Make grant compliance for your not-for-profit organization a priority

Not-for-profit organizations have seen a rapid rise in federal funding, primarily due to the COVID-19 pandemic and hyperinflation. With this influx of funding, scaling grant management and compliance monitoring is key.

Ongoing compliance monitoring, including that of subrecipients, has become increasingly important to cognizant agencies and a focal point of annual single audits.

The Coronavirus Aid, Relief, and Economic Security (CARES), American Rescue Plan Act (ARPA), and other COVID-19 relief funds have become major programs in single audits and the focus of funding agency compliance reviews, which aim to help assess an organization’s ability to manage and monitor funding.

For organizations of all sizes, identifying grant compliance requirements and monitoring how your organization adheres to them are both important in managing government funded awards.

What is grant compliance and why is it important?

Federal, state, and local government grants all come with compliance requirements to regulate how taxpayer funds are being spent. These requirements include the spending and use of funds, programmatic and financial expenditure reporting, and the frequency of recipient and subrecipient audits.

Regardless of the government agency awarding funds, funders want to ensure that recipients are good stewards of funding received and that funding is spent on purposes that align with the intended mission and purpose of the grant.

Ensuring that your employees understand any applicable requirements, along with deploying ongoing internal monitoring, helps to ensure continued eligibility for future funding while mitigating noncompliance risk and avoiding penalties, including federal agency audits and even debarment.

Grant compliance requirements

Your specific compliance requirements will be outlined in your prime funding agreement or contract with the awarding agency.

These requirements typically include what the funds can and can’t be used for, when they can be used (period of service and performance), what programmatic and financial reporting is required, and other restrictions or stipulations of use. Refer to the