When you receive a government grant or contract, you’re in business with one of the largest and most powerful purchasing organizations in the world. You’re getting the funds to further your innovation, but you also need to adhere to strict rules and regulations.
Federal Acquisition Regulations (FAR) and sbir accounting compliance
When you signed your government funding award, you accepted the terms and conditions embedded in the award including 45 CFR Part 75, 2 CFR Part 200, and 48 CFR part 31. The Federal Acquisition Regulations (FAR) require you to maintain a FAR compliant accounting system subject to special rules depending on the type of government funding you’ve received, such as SBIR, STTR, R01, ARPA-E, BARDA or IDIQ.
What does an SBIR compliant accounting system do?
This is by no means a complete list but, at the very least, a FAR compliant system should:
- Segregate direct, indirect (F&A) and “unallowable” costs
- Accumulate direct costs by contract/grant budget category
- Allocate indirect costs (fringe and F&A rates) to intermediate and final cost objectives based on a “logical and consistent method”
- Reconcile the job-cost ledger with the general ledger
- Track employee time by job activity
- Charge direct and indirect labor costs to the appropriate accounts
- Produce monthly reports of charges to contracts & grants to support billings/draw downs
- Exclude unallowable costs
How do you find an NIH Grants Policy Statement compliant accounting system?
Whether you have NIH, DOE or DOD funding, there are two parts to this question. Let’s start with the system, itself.
At Jameson, we’ve looked at countless accounting systems for our clients and have tried many of them ourselves. Here’s what we found:
- On the high end, Deltek and Unanet are great systems, but they are EXPENSIVE and very hard to learn how to use, even for our CPAs with 15 years of experience. We recommend Deltek to hard-core contractors with annual government revenues exceeding $50M. Deltek’s Costpoint system will run you upwards of $300,000. We typically recommend Unanet to contractors with annual government revenues of $10-$50M. Unanet’s SAAS can be had for $10-$20k/year. Oh, and expect a CPA with 15 years of experience to incur 6-12 months to implement these high-end systems. And please don’t ask about inventory or other non-government centric modules.
- On the lower end, there are several options that can be acquired for anywhere from $2,000 – $5,000. Frankly, we’ve tried them all and have found that each tries to do too much and as a result – does nothing well. In our opinion, they are mostly poorly architected, and most important – don’t have enough installed users to make us comfortable that they’ll be around for long. We have not been comfortable putting any clients on these low-end systems.
More important – The most important aspect to maintaining a FAR compliant accounting system is the expertise of the accountant doing the work.
An accounting system is not just software!! You need a CPA with government grant and contract accounting expertise to know how to make it and keep it FAR compliant.
This is where some awardees get into trouble. They find an accounting system that could be compliant, but don’t know how to find, hire and train someone with the necessary expertise. Most fall into the trap of wasting a LOT of time trying to figure out how to do it themselves, rather than focus on building their business.
We really wanted a better solution for our clients, so we developed our own.
Introducing JamesonWorx. An SBIR compliant accounting system for awardees of $10M or less.
JamesonWorx turns Quickbooks Online into a FAR Part 31 compliant acceptable accounting system.
As a stand-alone product, QuickBooks is NOT FAR Part 31 compliant. It will not produce an indirect rate calculation or a proper job cost report even if you set up the chart of accounts properly.
To remedy this QuickBooks shortfall, we created a proprietary data model using Microsoft Power BI to automatically pull data from QuickBooks Online to populate these two key reports that you need to have a FAR compliant accounting system – an indirect rate calculation and a proper job cost report – key supporting reports when billing the government.
Enhanced, instant visibility.
Our easy-to-use Power BI dashboard can be accessed anywhere via iPhone, iPad, Android, IOs or PC, giving you instant visibility into the actual spending on each project, as well as remaining backlog by budget category.
An executive summary dashboard gives you all your key performance indicators in one easy-to-read screen. Top management can have a dashboard that provides visibility into the entire business, while project managers and others can be allowed dashboards affording them visibility into only the projects they control.
JamesonWorx comes with Jameson Expertise.
JamesonWorx is more than just software, it’s a solution. We have four, clearly-priced service levels and each comes with our Jameson expertise – through a seasoned CPA assigned to your account.
When you have access to our CPAs with deep expertise in government contract and grant accounting, you have access to over 30 years of government grant and contract accounting experience, with clients from coast-to-coast, and over $4 billion in awards managed. We know the agencies and regulations—and how to help our clients avoid trouble.
Ed Jameson, CPA, Managing Member
With over 40 years of experience as a government funding award accounting specialist, Ed is a recognized national expert in the field. In addition to helping hundreds of clients navigate FAR Part 31 compliance. he has been an active speaker and panel moderator at Tech Connect's National SRIR/STTR conferences since 2011. presents at the DOD's Mentor Protégé Summit and presents regularly for several state and local organizations.