CNE Grant Management & Compliance 2 — Questions and Answers
Question 1: A nonprofit receives a federal grant with a period of performance ending June 30. Unspent funds must be returned unless the organization does what?
- Requests a no-cost extension before the end date (Correct answer)
- Transfers the balance to unrestricted reserves
- Submits a budget modification after the period ends
- Notifies the board treasurer in writing
Correct answer: Requests a no-cost extension before the end date
A no-cost extension must be requested and approved before the period of performance ends to retain unspent federal grant funds.
Question 2: Under Uniform Guidance (2 CFR Part 200), which cost principle determines whether a grant expense is allowable?
- The cost must be necessary, reasonable, allocable, and consistently treated (Correct answer)
- The cost must be pre-approved by the awarding agency in all cases
- The cost must appear in the original grant budget line items
- The cost must be incurred within the first six months of the grant
Correct answer: The cost must be necessary, reasonable, allocable, and consistently treated
Uniform Guidance requires costs to be necessary, reasonable, allocable to the federal award, and consistently treated across cost categories.
Question 3: When a grantee organization discovers a financial error in a previously submitted federal financial report, what is the required action?
- Submit a corrected report to the awarding agency promptly (Correct answer)
- Adjust the next report to offset the discrepancy silently
- Notify only the board's audit committee
- Wait until the annual audit to correct the record
Correct answer: Submit a corrected report to the awarding agency promptly
Grantees must promptly submit corrected financial reports and notify the awarding agency when errors are discovered in previously submitted reports.
Question 4: Which document governs the specific terms, conditions, and obligations of a federal grant award?
- The Notice of Award (NOA) (Correct answer)
- The grant application narrative
- The indirect cost rate agreement
- The CFO's internal budget memo
Correct answer: The Notice of Award (NOA)
The Notice of Award is the legally binding document that sets forth the terms, conditions, and amount of a federal grant.
Question 5: A nonprofit's indirect cost rate has expired. What is the proper approach for charging indirect costs to an active federal grant?
- Negotiate a new rate with the cognizant federal agency before charging
- Continue using the expired rate until the audit flags it
- Apply the de minimis rate of 10% of MTDC without negotiation (Correct answer)
- Charge no indirect costs until a new rate is executed
Correct answer: Apply the de minimis rate of 10% of MTDC without negotiation
Organizations without a negotiated rate may use the de minimis rate of 10% of modified total direct costs (MTDC) under 2 CFR §200.414(f).
Question 6: What is the purpose of a grant closeout report in federal grant management?
- To document final expenditures, outcomes, and return of unobligated balances (Correct answer)
- To request additional funding for unmet program objectives
- To certify that all subgrantees have been paid
- To transfer grant assets to a successor organization
Correct answer: To document final expenditures, outcomes, and return of unobligated balances
Closeout reports confirm that all financial and programmatic obligations are met, final costs are reported, and any unobligated funds are returned.
Question 7: A nonprofit subgrants 40% of a federal award to a community partner. Under Uniform Guidance, the primary grantee is responsible for which of the following?
- Monitoring the subrecipient's use of funds and compliance (Correct answer)
- Filing taxes on the subrecipient's behalf
- Obtaining separate federal approval for each subgrant payment
- Requiring the subrecipient to have its own indirect cost rate
Correct answer: Monitoring the subrecipient's use of funds and compliance
Pass-through entities must monitor subrecipients to ensure federal funds are used for authorized purposes and in compliance with applicable requirements.
CNE Grant Management & Compliance 2
A nonprofit receives a federal grant with a period of performance ending June 30.
Unspent funds must be returned unless the organization does what?