Policy
FIACCT 14-00_00 Grant Accounting
Effective: July 1, 1994
Revised: March 16, 1998
Purpose
The purposes of this policy are:
To provide the information needed to understand the basic concepts of grant accounting;
To identify Grant Accounting tables (both user-controlled and system-maintained); and
To give the instructions needed to enter the Federal Aid Master and Federal Aid Charge transactions.
Cash Management
Improvement Act (CMIA)
Federal Aid Management Subsystem Government-Wide Federal Aid Number Grant Budget Line Reporting Category Sub-Grant Federal law which addresses the transfer of funds from the Federal government to the states for financing Federal assistance programs.
Federal Aid Management Subsystem
The subsystem in FINET used to perform grant accounting. Throughout this section the phrases grant accounting and federal aid management subsystem are used interchangeably.
Government-Wide Federal Aid Number
The government-wide federal aid number is used to group multiple
grants together as a single grant. It may be used, for example, with a
block grant where multiple agencies are earmarked as recipients of grant dollars.
Grant Budget Line
A grant is divided into subdivisions called grant budget lines. These
budget lines are identified by the reporting category code when the grant is established in FINET.
Reporting Category
The reporting category defines a grant budget line. Each grant must have at least one reporting category.
Sub-Grant
FINET has a feature which allows departments to group multiple grants together for reporting purposes. When this is done the grants which make up the government-wide grant are called sub-grants.
Policy
A. The Division of Finance will maintain the grant accounting functional components in FINET, which include periodic processing of the daily updates (nightly cycle), monthend processing and annual
processing.
B. Each Department will establish and maintain the grant accounting information and data elements in
FINET such that accurate and timely reports and drawdowns are possible. Coordination and reconciliation of grant information and balances between FINET and an agency controlled system is the Department’s responsibility.
Background
The grant accounting component in FINET maintains grant related data independent from the
organization structure. Each department can define the grant structure usage that is specific to their
department and can divide the grant into subdivisions called reporting categories. The major uses of grant accounting are:
To provide a budgetary control structure independent from appropriations tailored to grant requirements.
To provide an automated mechanism of recording both direct and indirect grant costs and associated revenues.
To provide the facility for meeting the specialized financial and management reporting needs of
those persons associated with grants such as:
Program administrators
Agency managers
Division of Finance personnel
The primary function of the grant accounting component is to identify and collect all grant related
financial information. All descriptive and financial information pertaining to a grant structure will be
maintained in various federal aid tables and ledgers. Information is available to support a wide variety of
reporting options.
There are five system maintained tables that are updated when grant specific data is processed. These
tables contain descriptive data, budgets, encumbrances, expenditures, revenues, and balances for each
grant and grant budget line. In addition, there is a federal aid inception to date detail ledger that maintains detail transaction information.
Grant accounting provides the capability to reject expenditure transactions which exceed grant budgeted
amounts. Available funds checks for grant spending is performed at the reporting category level (grant
budget line). Transactions which exceed available funds can be rejected or accepted based on the level of
control desired. Appropriation, expense and revenue budgets will also exist and all transactions are subject to appropriation control, but these are independent of the grant budget. In addition, start and stop date ranges may be established that identify the time span when grant transactions may be processed. There is also a control that determines whether a reporting category is opened or closed. If the control is set to closed then transactions cannot be posted to that reporting category.
Frequently, grants are not monitored by the same fiscal year as the state accounting fiscal year and often
extend over more than one year. FINET addresses this issue by specifically providing for a grant “fiscal year” which is independent of the accounting fiscal year. Grant budgets can be established which are not
closed at the end of the accounting fiscal year but continue into the new year and for the life of the grant with remaining balances and expended amounts intact. Reports can be produced based upon the state
fiscal year, alternate fiscal year, or inception to date for the life of the grant for multi-year grants.