How to prepare and file the SF-425 Federal Financial Report

Who files the SF-425, and with whom

The Federal Financial Report (SF-425) is the standard form for reporting cash and spending on a federal grant or cooperative agreement. The Uniform Guidance (2 CFR Part 200) says a federal agency "must require only OMB-approved government-wide data elements" on recipient financial reports, and it names the SF-425 as that set (2 CFR 200.328(a)). The recipient, the organization that holds the award directly from a federal agency, files the report with that agency.

A subrecipient gets its funds through a pass-through entity, often a state agency, and reports to that entity instead (2 CFR 200.328(d); definitions in 2 CFR 200.1). The subaward names the form, which may be the SF-425 or the pass-through entity's own expenditure report. On a Nonprofit Security Grant Program subaward, for example, the nonprofit reports to its State Administrative Agency, and the state files the SF-425 with FEMA; NSGP reporting and closeout covers that case.

Start with the award or subaward terms and the awarding agency's or pass-through entity's current instructions. Those documents may impose program-specific or stricter requirements in addition to the Uniform Guidance. If the instructions appear to conflict, ask the awarding agency or pass-through entity for written clarification before acting. The federal grant compliance checklist shows where financial reporting fits with the rest of the award.

Due dates and how often you report

The award sets the frequency, inside federal limits. The agency or pass-through entity must collect financial reports at least once a year and may not collect them more often than quarterly unless it imposes a specific condition under 2 CFR 200.208 (2 CFR 200.328(b)). A specific condition can require "additional or more detailed financial reports," and the agency must first tell the organization why and what will remove the condition (200.208(c)–(d)).

On calendar quarters, the 30-day rule gives due dates of January 30, April 30, July 30 and October 30. Those are the dates in the DOJ Grants Financial Guide and in the Department of Energy's December 2025 SF-425 instructions. The agency or pass-through entity "may extend the due date for any financial report with justification" (200.328(d)). Ask for an extension in writing before the date passes, and keep the answer in the award file.

The government-wide line instructions were last revised June 28, 2010. They still give 90 days for a final report and still ask for a DUNS number in line 4a; the Department of Energy's 2025 version asks for the Unique Entity ID (UEI) in that field. Use the due dates and identifiers in your award terms. The current regulation sets 120 days for a recipient's final report.

Agencies run the report through different systems, and a late report can stop payments:

• Department of Justice. Recipients file in JustGrants. A late quarterly report is treated as delinquent, drawdowns through Treasury's payment system are blocked, and a hold goes on the remaining funds (DOJ Grants Financial Guide, 3.15).
• Agencies that use the HHS Payment Management System (PMS). PMS fills in the cash lines (10a through 10c) from the organization's drawdowns, refunds and adjustments. On a final report those lines can't be edited (PMS, FFR updates).
• Department of Energy. Quarterly reports are due 30 days after each calendar quarter and the final report 120 days after the period of performance (DOE Appendix 9).

What each part of the form reports

Every amount on line 10 is cumulative, from the start of the award through the end of the reporting period, not the total for one quarter (SF-425 instructions). The agency says which block to complete for a single award: the cash lines, the expenditure lines, or both.

Line 7 asks whether the report uses cash or accrual accounting. On a cash basis, a cost counts when it's paid; on an accrual basis, when it's incurred. An organization that keeps cash-basis books doesn't have to build an accrual system when an agency wants accrual figures; it may develop them from the records on hand (2 CFR 200.302(b)(2)). DOJ allows either basis "as long as the methodology is disclosed and consistently applied" (DOJ Grants Financial Guide, 3.2).

Tie every figure to the books

The report should come straight from the accounting system. The regulation requires a financial management system that can produce the reports the award requires, identifies each award, and records its receipts, obligations and expenditures with source documentation (2 CFR 200.302(a)–(b)). In DOJ OIG Audit Report 25-092 (2025), auditors compared a grantee's 10 financial reports with its accounting records. Three didn't match: two under-reported spending by $3,575 and one over-reported it by $1,990. The grantee had no written procedure for the reports, and the OIG recommended one, along with corrected resubmissions.

A short written procedure prevents most of this. It should name who prepares and who reviews each report, and it should cover these checks:

• Pull a general ledger report for the award, coded to that award, through the reporting period end date.
• Report what was spent, not what was drawn. DOJ tells recipients to report actual expenditures rather than drawdown amounts, and to include costs incurred at the subrecipient level (DOJ Grants Financial Guide, 3.15).
• Compare line 10a with the payment system's record of cash received.
• Carry forward last period's cumulative figures and check that nothing went down without an explanation in line 12.
• Keep the worksheet that ties each line to the ledger with the report as filed.

The same ledger supports draws, so the two processes should use the same numbers. Federal grant payments and drawdowns covers the cash side.

Cost share on the report

If the award requires cost share, report it on lines 10i through 10k. Line 10j is the share actually provided, and it may include allowable third-party in-kind contributions. On the final report, line 10j should be equal to or greater than line 10i (SF-425 instructions).

DOJ calls the failure to report cost sharing properly "the most common error" it finds at final reconciliation and closeout. If the match isn't reported, DOJ assumes the recipient didn't meet it and starts collecting a cash cost share (DOJ Grants Financial Guide, 3.3). Record match as it happens, with the same documentation you'd keep for a federal cost, so the final figure isn't a reconstruction.

The final report

The final SF-425 covers the life of the award. Its reporting period ends on the last day of the period of performance, and its figures stay cumulative. Line 10f should be zero "unless the awarding agency has provided other instructions" (SF-425 instructions), because all obligations must be paid within 120 days after the period of performance for a recipient, or 90 days for a subrecipient unless an earlier date was agreed (2 CFR 200.344(c)). DOJ has recipients show the federal funds being returned as the unobligated balance on line 10h (DOJ Grants Financial Guide, 3.18).

If the final indirect cost rate isn't set yet, file the final report anyway and submit a revised one once the rates are final (2 CFR 200.344(b)). In PMS, a payment request made after the liquidation period is an "expired" payment that needs the awarding agency's approval, and money drawn in error has to be returned before the final report will reconcile (PMS, FFR updates). The final report is one part of closeout; federal grant closeout and record retention covers the rest.

Other errors that send a report back

• A skipped quarter. If the award requires quarterly reports, a quarter with no spending still needs one. DOJ requires a report for every due date that has passed once an award is accepted, starting from the award's start date (DOJ Grants Financial Guide, 3.15).
• A wrong period end date. Interim reports end on a calendar quarter-end date. The final report ends on the period of performance end date (SF-425 instructions).
• Quarterly figures instead of cumulative ones. Line 10 is cumulative from the start of the award, and DOJ asks for program income as a cumulative amount too.
• Cash on hand with no explanation. A large balance on line 10c needs a reason in line 12.
• The wrong indirect rate or base. DOJ asks recipients to report the rate type and base approved for the award.