Federal Grant Terms Glossary
A Reference from G1VE Advisory · 54 terms
Allowable Cost
A cost that meets all four tests under 2 CFR §200.403: it must be necessary and reasonable, allocable to the federal award, consistent with your organization's policies, and conform to the Uniform Guidance cost principles. If a cost fails any of these tests, it cannot be charged to the grant.
Allocable Cost
A cost is allocable to a federal award if the goods or services involved are chargeable or assignable to that award in accordance with the relative benefits received. If a cost benefits multiple projects, it must be distributed proportionally — not charged entirely to one grant.
Assistance Listing (formerly CFDA)
The federal database that catalogs all domestic assistance programs. Each program has a unique number (e.g., 93.778 for Medicaid). This replaced the Catalog of Federal Domestic Assistance (CFDA) in 2019. You need the Assistance Listing number for your SEFA and Single Audit.
Authorized Organizational Representative (AOR)
The individual authorized by your organization to legally commit the organization to the terms of a federal grant. This person signs the application and is responsible for certifications and assurances. Must be registered in Grants.gov and SAM.gov.
Award
The federal financial assistance instrument (grant, cooperative agreement, or fixed amount award) that provides funding to a recipient. The award document specifies the amount, period of performance, terms and conditions, and reporting requirements.
Budget Period
The interval of time into which the project period is divided for budgetary and funding purposes. A 3-year grant might have three 12-month budget periods. Funds are typically authorized by budget period, and unspent funds may or may not carry forward depending on award terms.
Buy America Act / Build America Buy America Act
Federal requirements that certain products purchased with federal funds (primarily iron, steel, and manufactured goods) must be produced in the United States. The Build America, Buy America Act (2021) expanded these requirements to all federal financial assistance programs for infrastructure projects.
Closeout
The process by which the federal agency determines that all applicable administrative actions and required work have been completed. Closeout must occur within 120 days of the end of the period of performance (2 CFR §200.344). Includes final financial and performance reports, return of unexpended funds, and equipment disposition.
Cognizant Agency
The federal agency responsible for negotiating and approving your indirect cost rate. For organizations receiving the most direct federal funding, the cognizant agency is typically the agency providing the largest dollar amount of direct funding.
Cooperative Agreement
A type of federal award similar to a grant, but with the expectation of substantial federal involvement during the project. The federal agency plays an active role in project direction, not just monitoring. Common with DOL and HHS programs.
Cost Allocation Plan
A document that describes how your organization distributes shared costs (like rent, utilities, and administrative salaries) across multiple funding sources. Required when costs benefit more than one program or activity.
Cost Sharing / Matching
The portion of project costs not paid by the federal award. May be required by the NOFO or offered voluntarily. Must be verifiable, not from another federal source (unless authorized), necessary and reasonable, allowable under the Uniform Guidance, and incurred during the period of performance.
Corrective Action Plan
A written plan that an organization must submit in response to audit findings. It describes the specific steps the organization will take to address each finding, the responsible parties, and the timeline for completion.
Davis-Bacon Act
Requires that workers on federally funded construction projects be paid prevailing wages as determined by the Department of Labor. Applies to construction contracts over $2,000 funded by federal grants that include construction activities.
De Minimis Indirect Cost Rate (10%)
A simplified indirect cost rate available to organizations that have never had a negotiated rate (NICRA). Under 2 CFR §200.414, you can charge 10% of Modified Total Direct Costs (MTDC) as indirect costs without negotiating a rate with your cognizant agency.
Debarment
An action taken by a federal agency to exclude an organization or individual from receiving federal awards. Debarred entities are listed in SAM.gov. You must verify that all subrecipients and contractors are not debarred before issuing subawards or contracts.
Direct Costs
Costs that can be identified specifically with a particular federal award or cost objective. Examples: salary of a project coordinator working 100% on the grant, supplies purchased exclusively for the grant program, travel directly related to grant activities.
