Getting out of Funding Purgatory: Advice for the High-Risk Grantee

If your organization has experienced financial difficulty in the past or received a less than perfect audit, you might still get federal grant funds but be designated by the government as a “high risk” grant recipient. If your organization is cash poor, a high-risk grantee designation will make things even harder because you’ll be placed on reimbursement funding status—a kind of funding purgatory. Reimbursement funding status means you must advance your own funds first and then get reimbursed when you submit documentation of spending.

Although this can be a problem, you are not without options. Many federal agencies will permit you draw down a one-time working capital advance to prime the cash pump so to speak. This one-time advance can be hugely helpful and ease the financial burden of being on reimbursement funding status.

While in funding purgatory there is much you can do to graduate to a normal advance payment status. First, correct any financial management and financial system mistakes. Second, do what is necessary to promptly resolve past financial and compliance audit findings with appropriate written responses and fixes on a go-forward basis. Most auditors and compliance professionals are eager to help you shed your high-risk status. Even your funding sources will be eager to help as this will mean less paperwork and oversight for them. 

Learn how to tame the rules and regulations, focus on excellence, and embrace accountability in the Grant Management Essentials training. If the thought of applying to federal grants seems daunting, learn how to dive into the world of federal grants in our Competing for Federal Grants training. Sign-up or contact us for more information!

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