Most donor audit findings are not about missing money. They are about missing paperwork: a payment with no approval, a purchase with one quote instead of three, staff costs charged to a grant with no record of time spent. All of these can be fixed before the auditor arrives.
What auditors ask for first
| Item | What good looks like |
|---|---|
| Grant ledger | Every income and expense coded to a donor and a budget line |
| Budget versus actual | By budget line, with a short reason for anything over the donor's allowed variance |
| Procurement files | Quotes, approval and delivery note behind each purchase above your threshold |
| Staff costs | Timesheets or an allocation that matches how salaries were charged to each grant |
| Advances | Every staff and partner advance accounted for with receipts |
| Bank reconciliations | Monthly, signed and matching the ledger |
Three places NGOs slip
- Shared costs. Rent, internet and admin staff charged to grants without a written allocation method. Agree one method and apply it every month.
- Tax on payments. Exemption from income tax does not remove PAYE on salaries or withholding tax on consultants. Both are regular audit findings. Our withholding tax guide has the rates.
- Assets bought with grant funds. Keep a register showing which donor paid for each laptop, motorbike or vehicle.
The PBO annual report
Under the PBO Regulations 2026, registered organisations file an annual report with audited accounts within six months of year end. Books that are donor audit ready make that filing much easier.
Five steps for this month
- Reconcile every bank account to the end of last month.
- Run budget versus actual for each grant and note the reasons for variances.
- Chase receipts for every open advance.
- Check that procurement files are complete for the ten largest payments.
- Confirm PAYE and withholding tax are filed and paid on all grant payments.
Run an NGO or PBO?
We keep grant ledgers by donor, prepare budget versus actual reports and get your files audit ready, so audit week is about confirming, not searching.
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