(The following was excerpted from an article in the Federal Grants Management Handbook.) The U.S. Department of Agriculture is finalizing new standard operating procedures to ensure Office of Advocacy and Outreach staff properly monitor grantees in the Social Disadvantaged Farmers and Ranchers Program, also known as Section 2501 grant funds.

These procedures stem from a recent USDA Office of Inspector General report that found that OAO officials failed to adequately monitor Section 2501 grant funds in fiscal years 2010 and 2011. The OIG determined that OAO officials did not assign monitoring duties to its staff, did not have policies and procedures or internal controls in place for monitoring Section 2501 grantees in FY 2010, and did not fully follow procedures OAO had drafted for FY 2011 grantees.

“Given these problems, we concluded that there is reduced assurance that Section 2501 funds were being used for their intended purposes and were accomplishing the program’s goals,” OIG said.

OAO oversees the Section 2501 program, which provides grant funds for outreach, training, education and technical assistance to encourage and assist socially disadvantaged farmers, ranchers and forest landowners to purchase property. In FY 2010 and 2011, OAO awarded 119 grants totaling $38 million, yet it did not have monitoring policies in place. It was not until August 2011 that OAO drafted standard operating procedures for staff to use during the grant management process, which included instructions for program leads and program staff to review progress and financial reports and conduct onsite visits.

Although OAO officials were responsible for reviewing and approving the reports, they told the OIG that they were instructed to focus only on the FY 2012 grant process, and not to review previously awarded grants. According to OIG, the OAO deputy director said he would monitor awards made prior to FY 2012, but he only made sure OAO received the reports. In addition, OAO officials also told the OIG that until October 2011, grantees were submitting the wrong type of reports.