News & Insights
Five Steps to Ensure Easy and Successful Grant Reporting
January 29th, 2024
By Renee McNutt |
Accounting & Outsourced Solutions |
Business Accounting Software
By: Renee McNutt
Navigating the grant management processes can be a challenge for nonprofit organizations, and as more grants come into the picture, each with its own unique stipulations and timelines, the demand for a structured internal organization is crucial. A comprehensive strategy can ease common road bumps found in grant accounting. Below, we talk about valuable steps aimed at simplifying the process and ensuring a more efficient and organized grant management system.
Step 1: Review the Grant Agreement
As your organization receives executed grant agreements, they should be …
- Saved in a safe, digital location that’s easily accessible when it’s time for your organization’s audit.
- Kept organized in an Excel spreadsheet to keep the information. Some of the information that should be gathered and recorded includes:
- Grant amount
- Assistance listing number (ALN) (previously called the CFDA number)
- Any allowable costs and indirect cost allowance
- Grant and reporting period
- Reporting requirements
If your organization has any federally funded grants over the $750,000 threshold requirement for a single audit, having this detail handy will help with the schedule of expenditures of federal awards (SEFA) preparation.
Step 2: Understand the Grant Budget
After reviewing the executed grant agreement, it is best to revisit the budget submitted with the grant application and the storyline.
It’s also important to understand the process to amend the budget and if there is any flexibility to a specific percentage if you are over or under budget in a category. A great way to track this detail is by importing the grant budget into your accounting software and processing a budget vs actual report monthly throughout the grant period.
Common areas for budget amendment include when:
- Staffing has changed
- Costs have increased
- Potential outreach has expanded
Step 3: Set up Classes
Corresponding budget entry into your organization’s accounting software and setting up classes within the software helps allow you to track specific expenses applied to this grant. By using the class when recording transactions related to the grant, you can see all connected details and save yourself time trying to dig information from other locations. Additionally, classes allow you to filter reports by that grant – a useful tool when it is time for completing grant reporting.
Step 4: Complete Month End Journal Entries
To keep your accounting organized, it is best practice to make all entries related to the grant for that period at period end. This includes an entry for indirect costs or to recognize revenue for the grant that period.
The revenue recognition entry for reimbursement grants would include booking receivable for total expenses for the grant period. For a grant where funding was received upon grant execution, the entry would decrease deferred revenue for expenses during the grant period.
Step 5: Submit to the Grantor
Standard items required may include:
- Statement of Activities
- Grantor specific report such as an invoice template or Statement of Expenses (SOE)
- Support for the monthly transactions either in the form of a General Ledger report or copies of bill support
Common methods these reports may need to be submitted are via email, an online portal such as EGRAMS, or a grantor specific website.
How Maner Costerisan Can Help
The steps outlined above serve as a guiding compass, a roadmap towards streamlined and organized grant management.
At Maner Costerisan, our team of experts are prepared to support your organization because we understand the intricate nuances and challenges that accompany grant accounting.