Maintaining Audit-Ready Documentation

Being audit-ready means you can produce the support for any grant transaction when someone asks for it. This guide covers what to keep, how long to keep it, and how to organize it.

Core documentation requirements

For every transaction

Keep the evidence that fits each expense and its risk, because an invoice alone may not show that a cost is allowable. A complete record usually includes these items:

• An invoice or receipt that shows what was bought
• Proof of payment, e.g., a check copy or bank record
• Evidence of who approved the expense
• The reason the expense was charged to the grant, including the allocation basis for a shared cost

For every grant

Keep a complete file for each grant:

• The award letter or agreement with the original terms
• The approved budget and every approved change
• Correspondence with the funder
• Submitted reports and any acknowledgments
• Approved modifications, e.g., budget changes and extensions

For your organization

Keep your written policies:

• Accounting policies that explain how you handle transactions
• Your cost allocation method
• Internal controls, e.g., approval limits and separation of duties
• Personnel policies, e.g., time reporting and payroll procedures

How long to keep records

No single rule says to keep everything for seven years. Set a retention schedule with input on legal, tax, employment, privacy, litigation hold, audit, and funder requirements.

For federal awards, 2 CFR 200.334 generally requires you to keep financial records and supporting documents for three years from the date you submit the final financial report. For awards renewed quarterly or annually, the three years run from the quarterly or annual financial report. The section lists exceptions that change the start date or the length of time:

• Litigation, claims, or audits that start before the three years end
• A written notice from the agency or pass-through entity that extends the period
• Property and equipment records, which you keep for three years after final disposition
• Certain program income records
• Indirect cost rate proposals and cost allocation plans

Federal agencies and pass-through entities can't impose other retention requirements beyond the ones in that section.

Organizing your files

Paper files

If you keep paper files, use one folder per grant with a consistent layout and clear labels. Store the folders securely.

Digital files

A simple folder structure might look like this:

Grants/
  [Funder name]/
    [Grant name and year]/
      Award documents/
      Budget/
      Correspondence/
      Reports/
      Supporting documents/

Where GrantLink fits

GrantLink can hold allocation details, an activity history for each grant, synced QuickBooks transaction data, and generated reports. GrantLink is not your accounting ledger, and it does not replace your records retention and backup system.

Documentation practices

When a transaction happens

1. Scan receipts right away, because paper fades and gets lost.
2. Add a note to explain anything unusual.
3. Attach the support to the record in QuickBooks or GrantLink.
4. Record who approved the expense.

Each month

1. Reconcile bank and grant balances.
2. Review and clear open items.
3. File loose documents.
4. Back up digital files.

When a grant ends

1. Finish all allocations so nothing is pending.
2. Prepare the final reports that document spending.
3. Organize the file for audit or archive.
4. Keep the closeout correspondence with the funder.

Common documentation gaps

Watch for these gaps:

• Missing receipts. Set receipt policies early.
• Verbal approvals. Get approvals in writing.
• Allocations with no explanation. Record the reason for each allocation.
• Missing records of time worked, which you need to support personnel costs.
• Award modifications without written approval. Get them in writing.

Using GrantLink for documentation

Attach files

Store each piece of support in the system that owns the record, e.g., as an attachment on the QuickBooks transaction or in the Documents area of the grant's Details section. Keep a clear reference that connects the support, the QuickBooks transaction, the allocation, and the submitted report. Don't assume GrantLink links a document to a specific transaction line.

Add notes

Use the grant's Notes, the memo or reason on an allocation, and the grant's Activity history for day-to-day context. Keep accounting approvals and source evidence in your organization's controlled record system.

Export copies for your records

You can ask the assistant for a data export in a new chat and download it as an Excel or CSV file. Settings > Exports lists your export requests. Store the downloaded files in your secure backup location. See exporting data to Excel and CSV for the steps.

Summary of good practices

1. Document each transaction when it happens, so you don't have to catch up later.
2. Use the same system and the same steps every time.
3. Organize files so other people can find them.
4. Keep records secure and backed up.
5. Train staff so everyone follows the same procedures.

How GrantLink supports this today

GrantLink keeps grant records next to your QuickBooks data. Each grant has a Budget section, a Transactions section with Allocations, Invoices & receipts, and Funding shares, a Reporting section, and an Activity history. Documents and notes are in the grant's Details section. These records can help you prepare for an audit, but they don't replace the award terms, your accounting policies, or professional review.