Grants and Program Management

Grants and programs are, in many respects, similar to contracts. Grantees and their subgrantees may attempt to perpetrate fraud through kickbacks, falsification of credentials, overstatement of costs or performance, and failure to render adequate levels of service.

Grants and programs are fraud magnets because they involve a great deal of money and it is sometimes difficult to measure or verify if the grantee has actually done what he or she was paid to do.

A common type of fraud perpetrated against grants and programs is simply the provision of services at a level less than that agreed upon. Another common type of fraud is the overstatement of the number of beneficiaries who were, or are, being served.

Because the government is not the direct recipient of the services covered by the grant or program, it’s often difficult to ascertain the levels of service actually provided or the number of beneficiaries who actually receive the service.

Awards are often subject to a number of legal requirements, such as the Buy American Act. Recipients can reduce their costs by flouting these laws. Such non-compliance can be lucrative for the recipient and difficult for the grantor or program administrator to detect.

Risks Risks Risks
Misdirected Payments

Payments are misdirected to someone posing as a legitimate vendor. No proper documentation or approval of additions, changes, or deletions to vendor master file.

Vendor addresses do not agree with vendor approval application.

Verify that all changes to vendor records (name, address change, bank account) are submitted by an authorized vendor signatory, and approved by an agency signatory. This is to prevent theft or misappropriation of funds.

Segregate duties between processing of accounts payable invoices and updates to vendor master files.