When you’re in charge of an NFP, you’re often faced with many challenges to acquiring the funding necessary to operate your organisation and provide the services you’ve identified to support your community.

Most NFPs are funded through donations and grants, and many of those grants are from various government departments, though some are through donations from philanthropic organisations or charities. This is dependent on the type of service your NFP supplies.

To receive the funding you need, the grant application is often a mammoth task to complete and there is no guarantee you’ll get the funding. But this blog isn’t about the initial grant application, indeed, completing the form to win the funding is just the first step in a detailed administrative process. Once you have the funds, you must ensure you cross every ‘t’ and dot every ‘i’ when it comes to advising the funding body of your expenses and the outcomes.

This is done in the form of an Acquittal Statement.

These statements refer to proving that the funds provided were spent appropriately and meet the agreement terms and conditions arranged with the funding body, government agency or foundation.

This requires meticulous financial reporting and is achieved through the acquittal process.

The Acquittal Statement will typically include four elements:

1. Financial Information

This report shows exactly how the money has been spent and must include receipts for all expenses. A financial report can be provided with a good bookkeeping software package, but of course, the old saying ‘garbage in, garbage out,’ also applies. The information has to be entered correctly and checked for errors to ensure the financial picture is true and correct.

2. Data and Statistics

When you signed the funding agreement, terms would have likely included a baseline of expected outcomes. The funding is provided with a particular result and impact in mind, so it’s essential to collect data and statistics that clearly show the outcomes. This is a crucial part of the Acquittal Statement and is done by collecting and analysing data and statistics.

3. Qualitative Information

The Acquittal Statement should also contain information that qualifies how you collected your data. This could be in the form of surveys or case studies; the more in-depth information provided, the better.

4. Project Documentation

This includes providing additional proof, such as photos or promotional materials, and should be relevant to the details in the acquittal statement, relating to the specific funding and outcomes.

The funding body is likely to have unique reporting requirements and the acquittal report must be completed to their specifications.

It’s common for the acquittal statement to be due 12 months after funding has been agreed and signed off, but it’s best practice to monitor expenses against the grant allocation on an ongoing basis. Make sure you adhere to the budget as much as possible. For example, there may be a small allocation for advertising, an online presence or launch event and it’s easy to go over budget. You must track against the allocations in the original proposal and budget.

While good bookkeeping, processes and general data collection are important for running any business and it’s essential at the end of the financial year to provide correct information to the tax office, remember, these acquittal statements are specific to the funding body and their requirements. 

Acquittal statements are separate to other reporting criteria. At the end of the financial year, the ATO requires purely financial information, and while the ACNC also requires an annual report, these reporting requirements are for the organisation as a whole and not necessarily for each specifically funded project.

No matter whether you’re in the private sector, in government or providing a not-for-profit service, your accounts and processes, of course, need to be in order, but this is even more critical for NFPs.

Successful acquittal builds trust with funding bodies and increases the chance of future funding, not only with an existing grant provider, but by demonstrating best practice and good budgeting, this will hold you in good stead with other grant providers.

If you’re a little overwhelmed with all these requirements, you could enlist the support of an NFP specialised bookkeeper, like WestBAS. If you have any questions, don’t hesitate to reach out to Susan to discuss any queries you may have around acquittal statements for your not-for-profit organisation.

In the meantime, here’s a couple of links that might be handy for more information:

https://www.communitygrants.gov.au/non-audited-financial-acquittals

https://betterboards.net/glossary/acquittal/ https://intermediaries.news.ato.gov.au/link/id/zzzz661f2c83911af052Pzzzz5ef3f61be3d7c818/page.html