Attachment 1 - Integrity_Monitor_Guidelines.1603299713512~3.pdf

Integrity Oversight Monitor Guidelines August 2020

State of New Jersey COVID-19 Compliance and Oversight Taskforce

Table of Contents

Introduction 4

Conditions for Integrity Monitors 6

Risk Assessment 7

Establishing a Pool of Integrity Monitors 9

Procedures for Requesting and Procuring an Integrity Monitor 11

Integrity Monitor Requirements 12

Integrity Monitor Management and Oversight 16

Integrity Monitor Report Template 17

Risk Matrix 20

The State of New Jersey COVID-19 Compliance and Oversight Taskforce is composed of the following members or their designees:

• Kevin D. Walsh, Acting State Comptroller, Taskforce Chair

• Gurbir S. Grewal, Attorney General

• Elizabeth Maher Muoio, State Treasurer

• Daniel Kelly, Executive Director, Governor’s Disaster Recovery Office

• William Viqueira, Accountability Officer, NJ Transit

• Amanda Schultz, Accountability Officer, Department of Education

• Catherine Schafer, Accountability Officer, Department of Children and Families

Introduction

On July 17, 2020, Governor Murphy signed Executive Order 166 (“EO 166”), which, among other things, established the COVID-19 Compli-ance and Oversight Taskforce (the “Taskforce”).

The purpose of the Taskforce is to advise State departments, agencies, and independent author-ities that receive or administer COVID-19 re-covery funds (“Recovery Program Participants”) regarding compliance with federal and State law and how to mitigate the risks of waste, fraud, and abuse. As defined in EO 166, “COVID-19 Recovery Funds” are funds provided through the CARES Act, to state and local governments, and non-government sources to support New Jersey’s residents, businesses, non-profit organi-zations, government agencies, and other entities responding to or recovering from the COVID-19 pandemic.

Pursuant to EO 166, the Taskforce is responsible for issuing guidelines regarding the appointment and responsibilities of COVID-19 Oversight Integrity Monitors (“Integrity Monitors”). Recov-ery Program Participants may retain and appoint Integrity Monitors to oversee the disbursement of COVID-19 Recovery Funds and the administra-tion of a COVID-19 Recovery Program. They are intended to serve as an important part of the state’s accountability infrastructure while working with Recovery Program Participants in developing mea-sures to prevent, detect, and remediate inefficiency and malfeasance in the expenditure of COVID-19 Recovery Funds.

EO 166 requires Recovery Program Partic-ipants to identify a central point of contact (an “Accountability Officer”) for tracking COVID-19 funds within each agency or au-thority. The Accountability Officer is respon-sible for working with and serving as a direct point of contact for the Governor’s Disaster Recovery Office (GDRO) and the Taskforce.

Accountability Officers should also ensure ap-propriate reviews are performed to assess risks and evaluate whether an Integrity Monitor can assist in reducing or eliminating risk to ensure the public that state and federal funds were used efficiently, fairly, and prudently.

Recovery Program Participants and Integrity Monitors should be focused on the common goal of maximizing the value of COVID-19 Recovery Funding by ensuring that every dollar is spent efficiently and properly. Integ-rity Monitors can add value to a program by assisting in implementing the fiscal controls necessary to maintain proper documentation, flagging potential issues in real time, maximiz-ing reimbursements, sharing information with and responding to inquiries from the GDRO and Office of State Comptroller (OSC), and reporting to those offices, the Treasurer, the Attorney General, and legislative leadership.

Recovery Program Participants, Accountabili-ty Officers and Integrity Monitors should work together to fulfill the goals of EO 166 and these guidelines. The retention of Integrity Monitors will support monitoring and oversight that will ensure that Recovery Program Participants ad-minister COVID-19 recovery funds in compli-ance with program, financial, and administra-tive requirements set forth in the federal-state grant agreement, the state-Recovery

Program Participant sub-grant agreement, and applicable federal and state laws, regulations, and guidelines. Additionally, these guidelines will assist the State in fulfilling its monitoring responsibilities as set forth in 2 CFR 200 Sub-part D. This may involve routine desk reviews and, when appropriate, on-site reviews by an Integrity Monitor. Recovery Program Partic-ipants that do not retain an Integrity Monitor will comply with these requirements, in coor-dination with the GDRO, as addressed in the Compliance Plan adopted by the Taskforce.

