Grant Requirements – Impact on Organization Infrastructure

For grant recipients, both first time and experienced, understanding the scope of requirements associated with awards can be time consuming, complex, and confusing.  Many of the requirements associated with grants are embedded in the overall constitutional structure of the government and the legislative acts that created the specific agencies and programs.  Add to that the fact that agencies have the ability to impose additional restrictions and requirements on grant recipients through specific grant agreements and you have a multitude of requirements to identify and meet.

Many times businesses pursue grants as a “free” funding source without fully understanding the implications on the infrastructure and operations of the business – including recordkeeping, regulatory, and accounting system requirements.  The requirements and restrictions placed on organizations from the moment a grant is awarded can be quite extensive.  An organization which does not have or has not planned for new business processes and systems to meet compliance requirements is often faced with a short amount of time to get adequate controls and systems into place.

Each grant agreement generally spells out any special terms, restrictions, or requirements the organization needs for compliance that are unique to the specific award.  However, the “usual and customary” requirements may be incorporated through reference to a specific regulation, etc. or may be implied through the grant application and award process.  Each organization receiving an award (or multiple awards through a single agency or multiple agencies) is responsible for understanding the scope of requirements, restrictions, and regulations they are accepting in return for the grant funding.

By signing a grant agreement, the signatory is accepting and acknowledging the organization’s obligation to comply with ALL requirements, whether directly spelled out or incorporated through reference or practice. Failure to comply with that clause can result in debarment and/or being required to repay the grant (at a minimum).

So how do you decide whether to pursue a grant or accept an award?
    Review applicable requirements of granting agencies
    Inquire about any possible additional requirements that may be placed upon a specific award (Homeland and National Security related, for example)
    Analyze the impact on implementing new systems or making changes to existing systems

Grants are meant to cover some development costs related to proof of concept. They are not meant as a sole means of funding technology innovation or development, nor are they meant to fund research for the sake of research.  Grants are meant as a means of supporting organizations’ efforts to identify and develop technology and products with commercial potential.

Grants can significantly impact all of these areas:
    Intellectual property ownership
    Accounting
    Human resources
    Commercialization efforts
    Physical asset ownership
    Other systems and processes

Take time to evaluate your existing operations and understand the ramifications and advantages to pursuing grants as a funding source, BEFORE you apply for your first grant.  If you have already applied, then take time before accepting the award to understand what changes your existing organization will need to implement if you receive the award.  If you have applied for your first grant and have just begun establishing your business, seek out experienced companies and experts to aid you in formulating your business’ infrastructure and system.  If you are an experienced grant recipient, you may want to consider having a review of your current processes and system to look for opportunities to improve operations and reduce cost of compliance.

Copyright © 2007 F.O.C.U.S. Resource, Inc.

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