Grant Management & Compliance
Grants are financial awards provided by a funding/issuing authority (grantor) to a recipient (grantee) with the purpose of assisting the grantee to perform certain initiatives. Grants are critical sources of funding for many government and nonprofit agencies and provide resources for operations and/or financial support when other funding means are not available or sufficient. In 2018, the Federal Government spent $697 billion on aid to State and local governments and approximately $750 billion in 2019 and 2020.
Due to the sizable effect of COVID-19, agencies are faced with additional challenges navigating grant terms and conditions. The grantor agency may not have anticipated potential scenarios resulting in unclear guidance or guidance that is subject to change. If changes occur during a grant period, it can be difficult to change current practices, which is the case with some federally funded programs related to COVID-19, such as the CARES Act.
What is at Risk?
The grant management process introduces risks and challenges for both grantors and grantees at each stage of the grant lifecycle.
Grantors typically have the right to audit their grantees to evaluate compliance with grant terms and conditions. If a grantor identifies non-compliance during an audit there is a risk that the grantee could owe money back to the grantor. Further, significant findings of non-compliance could result in a grantor determining not to provide future funding to the grantee or demanding additional reporting requirements which further strain resources.
Additionally, record-keeping requirements for various grant programs can extend from three to seven years after the grant is closed. This means the grantee must maintain sufficient evidence for grant-related expenditures and programmatic data up to seven years after a grant is closed, depending on the grant’s or agency’s requirements. If the grantee is not able to locate supporting documentation for an expenditure during an audit, an auditor could treat the expenditure as unsupported and therefore ineligible for reimbursement resulting in the grantee owing money back to the grantor.
Grantor Risks
- Pre-Award: Criteria for application evaluation not clearly defined resulting in inconsistent or inadequate application review
- Award: Program requirements or proper use of grant funds not clearly defined or communicated resulting in inappropriate or inconsistent use of grant funds
- Post-Award: Lack of timely and consistent monitoring results in the funding of inappropriate grant expenditures or ineffective programs
- Closeout: Utilization of funding not timely or effective in executing program goals
Grantee Risks
- Pre-Award: Inadequate resources to identify grant programs resulting in limited funding opportunities and/or applications with inaccurate or incomplete information impacting the application’s success or funding level
- Award: Application is not successful or award amount is not sufficient for program needs resulting in financial implications
- Post-Award: Inadequate systems and/or record-keeping to accurately track and report expenditures or programmatic data requirements result in inaccurate or incomplete reimbursement and/or inadequate resources to drive program objectives or monitor compliance resulting in non-compliance with requirements
- Closeout: Inaccurate or incomplete financial, programmatic, and/or compliance-related reporting requirements are resulting in delays, penalties, or additional resources/effort
How We Help
There are a variety of methods to evaluate and enhance grant programs. As the grantor, assistance can be focused on developing internal checklists to evaluate grantee compliance, or establishing a cyclical audit function to periodically evaluate grantees’ grant management practices. As the grantee, assistance can be provided to establish new or evaluate existing policies, procedures, and processes to monitor compliance or conduct periodic self-assessments of grant management practices to improve internal processes. Both the grantor and grantee could benefit from grant-related risk assessments to identify opportunities to mitigate financial, operational, and compliance risks.
REACH OUT TO OUR TEAMAssist in development of policy, procedure, or best-practice guidance documentation
Monitoring tools for grant programs for audit programs, checklists, self-assessments, and data analytics
Evaluate existing grant management practices for improvement
Assess compliance with financial and programmatic reporting requirements
Conduct formal audits of grant management areas
Common Findings
Streamlining Overall Processes
Monitoring Grantee Performance
Improving the Timeliness of Grant Closeout
Improving Federal Grants Management
Using Evidence to Assess the Effectiveness of Federal Grants
