Grant management is an important cornerstone of many federal agencies. Doing it well enables grant-funded organizations to provide essential services to populations that need them. But it’s not always easy. Federal agencies face challenges ranging from resource constraints to compliance, which can hinder the efficient use of taxpayer dollars and the achievement of program objectives. 

This article explores common challenges in federal grant management and outlines steps your agency can take to overcome them. 

CHALLENGE 1: RESOURCE CONSTRAINTS

One of the most pressing issues facing federal agencies is the lack of adequate resources, particularly in terms of staffing. 

This challenge can present itself in several ways:

• Insufficient staffing to manage grant programs effectively
• Loss of institutional knowledge due to retirements
• Difficulty training new staff to replace retiring employees with decades of experience

For example, let’s say you’re managing a large-scale federal housing assistance program. When your most experienced grant manager retires, taking with them years of intricate knowledge about program requirements and processes, you find yourself struggling to maintain the same level of oversight and efficiency. New staff members, while qualified, lack the deep understanding of program nuances, leading to delays in processing applications and increased errors in eligibility determinations. 

To address these challenges, you can:

• Implement continuous training and knowledge transfer programs
• Develop comprehensive onboarding processes for new staff
• Create mentorship programs to facilitate knowledge transfer from experienced staff
• Partner with external experts to fill knowledge gaps and provide specialized expertise

In the housing assistance program example, you might implement a structured mentorship program where staff members work closely with their replacements for several months before leaving. Additionally, you could develop a comprehensive digital knowledge base that captures key processes, decision-making criteria, and common scenarios, making it easier for new staff to access critical information quickly.

CHALLENGE 2: TECHNOLOGICAL LIMITATIONS

Outdated systems and lack of integration between platforms can significantly impede grant management efforts. Technological constraints can result in:

• Inefficient data processing
• Difficulty in tracking grant performance
• Challenges in meeting reporting requirements

Imagine you’re overseeing a federal education grant program. Your current system requires manual data entry from various sources, leading to frequent errors and delays in reporting. When it’s time to generate reports on your department’s portfolio of grants, your team spends weeks compiling and reconciling data from different spreadsheets and databases, often missing critical deadlines. 

To overcome these limitations, you could:

• Develop comprehensive dashboards for real-time reporting
• Use data visualization tools for easier monitoring
• Adopt integrated platforms that connect program and finance data

In the education grant program example, you might implement an integrated grant management platform that automatically collects data from various sources, standardizes it, and generates real-time performance dashboards. This would allow your team to quickly identify trends, track progress against goals, and generate accurate reports with minimal manual intervention, significantly reducing errors and improving timeliness.

CHALLENGE 3: INTERDEPARTMENTAL DISCONNECT

A common issue in many agencies is the lack of communication and coordination between program staff and finance teams. This disconnect can lead to:

• Misalignment of objectives
• Inconsistent reporting
• Inefficient use of resources

For example, imagine you’re managing a large environmental conservation grant. The program team is focused on achieving specific conservation targets, while the finance team is primarily concerned with budget adherence and financial reporting. This disconnect results in overspending in certain areas without proper financial oversight, while other critical activities are underfunded due to lack of communication about program priorities. 

To enhance interdepartmental collaboration, you might:

• Establish regular joint meetings between program and finance teams
• Create cross-functional teams for grant management tasks
• Develop integrated reporting tools that combine programmatic and financial data
• Provide cross-training opportunities for program and finance staff

In the environmental conservation grant example, you could hold monthly cross-functional meetings where program and finance teams review both conservation progress and financial metrics together. You could also develop an integrated dashboard that shows both program outcomes and financial data side-by-side, helping both teams understand the full picture of grant performance and make more informed decisions about resource allocation.

CHALLENGE 4: COMPLIANCE COMPLEXITIES

Keeping up with changing regulations and ensuring consistent application of rules across various grant programs can be challenging. 

But if you don’t, you could end up with:

• Increased risk of audit findings
• Difficulty in maintaining compliance across multiple programs
• Potential for misuse of funds

For example, let’s say you’re managing a portfolio of healthcare research grants. Each grant has its own specific compliance requirements, and regulations are frequently updated. Your team struggles to keep up with these changes, leading to inconsistent application of rules across different grants. 

To address these compliance challenges, you might:

• Implement robust internal controls
• Conduct regular compliance training for staff
• Establish a system for monitoring and interpreting new regulations
• Develop and maintain detailed standard operating procedures

In the above scenario, you might implement a centralized compliance management system that automatically tracks regulatory changes and notifies relevant staff. You could also establish a dedicated compliance team responsible for interpreting new regulations, updating procedures, and conducting regular training sessions for grant managers. 

This helps you ensure consistent application of rules across all grants and reduce the risk of non-compliance.

CHALLENGE 5: CONSISTENCY & EFFICIENCY

One significant challenge faced by federal agencies in grant management is maintaining consistency and efficiency, especially in the face of staff turnover and changing regulations. Without clear, documented processes, agencies risk inconsistent application of rules, inefficient operations, and potential compliance issues. 

For example, let’s say your agency manages a complex environmental grant program. New staff members struggle to understand the intricate requirements, leading to delays in processing applications and inconsistencies in how regulations are applied across different projects. 

To address these challenges, you could:

• Create detailed standard operating procedures for all grant-related activities
• Regularly review and update these procedures to reflect changes in regulations or best practices
• Ensure all staff have access to and understand these policies

With robust written policies and procedures, you can create a standardized approach to grant management that survives staff turnover and evolving regulations. 

In our environmental grant program example, you might develop a comprehensive manual that outlines step-by-step processes for application review, fund disbursement, and compliance monitoring. This resource would serve as a valuable tool for both new and experienced staff, helping to maintain consistency and reduce the risk of errors or non-compliance.

CHALLENGE 6: RESOURCE GAPS

Despite the importance of federal grant management, many agencies face a lack of adequate resources and specialized expertise. This can take the form of budget constraints, staffing shortages, and difficulty attracting or retaining qualified personnel. 

To overcome these challenges, agencies can:

• Partner with outside accounting firms or consultants to fill knowledge gaps
• Rely on external experts to develop and implement corrective action plans
• Seek specialized support for ongoing monitoring and complex grant management areas

External partners like Mercadien can bring fresh perspectives and best practices from across the industry, helping agencies overcome resource constraints and improve their grant management processes. 

STRENGTHEN YOUR FEDERAL GRANT MANAGEMENT WITH MERCADIEN

Federal grant management is a complex process that requires a multifaceted approach. Agencies must contend with resource constraints, technological limitations, interdepartmental disconnects, shifting compliance requirements and more. 

But it’s worth the effort. Because grant management isn’t just about compliance. It’s about maximizing your use of public funds to better serve communities. 

Whether you’re facing a complicated new challenge or a simple lack of resources, Mercadien’s Federal Government Services team can help. We can help you build compliant processes, diagnose and mitigate risk and more. To learn more and get started, contact us today.

DISCLAIMER: This advisory resource is for general information purposes only. It does not constitute business or tax advice and may not be used and relied upon as a substitute for business or tax advice regarding a specific issue or problem. Advice should be obtained from a qualified accountant, tax practitioner or attorney licensed to practice in the jurisdiction where that advice is sought.