Grant or restricted-fund misuse (public sector / nonprofit)

Restricted funds or grant awards are spent on unallowable costs, charged to the wrong grant or fund, or moved between funds to cover deficits. The reported results by fund or grant are misstated, and the scheme often also involves misappropriated disbursements.

Fully covered.

Starter pack: Not part of a starter pack

Red flags

In the data

• Cost transfers between funds or grants, especially after period end
• Grant spending concentrated near the end of the award period
• Fund balances or grant expenditures out of line with prior periods

Behavioral

• Program staff under pressure to spend down awards

Internal controls

• No review of cost transfers
• Periods not locked after grant reporting