Articles

Posted by: Steve Vasconcellos

As the pace of technology advancement increases, the information systems we rely on to record and store accounting information are growing in complexity and sophistication. Financial data can be dispersed over multiple systems or “sources of truth,” leading to inconsistencies or inaccuracies that may impact business decisions.

With this greater dispersion of information, personnel may end up with too much access, leading to an increased potential of manual error in data entry or even fraud. The completeness, accuracy, and integrity of financial information is, and should be, of great concern to organizational leaders with decision making responsibilities. As such, there is greater need than ever to assess the control environment around the IT systems that produce financial data.

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Posted by: Sarah Huang

Update: This article was updated on 3/25/2021 to reflect changes brought on by the American Rescue Plan Act of 2021. For more information on the extension, see this article

The Employee Retention Credit (ERC), introduced in March 2020 as part of the CARES Act, was a much-needed funding source for many employers. However, many were ineligible to claim the credit in 2020 as they opted to receive funding through the Paycheck Protection Program instead.

With the recent enactment of the Consolidated Appropriations Act of 2021 and the American Rescue Plan Act of 2021, the rules have changed and the credit has been extended to December 31 ,2021.

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Posted by: Kelly Rancourt

Recipients of Provider Relief Funds (PRF) under the CARES Act have spent 2020 and the beginning of 2021 navigating the evolving guidance related to this program. There have been many questions related to PRF and, ultimately, the reporting that will be required.

On Friday, January 15, 2021, the Provider Relief Fund Reporting Portal opened for registration and PRF recipients are now getting closer to final guidance on what will be necessary to include in the December 31, 2020 report that is due in early February. Given the guidance we now have available, this article will give a brief overview of the report and its requirements.

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Posted by: Sarah Huang

On August 10, 2020, the Small Business Administration (SBA) opened up its Paycheck Protection Program (PPP) loan forgiveness portal to lenders, which means banks may now process loan applications from borrowers. Unfortunately, given the ever-changing standards and large volume of loans, many lenders have been hesitant to broadly open their own forgiveness platforms until the rules are well established and final guidance has been issued. Additionally, some banks are prioritizing the loan forgiveness process, focusing first on the large balance loans.

Based on what we know so far, this article will provide an overview of the application process and the documents and forms borrowers should have on hand when applying for loan forgiveness.

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Posted by: Christie Streit

On December 27, 2020, President Trump signed the Consolidated Appropriations Act, 2021 (referred to here as the Relief Act). The Relief Act contains a number of provisions that will provide much-needed assistance to industries hit hardest by the coronavirus pandemic.

The most important changes include the following:

  • A Second Draw of the Paycheck Protection Program (PPP) is available, with a larger allowable dollar amount for certain industries;
  • Tax deductibility of expenses paid using forgiven PPP funds and other exciting tax benefits; and
  • Changes to eligibility and amount of Employee Retention Tax Credits (you can now get both the PPP and the Employee Retention Tax Credit).

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Posted by: Troy Rector

Commercial recipients of Provider Relief Funds (PRF) under the CARES Act must be aware of existing U.S. Department of Health and Human Services (HHS) regulations that could impose an external audit requirement on them. If affected, the organization would need to contract with a CPA firm to perform the required audit.

What are the Source Regulations?

45 Code of Federal Regulations (CFR) 75.216 and 501(i) and (j) require that “Commercial Organizations” who receive HHS awards of $750,000 or more in a fiscal year are required to have either of the following two external audits performed within nine months of year end:

  1. A Single or program-specific audit (Single Audit) in accordance with 45 CFR Part 75 – Subpart F or
  2. A Financial-related audit of all HHS awards in accordance with Government Auditing Standards.

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The Paycheck Protection Program (PPP) loans, issued by the Small Business Administration (SBA), have provided substantial relief for businesses and organizations navigating through the pandemic. In this article, we will touch on the two ways PPP loans can be accounted for under generally accepted accounting principles (GAAP).

The guidance for accounting for PPP loans is based on the American Institute of Certified Public Accountants’ (AICPA) Technical Q&A 3200.18, Borrower Accounting for a Forgivable Loan Received Under the Small Business Administration Paycheck Protection Program, which was prepared in consultation with the Financial Accounting Standards Board (FASB) staff. This technical guidance from the AICPA states there are two options to account for the PPP loan funds: 1.) as debt;

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Posted by: Christie Streit

On December 27, 2020 President Trump signed the Consolidated Appropriations Act, 2021 (referred to here as the Relief Act). The Relief Act contains a number of provisions that will provide much-needed assistance to the hospitality sector and other industries hit hardest by the coronavirus pandemic.

The most important changes include the following:

  • A Second Draw of the Paycheck Protection Program (PPP) is available, with a larger allowable dollar amount for certain industries (this includes owners and/or operators of restaurants or hotels!);
  • Tax deductibility of expenses paid using forgiven PPP funds and other exciting tax benefits; and
  • Changes to eligibility and amount of Employee Retention Tax Credits (you can now get both the PPP and Employee Retention Tax Credits).

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Posted by: Troy Rector · Deby MacLeod

The Office of Management and Budget (OMB) recently issued Frequently Asked Questions regarding the implementation of Section 889(b) of the National Defense Authorization Act (NDAA) of Fiscal Year 2019. If you’re part of a not-for profit organization, you may be asking yourself, “What is the Prohibition on Covered Telecommunications and Video Surveillance Services or Equipment covered in Section 889 of the NDAA, and what do we need to do?”

In this article, we will provide an overview of this provision, including how it differs between Federal contractors and Federal grant recipients, and steps your organization should be taking to ensure you comply.

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Posted by: Sarah Wine

The holiday season has just passed, which means your arts organization may have seen a spike in gift certificate sales as communities focused on supporting local businesses and not-for-profits in the challenging climate of COVID-19.

Yet as easy as it is for the consumer to buy the gift certificate, the seller should be aware of the related tax, legal, and accounting considerations in order to prevent unintended exposure.

New Washington Law Regarding Gift Certificates

Effective July 1, 2020, the Washington State Legislature, under RCW 19.240, removed its existing exemptions for not-for-profit arts organizations, thereby disallowing expiration dates for gift certificates to conform with other industries in Washington State.

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