Financial Oversight Lessons

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Guidance and tools to support a Grant Expenditure Monitoring
Publication Date
Arts, Communities, Journalism, Media Innovation

Related Opportunity 

Knight Foundation VP/CFO Juan Martinez lead a 39-minute webinar on implementing the GEM toolkit for foundations. Watch the archived replay now on


You can download a key tool mentioned in 'Financial Oversight': The GEM Risk Factor Scoring Sheet.xlsx (Excel file).

As a private foundation that achieves its mission using tax-exempt funds, the Knight Foundation must ensure that grantees appropriately spend funds to produce public benefit. This financial oversight responsibility led Knight to develop and launch the Grant Expenditure Monitoring (GEM) program in 2006 in partnership with accounting firm KPMG.

The GEM program plays a crucial role in maintaining compliance and accountability by supporting a series of financial reviews with Knight grantees. While the overwhelming majority of financial reviews conducted with grantees have indicated that projects were proceeding as planned and found no financial irregularities, a handful of reviews have turned up significant financial issues that prompted us to take corrective actions. Though the GEM was originally conceived as purely a financial review, the process has also provided opportunities for Knight staff and grantees to collaborate more closely. The program has been a key resource for program staff by bringing KPMG’s high level of business expertise to the complex operational issues that grantees face. Meanwhile, reviews have helped grantees identify ways to strengthen their capacities and operations. To examine the impact of the GEM and improve its ongoing effectiveness, we commissioned a pair of assessments in 2011 which analyzed the design of the program from an accounting perspective and gathered feedback from grantees and staff. The assessments affirmed the value of the GEM program but also led us to make some key adjustments to the program.

This report outlines the lessons we have learned about financial oversight from managing the GEM program, and it provides guidance and helpful tools to support others interested in the program. The report contains our latest thinking, and discusses some of the ongoing adjustments we are making to the program based on key findings. We hope that other funders—especially trustees and staff in finance and governance positions—will find this guide useful as they monitor and advance the work of their own grant partners.

Juan J. Martinez
Vice President/Chief Financial Officer

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We seek to weave the arts into the fabric of communities to engage and inspire the people living in them. We believe shared cultural experiences contribute to a sense of place and communal identity.

About our Resources and tools methodology

We follow evaluation and social impact measurement trends to identify best practices and tools. The assessment resources below include a mix of Knight and third-party tools to collect useful information about the effectiveness and impact of the work of our grantees.  Inclusion in this list does not necessarily constitute endorsement by Knight Foundation.