Conditions for Oversight Monitors A Recovery Program Participant should evalu-ate whether it should retain an Integrity Mon-itor in accordance with these guidelines using the following standards.

For Recovery Program Participants that have received or will administer a total of up to $20 million in COVID-19 Recovery Funds: The Recovery Program Participant’s Accountability Officer shall conduct a risk assessment taking into account both the likelihood and severity of risk in the participant’s program(s) and consult with the GDRO regarding whether an Integrity Monitor is necessary to reduce or eliminate risk in view of the agency’s or authority’s existing resources, staffing, expertise or capacity. The availability of federal funds should be consid-ered in evaluating whether to retain an Integ-rity Monitor. In an appropriate circumstance, a Recovery Program Participant may request or may be directed by the GDRO to retain an Integrity Monitor using non-federal funds.

For Recovery Program Participants that have received or will administer a total of $20 mil-lion or more in COVID-19 Recovery Funds: A Recovery Program Participant that has received this amount of funding should retain at least one Integrity Monitor, subject to federal fund-ing being available. Multiple Integrity Mon-itors should be retained if one monitor is not adequate to oversee multiple programs being implemented by the agency or authority as de-termined in consultation with the GDRO.

In an appropriate circumstance, a Recovery Program Participant may request or may be directed by the GDRO to retain an Integrity Monitor using non-federal funds.

Risk Assessment As noted above, not all Recovery Program Participants within the up to $20 million range should retain an Integrity Monitor. A Recovery Program Participant’s Accountability Officer, in consultation with the GDRO, should assess the risk to public funds, the availability of feder-al funds to pay for the Integrity Monitor, the entity’s current operations and whether internal controls alone are adequate to mitigate or elim-inate risk in determining whether the use of an Integrity Monitor is necessary.

An Accountability Officer will conduct an initial review of the Recovery Program Partici-pant’s programs, procedures and processes, and assess the organizational risk and the entity’s risk tolerance. The risk assessment should in-clude a review of the agency’s ability to comply with CARES Act or other federal statutory and regulatory requirements as well as applica-ble state laws and regulations, including with regard to reporting, monitoring, and oversight, and a review of the agency’s susceptibility to waste, fraud, and abuse.

An Accountability Officer conducting a risk assessment should complete and memorialize the assessment using the matrix attached to this document. The risk assessment should be shared with the GDRO and OSC. Some of the specific factors an Accountability Officer should consider when assessing risk for a Recovery Program Participant within the up to $20 mil-lion range include:

• Organizational leadership, capacity, exper-tise, and experience managing and account-ing for federal grant funds in general, and disaster recovery funds in particular;

• Input from the individuals/units that will be disbursing funds or administering the program;

• Review of existing internal controls and any identified weaknesses;

• Prior audits and audit findings from state or federal oversight entities;

• Lessons learned from prior disasters;

• Sub-recipient internal control weaknesses, if applicable;

• Adequacy of financial, acquisition, and grants management policies and proce-dures, including technological capacity and potentially outdated financial management systems;

• Barriers to reporting;

• Experience with state and federal procure-ment processes, value of anticipated pro-curements, and reliance on contractors to meet program goals and objectives;

• Potential conflicts of interests and ethics compliance;

• Amount of funds being disbursed to a particular category of sub-recipient and the complexity of its project(s); and

• Whether federal or state guidelines provide guidance regarding the uses of funds (i.e., discretionary vs. restrictive).

The Accountability Officer should determine the organization’s risk tolerance as to all re-covery programs jointly and as to individual programs, recognizing that Integrity Monitors may be appropriate for some programs and not others within an agency or authority. If the risk exceeds an acceptable level of risk tolerance, the Accountability Officer should engage an Integri-ty Monitor.

An important element in the risk assessment is documentation of the process and results. This is critical to ensuring the extent of monitoring and oversight. The overall level of risk should dictate the frequency and depth of monitoring practices, including how to mitigate identified risks by, for example, providing training and technical assistance or increasing the frequency of on-site reviews. In some cases, monitoring efforts may lead an Accountability Officer or the GDRO to impose additional special conditions on the Recovery Program Participant. De-pending on the kind of work the sub-recipient performs, it may be appropriate to reevaluate frequently, including quarterly, to account for changes in the organization or the nature of its activities. See 2 CFR Section 200.207 in the uni-form guidance for examples; GAO Report: A Framework for Managing Fraud Risk in Federal Programs (2015).

