Grants - Understanding the Regulations

Grants and their related contracts fall under an enormous web of laws and other rules and regulations. Compliance occasionally posed problems when one regulation conflicts with another. Below are the general rules for determining what takes precedence.

First Rule: The most restrictive rule or law should be the one to follow. Regardless of which level of government or applicable agency created the rule or law, the strictest version applies if the regulatory body has oversight authority.

Second Rule: The federal government "outranks" state government and departments of state government "outrank" state divisions. Federal law supercedes state law, state law supercedes county law, and county law supercedes city law. A state may not allow a citizen to disobey a federal rule by passing a law less restrictive than the federal law.

Third Rule: Laws supercede rules and rules supercede policies and procedures, if they are all the same level of restrictiveness. The federal government makes rules in its various departments. Those federal rules take precedence over state law or rules.

Any entity cannot create an enforceable policy less restrictive than state law or rule. It can create policy more restrictive, with some exceptions. For example, an institution may require booking assets over $500 although the federal and state government does not require recording assets less than $5,000. (Central Washington University's basic capitalization guideline is $5,000)

Professional organizations may have their own codes, and those professional codes follow after federal and state requirements, whether they are laws or rules. Only members of the professional organization must comply with these types of codes. Professional standards may be codified into law, depending upon the state. An example would be laws governing real estate.

Grants have some special considerations. A college or university has one single "cognizant agency" of the federal government and that agency sets the majority of the rules and regulations for all grantees at that institution. The "cognizant agency" rules are the ones a recipient must follow, unless the actual granting agency creates additional requirements, usually contractually. The main exception is the costing rules from the Office of Management and Budget (OMB), which oversees all funding and cost rules. The only time a granting agency can impose more strict guidelines is through a contractual agreement.