Grant compliance means you use funds as the award allows and you can prove it with records. This checklist covers the main compliance areas for a nonprofit that receives grants. Federal items apply to federal awards, including federal funds you receive through a pass-through entity.

Federal citations refer to the 2024 revision of 2 CFR 200, which took effect on October 1, 2024. OMB published a proposed revision on May 29, 2026. As of October 2026, no final rule is in effect.

Before you accept an award

Make sure you can comply before you accept a grant.

Organizational readiness

Your financial system can track spending by grant.
You have staff capacity to manage the grant.
Your policies are in place, e.g., procurement, travel, and personnel.
Your insurance meets the award's requirements.
Your registrations are current, e.g., SAM.gov for federal awards and any state charity registrations.

Award review

All relevant staff understand the terms.
The budget is realistic and complete.
You can meet any match requirement.
Reporting deadlines are on the calendar.
You understand and accept the restrictions.
You have identified the changes that need prior approval.

Financial management

Cost principles (2 CFR 200 for federal awards)

Each cost you charge to a federal award must meet these tests under 2 CFR 200.403 to 200.405:

Allowable. The award terms and the cost principles permit it.
Allocable. The grant benefits in proportion to the charge.
Reasonable. A prudent person would pay the same amount in the same situation.
Consistent. You treat the same type of cost the same way, as direct or indirect, across all activities.

Allowable and unallowable costs

Costs that are generally allowable when they meet the tests above:

Salaries and wages, with records of the work performed
Fringe benefits
Travel, under your policy and the award limits
Supplies used for the grant
Contract services, bought under proper procurement
Indirect costs, under your rate agreement or the de minimis rate

Costs that are often unallowable or restricted under the federal cost principles are listed below. Exceptions, credits, and award terms can change the answer, so review the specific cost section:

Budget management

The budget was approved before you spent funds.
Spending stays within budget categories, or you have approval for changes when the award requires it.
Total spending stays within the award.
You got prior approval for budget changes that need it.
Cost transfers are timely, justified, and documented.

Documentation

General documentation

Every expense needs:

Source support that fits the transaction, e.g., an invoice, receipt, payroll record, or agreement
Evidence that the expense was posted and paid, as the accounting basis and report require
The reason the expense was needed
Grant coding that shows which grant pays for it
Approval by an authorized person

Personnel documentation

Personnel records and controls that fit your organization and the award. A timesheet is not required in every case.
Payroll support that accurately reflects the work performed, under 2 CFR 200.430(g). Federal rules don't require semiannual certifications in every case.
Position descriptions that match the actual duties
Records of effort that match the charges
Support that salaries are reasonable

Travel documentation

Prior approval, if the award requires it
A documented business purpose
Receipts or other support, as your policy, the award, and the type of cost require
Compliance with your travel policy and the award limits. 2 CFR 200.475 doesn't require every recipient to use federal per diem rates.
Mileage records or similar support, when your reimbursement method needs them
A comparison to other options, if required

Procurement documentation

For each purchase, keep the records that fit the procurement method and your documented thresholds. Not every item below applies to every purchase:

Evidence of competition, e.g., quotes or bids
The reason you chose the vendor
Conflict of interest disclosures
A contract or purchase order
An analysis showing the price is reasonable

Under 2 CFR 200.1, the federal micro-purchase and simplified acquisition thresholds follow the FAR. Since October 1, 2025, FAR 2.101 sets them at $15,000 and $350,000. Your own thresholds may be lower, based on your documented procedures and risk.

Federal requirements

The items below apply if you receive federal funds directly or through a pass-through entity.

Uniform Guidance (2 CFR 200)

Written procedures for deciding whether costs are allowable and for cash management, under 2 CFR 200.302(b)
Written procurement procedures and conflict of interest standards, under 2 CFR 200.318
A travel policy, if you charge travel to awards
A documented indirect cost rate or the de minimis rate election
Property management procedures
Subrecipient monitoring, if you make subawards

Certifications and representations, when they apply

Lobbying certification or disclosure required for the transaction
Suspension and debarment checks or representations required for the covered transaction
Drug-free workplace requirements that apply to you and the award

SAM.gov registration

Your SAM.gov registration is active. Under 2 CFR 25.200, you must review and update your registration at least once a year while you have an active award or pending application.
You have a Unique Entity Identifier (UEI).
Your banking information is current.

