In the past few months, several incidents have occurred that illustrate the need to understand your legal obligations when you accept a grant award.

I spoke to a grant writing colleague of mine from a school district in the Midwest who was told to misappropriate federal grant funds about a year ago. He resigned from his position when it became clear the district superintendent was determined to spend the grant dollars for other district expenses.

A recent audit by a federal employee showed that a superintendent from a school district in the Northeast had diverted more than $300,000 in federal grant funds designated for a magnet school to cover other district expenses that were totally unrelated to the project. District officials are unsure what the outcome of this situation will be.

An April 21 article in Education Week titled “NSF Pulls New Orleans Funding” revealed that more than $4 million in funds for the National Science Foundation’s Urban Systemic Initiative program will not be given to the New Orleans Parish School District in the final year of the grant. The school district was placed on probation for six months before receiving notice that the funding would end prematurely.

Another article in Education Week reported that the NSF is terminating a five-year, $15 million grant to the San Diego Unified School District, primarily because of the district’s “self-admitted inability to address both science and math at the elementary level” due to an increase in the time devoted to reading, according to NSF spokesperson Lee Herring.

These are all serious situations that point to a need to understand exactly what happens when you agree to accept a grant award, what your obligations are as a grantee, and what options funders have when grantees don’t meet their obligations.

It is crucial to read the entire Request for Proposal before submitting a grant. In most cases, you will find copies of the paperwork that will have to be signed and the programmatic and fiscal reporting requirements required by the funding source that you, as a grantee, will be expected to follow when you accept a grant award.

When you accept an award (often you will be asked to do this in writing), you are entering into a contract with the funding source. You are telling the funding source that you will follow the rules they have set forward as a condition of receiving the grant dollars.

You are also telling the funding source that you expect to carry out the project in the manner that you described in your proposal, with the expected goals and objectives you outlined in your proposal, using the staff you described in your proposal, during the timeframe you outlined in your proposal, and by spending the amount of money you put in your proposal budget!

Frankly, I am amazed when people ask me if you really have to do all the things you say you will in a grant proposal.

Of course, there is room for negotiation when a funder decides to give you less than the amount you requested. In some cases, you might find that not all activities can take place as described if they aren’t going to be funded, so they might have to be scaled back or eliminated.

It’s also crucial to be realistic when designing project activities based on factors such as scheduling availability, training requirements, and curriculum requirements.

Funding sources can–and do–monitor their grant programs. The recent decisions by the National Science Foundation show the agency is very serious about how the federal funds in the Urban Systemic Initiative program are spent and whether grantees are actually meeting the goals they outlined in their proposals. The NSF is just one example of the many funders who have withdrawn funding from grantees over the years.

Funding sources use a combination of on-site monitoring visits and reviews of programmatic and fiscal reports to decide how successfully grantees are carrying out their projects. If a funding source determines that a grantee is failing to comply with the terms of a grant agreement, that source can withhold future grant funds and even terminate the grant. In some cases, the funding source can also require that all paid grant funds be reimbursed.

Obviously, these actions have serious short- and long-term ramifications for a grantee. Having to return grant funds not only damages the credibility of the grantee in the eyes of the funding source; it can also damage a grantee’s credibility with future funding sources and potential collaborative partners.

Trust and credibility are vital components of any successful relationship between a grantee and a funding source. Be sure not to jeopardize either of yours. Read the contracts very carefully and make sure you understand your legal obligations before accepting any grant awards.