Doherty said that at the time of funds drawdown, grantees often do not know to the penny how much they will need to cover expenditures. Thus, there is inherently some guesswork involved, even when drawing down by individual award. Grantees often have to go back and make adjustments to accounts. These estimates are then adjusted to actual expenditures when grantees submit their expense reports. In contrast, one federal agency that requires advanced payment requests to be made by individual grant award is the U.S. Department of Education.
Some grantees draw every day to minimize cash on hand.
Given the choice, Doherty thinks many grantees will opt for pooling. For those grantees that do not have more than a handful of awards, he conceded, perhaps individual drawdown would be more attractive because they would not have to submit monthly or quarterly reports on actual cash expenditures. Requiring this determination 'up front' may cause recipients to draw larger amounts of cash less frequently, resulting in poor management of federal funds. If the drawdown process becomes too cumbersome, Doherty explained, grantees are likely to use it less frequently. But not all grant payment requests are allowed to be pooled, he added.