Grant Compliance 101 Guidance for New Hampshire Nonprofits
Grant compliance is an important topic for any nonprofit organization. Effective compliance practices help protect your funding streams, safeguard your reputation, and preserve your ability to secure future grants. In short, getting compliance right is foundational to long-term organizational health.
When compliance falls short, the consequences can be significant. Issues with grant compliance can result in:
- Repayment of funds to the State or federal agencies
- Audit findings (including Single Audit findings, if applicable)
- Increased oversight from funders through desk reviews / monitoring
These outcomes are avoidable with the right knowledge and habits in place.
What Is Grant Compliance?
At its core, grant compliance means spending funds in accordance with the grant agreement, following all applicable rules, including the Uniform Guidance where relevant, maintaining proper documentation, and meeting all reporting and timing requirements. It is a holistic commitment to operating within the boundaries your funder has set, from the first dollar spent to the final report submitted.
5 Key Rules to Follow
With that foundation in mind, here are five core rules that apply to virtually every grant your organization may receive.
1. Only Spend on What’s Allowed
Grant funds must only be used for approved purposes. Most grants explicitly state what can and cannot be done with the funds, and the original application typically outlines the spending categories the recipient agreed to. Before making any expenditure, confirm it falls within those approved categories. When in doubt, check before spending.
2. Stay Within the Grant Period – Period of Performance
Every grant has a defined period of performance with a start date and an end date. Make note of both and be aware that there is often a window after the grant closes during which funds can still be spent. Pay special attention to any pre-award costs and the requirements that govern them. Notably, the highest-risk times during the period of performance are the first and last months of the grant. Activity in these windows deserves extra scrutiny.
3. Accurately Track Time and Effort
Time charged to a grant must reflect the actual work performed; it cannot be booked simply to match a budget figure. Timesheets or certifications must be maintained for all staff whose time is charged to grant funds. The more supporting documentation you can keep (notes, calendars, project logs), the stronger your position will be if questions arise during an audit or review.
4. Maintain Documentation
Proper documentation is not optional; it’s critical. If an expenditure, decision, or activity is not documented adequately, it may result in an audit finding, even if the underlying action was entirely appropriate. Establish clear internal processes for retaining records, and ensure your team understands what needs to be kept and for how long.
5. When in Doubt, Ask!
The organization or entity that awarded the grant should have resources available to answer questions and address concerns. Do not wait until after funds have been spent to seek clarification. Reach out proactively before making decisions that feel uncertain. A quick conversation can prevent a much larger problem down the road.
Common Issues That Result in Findings
Among the most frequent compliance failures are missing documentation and payroll allocations unsupported by time records. Both of these issues are avoidable with consistent habits and clear internal policies. By building a culture of documentation and accuracy within your organization, you dramatically reduce the risk of findings and the disruptions they bring.
