You have been awarded a grant... now what?
You set out to receive grant funds for a project or program. You do everything correct. You connect with the funder, ensure that your project aligns with the funder's initiatives, submit a great application highlighting all of the great work that you will be able to do with the funds if awarded. A few weeks (or months) later, you find out that your have been awarded the grant. Now you can start the work!
This is not the end of the grant cycle. Once you have received the funds, it is important to make sure that you understand the following:
When must the funds be spent?
What reporting is required and what is the frequency?
Will the funder conduct a site review?
What financial reporting is required?
How must the funds be allocated?
It is important to go through the award letter and/or contract to make sure that you are clear on everything the funder wants. If they provide templates, use them! If they give reporting due dates, abide by them! If you are having challenges meeting the deliverables, communicate with them!
The two biggest things that can be challenging with the grant award process: 1) understanding that cash is fungible and 2) accrual accounting.
There are times when the award period may be October 1st thru September 30th of the following year. You may be required to provide quarterly reports, meaning that your reports will be due January, April, June, and September. You may not receive the funds (cash) until mid November. Does this mean that you can either be late on your first quarterly report OR submit data for only 2 of the three months in the quarter? Absolutely not.
If the award year starts October 1st, unless otherwise specified, you must begin providing services and/or spending the funs as of October 1st. The principles of accrual accounting tell us that those funds are considered received as of October 1st, even if the cash has not gotten to your organization. There is an expectation that you are able to begin the services using other cash on hand (ie. cash is fungible). The federal government is notorious for providing funds weeks (sometimes months) after the award, but still wanting the appropriate reports regardless.
As a small business, this can be extremely challenging. When applying for the grant funds or at award, it is important to request clarification as to whether the funder wants you to start providing services immediately or once they provide the actual funds. From there, you can make better fiscal decisions for your organization.
Being financially responsible is a key component to the grant fund cycle, as that may open the door for additional funding in the future. Further, it important to know how the funds must be allocated. While you may have submitted a budget indicating how the funds will be spent, a funder make make changes to how they want the funds allocated. This information may be found in the award letter and/or contract.
Cash is fungible. Communication is key. Reporting is mandatory.
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