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Instructions and Guide to the SUBRECIPIENT RISK ASSESSMENT (Self Assessment)
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Definitions
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GAAP: Generally Accepted Accounting Principles
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GAAS: Generally Accepted Auditing Standards
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GAGAS: Generally Accepted Government Auditing Standards
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OMB: Office of Management and Budget
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Using the Assessment
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The answers provided on this self-assessment questionnaire assist in the determination of a subrecipient's risk of noncompliance with State and Federal statutes, regulations and the terms and conditions of the subaward in compliance wtih 2 CFR §200.331 (b). Some questions require a simple yes, no, or N/A answer. However, additional information may be provided in the comments sections and should be included if the answer demonstrates that the subrecipient has internal controls in one area, but not throughout the process. For example: The subrecipient may describe a good process for determining allowablility and reasonableness, but not fully explain how the cost is allocated across funding sources. Additional explanation for each question is provided below.

Assessment Reviewers: If a question is not answered or the answer does not address the question asked, then select the appropriate column to calculate the highest risk rating for that category. If you receive an answer that does not fit into one of the drop down choices, please contact the Internal Audit Division to discuss. ALL questions should be answered.
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EXPERIENCE ASSESSMENT
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Sheet1!B11Previous Experience of Subrecipient with managing federal funds A subrecipient that has experience in managing federal funds has a lower risk of error (or non-compliance with federal requirements) than a subrecipcient with little to no experience.
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2Previous Experience of Subrecipient with funding program A subrecipient experienced in managing a particular federal funding program will have a lower risk of non-compliance than a subrecipient who is familiar with the funding program. Each funding program has specific guidance and regulations.
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4Previous Experience of Staff with Funding Program A subrecipient with staff that has little experience in managing a particular funding program has a higher risk of error than an entity with staff experienced with the funding program.
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MONITORING/AUDIT ASSESSMENT
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4Recent Review A subrecipient who has not had a recent financial or program review is a higher risk since CDOT is not familiar with or had an opportunity to review their processes or if they comply with guidance and regulations.
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5Non-compliance Issues in Prior Visit A subrecipient who has experienced non-compliance issues in the past will be assessed as a higher risk so the appropriate monitoring can occur to verify if the non-compliance issues can be mitigated.
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OPERATION ASSESSMENT
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6Timesheet Maintenance §200.430 of the Supercircular requires salaries and wages to be based on records that accurately reflect the work performed. These records must reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities.
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FINANCIAL ASSESSMENT
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7Indirect Cost Rate Whether a non-Federal entity has an indirect cost rate or not, will not impact the overall risk rating on this form. However, if an indirect cost rate will be requested, the non-Federal entity must notify CDOT Audit so that the indirect cost rate can be reviewed and included in the Federal award.
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8Size of Grant If the funds received from CDOT make up a substantial portion of the entity's overall funding, there is typically a higher risk to the funding if the entity were to have any financial issues.
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9Lapsed Funds Funds "lapse" when they are no longer utilized or available for obligation. Funds lapse at the end of the applicable fiscal year, unless another date is provided by statute or contract. If a subrecipient has previously allowed funds to lapse they are considered higher risk.
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10Local Match Difficulty in meeting local match requirements can affect project delivery and is indicative of higher risk.
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11Total Federal Funds This information is important in deciding how much federal funding makes up the total funding sources for the entity. If an entity manages a small amount, the risk is higher that they will be unfamiliar with the fiscal requirements of accounting for the funds. "Total Federal Funds" includes funds for projects in which your entity administers/performs the work (i.e. construction projects), but not for funds that you pass-through to other entities.
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INTERNAL CONTROLS ASSESSMENT
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Sheet1!B13Significant Changes in Key Personnel Significant changes in key personnel can increase the risk of non-compliance with federal requirements for that entity. For example, a new controller may not be familiar with subaward requirements, or a new executive director could make large changes in the entity that may increase their risk of consistent compliance.
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5Financial Procedures and Controls Subrecipients with effective written procedures and financial controls, along with staff familiar with CDOT procedures and manuals, will have a lower risk of non-compliance with federal requirements.
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14Receipts and Expenditures Separated per Each Award Subrecipients with accounting systems in which separate costs are maintained for each award reduce the risk that costs are ineligable due to being comingled and billed to multiple awards more than once.
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15Recording of Expenditures by Budget Cost Categories Subrecipients with accounting systems that can track costs by award AND by the different types of costs allowed in the award (i.e. labor, sub-consultant/contractor, and materials)reduce the risk that costs are not allocable (see below).
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16Reasonableness, allowability, allocability
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Allowability - Expenses charged to a grant must meet the following allowability criteria:
a) The costs must be reasonable.
b) The costs must be given consistent treatment through application of those generally accepted accounting principles appropriate to the circumstances.
c) The costs must conform to any limitations or exclusions set forth in the grant agreement or in the Federal Cost Principles.
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Allocability - Once allowability criteria have been met, the cost must be evaluated against the criterion of allocability. That is, the cost has been incurred solely to support or advance the work of a specific grant award. It also means the process of assigning a cost, or a group of costs, to one or more cost objectives, is in reasonable and realistic proportion to the benefit provided or other equitable relationship. A cost objective may be a major function of the agency, a particular service or project, a sponsored agreement, or indirect Cost activity. The process may entail assigning a cost(s) directly to a final cost objective or through one or more intermediate cost objectives.
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