A Grants Management System for Cost Accounting

Abstract

The explosive increase in demand for services, relative to the increase in resources, has made essential the need for good financial management, including cost and managerial accounting. Municipalities have found grants from contracts with the Federal and State governments important sources of financing. According to a recent survey, nearly 40% of U.S. cities’ general fund revenue is derived from Federal and State grants.(1) In the case of the City of New York, in 1978, for example, about 37.8% of the City’s general fund revenue came from these sources. It follows that the generation of relevant information involving grant-related financial activities is necessary for the effective and systematic management of this source of the City’s general fund revenue. To address this need, the City of New York has recently installed what is called the grants management system (GMS). Its objective is to provide in an accurate and timely manner specific accounting and reporting facilities needed to manage grants.