According to CNN, the most recent Congressional Budget Office report indicates the U.S. could default on its loans in mid-2023, which will reignite uncertainty around the federal debt ceiling. That uncertainty will endanger federal grants and could leave your organization scrambling to find ways to make up lost funds. Now is the time to ensure your technology gives complete visibility into finances at federal, state local and tribal government organizations, and prepare for economic uncertainty.

A more visible tech stack

Technology can proactively position your organization in the event of economic uncertainty. But how do you begin evaluating your organization’s technology? You must take a holistic view of the individual systems that make up your organization’s tech stack and ensure each can communicate together and effectively perform tasks or workflows.

Visibility into your complete financial picture is essential. If your technology is single-purposed or isn’t optimized for government accounting, you’re wasting time and squandering funds. As the core of your operations, your accounting tech is the lifeblood that makes your organization run. Look at your current solutions and see if your technology helps your organization provide insights into:

Grants

Your technology needs to provide strong insights to grantors around hard key performance indicators and metrics. It should easily show how much money, down to the cent, is available for grants. Your technology needs to make telling your organization’s story easier.

To counter potential lost federal grant funding, your technology should embrace transparency. Showing you’re properly using public funds and operating as a good steward will be crucial when applying for new grant opportunities.

Managing budgets

When your technology allows for budget modeling, you can explore various “what-if” scenarios to prepare for any situation your organization encounters. For example, your technology should:

• Provide insights into past financial performance to provide benchmark as to how monies should be allocated and spent in upcoming fiscal years.
• Have the capabilities to model various scenarios that you can share with your stakeholders
• Show visibility down to the transaction level how funds from various programs, like Medicare, education, Social Security and housing programs, are accounted for.

Managing diverse sources of funding

Your technology should also account for various types of funding and assets. A few examples might be gifts-in-kind, credit card transactions, volunteer hours, fixed assets or infrastructure project funding for proposals and projects already occurring. Do you have modern technology that quickly provides insights into the many funding sources you already have underway and are you able to report on the financial performance by each funding source, including federal grants?

Embracing a modern tech stack

When evaluating your current solution, consider whether the technology you’re planning to adopt prepares your organization for future growth. Local government organizations can benefit from employing a cloud-based modular solution in a few ways.

Moving to a cloud solution gives your organization flexibility. A cloud solution lets you access data wherever there is an internet connection and is crucial for remote work. Cloud solutions often embrace a modular approach to technology that scales according to your organization’s needs, and workflows employees run through frequently. Your technology should grow with the goals and demands your organization faces and not serve as a monument to the time you installed it. Cloud solutions are tailored to your organization today and can be added to anticipate where you are tomorrow.

You’re also taking steps to improve organizational security when you employ new tech. As a government organization, compliance is crucial when upgrading accounting systems. If your organization doesn’t stay compliant, it erodes public trust. You’ll want to ensure your software vendor follows Government Accounting Standards Board (GASB) standards and applies a GASB methodology to transactional data. Most common GASB mistakes happen when a provider doesn’t use GASB methodology at the transactional level.

Find a system with robust internal controls that include:

• Features that identity and flag anomalies related to fraud.
• The ability to check balances, which acts as a fraud deterrent quickly.
• User control restrictions that give granular control over how your employees access financial systems.

• Automated business rules to reduce the likelihood of errors and fraud, among others.
• Multi-factor authentication.
• Licenses that allow for view-only access to your data for auditors and other parties you’d share fiscal data with.

Implementing these controls creates a better, more secure user experience for your employees and builds trust with your beneficiaries.

While the looming uncertainty of the debt ceiling won’t go away anytime soon, your organization can be prepared for whatever happens by taking a holistic view of its technology and adopting a fluid, responsive attitude toward financial planning.

Neil Taurins is the general manager of nonprofit solutions at MIP Fund Accounting. 

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