Grant-Related Considerations

 Grant-Related Considerations

There are three issues that distinguish Interfund Grants from ordinary Grants:

Determining the Grantee

For most Grants, the Grantee is a non-profit agency. However, for Interfund Grants, the Grantee is a Fund. Do one of the following to create a Grantee record for Interfund Grants:

• Create a Profile and Grantee record for each Fund that receives Interfund Grants. You should give these records names that help you to identify them as Grantee Funds on Grant reports (for example, Smith Fund – Interfund). NOTE: Use this option if you want to see the recipient Fund as the Grantee on Grant reports.
• Create a single, “dummy” Profile and Grantee record called Interfund Activity and use this same Grantee record for all Interfund Grants, regardless of the recipient Fund. You could then use the Program Name field to identify the specific Fund for each Grant. NOTE: If you use this method, Grant history reports by Grantee will combine all Interfund Grants (they will not be separated based on the recipient Fund). This may be desirable since it allows you to view all Interfund activity by selecting a single Profile.

TIP: If you want to show the recipient Fund as the Grantee for Fund Statement Detail, enter the recipient Fund ID as the first six characters of the Description text. The Fund Statement Grant Detail will print Transfer to <Fund Name> in the Grantee Name field.

NOTE: If you print checks in Accounts Payable to accomplish the transfer, you may wish to identify the main organization Profile as the fiscal agent. 

Determining the Appropriate Expense Account

Some organizations prefer to distinguish Interfund transfers from Grant expenses (and gift revenues) in General Ledger. Instead of debiting the Grants Expense account, an Interfund Grants account is debited.

You can also optionally code this account as Transfer account (Account Type = Tn) instead of an expense account (Account type = Xn).

To automate this substitution, do the following:

1. In the General Ledger module, lookup the natural account number for the Interfund Grants account on the Master Chart. Refer to the Master Chart Report for more information.

2. Enter the natural account number of the transfer account in the Grants Interfund field of the Fund Class record for the giving Fund. Refer to File Maintenance – Funds for more information.

3. When you create an Interfund and post, the debit account in the Grant Voucher will be the account indicated in the Fund Class record of the giving Fund. 

Transferring the Assets

Once the Interfund Grant is posted to Accounts Payable, some organizations print a check to use as the vehicle for transferring the dollars to the recipient Fund. The check can then serve as the source document for the corresponding Interfund gift entry (even if the same Cash Account is used for both the Interfund Gift and Interfund Grant)

NOTE: Cutting a check is not generally required, but it may be necessary if an actual physical transfer needs to be made between bank accounts.

If you prefer not to cut a check, you must do the following (in the Accounts Payable module):

1. On the Line Items tab (Item Entry super tab), verify that the asset account that appears in the Cash Account field of the Voucher is the account that should be credited.
 IMPORTANT: If the natural account number entered into the Cash Account field on the Voucher is the same as the deposit account for the corresponding Gift, no actual transfer of cash needs to be made. If it is different, you will need to make an actual cash transfer (for example, by wire).

2. Post the Grant Voucher to Open Items.

3. Enter and post a pre-paid applied to the Open Item.

NOTE: When you use interfund Grants to transfer assets, we recommend that you do one of the following to record check numbers for all of your interfund transactions:

• Use the same check number (for example, 99999).
• Use the Grant Number for the interfund Grant as your check number.