How do I reissue a Grant after the grantee sends back the check?

A Scholarship check was mailed to the wrong school.  The school cashed the check and sent us back a new one.  How do we record the refund and then create a check for the correct school?

Answer:

There are three main parts to processing a refund and reissuing a new check:

• Record the receipt of the refund check.
• Adjust the Grant or Scholarship record to process the refund and reinstate the grant amount.
• Process a grantee or payee change on the reinstated grant or scholarship

1. Record the receipt of the refund check

Do one of the following: 

a. Process a Non Gift in the Gifts Module (most frequently used method)

OR

b. Do a simple two-line Journal Entry

OR

c. Populate the 'Expense/Revenue Account' and 'Cash Account' fields in the Adjustments window when adjusting the Grant.

In each of these cases you will be debiting the cash account that you are depositing the check into and crediting either the Grant Expense account or a Refund Revenue account.

Best Practice Recommendation: If the grant refund is being recorded during the same year the grant was expensed you should credit the grant expense account.  If the grant refund is being recorded in a subsequent year from when the grant was originally expensed you should use a grant refund account so that the current years grant expense is not incorrectly decreased. 

Available to Spend Note: If you need the available to spend on the fund to increase after the refund is processed, you will need to use the correct credit account on the transaction that is the same account type as being used for the ATS code on the fund.

For example, if your ATS code is based on a single fund balance which is a Q3 account, then the credit account you use to record the receipt of the check needs to be a R3 so that the credit will roll to the fund balance.

It is recommended to use a grant refund account and not a contribution account since refunds are not gifts and also you would not want to affect the grant expense account either. This way, all refunds are separated into their own account.

2. Adjust the Grant\Scholarship Record-Reinstate Grant Amount-Process Grantee or Payee change

a. Open the Grants\Scholarship Module and go to the Application History Tab

b. Open the Grant\Scholarship to be adjusted

c. Go to the Adjustments Tab

d. Select Grant Adjustments and click Run Process

e. Enter the date of the Refund as well as a Status and Reason if you choose.

f. Click the Refund radio button

g. Check 'complete refund' if doing a complete refund, it doing partial refund, do not check that check-box

h. Check 'reinstate grant amount'

Complete Refund with amount reinstatement:

Partial Refund with amount reinstatement:

i. (Optional) If you are using the third method from Step #1 of recording your refund check, populate the 'Expense/Revenue Account' and 'Cash Account' fields. 

j. Click Process adjustment.

k. Review the Adjustments report and click 'Commit Changes'

l. Go to Accounts Payable\Item Entry and post the debit memo that has been created. This will reinstate the open item so a new check can be printed. 

Note: If you entered GL accounts in step i, you will need to go to the general ledger and post the entries that were created. 

m. Process a grantee or payee change on the grant or scholarship.