As a grant manager with the biggest Type A personality, my worst nightmare is having to scramble for a funder’s site visit or audit. My theory is that daily management meant I was always prepared for whatever a funder threw my way.
What things should you be prepared for? And how do you ensure you don’t spend days running around like a chicken with your head cut off before anyone arrives to look at your grant “books”? Your favorite overachiever (IT ME) is here to keep your ducks (and chickens) in a row.
Private funders often like to conduct site visits as part of the application process. That’s a whole different experience than funders (both private and public) visiting during your grant implementation period, and the latter is what we’re focused on here.
Curious why a funder even wants to visit your organization? There are a ton of reasons, including:
• Evaluating your organization’s capacity and compliance with grant regulations – They want to make sure you have your paperwork in order, that key players understand their role, and that your organizational policies and procedures are being followed.
• Witnessing your program in action – If your application says you’re conducting certain activities from 8am – 5pm, Monday-Friday, they want to see that said activities are actually occurring as spelled out in your grant proposal. Did you report that a piece of equipment was purchased and being used? Well, they want to see it for themselves.
• Building relationships – Funders are people, too. And it helps them to have face-to-face conversations and interactions with their grantees. They can better understand our organization, the people and places we serve, and our needs if they see our programs in action. The better we understand each other, the better our future relationship.
• Investigating concerns – If your organization is steadily late on submitting reports or isn’t spending grant funds in a timely fashion, the funder may wonder what other roadblocks are happening with our grant program. A site visit helps them grasp fully whatever is going on and gives them an opportunity to dole out helpful advice to get us back on track.
No matter the reason for the site visit, you want to always look at it as an opportunity to wow your funder with your grant management prowess. When a funder schedules a site visit, you should:
• Ensure you have the right people there. If the funder asks for your Executive Director to attend, make sure the Executive Director is there. If they don’t request specific employees, you can put the right team together. It’s a good idea to include someone from finance, your program director, and any other key players in managing your grant and the associated program/project.
• Make sure your grant files are up to date. This includes all required reports, expenses (and reimbursement requests), the original application, award agreement, and any other relevant information.
• Reserve a quiet space for your meeting and bring all relevant files.
• Be prepared to answer all their questions, but if you don’t know an answer, it is okay to tell them you’ll track that information down and get it back to them quickly. (Then follow-up with an email as soon as possible.)
• Be ready to show them the project in action, if that is feasible. (There can be client privacy reasons for not allowing a funder to visit a program in process.)
• Understand that the funder may leave you with suggestions for improvement, and it’s important to make relevant changes shortly after their visit.
Once this site visit is complete, it’s smart to reach out to the funder to thank them for their visit and share any updates that have been made as a result of said visit.
If you want a more in-depth look at site visits, check out the Grant Professionals Association Journal article “Strategies for Successful Site Visits: Tips and Techniques for Grant Professionals and Managers” that Kimberly co-authored with fellow grant professionals Danny Blitch, Eden Freeman, and Margit Brazda Poirier in 2010. You can read it HERE.
If your agency is prepared to handle federal grant funds, chances are an accounting firm is hired to conduct an annual financial statement audit. Some may refer to this as a basic audit, and auditors follow Generally Accepted Auditing Standards (GAAS).
While grants are not the focus of said audits, it is likely that grants will be one of the aspects reviewed. If you’re the grant manager, you should be prepared to spend a day (or more) with your agency’s hired auditors.
Preparing for an audit is much like a site visit. The difference is you’re not meeting with a particular funder, but a hired auditor who will want to look at a smattering of your grant programs. They are mainly focused on the processes and procedures followed to ensure all grant funding is accounted for and grant regulations are met.
Your best bet is to conduct grant management every day of the year. This way, you aren’t stuck spending days on end trying to document everything in the days leading up to the audit. Here’s what I mean by that:
• Every time you submit a report (financial, narrative, or other) to your funder, include a copy in your files.
• Keep a copy of every receipt, invoice, purchase order, check, etc. included as part of a purchase. Make sure you track every penny spent and have documentation in place to show you followed your agency’s procurement policy. For example, if your policy requires three quotes when purchasing items or services between $5,000 and $50,000, then keep copies of the three (or more) quotes you received.
• Make sure you have a copy of your organization grant application and the signed award agreement. If there have been any amendments to the award agreement, keep copies of those too.
