Written by Justo Torres, Director, Contracts and Grants
Reconciling charges posted to contract and grant projects is a critical step in financial internal controls. In essence, it provides a process by which debits or credits posted to a project can be verified and errors eliminated against a contract or grant.
Why monthly?
In short, most contracts or grants are invoiced monthly. That means that expenditures are reported to sponsors on a monthly basis. Sponsors also make payments on a monthly basis. Monthly reconciliation ensures that incorrect charges are not reported to a sponsor and that sponsors do not pay NC State University for incorrect charges.
Monthly reconciliation also facilitates efficient project closeout. If an award has been reconciled on a regular basis, the closeout process is less burdensome than a situation where three to five years of charges have to be reviewed.
Tips for Monthly Grant Reconciliation
Here are some tips and tricks for reconciliation:
- Confirm that expenses are allowable, reasonable and appropriate to the award.
- Correct errors, incorrect postings or allocations in a timely manner.
- Process journals and cost transfers to ensure corrections and adjustments are completed in the General Ledger.
- Ensure that awards are not overspent.
Proactive monthly reconciliation is time and effort well spent. It will minimize grant audit findings and protect units from having to cover unallowable expenditures from non-sponsored sources.