Essentials of Grant Administration Teleconference

Notes from teleconference on Essentials of Grant Administration -- August 10, 2005

Speaker: Henry Flood, president of The Institute for Grant Program Administration

Pre-Award and Post Award Issues

Grant management begins at the moment you apply for a grant. You must go along with federal and state regulations when writing the grant. Particularly, pay attention to construction/renovation considerations as there are many regulations concerning this area of funding. When planning the budget, look to see what costs are eligible in the grant beforehand since your budget becomes your management tool once the grant is approved.

Pre Award

The different departments of your organizations should contribute to the writing of the grant, both in the narrative and the technical aspect. Having a clear vision to base the grant request upon allows the grant writer to fully understand what the organization hopes to accomplish. Staff input in the grant application process ensures that you are staying focused on what is important to your mission, while keeping  you focused on what is feasible to achieve.

An organization should only apply for grants based on their mission and needs, they need to match up to the funding priorities of the funders. This is called strategic grant seeking. You do not want to go after funding that is not consistent with your mission. You will not be successful and your organization will not be able to sustain those projects properly.  With clearly defined goals and objectives, your organization will be in a better position to match their needs to the funder’s priorities and receive funding for projects that will be beneficial to your organization.

Once the application is sent in, your organization should also be prepared to process the award. This is done through a post-award management system of application tracking. This will explain why you asked for money and for what the money will be used. This process will take coordination with the grant writer and the funder. The most important thing to remember is that it is necessary to fully explain how the money will be used and the process of implementation. If you fail to do so, you may not receive the funds.

Post Award

So you get the grant, now what should you do? Begin by setting up a system to organize your paperwork. It might be helpful to create a project file that will be used to document all major actions from grant award through closeout. A six-part file folder is recommended.

• Section 1- contains a copy of the executed grant agreement, including the grand budget as approved by the funding source (even if it a separate document.)
• Section 2- contains a copy of the grant budget in a format that reflects how it will be processed though your accounting system. As you spend money this document will be revised to show funds spent from authorized categories and the net remaining account balances.
• Section 3- contains correspondence with the funding source in ascending order from earliest to latest.
• Section 4- contains financial reports that you have filed with the funding source.
• Section 5- contains program progress reports.
• Section 6- contains the audit and project closeout documentation. Also include a copy of the approved grant proposal in this section.

Once the grant is approved you will want to get the staff together and review the document to see what you said you were going to do. Then you should create a work plan based on the outcomes and deliverables. The work-plan organizes the staff and lets you know when things are due and you can list/document procurement requirements.

You will also need to look at the people you will need to pay. Accounts will need to be set up to track different costs and what percentage of time a staffer works on a certain grant. All costs will need to be allocated correctly and accurately.

For small purchases, you will need to get 3 quotes and create files for the selected vendor. With quotes for purchases over $10,000, there are certain clauses that are required by the government, so make sure that you know what they are and follow them.

Progress reports are usually done every 90 days, quarterly, after the grant is awarded. A progress report, a 2-3 page update on what you did, must include financial (SF 269) forms with the total amount drawn down compared to the total disbursements.

Make sure that your books are kept straight. Work with an accountant, but remember that accountants record what is allocated and then spent. It is often looked at 60 to 90 days afterward, so you want to keep some kind of document that shows your current draw down. Your budget tracker shows where the money is going to be spent, essentially it shows actual to budgeted.

Quality Control

Your organization needs to check with OMD Circular 110 and make sure that you are following the requirements. In particular, you need to track of what you are supposed to be spending and what your actual account balances are. Remember: the basis of your implementation control is your detailed work-plan. This is where the outcome measures are clearly defined and explained, and it is also where you prove you are getting results and how you are meeting desired outcomes.

Audit/Closeout

If you get more than $500,000 of federal assistance, you have to have a single audit in order to be in compliance with you grant. Make sure that you ask for closeout instructions from your funding agency, the grant does not end until you have formally closed out the grant from the agency.

The A-122 is the document that explains the cost principles applicable to nonprofit organizations. Your grant writer and the person who creates the budget should be very familiar with this document. It is your thumbnail to cost allocation.

Indirect/Direct Costs

This usually becomes an issue when an organization has more than one or more large grants. Direct costs are those that can be linked to a project, for instance: personnel and supplies. Indirect costs are those that have to do with the general overhead such as utilities and accounting costs. Usually an outside CPA will calculate what your indirect/direct cost percentages are. Once you have it approved, most federal agencies will accept it, however, there may be a cap on the amount of administrative costs that you can allocate to a particular grant so you want to make sure that you do not take on to much of these extra costs.

Remember that grants cost money to manage. There is an administrative burden with each grant. If you are dealing with more than one grant, it is necessary to make sure that staff time is properly allocated to each of the grants and that your organization can manage the extra costs associated with the grant programs.