Blog · 30 August 2026 · 9 min read

Monthly close checklist for grant-funded projects

A practical monthly close checklist for grant-funded projects, covering records, reconciliations, coding, budget checks and donor reporting.

A monthly close is the point when you stop changing the records for a completed month, check that they are complete, and prepare reliable totals. Without a clear process, missing documents and coding errors often appear only when the donor report is due.

You do not need to be a trained accountant to follow a disciplined close. Work through the same checklist in the same order, record unresolved items, and ask another person to review the result where possible. For quarterly reporting, close each month separately rather than leaving all the work until quarter end.

1. Set the closing date and collect the records

Choose a closing date soon after the end of the month. Tell staff when receipts, travel documents, supplier invoices and activity records must be submitted. A clear cut-off helps you decide which transactions belong in the month.

Collect records from every place where project money moved. This may include the bank account, petty cash box, mobile money wallet, procurement file and staff advances register. Download or obtain statements that cover the full month, including the final day.

Be consistent about the reporting basis required by the donor. Under a cash basis, expenditure is normally recorded when payment is made. Under an accrual basis, costs may be recorded when goods or services are received, even if payment will happen later. Follow the grant agreement and the organisation's accounting policy.

For example, training materials are delivered on 29 June but paid for on 4 July. A cash-basis June report would normally exclude the payment. An accrual-basis June report may include the cost with the supplier invoice and evidence of delivery. Do not switch between methods simply to improve the budget position.

• ☐ Confirm the month or quarter being closed.
• ☐ Set a deadline for staff submissions.
• ☐ Obtain complete bank and mobile money statements.
• ☐ Collect petty cash records, invoices, receipts and advance returns.
• ☐ Confirm whether the report uses cash or accrual accounting.
• ☐ Keep late documents in a clearly marked follow-up list.

2. Check that each transaction has enough support

Read through the transaction list before concentrating on totals. Every entry should have a date, payee or recipient, amount, purpose, project code and payment method. The supporting documents should explain what was bought, why it was needed and who approved it.

A receipt alone may not tell the full story. A payment for a community meeting might need the supplier receipt, attendance list, approved activity request and evidence that the goods or service were received. The exact documents depend on the donor rules and the nature of the purchase.

Check the sequence of payment vouchers, receipt numbers and cheque numbers where these are used. Gaps do not automatically mean money is missing, but they should be explained. A cancelled voucher should remain on file and be marked as cancelled rather than removed.

Do not silently create or alter evidence when something is missing. Record the gap and ask the responsible person for the original document or an acceptable replacement. If the organisation permits a missing-document declaration, it should state the facts, receive proper approval and remain visibly different from an original receipt.

• ☐ Confirm the amount and date agree with the source document.
• ☐ Check that the expense has a clear project purpose.
• ☐ Confirm approval follows the organisation's authority limits.
• ☐ Check evidence of receipt for goods or services.
• ☐ List missing, unclear or duplicate documents for action.
• ☐ Mark corrections transparently without hiding the original entry.

3. Post entries and review the coding

Enter all valid transactions in the ledger or reporting workbook. Use the grant's approved budget lines, not descriptions invented during the month. Keep a simple coding guide so that similar costs are treated consistently.

Check common areas of confusion. Fuel for field monitoring may belong under transport, while fuel purchased for a generator may belong under office or programme running costs. A bank charge should not be included in training costs merely because it appeared after a training payment.

Review shared costs carefully. If office rent is 600 local currency units and the approved allocation gives 200 to the project, post 200 with the calculation and approval attached. Do not charge the whole amount merely because the project has available budget.

Scan the ledger for unusual entries. Look for duplicate amounts, payments posted twice, negative expenses, dates outside the grant period, blank descriptions and suppliers that do not match the stated purpose. Compare payroll entries with approved payroll records, contracts and evidence of payment.

Then calculate each budget line for the current month and cumulatively from the start of the grant. If travel shows 2,000 for the month and 7,000 previously reported, the cumulative total should be 9,000. Check the arithmetic rather than relying only on copied formulas.

• ☐ Post every valid transaction once.
• ☐ Use the approved project and budget codes.
• ☐ Document calculations for shared costs.
• ☐ Review payroll, advances and supplier payments separately.
• ☐ Search for duplicates, blanks and dates outside the grant period.
• ☐ Recalculate monthly and cumulative totals.

4. Reconcile bank, cash, mobile money and advances

Reconciliation means explaining the difference between your records and an independent balance. Do this for every place that holds project funds, not only the main bank account.

