Post-Award Grant Management: A Compliance Guide for Grant Professionals

Winning the Grant Is Only Half the Battle

After months of research, drafting, and revisions, you finally receive a Notice of Award. Congratulations are in order, but experienced grant professionals know that the real work is just beginning. Post-award management is where organizations either build lasting funder relationships or risk disallowed costs, clawbacks, and reputational damage.

A grant is not a gift. It is a binding agreement with clearly defined obligations for how funds are spent, tracked, and reported. The financial principles established in your original budget now become the framework you must operate within. Understanding these obligations from day one is essential for every grants administrator, program director, and nonprofit leader.

Understanding the Notice of Award

The Notice of Award (NoA) is a legally binding document that outlines the terms and conditions of your grant. Before spending a single dollar, you should carefully review the following elements:

• Award amount and budget period: Know the total funding and the specific period during which funds may be obligated.
• Special conditions: Some awards carry restrictions such as withholding of funds until certain benchmarks are met or additional approvals for specific activities.
• Reporting deadlines: Both financial and performance reports follow strict schedules, and missing them can jeopardize future funding.

Treat the NoA as your project constitution. Every spending decision and programmatic activity should trace back to its terms.

Grant Setup and Financial Infrastructure

Proper financial setup is the foundation of compliant grant management. The moment an award is received, your finance team should establish the following:

• Restricted account coding: Grant funds must be tracked in a dedicated account or fund code, separate from general operating revenue.
• Fund segregation: Federal and state regulations require that grant dollars are not commingled with other revenue streams.
• Budget tracking systems: Establish line-item tracking that mirrors the approved budget so that expenditures can be monitored in real time against each budget category.

Internal Controls and Fraud Prevention

Internal controls are the policies and procedures that prevent errors and fraud. At their core, they rely on a principle called separation of duties. No single individual should be responsible for authorizing, recording, and reconciling transactions. For example, the person who approves a purchase order should not be the same person who writes the check or reconciles the bank statement.

Auditors look specifically at whether your organization has documented internal control procedures, and whether staff actually follow them. Even small organizations can implement proportionate controls such as dual signatures on checks over a certain threshold or independent review of expense reports.

Time and Effort Reporting

Time and effort reporting is consistently one of the most frequently cited findings in federal grant audits. If staff members are paid from grant funds, you must be able to document that the time they charged to the grant reflects actual work performed on grant-funded activities.

This means maintaining timesheets, personnel activity reports, or equivalent documentation that accounts for 100% of an employee's compensated time, not just the portion charged to the grant. Semi-annual certifications may suffice for staff dedicated entirely to one program, but anyone splitting time across multiple funding sources needs more detailed tracking.

Procurement Standards

When purchasing goods and services with grant funds, organizations must follow specific procurement thresholds:

• Micro-purchases (currently up to $10,000): May be made without competitive quotes, though you should still ensure price reasonableness.
• Simplified acquisition ($10,000 to $250,000): Requires price or rate quotations from an adequate number of qualified sources.
• Competitive bidding (above $250,000): Requires formal sealed bids or competitive proposals with documented evaluation criteria.

Document every procurement decision thoroughly. These thresholds mirror the ones discussed in our article on advanced grant budgeting strategies, and getting them wrong during implementation is one of the most common audit findings. Sole-source justifications require written rationale and, in many cases, prior approval from the funder.

Reporting Requirements and Prior Approvals

Grant recipients must submit regular financial reports, often using the SF-425 (Federal Financial Report), as well as performance reports demonstrating programmatic progress. These are not formalities; funders use them to evaluate whether continued funding is warranted.

Certain changes during the grant period require prior written approval from the funder before implementation. Common triggers include:

• Changes to key personnel or project directors
• Modifications to the project scope or objectives
• Budget revisions that shift more than 10% of total costs between categories
• No-cost extensions to the project period

Implementing these changes without approval can result in disallowed costs or termination of the award.

Audit Readiness and Grant Closeout

Organizations that expend $750,000 or more in federal awards during a fiscal year are required to undergo a Single Audit under the Uniform Guidance. Even if your organization falls below this threshold, maintaining audit-ready records is a best practice.

All grant records must be retained for a minimum of three years after the final closeout report is submitted. Closeout itself involves submitting final financial and performance reports, returning any unobligated funds, accounting for property and equipment purchased with grant funds, and ensuring all terms and conditions have been met.

Key Takeaway

Post-award management is where grant professionalism truly shows. The organizations that build robust systems for tracking, reporting, and compliance are the ones that earn repeat funding and expand their impact year after year. For professionals looking to build these competencies into a long-term career, our guide to grant writing career paths explores the trajectory from grant writer to grants director.

If you want to master every stage of the grant lifecycle, from prospect research through post-award compliance and closeout, The Complete Grant Architect course provides a comprehensive, 16-week curriculum designed to transform you into a strategic grant professional. Enroll today and build the skills that set top-tier grant managers apart.