If the funding is sizeable, most federal funders require an external evaluation team. Find out how much the funder expects to see in the budget for evaluation —the amount can be a sizeable portion of the budget. Find out also the funder's expectations regarding the role played by the external evaluation team so you can write a description into your evaluation plan. Program coordinators for federal funds are good about answering such questions.
Foundations and corporations are just beginning to require external evaluators on projects with sizeable budgets. We expect this trend to continue. Certainly funds are likely to be audited, but beyond that, the more visible funders are beginning to require additional evaluation measures as they strive to get a handle on accountability.
We suggest that you consider getting an external evaluator for any grant of sizeable funds. The external evaluator can act as a partner to keep you from getting into trouble with regard to the evaluation report to the funder.
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