About the nonprofit client:
Early Learning Ventures (ELV) is a Colorado-based nonprofit organization dedicated to expanding access to quality, affordable childcare.
The organization focuses its efforts on improving its early childcare programs offered at the nation’s center and home-based childcare facilities. Eighty-five percent of the childcare facilities are small, independent businesses that lack the infrastructure and resources to invest in quality improvements. ELV currently serves over 600 childcare businesses and impacts more than 40,000 children.
The nonprofit’s accounting challenge:
Prior to NFP Partners, ELV partnered with a related entity’s corporate accounting department. This department tried to manage nonprofit accounting with software designed for commercial, for-profit accounting. While the missions of both organizations aligned, the accounting procedures did not.
ELV received a large, five-year, $3 million annual Early Head Start grant. Judy Williams, Executive Director of Early Learning Ventures, realized not being able to manage the finances became a major challenge, if not a risk, to the fulfillment of the grant.
This challenge came to a head after the nonprofit’s first annual audit which included the A133 Single Audit. ELV had a minor audit finding related to financial statement reporting. Ultimately, ELV decided it needed to find an accounting team with nonprofit expertise. They also needed a financial system that could provide funding source tracking.
“While we’re grateful for the support of our corporate accounting department, it became clear after receiving a large federal grant that we needed more visibility to the money being spent and greater ability to track grants independently and through the period of performance, not just the fiscal year,” Judy Williams said.
The nonprofit’s accounting solution:
NFP Partners began providing outsourced accounting services and implementing Abila MIP Fund Accounting™ for ELV in June 2017. The project included a go-live date of August 1, 2017.
ELV gained control of their nonprofit’s financial system. This solution allowed them to adjust their chart of accounts to include funding source designation as well as program and administrative designation. This greatly improved the financial report generation. Additionally, it enhanced accountability. This was done by creating funding source specific statements of financial position and activities to monitor net assets, revenue, and expenses.
The impact of outsourcing nonprofit accounting services:
Early Learning Ventures was also able to gain better financial insight to track and manage their nonprofit’s grants. Why? Because MIP generates reports across fiscal years which line up with grant period of performances.
In addition to the improvement of the financial system, ELV benefited from outsourcing accounting services to NFP which gave them dedicated accounting professionals experienced in nonprofit accounting and compliance.
It’s worth noting, in the 2017 annual audit, ELV resolved the prior year findings and had no further findings.
For more information on how NFP Partners can help your nonprofit through our outsourced nonprofit accounting services, click here.
To learn more about outsourced nonprofit accounting, visit our Ultimate Guide to Outsourced Nonprofit Accounting