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11 May
Understand grant requirements and lift the compliance burden
by Jorel M. Lopez
Grants are critical funding sources for many government and nonprofit agencies. A funding/issuing authority (grantor) provides these financial awards to a recipient (grantee) to assist in performing specific initiatives. They offer resources for operations, financial support, or both when other funding means are unavailable or insufficient.
For many reasons, recipients of grants may experience difficulties accessing these funds. For example, due to the widespread impact of COVID-19, additional challenges emerge in meeting grant terms and conditions. In this novel scenario, guidance may be unclear or subject to change. When changes occur during a grant period, it can be difficult to change current practices, as has been the case with some federally funded programs related to COVID-19, such as the CARES Act.
Meeting grant terms and conditions is imperative.
Grantors may have the right to conduct audits to evaluate compliance, and significant findings of noncompliance could result in a grantor deciding not to provide future financing to the grantee or asking for additional reporting requirements, further depleting resources. Additionally, the grantee may be required to keep records for various grant programs that extend from three to seven years after grant closeout. To comply with auditing the conditions, the grantee must maintain sufficient evidence of grant-related expenditures and programmatic data for up to seven years after a grant closes, depending on grant or agency requirements.
Failure to comply can have a significant financial impact. For example, suppose the grantee cannot locate supporting documentation for an item of expenditure during an audit. In that case, an auditor could treat the expenditure as unsupported and not eligible for reimbursement, resulting in the grantee owing money to the grantor.
There are a variety of processes to evaluate and improve grant programs.
The grantor can develop internal checklists to evaluate grantee compliance or periodically establish a cyclical audit function to assess grantees’ management practices. The grantee can create new or evaluate existing procedures, policies, and processes or conduct periodic self-assessments of grant management practices to monitor compliance or improve internal processes. The grantor and recipient may benefit from grant-related risk assessments to identify opportunities to mitigate financial, operational, and compliance risks.
To comply with grants, the grantee must follow the standards set by the government, supervisory boards, or your organization. These standards impact all areas, but most will include program rules and requirements, process documentation, progress, impact, and data reporting.
In these times of increased belt-tightening, awarding grants to worthy organizations and individuals is a greater responsibility. Achieving compliance is crucial to keep your funding flowing or to continue to invest in programs that advance your mission. Meeting the requirements can demonstrate your capacity and lay the groundwork for future funding and impact.
Things gets stricktier. The Federal Funding Accountability and Transparency Act (FFATA)* of 2006 initiated a continuously changing reporting procedure government-wide that requires disclosing information about entities and organizations receiving federal funds to the public via a central website, USAspending.gov.
Understanding the requirements of the grants you administer is required to lift the burden of compliance. Agencies need qualified staff using compliance tools to analyze data, document program impact, generate progress reports on demand while spending the right amount of time to accomplish, and provide transparency about the programs they are funding.
It is vital to show funders that your organization captures all the necessary data and protects against data loss or breach. For example, security is twice as essential in government agencies. Additionally, some compliance regulations require you to submit periodic reports with up-to-the-minute data on your program’s progress to ensure proper use of funds.
The main challenge for public sector organizations in meeting compliance mandates has been the inability to identify and collect data within their organization. Disparate technologies scattered across agencies amplified the challenge due to the lack of scalable, customizable, and monitoring in real-time across systems. At Acumenian, we create tools to help your organization monitor and manage an ever-increasing amount of data to enhance and optimize existing data sets. Additionally, we help your company maintain data integrity to report all components of planning, evaluation, operations, compliance with regulations and laws related to the grant program, financial accounting, personnel-related expenses, equipment/asset purchases, and programmatic inventory costs. Our services can generate this information at the click of a mouse, saving a lot of time and trouble. We offer grant services to become partners in your mission.
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