Report Summary

Title: Risk Assessment of VA’s Grant Closeout Process
Report Number: 19-09126-115 Download
Issue Date: 3/25/2020
VA Office: Office of Management
Report Author: Office of Audits and Evaluations
Report Type: Review
Release Type: Unrestricted

The OIG performed a risk assessment of VA’s grant closeout process to determine if an audit or review of VA’s process was warranted, as required by the Grants Oversight and New Efficiency Act of 2016.

The act also required agencies to report on grants that were expired for more than two years that had not been closed out, and to report challenges leading to delays in closing such grants. Given these requirements, the assessment team focused on the timeliness of grant closeouts at VA.

The team considered the number of open grants expired for more than two years, the relative size of their undisbursed balances compared to their respective grant programs, and the relative size of these grant programs to VA’s overall budget.

VA reported 34 expired grants more than two years old with undisbursed balances as of the end of 2019. The reported undisbursed balances for these open but expired grants totaled approximately $14.8 million, but this total was reduced to less than $500,000 when the team adjusted for system discrepancies associated with the State Home Construction and Veterans Cemetery Grants Programs.

For fiscal year 2020, the estimated budgets for the grant programs covered in this risk assessment totaled approximately $2.27 billion, or only about 1.03 percent of VA’s overall budget estimate of $221 billion. Moreover, VA’s largest grant program, State Home Per Diem, obligates funds at the time an invoice is paid. As a result, for about 67 percent of the $2.27 billion grant budget, VA has implemented a process to mitigate the risk of undisbursed balances that can tie up funds for other uses.

The team concluded that an overall audit or review of the timely closeout of grants is not warranted at this time.