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Non-Profit Case Study
Allocating costs, retrospectively
A $50 million social services not-for-profit organization put its energies into its programs, not its financial records. Consequently, it could not show what office expenses should have been allocated to a program funded by a $500,000 government grant, as it was required to do. The grant was disallowed, and the charity was asked to return the money.
Based on its expertise in auditing grants for not-for-profit organizations, Buchbinder Tunick & Co. developed a cost-allocation plan. We calculated what portion of grant proceeds should have been allocated to overhead expenses. Our people meticulously went through the client's financial records to allocate expenses such as rent, salaries, and supplies that were attributable to the grant. By clearly documenting the rationale for the plan and the methodology it used, Buchbinder Tunick proved to the government agency that the grant money was being well spent. The grant money remained with the charity, where it was put to good use.
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