Cost Center Coding Strategies for Effective Grant Reporting
For complex human and social services providers, managing grants and ensuring compliance can often feel like navigating a labyrinth. One effective strategy to simplify this process is through cost center coding. AAFCPAs provides the following detailed guidance on how to leverage cost center coding to streamline grant reporting and maintain compliance.
Design Your Cost Centers at the Right Level
Start by determining the reporting requirements and compliance elements specific to your grants. The level at which you design your cost centers for reporting might differ from how they are structured within your organization. It’s important to strike a balance between meeting reporting needs and not overburdening your staff. Keep your focus on the key requirements to ensure efficiency.
Configure Systems and Workflows
Many grants necessitate demographic data. Explore using statistical accounts in your General Ledger (GL) or consider other applications that simplify data collection. Ensure these tools support your reporting and Key Performance Indicator (KPI) drivers.
A multi-dimensional chart of accounts allows you to track multiple levels, catering to both organizational and funder needs. Utilize the chart hierarchy to roll up information to the appropriate reporting level. Minimize manual manipulation by taking full advantage of your systems. Assess if your current infrastructure supports your needs or if additional applications, such as a time-tracking tool, are required.
Transform Your Systems: Insights for Human Services
Enhance your organization’s efficiency with tailored strategies to streamline your systems, improve reporting, and ensure compliance in human services.
Configure Allocations
Use your GL system to house as many allocations as possible, ensuring there’s a record of them. If allocations are dynamic, identify the drivers and data sources and integrate them where possible to reduce manual manipulation. Proper documentation is crucial to justify allocations to grantors and ensure they adhere to guidelines, such as those for administrative expenses and time tracking.
Configure Processes for Meeting Required Documentation
Communicate your cost centers and reporting policies clearly to your team. Use grant or project modules to track compliance requirements effectively. Leverage milestones and billable expense features to invoice in a timely, complete, and accurate manner.
Ensure user systems are configured correctly. Restrict users to certain cost centers or set defaults to minimize miscoding. Provide comprehensive training and documented guidance on universal areas, like time tracking, where daily involvement is high.
Monitor Functionality
Implement controls at key data entry points and ensure timely updates. Time tracking is a crucial entry point, so integrate your systems to provide updated cost-center information for accurate reporting. Review your activities annually to keep up with requirements and ensure staff are using the most efficient tools. With new technology emerging each year, there may be better solutions available.
By following these strategies, human and social services providers can simplify grant reporting, ensure compliance, and ultimately focus more on delivering critical services to those in need.
How We Help
AAFCPAs is deeply immersed in serving the health and human services sector. We understand programs and operations, funding and reporting requirements, and the frustrating challenges with systems. Several of our complex, multi-service agency clients are solving the above challenges by leveraging our in-house Business Process & IT Consulting practice, which works with clients to conduct assessments, system selections, and implementations. We manage the end-to-end process on our clients’ behalf, advising on effective solutions for common and unique challenges and offering an unbiased, third-party perspective. Our comprehensive documentation covers everything from Business Process Assessments to Requests For Information and demo scenarios tailored to your needs. We stay informed on the latest systems along with the best options available, skilled in conducting thorough team discovery sessions. Our long-term partnerships with leading software vendors help us provide the most informed guidance, offer leverage during price and term negotiations, and promote a smooth transition. We serve as project managers on your behalf, guiding the process and ensuring tasks are completed on time and to your satisfaction.
If you have questions, please contact Robyn Leet, Partner, Business Process Assessments & Attestations at 774.512.4010 or rleet@nullaafcpa.com, Stuart Karas, Senior, Systems and Process Optimization Consultant at 774.512.9095—or your AAFCPAs Partner.