Documentation under the Uniform Guidance
Under the Uniform Guidance, non-Federal entities must provide financial records sufficient for auditors to determine if Federal funds were spent in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Financial records must be supported with source documentation such as receipts, invoices, and contracts, so that auditors may easily discern exactly how Federal funds were used. The financial records must be comprehensive, and contain information pertaining to Federal awards, authorizations, obligations, unobligated balances,assets, expenditures, income and interest.
Auditors may deem costs to be questionable if they are:
- not supported by adequate documentation,
- found to be unreasonable, or
- in violation of a statute, regulation, or the terms and conditions of the Federal award.
Documentation must also be provided to prove that funds used for salaries and wages accurately reflect the work performed. Such documentation must be incorporated into the official records of the non-Federal entity and include payroll records, time sheets, time distribution records, and time and effort reports. Financial managers must provide assurance that charges are accurate, allowable, and properly allocated. Should they fail to meet these standards, auditors may ask for additional supporting documentation.