Article Archives: 2013

By Clark Nuber PS

In May 2013, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) issued an updated Internal Control-Integrated Framework. COSO’s original Framework was issued in 1992 and has since been adopted by numerous organizations in establishing internal controls.

Many not-for-profit organizations are familiar with the concepts of the original Framework based on their past experiences with financial statement audits. Beginning in the mid-1990s, the auditing profession has used the original Framework in analyzing most organizations’ internal controls. Additionally, the OMB Circular Single Audit, which applies to many not-for-profit organizations that receive Federal grant awards, has required auditors to use the original Framework in evaluating internal controls.

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Posted by: Sarah Huang

By Sarah Huang, CPA

Ninety percent of schools had underreported taxable income according to the statistics from the IRS’s final report on the College and University Compliance Project released at the end of April; $170 million in adjustments were made to net operating losses (NOLs). Wages increased $36 million, netting $7 million in taxes and penalties. The list goes on. But what does this really mean to the non-profit sector and what should you do about the results?

The IRS began its study on colleges and universities in 2008 with the goal of gaining a deeper understanding of the sector.

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Posted by: Joe Haberzetle · Bob Heller

By Joe Haberzetle, JD, LLM and Bob Heller, JD, LLM

In recent years the Washington Board of Tax Appeals has developed a reputation as a difficult venue for taxpayers to achieve positive results, particularly with respect to excise tax and property tax exemption issues. However, the Board’s recent decision in St. Andrews Building Corporation v. Department of Revenue1 is a solid win for the taxpayer and may create opportunities for other Washington not-for-profit organizations to claim the public meeting hall property tax exemption.

Background

Washington law states that in order to be eligible for the public meeting hall exemption,

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Posted by: Shawn Hansen

By Shawn Hansen, CPA

The Internal Revenue Service (IRS) recently announced that it has established a new program to review and approve certain types of 403(b) plan documents.

Previously, final 403(b) regulations that became effective in 2009 required employers sponsoring 403(b) plans to adopt a written plan document describing the plan’s major provisions and rules. Although the final regulations mandated written plans, the IRS didn’t have a process in place to approve those plans…until now.

With the new program, organizations adopting a pre-approved 403(b) plan document will now have a cost-effective and efficient way to obtain assurance that the written form and design of their plans satisfies Section 403(b) of the Internal Revenue Code.

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The AIPCA has completed its first comprehensive update to the Not-For-Profit Entities Audit and Accounting Guide since 1996. The updated guide, available now, includes changes to AICPA literature that stem from the Auditing Standards Board’s Clarity project and authoritative guidance from the FASB ASC Codification.

The updated guide includes simplified explanations, examples, guidance and recommendations provided by the Financial Report Executive Committee. You can purchase the guide directly from the AICPA in eBook format at this link.

Changes to Note
The most significant changes include:

  • New sections or updated guidance related to specific accounting areas such as:
    • Noncash gifts (including gifts- in-kind)
    • Contributions of fund-raising materials,

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By Jennifer Mace, CPA and Jennifer Becker Harris, CPA

U.S. charities are now more than ever diversifying their investment portfolios to include foreign investments, especially foreign program-related investments. They are also offering services on the ground in foreign countries with essential charitable programs.

Most charities are aware of the foreign bank account reporting obligations for those accounts and for individuals with signing authority over such accounts. What charities that invest or operate abroad may not be aware of is the complexity of the federal compliance issues that govern other foreign activities. These activities can involve making grants to foreign entities,

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Posted by: Troy Rector

By Troy Rector, CPA

The second of a two-part series covering the Proposed Uniform Guidance recently issued by the Office of Management and Budget (OMB). Part 1 provided an overview of the overall Proposed OMB Uniform Guidance document and specific changes to cost principles and administrative requirements applicable to Federal awards. Part 2 discusses OMB’s proposed changes to the Single Audit Act.

Sweeping changes such as the ones in the Proposed Uniform Guidance don’t happen often. In fact, OMB Circular A-133 – Audits of States, Local Governments and Non-Profit Organizations – currently in use was issued under the Single Audit Act of 1984 and the Single Audit Act Amendments of 1996.

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Posted by: Troy Rector

By Troy Rector, CPA

The first of a two-part series covering the Proposed Uniform Guidance recently issued by the Office of Management and Budget (OMB). Part 1 will provide an overview of the overall Proposed OMB Uniform Guidance document and specific changes to cost principles and administrative requirements applicable to Federal awards. Part 2 will discuss OMB’s proposed changes to the Single Audit Act.

The recently issued Proposed OMB Uniform Guidance: Cost Principles, Audit, and Administrative Requirements for Federal Awards (Uniform Guidance) is the largest change to the OMB circulars impacting grant compliance in many years.

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By Jennifer Becker Harris, CPA

Great news! A local company has chosen your charity as the beneficiary of an upcoming sales campaign. The promotion promises a $1 donation to your charity for each unit sold. NFP call-out box3The company estimates your charity will receive $100,000 as part of the promotion. Your charity’s name will be used prominently throughout the marketing campaign, and because the company sells the product throughout the U.S., it will be excellent publicity for your charity. Now what?

This type of marketing is often referred to as “charitable sales promotion” or “cause marketing.” Charitable sales promotions have exploded over the last decade,

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You know it’s crossed your mind.

You’re pressed for time and need to run a quick errand. It wouldn’t hurt to run into the store/post office/dry cleaner/whatever and not take the extra time to secure your belongings in the car. After all, you’re locking the doors, right?

Or this: it’s been awhile since you’ve changed your computer passwords (which all happen to be the same password for every website on which you conduct transactions). You procrastinate and decide to change your password the “next” time.

A broken window later, and not only is your property gone, but so are your insurance cards and other identification that can be used to mine personal information.

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