Last week we looked at The Top 5 Mistakes Every Grant Manager Should Know: Part I.
Today we are continuing our series by exploring the final three common types of issues that surface in Federal awards.
These mistakes are so common that the Federal Audit Clearinghouse uses standard codes for reporting them when audit data is reported.
Have you seen any of these?
Mistake #3 Timing Mistakes
The third type of common mistake category is timing mistakes.
Cash Management
The first one has to do with cash management.
This one typically affects a very small group of people at your organization-but it is one auditors LOVE to look for.
In short, when organizations get Federal funds advanced to them, sometimes they take the money too soon.
I’ll just give you an extreme example:
Let’s say that you draw $1 million in advances, but you don’t actually pay the contractors until six months later.
This would be a violation of the grant management regulations because you’re taking those advances too soon.
You have a duty to make sure that you’re only taking what you need to pay your immediate cash requirements.
Timely Reporting
The next area of timing mistakes has to do with reporting.
Though it may seem odd in this time of online calendars and reminders, sometimes reports are filed too late.
It can be inadvertent or deliberate. (For example-no one wants to be the bearer of bad news.)
But either way, it’s a common type of grant management mistake that will lead to problems.
Spending Too Soon or Too Late
And finally, just like the Goldilocks dilemma, spending the funds too soon or too late can get you into trouble.
Spending outside the period of performance is a common timing mistake.
It can be spending funds after the period of performance while trying to get things wrapped up or get all the money spent.
It can also include spending before the award is started because you want to get the project rolling along.
Whether it’s too early or too late, that’s what these timing mistakes are all about.
Mistake #4 Tracking Mistakes
The fourth category is tracking mistakes.
This has to do primarily with equipment and real property.
Sometimes organizations will buy equipment and in short order nobody really knows where it is.
As an award recipient, you need to track where it is, what condition it’s in and if you still need it.
You not only need to do a physical inventory every two years but you also have requirements for reporting every year.
And if you are disposing of the equipment or property, you also need to know who has a share in the purchase.
Otherwise you could sell it and then either give too much or not enough back to the Federal government.
Mistake #5 Procedural Mistakes
Finally, the last category of common mistakes is procedural mistakes.
This happens when there are certain terms and conditions written into the award that either the procurement people or others are not aware of.
Written Procedures
For example, when it comes to procurement with Federal funds, there is a requirement for you to have written procurement procedures.
It doesn’t matter if you have the most wonderful process in the world!
If you haven’t actually put pen to paper or typed it on the keyboard—you are not in compliance with the grant regulations to have those written procedures in place.
Suspension and Debarment
Suspension and debarment is another common area of procedural mistakes.
It should be simple to comply, but all too often the required documentation is missing.
What to do?
The easiest way that we’ve found to comply with this procedural requirement is to print out the screen shot when you do the search on whether or not an organization, contractor or individual is suspended Grant Manager Should Know or debarred through the system for award management. (also known as SAM.gov)
The screen shot will document that you checked, who you checked and when you checked.
Matching and Cost-share
Finally, matching and cost-share have their own unique set of rules that it can be easy to overlook.
Sometimes individuals in organizations are not aware that their matching and cost-share needs to happen on a certain schedule as the Federal dollars are spent Grant Manager Should Know .
Ignorance is no defense when it comes to managing grants, so make sure special requirements get communicated.
Coming Soon: Mistakes Will Be Easier to Spot
All of these are examples of our top 5 grant management mistakes.
What you may not have been aware of it that the new grant guidance and the new analytical tools that that Federal agencies will be using are going to make these types of things Grant Manager Should Know a lot more obvious to the funding agencies than it ever before.
It’s Simple: S-M-T-T-P = Spending, Monitoring, Timing, Tracking, Procedural
So as I think about those five mistakes: Spending, Monitoring, Timing, Tracking and Procedural mistakes—let’s shift it into a more positive light.
S-M-T-T-P also stands for “Spend More Time Training People.”
Because the truth is, that you’re either going to spend the time on the front-end showing people how to do it the right way, or on the back end with a corrective action plan and a potentially costly repayment of disallowed costs.
It’s your choice!
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!
Author:
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.
