In the last few years, the Office of Management and Budget (OMB) retooled the administrative guidance for organizations receiving federal awards. The Uniform Guidance established – among other things – that non-federal entities should have written policies and procedures in place that support their control environment. This emphasis on written policies ensures federal grants and awards are used as intended.
Today, we’re able to offer an update on that post: on September 17, 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-07, Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets. The finalized standard confirms the information we previously provided.
In a surprising turn of events this spring, the Financial Accounting Standards Board (FASB) pushed back the implementation deadline for nonpublic entities recognizing revenue under Accounting Standard Codification (ASC) 606. Nonpublic entities – both for-profit and not-for-profit – were initially expected to comply with the new revenue recognition standard on reports for fiscal years beginning after December 15, 2018.
Due to the COVID-19 pandemic, some recent changes have been made to the procedures that nonprofit organizations follow to register with their state. Below is an overview of the changes that affect Pennsylvania and New Jersey charities.
Service is at the center of any nonprofit organization, and to successfully serve their communities, nonprofits must have (1) staff members who have a deep passion for the mission, and (2) a steady stream of support.
Businesses continue to figure out new ways to drive revenue, manage expenses, and implement new measures to protect employees from COVID-19. The sudden shift to a business situation which months ago seemed impossible means there has been little time for much else.
According to the Association of Certified Fraud Examiners (ACFE) 2020 Global Study on Occupational Fraud and Abuse, employee corruption was identified as the leading source of fraud amongst nonprofit organizations. It was found that in 74% of the cases, either the Executive Director or Manager was the primary perpetrator of illegal activity.
The federal government responded with two important pieces of legislation, including the Families First Coronavirus Response Act and the Coronavirus Aid, Relief and Economic Security (CARES) Act. They both provide significant compliance changes, but more importantly, outline various tax changes, loan options, and additional assistance for independent schools.
Under ASU 2016-14, Presentation of Financial Statements of Not-for-Profit Entities, all nonprofit organizations are required to present an analysis of expenses by their function and natural expense classifications in one location.
By ROBERT J. GAFFNEY
Each year, approximately $300B is donated to nonprofit organizations in the United States. Since these contributions can be taken as deductions on individual tax returns, it is no wonder that the IRS has enacted some reporting standards for the acknowledgment of these contributions.