This error can appear when clicking on "Create Unposted Grant Applications" when processing Recurring Grants from Fund Distribution. 
This error can be resolved by resetting the vendor and fiscal sponsor on the first grant in the distribution list.  By deleting the entries in these two fields, and re-entering the grantee numbers, this error should resolve. 
To do this: 
1) Open up the Fund
2) Go to the Distributions tab
3) Delete and re-enter the "Designated Vendor/Grantee" and "Payee/Fiscal Sponsor ID".