Nonprofit finance, accounting, and tax news. Other tidbits of interest to the charity community.
A law expected to go into effect in Florida as soon as the governor signs it will give charity regulators more authority to oversee charities and deal with bad actors. Report is by Kris Hundley from Tampa Bay Times: New law will give regulators more oversight of charities.
Here is an overall assessment of the new law: (more…)
There is a perception that regulators, such as the IRS, California Franchise Tax Board, and California Attorney General scour every filing they receive from charities to make sure every charity is obeying every law and has every box checked correctly. Based on that detailed analysis, the agencies decide who to audit for misconduct and they start enforcement action on everyone that steps so much as an inch out of line or answers even one question “wrong”.
Umm. Not quite.
The perception amongst my colleagues who work with charities is that the various regulators barely have time to file the reports and probably don’t have time to study anything. I have long guessed that the volume of reports is so overwhelming that there isn’t time to carefully consider anything unless someone from the public complains.
In her report, Bill targeting ‘scam charities’ in California law moves forward, Kendall Taggart from the Center for Investigative Reporting confirms my colleague’s read of the situation is more accurate that the common perception.
Charities and fundraisers operating in California are required to file an annual report with the Registry of Charitable Trusts in the Attorney General’s office. The initial filing is a CT-1. The recurring annual report is the RRF-1.
Here is some info from the article: (more…)
Update: The IRS has closed the audit.
The 2013 990 tax return and audited financial statements for Food for the Hungry (FH) are hot off the press and available at their website.
I previously discussed the costs incurred by Food for the Hungry to address their audit from the IRS. See previous post: Case study of legal and accounting costs during major IRS audit.
I am looking at that situation because this audit is of interest to the wider non-profit community and it is also a case study of the costs involved in a major dispute.
Try to stay out of court
Here are two posts on the whole idea of avoiding litigation:
Update of costs
Is it a good idea for an artist to create an NPO to get grant money?
If you’ve been wondering, consider the advice from Corbett Barklie at KCET: Should I Become a Nonprofit?
In addition to the cost and time involved in forming an NPO, the article points out the cost and time to maintain the infrastructure.
You want to boil down hundreds of pages from several books? I came across one sentence that does a good job:
…poverty is a symptom— of the absence of a workable economy built on credible political, social, and legal institutions.
I’ve been reading a lot of economics books lately. (Okay, okay, you can pray for me – a CPA reading economics books for relaxation and learning and growth.)
If we can figure out how we on this planet have gotten to the place where we have the highest wealth, best health, and longest life expectancy in history, we can keep going on the same path. Likewise, we can maybe figure out how to bring along those people groups that don’t share in the abundant bounty.
Here is the ache in many hearts: How do we ‘solve’ poverty and suffering?
I retract my previous comments on the rate that may be used by a charity to reimburse its volunteers for personal use of vehicles.
By Congressional action, individuals may deduct $0.14 per mile for the personal use of vehicles while performing volunteer services to a tax-exempt charity. Reimbursements by the charity to the volunteer should be limited to the same amount, $0.14 per mile. Any reimbursement over that rate should be reported as personal income to the volunteer.
I’ve previously asked Do you use an overseas bank account in your ministry? Then you may have a filing requirement for that account.
Here’s the issue: The federal government has a requirement to file a specific report if you have financial accounts outside the U.S. that have more than $10,000 in the account at any point during the year.
This filing requirement applies to the organization and any individual with signature authority on the account. That means your ministry must file reports (if your accounts clear the threshold on any day of the year) and every check signer must as well.
For just a little more detail, you can read the other posts on this blog at this tag.
If you want some deep detail, check out an article by Karen Nakamura, at Corporate Taxation Insider: Foreign bank account reporting.
If you have been around the Christian world a while, you know the reality that pastors can commit serious sin that can require removal from the pastoral office. As an auditor providing service to the religious community, I’ve seen this play out at more than one client.
When should a pastor be removed? How wide should the confession be made known? Is restoration possible? How does church leadership walk through restoration?
Those are all questions to address if you are in leadership when your church is hit with a pastoral failure.
The best article I’ve read in a long time is currently at Christianity Today, written by Pastor Ed Stetzer: When Pastors Fall: Why Full and Public Repentance Matters – – Pastors are held to a higher standard and must repent of sin in accordance with that standard.
