12 Aug 2026
Setting the Ground Rules - Policy Guide & Application (200.400–200.401)
Welcome to Season 3 of Grants Management Experts!In this kickoff episode, I'm introducing the Uniform Guidance Subpart E, Cost Principles, starting with the foundational sections 200.400 (Policy Guide) and 200.401 (Application). These two sections are your compliance baseline, and they dictate exactly how you can and cannot spend your grant money.I'm breaking down who's actually responsible for grant administration, why consistency is the golden thread running through compliance, and why documentation can make or break whether a cost is deemed allowable.What You'll LearnWhy Sections 200.400 and 401 matter: I explain how these sections establish accountability and provide the framework for applying cost principles and how they apply to every organization receiving federal funds, not just grant managers.Who's really responsible: I make the case that managing a federal grant is not the responsibility of the federal agency or your auditor, it sits with your organization, and specifically with your organization's leadership, through a fiduciary duty that runs top to bottom.Sound management practices: I walk through why recipients and subrecipients must adhere to laws, regulations, and award terms, and must keep grant funds and organizational funds consistently and well documented.Students as trainees and employees: I cover how, for research awards, students supporting the work may be classified as trainees or employees depending on the role they perform and why that dual role must be recognized.No profit from federal grants: I explain that unless the award terms explicitly allow it, unspent funds on a fixed award (like $10,000 left over from a $50,000 award) must be returned to the federal agency, not kept as profit.Direct vs. indirect costs: I talk through why every organization is different, what's a direct cost for one organization may be indirect for another and how the Uniform Guidance gives me room for management judgment, as long as that judgment is reasonable, allowable, documented, and consistently applied.Application isn't one-size-fits-all: I break down how Section 200.401 acts as a gatekeeper, translating cost principles into practice based on your organization's nature, the specific grant's terms, and your own written policies and procedures.The golden rule of compliance: I share why consistency between your written policies, your actual practices, and your accounting records is what auditors look for and how it's often inconsistency, not just an unallowable cost, that leads to audit findings.Document, document, document: I remind you that "if it isn't documented, it didn't happen", and I take it one step further: if it's undocumented, it didn't happen, and the cost won't be believed as allowable.Key Quote"That responsibility of managing the grant does not sit with the federal agency... and it doesn't sit with your auditor. It sits with your organization and it really sits with your organization's leadership."Resources I Mentioned:2 CFR 200, Subpart E - Cost PrinciplesSection 200.400 (Policy Guide)Section 200.401 (Application) Connect with Jasmine & Markanday Consulting:Instagram: @markandayconsultingLinkedIn: @markandayconsultingWebsite: www.markanday.consultingIf you found this episode helpful, please subscribe, rate, and share it with your colleagues. Join me next time as I continue exploring important grants management topics. Until then, stay informed and stay compliant.Register for my Free Upcoming Live Training on August 19th | Time: 1:00 - 2:00 PM CST | Grant Management Essentials: Avoiding Costly Compliance Mistakes Before Your Next Audit here!
