Grant and restricted fund accounting
What you've spent, what's left, and what's owed back.
Leadership should be able to answer those three questions for every award without a two-week reconstruction. Truvio builds grant and restricted fund tracking into the accounting system itself, keeps it current through the monthly close, and produces funder reports that reconcile to the general ledger because they were derived from it.
Where it breaks down
Grant accounting rarely fails loudly.
It degrades quietly, and the cost shows up as a late reimbursement, an awkward funder conversation, or a finding in the audit.
Tracking lives in a spreadsheet beside the books
Award balances are maintained separately from the general ledger, so the two drift apart. By the time anyone reconciles them, the difference is months old and nobody can explain it.
Restriction is recorded at the wrong level
Revenue gets posted to a single contributions account with the restriction noted somewhere else, or not at all. Releases from restriction then become an annual guess rather than a monthly entry.
Allocation has no written methodology
Shared costs get split by a percentage somebody chose years ago. It may even be reasonable, but when an auditor or a federal awarding agency asks how it was derived, there is no documentation behind it.
Reimbursement requests lag
Billing a cost-reimbursement grant requires knowing what was spent against it. When that takes two weeks to assemble, drawdowns slip and the organization finances the funder out of its own cash.
Funder reports do not tie to the financials
The report sent to the funder and the audited statements describe the same spending differently. This is the kind of discrepancy that turns into a finding.
What Truvio runs
Tracking inside the books, not beside them.
The single highest-value change in most organizations is moving award tracking out of a parallel spreadsheet and into the accounting system, where it reconciles by construction.
- Chart of accounts and fund structure designed so award, program, and restriction are dimensions in the system rather than notes outside it
- Award-level budget, expenditure, and remaining-balance tracking maintained through the monthly close
- Revenue recognition appropriate to each agreement: conditional and unconditional contributions, cost-reimbursement grants, and fee-for-service contracts
- Net asset release entries posted monthly rather than reconstructed at year end
- Reimbursement requests and drawdowns prepared on the funder schedule
- Funder financial reports reconciled to the general ledger before they are submitted
- The schedule of expenditures of federal awards maintained through the year for organizations subject to a single audit
Allocation and indirect cost
The part that draws questions.
A methodology you can defend
Shared costs get allocated on a documented basis that reflects how the resource is actually consumed: time and effort for personnel, square footage for occupancy, headcount or usage for shared services. The basis is written down, applied consistently, and reviewed when programs change.
Indirect cost that holds up
Whether the organization uses the de minimis rate or a negotiated indirect cost rate agreement, the underlying cost pool and base need to be consistent with the methodology on file. Truvio keeps that alignment and supports rate negotiations and renewals with the underlying data.
Time and effort that matches the accounting
Personnel is the largest cost in most nonprofits and the most common source of findings. Charging payroll to awards has to agree with what the time records actually show, and the reconciliation between them needs to happen during the year rather than in response to a question.
Related: audit preparation and the full scope of controller services.
Questions about grants and fund accounting.
- Can QuickBooks Online really handle fund accounting?
- For most small and midsize nonprofits, yes, provided it is configured for it. Classes, locations, projects, and a chart of accounts built around the actual reporting requirements will carry award and restriction tracking well. Problems usually come from a default setup that was never designed for grants, not from the software itself.
- We use MIP or another fund accounting system. Is that a problem?
- No. Jeremy served as Controller of a nonprofit healthcare organization running MIP Abila and led its migration from the desktop product to MIP Cloud, and has also led a move from QuickBooks Desktop to QuickBooks Online. The accounting requirements are the same across systems. Only the mechanics differ.
- How long does it take to clean up grant tracking that has drifted?
- It depends on how far back the records diverge and how many awards are open. A focused cleanup is usually measured in weeks rather than months, and the sequence is normally to reconcile the current year first so reporting can resume, then work backward only as far as the audit or a funder actually requires.
- Do you handle the programmatic parts of funder reports?
- No. Truvio produces and reconciles the financial sections and makes sure they agree with the general ledger. Program outcomes and narrative stay with your program staff, who are the only people who can write them accurately.
- What if we are not sure whether we need a single audit?
- That turns on federal award expenditures for the fiscal year, measured against the Uniform Guidance threshold, including funds passed through from a state agency or another nonprofit. Pass-through money is the piece organizations most often miss. It is worth determining well before year end, because the answer changes what has to be tracked.
Talk with Jeremy
If you cannot answer those three questions today, start there.
Describe your funding mix and what reporting currently takes. You will get a read on whether this is a configuration problem, a process problem, or genuinely a staffing one.