Government grant and federal contract accounting in Colorado

Organizations that receive federal grants, contracts or cooperative agreements must account for those funds under rules that extend well beyond ordinary bookkeeping. SBA CPA establishes the records, cost tracking and written policies that keep you in compliance with Uniform Guidance, the FAR and related requirements, while easing the administrative burden on your staff.

What’s included

Accounting systems that track costs separately by award, grant and contract

Compliance with Uniform Guidance (2 CFR 200), FAR, CAS and agency supplements

Allowable-cost reviews and support for indirect cost rates

Timekeeping and labor allocation procedures

Financial reporting and drawdown support for awarding agencies

Written policies and procedures, with guidance for the staff who apply them

Single audit readiness

An overhead view of a team at a wooden table with laptops and a tablet showing a discussion outline, notebooks and coffee mugs

Why does grant accounting differ from ordinary bookkeeping?

Federal funding comes with conditions. Grants, contracts and cooperative agreements each require that funds be tracked separately, spent only on allowable costs, documented in a prescribed way and reported on schedule. An accounting system designed for ordinary operations usually cannot answer the questions a grant officer or auditor will ask, such as how much of a staff member’s time was charged to a particular award, or whether an expense was allowable under the award’s terms.

SBA CPA works with organizations that receive federal contracts and federal assistance, including grants and cooperative agreements. We tailor the work to how your organization operates, so that compliance becomes part of your regular routine rather than a scramble before each report is due.

Which rules apply to your organization?

Depending on your funding sources, your accounting may need to satisfy several sets of requirements at once:

Uniform Guidance (2 CFR 200) for grants and cooperative agreements
Grants Policy Statements issued by individual awarding agencies
Federal Acquisition Regulation (FAR) for federal contracts
Cost Accounting Standards (CAS) for certain covered contracts
Agency supplements that impose additional terms of their own
Generally Accepted Accounting Principles (GAAP) for your financial statements

We help you determine which of these apply, where they overlap and what each one requires of your day-to-day bookkeeping.

What does a compliant grant accounting system include?

In practice, a sound system rests on a few essential elements. It needs a chart of accounts and cost-tracking structure that keeps each award separate, and a timekeeping process that supports how salaries are charged across programs. It needs clear rules distinguishing direct, indirect and unallowable costs, along with procurement records that show how vendors were selected. And it needs a reporting calendar, so that drawdowns and financial reports are submitted on time.

Indirect costs warrant particular attention. Organizations without a negotiated rate may elect a de minimis indirect cost rate of up to 15 percent of modified total direct costs. That option is simpler than negotiating a rate, but once elected it must be applied consistently, and no cost may be charged as both direct and indirect.

We also draft the policies and procedures your staff need, so that the people who approve purchases, code expenses and record time understand precisely what the rules require.

When is a single audit required?

Under 2 CFR 200.501, a non-federal entity that expends $1,000,000 or more in federal awards during its fiscal year must have a single or program-specific audit for that year.

For example, consider a Colorado nonprofit that expends $650,000 under a federal grant received directly from an agency and $450,000 under a federal program passed through a state department. Together those amounts total $1.1 million in federal expenditures, so a single audit is required even though neither award crosses the threshold on its own. The figures are illustrative. Identifying the requirement early allows you to budget for the audit and to prepare the schedule of expenditures of federal awards, which lists federal spending by program, as the year progresses.

A framework for each new award

When a new award arrives, work through five questions before the first dollar is spent:

Which rules govern this award, and does it carry agency-specific terms?
How will costs be tracked separately from other funding?
How will staff time charged to the award be documented?
Which indirect cost rate applies, and is it being applied consistently?
Which reports are due, to whom and by when?

Recording the answers in writing and sharing them with the people who spend the funds prevents most compliance problems before they arise.

Beyond compliance: supporting growth

Compliance is the baseline. We also help you manage your federal contracts and awards within a broader plan for growth and profitability, so you can pursue new funding knowing your systems are equipped to support it. Nonprofits with federal funding often pair this work with our nonprofit accounting services, and organizations that need audited financial statements can work with our assurance team. To discuss your awards, the first step is an introductory call with our client services team.

Common questions

What is Uniform Guidance?

Uniform Guidance is the common name for 2 CFR 200, the federal regulations that govern the administration of grants and cooperative agreements. It sets requirements for financial management, allowable costs, procurement, reporting and the single audit.

When does an organization need a single audit?

Under 2 CFR 200.501, a non-federal entity that expends $1,000,000 or more in federal awards during its fiscal year must have a single or program-specific audit for that year. Expenditures from all federal sources count toward the threshold, including federal funds passed through a state or other agency.

What is the de minimis indirect cost rate?

Organizations without a negotiated indirect cost rate may elect to charge indirect costs of up to 15 percent of modified total direct costs. The rate requires no documentation to justify it, but once elected it must be applied consistently across federal awards.

Do you help with federal contracts as well as grants?

Yes. Federal contracts are governed by the Federal Acquisition Regulation and, in some cases, the Cost Accounting Standards. We help contractors establish compliant accounting and manage their contracts in step with their growth plans.

How do we get started?

Schedule an introductory call or request a proposal. Our client services team will ask about your awards, funding agencies and reporting deadlines, then define the scope of the engagement.