Disallowed Costs
Costs that an auditor or federal agency determines are not allowable under the terms of the award or the Uniform Guidance. Disallowed costs must be repaid to the federal government. Common causes: costs outside the period of performance, unallowable cost categories, procurement violations.
Drawdown
The process of requesting and receiving federal funds from the federal payment system (typically PMS or ASAP). Drawdowns should be timed to cover immediate cash needs — not drawn down in advance and held in your account (this violates cash management rules).
Equipment
Under federal rules (2 CFR §200.1), equipment is tangible personal property with a useful life of more than one year and a per-unit acquisition cost of $5,000 or more. Equipment purchased with federal funds must be tracked, used for the authorized purpose, and disposed of per federal rules.
eRA Commons
The electronic Research Administration system used by NIH and other HHS agencies for grant application submission, review, and management. Principal investigators and institutional signing officials must have eRA Commons accounts.
Federal Awarding Agency
The federal agency that provides a federal award directly to a recipient. For example, if HHS awards a grant to your organization, HHS is the federal awarding agency.
Federal Financial Report (SF-425)
The standard form used to report financial status of federal awards. Typically submitted quarterly or semi-annually. Reports cumulative expenditures, unliquidated obligations, and unobligated balance.
Fixed Amount Award
A type of federal award where payment is based on meeting specific milestones or deliverables rather than actual costs incurred. Less common than cost-reimbursement awards. Reduces administrative burden but limits flexibility.
Flow-Down Requirements
Federal requirements that a pass-through entity must include in subaward agreements. These ensure that subrecipients comply with the same federal rules as the prime recipient. Required elements are listed in 2 CFR §200.332.
General Purpose Equipment
Equipment that is not limited to research, medical, scientific, or other technical activities. Examples: office furniture, computers used for general purposes. General purpose equipment is typically unallowable as a direct cost unless specifically approved in the budget.
Grant Agreement
The legal instrument used when the principal purpose is to transfer money, property, services, or anything of value to the recipient to accomplish a public purpose. Unlike a cooperative agreement, a grant does not involve substantial federal involvement in the project.
Grants.gov
The federal government's central portal for finding and applying for federal grants. All discretionary grant opportunities must be posted here. Organizations must register in Grants.gov (linked to SAM.gov) before they can submit applications.
Indirect Costs
Costs that benefit multiple activities and cannot be easily assigned to a specific grant. Examples: executive leadership salaries, rent, utilities, accounting department costs. Charged to grants using an indirect cost rate applied to a base (usually MTDC).
Indirect Cost Rate
The percentage used to calculate the indirect costs charged to a federal award. Can be a negotiated rate (NICRA), a provisional rate, or the 10% de minimis rate. Applied to a cost base, typically Modified Total Direct Costs (MTDC).
Internal Controls
The processes and procedures an organization uses to ensure compliance, prevent fraud, and safeguard assets. Federal regulations require that recipients of federal awards maintain effective internal controls over the federal award (2 CFR §200.303).
Liquidation
The process of paying obligations that were incurred during the period of performance. The 120-day liquidation period after the end of the performance period is for paying existing obligations — not for incurring new costs.
Micro-Purchase Threshold ($10,000)
The dollar threshold below which procurement does not require competitive quotes. For micro-purchases, you only need to determine that the price is reasonable. Above this threshold, you must obtain quotes from multiple sources.
Modified Total Direct Costs (MTDC)
The base used to calculate indirect costs for most federal awards. MTDC includes all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each subaward. Excludes equipment, capital expenditures, rental costs above $25K, and participant support costs.
Negotiated Indirect Cost Rate Agreement (NICRA)
A formal agreement between an organization and its cognizant federal agency that establishes the indirect cost rate(s) the organization can charge to federal awards. Must be renegotiated periodically.
Notice of Award (NOA)
The official document from the federal agency notifying the recipient that an award has been made. Contains the award amount, period of performance, terms and conditions, reporting requirements, and special conditions.
