Government Awards

Government Awards

Many startup and emerging technology companies are focused on areas of scientific research and development, including those in the health care industry, alternative fuels, and the ever-growing cybersecurity market.

When these companies seek funding for their research, they may consider applying for government grants or contracts. If a company has obtained, applied for, or is considering applying for a government award, then there is a world of often complex compliance requirements for management to be aware of. Government grants and contracts will contain language referring to CFR 200 (Code of Federal Regulations) and FAR (Federal Acquisition Regulations) that contain a whole host of requirements related to properly accounting for costs incurred pursuant to the awards.

The hidden cost of the awards is in implementing proper procedures and documentation to adhere to the applicable regulations. Additionally, if a company’s annual spend on all federal grants is over $750,000 (has recently increased to $1,000,000 for audit periods beginning on or after October 1, 2024), then it will be subject to a special type of financial and compliance audit known as a Single Audit.

Consulting with professionals who are experienced in the Federal arena from a finance & accounting standpoint is highly recommended due to the complexities of the regulations. They can help develop a system of necessary checks and balances, draft the required policies and procedures documents, and implement strong accounting and reporting systems that yield the information necessary to stay compliant with the award provisions.

Despite this additional overhead for smaller companies, the investment often pays off, especially if a company is committed to focusing a majority of its efforts on the Federal arena. Once the necessary processes and procedures are established and documented, managing either a single award or multiple awards should proceed smoothly.