Friday, April 3, 2009

How Valuable is Your Finance Staff?

So you got the grant! Congratulations! However, now is not the time to sit back on your laurels. Grant management is as important as getting the grant in the first place, because if you do it well, you may be able to get another grant from the foundation or government agency. Along with making sure the program you promised is on track, you need to make sure your financial management of the grant is on track. Which may mean making sure your financial staff is up to speed on what is required from the grantor or hiring a financial consultant. Dwayne Briscoe of Bookkeeping Results, LLC, provides some interesting advice on financial grant management, some nuggets to think about. Bunnie

How Valuable Is Your Finance Staff?

by Dwayne Briscoe, Bookkeeping Results, LLC

I have assisted in the handling of nonprofit organization finances for years, and recently I’ve worked with organizations as their sole financial “department”. With the experience I’ve accumulated I want to share my thoughts in hope that people may be able to gain some useful insight from an outside perspective.

The new audit requirements for government funded grants; more stringent restrictions by foundations; the new 990 tax filing return; and the detailed scrutiny of donors to determine where their dollars go; are items of interest that need to be discussed and planned for. Grant fund applications are becoming more and more stringent on the financial side, seeking tighter control over accountability and seeking working fiscal year and mid-year budgets. Times are changing and to not be prepared spells disaster for any organization, whether for profit or nonprofit.

There are three key areas to consider for any nonprofit in order to re-evaluate how it is going to move forward and how it is going to sustain its current level of service. The ultimate buy-in must be from upper management, including the board of directors, because it takes a village to sustain a nonprofit, not just one person.

1. Who is managing your finances? I often work with business and nonprofit clients who end up in a situation for which their books are in dire need of clean-up. One reason for this is the hiring of staff or an outside contractor uneducated in how they should perform their duties correctly in order to complete the tasks at hand. Outside of criminal background checks, are personal/professional reference checks made? Testing performed for specific software used for the organization? Or even an expert in the financial field consulted as an outside interviewer?

Not everyone can do accounting work, although some think it’s just simply knowing how to use a calculator. There are too many rules and regulations that can lead to financial ruin.According to Salary.com (http://www.salary.com/) the average low end bookkeeper makes $32,404 per year or $15.58 per hour. The median range is $37,016 per year or $17.80 per hour, and the high range is $41,047 per year or $19.73 per hour. These hourly rates obviously exclude payroll taxes and benefits, but take a look at what you’re paying your staff currently compared to these rates. Another question to consider is that often program staff are given the opportunity for continuing education, but are the financial department staff?

2. Who reviews the grant financial reporting for reimbursements outside of the financial department? If it’s only the financial department doing this, it’s one of the biggest mistakes that can be quite costly in the end. All grants have a variety of rules and regulations that must be followed, including how they are presented for reimbursement. This is where an outside source is a valuable asset to review everything to determine if there are any potential conflicts before the grantor sees it.

3. How often do you review the Agency’s budget and grant budget schedule?
A minimum of once a month is necessary in order to make sure that you are not only on target but can also plan for potential budget changes before the end of the grant term. A budget change less than 3 months out before a grant ends, isn’t always the easiest thing to get approved. Always be aware of where everything is in any given moment, to allow you to be prepared for the worst.Invest in your future by partnering with your financial staff. They are the ones who need your support the most.

2 comments:

  1. This world is quite the big place and to encounter a story such as this one just puts me out of my ordinary. I gotta hand it to whoever wrote this, you've really kept me updated! Now, let's just hope that I can come across another blog just as interesting

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  2. Thanks for the great post. It gave some great info and if you want to know about grant writers and how they can help your organization do some more research online.

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