Ready for a grant compliance “comeback” story?
A while back, I wrote about troubles that the City of Detroit had with federal grant compliance.
The Detroit News reported that the Ford Foundation had donated $127,000 to review the City of Detroit’s federal grant management and recommend how to improve the grant administration process.
At the time, Detroit’s Emergency Manager Kevyn Orr stated he didn’t believe that any of Detroit’s 71 Federal grants complied with the federal regulations.
So, what has happened since then?
I am happy to share a happier ending for the troubled grant administration areas with this recent headline: “City of Detroit Secures $1 Billion in Grant Revenue Since Bankruptcy to Support Residents, Business, & Neighborhoods.”
- Read more at https://detroitmi.gov/news/city-detroit-secures-1-billion-grant-revenue-bankruptcy-support-residents-businesses-neighborhoods
Goal Is Compliance
In the midst of the grant compliance regulations, we can lose sight of the #1 goal of compliance.
The #1 goal of compliance is the ensure that the people we are supposed to help are the ones helped.
It’s that simple.
And it looks like the recommendations that came out of the Ford Foundation grant have helped bring the nearly $300 million in federal grants run through Detroit back into compliance with the Federal regulations.
And a significant increase in total funding prove the point:
- The future of grant management will belong to organizations that take compliance seriously.
Before this turnaround, Detroit has forfeited parts of its Federal awards due to a lack of proper oversight and monitoring.
A few short years later the total grant revenue has increased steadily, with a total of $1 BILLION in grant revenue since exiting bankruptcy
Turning Around Grant Compliance
In the past, Detroit News reported that “every grant-receiving department in the City has performance issues,” according to an internal report.
And historically, three departments: Health, Human Services, and Workforce Development accounted for over 50% of the questioned costs and audit findings.
These three departments were the focus of City officials.
And despite the difficulties, the City of Detroit’s commitment to better grant compliance is delivering results!
2 Shocking Examples of Mismanagement
Here were two examples cited in the article by Detroit News:
“In November 2011, Detroit forfeited more than $9 million in weatherization funding because it didn’t spend it as quickly as other communities.”
(Read this as they didn’t spend the funds by the end of the award period)
“Another audit found a portion of an $11 million grant to provide clothes for 400 low-income job seekers helped only two people between October 2010 and September 2011.”
(Do you think the program objectives have been met?)
Fortunately, the grant compliance focus has turned around the history of audit findings and questioned costs.
Improved compliance attracts additional grant funds
The Benefits of a Commitment to Grant Compliance
In addition to heightened federal review and outside consulting help, the City also introduced a new grant management database and committed to hiring additional staff to monitor the grant compliance process.
Former Mayor Bing claimed that his administration “has made considerable progress in ensuring that grant funds are spent effectively and efficiently.”
He did welcome the additional outside resources to make sure grant funds are appropriately spent.
And the improved compliance has paid off in several ways:
- The City of Detroit has attracted additional grant funds and diversified their funding sources
- The Department of Justice (DOJ) and the Department of Housing and Urban Development (HUD) have removed the City from the high-risk auditee status
- Grant-related findings and questioned costs have decreased dramatically
Chief Development Officer Ryan Friedrichs summed it up best:
“Our goal every day is to help the City compete for the resources that will most enhance the quality of life for Detroit residents. Public and private funders look for accountability and impact as they invest their resources, and Detroit has made great strides on both fronts these past five years.”
In our next post in the series, we’ll look at three foundational suggestions for improving the conditions of grant management in these types of difficult grant compliance situations.
Ready to Improve Your Grant Management?
How about you?
Would you like to be a better grant manager?
We have another grant management training seminar coming soon.
Click here to get all the details!
Hope to see you there!
Lucy Morgan CPA, MBA
CEO, Compliance Warrior
Author of “Decoding Grant Management-The Ultimate Success Guide to the Federal Grant Regulations in 2 CFR Part 200” The 2nd Edition is now available on Amazon in Paperback and Kindle versions.