As the landscape of U.S. foreign aid continues to evolve under the current administration, organizations receiving USAID funds face heightened expectations around transparency, accountability, and impact. While funding priorities may shift, the need for strong financial stewardship remains constant. For implementing partners, maintaining full compliance with USAID grant requirements is not just a matter of policy—it’s a strategic imperative. Whether funding levels increase, decrease, or are restructured, organizations that demonstrate responsible and compliant management will be better positioned to sustain and grow their partnerships with USAID.
1. Understand the Terms and Conditions of the Grant Agreement
Before spending a single dollar, it’s crucial to thoroughly review and understand the grant agreement. This document outlines the specific requirements, limitations, and responsibilities associated with the funding. It includes clauses related to allowable costs, procurement rules, reporting obligations, and performance standards. Program and finance staff should be familiar with the agreement and receive training if necessary. Misinterpreting or overlooking key provisions can lead to unintentional noncompliance, so clarity is key from the start.
2. Maintain Strong Internal Controls
Strong internal controls are the foundation of good grant management. These controls help ensure that USAID funds are used appropriately and in accordance with the agreement. They include clear policies and procedures, segregation of duties, proper authorization processes, and regular monitoring activities. Special attention should be paid to the specific compliance requirements listed in the agreement, such as procurement thresholds or cost allowability. Regular internal reviews can help identify and correct potential weaknesses before they become bigger issues.
3. Stay Informed of Changes or Modifications
Grant agreements can evolve over time through modifications, amendments, or updated guidance from USAID. It is essential to monitor and respond to these changes promptly. Designate a team member to track communications from USAID and review any changes to ensure that internal processes remain aligned with current requirements. Failure to adjust to updated terms can lead to inadvertent violations, even if they are rooted in earlier compliance.
4. Properly Document All Transactions
Accurate, complete, and well-organized documentation is critical for audit readiness. Every financial transaction related to the grant should be properly supported with receipts, contracts, timesheets, and other relevant documentation. This not only ensures transparency but also demonstrates accountability to USAID and external auditors. Implementing standardized filing systems—both digital and physical—can help staff retrieve documentation quickly when needed, particularly during audits or compliance reviews.
5. Seek Guidance from Grant Specialists
Even with strong systems in place, managing USAID funds can be complex. Don’t hesitate to seek support from experienced grant specialists who understand the nuances of federal funding. Whether internal staff or external consultants, these experts can offer valuable insights, provide training, and help interpret regulations. Consulting with specialists can also reduce the risk of missteps and provide assurance that your organization is meeting its compliance obligations.
Final Thoughts
As USAID priorities shift, strong compliance is more important than ever. By maintaining internal controls, staying current on grant requirements, and seeking expert support, organizations can demonstrate accountability and strengthen their position as trusted partners—helping safeguard future funding in a changing environment. At Han Group, we are here to help. Please contact us with any questions.
