1. Is there a chart of accounts?

2. Does the accounting system include a project cost ledger providing for the recording of expenditures for each program by required budget cost categories?

3. How do employees account for their time and effort? Please explain.

1. Does the organization prepare financial statements at least annually? (Provide a copy of latest Balance Sheet and Income Statement.)

2. Has the organization established line(s) of credit? If so, identify source and amount.

1. Are there budgetary controls in effect (e.g. comparison of budget with actual expenditures on a monthly basis) to preclude drawing down federal funds in excess of:

1. What safeguards has the grantee instituted to ensure adequate internal controls in the company? Please describe. Some examples might be:

c. Other

GRANTS MANAGEMENT INFORMATION: If the specialist reviewing the information provided in response to these questions requires any further assistance, the Division of Financial Advisory Services (DFAS) may be contacted on 496-4494. The address for DFAS is 6100/6B05, MSC 7540.

Section A. Accounting System:

The grantee organization needs to incorporate an accounting system that will track costs between direct and indirect costs (general ledger) as well as direct costs by project (project ledger). The grantee will also need to establish a time and effort reporting system to track personnel costs by project. It is industry practice to require daily reporting of effort expended on individual projects or activities. This should be reported on an hourly basis, or in increments of an hour.

Section B. Financial Capability:

The grantee should prepare financial statements at least annually. At a minimum, current internal balance sheet and income statements are required. The balance sheet items are used to compute the current ratio.

Section C. Budgetary Controls:

The grantee should establish a system to track expenditures against budget and/or funded amounts.

Section D. Internal Controls:

The grantee should describe a plan to safeguard cash receipts and disbursements. One person should not have control over all aspects of the accounting system; for example, signing checks and making deposits as well.

1. Chart of Accounts – This is a list of a grantee organization’s accounts identified by a specific number.



2. Balance Sheet – This is a statement of financial position of a grantee disclosing the assets, liabilities, and ownership at a given point in time.



3. Income Statement – This is a summary of the revenue and expenses of a grantee for a specified period of time, usually for an accounting year.



4. General Ledger – This summarizes all transactions affecting assets, liabilities, equity and operating revenue and expenses of a grantee.



5. Project Ledger – This is a subsidiary ledger containing data by cost element (for example, labor, materials, equipment, travel) for each project.



6. Current Ratio – This is a ratio computed by dividing current assets by current liabilities as reported on the balance sheet.