Grants help councils distribute funds to community groups and provide external capital for local projects. Understanding why grants management is important helps local governments take a structured approach that ensures compliance, maximises impact and improves funding outcomes. However, local governments often face significant challenges in providing and receiving grants. A structured approach and appropriate use of grant management software for local governments can help overcome these hurdles and maximise the impact of every dollar.
When councils distribute grants, consistent processes ensure fair and transparent decisions that fund the right projects. For councils that receive grants, clearly defined processes mean staying on top of applications, tracking cash flow, and monitoring the providers of each grant. Implementing best practices in grant management allows local governments to use resources more efficiently, securing additional funding and achieving stronger outcomes for their communities.
How Grant Management Software for Local Government Improves Funding Outcomes
For Grant Giving
Grant management software for local governments plays a key role in ensuring the fair and transparent distribution of funds. By automating key processes, it reduces delays in approvals, keeps processes and reporting compliant, and helps fund the right projects. Grant management software ensures councils can track key milestones, maintain compliance, and keep projects on schedule.
For Grant Receiving
Local governments that adopt structured grant management software to orchestrate their grant-seeking processes greatly increase their chances of securing state or federal backing for initiatives. By collaborating on applications, obtaining key approvals, and tracking awarded funds, automated software helps align grant seeking efforts, ensure compliance with grant conditions, and reduce the risk of under- or over-spending occurring. Following local government grant management best practices makes it easier to manage multiple funding sources, track deadlines and maintain accurate records.
Common Challenges in Local Government Grant Management
Despite its importance, managing grants can be challenging, whether you're distributing funds or applying for them.
Challenges of Grant Providing
Ensuring Fair and Transparent Fund Allocation
Grant providers often manage multiple applications at once, which can lead to bias or inconsistent decision-making. Unequal fund distribution can result in public dissatisfaction and damage a council’s reputation.
Compliance with Regulatory and Reporting Requirements
Councils must follow strict state and federal guidelines that often require detailed reporting and audits. Failing to comply can lead to legal issues and reduced opportunities in the future.
High Administrative Workload and Manual Processes
Many councils still rely on paper-based applications, which are slow and prone to errors. Manual processes are resource-intensive by nature and can be costly for local governments that are already resource limited.
Monitoring Grant Utilisation and Measuring Impact
Once funds are awarded, it can be difficult for local governments to see if they're spent correctly, or if the project meets its goals. Poor oversight can lead to misuse of funds or projects that fall short of their objectives.
Managing Multiple Grant Programs Simultaneously
Local governments often process multiple grants at once, each with its own eligibility rules and deadlines. Without a central grant management system, it is easy to lose track of different applications and funding sources.
Poor Governance and Variation in Management
When using manual processes, changes in management personnel can disrupt timelines, budgets and approvals of local government grants. When combined with poor governance from a previous administration, local governments can experience a lack of transparency, delays in approvals, and a potential loss of funding.
Limited Resources and Staffing Constraints
Many councils work in small teams so there is limited capacity to manage a high volume of applications. This can lead to delays, backlogs, and limited ability to take on extra tasks.
Lack of Real-Time Financial Oversight
Without real-time tracking, it can be tough to monitor grant spending, remaining balances, and fund allocations. Limited financial oversight can lead to budgeting issues, unexpected over- or under-spending, or missed financial opportunities.
Challenges of Grant Receiving
Navigating Application and Eligibility Requirements
Government grants often come with strict eligibility rules and detailed applications. Incomplete or badly prepared submissions can cause delays or lead to an application being rejected.
Ensuring Compliance with Grant Conditions and Reporting Requirements
Many grants require ongoing reports, financial management, and checks to confirm alignment with regulations. Missing these obligations can lead to funding clawbacks, penalties, or disqualification.
Managing Multiple Grants Simultaneously
Local governments often handle multiple grants with different deadlines and reporting needs. Without a centralised system, keeping up with everything can be time-consuming and overwhelming.
Tracking Grant Spending and Budget Allocation
Effective grant management requires careful financial oversight. Poor tracking can lead to budget breaches and funding agreement violations.
