Best Practices

Establishing a Grants Administration Oversight Committee

State and local governments often receive significant grants from other governments and organizations to support their programs and activities. Often grants come with requirements that apply to operations, compliance, sub-recipient monitoring and reporting. Typically there are negative consequences for failing to meet these requirements, such as the need to return funds to the grantor. Likewise, a grant may result in a program that continues, or an asset that must be maintained, well beyond the expiration of the grant.

To help avoid these negative consequences or unanticipated burdens, the GFOA recommends that governments create both a grant administrative oversight policy (grant policy) and a grant administrative oversight committee (oversight committee) to ensure adherence to that policy.

A grant policy should: (1) require that certain steps be taken before applying for or accepting grants; and (2) address issues related to the ongoing operations of the grant. For example, rather than presuming that a grant will be renewed or continued, a grant policy should require that a grant-funded program or asset be evaluated before making a decision to renew or continue.

A centralized grant oversight committee should analyze grants before they are accepted, renewed, or continued to determine whether acceptance, renewal, or continuation would be appropriate.  The GFOA recommends that a grant oversight committee be both interdisciplinary and permanent, and meet no less frequently than once each quarter.1  The composition of the oversight committee should be as follows:

  1. Representatives on the committee should include at a minimum the chief financial officer (CFO), budget manager, assistant city/county/town manager, or equivalent, internal auditor, or equivalent, grants administrator/coordinator, and at least one department head2 (selection can be done on a rotating basis after a minimum term is served).3
  2. In addition to the permanent members of the committee there should be flexibility  to appoint subject matter experts on an ad hoc basis to help  address specialized situations. As an example, there may be a need to deliberate human resources or legal issues. Depending on the need for these ad hoc members they may only need to be included for a short period of time.

The GFOA recommends that the oversight committee be involved before applying for, accepting, renewing, or continuing a grant to ensure that all of the following occur:

  1. A department or agency that it is seeking a new grant or renewing an existing grant notifies the committee of its intent, which prompts the committee to  analyze all applicable grant requirements before a decision to accept or renew is made;
  2. A department or agency seeking a grant describes to the committee how the grant is consistent with the government’s mission, strategic priorities and/or adopted plans. The fact that the grant would provide additional funding for a department is not reason, of itself, to attempt to obtain the grant;
  3. A department or agency seeking resources performs a cost/benefit analysis prior to grant application or acceptance. As necessary, the department should perform the analysis with assistance from those with special expertise (e.g., engineers). This analysis would also include costs that the government may incur at the expiration/termination of the grant and costs that may be incurred because of requirements for the government to continue certain activities/programs after the grant expires/terminates (see points 7 and 8 below);
  4. Oversight responsibility (both departmental and individual) is assigned for any new or renewed programs or activities that result from the grant, including responsibility for the financial reporting required by the grant;
  5. It is determined how the grant will be monitored, including the monitoring of any sub-recipients that may receive pass-through grants;4
  6. It is determined that proper resources will be available to support the grant (e.g., financial, human resource, information technology, etc.);
  7. There is an evaluation of the potential need for the government to incur personnel costs after the term of the grant. Such costs could be for personnel that will terminate with the expiration/termination of the grant (e.g., severance, unemployment, etc.), or costs that the government may incur because of a need to retain employees for a specified period after the grant expires/terminates (e.g., a public safety grant that requires law enforcement personnel to remain employed for a specified period of time); and
  8. There is an evaluation of the potential that the government will incur operating and maintenance costs for assets after the expiration of the grant.


1 See GFOA’s best practice on Grants Administration, 2013

2 The person selected should represent a department of the government that receives grant resources.

3 Smaller and/or special-purpose governments may not have all of the separate positions mentioned for the composition of the oversight committee. In such cases, consideration should be given to reducing the total number of members on the oversight committee, while including those that have responsibilities that would normally be associated with the listed positions.

4 In cases where a government finances grant programs of its own that provide resources to other governments, organizations, and individuals, the oversight committee can also handle the review of these grants to ensure that monitoring and sub-recipient monitoring of these programs are being performed.

  • Board approval date: Saturday, January 31, 2015