Chances are, if you are the lone grant professional at your organization, you’re swamped with work. Heck, even if you are part of a larger grant team, you’re probably overwhelmed. Everyone needs funding NOW. Which means grant prospect research and proposal development are your focus. And that is important. But if your organization does not have robust grant policies and procedures in place, you’ll regret it down the line.
Why does it matter? Good policies protect your organization, build funder confidence, and support your mission. It also makes your job easier, as everyone in your organization understands the role that each of them plays in grant work.
Strong policies and procedures are especially important if your organization receives federal grant funding. Consequences of noncompliance with federal award requirements include:
- Repayment of funds,
- Loss of eligibility for future funding,
- Negative audit findings,
- Legal and reputational risks, and
- Program disruption and community impact.
On the flip side, strong policies help ensure:
- Audit readiness and peace of mind,
- Increased funding opportunities,
- Stronger internal controls and reduced risk,
- Staff empowerment and clarity, and
- Mission focus and sustainability.
When building your grant management policies, consider starting with the following categories.
- Financial Management Policies – These outline how you track, report, and safeguard grant funds. They should address budgeting, allowable costs, and internal controls to prevent fraud or misuse of funds.
- Procurement Standards – Federal rules require fair, open, and competitive purchasing. Your policy should explain how you select vendors, document decisions, and avoid conflicts of interest. For example, you must have thresholds for when to get quotes or bids and rules for sole-source purchases.
- Conflict of Interest & Ethics – This policy ensures that staff and board members don’t benefit personally from grant decisions. It should require disclosure of potential conflicts and outline steps for recusal.
- Record Retention & Documentation – You must keep records for a minimum period – usually 3-5 years after the grant ends – and be able to produce them during audits. This includes financial records, meeting minutes, and correspondence.
- Subrecipient Monitoring – If you pass funds to partners, you’re responsible for ensuring they follow the rules too. This means having a policy for selecting, monitoring, and supporting subrecipients.
The Uniform Guidance (2 CFR, Part 200) which outlines the federal requirements of having internal controls and appropriate policies and procedures in place for recipients of federal funding does not dictate the specifics of these policies. Rather, they expect each agency to tailor their policies to fit the size, purpose, and resources available to that agency.
Consider the capacity, culture, mission, and compliance requirements when building your agency’s policies. It’s okay to look at the policies of others as a starting point, but you want to tailor them to fit your needs. Be sure to align policies with your size and structure. What works for a state agency will not be the same for a local government with 100 employees. Be sure to balance compliance with practicality. There is no point in creating a 10-step process when a 3-step process works.
When drafting new or updating current policies, be sure to assess your current reality. Start with the essentials (and the five policies listed above are certainly the essentials). Write your policies in plain language so everyone understands the steps and purpose. Once you have your policies in place, do not assume they are set. Test out your procedures and revise as needed. Just because it works on paper does not mean it works in practice.
You want to include staff training and communication along the way. Onboard new staff members with grant policy training, but also include regular refreshers. Monitor the policies’ success with annual reviews. Include checklists, spot checks, and anonymous feedback to find challenges or systems that are not working. That’s when you know it’s time to review your policies and update as needed. What worked two years ago might not work as well today.
Written by: Amanda Day, GPC
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