Re: accounting for vehicle grant RESADM-L Member 07 Apr 2003 11:31 EST
Thank you for the reply, Greg. I will confess that I don't really understand the difficulty this award generates for our accountants, so I apologize if my description of the problem is unclear. The accountant's exact question is "Do I record 80% of the value as an expense toward the A-133 audit?" and to me it is a very simple answer: yes. But our finance people have indicated that it is difficult for them to reach a conclusion on that question. Because the state agency could reclaim the vehicle, our finance vp considered recording this as a non-depreciable asset, but was advised by our auditor that this would be based on faulty logic. I have the impression that the real concern is the impact on our financial statement of recording this as asset and acknowledging the liability of its accompanying operating expense. The next question I fielded was "is it too late for us to give the van back?" (this is NOT what we will do) Of course all of these questions were discussed at the time we prepared the application, but it was a LONG grant process (two years from application to award), and revisiting the issue has generated more discussion. -----Original Message----- From: GSchmidt [mailto:xxxxxx@COX.NET] Sent: Saturday, April 05, 2003 11:18 AM To: xxxxxx@HRINET.ORG Subject: Re: [RESADM-L] accounting for vehicle grant Molly: I'm not sure what the A-133 issue is that your accountant is concerned about. If I had to guess, I'd say it's about how to categorize the asset federal vs state. If this is the case, follow the source of funding (80/20). The lien should be immaterial unless you try to dispose of the vehicle without proper authorization. There is probably some underlying agreement between the Fed and State on how to disburse any return on assets from liquidations (either through sale, insurance proceeds, etc.). I'm pretty sure that if you looked at the terms or regs governing the project, you'll see something to the effect that if you dispose of the asset, the state is to receive all funds generated as a result of the transaction. Greg Schmidt RESADM-L Member wrote: >Good morning, > >I'm interested in the accounting practice for any institutions who have >received a grant from a state/federal transportation program (generally >referred to as the "Section 5310" program) -- the grant is in the form of a >vehicle built to our State Dept. of Transportation specs, not in the form of >dollars. We have received such a grant for the express purpose of operating >a transportation program for the Health Center's adult day care program, and >our organization's grant accountant has questions about the award in >relation to tracking A-133-eligible awards. > >The award contract provides a stated dollar value for the vehicle, which is >supported 80% with federal funding and 20% with state funding. The contract >assigns title for the equipment to the Health Center with a lien assigned to >the State. > >Our accounting dept. has determined that the vehicle should be recorded as a >non-depreciable fixed asset, but questions remain about how to record the >award in relation to A-133 requirements. > >Since my area of expertise is primarily in pre-award proposal development, >I'm seeking the collective wisdom of RESADM-L to pass on to our accountant. > >(Note: We are a not-for-profit, non-university hospital and our >organization's cost accounting standards are 45CFR74/OASC-3, not A-122 or >A-21.) > >----------------- >Molly Daniel >Grants Specialist >Planning Dept. >Sarah Bush Lincoln Health Center >1000 Health Center Drive >Mattoon, IL 61938-0372 >tel. 217-258-2195 >fax 217-258-4135 >email: xxxxxx@sblhs.org <mailto:xxxxxx@sblhs.org> >web: www.sarahbush.org <http://www.sarahbush.org> > > >====================================================================== > Instructions on how to use the RESADM-L Mailing List, including > subscription information and a web-searchable archive, are available > via our web site at http://www.hrinet.org (click on "Listserv Lists") >====================================================================== > > > ====================================================================== Instructions on how to use the RESADM-L Mailing List, including subscription information and a web-searchable archive, are available via our web site at http://www.hrinet.org (click on "Listserv Lists") ====================================================================== ====================================================================== Instructions on how to use the RESADM-L Mailing List, including subscription information and a web-searchable archive, are available via our web site at http://www.hrinet.org (click on "Listserv Lists") ======================================================================