Grant Fund Accounting

Question 1

Grants in General

Answer 1

• Must appear in budget before they can be spent; acknowledged through public process and approved by governing body
• Once through budget - grant considered appropriated
• Utilized in 3 Ways
  1) Operating Budget (Appropriation)
  2) Capital Project (Improvement Authorization)
  3) Dedicated Trust Fund

Question 2

Steps after Grant Awarded

Answer 2

• If prior to budget adoption, include in budget

- If after budget adoption; must amend budget through Chapter 159 amendment

Question 3

Accounting for Grants in Current Fund

Answer 3

• Grant Revenue immediately realized in Current Fund

- Grant Appropriation is immediately charged as expended in Current Fund

Question 4

Accounting for Grants in Grant Fund

Answer 4

• Each grant is separately recorded in Grant Fund: a receivable is set up for each revenue and a spending reserve is set up for each appropriation
• Local match requirements are to be disbursed from the C/F budget to G/F

Question 5

Appropriated Reserves

Answer 5

• A spending reserve

- Has gone through budget process

Question 6

Unappropriated Reserve

Answer 6

• Grants received in cash that have not gone through budget process
• This account cannot be charged against to use grant funds

Question 7

3 Ways to Access Unappropriated Reserve

Answer 7

• Apply to a grant receivable after going through the budget
• Return funds to grant agency
• Cancel the Balance to C/F

Question 8

Grant Revenue

Answer 8

• Grant originates in C/F as “revenue and becomes “Grant Receivable” in Grant Fund
• Grant is transferred from C/F to G/F by passing through the “Interfund Account”

Question 9

Grant Appropriation

Answer 9

• Grant originates in C/F as “Budget Appropriation” and becomes an “Appropriated Reserve” in the Grant Fund
• The grant is transferred from C/F to G/F by passing through the “Interfund Account”

Question 10

Chapter 159 Process

Answer 10

NJSA 40A4-87

• Add a grant to already adopted municipal budget
• Insertion of Special Item of Revenue which was not known at time of adoption
• Chapter 159s can also include private donations for public events
• Governing body must adopt resolution for the amendment and for municipality send one certified copy to Director of DLGS

Question 11

Grant Fund Worksheet

Answer 11

• Does not contain budgetary accounts (no revenue or appropriations)
• Only contains balance sheet accounts or permanent accounts

Question 12

JE: Realize Grant Revenue in C/F and transfer to G/F

Answer 12

Debit: Due to/from Grant Fund
Credit: Revenue - Anticipated Grant Revenue

Question 13

JE: Set Up Grant Appropriated in C/F

Answer 13

Debit: Appropriation Grant
Credit: Due to/from Grant Fund

Question 14

JE: To Set Up Gran Receivable from Grant Transferred From Current Fund

Answer 14

Debit: Grant Receivable
Credit: Due to/From C/F

Question 15

JE: To Charge Off Grant Appropriation in C/F and Transfer to Grant Fund

Answer 15

Debit: Due to/from C/F
Credit: Appropriated Reserve

Question 16

Grant Fund Accounting

Answer 16

For every entry that affects the interfund a balancing entry must be made in the other fund

Question 17

In Kind Match

Answer 17

• in lieu of cash match

- ie labor or use of facility or equipment

Question 18

Matching Funds - Not Anticipated

Answer 18

• Can budget for unanticipated matching funds in generic account “Matching Funds for Grants”; Non-spending account and still must be amended by Chapter 159 Resolution
• Emergency Appropriation NJSA 40A:4-46

Question 19

NJSA 40A:4-85

Answer 19

• Change in text, title or amount of any item of appropriation
• Permissible for: Salary adjustments from contract or court order, matching funds for grants, change in administrative code, change of salaried individual to contractual
• Not permissible for: Transfer or New Appropriation, satisfy a deficiency in appropriation, substitutions of a different appropriation to replace an existing one

Question 20

Emergency Appropriation

Answer 20

NJSA 40A:4-46

-Local