Post-Award Grant Management: Compliance, Reporting, and Audit Readiness

Winning the grant is just the beginning. What happens after the award determines whether funding produces impact—and whether your organization receives future support.

Post-award management encompasses compliance, reporting, financial management, and programmatic execution. Organizations that excel at post-award management build reputations that attract ongoing funding. Those that struggle face audit findings, fund recovery, and damaged credibility.

The Post-Award Transition

From Proposal to Implementation

The transition from winning to implementing requires:

1. Award document review: Understand all terms and conditions
2. Budget setup: Establish accounting codes and tracking systems
3. Team orientation: Ensure all staff understand requirements
4. Partner notification: Communicate with subrecipients and collaborators
5. Timeline development: Create detailed implementation schedule
6. Reporting calendar: Map all due dates

Key Award Documents

Review these carefully:

Notice of Award: Official document specifying funding, period, and requirements

Terms and Conditions: Legal requirements governing the award

Approved Budget: What you can spend, in what categories

Approved Scope: What you committed to deliver

Keep these documents accessible throughout the grant period.

Internal Controls

Internal controls protect both the funder's investment and your organization.

Separation of Duties

No single person should control all aspects of a financial transaction:

| Function | Should Be Separated | |----------|---------------------| | Authorizing purchases | Approving payments | | Receiving goods | Recording inventory | | Handling cash | Recording receipts | | Preparing payroll | Approving payroll |

Minimum separation: The person who spends funds should not be the same person who reconciles accounts.

Approval Thresholds

Establish purchase approval requirements:

| Amount | Required Approval | |--------|-------------------| | Under $500 | Program Manager | | $500-$5,000 | Director | | $5,000-$25,000 | Executive Director | | Over $25,000 | Executive Director + Finance Committee |

Document and follow these consistently.

Documentation Requirements

Maintain documentation for every transaction:

Personnel costs:

• Timesheets showing effort on grant
• Supervisor approval
• Payroll records

Purchases:

• Purchase requests
• Competitive quotes (where required)
• Invoices
• Receiving records
• Payment documentation

Travel:

• Pre-approval
• Receipts
• Purpose documentation
• Per diem calculations

If you can't document it, you can't charge it.

Time and Effort Documentation

Personnel costs are the largest category in most grants—and the most scrutinized.

Federal Time and Effort Requirements

Federal grants require documentation that personnel costs reflect actual effort:

For employees working on single cost objective:

• Semi-annual certifications
• Signed by employee or supervisor with firsthand knowledge
• After-the-fact confirmation of effort

For employees working on multiple cost objectives:

• Monthly reports (or more frequent)
• Allocation based on actual work performed
• Verified by documentation

Time and Effort Best Practices

• Record contemporaneously: Don't reconstruct time weeks later
• Be specific: "Grant activities" isn't sufficient
• Train staff: Everyone must understand requirements
• Supervisory review: Second signature adds protection
• Adjust allocations: If actual effort differs from budget, adjust

Consequences of Poor Time Documentation

• Questioned costs requiring repayment
• Audit findings affecting future funding
• Potential fraud allegations for false certifications
• Organizational reputation damage

Time and effort certification is a legal statement. Treat it seriously.

Federal Procurement Requirements

Grants involving federal funds must follow specific procurement rules.

Procurement Methods by Amount

| Dollar Amount | Required Method | |---------------|-----------------| | Micro-purchase (under $10,000) | Reasonable price | | Small purchase ($10,000-$250,000) | Price quotes from multiple sources | | Large purchase (over $250,000) | Competitive bids or proposals |

Thresholds may vary; check specific grant requirements.

Required Procurement Documentation

• Description of need
• Method used and justification
• Quotes/bids received
• Basis for selection
• Conflict of interest disclosure

Conflicts of Interest in Procurement

No purchasing from:

• Employees or their family members
• Board members or their family members
• Organizations where staff/board have financial interest

Without full disclosure and approval.

Financial Reporting

SF-425: Federal Financial Report

Most federal grants require SF-425 reporting:

Typical frequency: Quarterly or annually

Content:

• Federal funds authorized
• Federal funds drawn
• Expenditures by category
• Unliquidated obligations
• Recipient share (match)

Due dates: Usually 30-90 days after reporting period end

Tip: Reconcile grant accounts monthly to avoid end-of-quarter scrambles.

Cash Management

Drawdowns: Request federal funds as needed—not too early (violates cash management rules) or too late (cash flow problems).

Interest: Interest earned on federal funds may need to be returned or reported.

Reconciliation: Monthly reconciliation between grant expenditures and drawdowns.

Programmatic Reporting

Progress Reports

Most grants require periodic progress reports:

Common elements:

• Progress toward objectives
• Activities completed
• Outputs achieved
• Challenges encountered
• Plans for next period

Quality matters: Progress reports influence renewal decisions. Don't treat them as bureaucratic exercises.

Performance Measurement

Track outcomes throughout implementation:

• Collect data at established intervals
• Compare actual to proposed targets
• Identify variances early
• Adjust activities if outcomes lag

Don't wait until final report to discover you're not achieving goals.

Record Retention and Audit Readiness

Retention Requirements

Federal grants require record retention for:

• Minimum 3 years after grant closeout
• Longer if audit findings are pending
• Longer for records related to property or equipment

The "Grant Binder" Approach

Maintain organized files for each grant:

Award documents:

• Notice of award
• Terms and conditions
• Approved budget
• Approved scope

Financial records:

• Monthly expenditure reports
• Drawdown documentation
• Budget modifications

Programmatic records:

• Progress reports
• Outcome data
• Participant records
• Activity logs

Compliance documentation:

• Time and effort records
• Procurement files
• Conflict of interest disclosures

Single Audit Requirements

Organizations expending $750,000 or more in federal funds annually must complete a Single Audit:

• Independent audit of federal programs
• Compliance testing
• Findings reported to federal agencies
• Available publicly through Federal Audit Clearinghouse

Single Audit findings can affect future federal funding. Take them seriously.

Budget Modifications

When Modifications Are Needed

Common reasons for budget modifications:

• Actual costs differ from estimates
• Program changes require different resources
• Savings in one category needed elsewhere
• Personnel changes affect salaries

Types of Modifications

Within categorical flexibility: Many grants allow moving funds between categories (often up to 10%) without approval.

Requiring prior approval:

• Moving funds beyond flexibility limits
• Adding new budget categories
• Significant scope changes
• No-cost extensions

Requesting Modifications

• Justify the need clearly
• Explain how change benefits the program
• Document that grant purposes will still be achieved
• Request in writing through appropriate channels
• Wait for approval before implementing

Common Compliance Failures

Most Frequent Audit Findings

1. Inadequate time and effort documentation
2. Procurement violations
3. Unallowable costs charged
4. Missing supporting documentation
5. Failure to meet match requirements
6. Late or missing reports

Consequences of Non-Compliance

• Questioned costs requiring repayment
• Suspended or terminated awards
• Special conditions on future awards
• Debarment from federal funding
• Damaged organizational reputation

Prevention Strategies

• Train all staff on requirements
• Establish clear procedures
• Monitor compliance regularly
• Address problems immediately
• Seek guidance when uncertain

Ready to Master Post-Award Management?

This article covers Week 13 of "The Grant Architect"—a comprehensive 16-week grant writing course that transforms grant seekers into strategic professionals. Learn compliance fundamentals, reporting requirements, and audit readiness practices that protect organizational reputation.