PREPARING YOUR GRANT PROPOSAL BUDGET M ANDY C. F UNCHESS, CPA PARTNER S CHLENKER & C ANTWELL, PA...
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Transcript of PREPARING YOUR GRANT PROPOSAL BUDGET M ANDY C. F UNCHESS, CPA PARTNER S CHLENKER & C ANTWELL, PA...
PREPARING YOUR GRANT PROPOSAL BUDGET
MANDY C. FUNCHESS, CPA
PARTNERSCHLENKER & 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
PROGRAM BUDGET SPECIFICS
• 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
505-275-3915
SCHLENKER & CANTWELL, P.A.CERTIFIED PUBLIC ACCOUNTANTS