Nebraska Paves the Way for Improved Grant Subrecipient Monitoring

May 14, 2025 | Mona Poblete, Ryan Daly

The “Why”

When Ryan Daly, now Deputy Director of Finance and Operations, arrived at Nebraska Department of Health and Human Services Division of Public Health (DPH), there was no department-wide process for public health subrecipient monitoring. At that point, there was no policy, plan, or guidance for staff on how to do this activity in a way that would meet an auditor’s standard. The division had years of repeat audit findings, many of which were due to “insufficient subrecipient monitoring.” These types of findings carried “questioned costs,” or a dollar figure that would ultimately be reported in the Single Audit. There were even multiple single audits that were still up for review after a long length of time, resulting in significant costs to the state.

These experiences motivated DPH to create a monitoring team and to develop policy, guidance, and tools to address the lack of structure for subrecipient monitoring. These measures saved millions of dollars each year and reduced the large amounts of time spent on appeals.

ASTHO’s CFO and Financial Leaders Peer Network (CFO PN) provides support, mentorship, and subject matter expertise of state and territorial health agency financial leaders. The network also connects public health financing expertise to impact community health initiatives and to help drive improvement. In addition to his own research on how to address DPH’s subrecipient monitoring, Daly — a member of the CFO PN — accessed tools from Washington State Department of Health, which were shared by its Chief Financial Officer, Amy Ferris. Washington’s invoice documentation requirements became the basis for developing those of Nebraska’s DPH. Additionally, other states shared their pre-award risk assessments, which Daly used to develop Nebraska DPH’s.

The Tools

More than two-thirds of DPH funding comes from federal grants and cooperative agreements. Nebraska DPH is decentralized and there are 1000 active contacts and subawards at any point in time. Regulation requires recipients of federal assistance to monitor subrecipients for compliance with federal law, regulations, and grant terms and conditions.

Nebraska’s new framework and policy for subrecipient monitoring educates and provides guidance to DPH staff and funded subrecipients through set manuals and templates. They also manage roles and responsibilities and create opportunities for feedback to improve the process. As part of the framework, DPH created a suite of tools to enhance subrecipient monitoring and compliance.* 

The team developed, beta tested, and launched these tools in 2024. Now, DPH is continuing to train and provide change management. Daly and a member of his team held a session sharing these changes at the state’s annual public health conference; they received good questions and feedback, and continue to hold training webinars with DPH and subrecipients.

The Results

This process has been a success for Nebraska, which has seen significant drops in questioned costs. External partners also feel the positive change, noting that they are happier with the process. The 2022 – 2023 comparison of questioned costs resulted in a greater than 80% reduction year over year; this resulted in a 500% return on investment. The standardization of the process meant external partners had fewer templates to fill out, a better understanding of expectations, and a better understanding of next steps based on their risk assessed through the process. DPH’s FY24 Single Audit saw a 99% reduction in questioned costs from FY23 with a grand total of $3,325 for the year, down from multi-million dollar findings in previous years.

Daly’s biggest takeaways from this process were 1) Engaging with external partners was very valuable and reduced barriers; and 2) The CFO PN provided very helpful resources and models to follow, which gave DPH a strong foundation rather than starting from scratch. Daly and his team aim to continue to improve Nebraska DPH’s subrecipient monitoring process as well as share their successes and lessons learned with the CFO PN.

*For a full list of these tools and resources, please contact Ryan Daly at ryan.daly@nebraska.gov.