Let’s say I’m a non-profit organization, and I get a state grant do do a project. Let’s say I’m also incredibly incompetent, and because of my own stupidity, I squander away all the money and the project I got the grant for never gets done.
Is there any accountability there? Do I have to give the money back? Or am I home free, awash in my stupidity and public funds?
The details are going to vary by state and grant program, but every government grant has specific accounting standards, reporting requirements and other obligations to ensure the the money is spent as intended. If you violate these, the government can and will seek to get its (i.e. the taxpayer’s) money back, and depending on how exactly the money gets squandered you very well may be prosecuted.
I’m on the Finance Committee of a youth organization that gets about 1/4 of its income from government grants.
In our case, the grants are given for specific projects, and are not paid until after the project is done.
We have to front the money to do it, and then wait a month or two for the government to pay up. For year-long grants, we have to submit a ‘bill’ each month, detailing the hours of service that have been completed that month, and then wait for payment on that.
I suppose you could falsify your reports, claiming you had provided services that you haven’t, and get by with it for a few months. But the government auditors watch for this, and the field is small enough that such a thing would soon come to the attention of the people in the state agency. If nothing else, there are competing non-profit groups that would like to get these grants, and they would let the government know if your group was doing this.
This may be sort of a “where you stand depends on where you sit” issue. My husband, who works for a government agency that makes grants, has told me they have very little control over what is done once a grant is made. As an agency, they would like to have more control, logically enough. If the grant results in nothing useful, that group just won’t get funded again. Thus, a group with no track record will probably need to apply for grants in smaller increments. It is important to distinguish between grants and contracts, though. Contracts are closely monitored. I imagine there is a great deal of variation based on the specific terms of the grant, so if this is driven by a specific situation it would make sense to look into that with the agency in question.
I write all State and Federal grant applications for my volunteer fire company. There is a closeout form which accompanies each grant application, and I’m responsible for submitting supporting documents proving to the granting agency that the funds were expended in accordance with the stated purpose. Should I fail to expend the funds on the approved project by the final closeout date, I must return those monies with interest to the granting agency. Thankfully, it isn’t a problem, as I will gladly spend the $, submit the paperwork and close things out quick like a bunny so I stay in good graces. 