Reporting

Financial reporting

You submit the SF-425 or other financial report on time when the award or agency requires it.
Reports match the general ledger.
Cash draws are reconciled to spending.
Budget to actual variances are explained.

Program reporting

Progress reports are submitted by the deadline.
Outcome data is accurate and checked.
Activities are documented throughout the period.
Photos and other evidence are collected when required.

Typical deadlines

Report type	Typical deadline
Quarterly or semiannual performance report	Per the award. Under 2 CFR 200.329(c), these are due no later than 30 calendar days after the reporting period.
Annual performance report	Per the award. Under 200.329(c), annual reports are due no later than 90 calendar days after the reporting period.
Financial reports	Per the award and the agency's instructions
Federal final reports	120 calendar days after the period of performance for recipients, and 90 days for subrecipients, under 2 CFR 200.344. The agreement controls other grants.

Property and equipment

Tracking

You keep an inventory system for equipment that meets the definition and the award terms. Under 2 CFR 200.1, the federal equipment threshold is $10,000 per unit, or your capitalization level if it is lower.
You use tags or labels when your controls, the award, or the law require them.
You take a physical inventory and reconcile it to the property records at least once every two years, when 2 CFR 200.313(d)(2) applies.
You record where each piece of equipment is.

Disposition

When the equipment is no longer needed:

Request disposition instructions when the award terms require them, under 2 CFR 200.313(e). Not every item needs written approval.
Get the fair market value if you sell an item.
Handle the proceeds under the award terms.
Document the disposition.

Subrecipient management

If you make subawards, 2 CFR 200.332 applies.

Before the subaward

Check SAM.gov to confirm the subrecipient isn't excluded.
Evaluate the subrecipient's risk, under 200.332(c).
Include the required terms in the subaward document.
Pass through the Assistance Listing number and other required federal award information.
Document the subrecipient's indirect cost rate.

During the subaward

Carry out a monitoring plan, under 200.332(e).
Review financial reports.
Review performance reports.
Conduct site visits, if your risk assessment calls for them.
Address issues promptly.

At closeout

Collect final reports.
Reconcile spending.
Confirm the subrecipient's audit status.

Record retention

Federal grants

Under 2 CFR 200.334, keep records generally for 3 years from the date you submit the final financial report. Awards renewed quarterly or annually follow a different start date, and the section lists exceptions, including these:

Litigation, claims, or audits that start before the 3 years end
Property and equipment records, which you keep for 3 years after final disposition

All grants

Keep:

Audit preparation

Each year

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

Single audit

Under 2 CFR 200.501, you generally need a single audit if you spend $1,000,000 or more in federal awards in your fiscal year.

Prepare the schedule of expenditures of federal awards (SEFA) accurately.
Know which programs the auditor will test as major programs.
Prepare the items on the auditor's request list.
Address prior findings.

Internal controls

Separation of duties

The person who approves a transaction doesn't record it.
The person who handles cash or assets doesn't record them.
Someone independent does the reconciliations.

Approval rules

Expense approval limits are defined.
Journal entries need approval.
Budget changes follow an approval process.
Signature authority is documented.

Internal review practices

Set how often you review grant budgets, based on reporting deadlines, risk, and transaction volume.
Set how often you review compliance, based on award requirements and risk.
Review policies when regulations, awards, systems, or your organization change.

Example internal compliance calendar

The calendar below is a planning template, not a federal schedule. Replace each item with the award's actual deadlines and your own controls.

Monthly

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

Quarterly

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

Annually

Update policies as needed.
Review and update your SAM.gov registration.
Prepare for the audit.
Refresh staff training.

At the end of each grant

Complete the final financial reconciliation.
Submit final reports.
Dispose of property as required.
Organize records for retention.

Common compliance problems

Problem	Prevention
You can't support a charge.	Document each cost when it happens.
Costs are moved to cover shortfalls.	Charge costs correctly the first time, and justify any transfer.
Payroll charges don't match records of the work performed, or nobody reviews and adjusts interim estimates.	Run a documented personnel cost system that meets the award and the rules.
Staff skip competition requirements.	Follow your procurement policy, even when a purchase is urgent.
Reports are late.	Put deadlines on a calendar and set reminders.

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.

See the grant behind the numbers