If the Accountability Officer or the GDRO determines that an Integrity Monitor should be retained for a Recovery Program Participant that is receiving or administering federal funds up to $20 million, the Accountability Officer and GDRO should assess whether federal or other funding exists to pay the costs associated with the Integrity Monitor’s services. Some federal programs have caps on the amount of funding that can be used for oversight and administra-tive expenses.

https://www.gao.gov/assets/680/671664.pdf

Establishing the Pool of Integrity Monitors The New Jersey Department of the Treasury, Division of Administration (Treasury) will desig-nate a department employee to act as the State Contract Manager for purposes of administer-ing the overarching state contract for Integrity Monitoring Services. The State Contract Man-ager will establish one pool of qualified integrity monitors for engagement by eligible Recovery Program Participants. Treasury will issue a bid solicitation for technical and price quotations from interested qualified firms that can provide the following services: (1) Program and Pro-cess Management Auditing; (2) Financial Auditing and Grant Management; and (3) Integrity Monitoring/Anti-Fraud services.

The specific services Integrity Monitors provide vary and will depend on the nature of the programs administered by the Recovery Program Participant. The pool of Integrity Monitors should include professionals available to perform one or more of the following services:

Program and Performance Monitoring

Financial Monitoring / Grant Management

Integrity Monitoring / Anti-Fraud

Development of processes, con-trols and technologies to sup-port the execution of CARES Act funded programs and other federal programs, e.g. FEMA.

Comprehensive understand-ing of the relevant grant programs and criteria.

Forensic accounting and other specialty accounting services.

Review and improvement of procedures addressing financial management.

Streamlining of grant man-agement and fiscal manage-ment processes to ensure accountability of funds and compliance with program regulations.

Continuing risk assessments and loss prevention strate-gies.

Workload analysis; skills gap analysis, organizational effec-tiveness and workforce recruit-ing strategies.

Monitoring all grant man-agement, accounting, bud-get management, and other business office functions.

Performance and program monitoring and promotion of best practices.

Consulting services to support account reconciliations.

Providing training for staff in the area of detection and prevention of waste, fraud, and abuse.

Prevention, detection and investigation of fraud and misconduct

Quality assurance reviews and assessments associated with the payments process to ensure compliance with federal and state regulations.

Ensuring compliance with all applicable federal and state accounting and finan-cial reporting requirements.

Implement and manage ap-propriate compliance systems and controls, as required by federal, state and local law.

Risk analysis and identifications of options for risk management.

Provide data management systems/programs for the purpose of collecting, conducting and reporting required compliance and anti-fraud analytics.

Subject Matter Expert knowl-edge of required standards for related monitoring and finan-cial standards.

Procedures for Requesting and Procuring an Integrity Monitor To retain an Integrity Monitor, a Recovery Pro-gram Participant should proceed as follows:

• A Recovery Program Participant shall desig-nate an agency employee to act as the contract manager for an Integrity Monitor engagement (Agency Contract Manager), which may be the Accountability Officer. The Agency Con-tract Manager should notify the State Contract Manager, on a form prescribed by Treasury, along with any required supporting documen-tation, of its request for an Integrity Monitor.

The Agency Contract Manager should indi-cate which Integrity Monitoring services are required.

• The Agency Contract Manager will develop an Engagement Query on an individual basis.

• The Engagement Query will include a detailed scope of work; specific performance mile-stones, timelines, and standards and delivera-bles.

• The Agency Contract Manager, in consulta-tion with the Office of the Attorney General, Division of Law, will structure a liquidated damages provision for the failure to meet any required milestones, timelines, or standards or deliverables, as appropriate.

• The Agency Contract Manager will submit its Engagement Query to the State Contract Manager. Upon approval by the State Con-tract Manager, but prior to the solicitation of any services, the Engagement Query shall be sent to OSC for approval pursuant to EO 166.

After receiving approval from OSC, the State Contract Manager will send the Engagement Query to all eligible Integrity Monitors within the pool in order to provide a level playing field.

