Grant Accounting and Financial Management

PREPARING YOUR GRANT PROPOSAL BUDGET MANDY C. FUNCHESS, CPA PARTNER SCHLENKER & CANTWELL, PA SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

Grant Accounting Forms of Grants private foundations or donors grants from federal, state or local governmental agencies. Nature of the grant drives the accounting treatment. Grant accounting treatment contributions exchange transactions for purposes of recording the revenue in the accounting records. SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

Grant Accounting cont. Majority are cost reimbursement grants Grants require expenditures before receiving grant funds for those expenditures If expenses exceed amount received, a receivable is recorded, unless allocation was overspent If amount received exceeds expenses, deferred revenue is recorded NFP organization provides cash up front and it reimbursed following the expenditures Advancement Grants grant funds are received before expenditures are made SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

Grant Accounting - continued Grant contracts/agreements many grant awards require signing a contract or agreement specifying the conditions required for the grant award. It is very important the contract terms are carefully read and understood. These terms often include: Expenses that can or cannot be incurred with grant funds. The budget for the grant award, which describes what can or cannot be spent for each budget line item. The contract period, which is the period of time expenditures can be made from grant funds. Reporting requirements of program and financial results. How to submit reimbursement requests for reimbursement grants. SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

Grant Accounting - continued The majority of non-governmental grants are in the form of grants from private foundations or corporations. These types of grants are generally treated as contributions (promises to give). Promises to give are generally recorded as revenues at the time the promise is made (usually with a corresponding receivable). Promises to give are then characterized as restricted or unrestricted. This characterization can be based on time restrictions (i.e. United Way is a good example) or on purpose restrictions. SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

DIVERSIFIED PROGRAM FUNDING United Way can fund up to 50% of an Agency s prior year revenue United Way can fund 100% of a program, BUT they strongly prefer not to be the sole funder. More diversified funding = better chance of United Way funding SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

Preparing your grant budget. What does this mean? Step 1 - Define the Program! Step 2 Begin gathering the required information. Step 3 Fill out the forms! SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

United Way Budget Forms SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

PROGRAM BUDGET VS AGENCY BUDGET Single, direct service program NOT whole agency! Pick a program and apply for United Way funding for that program only The forms are asking for information on only that program SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

PROGRAMBUDGETSPECIFICS What s your fiscal year end? Your actual prior fiscal year budget what does this mean? Your actual current fiscal year budget what does this mean? Grant period (7/1/14-6/30/15) SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

Program Budget specifics cont. Expense specific: Grant Period: Requesting UWCNM Funding The $ amount of what you are requesting assuming 100% funding UWCNM Funding as a percentage of budgeted expenses Calculate by dividing the total budget by UWCNM funding SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

PROGRAM FUNDING SOURCES Revenue Break down by funding sources United Way Government Funding Foundation/Corporate Support/Contributions Membership Dues Received Investment Income In-kind support Other income - describe SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

Program Funding Sources Details ..Details Program vs Agency can they be the same? SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

Program Budget Expenses Breakdown by Function expenses categories Costs that are clearly identifiable to the particular program should be charged here. Allocation of salaries, benefits, rent, office supplies, etc. for each program. SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

PROGRAM SURPLUS VS DEFICITS What is a surplus? Is there such thing as too much surplus ? Program deficit? Why? Should we close the program? SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

Functional Expenses Cost categories: Program activity related to mission Unrelated business income and expenses Management and administrative expenses related to overall direction Fundraising expenses related to contribution revenues SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

Functional Expenses Ratios Admin. & Fundraising Cost Ratio Total admin. & fundraising costs Total costs Sample NPO: $ 295,000 = 18% 1,640,000 Fundraising Efficiency Ratio Total fundraising costs Total contributions Sample NPO: $ 50,000 = 15% 350,000 SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

Functional Expenses, continued Where to charge expenses: Costs that are clearly identifiable to a particular activity (program, fundraising, management & general) should be charged to that cost center. Fundraising costs cost of all materials & activities that include a fundraising appeal Management & general cost of publicity and public relation activities designed to keep the organization s name before prospective contributors SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

Functional Expenses, continued Joint costs should be allocated with a rational and systematic method resulting in a reasonable allocation of costs. Physical units method number of lines, copies, square inches, etc. Relative direct cost method % of salaries, % of total expenses, etc. SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

CONCLUSION QUESTIONS? SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS

THANK YOU!! MANDY C. FUNCHESS, CPA MFUNCHESS@CPASCH.COM 505-275-3915 SCHLENKER & CANTWELL, P.A. CERTIFIED PUBLIC ACCOUNTANTS