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Understanding Budget, Payments and Milestones in Grants Manager Plus

Managing finances is at the core of InfoStrat's Grants Manager Plus software for grantors to manage the full lifecycle of a grant.  This post explains key concepts for understanding how budgets, payments and milestones are managed in the solution.

Grants Manager Plus may be configured to your business rules, so your implementation may differ from the scenarios described here.  Many of the functions and workflows are nearly universal for grant management, such as having an approval routing workflow or checking the amount requested against budgets and remaining funds.

When a grant manager creates a grant program, it will contain related budget codes, budget line items, and optional budget gates and milestones.  The budget codes are used by grantees to provide their proposed budgets, and hence to roll up totals for reporting.  Budget gates are thresholds which are tied to project (grant) progress which is measured by milestones.  In a building project, for instance, a payment may be triggered by 50 percent completion (a milestone) and tied to a pre-defined percentage of funds for which a grantee is eligible at that time.  Like budgets, the milestone budget control gates are established on a program level where the system connects Program Budget Codes, Milestone Types and the percentage that the completion authorizes in a Program Milestone Budget Gate entity.

Many grants involve vendors who provide goods and services to grantees.  A payment request may include one or more vendor invoices which are used to provide proof or work and supporting documentation for auditing a grant.  Vendor invoices may contain invoice lines which are mapped to budget line items and milestones.

Payment requests are usually initiated by the grantee using the grants portal.  Below is the payment request screen which is rendered with Microsoft Dynamics Portal:

Payment request on the grantee portal

The create/edit payment screen shows the details of the payment request.  It also allows creation of line items and submission of file attachments to the payment request.

The portal stores data directly in Grants Manager Plus, and accesses data from Grants Manager Plus to allow the grantee to check on payment request status.  As the payment request is processed and approved, the status of the record will change.  For instance, here is a description of some of the business rules pertaining to a payment request which are triggered when a payment request is submitted.  You will want to document similar rules for your organization:
  • Set new status ‘Under Program Review’
  • Validate Service Date range must be within the Subrecipient’s contract begin and end dates
  • Reset to Draft, notify submitter if rule is violated
  • For Vendor Payments only--Service Dates should not cross over Agency’s Fiscal Year (default Fiscal year ends on the last day of August each year)
  • Reset to Draft, notify submitter if rule is violated
  • Validate that Invoice Total exceeds Payment Request Line Item (PRLI) total
  • Reset to Draft, notify submitter if rule is violated
  • Iterate over each PRLI and validate that none are overdrawn
  • create Task: Payment Request should be approved by Program staff within 7 calendar days
  • Start waiting for 28 days: Invoice should be processed for payment (or declined) by Finance staff within 28 calendar days of submittal

You may want to change some of the deadlines such as 7 and 28 days depending on your organization's business rules.

If you are using program milestone budget gates, your conceptual data model will look something like this:

When a new grant application is created, the budget/milestone structure is copied from the Program to the application. A grant manager may change it on an individual application level if needed.

When a new Budget Line Item (BLI) is created, the set of Milestone Completion Gates is copied by system from the application/contract to this new BLI.

Milestone Completion Gates enforce business rules like these examples:

  • For a single BLI record where Funded (Obligated) = 100K, Net Drawn=20K, Remaining=80K, a Milestone for 50% is Completed
  • System calculates Milestone Gate Permitted Amount as 100K * .5 = 50K
  • System calculates Amount Available to Draw as (Funded Amount)* (% milestone complete) – (previously drawn amount)= (100k * .5)– 20k = 30k
  • Someone submits a payment request (PR) with the PR Line Item connected to this BLI with PR Line Item Amount Requested = 40K
  • On submit of PR, system compares amount requested from each PR Line Item with the Amount Available to Draw value from BLI record that is a parent of PR Line Item
  • In this example, PR Line Item Amount Requested (40K) exceeds Amount Available to Draw (30K)
  • System automatically sets PR Line Item's field Over BLI Limit to true
  • When a grantee Submits a PR, System scans all Line Items and finds one where Over BLI Limit = true. System automatically rejects the entire PR by resetting the status of this entire PR to Draft and sending appropriate notification (we can also flag offending PR Line Item)

In Grants Manager Plus, internal grant manager users see payment requests using the Dynamics 365 user interface, such as this payment request line item:

The review and approval process is based on a Dynamics 365 business process flow. It may include alerts to participants who review payment requests to notify them when a new request is submitted.  Payment reviewers may also use dashboards which show pending review tasks.

Dynamics 365 includes queues for work such as payment processing which allow activities to be assigned to a group of people rather than just to an individual.

Together, these payment request features allow grantors to enforce management controls on their finances and ensure that they are in compliance with guidelines associated with their grant funding.

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