Internal controls in small organizations

Proper internal controls are essential for all organizations but can be very difficult for small nonprofits to accomplish due to size of the staff. It is critical that segregation of duties is implemented throughout the financial policies. Don’t miss: Is your nonprofit going through a name change? Four key controls (not all-inclusive) that should be …

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Is your nonprofit going through a name change?

From time to time, a non-profit organization may change their name to better reflect their mission. If your organization is going through a name change, here are the steps needed to report it to the IRS. Don’t miss: Nonprofit board governance best practices Report the name change on the next annual tax return (Form 990 …

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Nonprofit board governance best practices

As part of their regular policies, non-profit organizations may want to consider following these board governance best practices. Whistleblower policy – The benefit of having a whistleblower policy in place is that it encourages staff and others to come forward with any information they have related to fraud or illegal activity. These policies allow those …

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Special Events Revenue: GAAP vs Form 990

For those non-profits that have had special events this can be one of the more difficult areas, specifically when it comes to reconciling between the financial statements and the Form 990. Before we start detailing the differences, it will help to outline the different revenue types related to special events. The different revenue types include …

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Provider Relief Funds, your SEFA and reporting as income

If your organization has a fiscal year-end of 6/30/21, here are a few points to be aware of regarding when to include Provider Relief Funds (PRF) on your SEFA and when to report it as income. Don’t miss: Shuttered Venue Operating Grant update PRF monies received during “Period 1” (which is monies received from 4/1/20- …

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Shuttered Venue Operating Grant update

Many nonprofit arts and cultural organizations have recently received Shuttered Venue Operating Grant (SVOG) monies. Here are a few points to know relating to this funding. The grantee must maintain advance payments in interest bearing accounts, and the limit on interest earned on grant fund deposits is $500 per year. Any amount greater than $500 …

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Notable IRS Regulations on UBTI

In addition to finalizing the rule of using NAIC codes for making the determination as to whether an organization has more than one separate unrelated business activity for Form 990-T reporting purposes, which you can read all about here, the IRS Final Regulations (which adds section 512(a)(6) to the Internal Revenue Code) also includes other …

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Gifts-in-kind: What you need to know

A lot of not-for-profit organizations receive gifts-in-kind but there has not always been a lot of guidance on presenting gifts-in-kind in the financial statements and footnotes. Good news, the FASB has issued ASU 2020-07 – Not-for-Profit Entities (Topic 958) which addresses these issues. Don’t miss: Are you missing a related party footnote disclosure? This standard …

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Are you missing a related party footnote disclosure?

Related party footnote disclosure is easy to overlook but is quite significant in proper financial reporting and a requirement of GAAP if applicable. A related party footnote is needed to disclose certain common control relationships and corresponding transactions recorded in the financials that are related to one party having the leverage to influence the policies …

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New rules for taxable income

Tax exempt organizations may not be 100% tax exempt. Organizations may get involved in certain income-producing activities that could be subject to tax (unrelated business taxable income or UBTI). Under the Tax Cuts and Jobs Act, the IRS began requiring tax exempt organizations to report the income and expenses from each unrelated business activity separately …

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