Archive for the ‘Business Advice’ Category

How Can Super Circular Reforms Work For Your Non-profit Organization?

Thursday, July 31st, 2014

When it comes to maintaining a high level of transparency and accountability, not-for-profit organizations face a lot of challenges. Not only does the community look to your organization to provide high-quality services and resources, the government expects your organization to utilize federal funding responsibly. The ability of not-for-profit organizations to secure federal assistance is critical, which is why industry leaders are seeking more clarity pertaining to a wide range of recent reforms made to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. These reforms are scheduled to take effect the Dec. 26, 2014. Here’s some insight into what you can expect moving forward.

Super Circular Reforms

Last December, the Office of Management and Budget (OMB) passed sweeping reforms to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, also known as the Super Circular or the Omni Circular. The goal for these reforms is to help the federal government streamline its guidance concerning administrative requirements while strengthening the oversight of federal funds. By ensuring compliance of these reforms, the OMB hopes to reduce financial waste, fraud and abuse.

Whether you’re the director of an organization that seeks federal grants and/or assistance, an accountant who serves such an organization, or a citizen who benefits from the organization’s government funding, the Super Circular is a big deal. The federal government awards more than $500 billion every year, and it is the OMB’s responsibility to ensure that every dollar spent is a good use of taxpayer funds.

What Do Super Circular Reforms Mean For You?

  • This newer guidance effectively consolidates eight federal circulars into one, which makes guidelines, cost principles, and audit requirements easily accessible. Having one “Super Circular” to thumb through – even though it tops 100 pages – is a welcome change to grant seekers, grant recipients and awarding agencies.
  • Now that the grant guidance is easily accessible and transparent, the OMB anticipates increased competition among agencies and organizations that are eligible for monetary assistance.

For example: If you have never applied for aid in the past, but you think your organization or government agency may be eligible for federal assistance, you can now easily find out. More agencies and organizations are expected to take advantage of the fact that these guidelines are easily accessible, which means there will be more people vying for government money.

A comprehensive list of federal assistance programs is available in the programs tab of the Catalog of Federal Domestic Assistance (CFDA) website. This site not only provides a list of programs and grants available, it provides key information about what is required to apply and qualify for federal assistance.

  • New provisions have established a higher threshold for an A-133 audit. The threshold for an A-133 audit is now $750,000 – which is higher from the previous threshold of $500,000. This means that not-for-profit organizations that bring in less than $750,000 annually are not required to complete an A-133 audit, which will provide some relief to about 5,000 non-federal organizations. This doesn’t mean the OMB will stop monitoring the federal aid that is distributed to these organizations, the OMB says 99.7 percent of aid awarded to organizations and agencies will still be subject to single audit oversight.

Please Note: If your fiscal year ends in December, the $750,000 single audit threshold won’t go into effect until your Dec. 15, 2015 audit. And if your fiscal year ends in June, it won’t go into effect until December 30, 2016.

  • The Super Circular significantly reforms how organizations and agencies will maintain their cost principles. Specifically, in its guidance, the OMB places a greater emphasis on internal controls. The Super Circular effectively defines what organizations and agencies can consider indirect costs, administrative salary direct costs, compensation, and costs associated with materials and supplies.

For example: While the salaries of your administrative and clerical staff may have been treated as indirect costs in the past, the OMB says that it may now be more appropriate to consider them as direct costs if the work performed is specifically outlined within the grant-funded project or initiative.

  • The deadline for organizations and government agencies to comply with the OMB’s reforms is Dec. 26, 2014.

Because the reform-laced Super Circular was written with the goal of helping organizations and agencies apply for aid, manage funds and prepare for audits, it is anticipated that the OMB will succeed in its efforts to increase competition among organizations and agencies that are eligible to receive aid. As a result, more insight and accountability will be demonstrated by recipients of federal assistance.

Super Circular Help

The OMB has repeatedly said that these reforms will make the process of obtaining federal funds easier and more transparent. If you have specific questions as to how the Super Circular will affect your organization or government agency, contact Rea & Associates. Our Ohio not-for-profit team can help you make sense of these revised regulations.

Author: Brent Ardit, CPA (Dublin office)

 

Want more not-for-profit business advice? Check these posts out:

Ohio Bureau of Workers’ Compensation To Pay Small Business Claimants $420 Million 

How Effective Is Your Nonprofit Organization?

How Do You Build a Strong Not-for-Profit Board?

 

 

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Ohio Bureau of Workers’ Compensation To Pay Small Business Claimants $420 Million

Wednesday, July 30th, 2014

Countless small businesses, churches and charities in Ohio have learned how sweet justice can be. After a seven-year court battle, an Ohio judge ruled in their favor last week, ordering the Ohio Bureau of Workers’ Compensation (BWC) to pay out $420 million to those hurt by the state agency’s practice of overcharging for workers’ compensation premiums between the years of 2001 and 2008. It was discovered that thousands of businesses, churches and charities across the state were affected and countless business owners and their families found themselves in facing unforeseen debt or battling bankruptcy.

To fulfill its obligation under the settlement agreement, the BWC will create a fund that will be specifically used to pay: claims made by employers found to be participants in the class action lawsuit, attorney fees, court costs, and costs associated with administering the fund. According to the settlement agreement, any unclaimed money will be returned to the bureau.

