A grant agreement is the formal contract between a funding body and recipient that establishes terms and conditions for grant money. Grant agreements specify: the amount and payment schedule, what the funds can be used for (eligible expenditures), required outcomes and deliverables, reporting requirements and timelines, financial accountability provisions, audit rights, procurement requirements, acknowledgment and communications obligations, and consequences for non-compliance including potential funding recovery. Grant agreements are legally binding—recipients who don't meet conditions may be required to return funding. Municipalities receiving provincial or federal grants should carefully review agreements before accepting funding to ensure they can meet all requirements. Staff responsible for grant-funded projects must understand agreement terms and build compliance activities into project plans. Good grant management includes documenting compliance throughout the project, not just at reporting deadlines.