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Best Practices for Grantees and Grantors: Grant Compliance

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In our quest to maintain high-quality programs that provide necessary services to the greater public, grantors and grantees focus on grant seeking. This often leads to grant professionals overlooking the often taxing work of complying with the requirements and stipulations of grant-awarded funding. I realize that the feeling of receiving an award is exhilarating, but we cannot stop our grant work once the award is funded. Grant compliance is the cornerstone of grants management, and every grant professional should become well versed in this topic, whether or not this is part of your work portfolio. The Office of Management and Budget (OMB) has become more focused on grant compliance, and (in general) grantors have created a larger culture of oversight that requires more stringent review of grantee programs. Grantees must ensure that funds are spent in accordance with a budget provided in a grant application, programs are being measured and issues addressed as they arise, and there are individuals within a grantee organization solely focused on managing grant compliance. Grantors themselves must be careful watchdogs to ensure that the funds they allocate and used carefully, and they are maintaining accurate records themselves.

What Does Grant Compliance Look Like?

Grantor Compliance

Are you able to address these issues? Do your RFP requirements align with your organizational priorities? Do you meet regularly with executive leadership to address short-term and long-term strategic goals for your grant programs? Do financial and programmatic staff meet regularly to ensure that grantees are meeting all of the requirements stipulated in your award agreement? Do you maintain records of each grantee should additional compliance and/or audit issues arise? Are there standard operating procedures and systems in place to create a compliance framework within your organization?

Grant compliance is the cornerstone of grants management, and every grant professional should become well versed in this topic...

Grantee and Sub-Grantee Compliance

Are you able to address these issues? Do you understand the statutory and/or regulatory rules that govern the grant award for which you have been funded? Do you review the grant award requirements and track progress in meeting milestones established in your award agreement? Are there designated personnel with your organization to manage grants in the post-award phase? Is leadership aware of the post-award grant requirements, especially for larger grant awards? Do you regularly collaborate with grantors to ensure open communication, and address issues as they arise?

What Happens If I Don’t Comply?

Unfortunately, there is no "Get Out of Jail Free" card as there is in Monopoly, as lack of compliance could lead to some of these real consequences.

Loss of Grant Funding

Grantees and sub-grantees can lose funding during an award period if there is a gross failure to comply with grant requirements. Grantors can also opt to not fund a grantee/sub-grantee in subsequent years based on lack of compliance, which can sever the relationship and cause irreparable damage. In addition, grantors (particularly at the state or local government levels) can lose funding earmarked for a particular program(s) if there is mismanagement of grant funding.

Designation as “High Risk Grantee”

Federal agencies have the opportunity to designate grantees as high risk, which can hurt a grantee’s chance to obtain funding from other agencies, not just the agency that designated the organization as high risk.

Audit Findings

Grants management is often linked to audits, and if there are correction actions that grantees or grantors must address, this will take time and resources to address. Negative audit findings can lead to additional problems if they are not rectified. Grant compliance is an ongoing process, and must be included in strategic planning processes. As we have seen with Transparency.gov, and merging of all the OMB cost circulars, the federal government is more focused than ever on the judicious spending of funds. Private funders are also more cautious since the competition for funding is greater, and any mistake can cost a grantee an award.

About the Author

Rachel Werner, GPC

Rachel Werner’s career has spanned the corporate, nonprofit, and public sectors. The founder of RBW Strategy, Ms. Werner spent nearly seven years as a dedicated fundraiser and grant writer for nonprofit organizations and freelance clients. She has served as a dedicated fundraiser and grant writer for nonprofit organizations and as a grants management specialist implementing a compliance system for large U.S. Department of Education No Child Left Behind funds within charter schools across the U.S. In addition to being a skilled project manager, she has strong subject matter expertise pertaining to the grants lifecycle. She can be reached at Rachel@rbwstrategy.com.


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