Preparing for Grant Audits

Grant audit preparation often breaks down when the support is spread across QuickBooks Online, spreadsheets, email, and shared drives. The sections below explain how to prepare for Single Audits, funder reviews, and internal audit requests with complete documentation, reconciliations, and reports.

Types of grant audits

Single Audit

Under 2 CFR 200.501, a non-federal entity that spends $1,000,000 or more in federal awards during its fiscal year must have a single or program-specific audit for that year. The $1,000,000 threshold applies to fiscal years that begin on or after October 1, 2024. A Single Audit has these features:

• It covers the whole organization, including the financial statements and federal awards. Compliance testing focuses on the major programs the auditor selects under Subpart F.
• It tests internal controls and compliance with federal requirements.
• The report is filed with the Federal Audit Clearinghouse, which makes it public.

For more detail, see Single Audit Requirements Explained.

Funder audits

A funder may audit its own grants. A funder audit can be a desk review or an on-site visit, and it focuses on that funder's award. Expect requests for detailed documentation.

Internal audits

An internal audit is your organization's own review. It tests internal controls and finds problems before an external audit.

What auditors look for

Financial documentation

• Support for transactions, e.g., invoices and receipts
• Your allocation method
• Budget to actual comparisons
• Bank reconciliations

Compliance documentation

• The grant agreement
• The original budget and any changes
• Correspondence with the funder
• Approvals

Internal controls

• Segregation of duties
• Approval processes
• Written policies
• Training records

Using GrantLink for audit preparation

Draft an audit summary

1. Open Chats > New chat.
2. Ask the assistant for an audit summary for the grant, e.g., "Create an audit summary for [grant name]."
3. Review the output and check its figures against QuickBooks Online and your source documents before you rely on it or share it.

Reports for a grant are listed on the grant's Reporting > Reports page.

Export transaction detail

To export the transactions allocated to a grant, ask the assistant in Chats > New chat for a transaction export for that grant and period, and then download it as an Excel or CSV file. Ask for the columns the auditor needs, e.g., date, vendor, amount, account, budget category, and allocation notes. See Exporting Data to Excel and CSV.

Activity history

Each grant has an Activity page, and Settings > Activity log shows activity for the organization. Use this history together with the QuickBooks Online records. Confirm that the population the auditor asked for is complete. Application history does not replace invoices, approvals, payroll support, award terms, or the general ledger.

Pre-audit checklist

The timing below is an example of an internal plan, not a deadline from auditing standards. Replace it with the dates you agree on with your auditor and funders.

30 days before the audit:

• Confirm the audit scope and timing.
• Review prior audit findings.
• Gather grant agreements.
• Prepare the staff who will be involved.

14 days before the audit:

• Run your GrantLink reports.
• Reconcile bank statements.
• Organize supporting documents.
• Confirm that all allocations are complete.

The day before the audit:

• Set up a workspace for the auditor.
• Prepare electronic file access.
• Brief staff on procedures.
• Have contact information ready.

Common audit findings

1. Missing documentation. Keep all receipts and invoices.
2. Inconsistent allocation. Use the same allocation methods each time.
3. Budget overruns. Monitor spending against the budget.
4. Late reporting. Submit reports on time.
5. Unallowable costs. Know what each award allows.

Good practices

1. Review your records throughout the year instead of waiting until year-end.
2. File documents when you receive them.
3. Tell your auditors about known problems early.
4. Put corrective actions in place after each finding.
5. Reconcile GrantLink to QuickBooks Online. QuickBooks Online is your accounting record, so investigate differences and do not assume that an allocation in GrantLink changed QuickBooks Online.

How GrantLink supports this today

GrantLink keeps grant allocations based on QuickBooks Online transactions, along with budget lines, fund receipts, funding shares, documents, reports, and activity history. You can use these records when you prepare for an audit. GrantLink does not replace funder guidance, your accounting policy, or review by your accountant or auditor.