How To Ensure Grant Compliance After You Win Funding

Grant compliance is all about adhering to the requirements of a grant you’ve been awarded.

Every grant has different obligations and restrictions, such as:

• How funds must be allocated
• Geographic restrictions
• Transparent and accurate financial tracking
• Maintaining detailed budget and financial documentation
• Developing reports
• Measuring specific performance metrics

Before you apply for grant funding, it’s a grant compliance best practice to make sure that you have a clear understanding of these post-award compliance obligations and protocols.

Think of it as similar to learning the rules of the road before you take your new car out for a spin. You don’t want to apply for funding only to realize you don’t have the capacity or ability to fulfill the post-award obligations.

Yet, many nonprofits work so hard on getting an award that they drop the ball when it comes to managing the funding effectively and sharing with funders the impact of their grant.

Rachel Werner, Owner & CEO of RBW Strategy, shared with us why this is so important:
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“If your organization does not report on outcomes or provide enough information on progress to your funders, you may not receive additional funding in the future.”

On the flip side, showing funders that you can fulfill your post-award obligations while also making a significant impact in your community is a great way to justify another gift down the road.

Sidebar: § 2 CFR 200

Government grants, like those from the NIH, have stricter requirements and reporting obligations than other types of funding opportunities.

For example, if you receive state, local, or federal government funding, your organization must comply with § 2 CFR 200 and its components.

§ 2 CFR 200 (uniform grant guidance), under the Office of Management and Budget, serves as a code of federal regulations and official guidance to administer all federal grant awards. This means if you receive government funding, you must comply with these regulations.

Here is the specific information from § 2 CFR 200. 303:
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“Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”

If you received a federal grant, you will want to have someone on your team review the grant reporting requirements and other government grant compliance stipulations in the Code of Federal Regulations under Title 2, Part 200 the OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Rewards.

One of the first things you want to do after you win a grant award is take stock of your current systems, resources, and processes and compare them to the requirements of the funder.

Think of it as planning a big family dinner and figuring out if you need to run to the store or if you’ve already got everything in your pantry. You need to evaluate what you already have in your organization to be properly prepared to fulfill compliance requirements.

Rachel Werner encourages grant managers to assess their resources and find any gaps between what the grant requires and your nonprofit’s current situation. This includes looking into your:

• Technology and Systems
• Knowledge
• Documented Policies
• Leadership Buy-in
• Personnel

For example, maybe the grant you won requires detailed financial tracking and you don’t have a streamlined system to track expenses, maintain the budget, and provide regular financial statements to the funder. It’s important to identify these gaps so that you can fill them in as needed.

Here’s some great advice from Jeannette Archer-Simons, President and Development Director of Archer-Simons Consulting Group:
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“Often a nonprofit is so excited about receiving a grant or funding that they just start running. When the funding is accepted, take a breath. Look at what the reporting requirements are. Who should know that there is a reporting requirement and should be involved? Have a quick sit down or virtual meeting and outline who will be responsible for what elements of reporting and set the deadline for receiving the information.”

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By taking stock of your nonprofit’s capacity to meet the grant’s requirements, you’ll be better prepared to maintain compliance throughout the life of the grant.

Once you’ve carefully looked over the grant’s requirements, Rachel Werner encourages grant managers to create or update their policies and procedures so that they can properly administer the award.
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It’s important to have clear, documented policies and procedures that reflect strong internal controls.

Not all grants will require the same policies. But some of the ones Rachel suggests you consider include:

• Travel policy
• Cash management policy
• Budget reconciliation policy
• Conflict of interest policy
• Procurement policy
• Time and effort reporting policy.

For example, maybe you need to develop an Approval policy that clearly outlines the process for spending the grant funding to reduce the risk of errors or fraudulent activities.

The Financial Accounting Standards Board (FASB) and the Government Accounting Standards Board (GASB) have also issued a series of practices and controls to be employed across sectors, known as the General Accepted Accounting Principles (GAAP). Abiding by GAAP ensures an organization is following appropriate policies, rules, and regulations and that financial reports are accurate and consistent.

Not only will these policies and procedures help you better manage your funding, but they’ll also help instill confidence and trust in the funder that you are handling the grant in a responsible manner.

As you formalize your policies, you need to ask yourself—what are the processes or systems in place to implement those policies?

Rachel Werner outlines three areas where you should have standardized systems to make tracking and managing your award more streamlined and efficient:

• Financial
• Programmatic
• Operations

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As you can see from the graphic above, there’s a lot that goes into tracking and managing awards—from remembering key deadlines to adhering to reporting requirements to tracking expenditures and more. This is where a dedicated grant management system comes into play.
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Instrumentl’s dedicated grant platform is designed specifically to help you track and manage your grants throughout their entire lifecycle.

Overall ​​Instrumentl provides a centralized tool for grant tracking and compliance that makes post-award management a breeze.

For example, with our shared grants calendar, your entire team can track deadlines and tasks so that everyone knows what they are responsible for and what the next steps are.

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And with the dedicated Awards tracker, it’s easy to manage the financials of your grant and track your spending against your proposed budget.

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You can follow this guide to upload all your grants into Instrumentl in order to monitor, record, and manage all aspects of your funding with ease.

Staying compliant requires regular training and education for all team members involved in grant management.

Compliance is everyone’s responsibility, and it is one thing to document who will be taking on what task, but you also need to ensure they are trained appropriately, including on:

• Compliance requirements
• Financial management
• Reporting requirements
• Regulatory updates

You should also engage your nonprofit’s board in compliance matters and have your staff attend workshops, webinars, and conferences related to nonprofit management. That way the entire team is on board and educated on the grant management process.

For example, you will want to have someone on your team who can stay apprised of any regulatory changes and updates that are relevant to your nonprofit and its funding.

Not having a trained and educated team can be detrimental—from missing deadlines to going over budget to not understanding the rules and regulations in which you must be compliant. Any of these mistakes could threaten your grant funding and your chances of winning awards in the future.

Your team doesn’t have to meet weekly or even bi-weekly, but you should set up quarterly reviews with the grant management team to assess compliance status, review financial reports, and address any challenges or discrepancies.

For shorter grants, just make sure that your team is meeting before each milestone and regularly during the implementation of the award.

These reviews will help with any challenges your team may be facing during the grant management process. If a problem does arise or if you see the project heading in a different direction, your entire team will be in continuous communication to solve any issues as they arise.

Not only that, but many larger grants and government grants will require quarterly grant reports. So, you can review your grant compliance quarterly with your team and then also schedule this same time to develop reports for your grant if required.

Grant compliance is the responsibility of your entire team, but not everything needs to be done at once. We suggest you focus on your high-priority grant management needs, which are based on requests from funders. Then, identify your gaps and determine if they can be filled through your internal and external resources. You will find that grant compliance becomes much easier once your entire team is organized.

Luckily, Instrumentl can help keep busy grant professionals organized and on top of both new and recurring grant awards. Sign up today for a free 14 day trial to try it out yourself!