Leadership Lessons Learned from Federal Agency Compliance Reviews

Organizational leaders receiving federal funding should be prepared to quickly respond to targeted reviews of their accounting practices for any federal grant. Early in 2025, the Computer Science Teachers Association (CSTA) was selected for a standard targeted review, which is a practice conducted by the federal agency to confirm overall compliance with award conditions, prevent financial mismanagement and ensure strong internal controls. CSTA manages a federal grant portfolio that exceeds $20 million in total award revenue and has a federal grants and compliance manager on staff. This review highlighted unique accounting challenges and was a good reminder of not only the importance of sound practices regarding the expenditure of federal funds but also the criticality of collaboration between finance and program staff. To that end, below are some common best practices for those who are growing their federal grant portfolio or looking to obtain federal funding.

Uniform Guidance Awareness

Organizations receiving federal funding should be fully aware of the federal financial management requirements contained in 2 CFR part 200 (the Uniform Guidance) and have consistent processes for allocating personnel costs, direct costs and indirect costs to federal awards. In addition, there should be strong accountability measures that ensure monthly account reconciliations and the review of the allowability of expenditures between finance and program staff.

Maintain Regulatory Compliance 

Throughout Grant Lifecycle Finance staff and program managers must ensure all grant financial activities fully comply with the Uniform Guidance, agency-specific requirements (e.g., NSF PAPPG), federal award terms and applicable civil rights and equal opportunity laws. This includes the regular monitoring of updates to federal regulations and integration into internal controls and procedures. Often, this means having a subject matter expert on staff or at an accounting firm.

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