The project manager is responsible for satisfying DHSPS expectations for the project within the approved budget. The project manager must align available resources with a service delivery model that efficiently and effectively achieves program goals. This entails an understanding of the approved budget and how it supports the project’s activities to achieve program benchmarks, the allocation of resources to achieve those benchmarks, and the monitoring and evaluation of progress towards achievement of the benchmarks.
Healthy Start Specifics
Once your grant has been awarded, your program must begin tracking income and expenses accordingly. The first step is to understand your program’s approved budget, and what costs and other income were intended for each line item. An intimate knowledge of your budget narrative will ensure effective allocation and tracking of costs, and minimize the need for revisions and corrections as the grant progresses. If your program is part of a larger organization, it is vital to sit down with the appropriate staff person in your finance department to discuss program goals and reporting expectations. Create an open line of communication to share project-specific budget information, as appropriate.
Your Funding Opportunity Announcement (FOA) required a budget narrative which, “specifically describes how each item will support the achievement of proposed objectives.” Line items included in your budget should include (but may not be limited to):
- Personnel costs
- Indirect costs
- Fringe benefits
- Evaluation (may be included in the subcontract line)
A project director or project manager should monitor the grant budget on a month- to- month basis. Ongoing monitoring of your grant budget relies on your organization’s financial management systems and available tracking tools. The tools you employ to monitor your grant budget’s performance may not “look” like your official grant budget submitted to HRSA. If you have a finance or accounting department, talk to them about which reports they can run to help you review and monitor your budget on a real-time basis. Alternatively, you will need to develop tracking tools for budget monitoring.
Two key budget tracking tools are:
- Statement of Financial Activities: Commonly referred to as a profit and loss sheet, this report shows the current total dollars spent and remaining in budget lines. It may also include a variance column showing underspending or overages, which may help you regulate your spending throughout the grant period.
- Cash Flow Projection: The Wallace Foundation (with Financial Management Associates) has provided a cash flow projection template to help program managers estimate their costs at various points in the year to ensure an appropriate flow of income to support those costs. This tool may help Healthy Start programs plan for grant drawdowns.
Some additional tools to help plan, monitor and reconcile your budgets:
- Resources for Nonprofit Financial Management: Collection of resources for nonprofit and grant financial management, including articles, templates, and other resources categorized by Planning, Monitoring, Operations, and Governance.
- Proposal Budgeting Basics: Online tutorial to help project managers understand the process of creating a budget, estimate costs, and develop a budget narrative.
- How to Manage a Federal Grant or Cooperative Agreement: Three-unit curriculum was developed to help, in part, “advance the financial management skills of nonprofit award recipients with respect to federal reporting.” Units 2 and 3 of this curriculum are most relevant to budget management and monitoring.
- Financial Reports Inventory: A listing of financial reports and formats appropriate for different stakeholders and purposes.