A State By State Accounting Guide

What to Prepare for an Audit Review

Posted July 7th, 2012 by admin and filed in Uncategorized

This is where meticulous record keeping pays off. The grant’s program manager will inevitably come and ask to see documentation. It is best that a file is kept with copies of everything pertaining to the grant.

During the grant period, the organization has turned in quarterly Financial Status Reports (SF-269) along with other progress reports. These should be accessible to the program manager. Prepare  hard copies of other documents as well.

Copies of the following documents should be prepared for an audit review:

  • Grant application
  • Letters and correspondence (including emails) regarding the grant
  • Grant budget
  • Time and Attendance reports
  • Grant adjustment notices (including subgrantees)
  • Grant award document
  • All receipts, invoices, bills, canceled checks etc.
  • Grant employees’ payroll information

The purpose of an audit is to verify the organization has followed the grant’s guidelines. Having these documents in good order will help demonstrate to the auditor the organization’s faithful compliance. It is advisable to keep all records of grant activities on file for three years after the grant ends. However, if the organization is under investigation, the records must be on file until the investigation is over.

In addition to the above documents specific to the grant, the organization must also prove its existence, structure, policies and procedures. Having these on file and prepared for the auditor’s review is crucial for the audit process to go smoothly.

 Proof with these records and documents:

  • Board member information
  • Operating budget of the organization
  • IRS letter of determination (proof of tax-exempt status)
  • Organization’s articles and bylaws
  • Indirect cost rate
  • Financial statements

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