Notice of Funding Opportunity (NOFO)
The formal announcement published by a federal agency describing a funding opportunity. Contains program description, eligibility requirements, application instructions, review criteria, and award information. Published on Grants.gov.
Obligation
A legally binding commitment to pay for goods or services. Under federal grants, obligations must be incurred during the period of performance. An obligation is different from an expenditure — you can obligate funds (sign a contract) during the performance period and pay (expend) during the liquidation period.
Office of Management and Budget (OMB)
The executive branch agency that issues the Uniform Guidance (2 CFR Part 200) and oversees federal grant policy. OMB sets the rules that all federal agencies must follow when awarding and managing grants.
Pass-Through Entity
A non-federal entity that provides a subaward to a subrecipient to carry out part of a federal program. Pass-through entities are responsible for monitoring subrecipient compliance, including Single Audit requirements.
Period of Performance
The time during which the recipient may incur new obligations to carry out the work authorized under the federal award. Costs incurred outside this period are generally unallowable. Also called the grant period or project period.
Prior Approval
Written approval from the federal awarding agency required before taking certain actions. Common prior approval requirements: budget transfers exceeding a threshold, changes in scope, changes in key personnel, no-cost extensions, equipment purchases.
Procurement Standards
The federal rules governing how recipients purchase goods and services with federal funds (2 CFR §200.317–327). Different competition requirements apply based on dollar thresholds: micro-purchase, small purchase, and competitive procurement.
Program Income
Gross income earned by the recipient that is directly generated by a supported activity or earned as a result of the federal award. Examples: fees for services, sale of commodities, usage or rental fees. Must be reported and used per award terms.
SAM.gov
The System for Award Management — the federal government's primary registration database for organizations doing business with the federal government. Registration must be active and renewed annually. Required for all federal grant applicants and recipients.
Single Audit
An organization-wide audit required under 2 CFR Part 200, Subpart F, for any non-federal entity that expends $750,000 or more in federal awards during a fiscal year. Covers both financial statements and federal award compliance. Results are submitted to the Federal Audit Clearinghouse.
Small Purchase Threshold ($250,000)
The dollar threshold above which full competitive procurement procedures are required. Between $10,001 and $250,000, simplified (small purchase) procedures apply — requiring quotes from an adequate number of sources.
Subrecipient
A non-federal entity that receives a subaward from a pass-through entity to carry out part of a federal program. Subrecipients are subject to the same federal compliance requirements as the prime recipient. Distinguished from contractors by the nature of the relationship (2 CFR §200.331).
Subrecipient Monitoring
The activities a pass-through entity must perform to ensure subrecipient compliance. Includes risk assessment, reviewing financial and performance reports, desk reviews, site visits, and verifying Single Audit completion (2 CFR §200.332).
Supplanting
Using federal funds to replace (supplant) funds that would otherwise be available from state, local, or other non-federal sources. Many federal programs prohibit supplanting — meaning federal funds must supplement, not replace, existing funding.
Time-and-Effort Documentation
Records that accurately reflect the work performed by employees whose salaries are charged to federal awards (2 CFR §200.430). Must reflect actual activity — not budgeted percentages. Required for all personnel charged to federal grants, especially those splitting time across multiple funding sources.
Uniform Guidance (2 CFR Part 200)
The comprehensive set of federal regulations governing grants and cooperative agreements. Covers administrative requirements, cost principles, and audit requirements. Issued by OMB and applicable to all federal awarding agencies. The single most important regulatory document for federal grant management.
Unique Entity Identifier (UEI)
The unique identifier assigned to entities registered in SAM.gov. Replaced the DUNS number in April 2022. Required for all federal grant applications and awards.
Unobligated Balance
The portion of federal funds authorized under an award that has not yet been obligated. At the end of the period of performance, unobligated balances are typically returned to the federal agency unless a no-cost extension is approved.