Checklist: Improve Transparency and Public Trust with a Pre-Award Risk Assessment

  Implement a Standardized Application Process to collect relevant information around each applicant’s associated risk. This could include financial statements, project plans, references, and disclosure forms. A clear and structured application process ensures consistency in evaluating applicants.

  Assess Financial Stability of potential grantees by reviewing financial statements, cash flow projections, and credit history. Throughout the assessment, look for indicators of financial health like positive cash flow, manageable debt levels, and sound financial management practices while also surveying for prior suspensions, debarment status or presence on the Department of Treasury’s Do Not Pay (DNP) Business Center. 

  Vet the Organizational Background of potential grantees by evaluating OMB’s Federal Awardee Performance and Integrity Information System (FAPIIS) to identify instances of grantee’s criminal, civil, and administrative proceedings in connection with federal awards; administrative agreements issued in lieu of suspension or debarment; non-responsibility determinations; contracts terminated for fault; defective pricing determinations; and past performance evaluations.

  Examine the Accounting System by reviewing the steps grantees have taken to comply with Uniform Guidance financial management requirements. Understand how the grantee’s system will produce reports and account for receipt and expenditures of funds to comply with award terms and conditions.

  Evaluate Organizational Capacity and Past Performance of the potential grantee to effectively manage grant funds and deliver on project objectives. Consider factors like staff expertise, infrastructure, partnerships, and resources available to execute the proposed project. Additionally, examine the past performance of potential grantees by evaluating their record with similar grants or prior federal awards. Look for successful outcomes like timeliness of reporting, implementation, adherence to reporting requirements, and any instances of noncompliance or mismanagement.

  Assess Governance Structure and Compliance History of the potential grantee to include review of board composition, conflict of interest policies, ethics guidelines, and any previous legal or regulatory violations. Examine audit reports and findings from single audits, and review information from OMB-designated repositories for government-wide financial integrity qualifications (as mandated by the Payment Integrity Information Act of 2019 and public contract law).

  Utilize Risk Assessment Tools or software that can help streamline the process and provide a quantitative analysis of risk. These tools can automate data collection, perform risk calculations, and generate risk scores or ratings for each applicant.

  Practice Thorough Due Diligence on potential grantees, which may involve conducting site visits, interviews, reference checks, and background checks. This step provides additional insights into the applicant’s operations, integrity, and capacity to deliver on the proposed project.

  Establish a Risk Ranking System that categorizes applicants based on their level of risk. This can help prioritize resources and encourage an increased focus on high-risk applicants. A risk ranking system will help to justify further scrutiny, additional risk mitigation measures, and placement of specific conditions (as applicable).

  Document Findings and Decision-Making throughout the pre-award risk assessment process for each applicant. This includes summarizing the evaluation criteria, identifying risks, and providing a rationale for the final decision. Maintaining clear and consistent documentation ensures transparency and accountability in the decision-making process.