Benefits
Plan now for what will be expected
Understand the processes, policies, and infrastructure needed to comply with the awards you’re after to build these costs into your application.
- Compliance requirements assessment
- Compliance roadmap
Award budget, handled
Get an award budget created for you to accommodate successful program management and cost recovery, so your team can execute with confidence.
- Award budget creation
Get compliance costs funded by the award
Submit your application with a budget that considers the full grants lifecycle, ensuring compliance costs are funded, not out-of-pocket.
- Budget submission
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Clean Energy Infrastructure Developer
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Read moreFAQs
Can’t find what you’re looking for?
Why do so many grant recipients end up covering compliance costs out of pocket?
The most common cause is a budget submitted without accounting for the full grants lifecycle compliance infrastructure the award requires. Recipients who underestimate the cost of establishing 2 CFR 200-compliant internal controls, financial management systems, procurement policies, and subrecipient monitoring frameworks find themselves absorbing those costs after award because they were never built into the application. Federal agencies expect awardees to arrive at execution with compliant systems already funded and operational. A compliance requirements assessment conducted before submission identifies the specific infrastructure your organization must build or maintain, allowing those costs to be included in the award budget rather than funded from organizational reserves.
What compliance costs are actually allowable in a federal grant budget?
Under 2 CFR 200 Subpart E, allowable costs must be reasonable, allocable to the award, and consistent with the recipient’s established cost accounting practices. Compliance-related costs that are routinely allowable include indirect costs associated with financial management, audit preparation under the Single Audit requirements of 2 CFR 200 Subpart F, procurement system development, and staff time dedicated to grants administration. Direct costs for compliance infrastructure, such as system implementation or policy development specifically required by the award, are allowable when properly justified and approved by the federal agency. The critical discipline is documenting the nexus between each budgeted cost and the award’s programmatic and regulatory requirements before submission, not after.
How do indirect rates factor into a grant budget, and what happens if we get them wrong?
Indirect cost rates determine how much of your organization’s overhead, general and administrative expenses, and other shared costs can be recovered against the award. For recipients without a Negotiated Indirect Cost Rate Agreement (NICRA) executed by a federal cognizant agency, 2 CFR 200.414 permits use of a de minimis rate of 15 percent [BS1] of modified total direct costs, but this rate frequently underrepresents actual indirect costs and leaves recoverable funding on the table. Overstating rates without adequate support creates audit exposure under a Single Audit or agency review. Accurate pre-award rate development grounded in your actual cost structure is the foundation of a defensible, fully funded budget submission.
How early in the application process should compliance costs be built into our budget?
Compliance costs must be modeled before the budget is drafted, not reconciled after an award is received. The sequence matters because federal agencies evaluate budget narratives for specificity and reasonableness, and vague or unsubstantiated compliance line items are among the most common causes of budget negotiation friction and post-award cost disallowance. A structured compliance roadmap developed prior to submission maps the specific regulatory requirements of the target award to your organization’s current compliance posture, quantifies the gap, and produces the documentation needed to justify each compliance-related budget line with precision. For large or complex awards such as DOE, DOW, or NIH programs, this analysis is a prerequisite for a competitive, defensible submission.
What distinguishes a budget submission that funds compliance fully versus one that creates downstream risk?
The difference lies in whether the budget was built from a compliance requirements baseline or assembled from program cost estimates alone. A fully funded submission accounts for financial management system requirements under 2 CFR 200.302, procurement standards under 2 CFR 200.317 through 2 CFR 200.327, records retention obligations, subrecipient monitoring costs where applicable, and the administrative burden of financial and programmatic reporting cycles. Budgets that omit these line items create a structural deficit that recipients absorb throughout the period of performance, compressing program delivery capacity and increasing the likelihood of audit findings at closeout. The submission itself is the last low-cost opportunity to fund what the government already expects you to have in place.
Eliminate compliance costs from your own pocket
Build a grant budget that funds the compliance costs the government expects and secure them within your awarded dollars.