URBS 4/553—Grants Administration


Post-Award Grants Management

Performance Management

Because of the high cost of detailed financial reviews, agency administrators have an incentive to shift some or all of the evaluation costs to the grantees (Doolittle, 1981). This is accomplished by demanding detailed post-award reporting.

 

Pre-Award planning

  • Negotiations with funder
    • Renegotiate start date (grant funds will probably come later than you had anticipated in proposal)
    • Adjust budgets for salary increases or fringe benefit rates that have changed since proposal was written (cannot adjust total award—will have to decrease elsewhere)
  • Get acquainted with OMB Circulars (US Office of Management & Budget):
    • A-110 (Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations) or A-102 (Grants and Cooperative Agreements with State & Local Governments)
    • A-122 (Cost Principals for Nonprofit Organizations) or A-21 (Cost Principals for Educational Institutions) or A-87 (Cost Principles for State, Local, and Indian Tribal Governments)
    • A-133 (Audits of State, Local Governments, and Nonprofit Organizations)
  • Record Retention Plan: OMB Circular A-110 sets a standard for retaining records of 3 years after program is completed (longer if there is a dispute). Create a plan for organizing, storing, and eventually expunging records (note that changes in computer hardware may make some storage systems obsolete before their expiration date).
  • “Go slow to go fast” (Gosmire, 2006)—take time before you start to get your ducks in a row.

        New relationships to form

        Identify and publicly recognize “true” external players

        Assemble work team focused on goals and long-range efforts as well as day-to-day operations

 

Documenting Progress:

  • Performance reporting
    • “To maintain accountability standards, grant recipients are expected to implement systems to monitor grant activities and progress. To manage the project effectively, it is necessary to institute performance management systems that ensure that necessary data are collected on a timely basis.” (Hall, 2009)
      • Personnel:
        • Document time, either by hours or by “percent of effort”
        • Personnel policies based on merit
      • Procurement and Purchasing systems
        • Paper trail, from purchase order to encumbrance to receipt to payment
        • Policies for competitive bidding for larger (more than $25,000) projects. See American Bar Association’s “Model Procurement Code
        • Property Management system
          • Record essential information about minor ($500-$4,999) and major ($5,000 or greater) capital goods
          • Plan to dispose of property (worth more than $5,000 at end of grant)
      • Accounting systems (ensure that funds are not commingled)
      • Risk management
        • Security bonding for key managers who handle receipts and payments
        • Insurance for expensive equipment
        • Liability insurance
      • Ethics policies (“Don’t do anything you wouldn’t want to see on the front page of the newspaper.”)
        • Conflict of interests policies
        • Written policies precluding employees and contractors from personal gain from grant funding
        • Research integrity (if appropriate)
          • IRB (Human Subjects review)
          • IACUC (Animal care review)
        • Procurement controls
          • Favoritism in awarding contracts
          • Unfair solicitation
          • Kickbacks
          • Exclusionary practices to limit competition
          • Fair share controls for minority contractors
      • Extend controls outside boundaries of organizations if subcontractors are involved
      • Recording of matching and in-kind contributions (especially if recognized in grant proposal)
  • Accountability reporting (see notes on financial reporting)
  • Reporting to stakeholders—dissemination of project results (to both internal and external stakeholders)

 

Reporting

  • May be required quarterly, semiannually, or annually
  • Commonly two reports (Hall, 2009):
    • Financial (OMB Standard Forms SF-269 [Financial Status Report] and SF-272 [Cash Transactions Report])
    • Technical—narrative description of activities that have taken place and their timeliness (on time or not)
    • The two forms should be consistent—it should be apparent form the technical report why money was drawn down and in what amount. If funds are being used more slowly or more quickly than anticipated, the technical report should make the reason apparent.
    • If reports are not consistent, it indicates management problems at best (and fraud, at worst)
    • Be very careful to submit reports on time
  • Grant Closing/Final Report—summary of the entire project at the end

 

Miscellaneous Issues:

  • Federal forms must be filed requesting reimbursements and fund advancements (in other words, once the grant is awarded the money doesn’t “just come,” you have to file paperwork asking for it).
  • Amendments: Grant contracts may be amended—but make sure it is documented in writing before acting on it.
    • Changes in scope of work
    • Budget amendments (transfer from one category to another)
  • Some grants require annual meetings of project directors (which will incur travel expenses)
  • Some grants require site visits from program officers
  • Some grants (total over $500,000) will require an annual audit
  • “No cost extension”—Can request an extension of the time period for performance, provided there is no additional cost incurred by the grantor. One year extensions are not unusual, but you have to get it in writing.
  • Continuing funding from multi-year grants may not occur because of

        (lack of) performance results

        Nonallocation of resources from agency budgets

  • Overhead (administrative) costs are usually not funded, which complicates ability of organization to plan for program development, staff development, and organizational capacity (Gronbjerg, 1991).

Financial Management

Agency reviews of grant funding reports are frequently delayed. An audit may result in rejection of an expense under review—in effect, a retroactive disapproval of an expense. (Doolittle, 1981)

Budget and spending plan

  • Identification of all costs
    • No activities or costs can be incurred before official start date of project
    • Costs must be
      • Allowable by funder
      • Included in proposal budget
      • Reasonable
      • Necessary to the project
      • Not excluded by terms or grant award/agreement letter or by law, executive order, or agency regulations
      • Capable of being allocated (not comingled with other funds)
      • Treated consistently when charged
  • Identification of in-kind and/or matching funding
  • Identification of program income (fees)
  • Subcontractor performance & accountability
  • Process & procedures for prior approval
    • Travel
    • Equipment

 

Mistakes sometimes happen. When they do, immediately correct the mistake through appropriate journal entries and correction memos (Flood, 2001)

 

Audit findings

  • Non-material—while not out of compliance, does not follow best practices
  • Material—affects financial or compliance integrity of grant awards

 

Delayed payment system (common in government grants) can result in major cash flow problems and place a premium on access to endowments or reserve funds (Gronbjerg, 1991).

  • Personnel costs are fairly stable over time
  • Cash receipts can fluctuate widely
  • Personnel turnover can be used to create a cash reserve (but is costly in terms of recruiting and training)

 

Strict limitations on line-item expenditures, program requirements about staff qualifications or eligible clients restricts management flexibility

  • Access to own-source founds (reserves, membership fees, etc.) can be used to supplement efforts otherwise restricted by funders

 

 

Bibliography

Doolittle, F. 2009. Auditing disputes in Federal grant programs: The case of AFDC, Public Administration Review 41(4), 430-436.

Flood, H. 2001. “Essentials of grants management: A guide for the perplexed,” The Grantsmanship Center Magazine. http://www.tgci.com/magazine/Essentials%20of%20Grants%20Management.pdf (accessed 7/1/09)

Gosmire, D. 2006. The art (not science) of grants management, Journal of Women in Educational Leadership 4(3), 159-163.

Gronbjerg, K. 1991. Managing grants and contracts: The case of four nonprofit social service organizations, Nonprofit and Voluntary Sector Quarterly 20(1), 5-24.

Hall, J. 2009. Grant Management: Funding for Public and Nonprofit Programs. Boston: Jones & Bartlett Pubs., 2009.

 


 

 

MSU

2009 A.J.Filipovitch
Revised 5 September 2009