How to account for Formation Grants

Formations are encouraged to apply for Grants

The requirements and process to apply for grants is explained at QBSI 6.5. The State Office manages the Grant Process as we operate under the one Australian Business Number (ABN). Contact grants@scoutsqld.com.au for support.

Why account for a grant?

Grants are generally for equipment or improvements to the property maintained by the Formation. We are striving for all Formations to have accurate financial statements and part of this is explaining how to correctly account for grants awarded to your Formation.

When to account for a grant

Grants are accounted for as revenue when the obligation to construct or purchase is completed (ie when the grant is acquitted).

Accounting entries

Once the grant expenditure is finalised the Formation’s Treasurer will prepare a journal to account for the income and expenditure, examples provided below:

Debit Improvements/Equipment Credit 220 - Grant Income
710 – Equipment
720 – Furniture
730 – Improvements

If the Grant is for operational expenses

Debit applicable expense code Credit 220 - Grant Income
e.g. 490 - Training

If the Formation has paid for goods or services direct, a tax invoice must be submitted to State Office for reimbursement. It is recommended to help reconcile these transactions that both the purchases and reimbursement be allocated to 850 – Suspense, GST Free.

All Formation transactions related to grants should be treated as GST Free.

What value do I use for the journal?

It is important that you journal the grant income and expenditure at cost (ie amount received and spent).

How to raise a journal entry in Xero

Please refer the link Add, import and post manual journals (xero.com) If you need assistance with this please contact the finance team using the details provided below.

What happens if funds are required to be returned to the grant provider?

If the grant funds are not fully expended, then the funds are required to be returned to the grant provider, and this refund is processed by the State Office. This reduces the value of the grant income to be processed by the Formation.

Feedback

We welcome feedback and suggestions on any matters on this Fact Sheet. Please contact us by emailing finance@scoutsqld.com.au so that we can answer your questions or to provide you with assistance.