IN THIS ARTICLE
Restricted grants require records that show both where funds went and how spending aligned with the funder’s stated purpose. A consistent documentation process can make reporting, review, and closeout more manageable.
| Record type | What to retain | Question it helps answer |
|---|---|---|
| Grant agreement and amendments | Award letter, signed agreement, approved budget, and written changes | What is the restricted purpose, period, and reporting requirement? |
| Transaction support | Invoices, receipts, contracts, payroll support, and payment records | What was paid, when, and for what? |
| Allocation support | Allocation worksheets and the method used for shared costs | How was the grant’s share of a shared cost determined? |
| Program evidence | Activity records, deliverables, progress materials, and approved changes | How did the work connect to the grant purpose? |
| Reporting file | Submitted reports, reconciliations, attachments, and funder correspondence | What was reported and how was it supported? |
Start with the grant agreement
Treat the signed grant agreement, award letter, approved budget, and related amendments as the primary record set. Review them before coding expenses or preparing reports. Identify the grant purpose, allowed and excluded costs, grant period, reporting deadlines, required approvals, and any documentation the funder specifically requests. If terms are unclear, document the question and seek clarification from the funder or an appropriate adviser.
Create a grant file that is easy to review
Maintain one organized file for each restricted grant, whether it is stored digitally, physically, or in both formats. Use consistent file names and keep source documents together with the records that explain how funds were used. A clear file helps staff locate support for an expense, prepare a report, and respond to funder questions without reconstructing the history later.
Track spending against the restriction
Set up a method to identify grant-related income and expenses separately from unrestricted activity and from other restricted awards. Match each transaction to the approved purpose and retain the supporting record, such as an invoice, receipt, contract, payroll support, reimbursement request, or allocation worksheet. When a cost supports more than one program or funding source, retain the basis used to allocate it and apply that approach consistently.
Maintain evidence beyond payment records
A payment record may show that money was spent, but it may not show that the expenditure advanced the restricted purpose. Keep program records that connect activities and costs to the grant, such as participant records where appropriate, event materials, service logs, deliverable records, internal progress updates, or communications approving a change. Handle personal or sensitive information according to the organization’s privacy practices and applicable requirements.
Prepare for reporting throughout the grant period
Do not wait until a report is due to assemble documentation. Maintain a reporting calendar, compare actual activity with the approved budget, and record explanations for material changes or timing differences. Before submitting a report, reconcile the amounts to the organization’s accounting records, confirm that required attachments are included, and retain a copy of the final submission and funder correspondence.
Close out and retain records deliberately
At the end of the grant period, document final spending, remaining funds, final deliverables, and any closeout communication. Retention periods and required closeout steps can differ by funder, grant type, contract terms, and applicable rules. Follow the specific agreement and the organization’s records-retention policy, and obtain professional guidance when requirements are uncertain.
Keep the process practical
A repeatable workflow is often more useful than a complex system. Assign responsibility for collecting source documents, reviewing coding, monitoring deadlines, and approving reports. Periodic internal checks can identify missing support or inconsistent records while there is still time to correct the file. For practical support in organizing grant documentation around your needs, contact A&W Financier to discuss your needs.
PUT IT INTO PRACTICE
Your next steps
- Create a separate file for the grant and save the agreement, award letter, budget, and amendments.
- Record the grant period, reporting dates, spending restrictions, and required deliverables in a deadline calendar.
- Code or otherwise identify grant-related income and expenses in a consistent manner.
- Attach or link each expense to supporting documentation and, where needed, an allocation method.
- Keep program evidence that demonstrates the connection between activities and the restricted purpose.
- Reconcile reporting amounts to accounting records before submission and save a final copy of each report and its attachments.
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