• Interested, eligible Integrity Monitors will respond to the Engagement Query within the timeframe designated by the State Contract Manager, with a detailed proposal that in-cludes a detailed budget, timelines, and plan to perform the scope of work and other re-quirements of the Engagement Query. Integ-rity Monitors shall also identify any potential conflicts of interest.

• The State Contract Manager will forward to the Agency Contract Manager all propos-als received in response to the Engagement Query. The Agency Contract Manager will review the proposals and select the Integrity Monitor whose proposal represents the best value, price and other factors considered. The Agency Contract Manager will memorialize in writing the justification for selecting an Integ-rity Monitor(s).

• Prior to finalizing any engagement under this contract, the Agency Contract Manager, in consultation with the Accountability Officer, will independently determine whether the intended Integrity Monitor has any potential conflicts with the engagement.

• The State Contract Manager, on behalf of the Recovery Program Participant, will then issue a Letter of Engagement with a “Not to Exceed” clause to the engaged Integrity Monitor and work with the Agency Contract Manager to begin the issuance of Task Orders.

Integrity Monitor Requirements A. Independence

The process by which Integrity Monitors are retained and the manner in which they perform their tasks in accordance with these guidelines are intended to provide independence as they monitor and report on the disbursement of COVID-19 Recovery Funds and the adminis-tration of a COVID-19 Recovery Program by a Recovery Program Participant. Although the Integrity Monitor and the Recovery Program Participant should share common goals, the Integrity Monitor should function as an inde-pendent party and should conduct its review as an outside auditor/reviewer would.

An Integrity Monitor for a particular agency should have no individual or company affilia-tion with the agency that would prevent it from performing its oversight as an independent third party. Integrity Monitors and Recovery Program Participants must be mindful of applicable con-flicts of interest laws, including but not limited to, N.J.S.A. 52:13D-12 to -28, Executive Order 189 (Kean, 1988) and requirements set forth in the Uniform Grant Guidance, among others.

B. Communication

Integrity Monitors should maintain open and frequent communication with the Recovery Pro-gram Participant that has retained its services.

The purpose of communicating in this manner is to make the Recovery Program Participant aware of issues that can be addressed during the administration of a program and prior to future disbursement of funds by the Participant.

Therefore, Integrity Monitors should not wait until reports are issued to notify a Participant’s Accountability Officer of deficiencies. This will enable the Recovery Program Participant to take action to correct any deficiencies before addi-tional funds are expended. Substantial defi-ciencies should also be reported in real time to the GDRO, the State Comptroller, and the State Treasurer.

Prior to the posting of an Integrity Monitor report that contains findings of waste, fraud, or abuse, the Recovery Program Participant should be permitted to respond to the findings and have that response included in the publicly posted report. This will allow the Recovery Program Participant to highlight any course corrections as a result of the finding or to contest any finding that it feels is inappropriate. A Recovery Program Participant’s response is due within 15 business days after receipt of an Integrity Monitor report.

Integrity Monitors must respond promptly to any inquiries posed by the GDRO, State Comp-troller, State Treasurer, and Agency Contract Manager pursuant to EO 166.

C. General Tasks of Integrity Monitors

The tasks of an Integrity Monitor may vary based on the agency/program the Monitor is oversee-ing. Generally, the role of Integrity Monitors is to ensure that Recovery Program Participants are performing according to the sub-award agree-ment and applicable federal and State regula-tions and guidelines with the intent to safeguard

COVID-19 Recovery Funds through the follow-ing tasks:

• Perform initial and ongoing risk assess-ments;

• Evaluate project performance;

• Evaluate internal controls associated with the Recovery Program Participant’s finan-cial management, cash management, acqui-sition management, property management, and records management capabilities;

• Validate compliance with sub-grant award and general term and special conditions;

• Review written documents, such as quarter-ly financial and performance reports, recent audit results, documented communications with the State, prior monitoring reports, pertinent performance data, and other doc-uments or reports, as appropriate;

• Conduct interviews of Recovery Program Participant staff, as well as the constituents they serve, to determine whether program objectives are being met in an efficient, effective, and economical manner;

• Sample eligibility determinations and deni-als of applications for funding;

• Review specific files to become familiar with the progression of the disbursement of funds in a particular program, i.e., are actual expenditures consistent with planned expenditure and is the full scope of services listed in the project work plan being ac-complished at the same rate of actual and planned expenditures;

• Ensure that the agency is retaining appro-priate documentation, based on federal and state regulations and guidance, to support fund disbursement;

• Follow up with questions regarding specif-ic funding decisions, and review decisions related to emergency situations;

• Facilitate the exchange of ideas and promote operational efficiency;

• Identify present and future needs; and

• Promote cooperation and communication among Integrity Monitors engaged by other Recovery Program Participants (e.g., to guard against duplication of benefits).

