The Grant Cycle

Reimbursement & Direct Grants

Reimbursement Process

Grant recipients do not automatically receive payment if an LCC approves their grant request. The LCC Program is reimbursement-based: recipients need to spend the money to then be reimbursed from LCC funds. Beginning once the LCC completes their reporting to Mass Cultural Council (November – January) and continuing throughout the year, grant recipients can submit their reimbursement requests. LCCs specify exactly what kind of documentation a grantee needs to provide in order to be reimbursed in the approval letter. LCCs must also check with their town/city to see if they have specific requirements.

Third-Party Vendors

Reimbursements can be directed to third-party vendors who have provided goods, materials, or services to the grant recipient. The LCC must retain a copy of the documentation provided by the applicant with the application as part of the LCC’s records. LCCs should check with their municipality to determine how they ought to retain copies of third-party documentation.

To reimburse a third-party vendor the grantee simply needs to check off that option on the reimbursement form and supply the name and address of the vendor to be paid. The grantee should sign the reimbursement form, not the third-party vendor. However, if the municipality requires a completed tax form such as a W-9 or 1099, the third-party vendor should complete that documentation since they will receive the payment.

Council Programs

Please note that because the Local Cultural Council is a municipal entity, any expenses or programs, including Council Programs that use Mass Cultural Council’s allocation, must be reimbursement-based. LCC members must keep track of receipts and other proof of expenditures and submit them to the municipality using a reimbursement form once the project or purchase has been completed.

Direct Grants Process

LCCs who are providing direct grants MUST attach a copy of the Grant Agreement Form to their approval letter. The form serves the dual purpose of stating terms and conditions, as well as authorizing a payment. Using the Grant Agreement Form, the grantee will provide payment information and accept the terms and conditions of the grant. Because the payment process is different from the reimbursement-based process, the LCC’s approval letters must reflect this direct payment process.

If grant funds are to be paid directly to a third-party vendor, the vendor must fill out the form and return it to the LCC. In each case, the LCC will forward the W-9 to the appropriate municipal fiscal officer, typically the city auditor or town accountant, so that funds can be authorized and released to the grantee through the local vendor warrant process.

The Direct Grant process for LCCs provides grant funding up front to grantees in lieu of reimbursement based granting to enhance and encourage more programming opportunities by imposing less financial hardship on potential grantees, and to simplify the payment process for municipalities and LCCs.

The timeline of the Direct Grants process is not much different than reimbursement.

Once the Grants Decisions Report is completed in January of each year, the Local Cultural Council sends grant packet to the grantee which includes: An Approval Letter, Grant Agreement, W-9 and Final Report.
Grantee signs and sends Grant Agreement & signed W-9 back to LCC (ideally it is returned within 2-4 weeks)
LCC forwards Grant Agreement & W-9 to Municipal Officer for payment. (LCC does NOT keep copy of W-9 form).
Municipality processes paperwork in a timely manner (usually within two weeks of receiving the paperwork) and sends payments directly to the grantees.
Grantee, at the completion of the program, fills out the Final Report Form and sends to the completed form to the LCC.
Grantees must return the completed final report outlining the completion of the program/project that was funded.
If the grantee does not comply with the process set out in the Approval Letter, the LCC can request that the grantee return the funds. If funds are not returned, the LCC can choose to not allow the grantee to apply for the following year or any other sanctions they have made clear in their approval letter.

Forms

Approval Letter: Can be tailored to meet the needs of each LCC. Sets out special conditions, if any, for the grantee to comply once they receive the funds. An approval letter template is available as a Word document and a PDF.

Grant Agreement Form: LCC sends this agreement to the grantee to sign off on the direct grant they will receive. LCC reviews the agreement and signs-off on the agreement before sending it to the Municipal Fiscal Officer.

W-9 Form: IRS-required form that allows the municipality to pay performers, organizers, and vendors. This form must accompany the Grant Agreement Form that is received from the grantee and should be signed by the grantee. LCC sends the original W-9 to the municipal accountant or treasurer and does not keep a copy as W-9 forms include private information.

Final Report Form: Grantees must send a Final Report to LCCs upon completion of project/program. It is suggested that the report be filed within two weeks of program completion but absolutely within one year of date on approval letter. Additions can be made to the Final Report on a council-by-council basis.

The Final Report:

Confirms Grantee completed the project/program and details and completion.
Provides participation information and impact of program.
Acknowledges compliance with Mass Cultural Council and LCC guidelines.
Includes required documentation, if any.

LCCs can request additional documents to accompany the Final Report and state those requirements in the Approval Letter.

LCCs can request the return of grant funds if the grantee does not submit a Final Report or complete the project.

Grantees that do not repay the grant funds to the LCC jeopardize their future funding.