When you work with federal grants, it’s just a matter of time before someone says “We need the prior approval of the funder” to do this or that. But this vague term “prior approval” may leave you wondering two important questions when you manage grants:
- When does 2 CFR Part 200 aka the Uniform Guidance say we need to get prior approval?
- Who do we ask for prior approval?
In this article, I’m going to tackle both of these questions, so you know what to expect as a federal grant manager AND who to talk with when you need your funder to agree to one of the many areas that require their involvement.
When Do We Need Prior Approval for Our Federal Grant?
The Uniform Guidance (2 CFR Part 200) describes twenty-two different categories where prior approval may be required for the grant recipient in 2 CFR Part § 200.407 Prior written approval.
These categories for prior written approval range from employee-related areas such as compensation and travel, to items such as cost-share and budget revisions. In fact, the word approval appears ninety times in the Uniform Guidance, with prior approval making up thirty-three of those times and prior written approval coming in a close second with twenty-three mentions.
§ 200.407 Prior written approval.From 2 CFR Part § 200.407 Prior written approval (prior approval).
Under any given Federal award, the reasonableness and allocability of certain items of costs may be difficult to determine. In order to avoid subsequent disallowance or dispute based on unreasonableness or nonallocability, the non-Federal entity may seek the prior written approval of the cognizant agency for indirect costs or the Federal awarding agency in advance of the incurrence of special or unusual costs. Prior written approval should include the timeframe or scope of the agreement. The absence of prior written approval on any element of cost will not, in itself, affect the reasonableness or allocability of that element, unless prior approval is specifically required for allowability as described under certain circumstances in the following sections of this part:
(a) § 200.201 Use of grant agreements (including fixed amount awards), cooperative agreements, and contracts, paragraph (b)(5);
(b) § 200.306 Cost sharing or matching;
(c) § 200.307 Program income;
(d) § 200.308 Revision of budget and program plans;
(e) § 200.332 Fixed amount subawards;
(f) § 200.413 Direct costs, paragraph (c);
(g) § 200.430 Compensation—personal services, paragraph (h);
(h) § 200.431 Compensation—fringe benefits;
(i) § 200.438 Entertainment costs;
(j) § 200.439 Equipment and other capital expenditures;
(k) § 200.440 Exchange rates;
(l) § 200.441 Fines, penalties, damages and other settlements;
(m) § 200.442 Fund raising and investment management costs;
(n) § 200.445 Goods or services for personal use;
(o) § 200.447 Insurance and indemnification;
(p) § 200.454 Memberships, subscriptions, and professional activity costs, paragraph (c);
(q) § 200.455 Organization costs;
(r) § 200.456 Participant support costs;
(s) § 200.458 Pre-award costs;
(t) § 200.462 Rearrangement and reconversion costs;
(u) § 200.467 Selling and marketing costs; and
(v) § 200.474 Travel costs.
So as you can see there are many potential places you need to talk with your funding agency about your federal grant to stay in compliance and out of trouble.
Who Can Approve Prior Approval Requests for Federal Grants?
Just when you thought grant management couldn’t get any more complicated, then you realize you aren’t sure who is the RIGHT person to ask for prior approval.
And this part is tricky because the grant regulations don’t really tell you who to talk with at your funding agency.
When you manage a federal grant, you probably do most of your interacting with the Federal Program Officer (PO) for your grant. So, it seems logical that this would be the person who would approve your prior approval requests.
But even though that seems to be the logical choice, that is NOT the correct choice for most prior approval. Instead, most approvals must be routed through the Grant Management Officer (GMO) at the federal agency.
The Difference Between Federal Program Officers and Grant Management Officers & Specialists
The organization; StrengtheningNonprofits.org put together a nice comparison of the roles and responsibilities between the different federal agency personal that grant recipients interact with that I have shared below:
There are two Federal officers that oversee your grant.Source:
There are usually two Federal entities that play a role in overseeing your grant: the grant management officer and the program officer. The grants management officer (GMO) is the official responsible for the business management and other non-programmatic aspects of an award. These activities include, but are not limited to:
Evaluating grant applications for administrative content and compliance with statutes, regulations, and guidelines
Providing consultation and technical assistance to applicants and recipients, including interpretation of grants administration policies and provisions
Administering and closing out grants
The GMO, or an assigned grants management specialist working on behalf of the GMO, is usually responsible for receiving and acting on requests for prior approval or for changes in the terms and conditions of the award. The GMO is the only official authorized to obligate the agency to the expenditure of Federal funds or to change the funding, duration, or other terms and conditions of an award.
Program officers (POs) have a vested interest in the success of your program and are responsible for the programmatic, scientific, and/or technical aspects of assigned applications and grants. They have the following responsibilities related to the grant:
Providing programmatic technical assistance
Monitoring performance of the project/program, including reviewing progress reports and making site visits to observe operations
Performing other activities complementary to those of the GMO (The PO and the GMO work as a team in many of these activities.)
I hope this helps you better understand the prior approval requirements for your federal grant.
I also encourage you to check out my article about Grant Management-7 Things Your Program Officer Needs to Hear You Say to learn more about the ways to improve your communication with your federal Program Officers.
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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.