Integrity Monitors should generally perform desk reviews to evaluate the need for on-site visits or monitoring. Depending on the results of the desk review, coupled with the conclu-sions reached during any risk assessments that may have been conducted of the sub-recipi-ent’s capabilities, the Monitor should evaluate whether an on-site monitoring visit is appro-priate. If the Monitor is satisfied that essential project goals, objectives, timelines, budgets, and other related program and financial criteria are being met, then the Monitor should docu-ment the steps taken to reach this conclusion and dispense with an on-site monitoring visit.

However, the Integrity Monitor may choose to perform on-site monitoring visits as a result of any of the following:

• Non-compliance with reporting require-ments;

• Problems identified in quarterly progress or financial reports;

• History of unsatisfactory performance;

• Unresponsiveness to requests for informa-tion;

• High-risk designation;

• Follow-up on prior audits or monitoring findings; and

• Allegations of misuse of funds or receipt of complaints.

D. Reporting Requirements

1. Reports

Pursuant to EO 166, Integrity Monitors shall submit draft quarterly reports to the Recov-ery Program Participant on the last day of the quarter detailing the specific services rendered during that quarter and any findings of waste, fraud, or abuse. Prior to the posting of an In-tegrity Monitor report that contains findings of waste, fraud, or abuse, the Recovery Program Participant should be permitted to respond to the findings and have that response included in the publicly posted report. This will allow the Recovery Program Participant to highlight any course corrections as a result of the finding or to contest any finding that it contends is inap-propriate. A Recovery Program Participant’s response is due within 15 business days after receipt of an Integrity Monitor report.

Fifteen business days after quarter-end, Integ-rity Monitors will deliver their final quarterly reports, inclusive of any comments from the Recovery Program Participant, to the State Treasurer, who shall share the reports with the GDRO, the Senate President, the Speaker of the General Assembly, the Attorney Gener-al, and the State Comptroller. The Integrity Monitor quarterly reports will be posted on the GDRO transparency website pursuant to the Executive Order.

The specific areas covered by a report will vary based on the program being reviewed, the manner and use of the funds, procurement of goods and services, type of disbursements to be issued, and specific COVID-19 Recovery Fund requirements. The topics covered by the report should include the information includ-ed in the Uniform Template. See attached Uniform Template to be used by all Integrity Monitors for reports.

2. Additional Reports

EO 166 directs OSC to oversee the work of Integrity Monitors and to submit inquiries to them to which Integrity Monitors must reply promptly. OSC may request Integrity Monitors to issue reports or prepare memoranda that will assist OSC in evaluating whether there is waste, fraud, or abuse in recovery programs administered by Recovery Plan Participants.

The State Comptroller may also request Integ-rity Monitors to share corrective action plans prepared by Recovery Plan Participants to address reported deficiencies and to evaluate whether those corrective plans have been suc-cessfully implemented.

GDRO and the State Treasurer may also request reports from Integrity Monitors to which Integrity Monitors must reply promptly.

3. Reports of Waste, Fraud, Abuse or Potential Criminal Conduct

Issues of waste, fraud, abuse, and misuse of COVID-19 Recovery Funds are to be immediate-ly reported simultaneously to the GDRO, OSC, State Treasurer, and the Agency Contract Manager and Accountability Officer of a Recovery Program Participant.

Potential criminal conduct is to be reported imme-diately to the Office of the Attorney General.

