Obligations That Come With Grants

Grant agreements can vary in length from the two to four pages required by the U.S. Environmental Protection Agency all the way up to the thirty or forty pages of a CDBG grant agreement. Since the administrative and fiscal requirements are generally the same from grant to grant, much of the governmental grant agreement is boilerplate material, with information specific to a particular grant inserted in the appropriate places.

If the grantee is a local government, the chief elected official is the person designated to sign the agreement. If a nonprofit is the grantee, generally the President of the Board of Directors is the official empowered to sign. It is a good idea to review the agreement carefully prior to signing. Most grantees have their attorney review it. I have only seen two or three grantees who decided to not proceed with the project after reading the grant agreement. Most of the provisions of the agreement relate to administering the project according to the laws governing that particular program. In addition, the grantee is signing off that the project will proceed just as it was described in the grant application.

Standard information included in the grant agreement is as follows:

• a description of the project with the amount of the grant and the amount of the local match
• contact information for the agency and the grantee
• grant period or timeframe by which the project must be started and deadline by which it must be completed-this is generally at least one year. However, some programs offer multiyear funding. The timeframe will be spelled out in the grant solicitation. In general, most multiyear grants provide for no more than three or four years.
• listing of any information which the grantee must provide to the funding agency prior to beginning the project
• information regarding the penalties to be incurred if the grant terms are not adhered to
• provisions for modifying the project
• listing and description of the various laws which govern the program, including those dealing with environmental review, labor standards, historic preservation, fair housing, and equal opportunity

Once the grantee is satisfied that the requirements of the grant agreement are fully understood, it should be signed and returned to the agency. It is well to complete this process as soon as possible, as the project cannot start until the grant agreement is fully executed-meaning that it is signed by both the funding agency and the grantee.