Monthly Spotlight: Building Strong Internal Controls for Grant Success

This feature is part of an ongoing series from OHCS' Fiscal Compliance Monitoring staff. Each month, we'll post helpful new tips!

Safeguarding taxpayer dollars starts with strong internal controls. Every organization receiving federal or state funds is responsible for ensuring those dollars are used properly—and internal controls are the blueprint that makes it happen.

Why Internal Controls Matter

Consistency and Compliance: Clear policies prevent errors and keep your team aligned. Operational
Efficiency: Streamlined processes save time and reduce risk.
Audit Readiness: Controls ensure you’re prepared when monitors or auditors review your program

The Five Pillars of Internal Controls

Control Environment – Foster a culture of accountability.
Risk Assessment – Identify and address vulnerabilities.
Control Activities – Approvals, segregation of duties, and accurate recordkeeping.
Communication – Accessible policies and clear guidance.
Monitoring – Regular reviews and corrective actions.

Best Practices for Subrecipients

Segregate Duties: No one person should initiate, approve, and pay for a transaction.
Review Expenditures: Costs must be allowable, reasonable, and tied to the grant.
Document Everything: Keep policies current and accessible - auditors will ask for them.
Monitor Regularly: Monthly check-ins and annual audits strengthen your systems.

Bottom Line: Internal controls aren’t just about compliance - they protect your funding, reputation, and mission. When accountability becomes part of your culture, you gain peace of mind and confidence that your organization is managing taxpayer dollars responsibly.

OHCS wants to ensure that everyone has access to its information and programs. If you would like this information in a different language, please email Language.Access@hcs.oregon.gov.