Integrity Monitor Management and Oversight Agency Contract Managers have a duty to en-sure that Integrity Monitors perform the neces-sary work, and do so while remaining on task, and on budget. Agency Contract Managers shall adhere to the requirements of Treasury Circular 14-08-DPP in their management and admin-istration of the contract. The Agency Contract Manager will be responsible for monitoring contract deliverables and performing the con-tract management tasks identified in the circular, which include but are not limited to:

• Developing a budget and a plan to manage the contract. In developing a budget, the Agency Contract Manager should consider any caps on the amount of federal funding that can be used for oversight and admin-istrative expenses and ensure that the total costs for Integrity Monitoring services are reasonable in relation to the total amount of program funds being administered by the Recovery Program Participant;

• Daily management of the contract, including monitoring and administering the contract for the Recovery Program Participant;

• Communicating with the Integrity Monitor and responding to requests for meetings, information or documents on a timely basis;

• Resolving issues with the Integrity Monitor in accordance with contract terms;

• Ensuring that all tasks, services, products, quality of deliverables and timeliness of services and deliverables are satisfied within contract requirements;

• Reviewing Integrity Monitor billing and en-suring that Integrity Monitors are paid only for services rendered;

• Attempting to recover any and all over-bill-ings from the Integrity Monitor; and

• Coordinating with the State Contract Man-ager regarding any scope changes, compen-sation changes, the imposition of liquidated damages, or use of formal dispute processes.

In addition to these oversight and administra-tion functions, the Agency Contract Manager must ensure open communication with the Accountability Officer, the Recovery Program Participant leadership, the GDRO, and OSC.

The Agency Contract Manager should respond to inquiries and requests for documents from the GDRO and OSC as requested.

Integrity Monitor Report Template

Name:

Engagement:

No. Recipient Data Elements Response Comments A. General Information 1 Recovery Program Participant 2 Federal Funding Agency (e.g.

CARES, HUD, FEMA)

3 State Funding (if applicable) 4 Award Type 5 Award Amount 6 Accountability Officer 7 Brief Description, Purpose and

Rationale of Integrity Monitor Project/Program

8 Contract/Program Location (if applicable)

9 Amount Expended by Recovery Program Participant to Date

10 Amount Provided to Other State or Local Entities

11 Completion Status of Contract or Program

12 Expected Contract End Date/Time Period

B. Monitoring Activities 13 If FEMA funded, brief description of the status of the project work-sheet and its support.

14 Quarterly Activities/Project De-scription (include with specifi-cy activities conducted, such as meetings, document review, staff training, etc)

15 Brief description to confirm appro-priate data/information has been provided by recipient and what activities have been taken to review in relation to the project/contract/ program.

16 Description of quarterly auditing activities that have been conducted to ensure procurement compliance with terms and conditions of the contracts and agreements.

17 Has payment documentation in connection with the contract/ program been reviewed? Please describe.

18 Description of quarterly activity to prevent and detect waste, fraud, and abuse.

19 Provide details of any integrity issues/findings

20 Provide details on any other items of note that have occurred in the past quarter.

21 Provide details of any actions taken to remediate waste, fraud and abuse noted in past quarters.

C. Miscellaneous 22 Attach a list of hours (by em-ployee) and expenses incurred to perform your quarterly integrity monitoring review.

23 Add any item, issue or comment not covered in previous sections but deemed pertinent to monitor-ing program.

Name of Integrity Monitor:

Signature:

Date:

Name of Report Preparer:

Risk Matrix

Agency/Authority:

Program:

Funding Source:

Recipient or Subrecipient:

Completed by:

Date:

Risk Inquiry Areas Rating Element Summary Assess-ment/Description of Risks Identified

Risk Lev-el (Low, Medium, High)

Inquiry 1 Organizational leader-ship, capacity, expertise, and experience man-aging and accounting for federal grant funds in general, and disaster recovery funds in par-ticular.

Assess your agency’s experience and staffing capacity to manage and account for federal grant funds and/or disaster recovery funds. Consid-erations include: your agency’s organizational structure, supervisory roles, delegation of author-ity, line level staffing capacities, experience at all levels, and responsibilities and relations within and between different divisions or offices within your agency. Does your agency have a monitor-ing and oversight plan to assess your continued performance and compliance with the CARES fund requirements, federal and state laws and regulations? Does that plan include an assess-ment of internal controls, review of risks, threats and prevention and detection of fraud, waste, and abuse? How will your agency address risk areas and the need for corrective action?

Inquiry 2 Input from the individ-uals/units that will be disbursing funds or ad-ministering the program

How will your agency plan for the use of the CARES funds? Does your plan include consider-ations for federal and state requirements and eli-gible uses of the funds? Does your plan establish adequate funding and staffing requirements for administering the funds? Is your plan consistent with your statutory mission and the CARES fund objectives? Does your plan include or contem-plate the inclusion of input from line staff that are administering the program?

