Customer Success Story
National Democratic Institute

Nonprofit Organization uses Deltek Costpoint^® to manage accounting for more than 50 offices worldwide

Overview

“Democracy” seems to be the new catch word these days, splashed in the headlines, highlighted in the inaugural address, debated on the talk shows. But one nonprofit organization just celebrated its 20th anniversary doing just that — working, quietly and without a lot of fanfare — to strengthen and promote democracy worldwide.

Founded in 1984, the National Democratic Institute for International Affairs (NDI) joins with democratic advocates on the ground in countries around the world. These advocates initiate requests for assistance to address the difficult task of building democratic institutions, including national legislatures and local governments that function with openness and competence; broad-based political parties that are vehicles for public policy debates; and nonpartisan civic organizations that monitor elections, promote democratic values and citizen participation. More often than not, NDI's staff and volunteers comprise as much as 60 or 70 percent non-American personnel, bringing to bear the relevant talents, skills and experiences of an international network of experts to the 100+ countries in which it has worked.

With a multi-national staff of 170 headquartered in Washington, DC and 500 spread across more than 50 field offices, NDI has learned to use its resources to target its democracy building programs where it will make the most impact. All of this work is made possible by funding from various sources including the National Endowment for Democracy, USAID, the U.S. Department of State, international development agencies such as the World Bank, and private donations.

With 99 percent of its funding ($60 million in 2004) derived from grants, project accounting represents a critical concern to the organization. Back in 1998, however, NDI's accounting software failed to adequately address this need, resulting in a major drain on the Institute's 20- member accounting team who struggled through long, labor-intensive and duplicative transactions to manage even its most basic accounting calculations and reports. As inefficiencies rose, morale dipped and NDI began searching for a new accounting system to meet its special needs.

The Need

At the time, NDI was using a DOS-based version of Solomon to address their accounting needs, with severe limitations. “Simply put, the software just did not meet the project accounting needs or the special requests of our team,” said Sandy Schultz, Director of Finance at NDI. “There were just too many spreadsheets and laborious, time-consuming calculations to make.”

Inefficiencies included expense reports and journal entries requiring duplicate entries. These documents needed to be logged twice — once in the general ledger and once on the project side, with no way to change or reformat the data once it was entered. In addition, both rate calculations and labor allocations had to be manually calculated.

As Controller Andre Parraway explained, “Our month-end close using this version of Solomon was a nightmare. It took a half-day just to calculate indirect costs alone. The total process took anywhere from two to three whole days to complete.”

According to International Accounting Manager Kathleen Bush, travel advances were also difficult to track using NDI's previous accounting system. “Everyone had at least two general ledger accounts, one for cash advances and one for credit card advances. We had to manually track and clear these advances for all of NDI's employees, and at month end it took about two days on average to even sort this process out.”

In 1998, knowing that NDI could no longer function using the DOS version of Solomon, the accounting staff began the year-long process of evaluating new accounting software options. The organization explored American Fundware, Great Plains and several other systems, including Deltek Costpoint^®, an advanced backoffice enterprise software solution for project-based businesses. Deltek Costpoint is the project and financial accounting system central to the Deltek Enterprise^™ suite.

“Because Deltek seemed to be the only solution we looked at that was completely geared towards job costing capabilities, it was the logical choice for us,” Schultz said. “Grants drive everything we do and Costpoint spoke to this requirement exactly.”

Implementation of Deltek Costpoint began in the spring of 1999, taking just six months to complete. “The Deltek consultants worked with us to see exactly what we needed from our accounting system before the process even started, saving us even more time,” Schultz said.

The Benefits

NDI went live on Costpoint in October 1999, at the beginning of fiscal year 2000. Immediately, the accounting team began using the software to handle accounts payable, general ledger, payroll, labor and leave, travel and all project accounting. In addition, NDI began using the reporting tools within the Deltek Enterprise suite to better analyze key project and financial data.

NDI began to see benefits within the first month of using the solution. “Almost immediately, we saw drastic time savings, particularly now that we no longer have to process rate calculations and labor allocations manually,” Schultz said. “Having a single point of entry with Costpoint has saved us lots of time.”

Where closing out the month had taken two to three days on average using NDI's previous accounting solution, the entire process now takes just a couple hours on average using Deltek Costpoint. Similarly, travel advance reports currently take just 60 to 90 minutes to produce, versus a two-day process using the old DOS-based Solomon software.

“Another key benefit is the ease at which we're now able to get key financial data out of the system,” Schultz said. “Before, balance sheets and income statements all had to be adjusted manually. Now, we're able to print off financial statements in a flash as they're needed, and our ability to easily analyze the data has drastically improved. We can now easily see where our money is going more succinctly and with greater efficiency.”

NDI's accounting team also uses Costpoint to run about 200 reports on a month-end basis. These reports provide net summaries of the organization's financial details; job costs; project activity by region and by country; credit card and cash advance reports; and other key project and financial data.

In addition, NDI is able to tackle key organizational tasks using specific modules within Deltek Costpoint. With the Labor & Leave module, for instance, NDI now has the ability to track historical hours worked by employee, and run this data at any time.

“In the past using Solomon, we did this entire process by journal entry,” Parraway said. “We had to pour over mounds of paper for each employee, which as you might imagine was a very time-consuming process prone to human error. Now, whenever we get a question about how an employee charged their time or whether they charged their time to the right project, we are able to easily retrieve this information in Costpoint within seconds.”

Assistant Director of Finance Bill Hogan also detailed NDI's unique use of the Travel module as well. “Other organizations probably don't track funds they send to their field offices in their software's travel modules, but NDI does,” Hogan said. “We use Costpoint for field office accounting for anywhere from 55 to 60 field offices throughout the world. This way, we're able to approve cash and credit card advances as well as process expense reports for each individual office.”

Costpoint has also addressed issues that NDI did not anticipate. According to Grants Manager Laura Travis, NDI began to receive several non-government grants two years after implementing the Deltek accounting solution. With their different and widely varying reporting requirements, including differences in how and when NDI receives the funds, these new grants posed a challenge to the NDI accounting team.

“With Costpoint, we were able to build user-defined fields so the system could appropriately handle this diversification in our funding,” Travis said. “We used these fields to set up specific requirements for several different non-governmental grants so we could make sure we had money in the bank for each of them.”

As for cost savings, Schultz estimated that Costpoint has made it possible to maintain current staffing levels in the accounting department, keeping the accounting staff growth more modest when compared with the rest of the organization. “We probably would need at least five more people in our department were it not for Deltek's solution,” Schultz said.

He added, “Not only is there cost savings and time savings as a result of Costpoint, but it has also boosted our morale and kept us sane. People were very frustrated with our old system, and it really became a factor in employees' overall job contentment. This new system has really made life easier and more manageable for everyone.”