4-Week Audit Preparation Checklist
TLDR
Audit preparation done well is a four-week process, not a four-day scramble. This checklist distributes the preparation tasks across four weeks so each week's work is manageable, and the auditor arrives to an organized, complete evidence file rather than a work-in-progress.
How to Use This Checklist
Work through each week’s items in order. Most items are verification tasks: confirming that records are complete, reconciled, and in the location where the auditor will look for them. A few items are assembly tasks, pulling records from multiple sources into a single organized file.
The goal of each week is a specific outcome, not just a list of tasks completed. The outcome is stated at the top of each week.
Who should own this checklist: The Finance Director or Controller, with input from the grants manager for grant-specific records. Assign ownership before beginning Week 1.
Week 1: Accounting Records and SEFA
Week 1 goal: The accounting records are reconciled, the SEFA draft is ready, and the grant expenditure totals in the accounting system match what was reported to funders.
General Ledger and Fund Accounting
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Run a full-year grant expenditure report by grant, by budget category Purpose: This is the starting point for all reconciliation work. Everything else checks against this.
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Reconcile the grant expenditure report to the general ledger. Differences require explanation. Purpose: If the GL and the grant expenditure report do not agree, auditors will find the discrepancy.
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Verify that expenditures are coded to the correct grant and budget category in the GL. Identify any miscoded transactions and correct them now. Purpose: After-the-fact recoding late in the audit is a red flag. Corrections made before fieldwork are routine.
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Confirm that indirect cost charges are applied at the correct approved rate (NICRA or 10% de minimis) using the correct base. Purpose: Incorrect indirect cost application is one of the most common questioned-cost sources.
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Identify any budget categories that are overspent or close to the limit. Determine whether prior approval for rebudgeting was obtained; if not, flag for discussion with the auditor. Purpose: Overspent categories without prior approval are a disallowance risk.
SEFA Preparation
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Draft the Schedule of Expenditures of Federal Awards for the fiscal year. Purpose: The SEFA is the foundation of the single audit. Start it early.
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Confirm that every federal award active during the year appears on the SEFA, including sub-awards from state pass-through entities. Purpose: Missing awards on the SEFA affect major program selection and may create scope deficiencies.
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Verify each SEFA row has the correct Assistance Listing (CFDA) number. Purpose: Incorrect CFDA numbers cause misclassification of programs.
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Reconcile each SEFA row total to the corresponding grant expenditure total in the GL. Purpose: SEFA accuracy is tested by reconciling to accounting records. Discrepancies must be resolved.
4-Week Audit Preparation Checklist
A week-by-week audit preparation timeline for nonprofit grantees. Covers the four weeks before fieldwork begins — what to pull, what to verify, and what to have ready when the auditor arrives. Delivered by email.
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