Department: Finance & Accounting Process Owner: Controller Last Updated: January 2026
1. Overview and Purpose
Objective: To define the month-end procedures for preparing and updating the Net Asset schedule and other recurring close schedules required for financial reporting, grants, and audit support. This SOP ensures that net asset classifications are accurate, donor restrictions are tracked, and supporting schedules are complete and consistent with the general ledger.
2. Scope
This SOP applies to all schedules prepared during month-end close beyond standard reconciliations, including:
- Net Asset Rollforward / Classification Schedule
- Restricted vs Unrestricted Net Assets tracking
- Pledge / Contribution schedules (summary level)
- Any additional recurring audit schedules required by funders or the annual audit
This SOP supports financial statement preparation.
3. Step-by-Step Process
3.1 Pull GL Balances for Net Asset Accounts
- In your accounting system, run month-end Trial Balance
- Identify balances for:
- Unrestricted net assets
- Temporarily restricted net assets (by purpose / project)
- Permanently restricted net assets (if applicable)
- Export to Excel and save to your designated close folder
Reviewer / Back-up: Accounting Coordinator
3.2 Update Net Asset Rollforward Schedule
- Open the Net Asset Rollforward Template (Excel)
- Update beginning balances using prior month ending values
- Add current month activity by net asset category:
- Restricted contributions recognized
- Releases from restriction (if any)
- Capital campaign activity
- Board-designated transfers (if applicable)
- Recalculate ending balances and confirm tie to GL
Reviewer / Back-up: Senior Accountant
3.3 Validate Restricted Fund Activity
- Review restricted revenue detail from your revenue recognition procedures
- Confirm restricted gifts / grants were coded to correct restriction / class
- Confirm any releases (eligible spending) are supported by grant or donor terms
- Flag unusual movements for Controller review
Reviewer / Back-up: Controller
3.4 Update Supporting Schedules (As Required)
Typical recurring schedules updated here include:
- Pledge Summary / Rollforward (high-level)
- Grant restricted balance schedule
- Capital campaign balance schedule
- Tax credit support schedules if not captured elsewhere
Steps:
- Pull supporting GL or subledger reports
- Update schedule templates with current month activity
- Tie schedule totals to GL where applicable
- Save updated schedules in your designated close folder
Reviewer / Back-up: Accounting Coordinator / Senior Accountant
3.5 Review, Finalize, and Archive
- Perform a final tie-out:
- Net asset schedule totals = GL net asset totals
- Supporting schedules tie to related GL accounts
- Add notes explaining significant changes or unusual items
- Save final schedules in your organization's designated archive location
- Notify Controller and Finance Director that schedules are complete
Reviewer / Back-up: Controller
4. Key Roles and Responsibilities
| Role | Responsibilities |
|---|---|
| Accounting Coordinator | Pulls GL exports, updates supporting schedules, organizes archive |
| Senior Accountant | Updates net asset rollforward and restricted activity detail |
| Controller | Reviews classifications, approves schedules, signs off for reporting |
| Finance Director | Reviews large restricted / capital movements as needed |
5. Key Files and Systems
- Accounting System – Source of GL net asset balances and activity
- Net Asset Rollforward Template (Excel) – Primary rollforward schedule
- Restricted Fund / Capital Campaign Schedules (Excel) – Supporting rollforwards
- Pledge Summary Schedule (Excel) – High-level pledge balance support
- Document Management System / Close Folder – Archive location for all final schedules
6. Exceptions and Special Cases
- New Restrictions: If a new donor restriction or grant category arises mid-month, add a new schedule tab and GL mapping.
- Reclasses Post-Close: If restricted / unrestricted reclasses are made after schedules are finalized, update schedule and note revision.
- Board-Designated Net Assets: If board actions occur, document approval and reflect transfer within rollforward.
- Capital Project Funding: Ensure capital gifts are not released until eligible use / spend is confirmed.
- Releases from Restriction: Document in your accounting policies manual who can initiate and approve releases from temporarily restricted net assets.
7. Risks and Controls Summary
| Step | Risk | Control |
|---|---|---|
| 3.1 Pull GL Balances for Net Asset Accounts | Incorrect starting balances may cascade into misstated net asset totals | Net asset schedules always begin with a Trial Balance export as of close date |
| 3.2 Update Net Asset Rollforward Schedule | Misclassification between restricted / unrestricted may violate donor intent and distort reporting | Rollforward is updated monthly and fully tied to GL balances |
| 3.3 Validate Restricted Fund Activity | Improper restricted fund treatment can create compliance and audit findings | Restricted activity is reviewed monthly against donor / grant terms and coding |
| 3.4 Update Supporting Schedules | Missing schedules weaken audit trail and may delay reporting | Close checklist identifies required schedules and templates are updated from GL exports |
| 3.5 Review, Finalize, and Archive | Unreviewed schedules may carry errors into financial statements | Controller review and archive required before financial statement reporting begins |
