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 […]
Grant Accounting in Nonprofit Organization
Accounting for grants can quickly become chaotic if not properly administered. Nonprofit Auditors know grant funding has to be properly categorized and recorded as grant revenue, grant receivable or deferred revenue. Each expenditure must be matched to the appropriate grant. Discussion of each revenue category and each type of expenditure as well as the various […]
Non-Profit accounting: Vendor Files
As a nonprofit auditor in North Carolina I often encounter incomplete vendor files and vendor on-boarding procedures. A file should be set up for each vendor the organization uses to procure goods or services. A miscellaneous file is acceptable for vendors not used on a regular basis. The vendor invoices can be filed alphabetically in […]
Nonprofit Statement of Functional Expenses Allocation Methods, by Sherri Rose, Nonprofit Auditor
If you are a nonprofit organization in North Carolina you may be required to prepare a statement of functional expenses. The statement of functional expenses is not required for every non-profit organization; however, it is commonly included in the financial statements. Certain Grants may include language requiring expenses to be reported by functional classification. As […]
Not for Profit Organization Board of Directors – Audit Committee
The board is responsible for their own policies and procedures, like having all board members sign a related parties disclosure and code of conduct. The board is also responsible for establishing the audit committee and defining the committee’s responsibilities. The audit committee is comprised of members of the board of directors and is answerable directly […]
