How to evaluate grants management software

What the software does

Grants management software helps an organization that receives grants keep track of what it applied for, what it was awarded, what it may spend the money on, what it has spent and what it owes the funder in reports. For recipients of federal awards, the test of a system is whether it helps staff meet the Uniform Guidance and survive a single audit. This guide is written for recipients and pass-through entities, such as cities, counties, universities and nonprofits, and names no vendors.

Grants management covers the life of an award, and products differ in how much of it they handle:

• Pre-award: finding opportunities, deciding which to pursue, preparing applications and budgets, and getting internal approval before submission.
• Award set-up: recording the terms and conditions, budget, period of performance, match requirements and reporting deadlines of each award.
• Post-award: matching expenditures from the financial system to award budget lines, reviewing costs, tracking drawdowns, managing budget revisions and preparing performance and financial reports.
• Subrecipients: issuing subawards, assessing subrecipient risk, collecting reimbursement requests and reports, and monitoring.
• Closeout and audit: final reports, record retention and the Schedule of Expenditures of Federal Awards (SEFA) for the single audit.

Software for grantmakers, which runs competitions and reviews applications, is a different category, as is clinical trial financial management. Check that the products on your list are built for the side of the grant you are on.

Who should be on the evaluation team

• The central grants office or grants coordinator who runs the pipeline and award register.
• Program managers from departments that run grant-funded projects.
• Grant accountants and finance staff who match spending, prepare financial reports and draw down funds.
• The authorizing official or budget office that approves applications, awards and budget changes.
• IT, for the financial system integration and access control.
• A subrecipient, if you pass funds through, to test the external portal.
• Your single auditor, informally, to say what they would want to see.

Questions to ask and things to test

Use one or two of your current awards, not sample data:

• Award terms. Load an active award and check that its terms, deadlines and special conditions become obligations someone is assigned to, with reminders.
• Expenditure matching. Import a month of transactions from your financial system. How are they matched to awards and budget lines, and what happens to transactions that do not match?
• Cost review. Take a questionable cost through review. Does the system record who decided it was allowable and why, with reference to the award terms?
• Reports. Prepare a quarterly performance or financial report and compare it with the one you last submitted. Ask how report templates are kept current when an agency changes its format.
• Submission. Ask whether the software submits applications, reports and drawdowns to Grants.gov or agency systems, or prepares them for your staff to submit.
• Subrecipients. Have a subrecipient submit a test reimbursement request, and see how risk assessments and monitoring are recorded.
• Single audit. Generate a sample SEFA and walk your auditor through the supporting detail.
• Access. Confirm that program staff, accountants, approvers, subrecipients and auditors each see only what they should, and that changes are logged.

Limits to probe

• System of record. Most grants systems are not the accounting system of record. Expenditures are recorded in your financial system and brought in for matching. Ask how corrections flow back.
• Funds. Ask whether the vendor ever holds or moves grant funds. Many do not; drawdowns are paid by the funding agency directly to you.
• Submission. Some products prepare reports and drawdown requests but leave submission to your staff in the agency's own system.
• Allowability. Cost flags and opportunity suggestions are prompts. Allowability and eligibility decisions are made by your staff under the award terms.
• Opportunity data. Federal opportunities are listed on Grants.gov; ask which other sources a product can read, since state and private opportunities may need to be entered by hand.
• Audit outcomes. Software can organize records and deadlines. It cannot by itself prevent audit findings, and the single audit is performed by your auditor.

Regulations and standards to understand

For federal awards the main source is the Uniform Guidance, 2 CFR Part 200, as adopted by each agency and supplemented by the terms of your award. Check the current text; OMB revised it in 2024. Provisions a grants system should help with include:

• Payment (200.305): payment methods must minimize the time between the transfer of funds and their disbursement, which affects how drawdowns are timed.
• Subrecipients (200.332): a pass-through entity must identify each subaward with required information, evaluate each subrecipient's risk, monitor it, follow up on audit findings and confirm it is not excluded from federal awards, for example through SAM.gov.
• Record retention (200.334): in general, records are kept for three years from the date the final financial report is submitted, with exceptions.
• Closeout (200.344): recipients must submit final reports and liquidate obligations no later than 120 calendar days after the end of the period of performance, unless the agency allows otherwise.
• Single audit (200.501 and 200.512): an entity that expends $1,000,000 or more in federal awards in its fiscal year must have a single or program-specific audit. The reporting package goes to the Federal Audit Clearinghouse within 30 days of receiving the auditor's report or nine months after the end of the audit period, whichever is earlier.

Related requirements include SAM.gov registration and the Unique Entity ID (2 CFR Part 25), and subaward reporting under the Federal Funding Accountability and Transparency Act (2 CFR Part 170), which is now done in SAM.gov. Individual programs add their own rules, such as Build America, Buy America for infrastructure funding.

Implementation risks

• Chart of accounts. Matching depends on how grants are coded in your financial system. If awards and budget lines are not coded consistently, fix that first or matching will not work.
• Loading active awards. Entering the terms, budgets and history of every open award is the largest task at go-live. Decide which awards are loaded in full and which are tracked only to closeout.
• Departmental adoption. Grants offices often depend on program staff in many departments. If they keep separate spreadsheets, the system will be incomplete.
• Subrecipient onboarding. External users need accounts, training and support. Plan for subrecipients with limited capacity.
• Changing guidance. Agencies change report formats and terms. Assign someone to confirm each report against the agency's current instructions.
• Audit timing. Avoid switching systems mid-way through a fiscal year if you can, so one SEFA is not assembled from two sources.

Related reading on this site

Requirement pages: Uniform Guidance (2 CFR Part 200), ICH E6 Good Clinical Practice, FDA 21 CFR Part 11, HIPAA, Privacy Act of 1974.

This guide describes the category, not any one product. It is general information, not legal advice: for what a rule requires of your organization, read the rule itself or ask your counsel.