Accounting for Grants

Thomas Swanson

Does anyone have experience accounting for grant revenue and cost in Financial Edge? This could be restricted or unrestricted, government or non-government. Do you use any special FE tools/modules or just make journal entries? Do you keep track of them like a project? I am not talking about giving grants but receiving grants. Thanks.

AnneMarie Smith

We track grants al the time. You can either create a separate project for it or use one of the 5 transaction codes to track grants. For restrictions, we set up the chart of accounts with -01 unrestricted, -02 temporary and -03 permanent.

Roberta A. Gilbert

I used to work for a non-profit who had a lot of grants, some of them state or federal, but most of them from foundations. We also set up our chart of accounts in FE (this was pre-NXT era) to use funds 01, 02, & 03 as AnneMarie described. Each grant was assigned to one or more projects (depending on what was being funded), which we first mapped out in Excel to show the start and end dates of each grant. This allowed us to attach budgets to each project in FE by the length of the grant, which helped when some grants crossed fiscal years. I worked closely with the Grants Manager in our Development Dept and we reconciled our total grant revenue and receivables monthly. She entered the grants awarded into RE using a project code I gave her, and I would log into RE and pull that info into FE, based on mapping that we had set up when we integrated the two systems. She did the grant reporting using expense numbers from FE reports, and I would record the awards as receivable and pro-rate/defer the revenue by fiscal year. I'm greatly simplifying it here and it took a while to get this running smoothly, but it eventually worked pretty well and prevented us having to enter everything twice into 2 different systems.

Lisa Olscamp

We have a table set up for the grant codes. We can pull reports based on the Grant ID assigned. This includes things such as income statements by grant and trial balances. It works great as long as staff use the correct Grant ID.

Rose Michalec

Anne-Marie, how would you reclass your revenue from restricted to unrestricted to release it? Would you make a journal entry between funds? I am looking for a best practice to release restricted revenues.

AnneMarie Smith

Yes, I have a “release from restrictions” account for both unrestricted and restricted funds and do a journal entry to release. If it's all within the same year, I just move from contributions restricted to contributions unrestricted. The differential is in the account set up, with a 2 digit for fund type, unrestricted, temporary and permanent.

Michael Arnold

Yes, we have multiple cost reimbursement grants that we account for as separate funds within our Blackbaud accounting structure. We have chosen to use fund because it allows us to easily track cash payments and receipts. I would imagine you could use project codes as well, but we like the ability to have the system track the interfund aspects when we use our own cash to fund expenses prior to payment. However, if you use funds, make sure that you reconcile the interfund account every month!! Staying on top of the interfund transactions is critical because the transactions can add up quickly and less frequent reconciliations can become nightmares.