Grants Due Diligence Checklist: What Funders Need to Verify Before Awarding a Grant

Due diligence — verifying that an applicant is who they say they are, can do what they say they can do, and will use grant funds appropriately — is a critical step before awarding any grant. The depth of due diligence should be proportionate to the grant size and risk, but the basic elements should be present for every grant.

This checklist covers what to verify, how, and how to document it.

Tier 1: Basic due diligence (all grants)

Basic due diligence should be completed for every grant, regardless of size. These checks take minutes with the right systems and prevent the most common fraud and misuse scenarios.

Legal existence. Confirm the applicant organisation exists as a legal entity:
- [ ] Check charity registration number against the Charities Register (NZ) or ACNC (AU)
- [ ] Or check company/incorporated society registration against the Companies Register (NZ) or ASIC (AU)
- [ ] Confirm the registration is current and not lapsed or deregistered

Organisational identity. Confirm the applicant is who they say they are:
- [ ] Confirm the organisation's name matches the registration
- [ ] Confirm the address and contact details are consistent
- [ ] Confirm the authorised signatory is a current officer of the organisation

Bank account. Confirm payment will go to the right place:
- [ ] Confirm the bank account name matches the organisation name
- [ ] For new payees, obtain a bank account confirmation document or conduct a micro-payment verification

Conflict of interest. Confirm there are no undisclosed conflicts:
- [ ] Check COI declarations for all assessment participants
- [ ] Check for any known relationship between the applicant and funder staff or board

Tier 2: Standard due diligence (grants $5,000-$50,000)

For mid-sized grants, add:

Financial capacity.
- [ ] Review most recent financial statements — are they current (within 12-18 months)?
- [ ] Check for any significant liabilities, deficit positions, or financial concerns
- [ ] Assess whether the organisation can manage a grant of this size given their total income
- [ ] Confirm they have or will establish a separate bank account for the grant

Governance.
- [ ] Confirm the board/committee has a minimum quorum and appropriate composition
- [ ] Check there is a COI policy or that the organisation acknowledges the requirement
- [ ] Review any governance concerns noted in previous applications or public reporting

Track record.
- [ ] Confirm the organisation has completed previous grants with this funder without compliance issues
- [ ] Or, for new applicants, request evidence of previous successful grant delivery
- [ ] Check for any public reporting of governance or financial concerns

Eligibility. Confirm the application meets all programme eligibility requirements:
- [ ] Organisation type eligibility confirmed
- [ ] Geographic eligibility confirmed (if applicable)
- [ ] Project type is within eligible activities
- [ ] Application period and purpose match — not retrospective, not for ineligible purposes

Tier 3: Enhanced due diligence (grants over $50,000)

For large grants, multi-year grants, or grants to new or unfamiliar organisations, add:

Financial analysis.
- [ ] Review audited (or reviewed) financial statements for the past 2-3 years
- [ ] Assess financial trends — revenue, expenses, surplus/deficit, reserves
- [ ] Confirm the organisation has sufficient financial management capability for the grant size
- [ ] Check for any PAYE, GST, or creditor issues (informal inquiry or direct confirmation)

Site visit or senior interview.
- [ ] Meet with the organisation's senior leadership — to assess capability, governance, and understanding of the programme
- [ ] For capital or infrastructure grants, visit the project site
- [ ] For service delivery grants, visit the service environment where relevant

Reference checks.
- [ ] Contact at least one previous funder reference
- [ ] Ask about delivery quality, reporting quality, and any concerns
- [ ] Contact any lead agencies or partners named in the application

Legal structure review.
- [ ] Review the constitution, trust deed, or founding document
- [ ] Confirm the organisation's purpose is consistent with the grant purpose
- [ ] Identify any restrictions on how funds can be used (restricted funds, specific purpose endowments)

Sanctions and watchlist screening.
- [ ] For international organisations or grants to organisations working in sanctioned jurisdictions, check sanctions lists (UN, OFAC, RBNZ, AUSTRAC equivalents)
- [ ] For gaming trusts, AML/CFT due diligence as required

Tier 4: Special circumstances

Some grants warrant additional specific due diligence:

Religious organisations: Confirm the charitable purpose is clear and the grant won't fund religious activities ineligible under the programme.

New organisations (under 2 years): More detailed leadership assessment, business plan review, and potentially a smaller initial grant with performance-based follow-on funding.

International grantees: Legal status in home country, local banking capacity, sanctions screening, relevant in-country approvals.

Capital projects: Evidence of land ownership or lease, building consent status, procurement process, project management capability.

Research grants: Ethics committee status, methodology review by domain expert, institutional sign-off from employing organisation.

Documenting due diligence

Due diligence is only as useful as its documentation. For each check:

  • Record what was checked, when, and by whom
  • Record the outcome — confirmed, concern noted, concern resolved
  • Attach relevant supporting documents to the grant record
  • Note any conditions applied as a result of due diligence findings

Documentation is important for:
- Demonstrating probity if decisions are challenged
- Providing context for future rounds with the same applicant
- Supporting audit by the Auditor-General, ANAO, or charity regulators
- Enabling handover when staff change

Using software for due diligence

Grants management software that integrates with charity registries (for automated registration verification), maintains complete applicant history (for previous compliance review), and provides structured due diligence checklists (for consistent documentation) significantly reduces the manual work of due diligence without reducing its rigour.

Key software features:
- Charity registry API integration for automated registration lookups
- Previous application history for returning applicants
- Configurable due diligence checklists with completion tracking
- Document attachment for supporting evidence
- COI declaration and management workflow


Tahua provides grants management software with integrated due diligence workflows — automated charity registry checks, structured checklists, applicant history, and complete documentation.

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