Grant management is not just about doing everything right-it also can involve steering clear of situations that can lead you astray.
Here are 8 common-but avoidable grant mistakes:
Before you get the Grant:
5 Warning Signs of Grant Fraud
According to the Better Business Bureau (BBB) these five warning signs should alert an organization that offers for Federal grants may be fraudulent:
#1 You are contacted by someone offering you unsolicited grant funds in exchange for a processing fee.
• The Federal Government does not contact potential recipients to offer them money-or charge you to receive grant payments.
#2 You have to pay a fee to get information about grant opportunities.
• Federal grant opportunities are listed on Grants.gov and there is no cost for the information.
#3 You need to pay fees to apply for a grant.
• While you will likely need to provide financial information in your grant application-a legitimate grant application process will not request fees to submit your application.
#4 You can get a grant funds without having to apply.
• Grant recipients receive federal funds because they have applied for and been awarded grant funding. The Federal government will not call you and offer you money for a grant that you have not applied for.
#5 You are promised grant funds with “no spending strings” attached.
• Grant funds are awarded to states, cities, and institutions of higher learning, non-profits and other types of organizations to accomplish a specific public purpose-no “free” money.
After you get the Grant:
3 Common Forms of Grant Fraud
The National Procurement Fraud Task Force (NPFTF) looked at the three most common fraud scenarios found with existing grant recipients:
#1 Mischarging personal expenses to the grant as business expenses.
• A strong internal compliance and ethics program that encourages the recognition and reporting of fraud, waste, or abuse and mitigate the risk of mischarging personal expenses to the grant.
#2 Charging the grant for costs which were either not really incurred, or are not really attributable to that specific grant.
• Ensuring your organization has an adequate and effective system of accounting, internal controls, records control, and records retention all reduce the risk that bogus charges will be claimed for the grant-or incorrectly attributed to the grant.
#3 Inflating costs or hours for labor-including contractors and consultants.
• Organizations that put in place strong review and approval processes for labor charging-including whistle-blower processes lessen the chances of labor costs being “ puffed up “inadvertently or fraudulently.
Lucy Morgan CPA, MBA
CEO, Compliance Warrior
P.S. Making sure that grant funds are spent consistent with certain regulations, and appropriate oversight can feel a bit overwhelming.
If you’d like to find out more about how to avoid grant management problems and pitfalls?
Check out Grant Management Boot Camp training that helps that helps people work through these issues.
Click the link below for your type of organization to get more information about our courses and to get signed up.