Your Rules, My Rules, the Government’s Rules

In doing business, there is one thing everyone needs to learn, : there There is never one universal set of rules that applies to everyone. The second thing to know is that there will be exceptions to every set of rules. The third thing to know is that all rules are subject to interpretation, and the group making the rules usually gets the most power in providing the interpretation.

Government Funding and Rules

One Here’s one of the prime examples of interpretation of rules and the diversity of the rules that can apply – : government funding encompasses essentially not only your rules, but also my rules, and the government’s rules comes with government funding. The government has an entire set of rules for how it does business and how organizations are supposed to do business with it…, and how organizations are supposed to do business when using government funds. Those rules differ depending upon the type of transaction, the size of transaction, the particular program under which the transaction takes place, the part of the government involved, and the type of entity or organization the government is working with (your organization). So depending upon a number of factors and variables, the rules change…; imagine that!

So iIf you are a small business receiving a grant, versus a large government acquisition contractor, then there are different program parameters, expectations, and requirements. If you are a university, instead of a for for-profit business, then there are different rules. If you are conducting research versus selling commodity office supplies, then again, things are different.

Intent and Results

What isn’t different is the intent and result of the rules that are in place – t. The objective of all the rules and regulations is to ensure that the transactions are conducted in manner that achieves the “”best””  result for us, the taxpayers, because it isthese grants, awards, and contracts represent our tax dollars at work. The government is charged with fulfilling a the fiduciary roles of safeguarding the funds it uses, providing a fair and competitive process of awarding contracts and access to programs, and in general making sure that the objectives of each every program are achieved (whenever possible, or at least that the best efforts are made).

Dictating the Results, Not the Methods

In working with organizations understanding on rule compliance with the rules, it is important for a to remember this key concept to be understood. : The Federal government dictates that certain results must be obtained in howwhen recipients of grants and contracts conduct business, which include – the policies, procedures, systems, and controls that are in place – . However, the government does notthey do not dictate the specific methods. In other words, the government does not tell you to purchase a specific brand of an accounting system. Instead, the government tells youmandates the standards your accounting system must be able to meet and the functionality it must be able to achieve. The “how”How you achieve those standards and functionality is at the your organization’s discretion … as long as they you achieve and maintain those standards.

When and How …

The rules apply from day Day oneOne. You sign the agreement, or you accept the first dollar of funds, and  then the rules, terms, and conditions immediately apply. In the ideal world, all theevery rules, regulations, terms and conditions will would be included in the documents you sign or that are sent notifying you of your award, . but But, even if all of the details are NOT included in your award document— be it grant or contract—, itthis doesn’t mean you don’t havare exempt from compliancee to comply.

Remember, in the case of government transactions, the rules, regulations, policies, procedures, and requirements are PUBLIC information and accessible as such. The broad agency, program, and solicitation specifics that are applied to you (and other recipients) are available through websites, government publications, and by request from your government grant/contract offices. Your organization is responsible for knowing and complying with all aspects of the requirements, whether they are spelled out, pointed out, or need to be searched out or requested.

Say What? and And What?

I can hear your responses already. : “How am I supposed to know what I don’t know? Find How do I find what I don’t even know to look for, and how do I comply with requirements that are confusing at best and complex and ‘”bureaucratic” ’ at worst?” Much of the typical compliance that recipient organizations are required to put in place falls under what would be classified as ““sound business practices”” and “”financial and internal controls”.” In other words, the government (and other funders like banks and investors) ultimately want you to have a robust business management system that is comprised composed of policies, procedures, and management review and oversight of activities.

The A robust business management system ensures that transactions are appropriate, timely, and financially sound within the scope of activities that the business has chosen to engage in (and is authorized to engage in by its funding sources). The Such a business management system also ensures that resources are being properly managed, allocated, and safeguarded. It reports on, monitors, and tracks resources so that management can takes appropriate actions to achieve organizational objectives.

Ultimately, “Thems the Rules”

Like it or not, when you take accept funds from any source other than your own pocket, the funder gets to make the rules. Funding from any source comes with expectations of performance, reporting, and oversight. When it comes to government funding, the rules may be harder to identify, easier to ignore (at times and at your and your organization’s peril), and seem to be an undue burden to bear.

However, if you are proactive in complying with the rules and get started early in your funding process, then you will find that the rules become integrated into your business processes and are just a part of every day “business as usual.” Compliance doesn’t have to be an unbearable costly burden. Compliance done early and before non-compliance requires a “clean-up” is similar to implementing any other business process…: analyze, design, document, train, implement, transact, monitor … succeed.

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