pass-through entity, TEA awards federal grant funds to eligible subrecipients,
including local educational agencies (school districts and open-enrollment
charter schools), Education Service Centers, and non-profit organizations. The
responsibilities of pass-through entities are given in Title 2 of the Code of
Federal Regulations, Part 200.331, which requires TEA to “evaluate each
subrecipient’s risk of noncompliance with federal statutes, regulations, and
the terms and conditions of the subaward for purposes of determining the
appropriate subrecipient monitoring.”
To comply with
this requirement, the Federal Fiscal Monitoring Division conducts an annual
risk assessment of all subrecipients, to determine their potential risk of
noncompliance. Based on the outcome of the risk assessment, subrecipients are
assigned a risk level of low, medium, or high. The risk assessment includes
weighted risk indicators derived from multiple sources. The division updates
the risk assessment model annually to ensure risk indicators and weights
accurately reflect the potential risk posed to the agency in awarding funds to
Criteria Used in Risk Assessment for 2016-2017
are the criteria used to determine the risk level of subrecipients for the 2016–2017
- The subrecipient did not submit
the required annual financial and compliance report (AFR), including the
single-audit report, to TEA by the required due date or did not submit an
- The independent auditor who
prepared the subrecipient’s AFR, including the single-audit report, did
not express an unqualified opinion.
- The subrecipient was not required
to have a single audit conducted under Office of Management and Budget
(OMB) Circular A-133 because it did not meet the federal grant spending
- The subrecipient’s independent
auditor identified, in the single-audit report, at least one of the
following: (1) an instance of material noncompliance; (2) material
weaknesses in internal controls; (3) questioned costs of federal funds;
(4) a finding that was also a finding in the prior year.
- The subrecipient has a large
amount of federal expenditures compared to total operating costs.
- The subrecipient has been referred
by other agency divisions for significant issues or deficiencies that may
affect its use of federal grant funds or its implementation of federal
- The subrecipient has not been
monitored recently by the Federal Fiscal Monitoring Division.
- The subrecipient has not drawn
down federal funds by January of the current school year for one or more
of the following federal grant programs: Title I, Part A, Carl D.
Perkins, or IDEA-B Formula.
- The subrecipient has lapsed funds
for grants awarded in the NCLB consolidated grant application.
- The subrecipient has lapsed funds
for grants awarded in the IDEA-B Formula grant.
- The subrecipient has carried over
excessive amounts of funds for federal grants awarded in the NCLB
consolidated grant application.
- The subrecipient has changed
the primary contact and/or authorized official two or more times in the
past three years in the programs in the NCLB consolidated, special
education consolidated or Carl D. Perkins grant applications.
How You Can Access Your Risk Level
TEA has assigned
all subrecipients a risk level for the 2016–2017 school year. You may learn
your risk assessment level by accessing the GFFC Reports and Data Collections
secure application, where you will find your risk level notification letter
that states your 2016–2017 risk level. Follow these steps to access your
- Log on to TEASE or TEAL.
- Select “GFFC Reports and Data
- Select “Risk Assessment Level”
from the report title drop-down menu.
- Select “2016-2017” from the school
year drop-down menu.
Purpose of the Annual Risk Level
assessment determines the likelihood that a subrecipient may fail to comply
with applicable rules. If your organization is assigned a high risk level, it
does not indicate that your organization has failed to comply with the
requirements of your federal grant. Similarly, a low risk level does not
indicate that your organization is compliant with the specific requirements of
your federal grant programs. Only your independent auditor or a TEA monitor can
determine if your organization is compliant or noncompliant.
assessment is conducted annually, so your organization’s risk level can change
from year to year. A subrecipient assigned a high risk level for 2016–2017 may
be assigned a medium or low risk level in 2017–2018.
Effect of Different Risk Levels
organization’s risk level will be used by TEA in the following ways:
- Differentiated Grant Negotiation. TEA uses a differentiated
grant negotiation process for federal grant applications. Organizations
with a medium or high risk level are subject to a more stringent grant
negotiation review than those with a low risk level.
- Subrecipient Monitoring. Each year, TEA selects
subrecipients for fiscal monitoring, according to their risk levels. The
higher your organization’s risk level, the more likely you are to be
selected for monitoring.
Notice of Agency Policy
federal fiscal grant subrecipient monitoring and compliance reviews, and
implements related enforcement actions, in accordance with its established
policies and procedures. These policies and procedures incorporate best
practices and standards that may be similar to common auditing standards, but
the agency does not apply a specific set of external standards, such as the US
Government Accountability Office’s Generally Accepted Government Auditing
Standards (Yellow Book), nor is it required to do so.