Welcome to Feldesman’s Grants Practice Shorts series where we discuss helpful tips and strategies in common areas of federal grant management. Be sure to check out our other installments on our Grants Practice Shorts page.

Credit cards can be an efficient tool for meeting purchasing needs in federally funded programs. However, effective monitoring, internal controls, and supporting documentation are essential to ensure compliance with federal grant requirements.

Beyond the obvious risk of misuse or inappropriate charges, grantees should remain mindful that all credit card expenditures must satisfy federal cost allowability standards. Under the Uniform Guidance, costs charged to a federal award must be reasonable, necessary, allocable, properly documented, and consistent with applicable cost principles and award restrictions. See 2 C.F.R. Part 200, Subpart E.

Credit card statements alone are often insufficient to demonstrate cost allowability as they typically identify only the vendor and transaction amount. Organizations should therefore retain supporting documentation—such as receipts, invoices, approvals, and procurement records—before the passage of time makes retrieval difficult or impossible. Certain charges, including excessive finance charges or late payment fees, may constitute unallowable costs and may also signal weaknesses in internal controls. In addition, credit card transactions can create timing and allocation risks, including the inadvertent charging of expenses to the incorrect budget period.

Effective credit card management controls should include strong internal controls such as pre-approval requirements, segregation of duties, post-transaction review, and regular reconciliation processes. These checks and balances mitigate the risk of credit card misuse, strengthen fiscal oversight, and support ongoing grant compliance.

Our federal grant attorneys help organizations navigate complex grant compliance requirements while supporting operational and business objectives. For additional information, please contact Phillip Escoriaza or Adam Oppenheim.