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Monday, December 19, 2016

How to Manage Your Grant Reporting

Posted by David Miller

A nonprofit may have dozens―or even hundreds―of private grants, with reporting requirements that can run the gamut from simple to wildly complex. Without an efficient process to track and report how it spends restricted dollars, any organization can quickly find itself struggling to meet its obligations to grantors.

That’s not a scenario anybody wants. To avoid it, you need to construct a strong reporting structure. Whether you have one grant or 100, here are some steps that will help you build one.

  1. Start by translating your grant restrictions and reporting requirements into a useable tool. You’ll likely have a long document telling you what you must report, and how you can and can’t spend the funds, and you need to summarize that into a format you can reference and share with your team. This will save you countless hours over the life of the grant.
  2. Establish a budget, scheduled out by month, with subsets for items such as programs, salaries, materials and travel. You also need to anticipate what expenses are going to be restricted/unrestricted.
  3. Break large grants into more manageable chunks. For example, instead of an annual budget, break it out by month, program and expense type. This will facilitate the allocations that you should be doing monthly.
  4. Create an allocation methodology, based on the grant restrictions and how you want to manage the grant internally. Consider all your grants, not just the big ones, and compare the methodology to your budget to verify that the two are aligned. Then document and summarize your methodology along with your coding plan to create a reference tool, like you did with your requirements and restrictions. The two tools should synch up.
  5. Establish set processes for expense coding and allocating, and define the internal owner of these processes. Always make sure the coding gets done in as timely a manner as possible.
  6. Consider whether or not your accounting system can meet your reporting requirements in a manner that is efficient, repeatable and understandable. If you have a new grant with significant requirements, it may be time to think about new software. You don’t want to spend a lot of resources to make something work when you could instead use your money to upgrade to a better reporting system.
  7. Establish regular, ongoing communication with your grant sponsor(s).
  8. Create a grant reporting calendar, and then stick to it.

To learn more about how Armanino can support your grant reporting efforts, contact the Outsourced Finance and Accounting team.

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