Financial Controls for Nonprofit Organizations

I’m blaming the economy for the significant increase in fraud the nonprofit community discovered during 2009.  In an effort to avoid a repeat, it may be useful to outline some of the practices that contribute toward establishing and maintaining good financial controls for nonprofit organizations. These practices arise from financial control best practices and also from Aronson’s experience this past year in reviewing its clients’ financial controls. Continue reading »

The Pew Center on the States: State of the States 2010

The nation finally may be clawing out of the longest recession since the 1930s. But states still are groping to find the bottom of a fiscal crisis prolonged by historic revenue drops, eye-popping budget deficits, double-digit unemployment in more than a dozen states and rising demands for social services.

In State of the States 2010, the Pew Center on the States looks beyond the acute problems caused by the Great Recession to examine larger trends that have the potential to change state government in lasting ways.

Both policy makers and voters will make key choices this year that will help determine the shape of state government in this new decade and beyond. The latest in a series of annual publications, State of the States 2010 can help inform those choices with its nonpartisan, analytical look at the recession’s effects on policy and politics in the 50 states.

Stateline.Org

Reporting Jobs Created by Recovery Act Funds

The U.S. Office of Management and Budget has released updated Recovery Act guidance concerning jobs counting and data quality.  Recipients of Recovery Act contracts, grants, and loans are required to report quarterly on the number of jobs paid for with Recovery funds.  The method or formula for calculating jobs was simplified after the first round of recipient reporting.  The guidance makes two very important changes concerning jobs calculation:

• Simplification of jobs calculation: Total hours worked in jobs funded by ARRA divided by total hours in a full-time schedule (520) for the quarter
• Quarterly, not cumulative, reporting: Jobs are to be reported on a quarterly – not cumulative basis. (Other 1512 reporting such as for expenditure data remains on a cumulative basis.)

For more details see the Updated Guidance on the American Recovery and Reinvestment Act – Data Quality, Non-Reporting Recipients, and Reporting of Job Estimates

Donors Decrease Giving

The Barna Group has published the results of its nationwide study on the economic impact on donations to nonprofit organizations.  Many American’s have cut back on their contributions and become more pessimistic about the economic future the study finds.  In the study conducted from January 2010 to early February 2010, 48% of the adults surveyed said they have reduced giving to nonprofit organizations.  To read the full report, go to The Barna Group.

Changes to the 2009 Federal Form 990; Some Welcome Improvements

The new Federal Form 990 has one especially welcome change in Part IV, Checklist of Required Schedules, whereby there is a new question if the organization was included in a consolidated, independent audited financial statement for the tax year.  Many people were disgruntled last year with the new 2008 990 because the instructions clearly explained that you had to check “no” if your organization had an audit as part of a consolidation and did not receive a standalone report.  To see the new 990 and instructions for 2009, click this link:   www.irs.gov/app/picklist/list/formsInstructions.html

Independent Contractor or Employee: Classification is the Elephant in the Room!

Worker classification is one of those tricky compliance issues that everybody knows about, but nobody wants to talk about. With more and more states passing legislation to penalize employers who misclassify workers and independent contractors, audits are a valid concern for all businesses. Don’t be intimidated by this important topic – instead, be informed! Join Aronson & Company on March 3rd for a unique seminar that addresses how your company can prepare for audits and reduce liability.

Sign up here!

Charitable Giving –Tax Proposals

Included in the President’s 2011 budget is a provision that would limit the charitable deduction for those families with income over $250,000. This limitation could possibly hinder future donations. The Partnership for Philanthropic Planning and over 20 other organizations have urged the President to reconsider, noting the impact it could have on contributions made to nonprofits.

New job creation legislation is being prepared in the Senate. Included is a one-year extension of the IRA Charitable Rollover provision.  The IRA Charitable Rollover originated in 2006 with the Pension Protection act and was reenacted in 2008 with the Emergency Economic Stimulus Package. The provision allowed taxpayers over 70 ½ to direct up to $100,000 per year of their IRA to eligible charities.

Updates provided by the Partnership for Philanthropic Planning. For more information about this organization and new legislation affecting nonprofits, please visit their website at www.pppnet.org.

Accounting Standards Codification –NonProfits

As many people are aware the many different Financial Accounting Standards Board pronouncements and other authoritative accounting literature has been captured in one source  the  ” FASB Accounting Standards Codification “. All existing accounting standards are superceded and other accounting literature not included in the codification is nonauthoritative . Continue reading »

Moving to International Financial Reporting Standards (IFRS)

The AICPA recently reported in its CPA Letter Daily, “executives from three of the Big Four accounting firms said the nation’s plan to shift to global accounting standards could face significant delays and that the process could become extremely politicized. The executives said discussions about the shift are at a crucial point. For IFRS daily updates, training courses, case studies and other resources, visit http://www.ifrs.com/