Corrective Action Plans: Opportunities for Improvement

Wouldn’t it be wonderful if all of the billions in Federal Financial Assistance were spent without any violations, overpayments, or nefarious actions? While the Uniform Guidance provides a framework with checks and balances, it’s an impossible task.

Why? We’re human.

Fortunately, Federal agencies, pass-through entities, and auditors can put corrective action plans in place to address any issues discovered along the way. Most often corrective action plans follow a “problem-action-desired result” format, setting clear expectations between the government and grantee on what needs to be fixed.

Now, corrective action plans and corresponding follow-up reports will likely play a greater role in the risk assessment review process for all Federal grants. Someone looking at an application will be looking at your corrective action plans as part of their risk assessment of your capability to handle Federal funds. On the Federal side, how well your office handles corrective action plans could be reviewed and flagged by a congressional oversight committee or the Government Accountability Office (GAO).

So what can you do? Rather than load up your sad songs play list, try to make things better. Here are some suggestions:

• Own your corrective actions. For grantees, assign someone the responsibility of addressing any corrective actions identified through monitoring activities or your annual audit. Treat each corrective action as a mini-project until the issue is resolved.On the Federal side, ensure that you include the criteria for when a corrective action plan is required, how you will track these plans, and how you will report progress as part of your monitoring procedures. Keep in mind that you may need to carry on this monitoring past the period of performance.
• Avoid corrective actions in the first place. We’ve all experienced situations where the best laid plans go awry. Whether you are on the receiving or granting side, if you find a problem, don’t wait to address it. For recipients, if you are run into hurdles with your project, ask for technical assistance. Many Federal grant programs build in technical assistance services into their programs for just this reason. Keep in mind that this assistance could be for programmatic or administrative issues.Federal grants personnel should follow their program and agency’s monitoring protocols to help identify issues before they warrant a corrective action plan. For instance, if a grantee submits incorrect financial reports two quarters in a row, have your budget person talk to the grantee’s budget person to work it out. Or if you notice that a group of grantees has requested the same, unallowable purchase, schedule a conference call or webinar to review your grant’s allowable cost list.
• Stay up-to-date. Whether it’s through training, or reading blogs like this, you need to learn and share information on changes within the Federal grants space. For instance, what if you didn’t already know that the purchasing thresholds changed in the Uniform Guidance? You could easily make a decision that could show up in your regular audit, and in a future grant review.

Finally, you should document when and how you solve problems with managing and executing your grant. First, everyone likes a turnaround story. If you can move from having 10 corrective action plans to zero within a short period of time that might be a great story to share. Second, we all want to know the lessons learned so we don’t make the same mistakes. How you addressed a particular action could be the basis for a new best practice.

And that helps make it better for everyone.