As competition for federally sponsored research funding increases, it becomes even more imperative for universities, hospitals and other institutions to operate as effectively as possible when meeting grant accounting challenges in order to ensure the institutions continued eligibility for these funding sources. Because of this and due to increasing regulation, we see research institutions being better stewards of their funding, and applying more rigorous methods in monitoring funding for their research programs.
Common Grant Accounting Challenges
To that end, we understand the complexities department and center administrators face when managing multiple funding sources. Funding might originate from a variety of sources including sponsored research, state funds, clinical income, contracts, endowments, or even special commitments such as faculty startup funds.
Tracking funds from multiple sources can be a daunting task and ultimately impacts administrators managing these funds. Specifically, when funding comes from multiple sources, such as federal funds and institutional funds to meet cost share commitments, it’s important that a grant accounting system handle the exact tracking, budgeting and reporting necessary to fulfill the requirements of the funds used. To that end a grant accounting system has to be flexible enough to support tracking and monitoring funding from multiple different accounts, different sources, and potentially sub portions of accounts as well as provide reports and other functions to group these funds together in a single view.
Useful Grant Tracking Reports
As an example, administrators should find it fairly straightforward to generate an “All Funds Financial Summary” report. This report needs to easily track multiple types of funding sources, including both budget driven and revenue driven funds. This report should organize columns to contain information for user-defined funding groups and the rows of the report should display totals by the appropriate revenue or expenditure category. This report example provides just such a summary. The top row of values displays the total budget for budget driven funds and the beginning balance for revenue driven funds.
This format is often used in the analysis of the overall financial state of an organizational unit as well as supports the combination of information from disparate corporate entities that use different account structures or general ledger systems.
When Related Charges Utilize Multiple Funding Sources
When managing multiple funding sources for research projects, it’s also critical to use an accounting solution that easily tracks budgetary units such as a department’s administrative division, a recharge center or core facility, or individual faculty or investigators.
In this case, each of these types of expenditures must be tracked individually, as efficiently as possible. This may even involve the concept of “crossing accounts” which refers to cases where related expenditures are applied to multiple funding sources.
An example of “crossing accounts” occurs when a faculty member or scientist is given startup funds. These funds may come from a variety of sources, such as indirect cost recovery, unit operating fund accounts or from another unit assisting with a portion of the cost. The budget and expenses associated with this commitment must be tracked and monitored to ensure the faculty member knows their current balances and to ensure that the right funding source is contributing the correct amount. Therefore, a grouping system independent of funding source should be maintained. A grant accounting software system can help by allowing for the generation of these independent groupings, or cost centers. Reports can then be quickly and easily generated based on these subsets of data, or cost centers.
Overcoming Grant Accounting Challenges
In the two examples noted here, we have identified innovative ways to overcome grant accounting challenges faced by department and center administrators who track multiple funding sources. The key is to implement grant accounting systems that have these capabilities built-in.
such as sponsored research, state funds, clinical income, contracts, endowments, and others.
We invite you to contact the IT Works team to learn more.