If your organization was audited or had a financial review, you are required to fill out the Expenses section of the Cultural Data Profile (CDP). In the Financial Totals section of the survey, you will be asked for expense totals by three functional groupings: Program, Management and General, and Fundraising. In your audit or review, these can be found on the Statement of Activities, or sometimes in the Notes to Financial Statements section at the back of the audit or review. Please note that expenses may be listed in a different order in your audit than on the Data Profile.
As you fill out your Data Profile, you will have an opportunity to provide details on your expenses. If you have employees who receive a W-2, for whom you pay payroll taxes, you will enter information about their salaries and benefits in Personnel Expenses, along with pay for Independent Contractors and Professional Fees. All other operating expenses should be recorded in Non-Personnel Expenses. After you have entered your expenses into one or both of these sections, your column totals for functional groupings must match the corresponding values entered in the Financial Totals section. If these figures do not match you will receive an error message during the automatic error check when you submit your CDP survey.
To find expense details for Personnel and Non-Personnel Expenses, check to see if your audit has a Statement of Functional Expenses. If it does, use the same columns and logic to fill out the expense sections. Some audits or reviews include all three functional groupings; some may only have one or two, in which case you must follow your audit’s presentation of expenses.
If your audit only shows expenses by natural classification -- rent, insurance, interest, etc. --, you may need to rely on your internal financial records to provide the necessary details to fill out the expenses sections and to help you allocate portions of each expense line to the appropriate functional category. Your total expenses must still match the total in your audit or review.
The goal of entering expenses in this detailed manner is to create a clear and accurate snapshot of your organization for your funders and other stakeholders, including staff and donors. If you are new to bookkeeping, accounting, or cost allocations, ask for help from the individuals at your organization who are most familiar with your finances. They can help you develop allocation methods that are reasonable and replicable from year to year, which you can communicate to your outside auditor.
Watch this short video clip for best practices on entering long lists of expenses:
From: Webinar Series: What You Need to Know About the New CDP Survey, The Basics