Grant Reporting Essentials for Broadband Providers: Avoiding Pitfalls and Staying Audit-Ready

Why grant reporting matters for federally funded broadband projects

This is Article 2 of 5 in our series on navigating grant-funded broadband growth, covering grant audits, compliance triggers, and audit-readiness best practices. Upcoming articles focus on accounting challenges and scaling operations efficiently.

If your broadband company has received a grant, such as those from the National Telecommunications and Information Administration (NTIA), the Broadband Equity, Access, and Deployment (BEAD) Program, or the Rural Digital Opportunity Fund (RDOF), you are likely focused on network design, permitting, and managing contractors. Another high-level priority follows closely behind: how your finance team is tracking and reporting the grant dollars.

Even if your company is not required to undergo a formal grant audit this year, aligning systems now reduces risk, saves time, and builds credibility with funders. As discussed in our first article, “Audit Readiness for Grant-Funded Broadband Projects: Where Providers Get Stuck,” a grant audit evaluates whether your internal controls and spending practices may be subject to auditor review.

Why grant tracking needs its own system and how to implement it

Federal grants come with layers of requirements, not just for spending, but for demonstrating compliance. Your general ledger needs to do more than produce Generally Accepted Accounting Principles (GAAP)-compliant financials. It should allow you to:

• Clearly isolate reimbursable expenses,
• Document how spending aligns with project milestones, and
• Reconcile funding requests with accounting records.

In practice, this means your team should tag costs by grant now, even if an audit is not currently triggered. Grant-related activity should be integrated proactively into your accounting systems.

Three common pitfalls (and how to avoid them)

Broadband providers often encounter a few recurring challenges when first working with government funds:

1. Blending grant activity with operational spend

If construction costs are lumped into a single expense account, or split across departments with no consistent tagging, it becomes difficult to track reimbursable costs.
What to do: Use separate accounts, project codes, or classes in your accounting system. Define tagging methods and ensure consistency across the team.

2. Treating documentation as a one-time task

Gathering invoices, timecards, and contracts only at the draw request stage can create challenges during future audits.
What to do: Collect documentation at the point of payment approval to ensure files are complete and audit-ready.

3. Misunderstanding what costs are reimbursable

Not all project costs, including construction, overhead, or internal labor, are automatically reimbursable. Misinterpretation can delay reimbursements or trigger clawbacks.
What to do: Review cost categories with your CPA or grant advisor before submitting draw requests. Clarify what is reimbursable early, not during an agency review.

Best practices to stay audit-ready

• Set up a grant-specific chart of accounts. Even a simple structure (e.g., “Grant Funded CapEx – BEAD”) helps isolate reimbursable activity.
• Maintain a live tracker of draw requests. Include dates, amounts, what was requested versus received, and supporting costs. This helps with audit prep and cash flow planning.
• Assign internal responsibility. Even in small teams, designate someone to own the grant accounting process. They should understand federal rules and how company systems support reporting.
• Review federal audit thresholds annually. Spending $750,000+ in federal funds (or $1,000,000 for awards after October 1, 2024) may trigger a Generally Accepted Government Accounting Standards (GAGAS) or program-specific audit

Support is available to help you navigate these requirements

Many providers navigating federal grant compliance for the first time are scaling fast, hiring as they build, and working to stay aligned with evolving regulatory requirements. Planning early and following best practices positions teams to stay audit-ready. Keiter works with clients on GAGAS-compliant audits, documentation reviews, and readiness assessments to keep processes controlled and efficient.

Ready to assess whether your grant tracking and reporting processes are positioned to support compliance, audit readiness, and future funding requirements? Contact your Keiter Opportunity Advisor | Email | Call 804.747.0000 for more information.

Looking ahead

In the next article, we will help you determine whether your company actually needs a grant audit, and what steps to take if you are under the federal spending threshold. Understanding these requirements now can prevent unnecessary costs and reduce surprises down the road.

Resources and Further Reading

• 2 CFR Part 200 – Uniform Guidance (eCFR)
  Governs administrative and cost principles for federal awards, including audit requirements. Key sections: §200.502 (Federal Awards Expended) and §200.507 (Program-Specific Audits).
• Office of Management and Budget (OMB) Compliance Supplement – Office of Federal Financial Management
  Official compliance guidance used by auditors and recipients of federal funding, including the most recent updates to federal grant audit thresholds.
• Federal Register – 2024 Uniform Guidance Revisions (PDF)
  Official announcement of the 2024 updates to 2 CFR Part 200, including the Single Audit threshold increase and effective dates.
• BEAD Notice of Funding Opportunity (NOFO) – Audit Requirements (Section G)
  Details audit requirements for recipients of BEAD funding, including when GAGAS-compliant or program-specific audits are required for for-profit recipients.