Accounting for Non-Cash Contributions
Contributions can be made to a nonprofit in either cash or property. Non-cash contributions can be tangible or intangible. Tangible property could be vehicle donations, household items, land and buildings, etc. Intangible property could be stocks, bonds, copyrights, leased space, etc. Like cash, these items are recorded as contribution revenue when received. The amount and […]
Volunteers and Financial Reporting Requirements
Volunteers are an integral part of many nonprofit organizations. Some organizations depend on their very survival by incorporating volunteers. Since volunteers are non-paid staff, does your organization consider including in the financial statements the value of their contribution? As a nonprofit auditor, I have guidance to follow on recording the value of services performed by […]
Audit Preparation: Preparing the Schedule of Expenditures of Federal Awards (SEFA)
All nonprofit organizations that expend $750,000 and more are required to have a single audit under the Uniform Guidance One of the required statements included as part of a single audit is the Schedule of Expenditures of Federal Awards (SEFA). The SEFA is a required as part of the supplemental data presented with the A-133 […]
Subrecipient Responsibilities for Grant Revenue pass-through
A subrecipient is an organization that receives federal awards from a pass-through entity rather than directly from the federal grantor to carry out a program. An organization may receive grant funds directly from one or more federal agencies and at the same time receive funds indirectly as a subrecipient. The subrecipient is responsible for managing […]
How to prepare the Grant Revenue Schedule
Accounting for grant revenue is vital for the nonprofit organization. Careful attention to detail must be provided throughout the life of the grant. In addition to establishing procedures for recording, monitoring and reporting grants, the organization needs to consider grant reporting for audit purposes. When I begin a nonprofit audit, I request several items including […]
Year-end Financial Close for Nonprofit Organizations
All nonprofit organizations, even the smallest of nonprofits, benefit from having a well-defined year end closing process. The first step is to determine the procedures to be performed at year-end. Once the procedures have been identified they should be ordered chronologically into a checklist. Procedures performed too early or not on time can result in […]
Best Controls for Small Nonprofits by Sherri Rose, CPA Nonprofit Auditor
Smaller nonprofit organizations often do not have the volume of transactions to require multiple level controls. Too many controls can unnecessarily slow the accounting process. A few very good controls that prevent or detect errors, misstatements, omissions or valuation in multiple areas define a well-designed accounting system. When we hear the word “Controls”, most often […]
Form 990 Review
Part of a nonprofit organization’s board of director’s and management’s fiscal responsibility is a review of the information return, form 990. The review ensures the organizations details and results of operations are informative and accurate. Form 990 is a public document. Organizations like Guidestar publish forms 990 to help donors research nonprofits they wish to […]
NONPROFIT OPERATING RESERVES
The operating reserve is cash to be used in the organization. It is part of an overall cash flow plan. Reserves can be for a specific purpose; such as, fixed asset purchase or program expansion. General operating reserves are for use in the day to day operations to bridge budget shortfalls. Expert advice is to […]
Nonprofit and NC Sales and Use Tax Clarifications
Recently, I overheard a board member of a North Carolina nonprofit state they did not have to charge sales tax because they are exempt. Nonprofit auditors will tell you, this is simply not true. Just because an organization is not-for-profit does not exempt them from paying or collecting sales and use tax. North Carolina law […]
