The current economic situation has prompted many entities to apply for grants they’ve never applied for in the past, which has resulted in even more competition for grant funds. One of the possible by-products of this increased competition is that applicants might make promises in their proposals that they would be unable to fulfill if funded. Unfortunately, mismanaging grant funds can lead to negative publicity, the revocation of grant dollars, an adverse effect on future prospects for grant funding, and—in the worst case—criminal prosecution.
It’s important to submit any grant proposal with the best of intentions, so make sure you read the RFP or guidance carefully to ensure that you can meet the funder’s expectations if you receive an award. For example, do not agree to overambitious goals that cannot be met during the funding period—and don’t accept an award if you do not have the internal financial capability to track the use of funds.
Before accepting any grant award, review the grant agreement carefully to make sure you completely understand the expectations for accepting funds and can meet these expectations to the best of your ability. It is wiser to pass on grant funds rather than accept them knowing that your organization is not capable of carrying out the project as stated.
If you are the recipient of grant funds, do you have safeguards in place to make sure funds are not mismanaged? These safeguards can include the following:
1. Make sure that all staff involved in the project are familiar with the budget and the allowable line-item expenses for the project. Distribute a copy of the budget and the budget justification to all key staff members to use as a reference as the project is implemented.
2. If necessary, provide key staff with Time and Effort reports early in the project period, and discuss the importance of completing these reports on an ongoing basis. These reports are especially critical if there are multiple funding streams for the same project, and time is allocated under different funding streams at different levels. Remind project staff on a regular basis of the importance of keeping careful Time and Effort records.