Managing Federal Grants: Top Challenges and How to Overcome Them
For nonprofit organizations and government entities, federal grants provide critical funding to run impactful programs. But these grants come with extensive requirements that make management and compliance complex. Here are some of the top challenges with managing federal grants and tips to address them:
Understanding Regulations
Federal grants fall under specific statutes and regulations like the Uniform Guidance 2 CFR 200. These outline allowable costs, reporting requirements, and more. Understanding which rules apply can be difficult, especially if you manage multiple grant sources.
Tip: Invest in grant management training to ensure your team is up to date on current regulations. Also develop centralized policies and procedures for grant activities.
Meeting Reporting Requirements
Progress, financial, and closeout reports must be completed on time and with accurate data. This takes dedicated staff focused on monitoring outcomes, tracking spending, and gathering documentation.
Tip: Use grant management software to streamline reporting processes. And assign responsible staff for overseeing different reporting requirements.
Managing Subrecipients
When partnering with other organizations on a grant project, prime recipients must monitor subrecipient activities for compliance. This oversight burden grows as more subawards are issued.
Tip: Create subaward agreements that outline compliance expectations, reporting schedules, invoicing protocols and more. Also develop processes for ongoing subrecipient monitoring.
Adhering to Cost Principles
Grants require financial accountability, including tracking allowable vs unallowable costs. With complex rules like time and effort reporting for personnel expenses, errors can happen.
Tip: Maintain up-to-date policies on financial documentation, cost allocation, and other principles. Offer regular training to finance staff on managing grant funds.
Avoiding Audit Findings
Grantees meeting certain funding thresholds are subject to Single Audit requirements under Uniform Guidance. Findings can result in paybacks and other consequences.
Tip: Perform self-audits to identify any noncompliance early. And take preventative measures like strengthening internal controls and documenting due diligence.
Mastering federal grant management takes focus and proactive measures. But developing robust systems, processes, and capacity will enable your organization to thrive with federal grants. Reach out if our team at Cabrillo Compliance can help assess your grant management practices and risks.
