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Federal Grants

What if the government terminates the grant early?

Grant agreements usually outline conditions for early termination (e.g., breach of contract, falsified reports). If the termination is unjustified, we can appeal the administrative act in court. However, typically, the agency has broad discretion if performance indicators (KPIs) are not met.

Is co-financing mandatory for state grants?

Many state programs (like Enterprise Georgia or GITA) require matching funds or co-financing (e.g., 50% grant, 50% own contribution) to ensure the beneficiary's commitment. This must be proven by bank statements or audit reports. Failing to provide the co-share can lead to the cancellation of the grant.

Does the State Audit Office check private NGOs?

Yes, if an NGO receives funds from the state budget, the State Audit Office has the authority to audit how those specific funds were spent. They check for compliance with the budget, legality of expenses, and achievement of project goals. We help prepare documentation to ensure a clean audit.

Can I change the grant budget during the project?

Budget amendments are possible but require prior written approval from the grantor agency. Shifting funds between budget lines (e.g., from marketing to salaries) usually has a percentage limit (e.g., 10%) allowed without approval; anything above that must be formally requested and justified.

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State grants (often referred to as "Government Grants" or analogous to "Federal Grants" in other systems) are funds received from the Georgian state budget, ministries, or Legal Entities of Public Law (LEPLs). This is one of the most significant but also most regulated sources of funding. State grants differ from public procurement (tenders) in that a grant serves a public good rather than purchasing services for the state. However, receiving and managing a state grant is associated with strict bureaucratic requirements, complex reporting forms, and a high risk of audit by the State Audit Office. An improperly administered state grant can lead to financial sanctions and the blacklisting of the organization.

The state grant compliance service includes full legal support at all stages of the grant cycle. Specialists offer:

  • Legal analysis of grant competition conditions and verification of application compliance;
  • Reviewing and negotiating the agreement to be signed with the state agency;
  • Legal monitoring of budget spending to prevent misuse of funds;
  • Ensuring compliance with public procurement procedures within the grant (if required);
  • Legal preparation of interim and final reports;
  • Representation in disputes if the state agency demands repayment of funds.
This service helps ensure that state funding becomes an opportunity rather than a burden.

Managing state grants is complex in specific situations. For example, an organization receives a grant from the Innovation Agency (GITA) to develop a startup. The contract strictly defines what the funds can be spent on. If the organization buys equipment not listed in the budget, the agency may demand the return of the entire grant. Another example is a grant from the Ministry of Agriculture for a cooperative — co-financing is often required, and documenting it requires legal precision. Also, intellectual property created under a state grant (e.g., research, software) often remains state property, which must be understood in advance.

The legal framework relies on the "Law of Georgia on Grants" and, in part, the "Law on Public Procurement." The rules for issuing state grants are regulated by Government of Georgia decrees and the statutes of specific agencies (e.g., Shota Rustaveli National Science Foundation, Enterprise Georgia). The Law on the State Audit Office defines mechanisms for controlling the spending of budget funds. A lawyer ensures compliance with these complex regulations.

The process begins before signing the grant agreement. The lawyer checks obligations: What happens in case of force majeure? How are budget amendments made? During the project, the lawyer works with the accountant to ensure all expenses are legally sound (contracts, acceptance acts). With the help of a specialist on Legal.ge, you will avoid administrative errors that could cost your organization dearly.

Legal.ge is a platform connecting organizations with administrative law specialists. A state grant is a significant responsibility to taxpayers. Manage this responsibility competently with Legal.ge.

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