I’ll just summarize a few of the highlights. Please check out the full article.
Jeff Rutt, founder of HOPE International offers Confessions from a Recovering Toxic Charity Addict.
He explains his church was sending so many containers of assistance to their partner church in Ukraine that they were causing serious harm to the church. Here are five lessons he learned from the pastor of their partner church: (more…)
Jerry Bowyer has the report from Jerusalem. It is in the very early edition of today’s paper. Apparently that seditious rabble-rouser from Nazareth got his just due Friday past when the Sanhedrin and Roman government both agreed to address treason as treason ought be addressed.
The article’s first paragraph,
Jesus of Nazareth was executed today on the orders of the Roman State. Method of execution: Crucifixion. The charge under Roman law was treason, and under Herodian law blasphemy against the Temple. The evidence against this anarchist was so strong that authorities of both the Roman State and the Kingdom of Herod concurred with the arrest and execution, and he was subjected to trial by both governments. And in a rare uprising of spontaneous collective justice, the mass of people who were gathered for Passover called for his execution as well. The mob affirmed their loyalty to the state, chanting, “We have no king but Caesar.”
For the rest of the story, check out the full news report in Forbes: Jesus of Nazareth, Enemy Of The State, Executed For Treason.
After reading the full article, I’m sure you will agree with me that we shall never hear of his name again.
Hold on…
The paperboy is shouting something about an extra edition….Let me go get a copy of the paper to see what happened since sunrise.
Learn All About Nonprofit Expense Accounting on May 1 is the announcement from Sift Media of another free webinar on NPO accounting. The class is Expense Accounting – Key Accounting and Reporting Issues for Nonprofits #3.
The free class is one hour long and will be offered on May 1, 2014 at 2:00 p.m. Eastern. That means 11:00 here on the west coast.
Some of the topics covered will be the functional allocation of expenses and joint cost allocation.
I often ponder just how do you create a high-enough quality environment with superb-enough controls that you can make sure one out-of-control person can’t take down your whole organization.
I have four examples.
Most of them (but not all) had really good internal controls, great procedures, told their staff constantly what was acceptable, reminded staff of ethical and legal requirements. Some had rigorous internal monitoring procedures.
Yet one out-of-control person took out a bank, severely damaged another bank, and another individual came close to seriously hurting an international accounting firm. A group of people cost one company a guilty plea under the Foreign Corrupt Practices Act along with a hundred million dollar fine, deferred prosecution agreement, and tons of negative publicity. Let’s take a look at Barings Bank, KPMG, Société Générale, and HP.
Barings Bank trading losses
For a light-hearted look at what might be going through the mind of a person stealing from your ministry, check out how to Steal Like A Boss, from Charles Hall’s blog, CPA-Scribo.
Mr. Hall illustrates how a fraudster can get from “this is stealing” to “this is a loan”, or even better, to “this is the pay raise I’ve been deserving for quite some time now.”
There’s an old line from the newspaper era: Don’t pick a fight with someone who buys ink by the barrel. If you do, tomorrow you will see 10,000 printed copies of the next step of the argument.
The internet equivalent is:
Don’t pick a fight with someone who buys pixels by the terabyte.
Today’s addendum is: especially when said person routinely prints 13,700 copies of tweets.
Francine McKenna got a threatening email from a guy who had a role in a failed company. You can read all about it: Benjamin Wey Sent Me A Threatening Email About AgFeed.
Learn About Revenue Accounting for Nonprofits on April 25 is the announcement from Sift Media about a good overview of how to account for revenue in a charity. The course is Key Accounting and Reporting Issues for Nonprofits No. 2: Revenue Accounting.
The course is free and will be offered April 25 at 2:00 Eastern. Runs for one hour, thus you can get one hour CPE.
I read through the handout for the course. This will be a superb class those who are new to the nonprofit community.
It will be a good review if you are quite experienced. I have a fair number of years working the NPO community, yet still enjoy this type of class for two reasons: First, it reinforces what I think I know. Second, I frequently find some little tidbit that escaped my attention or that I’d forgot about. Thus it is quite helpful. That, by the way, is the reason I always read the annual risk alert updates. You should too.
Looks to be a great course. I’ve gone through two classes from this instructor. He does a great job.
Oh, did I mention it’s free? And an hour of CPE?