Grant acquittals in not-for-profits: Why finance should be the first to know
In most not-for-profits, finance is the last to know a grant has been awarded.
Having managed grant acquittals for not-for-profit organisations, we see the same pattern again and again.
The application is written by a non-finance team member whose focus is putting forward a strong submission.
The funding is specific, and the budget is built around what the grant asks for and what needs to be delivered.
Finance is rarely consulted at that stage, so nothing connects the application budget to the chart of accounts. The application creates categories that don't exist in the ledger, the numbers go in, and it's submitted. At this point, finance may not know it has happened.
Then the grant is approved and the funding contract is ready to be signed. Buried in it is the requirement to acquit, whether monthly, quarterly, or yearly, and every acquittal reports against the original budget, the one finance teams don't see until the last minute.
That is when the finance team ends up doing the heavy lifting.
This piece covers how to fix that before the next grant goes out, with a repeatable process and the system set-up that supports it.
"Acquittal report against what?" How the pain starts
The pain starts when finance is asked to produce an acquittal report for a grant they've never seen.
Say the report is due in three months. Finance asks the obvious question, and Nunzio Giunta, Giuntabell's founder, says it plainly: "Acquittal report against what?"
The answer is usually a surprise. There is a funding contract. There is a budget in the application. Nobody told finance either existed.
Now the team has to work backwards. They have to set up the project in the finance system, start tracking against the contract, and reverse engineer what has already been spent. Salaries and costs have to be reallocated to the grant, months after the transactions were coded.
By then, the work is no longer just building a report. It's cleaning up existing data first, which in most cases was never accurately matched to the grant, and then building the report on top of it. All of it has to make sense against a funding contract the team is reading for the first time.
Even where finance does know about the grant, we've seen teams scrambling at the eleventh hour, with the reaction: "What do you mean it's due today?"
Three things finance teams keep telling us
Nunzio hears the same three things from finance teams managing grant acquittals:
"Our current system cannot easily provide a report that is mapped to the categories of that funding contract."
"The system slows us down and creates stress."
"We don't have one source of truth that can report on our own chart of accounts and also on the funder's categories."
What funders are actually looking for
Getting acquittal reporting right comes down to consistency and confidence. Funders need to see that their money has been deployed in the most appropriate and risk-averse way.
What that looks like depends on the type of funder.
Government funders want the financial picture. How much have they paid the organisation? How much is the organisation holding on their behalf? If funds won't be spent, will they be refunded? Government funders are discharging their own duty, and they need to know whether money can be clawed back if it hasn't been used.
Philanthropic funders are more focused on impact. What outcomes has the funding delivered? How many people is it serving? What good is it actually doing? The financials still matter, but impact is what they're looking for.
The real cost of rebuilding acquittals from scratch
The biggest cost isn't the hours finance spends rebuilding the report. It's what happens when that report reaches the funder.
When acquittals are inconsistent, or don't give funders the information the funding contract asks for, funders start to lose confidence in the organisation. That loss of confidence surfaces at the worst possible moment: the next funding round, the extension, or the variation. A funder who doubts the numbers is less likely to renew the contract or commit additional funding.
The reverse is also true. When finance delivers consistent, reliable acquittal information period after period, it builds trust, and funders want to keep investing.
So the true cost of rebuilding acquittals from scratch is lost funding and missed opportunities down the track.
As Nunzio puts it: "It could be worth millions of dollars."
Building a repeatable process for grant acquittal reporting
Funding variations are one of the most frustrating things finance teams deal with.
We see it often with clients. A funding contract has already been signed, and partway through the year the funder decides to provide an extra $100,000 for an activity. Finance doesn't know about it.
Nunzio's advice is simple: make sure communication is clear across the entire funding cycle, from the application through to closing the contract off, including every variation in between. It needs to be fully transparent across all teams.
Once that communication becomes second nature, grant reporting becomes consistent and repeatable. Here's what it looks like in practice:
Get finance and non-finance teams working in one system. Program staff enter information in plain language, with no finance jargon, into a grants or projects module that finance works from directly.
Keep everything in one place. Milestones, reporting requirements, variations and a full audit trail all sit in the same system, so nothing depends on someone remembering to pass it on.
With everything in one place, finance can report proactively instead of reactively, and consistently every period. That consistency builds confidence across the organisation, and that confidence carries through naturally to the funder.
Where Sage Intacct changes the reporting
The process only holds if the system supports it. This is where Nunzio recommends a system like Sage Intacct, which lets finance report against the funder's categories quickly, alongside the organisation's own chart of accounts. That is one of the key pain points it resolves.
Then there's non-financial data. Many funders don't only want financial information. They want the number of clients visited, or the number of training programs delivered. Finance ends up relying on other sources for that data, which sit outside the system and outside the audit trail.
Ideally, you want it in the finance system, where it carries the same audit trail as the rest of the numbers.
If your next grant variation landed tomorrow, would finance know about it?
In 30 minutes, we'll look at how your organisation currently manages grants from award to acquittal. We'll show you where information is getting lost between teams, and what a consistent, repeatable process would look like for you. You'll walk away with a findings summary, whether you work with us or not.