For the bank account, start with the closing balance on the statement. Compare each bank entry with the ledger. Identify valid timing items, such as a payment recorded in the ledger that had not yet cleared the bank by month end. Also identify bank charges, interest or direct transfers that have not yet been posted.

Suppose the statement closes at 12,000 local currency units. A payment of 1,000 is in the ledger but has not cleared the bank. The adjusted bank position is therefore 11,000. If the ledger also shows 11,000, the two records agree. Keep the reconciliation and evidence that the payment cleared later.

Count petty cash physically on the closing date. The expected cash is opening cash plus receipts into the cash box, less recorded payments. If the records say 500 but the count is 450, record a shortage of 50 for investigation. Do not change an expense to force the figures to agree.

Apply the same discipline to mobile money and staff advances. Each advance should show the recipient, purpose, issue date, amount spent, amount returned and balance still outstanding. An advance is not automatically a project expense when cash is issued. Follow the donor's rule on when it becomes reportable.

• ☐ Match the full bank statement to the ledger.
• ☐ Explain every outstanding bank item.
• ☐ Count and reconcile petty cash.
• ☐ Reconcile each project mobile money wallet.
• ☐ Review advances by person and due date.
• ☐ Obtain approval for adjustments and record them clearly.

5. Check grant rules, budget limits and exchange rates

Once the records reconcile, check whether the costs are eligible under the grant. Ask whether each cost falls within the grant period, approved activities, budget and procurement rules. Also check any restrictions on items such as equipment, staff benefits, taxes, hospitality or payments to related parties.

Compare actual spending with the approved budget by line. A difference from budget is a prompt for explanation, not permission to move costs. If one line is running low, check whether the donor allows a budget transfer and whether written approval is needed before further spending.

Use the exchange-rate method stated in the agreement or reporting instructions. This might be the rate on the payment date, a monthly rate or the actual rate used when funds were converted. Keep evidence of the rate and apply the method consistently.

For example, a payment of 800 local currency units is converted at 4 units to 1 donor-currency unit. The reported amount is 200. Record both currencies and the rate used. If bank conversion charges are eligible, show them separately rather than hiding them inside the exchange rate.

Review taxes and statutory deductions as well. Confirm whether withholding tax was deducted, paid to the proper authority and supported by the required document. A supplier payment may be fully documented while the related tax obligation remains unresolved.

• ☐ Confirm costs fall within the grant dates and purpose.
• ☐ Check procurement and approval requirements.
• ☐ Compare spending with each approved budget line.
• ☐ Document any permitted budget transfer.
• ☐ Apply the required exchange-rate method.
• ☐ Review taxes, deductions and other compliance items.

6. Prepare, review and lock the reporting pack

Prepare a close pack that another person can follow. Include the ledger, donor report, bank reconciliation, cash count, mobile money reconciliation, advances list, budget comparison, exchange-rate support and list of unresolved items. File the underlying evidence using a consistent reference number.

Tie the donor report back to the ledger. Each budget-line total should agree with the underlying transaction list. Opening balances should agree with the previous approved report, and the current cumulative figures should equal the previous cumulative figures plus the current period.

Ask a reviewer to check the pack if staffing allows. The reviewer should not merely confirm that documents exist. They should challenge unusual costs, old advances, unsupported adjustments, unexplained budget differences and formulas that may have been overwritten.

Record corrections through dated adjustment entries. Avoid replacing the original workbook without retaining a version history. When the close is approved, protect or lock the final file and label it clearly, such as "June final approved". Keep later discoveries on an adjustment list for the next reporting period, unless the donor requires immediate correction.

Finish by carrying forward actions with named owners and deadlines. Examples include obtaining a missing supplier invoice, clearing a travel advance, confirming a tax payment or requesting donor approval for a budget change.

• ☐ Tie the report to the ledger and previous report.
• ☐ Assemble the complete close pack.
• ☐ Obtain an independent review where possible.
• ☐ Correct errors through visible adjustment entries.
• ☐ Save and protect the approved final version.
• ☐ Carry unresolved actions into the next month.

Questions

A sound monthly close is a repeatable sequence: gather, check, post, reconcile, review and sign off. Keep unresolved matters visible rather than forcing the figures to fit. Honest Record can automate document matching and selected checks, but approval, grant interpretation and follow-up still require responsible human review.

More guides

• Add budget versus actual without confusion
• What donors check in a small NGO financial report
• Using AI for bookkeeping safely
• Preparing grant records for a donor audit