What is supplanting, anyway?
Supplanting is the use of Federal Funds to replace already designated funds.
Technically, supplanting applies to State and Local Government units who receive Federal funding. However, you shouldn’t engage in supplanting no matter what. Supplanting defeats the purpose of grant awards. Let’s suppose your existing organizational budget includes the salary for your existing Director. And let’s suppose your organization receives a grant for $500,000 to increase its capacity. Since you were already paying the Director from your existing budget, you might not be permitted to use some of the $500,000 toward the salary, which was already allocated. Another illustration: suppose you received a Foundation grant award for a program, and also received a Federal award that includes funds for the same program. You should not use the Federal funds to replace the foundation funds.
What Should You Be Doing?
Federal Grant Funds are used to supplement, not replace other funds. Follow these rules to keep your organization on track.
- Every Grant File should be kept separate, with it’s own spreadsheet. Never lump all the funds together into one category that says: “grants”. That’s a big No-no.
- Allocate grant expenses for each respective grant award; don’t neglect to enter all receipts, expenditures and reports as they take place!
- Work with the bookkeeper/treasurer to set up budget categories for each grant award. This should be separate from the general operating budget, expenses, etc…
- As the grant manager, it is your responsibility to make sure expenses and reimbursements are consistently tracked for accuracy. I recommend meeting with the bookkeeper weekly and making sure the monies are correctly accounted and that your spreadsheets match.
- Make sure the Board of Directors understands the Supplanting/Supplement rules, since they are the fiscal planners.
- Know the details about each Funding Agency, keeping notes, emails, and all communications in the appropriate file.
- NEVER keep grant information solely on a computer. Always print and maintain paper copies, too.
- When in doubt, ask the Federal grant coordinator that has been assigned to your award. Better safe then sorry.
- Always file an amendment from the Federal Agency to utilize funds for a different purpose than you applied for.