Accounting for grant revenue is vital for the nonprofit organization. Careful attention to detail must be provided throughout the life of the grant. In addition to establishing procedures for recording, monitoring and reporting grants, the organization needs to consider grant reporting for audit purposes.
When I begin a nonprofit audit, I request several items including copies of all grants and the grant revenue schedule. Seldom, does the organization have a grant revenue schedule or even know what it is. The grant revenue schedule reports the grant macros and categorizes the grant award into unrestricted revenue, receivable, temporarily restricted, and deferred revenue. It also reports revenue released from restrictions.
The best way I know to explain how to prepare the grant revenue schedule, is by looking at an example. This spreadsheet indicates the basic layout and has instructions for information to include in each column.
Establish a policy for year-end financial close that includes preparation of the grant revenue schedule.
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