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Nonprofit Cost Analysis - Step #5: Check Your Data

Spend a few minutes double-checking the numbers to make sure that you haven’t missed any of the costs during the allocation, and that everything makes intuitive sense. Conduct these four simple checks:

1. Check to see that all costs have been allocated: 
To do this, sum up the allocated costs for all program areas and make sure that the sum is the same as the total original costs (direct plus indirect costs).

2. Check whether each cost item has been allocated correctly: 
For each cost item, make sure that the costs allocated to each program area sum up to the original cost item total. Ensure that there are no negative allocations. Finally, for cost categories where the allocation to a program is 0 (or 0%), make sure there is a legitimate reason for this.

Example:

3. Check job descriptions/rosters against your cost allocation:
Ensure that you have accounted for all staff members’ time (including part-time staff and contractors/consultants).

4. Verify the logic of your results:

• For each program, do the biggest cost allocations make sense to you?
• Across programs, do the relative proportions of each cost category make sense?

For a more detailed example, see:

Sense Check Sample Spreadsheet  

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