Compliance Crackdown: Are Your Drawdowns Audit-Proof? 🔍
Published 3 months ago • 2 min read
Hi Reader,
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With recent PMS slowdowns and shifting agency priorities, many grant recipients are facing new cash flow challenges. And with greater scrutiny on how and when funds are drawn, even small missteps can put your organization at risk.
Understanding Your Assigned Drawdown Method
Under 2 CFR 200.305, your drawdown method—advance or reimbursement—is outlined in your Notice of Award. Recipients don’t get to choose. But you're responsible for ensuring that the assigned method is followed correctly.
​ Here’s a refresher: ​
Reimbursement: You spend first, then draw funds. Lower risk, but can strain your cash flow.
Advance: You receive funds up front—but must use them immediately and follow strict controls.
​ Advance payments aren’t a fallback for delays. Your system must demonstrate an immediate need, and you must minimize idle federal funds on hand.
The Real Risk?
Improper drawdowns can lead to repayment or audit flags.
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Especially now—with budget freezes, PMS issues, and upcoming OMB audit memos—drawdown methods are under new scrutiny.
Best Practices:
✔️ Review your procedures and timing quarterly ✔️ Only request advances if justified and well-documented ✔️ Reconcile drawdowns and disbursements promptly ✔️ Train your team on how 2 CFR 200.305 works in practice
Grant Management Bootcamp: ​Get Ahead of Compliance Gaps
If reading about drawdown risks made your stomach turn a little, we feel you. We’ve seen what happens when teams don’t understand the rules: disallowed costs, inconsistent reporting, procurement missteps, and even potential fraud findings.
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That’s why we created Grant Management Bootcamp—to give grant professionals the tools, strategies, and support they need to get compliance right.
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Here’s what’s included:
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✅ Three live, expert-led sessions (May 6–8, 1–4 PM ET) ✅ Replays and slides so you can revisit anytime ✅ 12 months of direct email support for follow-up questions ✅ Step-by-step guidance on drawdowns, procurement, reporting, and more
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We know how overwhelming federal compliance can feel, especially when guidance changes, systems go down, or your team is stretched thin. This training is designed to cut through the noise and give you exactly what you need to stay audit-ready and #GrantReady in 2025. ​
Court Says Agencies Can’t Delay Approved Grant Funds
Last week, a federal judge ruled that agencies must release funding tied to the Inflation Reduction Act and Infrastructure Law—funds that had been paused for internal review. The decision sends a clear message:
​ Federal agencies cannot withhold or delay funds that have already been approved by Congress.
​ Even though this ruling involved infrastructure and climate programs, it matters for every federal grant recipient. Why? ​
Because even when funding delays happen, your compliance responsibilities don’t pause. You’re still expected to: ​
Follow 2 CFR 200.305 rules on drawdowns
Document your payment timing and justification
Stay audit-ready, no matter what’s happening at the agency level
​ What this means for you: Even if funding gets disrupted, you’re still on the hook for following federal rules. Make sure your payment method is the right one—and that it’s properly supported.
Q: Can I request an advance if my program funds are delayed? ​ A: Possibly—but only if you meet the criteria in 2 CFR 200.305(b). Advance payments can’t be used just to bridge delays. You must document immediate need, disburse funds within a few days, and ensure the advance is essential to program success.
Set a recurring reminder to audit your drawdown method usage. Confirm that each award is correctly documented, reconciled, and justified—especially when using the advance method.
Upcoming Webinar
May 22, 2025 ​Compliance Webinar: Preparing for Early Termination​ ​Learn what to do if your award is suddenly terminated—and how to protect your funding and operations. ​
We’ll keep tracking these changes and sharing the tools you need to stay compliant in 2025. And if questions come up in the meantime, please reach out anytime at Support@MyFedTrainer.com.
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