Fact: More federal money will go towards grants than contracts. Without adequate internal controls, training, and clear communication of expectations between Agencies (grantors) and the grantees, the risks of grant fraud, waste, and abuse are elevated. Good grant management is ethically sound.
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The Ethical Tone is Set and Maintained by those at the Top of the Grantor Organization
Without clearly communicated ethical standards and expectations from top managers, any grant program will fall prey to opportunists who seek to use public funds for their personal gain. Part of the control environment is the commitment to uphold integrity, accountability, and transparency in funding decisions and expenditures. Does your agency have regular ethics training and does top management set the proper example for grant managers? Are risk assessments conducted on a regular basis, especially BEFORE grants are awarded to new grantees? If there is a competitive awards process used, have panelists been screened for conflicts of interest? Does the agency have adequate resources to properly administer & account for grant funds? If fraud is known (or suspected) have grant officers been trained to alert the Inspector General? Knowing that these answers are part of the Agency's culture BEFORE grants are awarded can set the proper ethcial tone which will reduce fraud risks.
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Walking the Talk: Control Activities at Each Stage of the Grant Process (Pre-award, Award, Results, & Post-award analysis for Best Practices).
Control activities are important features to let Grantees know that someone is holding them accountable for the funds from the public fisc. In pre-award actions, managers should proactively reach out to award panelists to identify potential conflicts of interest and to hold training to ensure clear and objective funding criteria are used. Competition decisions should be able to withstand public scrutiny. Once awarded, grant agreements should be clearly communicated and objective so that quantifiable results are expected and readily reportable to the public. Modifications, when necessary, should always be well documented: beware of grantees who "bait and switch" in their proposals. Do the grant results accrue to the public benefit? If not, why not? Has the grantee reported in a timely fashion? Again, if not why not? Does the agency do "post-award" analysis to see what best practices can be learned from the grantee? Control actvities let fraudsters know that someone is watching.
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