A grant is, in effect, a contract. When awarded, the recipient of grant funding agrees to set guidelines that dictate program objectives, reporting requirements, and deadlines. If these stipulations aren’t met, your organization risks forfeiting the funding your community needs. Noncompliance, missed deadlines and disorganized processes are usually to blame for lost drawdown. If expenditure reports are incomplete or inaccurate, or deadlines are missed, the grant maker may be forced to withhold funds. Advanced planning and good accounting are essential to maintaining steady cash flow for your funded programs. Avoiding errors in general may be the ultimate goal, but having good processes in place to avoid them is especially important now with the influx of funding that has come along with COVID-19 funding streams.
Grants often require that funds be drawn down in stages. If the awarding organization determines that the grantee has drawn down excessive funds, they may be required to return the surplus funds with interest. Likewise, grant makers may also flag recipients that spend too little money, which may be a sign that their project is not being actively implemented. Without easy access to real-time data on expenses and time and effort, award data can become clouded, making it difficult to identify remaining funds.
To make use of every dollar awarded to your organization, consider implementing the following best practices when it comes to fund allocation, accounting, and deadlines.
- Be clear and upfront about all program expenses in the grant application.
- Be mindful of spending, and do not allocate money to items that weren’t outlined in the grant parameters.
- Draw down only as much cash as necessary to meet the immediate needs of the project.
- Pay out funds for grant activities as soon as possible after drawdown.
Organizations often forfeit grant money by losing track of documents, receipts and expenses. Without the ability to prove where money was allocated, the grant maker has no choice but to withhold funds. To avoid this, try the following:
- Put processes in place to track all applicable expenses in one central location in real-time, including approved budgets, receipts and timesheets.
- Maintain accurate time and effort reports.
- Continually monitor the fiscal activity (drawdowns and payments) for your grant(s).
- Provide non-financial team members access to metrics in real-time so that they can follow budgets without contacting the finance department.
Don’t lose out on current or future funds because you missed a deadline.
- Track all grant activities, expenses and deadlines in a central location, so you can keep important actions and dates top of mind.
- Take into account the timing of drawdowns with internal coordination and approval processes.
- Carefully plan out cash flow for your grant program and review cash requirements before each drawdown.
- Consider a specialized solution to maintain accurate records of all grant tasks, expenditures, program data, and deadlines.
Your ultimate goal should be to track every penny throughout the grant lifecycle by keeping all documents in one central location, track activities against goals, allocate funds according to grant requirements, and ensure that money is available for draw down. By being mindful of your fund allocation parameters, putting effective processes in place, and making sure you’re staying on top of deadlines, you can help you keep the funds you need to achieve your outcomes secure.
Grant management software can help you track activities against goals, allocate funds according to grant requirements, and ensure that money is available for draw down. To learn more, get in touch with us!
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Topics: Drive Best Practices