Grants Management

---
description: "Federal and state grant lifecycle management: pre-award application (NOFO analysis, project narrative, budget, SF-424 family), post-award setup (Notice of Award review, restricted-fund structure), ongoing management (drawdowns, budget modifications, subrecipient monitoring, progress reporting), closeout, and single audit readiness under 2 CFR 200 (Uniform Guidance)."
---

# Grants Management

**Purpose:** manage federal and state grants from application through closeout and single audit —
every decision framed against 2 CFR 200 (Uniform Guidance) and the applicable program statute.

---

## Phase 1 — Pre-Award: Application Development

1. **Read the NOFO in full.** Identify: eligibility requirements, selection criteria and weights,
   application format, required forms (SF-424 family), budget categories allowed/restricted,
   match/cost-share requirements, period of performance, submission deadline and portal (grants.gov,
   Workspace, agency portal).
2. **Needs assessment:** quantify the problem with data. Selection criteria typically require
   demonstrated need — population served, gap analysis, baseline data.
3. **Project design:** SMART goals (Specific, Measurable, Achievable, Relevant, Time-bound) mapped
   to each selection criterion. Logic model (inputs / activities / outputs / outcomes).
4. **Budget development:**
   - Line-item budget by object class (personnel, fringe, travel, equipment, supplies, contractual,
     construction, indirect costs, other).
   - Justification for every line: basis of estimate, why necessary and reasonable for the program.
   - Indirect cost: apply the negotiated indirect cost rate agreement (NICRA) or the de minimis rate
     (10% of modified total direct costs, 2 CFR 200.414(f)).
   - Match/in-kind: document sources, values, and allowability.
5. **Compliance certifications:** SF-424 assurances (non-discrimination, drug-free workplace,
   debarment, lobbying — 2 CFR 200 Appendix II).
6. Submit via grants.gov Workspace — track submission confirmation and agency validation.

---

## Phase 2 — Post-Award Setup

1. **Read the Notice of Award (NoA) completely.** Key elements: award number, period of performance,
   approved budget, special conditions (prior approvals required, reporting schedule, key personnel
   changes), applicable regulations (CFDA/ALN number maps to the program regulation).
2. **Restricted-fund account structure:** set up a dedicated account code or cost center for the
   award. Federal funds must not be commingled with other funds (2 CFR 200.302(b)(3)).
3. **Chart of accounts coding:** every expenditure coded to the award, the applicable budget
   category (object class), and the project activity.
4. **Subrecipient determination:** if passing funds to another organization, determine subrecipient
   vs. contractor status (2 CFR 200.330–332). Subrecipients require a subaward agreement with
   2 CFR 200 flow-down clauses.
5. **Internal controls:** establish policies for drawdowns, payment approval, and documentation
   standards before spending begins (2 CFR 200.303).

---

## Phase 3 — Ongoing Management

### Allowable Costs (2 CFR 200.400–475)

- A cost is allowable if it is: necessary and reasonable, allocable to the award, consistent with
  program regulations, conforms to any limitation in the NoA, adequately documented.
- Unallowable costs (2 CFR 200.420–475): alcoholic beverages, entertainment, fundraising, lobbying,
  bad debts, fines, penalties — these are absolute prohibitions, not judgment calls.
- Document every cost with: invoice/receipt, payment record, description of benefit to the program.

### Budget Modifications (2 CFR 200.308)

- Prior approval required for: rebudgeting >10% of total award between budget categories (for
  non-construction awards where agency has imposed prior-approval requirements), new direct costs
  not approved in original budget, key personnel changes, extensions beyond performance period,
  change in scope.
- Prior-approval request: describe the change, justify the need, certify no change in scope,
  attach revised budget pages.
- Never execute a modification before written agency approval.

### Drawdowns and Financial Reporting

- Draw funds based on cash need — not in advance beyond 3 business days of actual disbursement
  (2 CFR 200.305).
- SF-425 Federal Financial Report: due semi-annually during award, within 90 days of period end.
- Accrual basis reporting: report obligations incurred (costs accrued) not just amounts paid.

### Subrecipient Monitoring (2 CFR 200.331–332)

- Risk assessment of each subrecipient before subaward.
- Pass-down of all applicable 2 CFR 200 requirements in the subaward agreement.
- Monitoring activities: review of financial and programmatic reports, on-site visits, follow-up
  on findings. Document monitoring activities.
- Prime recipient is responsible for subrecipient compliance — "they didn't tell us" is not a defense.

---

## Phase 4 — Closeout (2 CFR 200.344)

1. Final performance report (within 90 days of period end unless agency extends).
2. SF-425 final financial report.
3. Return of unobligated balance.
4. Equipment disposition (2 CFR 200.313): report federally owned equipment; title vests in non-federal
   entity for equipment purchased under grants in most cases — notify agency if disposing.
5. Record retention: 3 years from the date of submission of the final financial report; longer if
   audit is open, litigation is pending, or the award involves real property/equipment.

---

## Phase 5 — Single Audit Readiness (2 CFR 200 Subpart F)

Trigger: ≥ $750,000 in federal award expenditures in a fiscal year.

1. **Schedule of Expenditures of Federal Awards (SEFA):** list every federal award expended during
   the year by CFDA/ALN number, federal agency, pass-through entity, award number, dollar amount.
2. **Major program determination:** Type A programs (≥ $750K or threshold per 2 CFR 200.518);
   Type B (all others). Auditor selects major programs for testing.
3. **Internal control over compliance:** map controls to the 12 compliance requirements in the
   OMB Compliance Supplement for each major program (activities allowed, allowable costs, cash
   management, eligibility, equipment/real property, matching, period of performance, procurement,
   program income, reporting, subrecipient monitoring, special tests).
4. **Finding remediation:** for each prior-year finding, prepare a Corrective Action Plan (CAP) with
   responsible party, timeline, and status.
5. **Auditor cooperation:** provide the SEFA, workpapers, invoices, payroll records, and subrecipient
   monitoring documentation promptly. Delays create findings.

---

## Anti-patterns

- Spending from a grant account before reviewing the NoA terms and conditions.
- Executing budget modifications without prior approval when required.
- Treating subrecipients as contractors (avoids 2 CFR 200 flow-down requirements — but creates audit risk).
- SEFA that omits pass-through awards received.
- Closing out a grant without retaining documentation for the required period.

## Output

A grants management artifact: application package, post-award setup checklist, budget-modification
request, single-audit readiness plan, or closeout package. Reference
[`../../templates/grant-narrative.md`](../../templates/grant-narrative.md) for application structure.