Grant Accounting Checklist

Read the agreement end-to-end. Capture the period of performance, allowable cost categories, matching/cost-share requirements, indirect cost treatment, drawdown method (reimbursement vs. advance), and reporting cadence (quarterly FFR vs. annual). Federal awards under 2 CFR 200 carry stricter procurement and time-and-effort rules than private foundation grants — flag the difference now.

Create a class, location, or dimension in QuickBooks/Sage Intacct/NetSuite that segregates this grant's activity. Don't create a parallel chart of accounts — use existing GL accounts with a grant dimension so reports tie to the consolidated trial balance.

Mirror the grantor's budget categories exactly — personnel, fringe, travel, supplies, contractual, indirect. Variances must be reportable in the grantor's format. Many federal awards require prior approval for line-item shifts above 10% of the total award.

Federal awards (direct or pass-through) trigger 2 CFR 200 Uniform Guidance — procurement standards, indirect cost rate negotiation, and Single Audit eligibility. Pass-through funds keep their federal character; check the CFDA/Assistance Listing number on the subaward to be sure.

Under 2 CFR 200.430, payroll charged to a federal award must be supported by records reflecting actual work performed — not budget estimates. Collect signed time-and-effort sheets (or after-the-fact certifications for 100%-grant employees) for every staff member whose payroll hits this grant.

Review the AP register and credit-card feed for the period. Tag each charge with the grant dimension and verify documentation: vendor invoice, approval, and connection to the grant scope. Unallowable costs under 2 CFR 200 Subpart E (alcohol, lobbying, entertainment, fundraising) must be coded out of the grant even when they appear on a mixed invoice.

Use the organization's NICRA (negotiated indirect cost rate agreement) or the 10% de minimis rate if no NICRA exists. Apply to the modified total direct cost base — exclude pass-through subawards over $25K, equipment, and participant support costs from the base.

Run a budget-to-actual by category for the quarter and life-to-date. Flag any line projected to overrun by quarter end and any line under-spent below 50% at the midpoint — under-spend triggers grantor questions and clawback risk at closeout.

Most cost-reimbursement grants are conditional contributions under ASC 958-605 — recognize revenue only as the barrier (qualifying expenditure) is overcome. Unconditional grants with donor-imposed restrictions hit revenue at award and sit in net assets with restrictions until released.

Tie the GL receivable to expenditures earned but not yet drawn. Tie deferred revenue to advances received but not yet expended. The two should never coexist on the same grant in the same period — that's a sign coding is wrong.

For PMS/ASAP federal drawdowns, reimbursement should hit the bank within 3-5 business days of submission. For state and foundation grants, 30+ days is typical. Anything past 60 days warrants a call to the program officer — and a working-capital conversation with the ED if grant cash is a material funding source.

Federal awards use the SF-425 Federal Financial Report. State and foundation grantors use their own templates. Tie every line — federal share of outlays, recipient share, program income, indirect expense — to the GL with a workpaper. Submitted numbers are part of the audit trail for the next 3-7 years.

The program officer's progress narrative and the FFR get reviewed together. If the program report claims 80% of milestones are complete but you've spent 30% of the budget, the grantor will ask why. Reconcile both reports with the program lead before submission.

Sample 10-15% of the period's expenditures. Test against the four-part test: necessary and reasonable, allocable, conforms to limitations, consistent treatment. Document the test in a workpaper — auditors will replicate it.

Pull the executed agreement, all amendments, FFRs filed to date, GL detail by project code, payroll allocation worksheets, indirect cost calculations, and procurement files for any contracts above the simplified acquisition threshold. Suralink or ShareFile keeps the auditors out of your inbox.

Under 2 CFR 200 Subpart F, an organization that expends $750,000 or more in federal awards in a fiscal year must have a Single Audit. Sum federal expenditures across all awards (direct + pass-through), not just this grant. Crossing the threshold mid-year is a common gotcha for organizations new to federal funding.

The Schedule of Expenditures of Federal Awards lists each federal program by Assistance Listing (CFDA) number, pass-through identifier, and expenditures for the year. Tie totals to the GL and to the FFRs filed. Auditors test SEFA accuracy as a major-program selection input.

Schedule a fieldwork kickoff. Walk the auditor through the grant lifecycle: how expenditures are coded, who approves, how time-and-effort is captured, how drawdowns are reconciled. A clear walkthrough cuts substantive testing time and reduces management-letter comments.

Federal awards: final SF-425 due within 120 days of period-of-performance end (2 CFR 200.344). Late closeout puts the organization on the federal high-risk list and can delay future awards. File even if expenditures equal zero.

Refund any unspent advance to the grantor. Confirm the receivable equals the final draw remaining. Release any net-asset restrictions in QBO/Intacct so the balance sheet reflects grant closure. Leftover balances on the GL after closeout are a recurring audit finding.

Federal: retain for 3 years after final FFR submission (2 CFR 200.334). Litigation, audit, or claim extends the period until resolved. Move the SmartVault/ShareFile folder to the archive structure with a retention-end date in the folder name so it's not deleted prematurely.