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The Relationship Between Compliance and State Grant Funding

As federal data legislation continues to increase, federal grantors are moving towards results-based grant funding. So now, not only are there the legislative reasons to maintain compliance, if states show positive results with funding, it could also have positive effect on their grant dollars. 

To better understand the connection between compliance and grant dollars, we are sharing three effects compliance can have on your state’s funding. 

Compliance Equals Greater Drawdown 

According to the Grant Accountability and Transparency Act’s 2018 Annual Report, Illinois saved $236,575,000 because of compliance with data legislation. Data legislation exists to assist states in using their grant dollars most effectively. Therefore, when states maintain compliance, they are less likely to leave funds unused.  

Compliance Means Retention of Funds 

If states are failing to comply with legislation, they could also lose their funding. When your state’s expenditure reports are complete and accurate, the grantor is more likely to continue providing you funding. 

One state in particular was able to ensure they maintained $100 million in funding by developing a Corrective Action Plan that involved procuring a grant management software to ensure compliance. 

Compliance Increases Chances of Future Funding 

Compliance doesn’t only affect current funding. It can also positively affect your state’s chance at receiving future funding. As federal agencies are focusing more on tangible results when it comes to funding, it’s going to affect how they award state funds in the future. 

Specifically, in 2018, the White House announced the President’s Management Agenda, an agenda that puts data standards at the center of federal management to increase transparency and improve the management of funding. This agenda is gearing the focus of grants management on accountability and compliance and will drive how agencies distribute state funds going forward. 

Want to learn hocompliance with data legislation saved the state of Illinois $258,075,000 in 2018Check out our eBook “Managing State Grants.”   


Photo by Sharon McCutcheon on Unsplash

Topics:  ComplianceFunding