Maintaining Strong Internal Controls During the Coronavirus Pandemic

As the COVID-19 pandemic grows, we’ve begun receiving questions from our clients on how to best handle the many disruptions. To help broadly respond to the situation, we’ve decided to publish our responses and recommendations here. So far, the impacts we’re seeing in and out of Washington state include cancellation of events, declining investment portfolios, and employees having to work from home, either for safety reasons or to care for children not in school.

While working from home is recommended by authorities for containing the outbreak, employees remoting in creates challenges when following internal control policies and ensuring proper segregation of duties.

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Charitable Solicitation Laws – Best practices to follow for compliance

By Cheryl Olson, CPA, CGMA

Due to highly publicized fraud cases and poor governance practices, as well as state budget issues, more people are scrutinizing the activities of not-for-profit organizations. This, of course, results in greater board and committee member expectations, donor questions and new regulatory requirements.

With all of this increased scrutiny, it’s essential that not-for-profit organizations learn how to navigate all of the rules and regulations, especially those relating to state laws. To assist in that goal, here are relevant information and good practices for your organization to follow that apply to charitable organizations under 501(c)(3) of the Internal Revenue Code,

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How to prevent and detect fraud and errors in a small organization

By Sarah Wine, CPA

As auditors we are often asked for guidance on how to implement strong controls in small organizations. The key is to, at a minimum, segregate the four functions in the accounting process: 1) authorization, 2) custody, 3) record keeping and 4) reconciliation so that every transaction cycle has at least one other person performing at least one of the functions.

Depending on the size of the organization, this may require the enlistment of employees outside of the accounting function to assist with maintaining controls. While segregation of duties is not a sure way to prevent, detect and deter fraud,

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5 Things Not-for-Profit Organizations Should Know About the New COSO Internal Control Framework

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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