It’s a common puzzle: 

• Grant recipients prefer flexible programs they can tailor to local circumstances – the more flexibility, the better. 
• However, grant funders (particularly government agencies) usually emphasize accountability in choices, processes, and results. 

Recipients and funders usually think that flexibility and accountability are in opposition, but they do agree that the use of funds should achieve intended mission outcomes. 

The key to creating an outcome-focused program that is both flexible and accountable is streamlining. Think strategically about which requirements are necessary for risk management and oversight – e.g., statutory or regulatory – and stick to that minimum. 

What about preventing fraud/waste/abuse?

Funding agencies often worry that a more flexible, streamlined system would leave room for problems. If a grant program shifts to focus on mission outcome and not on process, it can reduce collection of compliance-focused data, records, and reporting in favor of a smaller set of outcome measures. At its extreme, this could mean leaving programs open to abuse. 

But fortunately, the federal financial rules set a baseline, because they require knowing what grant or loan funds are paying for and ensuring necessary and reasonable costs. 

Remember: Every data point or record costs resources that then won’t be available for directly driving outcomes. In program design, the key is rebalancing the data and record burden to lessen it, focusing on keeping programs tied to outcomes while allowing flexibility in eligibility and local decisions wherever possible. 

How to find the flexibility/accountability balance

• Write sketches, not regulations. Too much emphasis on accountability can lead to overregulation, with too much documentation burden. Instead, reject “nice to haves” and focus policies and procedures on the minimum requirements possible to maintain accountability to the funder, e.g. “strictly necessary” financial and compliance records.
• Allow flexibility in eligible activities and allowable costs. Match the range of eligible or fundable program activities to those needed for effective program delivery. Alternatively, specify ineligible activities instead of listing eligible ones. Don’t make efficient program design bow to rigid one-size-fits-all program rules and consequent reporting burdens, or set limitations that are not related to risk.
• Regularly review program progress and refresh program guidance to favor desired outcomes.
• Don’t punish success. Maintain accountability with program tune-ups, not increasing scrutiny as programs grow or projects get larger. Review the program with implementors and beneficiaries and remove any disincentives to achieve and maintain program outcomes. Identify lower-functioning grantees, then provide technical assistance, up to and including a fiscal agent. If the program is annual or ongoing, don’t reduce funding for successful grantees below the level needed to maintain outcomes. (Make sure the data system collects the right information to understand cost per project or service unit needed to achieve this outcome.)
• Achieve, then maintain. Depending on your program types, maintaining outcomes over time may require some effort and resources. The outcome-focused data will enable a much better understanding of the actual costs. Capable, successful communities can also become peer advisors to help similar communities deliver for their stakeholders.

Flexibility that supports success

Thoughtful, intentional flexibility allows agencies to maintain strong oversight while empowering communities to deliver meaningful results. When programs reduce unnecessary data collection and shift attention toward mission-driven results, they create space for more effective local decision-making and continuous improvement – and ultimately better outcomes.

Contact our Grants Management and Administration team to discuss how your organization can build or strengthen this accountability/flexibility balance, in alignment with your program goals.