NSF OFFERS PHASE I GRANTEES $10K FOR ACCOUNTING FEES.

National Science Foundation accounting program designed to help Phase I grantees graduate to Phase II.

If you’re an NSF SBIR Phase I grantee, you must demonstrate the use of a FAR-compliant accounting system to receive a Phase II award. This system must:

• be in place during Phase I
• prove all Phase I monies were spent and how
• show the ability to account for greater, more complex Phase II funding

During the CAP review, NSF auditors test your accounting system, but it doesn’t stop there. To ensure that your business will be around for two years, an auditor evaluates your financial solvency, including financial ratios.

Because the NSF wants you to start off on the right foot, the agency allows direct funding for accounting expertise during Phase I.

Using Line G-6 can mean funding for accounting services.

On your NSF SBIR Phase I proposal, Line G-6 allows grantees to budget for accounting services—and receive up to $10,000 for them.  These funds must be used for one or more of the following:

• Hire a certified public accountant(CPA) to prepare audited, compiled, or reviewed financial statements
• Engage a CPA to perform an initial financial viability assessment based on standard financial ratios so the awardee organization would have time to improve their financial position prior to submitting the Phase II proposal
• Employ a CPA to review the adequacy of the awardee’s project cost accounting system for FAR-compliance
• Purchasing a project cost accounting system

Please note that #2, #3, and #4 will be part of your CAP review for Phase II funding.

$10k for accounting services does NOT make you FAR compliant.

The NSF program helps a Phase I grantee start off on the right foot. However, it’s YOUR job to maintain a FAR-compliant accounting system. We see problems occur here.

By nature, SBIR/STTR Phase I grantees are boot-strapped and under-staffed. While your focus is on your innovation, accounting can get pushed to the back burner. Before too long, your direct and indirect costs aren’t properly coded, timesheets aren’t prepared correctly or in a timely manner, and you are no longer compliant. If this isn’t fixed, know that the Accounting System Review portion of your CAP review will not go well.

If you’re an NSF Phase I grantee, Jameson can help.

The NSF wants to help you succeed and their program’s a good one. But to succeed, you must understand a few key principles.

1. Whether you choose to use NSF accounting monies to fund a financial review/audit or financial ratio analysis, to purchase an SBIR-compliant accounting system, or review the adequacy of your own, it’s just the beginning.
2. Most CPAs are generalists; they know GAAP but not FAR-compliance. A CPA that specializes in government award accounting, like Jameson’s, provides greater insight and info. Our CPAs specialize in this field; it’s all we do. We know all the rules and regulations, and how to help you avoid pitfalls.
3. There are a wide-range of FAR-compliant accounting systems out there with an equally wide range of capability and cost. You may not need a Mercedes, but you probably don’t want a Yugo, either.
4. Jameson has a Phase I Accounting Solution and a proprietary FAR-compliant accounting system. You can learn more about both here.

If you’d like to talk to one of our government grant accounting experts, please fill out the form below. We’ll be in touch promptly.