Grant compliance isn't just about avoiding audit findings—it's about being a trustworthy steward of funder resources. This checklist covers the key compliance areas every grant-funded nonprofit should address.

Pre-Award Compliance

Before accepting a grant, ensure you can comply:

Organizational Readiness

Financial systems adequate for grant tracking
Staff capacity to manage the grant
Policies in place (procurement, travel, personnel)
Insurance coverage meets requirements
Registration current (SAM.gov for federal, state registrations)

Grant Agreement Review

Terms understood by all relevant staff
Budget is realistic and complete
Match requirements can be met (if applicable)
Reporting deadlines are calendared
Restrictions are understood and acceptable
Prior approval requirements identified

Financial Management

Cost Principles (2 CFR 200 for Federal)

All costs charged to grants must be:

Allowable — Permitted under grant terms and regulations
Allocable — Benefit the grant proportionally to the charge
Reasonable — What a prudent person would pay
Consistent — Treated the same across grants

Allowable vs. Unallowable Costs

Generally Allowable:

Salaries and wages (with documentation)
Fringe benefits
Travel (per policy and grant limits)
Supplies directly used for grant
Contractual services (with proper procurement)
Indirect costs (per rate agreement)

Commonly unallowable or restricted under federal rules: Exceptions, credits, and award-specific provisions can change the conclusion; review the applicable cost principle.

Budget Management

Budget approved before spending
Spending within categories (or approval for changes)
No overspending total award
Prior approval obtained for budget changes (if required)
Cost transfers are timely, justified, documented

Documentation Requirements

General Documentation

Every expense needs:

Source support — Invoice, receipt, payroll record, agreement, or other evidence appropriate to the transaction
Posting and payment evidence — As applicable to the accounting basis and report being supported
Purpose documentation — Why the expense was needed
Grant coding — Which grant is charged
Approval — Appropriate authorization

Personnel Documentation

Personnel records and controls appropriate to the organization and award; a timesheet is not universally required
Payroll support accurately reflects work performed and meets award and internal-control requirements; federal rules do not universally mandate semiannual certifications
Position descriptions match actual duties
Effort reporting matches charges
Salary reasonableness documentation

Travel Documentation

Prior approval (if required)
Business purpose documented
Receipts or other support retained as required by policy, award terms, and the nature of the cost
Travel policy and award limits followed; 2 CFR 200.475 does not universally require recipients to use federal per diem rates
Mileage or equivalent support retained when required by the reimbursement method and policy
Comparison to alternatives (if required)

Procurement Documentation

For each purchase, apply the documentation appropriate to the procurement method and the organization's documented thresholds. Not every item below is required for every purchase:

Competition documented (quotes, bids)
Selection rationale explained
Conflict of interest certification
Contract or purchase order
Price reasonableness analysis

Federal Grant Requirements

If you receive federal funds (directly or as pass-through):

Uniform Guidance (2 CFR 200)

Certifications and Representations When Applicable

Lobbying certification or disclosure required by the transaction and applicable rule
Suspension/debarment representations or checks required for the covered transaction
Drug-free workplace requirements applicable to the recipient and award

SAM.gov Registration

Registration current (must renew annually)
UEI number obtained
Banking information current

Reporting Compliance

Financial Reporting

SF-425 or other financial report submitted on time when required by the award or agency
Reports match general ledger
Cash draws reconciled to expenditures
Budget-to-actual variances explained

Programmatic Reporting

Progress reports submitted by deadline
Outcomes data accurate and verified
Activities documented throughout the period
Photos/evidence collected as required

Timely Submission

Report Type	Typical Deadline
Quarterly financial	Per award; many federal periodic reports allow 30 days after the period
Progress reports	Per agreement
Annual reports	Per agreement
Federal closeout	Generally 120 days for recipients and 90 days for subrecipients; agreement controls other reports

Property and Equipment

Tracking Requirements

Inventory system for equipment meeting the applicable definition and award terms (the federal equipment threshold is currently $10,000 per unit, unless the recipient uses a lower capitalization level)
Tags or labels used when required by the organization's control system, award terms, or applicable law
Physical inventory conducted and reconciled at least once every two years when 2 CFR 200.313(d)(2) applies
Location of equipment documented

Disposition

When grant ends:

Disposition instructions requested when required by the award or 2 CFR 200.313(e); do not assume every item requires written approval
Fair market value obtained if sold
Proceeds handled per grant terms
Documentation of disposition

Subrecipient Management

If you make subawards:

Pre-Award

Risk assessment conducted
Award document includes required terms
Assistance Listings number and other required federal award identification passed through
Indirect cost rate documented

During Award

Monitoring plan implemented
Financial reports reviewed
Technical reports reviewed
Site visits conducted (if required)
Issues addressed promptly

Closeout

Final reports collected
Expenditures reconciled
Audit status verified

Record Retention

Federal Grants

Retain records generally for 3 years from submission of the final financial report under 2 CFR 200.334, subject to its different rule for quarterly/annual renewals and listed exceptions, including:

Litigation or audit pending
Records relate to real property or equipment

All Grants

Keep:

Audit Preparation

Annual Preparation

Reconcile all grant accounts
Review for compliance issues
Prepare supporting schedules
Organize documentation

Single Audit (generally if $1,000,000+ in federal awards is expended in the fiscal year)

SEFA prepared accurately
Major programs identified
PBC list items prepared
Prior findings addressed

Internal Controls

Segregation of Duties

Authorization separated from recording
Custody separated from recording
Reconciliation by independent party

Approval Requirements

Expense approval thresholds defined
Journal entry approval required
Budget change approval process
Signature authority documented

Optional Internal Review Processes

Grant budget review cadence defined based on reporting deadlines, risk, and transaction volume
Compliance review cadence defined based on award requirements and risk
Policy review triggers include regulatory, award, system, and organizational changes

Example Internal Compliance Calendar

The following is a planning template, not a federal schedule. Replace each cadence with the award's actual deadlines and the organization's risk-based controls.

Monthly

Reconcile grant expenses
Review budget vs. actual
Enter all transactions
Update encumbrances

Quarterly

Submit required reports
Review compliance status
Document grant activity
Update risk assessments

Annually

Update policies as needed
Renew registrations (SAM.gov)
Audit preparation
Staff training refresh

At Grant End

Final financial reconciliation
Final reports submitted
Property disposition
Records organized for retention

Common Compliance Pitfalls

Documentation Gaps

Problem: Can't support charges Prevention: Document at time of transaction

Cost Transfers

Problem: Moving costs to avoid deficits Prevention: Charge correctly initially, justify any transfers

Time Reporting

Problem: Payroll charges are not supported by records that accurately reflect work performed, or interim estimates are not reviewed and adjusted Prevention: Operate a documented personnel-cost control system that meets the award and applicable rules

Procurement Shortcuts

Problem: Skipping competition requirements Prevention: Follow policy regardless of urgency

Missed Deadlines

Problem: Late reports Prevention: Calendar and reminders

How GrantLink supports this today

GrantLink helps by organizing allocations backed by QuickBooks Online, budget lines, fund receipts, funding shares, documents, report outputs, and activity history. It supports audit preparation, but it does not replace funder guidance, accounting policy, or professional review.