• If you have requested any changes to your program, whether it’s a budget amendment or a change in scope of services, keep a copy of the original request and the approval of said change/amendment.
• If you are funding any contract work, make sure you have a signed and dated copy of the contract.
• Pay special attention to the special conditions section of the grant award agreement. If it says you must prove you followed the Buy American policy, then have documents that prove purchases were made in America. If you have to give a preference to hiring Veterans for a grant funded position, then provide documentation to show you gave said preference.
• If you are using grant or matching funds for someone’s time, then be sure to have documentation that shows the time they worked on the project.
• If you used grant funding to hire individuals, have copies of documentation where you advertised the position, the job description, and any other relevant documentation of the hiring process.
As you can see, grant management can include A LOT of paperwork. So, if you constantly collect relevant documents as you go, then you are ready for an audit any day of the year. Avoiding the last minute scramble means less stress for you as a grant manager.
If your agency spends (not gets awarded) more than $1,000,000 in federal funds during your fiscal year, then you are required to have a single audit. You can read about that requirement HERE and HERE.
This audit is conducted by the same agency you hire to conduct your annual audit. The big difference is that they will spend a lot more time paying attention to your grant funding.
To determine if you need a single audit, it’s best to start by building your Schedule of Expenditure of Federal Awards (SEFA). A SEFA is a simple spreadsheet that includes the following details for all cash and non-cash (food, medical supplies, etc.) federal assistance:
• Name of federal funding agency
• Name of pass-through entity (if applicable) – often this is a state agency, but not always
• Name of grant program
• Assistance Listing Number (formerly the Catalogue of Federal Domestic Assistance (CFDA) number)
• Federal award amount
• Match requirement (if applicable)
• Award date
• Period of performance
• Federal amount expended during your agency’s fiscal year
You then total the amount of that last item, and if it exceeds a million dollars, then your agency needs a single audit. I typically took the first stab at creating this spreadsheet, then finance would compare to their files. If there were any discrepancies, we’d work together to figure out who had the error.
Once your agency’s single audit is completed, it should be uploaded to the Federal Audit Clearinghouse HERE.
Fun fact, the Inspector General Act of 1978 was passed in the wake of the Watergate Scandal, as a means of ensuring integrity and accountability in the Executive Branch. The law created independent and objective organizations to conduct and supervise audits and investigations in relation to agency programs and operations. Each federal agency has its own OIG.
If your agency has a federal grant award, the OIG can show up unannounced to investigate for many reasons, including:
• An anonymous tip
• Negative information found in the news or a report
• Poor grant management
I had the “pleasure” of starting work at an organization when they were in the middle of closing out the findings from a recent OIG visit. Here’s what I learned about this type of audit:
(1) The easiest way to handle the OIG is to avoid a visit from them in the first place. I know, it sounds obvious. The reality is that many people leave grant management to the last minute. When you are juggling a multitude of responsibilities at work, it is easy to push grant work aside for later. But in doing so you are risking overlooking a report, rule, regulation, or requirement of the grant award. Make grant management your number one priority.
(2) Real estate agents say it’s all about location, location, location. For grant managers, it’s all about documentation, documentation, documentation. If you can’t prove how you spent the money, engaged your community, or implemented your program, then your funder is going to assume you did it wrong or not at all.
(3) The OIG assigns a liaison to walk you through the audit close out process. Listen to your liaison. They dole out great advice and lead you through the process. (P.S. It didn’t hurt that mine sounded like Barry White.)
(4) I am not an accountant, and many of the findings revolved around how money was spent on salaries for the hired staff members. I cannot stress this enough: finance coworkers are worth their weight in gold. Cultivate these relationships.
(5) Grant management is a team effort. Grant managers, program officers, finance folks, and a multitude of your coworkers and their knowledge are needed to make sure every grant requirement is accurately fulfilled. But it does not end there. Executive Directors, City Managers, University Presidents, and other bosses along with your board or council need to understand the value of grant management and make it a priority for your organization. It is important that everyone understands their role from the outset.
I’ve survived my share of site visits, annual audits, single audits, and one OIG audit. If you haven’t figured it out already, my best advice is to always stay on top of grant management. Item #5 on the OIG list is a great strategy for handling all visits from funders and auditors. Trust me.
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