After receiving a federal grant award, local governments must finalize a grant agreement with the awarding agency before funds can be obligated or spent. Completing this process often requires additional documentation, coordination across departments, and communication with the federal agency. This guide outlines practical strategies local governments can use to streamline the grant agreement process and move more quickly from award announcement to project implementation.
While other resources focus on planning and implementing federally funded infrastructure projects, this guide focuses specifically on steps local governments can take to finalize their grant agreement and access awarded funds.
Below are key strategies local governments can use to streamline your grant agreement process:
1) Prepare required document early
Many federal grants require the same or similar documentation, so there are some items you can begin to prepare as soon as you learn about your award. The DOT Project Readiness Checklist has more detail on how to prepare for many of these requirements and documentation requests. The U.S. DOT Project Delivery Center of Excellence also provides information about how to support community engagement (ex. surveys, public forums, etc.), conduct environmental reviews, and ensure compliance with relevant laws. The project delivery center also has many resources that will be helpful in the implementation and evaluation phases of your project life cycle.
If your project requires environmental review under the National Environmental Policy Act (NEPA), begin preparation as soon as possible by first determining the level of environmental review required, as this varies significantly and impacts timelines. Engaging an environmental consultant or coordinating with state environmental officers and gathering preliminary data early to streamline documentation can also be helpful. Being proactive with NEPA ensures that environmental reviews don’t hold up the grant agreement and start of the project. Note that administration officials have signaled the intent to amend the current required environmental review process.
Because many aspects of grant agreements are the same across programs, some local governments have found it helpful to hire an experienced consultant to help them navigate the process.
2) Begin project planning and prepare detailed budget information
Local governments will most likely be asked to provide additional budget details in advance of their grant agreement. While the exact forms vary by grant and grant size, most budget details templates will ask for costs in various categories (travel, equipment, supplies, contracts, etc.), including those related to personnel (salaries and fringe benefits).
Beginning implementation planning immediately after the award announcement, including staff responsible for the project and preparing detailed budget information, will position your team for success.
For grants that have a non-federal match requirement, you will be asked to confirm the source of the matching funds as part of your agreement. This planning process is also a good time to prepare for amendments or adjustments to your local government’s annual budget if they are needed to meet local match requirements.
3) Prepare for financial and match requirements
Federal grants often operate on a reimbursement basis, which can create challenges for local governments that need to identify matching funds upfront. To avoid delays, consider the following strategies for early financial planning:
- Preindicate matching funds: Explore ways to prepare for the match requirement in advance, such as setting aside a contingency or placeholder in the budget for potential grants. While the award isn’t yet certain, budgeting for potential matches can help expedite the process if a grant is secured.
- Leverage in-kind contributions: Consider using in-kind contributions, such as staff time, to meet match requirements if permitted. For example, if government staff will support the grant project, allocate their salaries or a portion of their time toward the match instead of requesting grant funding for these costs. This approach helps preserve cash and maximizes your grant funding for other critical expenses. Work with your grant administrator to confirm eligibility and establish a system to document these contributions effectively.
- Bridge financing options: Look into interim financing solutions to cover project costs while waiting for grant reimbursements. This may include short-term loans or collaboration with local financial institutions. Establishing these options ahead of time can help your government manage cash flow and start projects promptly.
- Future Budget Commitments: If immediate funding isn’t available, consider working with your governing body il and finance officials to commit matching funds in a future budget cycle. This approach allows your government to meet the match requirement without an immediate expenditure. Coordinating with your finance office and legal advisors can help ensure the commitment aligns with grant requirements.
4) Secure approvals from governing bodies and key decision makers
If there are items related to the grant agreement requirements described in the strategies above that require approval from city council, county commission, or another governing body, securing that approval in advance can reduce the time needed to finalize the grant agreement.
5) Build flexibility into the process
There is no getting around that some grant agreements, especially those for new programs, will take a while to finalize. For this reason, it can be helpful to plan ahead for the possibility of project schedule and cost adjustments (i.e., if the cost of a good or service has changed between the application submission and grant agreement) and be prepared to make these adjustments if necessary.
To help your project move forward more flexibly, consider discussing phased funding options with the awarding agency. Phased funding allows local governments to begin implementing certain portions of the project sooner, even as other components await necessary approvals and meet additional prerequisites.This approach can prevent delays, make efficient use of time and resources, and ensure that critical early steps are completed on schedule.
6) Don’t be afraid to reach out to the granting agency early, and try to take full advantage of every touchpoint
Being proactive by reaching out to the funding agency as soon as possible after you learn about your award will avoid delays in initiating the grant agreement process. Local governments may also consider designating a staff member responsible for coordinating communication with the federal program officer and managing document submissions.
This will also make it possible to request all of the required paperwork prior to completing the grant agreement. If the granting agency is one that has state or regional offices, like the Environmental Protection Agency or the Department of Transportation, you can also reach out to your contacts there to provide an additional level of support for your grant award process.
Don’t be afraid to ask all of your questions at once when you first reach out to the granting agency and continue to surface any questions that arise in any subsequent communications.
Likewise, require all relevant government staff involved with the project to join calls with the granting agency. This can allow folks to ask and answer questions as they arise from the granting agency and minimize the need for follow-up. This can condense the timeline for getting all of your questions answered and preparing to submitting all of your documentation.
When you do submit documentation, it is best to complete and submit all documentation together. It is important to follow the granting agency’s instructions carefully. Submitting documentation as a full package and as soon as possible, ideally within two weeks, is one of the aspects of the grant agreement timeline that local governments have the most control over and can go a long way towards speeding up the process.
7) Share information with other grant recipients
It can be helpful to reach out to your colleagues in other local governments that received awards. This allows winners to share information about timelines and questions that the granting agency has answered, which can save time for both award winners and granting agencies.
8) If needed, seek assistance from your congressional delegation
Sometimes, even when local governments employ all of the above strategies, they are still stuck waiting for a grant agreement to be finalized. If a grant agreement is significantly delayed and other options have been exhausted, contacting your congressional delegation to inquire about the status of the agreement can help communicate urgency to the granting agency.