Setting up gnucash for charity with project

[Chris Brittain]

Thanks Dale
The funders vary a little in how they operate. Most have already received
from my predecessor invoice by invoice supported claims and have paid out a
percentage retrospectively at to a maximum agreed. Unfortunately the trail
of this is difficult to follow as they sent the evidence, normally a folder
of receipted invoices,  to a number of the funders in turn. Others just
required evidence of completion before paying out. There has been mingling
of funds with each funder offering either a fixed amount, or most likely a
15% -50% proportion which can be crossed matched with each other and our
reserves. 
This will probably be a one off at this level (£250K) but there are
regularly smaller donations (£1-2K) for a specific purpose but the accounts
have not previously recorded these as restricted funds (UK usage not sure if
it is the same in USA) but I will in future be recording these as such to
meet accountancy requirements.
The board just want basic management accounts showing overall P&L and cash
flow, but previously they had project funding figures and day-to -day cash
flow separately with no apparent linkage between them. On my first check it
appears there may be a considerable overspend on the former and resulting in
reasonable healthy looking P&L with a big hidden erosion of the reserves. My
aim is to produce full management accounts monthly and also be able to
prepare annual accounts to UK Charity SORP standards. I will have to enter
data retrospectively for three years and reconcile a very opaque trail of
transactions because adequate annual accounts have not been produced for
some time!! I will have the services of a professional accountant to perform
a full audit but financial constraints mean that I will have to do all the
background work.
The setup of a subaccount on the banking side sounds good but perhaps I
would have to "tweak"  one of the standard reports to get the monthly report
I want.
Thanks

Chris  


-----Original Message-----
From: Dale Alspach [mailto:alspach at math.okstate.edu] 
Sent: 29 October 2014 15:39
To: Chris Brittain
Cc: gnucash-user at gnucash.org
Subject: Re: Setting up gnucash for charity with project

What to do depends on what level of reporting you will need on the
restricted funds. If the donor/grantor wants detailed accounting of
expenditure of the funds, you may need to actually create a system of
expense accounts specifically for the project. A second question is whether
this is a one time deal or similar things are going to happen in the future.

Does the donor allow mingling of funds? If not, your organization will need
an actual separate bank account. 

How does your governing board/committee want to see this in the
organization's reports? 
Do the expenditures for the project
need to be isolated from other expenditures?

If you do not need detailed accounting for the project, then you may be able
to simply setup a subaccount of your operating funds asset account (usually
a bank account). Place the restricted funds in the subaccount. When project
expenditures are made, take them from the subaccount.

Dale