| Authority/Reference(s) | |
|---|---|
| Revision Date | December 15, 2020 |
Policy
For each monitoring event, contract staff must determine the focus of review as programmatic, administrative, or fiscal. Selection of a monitoring review type should be determined by Risk Assessment Instrument (RAI) scores (if applicable) and performance analysis.
If the focus of the monitoring event is more than one review type, the “Combined” (e.g. Administrative and Fiscal) option in SCOR must be selected.
Regardless of the selected review type contract staff are required to use the current monitoring tools.
Programmatic Monitoring
Programmatic monitoring refers to the monitoring review type that focuses on the services that are being provided through the terms of the contract (e.g. client service, community based services). DFPS must identify goals and outcomes for the services provided to clients. Human Resources Code §40.058 states:
“…A contract for the purchase of program-related client services must include: ….clearly defined goals and outcomes that can be measured to determine whether the objectives of the program are being achieved...”
Contract staff are required to monitor performance as outlined in the service description and requirements in the statement of work to ensure compliance with the contract.
Programmatic monitoring activities may include, but are not limited to:
- Review of contract requirements to determine desired goals and outcomes.
- Review of procedures to determine if services are being provided appropriately.
- Interview of contractor’s staff to determine if services are being performed according to the contract.
- Review of complaints and resolution.
Administrative Monitoring
Administrative monitoring refers to the monitoring review type that focuses on the contractor's operations and management of the DFPS contract. To assess compliance with contract requirements, administrative monitoring activities may include, but are not limited to:
- Review of credentials and personnel files to verify required training, background checks, qualifications, and licensure.
- If applicable, ensure cybersecurity training is completed for all subcontractors, and contracted employees who have access to identified DFPS computer systems: PEIRS, IMPACT, TARE or CLASS.
- Review of governance structure, internal controls, required insurance, operating and business procedures, including subcontracting, if applicable.
Fiscal Monitoring
Fiscal monitoring refers to the monitoring review type that focuses on the contractor's compliance with fiscal obligations. DFPS must identify the fiscal obligations of the contractor and ensure they are clearly specified in the contract. Human Resources Code §40.058 states:
“…A contract for the purchase of program-related client services must include: ….clearly specified accounting, reporting, and auditing requirements applicable to money received under the contract.”
Ongoing fiscal monitoring may include, but is not limited to:
- Review of the contractor's financial management systems to test for:
- Accountability and proper documentation for DFPS' dollars spent.
- Sufficient cash on hand and procedures in place to sustain operations. The industry norm is 60-90 days operation without further funding.
- Proper and standard financial management and accounting procedures in place and utilized. These financial management and accounting procedures should adhere to the contract terms and conditions, the Uniform Grant Guidance (UGG) and Texas Grant Management Standards (TxGMS), and the Human Resources Code.
- Sufficient internal controls are in place and enforced as defined by §200.303 of the UGG.
- Allowability of expenditures per UGG and TxGMS (see policy Allowable Costs).
- Review and reconciliation of contractor's invoices submitted for payment (e.g. using billing review as outlined below).
- Analysis of financial reports that assess the current financial viability of the organization, such as:
- Financial statements.
- Annual independent audit.
- A single audit, when required.
- Review of contractor's adherence to proper payment of subcontractors, when applicable (see policy Subcontracting Responsibilities).
Risk Based Fiscal Monitoring
When conducting risk based fiscal monitoring, contract staff are responsible for identifying transactions to be tested and documenting the results using the fiscal monitoring tool developed by the Contract Division.
The process and requirements for fiscal monitoring are dependent on the payment type of the contract being monitored.
Billing Review
A billing review is an activity conducted by contract divisions that satisfies the requirements of fiscal monitoring when specific conditions are met. Billing review refers to the regularly conducted review of contractors' billings.
Contract staff may monitor a contract using the billing review process when all four of the following conditions are met:
- The billing invoices for the contract are routinely reviewed as a normal contract management practice, regardless of whether or not the contract has been scheduled for monitoring on the State Monitoring Plan (SMP).
To meet this condition, contract divisions should initiate the billing reviews with the first billing of the fiscal year and continue the billing reviews for the entire fiscal year.
- The contractor submits all the required and supporting documentation (e.g. receipts, invoices, etc.) to substantiate expenditures with each billing, and there is no other supporting documentation to review on-site with the contractor.
- The contractor provides a service for which on-site programmatic testing is not necessary or not possible.
- There is an assigned DFPS staff responsible for certifying the delivery of service.
When all the conditions listed above are met, a billing review is acceptable.