Organizations that get government grants are required to meet strict oversight performance standards during the duration of the project.
All project expenditures must be strictly accounted for and detailed audits are conducted by the government at least annually. All granted funds must be spent. Any money not spent goes back to the Treasury. Detailed program goals must be developed, approved and carried out exactly as specified in the grant application. Any project changes must be approved by the government. All project phases must be completed on time. And, of course, the project must be successfully completed.
Failure on the part of the grantee to perform under the requirements of the grant can result in penalties ranging from economic sanctions to prison in cases of improper use or theft of public funds.
By far, most government grants are applied for and awarded to other federal agencies, states, cities, colleges and universities, and research organizations. Few individuals have the money or expertise necessary to prepare adequate applications for federal grants. Most active grant-seekers, in fact, employ full time staffs to do nothing but apply for and administer federal grants.
With federal funding cutbacks and competition for government grants is intense. Seeking a government grant requires a lot of time up front with no guarantee of success. The time frame for review and funding can also be quite lengthy so while grant funds can be a useful source of funding, one has to have a lot of patience and have contingency plans for disappointing outcomes.