Introduction

This chapter compiles the applicable federal, state and agency requirements for monitoring funds administered by the Agency. In accordance with 40 TAC §802.62, monitoring activities should ensure that programs achieve intended results, resources are efficiently and effectively used for authorized purposes, and resources are protected from waste, fraud, and abuse. In the event of conflict between these standards and federal statute or regulations, federal statute or regulation will apply.

Note that these requirements are applicable to the Contractors’ (and Contractor’s subcontractors) monitoring functions. They do not describe the Agency’s monitoring function or its resolution procedures.

Record retention and access requirements are provided in Appendix K to this manual. All financial and programmatic records, supporting documents, statistical records, and other records pertaining to an award of federal or state funds must be retained and made available to authorized entities or their representatives in accordance with applicable administrative requirements.

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General

Programs, functions or activities supported by federal and/or state funds administered by the Agency must be monitored on a regular basis to assure compliance with applicable federal and/or state requirements.

Contractors that receive federal and/or state funds administered by the Agency must conduct regular fiscal and program monitoring of their activities and those of their subcontractors. The monitoring must cover all programs, functions, or activities supported by federal and/or state funds administered by the Agency, and be sufficient to accomplish the following objectives:

  • Determine that expenditures have been charged to the cost categories and within the cost limitations specified in the applicable laws and regulations
  • Determine whether or not there is compliance with provisions of applicable laws and regulations, contract provisions, uniform administrative requirements for grants and agreements as promulgated in the circulars or rules of the Office of Management and Budget, and official directives including
  • Texas Workforce Commission Workforce Development Letters
  • Provide technical assistance as necessary and appropriate

Monitoring must include the development and implementation of a risk assessment tool (Section 19.2 of this manual), monitoring plan (Section 19.3 of this manual), monitoring program (as part of its monitoring controls) (Section 19.4 of this manual), and reporting and resolution process (Section 19.5 of this manual). Written policies and procedures that describe and support the monitoring process must be developed and implemented.

Entity Specific Considerations:

Local Workforce Development Boards. Boards must develop and maintain a subcontractor monitoring system that covers any service or program service contract it awards from federal and/or state funds administered by the Agency. In addition, and in accordance with Texas Government Code §2308.303, a Board must monitor and evaluate the effectiveness of the following to help ensure that performance is consistent with state and local goals and objectives:

  • Career development centers
  • Contractors that provide workforce training and services
  • Vocational and technical education programs operated by local education agencies and institutions of higher education

Complete records of all monitoring must be maintained and made available to the Agency during the contract performance periods and retained in accordance with the retention requirements in Appendix K of this manual.

Faith-based Organizations. If a charitable or faith-based organization who is a subcontractor to a Board under any grant or program contract establishes a separate account for the government funds provided through the grant or program contract, then only the services and activities supported by those funds will be subject to audit.

Program Specific Considerations:

Workforce Investment Act. As required by WIA Regulations at 20 CFR §667.400, all Contractors and subcontractors that meet the definition of a recipient or subrecipient of WIA Title I funds, “must conduct regular oversight and monitoring of its WIA activities and those of its subrecipients and contractors.” The preamble further requires that this include monitoring the effectiveness of internships, work experience and other intensive services in responding to participants’ needs and results on participant outcomes.

Contractors have local flexibility in defining “regular” when determining what constitutes “regular oversight and monitoring.” However, the monitoring must occur no less than annually, and it must be sufficient to accomplish the three monitoring objectives in this section of this manual, and to evaluate compliance with the uniform administrative requirements and applicable cost principles.

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Risk Assessment

A risk assessment tool must be developed and used in accordance with the requirements of Commission rule.

The risk assessment tool must identify both high-risk subcontractors, and areas of high risk within an individual subcontractor’s operations. The Contractor is responsible for determining what constitutes high risk or an area of high risk.

Contractors must establish monitoring schedules and monitoring programs that best utilize monitoring resources based on the risk assessment tool’s outcomes. Contractors must quantify, as much as possible, and document areas of risk identified for assessment.

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Monitoring Plan

A local-level monitoring plan must be developed using the results of the risk assessment. The plan must include the information required by Commission rule.

The monitoring plan must incorporate the following:

  • A schedule or timetable for monitoring Agency funded activities, and subcontractors based upon risk assessment results
  • Identification of the type of review planned for each subcontractor, such as on-site review, comparative financial analysis, desk review, staff analysis, or other type of appropriate review
  • The estimated time budgeted to perform each review

Contractors may perform monitoring reviews either formally or informally, but must incorporate the risk assessment results in scheduling decisions.

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Monitoring Controls

Monitoring controls must be implemented to ensure that comprehensive and effective monitoring is achieved.

To ensure comprehensive and effective monitoring, Contractors and their subcontractors must:

  • Require periodic reports from their subcontractors outlining monitoring reviews, noncompliance issues, and the status of corrective actions
  • Ensure that a briefing regarding monitoring activities and findings is provided to the Board or appropriate Board subcommittee at regularly scheduled meetings
  • Require an annual evaluation of the monitoring function to determine its effectiveness, by a person or entity independent of the monitoring function
  • Develop a written monitoring procedure to be used in monitoring both program and fiscal operations

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Reporting & Resolution

Monitoring reports must identify instances of noncompliance with federal and/or state requirements, and provide recommendations for corrective action and program quality enhancements.

Monitoring reports must identify instances of noncompliance with federal, state and Agency requirements, and provide recommendations for corrective action and program quality enhancements.

A Contractor's subcontractor must establish timelines for the completion of corrective action plans that are based on the severity of the deficiency. The Contractor and subcontractor must coordinate to ensure implementation of corrective actions. Each Contractor has local flexibility in establishing a resolution process for coordinating the implementation of the plans with the subcontractor, but may at its discretion, model such process after the rules at 40 TAC §802.65.

Monitoring reports must be provided to the governing board. Upon request, copies must be provided to the Agency.

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