Inquiry 3 Review of existing in-ternal controls and any identified weaknesses.

Has your agency reviewed its internal controls to ensure that policies and procedures are in place to satisfy the CARES fund requirements, federal and state laws and regulations? Are your agen-cy policies and procedures adequate? Are they updated for all relevant processes required for the administration of the CARES funds? Does your agency have a monitoring and oversight plan to assess your continued performance and compli-ance with the CARES fund requirements, federal and state laws and regulations? Does that plan include an assessment of internal controls, review of risks, threats and prevention and detection of fraud, waste, and abuse? How will your agency address risk areas and the need for corrective action?

Inquiry 4 Prior audits and audit findings.

Has your agency been audited in the past? Have you considered and addressed any prior audit findings and recommendations that may be applicable to your success in overseeing COVID stimulus funding?

Inquiry 5 Lessons learned from prior disasters

Has your agency been audited after a previous disaster? Have you considered and addressed any findings and recommendations from such au-dit(s)?

Inquiry 6 Sub-recipient internal control weaknesses, if applicable.

If your agency is overseeing sub-recipients, have the sub-recipients been the subject of prior neg-ative audit findings and recommendations that could impact oversight? How will your agency ensure that sub-recipients adhere to all require-ments relating to their receipt of funds, including their use of funds and the reports they will be required to submit documenting their use of such funds?

Inquiry 7 Adequacy of financial, acquisition, and grants management policies and procedures, in-cluding technological capacity and potentially outdated financial man-agement systems.

When is the last time there was an assessment of financial, acquisition, and grants management policies and procedures? Is technological ca-pacity an issue? Are the financial management systems adequate or outdated? Have the systems been updated or can they be updated to function adequately for the administration of the CARES funds?

Inquiry 8 Barriers to reporting. Does your agency have, or intend to develop, tem-plates/forms or other documentation to report the results of the funding awards, including how your agency will respond to oversight bodies seeking to ascertain who received funds, the amount of funds, and the date funds were distributed?

Inquiry 9 Experience with state and federal procurement processes, value of an-ticipated procurements, and reliance on contrac-tors to meet program goals and objectives.

Assess and evaluate your agency’s procurement processes and experience with state and federal procurement requirements. Do you have a trained and qualified contract manager assigned to the contract? Do your contracts contain provisions to ensure that contracted vendors provide all necessary reports in the form/manner prescribed by contract? Have your contract templates been reviewed and checked for necessary state and federal contract language? If emergency contracts have been entered into, how do you plan to transi-tion after the urgent need has ended? Do you have plans to conduct a cost analysis?

Inquiry 10 Potential conflicts of interests and ethics com-pliance.

Evaluate the means used to ensure that there is ad-equate separation of duties surrounding program funding requests and determinations. Does your agency have a code of conduct or policy describ-ing measures to guard against potential conflicts of interest?

Inquiry 11 Amount of funds being disbursed to a particular category of sub-recipient and the complexity of its project(s).

Evaluate the guidance, policies and procedures, or other documents that are being used to ensure that your agency properly oversees the sub-re-cipients’ use of funds, including those relating to internal recordkeeping, monitoring, and sub-re-cipient reporting. Does your agency have a plan to monitor sub-recipients’ compliance with program requirements and those outlined in Uniform Grant Guidance 2 C.F.R. 200.331 (Requirements for pass through entities)? Does that plan assess risk of sub-recipients? Does that plan include training and training documents? Have you prepared templates or other reporting forms that you will be providing to sub-recipients? Has your agency developed a plan to address sub-recipient noncompliance?

Inquiry 12 Whether federal or state guidelines provide guid-ance regarding the uses of funds (i.e., discretion-ary vs. restrictive).

Evaluate how eligibility determinations will be made? Does your agency have written guidance or policies and procedures that provide direction in making and documenting eligibility determina-tions? Is the completeness and accuracy of infor-mation used in eligibility determinations verified?

If so, how? By whom? Is there supervisory review and approval in this process?

Note: This risk assessment tool may not include all relevant risk factors for your particular agency. Each agency should undertake a review to determine whether any additional risk areas should be reviewed, should identify those areas here, and should analyze them in accordance with the format of this tool.

State of New Jersey, COVID-19 Compliance and Oversight Taskforce