
So, in episodes #006 and #007, Johna is going to share the importance of developing relationships in the grant management process.
And she’s going to give some tips for determining whether you are having an honest disagreement about something that is maybe just an interpretation in complex regulations, or whether you are really in danger of cost disallowance for unethical behavior.
We’ll also talk more about potential consequences when “good grants go bad”.
So, I hope you will join in on our future episodes!
The Last Word with Lucy Morgan CPA
Lucy Morgan CPA: 21:56
Finally, let me share a little-known fact about my experience with grants.
When I got started with grants I felt very alone.
I was dealing with lots of new concepts, requirements and quite frankly I was too embarrassed to ask the people around me the right way to do everything.
If you are working on grants, maybe you can relate to some of those feelings.
That’s why of my goal with the Grant Talks podcast is to give you hope that you are not alone.
- The work you are doing is helping people with grants it is important work.
- You are making a difference in the world.
And yes, even though it can be confusing, hard, overwhelming, it’s worth the fight.
And I’m here to fight back against some of that confusion, nervousness and even unhappiness in the world of grants.
So, whether you are working on the federal side or other types of grants, I hope you will feel like I have your back with resources that make grant management more manageable.
(And I want to be your biggest fan and cheerleader about the good work you are doing.)
So, I hope you will do me the favor of sharing this podcast with other grant professionals.
Get the word out that we are here to help.
And if you have ideas about future podcasts that you’d like to see, please send me a quick email at [email protected].
And I hope this has helped in your grant journey.
Thanks again for checking out the GrantTalks.com podcast!
You can find all the episodes at GrantTalks.com
Oh, and remember I’ve placed some additional resources on these topics that you can download at GrantTalks.com
Thanks for tuning in!
Outro: 23:35
To learn more about how MyFedTrainer.com makes grant management more manageable, visit MyFedTrainer.com. That's MyFedTrainer.com. You'll find all the grant talks episodes at GrantTalks.com. That's GrantTalks.com.
More About Lucy Morgan:
Lucy M. Morgan is a CPA, MBA, GPA approved trainer, speaker, and author of 3 books including “Decoding Grant Management-The Ultimate Success Guide to the Federal Grant Regulations in 2 CFR Part 200.” As a leading authority on federal grant management for nonprofits, institutions of higher education and state, local and tribal governments she has written over 250 articles on grant management topics featured in LinkedIn, various publications and on the MyFedTrainer.com blog.
She is a sought-after presenter at national conferences sponsored by organizations such as the Grant Professional Association (GPA), National Grant Management Association (NGMA) and American Institute of Certified Public Accountants (AICPA).
Lucy is also a highly regarded trainer whose techniques and teaching style come from real-world experience. Having faced many of the same challenges her audiences have endured, Lucy understands that what looks good on paper may not always work in the real world. Because she has been there, she provides people of all professional backgrounds with practical tools to advance their careers and make a bigger difference in the world. She can be reached at [email protected].
- You can hear more about Lucy's journey into grant management in Episode 004
More Resources for Grant Professionals
Thanks for checking out the Grant Talks podcast!
In this episode of Grant Talks, we talked about a subject that you may want to know more about:
- Suspension and debarment requirements for federal grant recipients
So...as promised I want to share some resources that may help you on YOUR grant journey.
Click below to download a copy of:
I frequently get questions on suspension and debarment requirements especially from grant recipients who have audit finding and are looking to put solutions in place.
Here’s the thing…suspension and debarment findings are simple to avoid IF you know what the rules are.
And auditors love giving findings for this because it’s SO EASY for them to know if you are in compliance or NOT!
This would be a rude awakening!
So, if you are in this boat, be sure to also check out the Suspension and Debarment Infographic as a quick and easy reminder of the requirements. 😊
I hope these resources will keep you on the journey to more federal grants and better grant management.
It’s a quick and easy visual reminder about how and when to check for suspension and debarment of your contractors, key employees, and subrecipients.
Remember, NO federal funds can flow to people or organizations on the excluded parties list. And if they do, you are on the hook to pay that money back to the federal agency.
Here's a sample:
- Where to check
- When to check
- How to adequately document that you checked
- I’ll even share the right website to visit to get to the excluded parties list database. (Sometimes it seems like a game of hide-and-seek to get to the correct site!)
These resources are designed to keep you safe as a grant manager, and I hope that you will find them valuable on your grant journey.
Click here to download and share
P.S. If you want to know more about the writing a corrective action plan after an audit finding, check out my article at https://blog.myfedtrainer.com/write-corrective-action-plan/
Thanks again for listening in!
Lucy
