Navigating Federal Grant Compliance, Part 2

In the last blog installment, we covered three of the 12 compliance requirements. Let’s look at three more Uniform Guidance compliance requirements to help you successfully manage and administer federal funds: cash management (C), reporting (L), and subrecipient monitoring (M).

These compliance requirements are tested by your auditors and can be found within the compliance supplement.

Cash management

This compliance requirement focuses on how you get your money. Most programs operate on a reimbursement basis — award recipients must disburse funds for program purposes before requesting payment.

Some programs allow for advances and require entities to minimize the time between receiving and spending the funds and not use the money to earn interest. Either way, the request for funds should be reviewed, approved, and adequately supported.

Reporting

Virtually all programs require recipients of federal funds to give regular updates on the progress of their program management. Financial updates are commonly submitted monthly or quarterly via Federal Financial Reports (SF-425) and Requests for Advance or Reimbursement (SF-270).

Programs may also require program-specific narrative performance and special reports. Awardees can identify the reports applicable to them via their grant agreements and within the compliance supplement.

Subrecipient monitoring

If your organization operates as a pass-through entity (PTE), you are tasked with adequately managing the federal funds even though your organization is not the end recipient of the funds.

PTEs must:

• Evaluate a subrecipient’s risk of noncompliance, both before administering a subaward and throughout the award lifetime;
• Clearly identify the award as a subaward so the subrecipient is aware they are the recipient of federal funds; and
• Monitor the ongoing activities of the subrecipient to verify it is operating in accordance with the award and federal requirements.

Always read through your award agreements to make sure you are adhering to all the applicable compliance requirements, and if you are a PTE, have adequate monitoring procedures to verify your subrecipients are doing the same.

How we can help

Be on the lookout for additional blog posts covering the other federal compliance requirements and tips to navigate federal grant compliance. Review our grant compliance services page or contact us to learn how we can help with your organization’s specific grant management and single audit questions.