Dr. Frank Kardasz  P.O. Box 45048 Phoenix, AZ 85064
e-mail:   
kardasz(at)kardasz.org
Dr. Frank Kardasz, November 1, 2009

Grant advertisements often prohibit commingling of funds and supplanting of funds. Unfavorable audit findings sometime site
commingling and supplanting as problem areas. Here are the Department of Justice definitions of commingling and
supplanting.

Commingling of Funds

Federal agencies shall not require physical segregation of cash deposits or the establishment of any eligibility requirements
for funds which are provided to a recipient. However, the accounting systems of all recipients and subrecipients must ensure
that agency funds are not commingled with funds from other Federal agencies. Each award must be accounted for separately.
Recipients and subrecipients are prohibited from commingling funds on either a program-by-program or project-by-project
basis.

Funds specifically budgeted and/or received for one project may not be used to support another. Where a recipient's or
subrecipient's accounting system cannot comply with this requirement, the recipient or subrecipient shall establish a system
to provide adequate fund accountability for each project it has been awarded.

Supplanting

Federal funds must be used to supplement existing funds for program activities and must not replace those funds that have
been appropriated for the same purpose. Supplanting will be the subject of application review, as well as preaward review,
postaward monitoring, and audit. If there is a potential presence of supplanting, the applicant or grantee will be required to
supply documentation demonstrating that the reduction in non-Federal resources occurred for reasons other than the receipt
or expected receipt of Federal funds. For certain programs, a written certification may be requested by the awarding agency or
recipient agency stating that Federal funds will not be used to supplant State or local funds.

Retrieved October 31, 2009 from
http://www.ojp.usdoj.gov/financialguide/part2/part2chap3.htm
GRANTS AND FOUNDATIONS
Definitions of Commingling and Supplanting