What Community Action Agencies Should Know About Accounting Software

Volunteers working at a food bank.

Many Community Action Agencies receive funding from multiple sources in order to accomplish their missions. Ensuring those funds are accurately managed, audited, and reported is paramount to the ongoing receipt of funding.  

Top-performing agencies are directing resources to serve the highest-need communities through evidence-based practices and by relying on sound financial governance. When it comes to financial management, Community Action Agencies can save time and gain efficiency by going beyond basic bookkeeping and using accounting software designed for nonprofits. 

Community Action Agency of Butte County, Inc. (CAABCI) operates four major programs with a $7.5 million budget funded by nearly 30 different sources. After using QuickBooks for several years, they sought out MIP Fund Accounting to easily manage multiple funding sources and save time on reporting. 

CAABCI receives funding from federal, state, and local government grants as well as foundations, corporations, contracts, fees for services, and donations. Managing the multiple and widely varying funding sources made the accounting piece of the business extremely complex, and former CFO Dana Campbell knew the organization needed to upgrade.  

MIP helps CAABCI save time on reporting across multiple funding sources. As a flexible solution, MIP helps the organization code as needed depending on reporting requirements.  

Campbell said MIP’s accounting controls ensured the organization wasn’t making mistakes around reporting, and its flexibility helped adapt to what was needed in any given environment.  

“A main advantage of MIP is we’re able to adapt to each funding stream’s unique conditions,” Campbell said. “This is vital because funding sources typically have diverse requirements, and even interpret regulations differently, sometimes within the same federal department. For example, one grantor may define ‘occupancy cost’ as rent, while another defines it as rent, plus telephone and Internet services, plus taxes and insurance. MIP allows us to code each one differently in response.” 

Time Savings Across Organizations 

MIP is a complete accounting solution that increases efficiency and, most importantly, saves time importing and exporting third-party or self-generated data. Adopting a single, comprehensive system streamlines financial reporting by quickly incorporating data from all funding sources while preventing mistakes related to navigating multiple systems.   

“We can adapt the coding to track very specifically when necessary-all the way down to the pencil we’re using,” Campbell said. “For example, the utility company that helps fund our weatherization program recently requested that we track what percentage of insurance costs are allocated to different aspects of the program, including administration, customer enrollment, and field activity. We can code this into the system and easily capture the various allocations going forward.” 

It’s not just accounting for pencils, either. MIP makes reporting and forecasting more complete with at-a-glance, up-to-date metrics while pulling historical cost and compensation data for comprehensive reporting to help organizational efficiency. MIP also improves routine accounting events like audits, closing the books monthly and annually, and other accounting workflows like AP approvals, purchase orders, and requisitions. By centralizing information in one system, accounting teams can complete tasks in less time and prevent errors associated with manual entry.      

With MIP, other community action agencies say they’ve been able to close their books and have audits completed in as little as five weeks after fiscal year end.  

Make Audits a Breeze 

When it comes to audits, MIP is unmatched. MIP speeds up and simplifies audit prep. MIP has robust internal controls and features a complete audit trail. MIP’s internal controls limit user access and permissions on a granular level, and the audit trail produces a complete log of who has accessed financials, what changes they’ve made, and provides the workstation address at which they’ve made the changes. Organizations can grant a read-only license to auditors to access to financial information.   

MIP makes audits a breeze with:  

  • A Fully Auditable General Ledger   

As invoices change throughout the year, organizations and auditors will have complete visibility into all those changes, allowing for full transparency. 

  • Transaction Reports 

Quickly filter for transaction information and include details regarding entry or modification such as username, date, and time—further breakdown reports by segments, descriptions, debits, credits, attachment count, etc.   

  • Summary Organization Audit 

This additional audit shows changes to vendor records and transactions. With this audit, organizations can see if checks are printed and then deleted from the system.  

  • Complete Compliance   

Quickly generate a Statement of Activities for auditors to examine and document expenses back to each grant. This Statement of Activities shows expenses in one location without multiple spreadsheets.    

  • Classify Net Assets 

MIP allows for simple net asset classification within the software with donor restriction or without donor restriction.  

Just as MIP helped CAABCI, consider if MIP can help your Community Action Agency manage multiple funds, increase financial efficiency, and simplify the audit process. Setup an accounting strategy call to discuss how your Agency can save time generating reports  

Disclaimer: CAABCI spoke with MIP Fund Accounting in 2015 for a case study. Dana Campbell was the CFO of the organization at the time but has since left the organization.  

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Eric Oliver

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