The latest view on not-for-profit accounting issues

Sponsorship vs. Advertising

Selling sponsorships at a special event can be a great way for a nonprofit organization to raise additional money.  Sponsorships are also beneficial for donors as donors can receive tax deductions while receiving public acknowledgement of their sponsorship.  Though this may seem like a great source of additional revenue for a nonprofit, there are a …

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Board Governance = Tax Compliance?

The revised Form 990 is now old news since it came out back in 2008.  One of the significant changes to the form back then was the addition of the board governance section.  By adding that section, the IRS obviously was communicating their idea of what best practices should be followed by the Board of …

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Fundraising Costs in Nonprofit Entities

I recently read an article at www.abc15.com (Arizona news station) about how more than 250 Arizona nonprofits, who received more than $1 million in a recent Form 990 filing, reported that they did not spend anything on fundraising expenses in raising those funds.  In general, you would expect that if an entity generates contribution income, …

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Social Welfare or Social Club?

I recently assisted a client with completing a Form 1023 to apply for tax exemption with the IRS for a newly form nonprofit entity.  As part of this process, questions came up about whether the organization was a social welfare entity or more like a social club.  The main difference between the two is that …

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What the Yellow Book Update Means for You

Some of you may have heard that the Government Accountability Office (GAO) has recently updated the Government Auditing Standards for the Yellow Book this year.  Some of you may be wondering how is this update going to affect me, or what is my auditor going to be asking for that I should be prepared for?  …

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How to Tell the Difference Between a Vendor or Subrecipient

How can you tell if you have passed federal funds on to a subrecipient or simply paid a vendor?  The answer to this question may not always be easy.  This is something many not-for-profits struggle with, and it’s extremely important as single audit requirements that an entity which passes federal funds on to a subrecipient …

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Auditor Term Limits: An Update for Charter Schools

Last fall 2011 I wrote a blog regarding auditor term limits that were slowly creeping their way into governmental audits in the State of Arizona.  The legislature had passed Laws 2011, Chapter 344, sec. 5 and sec.16 of Arizona Revised Statutes §15-183 and §15-914, respectively, in July 2011 requiring Charter Schools to rotate their audit …

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6 Methods to Implement in Detecting Workplace Fraud

In these economically stressful times, pressure and incentive to perpetrate fraud are more plentiful. Employers must address fraud risk more rigorously than ever before. Annual communication with the entity’s auditor can help pinpoint areas of higher risk.  Once identified, these areas can become the focus of management brainstorming sessions to develop processes to heighten awareness …

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Single Audit Revisions – The Government Needs Your Help

Imaging looking at your Schedule of Expenditures of Federal Awards (SEFA) and noting that the total is $502,000.  Some of you might think, “Why couldn’t we have spent $3,000 less and save ourselves the cost of a single audit?”  And you’re not alone.  The United States OMB is working on reforming the Federal Grant process, …

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Auditor General Fraud Alert – Billing Schemes

The Office of the Auditor General for the State of Arizona recently issued a fraud alert regarding common billing schemes. The Alert cites a 2010 study done by the Association of Certified Fraud Examiners that indicated most misappropriation schemes involve the theft of cash receipts or involve fraudulent disbursements of cash. The study also indicated …

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