Short answer
The SF-425 should be built from the grant ledger, drawdown records, match support, program income records, and indirect cost calculation. Review each line before submission so the report agrees with the award file.
SF-425 line item review guide
The SF-425 is short, but each line can carry a lot of audit risk. It reports federal cash, award spending, match, program income, and indirect costs. A clean report is not just a completed form. It is a form that ties to the grant ledger and the source records behind it.
This guide is a review pass to use before submission. For a broader overview, read the SF-425 Federal Financial Report guide. For cash timing, use the drawdown controls checklist.
Header lines
Confirm the federal agency, award number, recipient name, EIN, report type, accounting basis, project period, and reporting period end date. These fields look basic, but errors can make a report hard to match in the agency system.
Use the legal name from SAM.gov and the award number from the notice of award. Mark a report as final only when the award is ending and the report covers the final period required by the agency.
Lines 10a through 10d: federal cash
Line 10a is total federal funds authorized. It should match the award plus approved amendments. Do not include a pending amendment until it is signed.
Line 10b is federal cash received. Tie it to payment system records and bank deposits. Line 10c is federal cash disbursed. Tie it to grant costs paid from federal cash. Line 10d is the cash on hand calculation.
If cash received is higher than cash disbursed, explain why. A small timing difference may be fine. A large balance can raise questions under 2 CFR 200.305 because recipients should not hold federal cash longer than needed.
Lines 10e through 10h: federal spending
Line 10e is federal share of expenditures. Start with the grant ledger. Remove unallowable costs, costs outside the period, unsupported costs, and costs charged to match instead of federal share.
Line 10f is federal share of unliquidated obligations. These are valid costs not yet paid or liquidated. Do not use this line as a place to park weak estimates. Keep purchase orders, contracts, invoices, or other support.
Line 10g adds expenditures and unliquidated obligations. Line 10h is unobligated federal funds. If a large amount remains late in the award, be ready to explain the spend plan or request an extension if the agency allows it.
Lines 10i through 10k: recipient share
These lines matter when the award has match or cost share. Line 10i is the required recipient share. Line 10j is recipient share spent. Line 10k is remaining share.
Match should have the same level of support as federal costs. Cash match should tie to ledger entries. In-kind match should have valuation support. Volunteer time should have logs with dates, hours, services, and rate support.
If line 10k shows a shortfall near the end of the award, tell program and finance leaders now. Match problems are easier to fix before closeout.
Lines 10l through 10o: program income
Program income is income earned from the federally funded activity. Examples may include fees for services, rental income from federally supported property, or sales from grant-funded activity. It is not every dollar your nonprofit earns.
Review the award terms. Program income may be deducted from costs, added to the award, or used as match. Use the method allowed by the award and 2 CFR 200.307. Keep a short memo if the award terms are not clear.
Line 11: indirect costs
If you charge indirect costs, recalculate the amount before submission. Confirm the rate, base, period, amount charged, and federal share. If you use the de minimis rate, apply it to the right base. If you have a negotiated rate, follow the rate agreement and award terms.
Indirect costs should agree to your ledger and cost allocation records. If you post indirect costs at month end or quarter end, make sure the posting is complete before you submit.
Final review
Before filing, compare the SF-425 to:
- Current award amount and amendments
- Grant ledger detail
- Drawdown history
- Bank deposits
- Match records
- Program income records
- Indirect cost calculation
- Prior SF-425 reports
The final report should tie to the closeout file. If prior reports had errors, do not quietly change the final. Ask the agency how it wants corrections handled.
How GrantPipe can help
GrantPipe helps keep grant costs, drawdowns, match records, and report due dates in the same place. That makes the SF-425 review less dependent on a spreadsheet that only one person understands. Better source records make federal reports easier to defend.
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Looking for something else?
- SF-425
- The Standard Form 425 Federal Financial Report used to report federal cash and financial status for many grants.
DEFINITION
- Unliquidated obligation
- A valid grant cost that has been incurred or committed but not yet paid, depending on the accounting basis used for the report.
DEFINITION
Q&A
What line causes the most review problems?
Line 10e, federal share of expenditures, is often the hardest line because it must agree to allowable grant costs in the ledger.
Q&A
Can the SF-425 be prepared from a spreadsheet?
A spreadsheet can help, but the amounts should trace back to the accounting system and award support. The spreadsheet should not become the only source.
Frequently asked