Nonprofit Monthly Close Grant Checklist

A grant close is a monthly check that asks one plain question: do the grant records still match the grant agreement?

That sounds simple. It often is not. A grant may have cash in the bank, a receivable waiting for payment, costs that have not been billed, payroll split across programs, and a restricted balance that must be released only after the rules are met. If finance waits until year end, small issues turn into audit work.

Use this checklist after the general ledger is mostly posted, but before the month is final.

1. Confirm the active grant list

Start with a list of active grants. For each grant, show the funder, award amount, grant period, payment method, report due dates, and budget version.

Mark grants that changed during the month. A signed amendment, approved budget move, new payment term, or deadline change should be saved in the grant file. Do not close from memory. Close from the agreement and written approvals.

For restricted grants, connect this step to the restricted fund reconciliation template guide. The close should feed that reconciliation, not sit beside it.

2. Tie cash to the grant record

List cash received during the month. Match each deposit to a funder, grant, invoice, draw request, or pledge schedule.

Then check for cash that arrived but was posted to the wrong place. Common errors include posting a reimbursement payment as new revenue, using the wrong grant code, or leaving the deposit in an unapplied cash account.

For federal awards, 2 CFR 200.302 expects records that identify the source and use of federal funds and are supported by source documents. That does not mean every monthly file needs to be huge. It means the deposit, request, ledger entry, and grant record should agree.

3. Review reimbursement requests and receivables

For reimbursement grants, compare costs incurred to amounts billed. Each open receivable should have a request date, amount, funder, grant, and expected payment date.

Use an aging view. Separate current receivables from items that are 30, 60, or 90 days old. Old grant receivables are not just an accounting issue. They can signal missing support, a rejected request, or a cash flow problem.

If this is a weak spot, use the grant receivable aging report guide before the close meeting.

4. Check expenses against the approved budget

Run budget to actuals by grant and line item. Look for overspent lines, underspent lines, negative balances, and costs posted outside the grant period.

For federal grants, 2 CFR Part 200 cost principles focus on allowability, reasonableness, allocability, and support. Use those ideas even for foundation grants. A cost should fit the grant purpose, grant period, budget, and file support.

Do not only review large totals. Scan detail for odd vendors, round-dollar entries, duplicate invoices, and costs with vague descriptions. The month is easier to fix than the audit.

For a deeper review, use the grant budget to actual review guide.

5. Review payroll allocation

Payroll is often the largest grant cost. Compare each allocation to time records, approved schedules, or another support method allowed by the grant.

If an employee worked less on a grant than planned, adjust the cost. If the person started or ended mid-month, check the date range. If fringe is allocated, confirm the method is consistent.

For federal awards, 2 CFR 200.430 covers compensation for personal services. It points finance back to records that reflect the work performed. A budgeted percentage alone is not enough when actual work changed.

See the grant-funded payroll allocation guide for a fuller file checklist.

6. Post releases from restriction

If restricted grant conditions or purpose limits were met, post the release entry. A release from restriction does not create cash. It moves the satisfied amount from net assets with donor restrictions to net assets without donor restrictions.

Tie the release to support. That may be expense detail, a date, a report, or another grant term. The release from restriction journal entry guide covers the basic debit and credit.

Do not release the full award just because the award was signed. Release only the amount that meets the restriction.

7. Write a short variance note

Each material variance should have one sentence that says what happened and what will happen next.

Good note: “Personnel is $8,400 under budget because the case manager role was vacant for three weeks. Program expects to fill the role in July.”

Weak note: “Timing.”

Board members and executives do not need every ledger line. They need enough context to know whether the grant is on track, late, at risk, or waiting on cash.

8. Save the close packet

Save the monthly packet in one place. Include the active grant list, budget to actuals, receivable aging, cash detail, payroll support, release schedule, variance notes, and reviewer approval.

GrantPipe can help keep grant records, documents, budget lines, and reports tied together. The close still needs finance judgment. The software should make the check easier to repeat.

End the close with an action list. Assign each missing item to one owner and one due date. A clean monthly habit is easier than a rescue project at year end.

DEFINITION

Monthly close

The finance review that locks a month after revenue, expenses, cash, receivables, and support are checked.

DEFINITION

Grant balance

The remaining amount tied to a grant after finance compares award terms, cash, receivables, expenses, and releases.