In their 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.
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 are used carefully, to maintain accurate records themselves.
What does grant compliance look like?
Well-applied grant compliance accommodates all federal, and sometimes state, compliance requirements and policies.
Grantor compliance – questions to ask
Ask yourself several questions as you prepare to organize grantor compliance.
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?
Grantee and sub-grantee compliance – questions to ask
Ask yourself several questions as you prepare to organize 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?
How do I maintain grant compliance?
Grant compliance requires effort, effort that ultimately helps to benefit both your government and your community. Perhaps more importantly, grant compliance ensures an open channel for continual grant awards, to better fund programs, curriculums, and facilities that directly improve citizen quality of life.
Here are a few ways you can improve your grant compliance workflow:
1. Know your stuff — Compliance requires research. Stay informed as grant compliance best practices change and evolve. Sometimes, grant compliance requirements are also included with your initial funding agreement. Still, it’s important to ask appropriate follow-up questions whenever a particular detail of that agreement is unclear, or if a particular reporting metric is difficult to convey.
2. Designate a compliance authority figure — Grant compliance often requires executive decision-making. You can help your government improve grant compliance simply by allocating responsibilities to a designated grant compliance specialist, someone with the bandwidth to audit compliance on a regular basis. This individual can delegate tasks appropriately, and serve as your contact person whenever a particular grant compliance detail is unclear.
3. Create, and maintain, internal processes — Great grant compliance begins with effective, efficiency grant compliance systems. Take the time to build documents that record each step of your grant compliance process, and explain which individuals or departments are to handle certain responsibilities. Document all compliance regulations, and keep that documentation handy for reference. If possible, use a cloud-based grants management software to save this documentation in the cloud, where all team members can access information remotely.
4. Implement data collection best practices — you’ll need to show grant funders that your government is capable of managing funds, and handling reporting, for each grant allocated. Make sure to take necessary steps in gathering and organizing data, to make the reporting stage easy. Secure data collection is also important to help prevent any data losses or breaches. If you’re considering a particular cloud-based grants management solution, be sure to ask about their cyber-protective measures.
5. Keep reports close — Grant reporting is a major part of grant compliance. For best results, keep all reports up to date and close at hand, in case you ever need to reference applicable grant figures. Whether you need to know how much funding you’ve earned or where funds are delivered across your community, the right reports can effectively replace grant-related anxiety with peace of mind.
What happens if I don’t uphold grant compliance?
Unfortunately, there is no “Get Out of Jail Free” card in grant compliance. A 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 option 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.
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. Ready for streamlined grants management? Connect with our Solutions team to discover how much time cloud-based grants processing could save you.