Grant Compliance Confidence Checklist for Nonprofits
A Step-by-Step System
for Grant Compliance,
Audit Readiness, and
Funding Protection
TWA Accounting & Business Solutions created the Grant Compliance Confidence Checklist for Nonprofits as a practical self-assessment tool to help you identify gaps, prioritize fixes, and build an audit-ready grant compliance system you can actually maintain.
What’s Inside (5 Phases)
The checklist is organized into five clear phases so you can implement compliance
like a system—not a scramble.
Phase 1: Pre-Award Preparation
Focus: eligibility, internal readiness, and setting yourself up to track grant funds correctly
- Application & documentation requirements
- Board approvals and budget assumptions
- Accounting system readiness to track grant funds separately
- Internal controls and a grant compliance calendar
Phase 2: Post-Award Setup
Focus: translating the award into clean financial and documentation systems
- Grant agreement terms, reporting requirements, and allowable/unallowable costs
- Indirect cost rate considerations and procurement restrictions
- Separate accounting codes/cost centers and budget-to-actual tracking
- Timekeeping and approval workflows
- Central grant file + retention (typically 3–7 years, per funder)
Phase 3: Ongoing Compliance
Focus: monthly/quarterly habits that prevent findings
- Allowable, reasonable, allocable costs + documentation standards
- Monthly reconciliations and budget-to-actual review
- Time & effort reporting and allocation methodology
- Programmatic compliance documentation (deliverables, participant records)
- Reporting deadlines and consistency between financial + program reports
- Monitoring, segregation of duties, and periodic internal audits
Phase 4: Audit Prep & Response
Focus: staying organized and responding confidently
- Organized grant files and complete supporting documentation
- Reconciliations before fieldwork
- SEFA preparation (if required)
- Audit liaison and timely response to audit requests
- Corrective action plans and follow-through on findings
Phase 5: Grant Closeout
Focus: clean final reporting and long-term record retention
- Final financial + programmatic reporting
- Reconciliation to accounting records
- Returning unused funds (if required)
- Archiving grant files and documenting lessons learned
Red Flags to Avoid
Common Audit Triggers Included In The Checklist:
- Timing errors (costs outside period) & Reporting delays
- Documentation gaps & Unallowable costs
- Procurement issues & Time tracking failures
- Match shortfalls & Fund commingling
- Unauthorized spending & Scope creep
Best Practices
For Grant Compliance Excellence:
- Document everything (if not documented, it didn’t happen)
- Communicate proactively with your program officer
- Build buffer time (2-week buffers for major deadlines)
- Train your team (quarterly compliance training)
- Review regularly (monthly self-audits)
- Seek expert help when the risk is high
What This Checklist Will Do for You
This isn’t just a to-do list. It’s a self-assessment framework designed to help you:
How to Use the Checklist
Accessible Anywhere
Print or save digitally so it’s accessible throughout the grant lifecycle
Audit Readiness
Catch documentation gaps before the auditors arrive
Stay Consistent
Review monthly to stay compliant and catch issues early
Designed for Non-Profits at Every Stage
If you recognize your organization in any of these scenarios, this framework is your solution.
First-Time Grant Recipients
You just received your first federal grant and need to set up compliant systems from day one to ensure success.
Steering Your Nonprofit
Through Its Growth Stage
You’re managing multiple grants and need streamlined, proven processes to reduce administrative burden.
Organizations Preparing to Apply
You want to demonstrate organizational capacity and build confidence before pursuing larger grant opportunities.
Non-Profits Facing Audits
You need to ensure your documentation and internal control systems are fully audit-ready right now.
Frequently Asked Questions
No. The framework applies to federal, state, local, and foundation grants. The checklist helps you build consistent systems funders and auditors expect.
Monthly is ideal. It’s designed to support ongoing compliance—not just audit season.
Yes. Small teams benefit the most from clear systems so compliance doesn’t depend on one person’s memory.
Yes. We can help interpret findings, build corrective action plans, and strengthen controls to prevent repeat issues.
Ready to Eliminate Compliance Stress
and Protect Your Funding?
Call: 877-573-5043 | Visit: TWA Accounting & Business Solutions
Your Mission Is Too Important to Be Put at Risk
You didn’t start your nonprofit to become a compliance expert—you started it to make a difference.
Strong grant compliance isn’t just about avoiding audits; it’s about protecting funding, building funder trust, and creating a foundation for sustainable growth.
Choose Your Audit-Ready Solution
If you want hands-on support implementing the checklist, we offer options based on complexity:
Templates, checklists, and 30 days of email support
Guided setup for one specific grant
Repeatable system + training for 2–3 grants
Expert-led implementation for 3+ awards