What it means
A charity or business may receive a grant for specific work. Reporting only a total spent gives the funder little assurance that the money reached the promised activity, so evidence connects a transaction to the grant's budget line, approved period and actual delivery.
Read the grant conditions before spending and identify eligible categories, procurement rules, match-funding requirements, cut-off dates and the required reporting format. A cost can be real and useful to the organisation yet ineligible for this particular grant, so do not allocate it merely because the grant has cash left.
Set a unique reference for each claim line and reconcile it to the ledger. When a payment covers several invoices, show which portion belongs to each, and keep corrections and credit notes in the trail rather than overwriting the original entry.
Build a clear trail: approval, supplier invoice or payroll record, receipt or service confirmation, payment where required, and allocation to the grant. For shared costs such as staff time or rent, document a consistent allocation method.
Avoid double-charging the same cost to two funders, and protect personal data in payroll or beneficiary records by disclosing only what the funder is entitled to receive. Separate evidence that a cost was incurred from evidence that it was paid and that the work was delivered.
Some funders require all three, while others use different milestones or advance-payment rules, and the grant agreement decides. Track exceptions early, because a missing invoice can often be recovered from a supplier before the reporting deadline, whereas a programme output that never occurred cannot be fixed by adding a receipt later.
If a cost is uncertain, seek clarification through the grant's authorised contact and keep the answer. Organise the records by claim period and line item, with a version of the submitted report, so that if the funder asks a question months later the team can find the exact source document and calculation.
Retention periods and audit rights depend on the grant terms and applicable rules, and for managers evidence is part of delivering the grant, not an afterthought, because good records protect the organisation from repayment disputes and make it easier to show the real outcomes achieved.
In practice
Real-world examples.
Example
A fictional training grant links tutor invoices, genuine session records and payment evidence to the approved dates. Each invoice carries the grant reference, so a reviewer can trace a payment to a session without asking for extra documents.
Example
A fictional charity allocates an employee's hours between grants using documented, non-overlapping time records. The records show the same hour is never charged to both funders, and the allocation method is applied consistently each month.
Example
A fictional funder asks whether equipment arrived within the eligible period. The recipient supplies its dated receipt and asset register, and the funder confirms the item was received before the grant end date.
Formula
Calculation
Supported eligible spend = Sum of costs with accepted evidence and eligible allocation under the grant terms
Unsupported balance = Claimed expenditure - Supported eligible spend
Worked example. A fictional grant report claims $100,000 spent. Records support $85,000 as eligible, $10,000 lacks required allocation evidence, and $5,000 is outside the approved period.
- Supported eligible spend = $85,000.
- Unsupported or ineligible amount pending resolution = $100,000 - $85,000 = $15,000, made up of $10,000 + $5,000.
The funder may accept later evidence for some items; do not assume all $15,000 is permanently repayable or approved. The $5,000 outside the approved period is unlikely to be rescued by new paperwork, whereas the $10,000 lacking allocation evidence may be supported once a documented method is produced. Reviewing the two groups separately tells the team where to spend effort first.Case study
Seen in the real world.
This illustrative and entirely fictional example follows Open Door Learning, an invented education nonprofit. It ran a funded after-school programme and filed a report showing all funds spent. During review, the funder asked for staff-time allocations and proof that tablets were delivered before the grant ended. Finance had invoices but no link to class schedules or receipt dates. The programme team reconstructed attendance and delivery evidence where reliable records existed.
It removed unsupported amounts from the claim pending clarification rather than creating backdated documents. The funder accepted part of the clarified claim and asked the charity to resolve the balance under its agreement. Open Door then set up an evidence folder by grant budget line and trained programme managers to capture proof at the time work happened. The next report took less time to support.
Watch out
Common mistakes.
- Treating every cost in a ledger account as eligible without reading the grant period and purpose.
- Charging one staff hour or invoice to two funders without a documented, non-overlapping allocation.
- Backdating or inventing records to close a gap found during review.
Questions
People also ask.
Is a payment receipt enough proof?
It may be one part of the trail. The funder may also need evidence of what was bought, delivered and why it was eligible.
Can shared staff time be claimed?
If the grant permits it, use a supported allocation method and avoid double charging.
How long should evidence be kept?
Follow the grant's retention terms and applicable rules. Record the deadline and audit rights for each award.
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