Grant Management & Compliance Flashcards

What is the difference between a grant 'amendment' and a grant 'modification' in nonprofit grant management?

Answer: Both refer to formal changes to grant terms; 'amendment' typically applies to funder-initiated changes while 'modification' may refer to grantee-requested changes, though usage varies by funder

The terms overlap in practice — both describe formal changes to grant agreements, with specific meanings varying by funder policy and grant type.

A nonprofit's Single Audit reveals a 'significant deficiency' in its internal controls over federal grants. What does this finding require?

Answer: A corrective action plan submitted to the awarding agency within the specified timeframe

Significant deficiencies found in a Single Audit require the organization to submit a corrective action plan describing how it will remediate the control weakness.

Which principle governs how costs shared across multiple grants or programs must be allocated?

Answer: Costs must be allocated based on relative benefit received by each program or funding source

Cost allocation must reflect the proportional benefit each program or grant receives from the shared expense, documented by a consistent, reasonable methodology.

What is the primary purpose of requiring a fidelity bond or crime insurance as a condition of some federal grants?

Answer: To protect federal funds against theft, fraud, or dishonest acts by employees handling grant money

Fidelity bonds protect grant funds from employee dishonesty, and some federal programs require grantees to maintain adequate bonding coverage.

A foundation program officer informs a grantee that its grant report was submitted late and incomplete. What is the most effective response?

Answer: Apologize, submit the complete report immediately, and communicate a plan to prevent future delays

Acknowledging the problem, correcting it promptly, and demonstrating a prevention plan shows accountability and protects the funder relationship.

What is the risk of 'front-loading' grant expenditures — spending the majority of grant funds in the first quarter of a multi-year grant?

Answer: It may signal poor financial planning and trigger funder scrutiny or require justification of the spending pattern

Unusual spending patterns like front-loading can raise red flags for program officers and auditors, who may question whether funds were spent appropriately.

When must a nonprofit disclose the existence of a federal grant on its IRS Form 990?

Answer: Government grants must be reported as revenue on Schedule A and in the financial statements included with Form 990

All government grants are reported as public support on Form 990 Schedule A and must be reflected accurately in the organization's financial statements.