How to read a funding agreement before the first dollar is spent

Signing day excitement often skips the clauses that matter at audit time. Eligible expenditure definitions, unspent funds rules, asset ownership, and the funder’s right to inspect records deserve a slow read — ideally with finance and the program lead in the same room.

Build a one-page compliance calendar from the agreement: report due dates, acquittal windows, and any mid-term reviews. Put owners next to each date. A calendar that lives only in the CEO’s inbox will fail when someone is on leave.

Ask clarifying questions early. Ambiguous “reasonable administrative costs” language is cheaper to resolve in week one than after twelve months of informal practice. Keep the funder’s written answers with the agreement file.

A short funding agreement health check at the start of a grant is often less expensive than fixing documentation gaps after a compliance letter arrives.