Pass-through entities play a pivotal role in the grant funding ecosystem. By receiving funds and distributing them to delivery partners, they help extend the reach and impact of grant programmes. However, this intermediary role comes with significant responsibility. The original grant recipient remains accountable for the performance, compliance, and integrity of all downstream partners.
Monitoring is the mechanism through which pass-through entities uphold this responsibility. It ensures that delivery remains on track, risks are identified and managed, and partners are supported to meet their obligations. Effective monitoring is not just about collecting reports, it is about building relationships, maintaining transparency, and enabling continuous improvement.
What monitoring means for pass-through entities
Monitoring refers to the ongoing oversight of sub-grantee activities, finances, and compliance. It enables pass-through entities to:
- Track progress against agreed objectives and outcomes.
- Ensure proper use of funds and adherence to grant conditions.
- Identify and address risks, issues, and underperformance.
- Support learning and adaptation throughout the grant lifecycle.
Monitoring typically includes three dimensions:
- Compliance monitoring: Ensuring sub-grantees follow contractual obligations, policies, and regulations.
- Performance monitoring: Assessing delivery against targets, milestones, and key performance indicators (KPIs).
- Financial monitoring: Reviewing expenditure, financial reports, and value for money.
Each dimension contributes to a holistic understanding of how the grant is being implemented and whether corrective action is needed.
Building a Monitoring Framework
A robust monitoring framework provides structure and consistency. It should be tailored to the grant’s size, complexity, and risk profile, and can include the following components:
- Reporting schedules: Define what sub-grantees must report, how often, and in what format.
- Site visits: Plan periodic visits to observe activities, verify data, and engage with stakeholders.
- Key performance indicators (KPIs): Establish measurable indicators aligned with grant objectives.
- Risk registers: Maintain a live record of risks, mitigation strategies, and escalation procedures.
- Roles and responsibilities: Clarify who within the pass-through entity is responsible for monitoring, analysis, and follow-up.
Monitoring should be embedded into internal policies and aligned with funder requirements. It must also be proportionate, smaller grants or low-risk partners may require lighter-touch monitoring, while high-risk or complex programmes may need more intensive oversight.
Monitoring Tools and Techniques
Pass-through entities can use a range of tools to support effective monitoring:
- Dashboards: Visualise performance data across multiple partners and indicators.
- Partner scorecards: Summarise sub-grantee performance, compliance, and risk status.
- Reporting templates: Standardise financial and narrative reporting to improve consistency.
- Remote monitoring: Use video calls, digital platforms, and mobile data collection to monitor partners in hard-to-reach areas.
- Third-party verification: Engage independent auditors or evaluators to validate data and assess compliance.
Technology can enhance monitoring efficiency, especially when managing multiple partners across geographies. However, it should complement, not replace, human engagement and contextual understanding.
Common Challenges and How to Address Them
Monitoring sub-grantees is not without challenges. Pass-through entities often encounter:
- Inconsistent reporting: Partners may submit incomplete or delayed reports, or use varying formats.
- Limited capacity for field visits: Budget or staffing constraints may restrict in-person oversight.
- Sensitive issues: Safeguarding concerns, fraud allegations, or underperformance may be difficult to address.
To overcome these challenges, pass-through entities can:
- Provide training and support to sub-grantees on reporting and compliance.
- Use risk-based prioritisation to focus resources on higher-risk partners.
- Establish clear escalation protocols for serious issues.
- Foster open communication and trust to encourage transparency.
Monitoring should be seen as a collaborative process, not a punitive one. It is an opportunity to strengthen partnerships and improve outcomes.
Embedding monitoring into grant agreements
Monitoring expectations should be clearly defined in grant agreements and onboarding materials. Key elements include:
- Reporting clauses: Specify frequency, format, and content of reports.
- Escalation procedures: Outline how issues will be addressed and resolved.
- Corrective action plans: Provide a framework for responding to underperformance or non-compliance.
- Joint monitoring plans: Encourage shared ownership of monitoring between the pass-through entity and sub-grantee.
- Feedback loops: Use monitoring findings to inform programme adjustments and learning.
Embedding monitoring into contractual and operational frameworks ensures that it is taken seriously and consistently applied. It is a continuous process that enables pass-through entities to fulfil their oversight responsibilities, support their partners, and deliver impact. It is not just a compliance requirement, it is a strategic tool for managing risk, improving performance, and building trust.
At Menzies LLP, we help grant recipients design and implement monitoring frameworks that are proportionate, practical, and audit-ready. Our services include independent reviews, monitoring plan development, and support for reporting and escalation procedures.
Contact us to learn how we can support your organisation in strengthening oversight and ensuring successful grant delivery.
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