Post-Award Grant Management: A Practical Guide

Post-award grant management is everything an organization does between receiving a notice of award and closing the award out: accepting the terms, setting up the budget and accounts, spending only on allowable costs, drawing down funds, getting approval for changes, reporting, monitoring any subrecipients, and completing closeout. For federal grants the rules come from the Uniform Guidance (2 CFR 200), the agency's own grants policy, and the specific terms in your notice of award. It is the longest phase of the grant lifecycle and the one where repayment demands and audit findings originate.

Start with the notice of award

The notice of award is the contract. Before anyone spends a dollar, read it end to end and extract:

• the period of performance and the budget period
• the approved budget by category and any costs the agency disallowed or restricted
• special conditions, such as a requirement to submit a revised budget or obtain approval before a particular activity
• reporting requirements and due dates
• the payment method and payment system
• the program officer and grants management specialist, who have different jobs: the program officer handles the project's substance, and the grants management specialist handles the financial and administrative terms

Some agencies treat your first drawdown as acceptance of the award terms, HHS among them, so the terms bind you whether or not anyone read them.

The first 30 days: setup

Most post-award trouble traces back to a rushed setup. A workable checklist:

1. Create a separate account or cost center for the award in your accounting system and load the approved budget by category.
2. Hold a kickoff meeting with program, finance, and leadership to walk through the budget, restrictions, and who approves what.
3. Build the reporting and compliance calendar, with an internal deadline and an owner for each item. Our guide to grant reporting requirements lists what federal and foundation funders require and when.
4. Issue subawards if the project includes partners, with the terms the Uniform Guidance requires.
5. Set up effort documentation for every person paid from the award.
6. Confirm your SAM.gov registration is active and calendar its annual renewal; a lapsed registration can block payments. Our SAM.gov and UEI walkthrough covers renewal.

Spending: the cost tests

Every cost charged to a federal award must pass the tests in 2 CFR 200 Subpart E. In practice, auditors ask four questions about each charge:

• Is it allowable? Permitted by the cost principles, the program's rules, and your award terms. Alcohol, lobbying, fundraising, entertainment, and bad debts are unallowable under the cost principles.
• Is it allocable? It benefits this award in proportion to the amount charged. A cost shared across programs must be split by a documented method.
• Is it reasonable? A prudent person would have paid it, given market prices and your own policies.
• Is it documented? Invoices, approvals, and for salaries, records that reflect the work actually performed.

Two thresholds from the 2024 revision of the Uniform Guidance come up constantly: equipment is property costing $10,000 or more per unit with a useful life of more than one year, and the de minimis indirect cost rate for organizations without a negotiated rate is up to 15 percent of modified total direct costs. Our guides to direct versus indirect costs and negotiated indirect cost rates explain how those categories work.

Salaries are the largest line in most awards and the most common finding. The Uniform Guidance no longer prescribes a specific certification form, but your records must be supported by a system of internal control and reflect the actual work each person did on each award.

Drawdowns

A drawdown is a request for federal cash. Most HHS awards are paid through the Payment Management System, and many other agencies use the Treasury's Automated Standard Application for Payments.

The rules are simple to state and easy to break:

• Draw only for costs you have paid or will pay almost immediately. Federal cash is not meant to sit in your account.
• Interest earned on federal advances above $500 a year must be remitted.
• Reconcile drawdowns to your general ledger every month. The cumulative cash drawn on your Federal Financial Report must match your books.

Changes that need prior approval

Projects change. Under 2 CFR 200.308, certain changes require the agency's written prior approval before you make them, including:

• a change in scope or objectives
• a change in a key person named in the award, or a key person's absence for more than three months or a 25 percent reduction in their time
• subawarding work that was not in the approved application
• moving funds out of participant support costs
• adding costs that the cost principles say need prior approval

Smaller budget shifts between categories are often allowed without approval, but limits vary by agency and award size, so check your terms. Where the agency allows it, as is common for research awards, a recipient may extend the period of performance once, by up to 12 months, by notifying the agency at least 10 days before the end date; a no-cost extension simply to spend leftover money is not a valid reason.

Internal controls and procurement

2 CFR 200.303 requires internal controls consistent with the Government Accountability Office's "Green Book" or the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. For a small organization that means:

• Segregation of duties, so one person cannot both approve and record a payment
• Written procurement procedures that meet 2 CFR 200.317 through 200.327, including competition requirements and conflict of interest rules
• Written policies for travel, timekeeping, and cost allocation that you actually follow
• Records retained for three years from the submission of the final financial report

Monitoring subrecipients

If you pass funds to a partner that carries out part of the project, you are a pass-through entity, and 2 CFR 200.332 makes you responsible for that subrecipient. You must evaluate its risk before issuing the subaward, include required federal information in the agreement, review its financial and performance reports, follow up on problems, and verify that it has a single audit when required. Distinguishing a subrecipient from a contractor is the first decision: a subrecipient carries out part of the program and makes programmatic decisions; a contractor sells goods or services.

Closeout

Under 2 CFR 200.344, a federal recipient has 120 calendar days after the period of performance ends to submit all final financial, performance, and other reports and to liquidate all obligations. Subrecipients have 90 days, or less if the pass-through entity sets an earlier date. Unspent cash must be returned. The agency aims to complete its side of closeout within one year.

Closeout surfaces whatever was ignored during the award: unreconciled drawdowns, missing effort records, unapproved budget changes. Organizations that reconcile monthly find closeout routine.

The audit connection

A nonprofit, university, or local government that spends $1,000,000 or more in federal awards in a fiscal year beginning on or after October 1, 2024, must have a single audit. The auditor tests exactly the areas above: allowable costs, cash management, reporting, procurement, and subrecipient monitoring. Our explainer on the single audit under 2 CFR 200 covers how to prepare, and our introduction to the Uniform Guidance is the place to start if these rules are new to you.

Organizations carrying several awards often move this work into dedicated software; our guide to choosing grant management software covers when that makes sense. If you would rather hand the administration off, our grant management service takes on the post-award work.