Meeting Audit and Financial Accountability Standards
Detailed financial records are necessary for audits, and councils must ensure funds are being used properly. Ineffective record-keeping can lead to penalties or damage a council's reputation.
Limited Staff and Resources for Grant Management
Limited staff resources can hinder applications, reporting and audits, delay submissions, and put compliance at risk.
Adapting to Changing Government Policies and Grant Priorities
Funding trends can shift with new policies or economic conditions. Missing these changes can breach the criteria of your agreement, leading to fewer grant wins.
Grant Management Best Practices for Efficiency in Local Government
Addressing these challenges starts with clear strategies, strong communication, and the right digital tools (see more on the advantages of Omnistar grant management software). Below are some best practices to help keep your grant programs efficient, transparent and geared towards positive community impact.
Grant Giving: Best Practices for Distributing and Managing Funds
Establish Clear Grant Guidelines and Criteria
To ensure the goals of your grant reflect the community’s needs and are aligned with current policies, set eligibility rules, funding priorities, and scoring systems at the beginning of the process.
Implement a Transparent and Structured Review Process
A structured review process provides your grant with the best possible chance of succeeding. Use consistent application forms and a standard scoring process to assess submissions. If necessary, bring in independent reviewers to reduce bias.
Streamline Application and Approval Workflows
Using a grant management system with automated workflow capabilities simplifies the grants management process, by automating critical processes from application eligibility through to approval and post-award fund distribution.
Enhance Compliance and Accountability
Require grantees to provide regular progress reports to confirm the proper use of funds. Schedule audits or site visits to ensure obligations are being met.
Provide Clear Communication and Support
Offer training, create FAQs, or write guidelines to support grant applicants. Keep lines open for feedback to refine future funding rounds.
Grants Receiving: Best Practices for Securing and Managing Grants
Develop a Proactive Grant Strategy
A proactive approach helps identify opportunities to apply for and distribute grants. Regularly look out for opportunities from state, federal, or private sources and match your applications to local priorities and community aims.
Standardise Grant Application Processes
Keep templates and case studies ready for new submissions. Assign a dedicated team or coordinator to manage applications and implement a consistent, audited process to ensure stakeholder endorsement is sought before applying for a grant. It is particularly important to do so when applying for grants with an in-kind funding requirement.
Ensure Strong Compliance and Financial Oversight
Strong financial management helps prevent grant budgeting issues. Using live tracking tools to monitor spending and deadlines, while maintaining thorough records will ensure adequate preparation for audits.
Automate Grant Management and Reporting
Choose software that centralises applications, fund tracking, and compliance. Set up automated alerts for key dates to avoid missing deadlines.
Measure and Report on Grant Outcomes
Track performance metrics to see how the project is working. Share detailed reports with funders to prove responsible use of their money.
Leveraging OmniStar For Local Government Grant Management
Grant management can quickly become complex, whether you're handing out funds or applying for them. Manual processes, compliance demands, and admin bottlenecks can cause unnecessary headaches. OmniStar helps solve these issues by providing an all-in-one platform that automates workflows, strengthens compliance, and improves transparency for local governments.
How OmniStar Tackles Common Grant Management Issues
OmniStar improves how you handle applications, approvals, and fund management through automated processes and a focus on compliance. SmartForms make data collection consistent, while automated eligibility checks and logic-based panels keep reviews fair. A single dashboard ensures that everyone can check in with the grant’s progress at a moment’s notice, while built-in reporting templates and audit-ready documentation simplify the management process.
Next Steps: Transform Your Local Government’s Grant Management with OmniStar
Without the right workflows, compliance checks and live reporting, grant management processes can become a source of frustration, cause budget snags, or even put future funding at risk. OmniStar streamlines the entire process, from intake and approvals to money disbursement and final reporting.
By adopting OmniStar, your council can maintain compliance and accountability, automate key processes and gain stronger financial oversight.
See how OmniStar can simplify grants management for your council by booking a demo today!
Talk to our team and discover a simpler way to manage grants.