Can You Make A Claim?

In order to make a claim, you must have been a private, non-group rated employer at some point during 2001-2008 who:

  • Subscribed to the state workers’ compensation fund
  • Was not group-rated
  • Reported payroll and paid premiums in a manual classification for which the non-group effective base rate was “inflated” due to application of the group experience rating plan

Employers who were non-group rated for at least one policy year between 2001 and 2008 are eligible to claim a portion of the settlement. Eligible employers should have received a notice that indicated their status as class members.  Class members are required to submit their claims to Judge Robert McGonagle of the Cuyahoga County Court of Common Pleas. Claims must be postmarked no later than Sept. 22, 2014. More information on this ruling can be found here.

Ohio BWC Claim Help

Need some assistance in determining how this ruling may impact you? Contact Rea & Associates. Our dedicated Ohio business consultants and CPAs can help you make sense of this BWC ruling and help you determine if you are eligible.

Author: Darlene FinzerCPA, QKA, CSA (New Philadelphia office)

 

Stay up-to-date on other recent business advice blog posts. Check these out:

Be On Guard For IRS Phone Scams

Is Your Business Running On Microsoft 2003 Servers? It’s Time To Update 

Why It’s Important To Have A Good Banker As Part of Your Business Advisory Team

 

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Be On Guard For IRS Phone Scams

Thursday, July 17th, 2014

You get a call from a man who said he was from the IRS and was informing you that criminal activity was found after the IRS performed an audit on your past taxes. Then he asks if you had a criminal lawyer to represent you. And as you tried to get a word in edgewise, he told you not to interrupt him because the IRS and local authorities were recording your phone call. Pretty unnerving, right?

Well, unfortunately, this phone call actually took place with a client. And these types of phone calls are happening constantly. Back in April, the IRS issued a warning for consumers about phone scams targeting taxpayers. During the 2013 tax filing season numerous phone scams occurred, but the IRS has seen an increase in these scams since then. Because the IRS believes that these incidents will continue to plague taxpayers, it’s important to be vigilant for these kinds of calls.

The 4-1-1 On These IRS Phone Scams

  • Some taxpayers who received these calls were told they’re entitled to a big tax refund, or that they owe a lot of money to the IRS that needs to be paid immediately. Don’t be fooled. The IRS won’t contact you via phone about these matters. If you ever owe the IRS money, you’ll be sent a written notification via mail.
  • The IRS will never ask you for personal financial information over the phone, such as your credit or debit card information. If you’re asked for this information from someone claiming they’re from the IRS, don’t give it and report the incident immediately to the IRS.
  • Some IRS scammers use fake names/surnames (most of the time these names are common) and IRS badge numbers when they identify themselves.
  • It’s possible that a scammer knows and can tell you the last four digits of your Social Security number.
  • The phone number that a scammer calls you from could look like it’s from the IRS toll-free number.
  • If you take one of these scam calls, you may receive a bogus follow-up email to make it look like it is a legitimate inquiry from the IRS.
  • You may be threatened with jail time or driver’s license suspension from one of these scammers. They may then hang up on you and then call back pretending to be the police or DMV, further trying to prove their claim to you.

What Should You Do If You Get One Of These Calls?

So have you received one of these calls? If so, and you’re not sure the next step, here’s what you should do:

  • If you think you might owe taxes or there may be an issue with your taxes, call the IRS at 1.800.829.1040. Someone at the line can help you determine if you indeed have a payment due.
  • If you feel you received this call unexpectedly and know you have no IRS issues, call and report the incident to the Treasury Inspector General for Tax Administration at 1.800.366.4484.

In light of these increasing incidents, be on the lookout and don’t fall prey to these scams. Hang up if you’re uncomfortable with the call. And know that the IRS would never ask for personal financial information over the phone or in an email. If you receive any suspicious emails, forward the email to phishing@irs.gov.

Ohio Tax Help

If you’re ever unsure about anything you received from the IRS, whether it be a letter, a phone call or email, contact Rea & Associates. Our team of Ohio tax professionals can help you determine if the inquiry is legitimate, and assist you with responding.

Author: Maribeth Wright, CPA (Cambridge office)

 

Looking for other articles on how to protect you and your business? Check out these articles:

How Can Heartbleed Affect You and Your Business’s Online Identity?

How Can I Protect My Business From A Data Security Breach?

Are You Secure? Cyber Security Targets Employee Benefit Accounts

 

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Is Your Business Running On Microsoft 2003 Servers? It’s Time To Update

Wednesday, July 16th, 2014

As a business owner, you have a lot to be concerned about. Ensuring that your business is bringing in revenue. Providing quality customer service. Retaining quality employees. The list goes on and on. Is maintaining and keeping your IT systems anywhere near the top of your list? If not, you might want to think again.

Microsoft To Stop Supporting Microsoft 2003 Servers

Back in April, Microsoft announced it was no longer supporting its Windows XP workstation software … this means that Microsoft is not providing any security patches or upgrades to computers using Windows XP software. Despite this news, many companies are still using the non-supported operating system. This leaves a huge hole in your operating system security. While many entities are planning to replace their XP workstations, we now find that Microsoft has some additional changes coming.

Microsoft recently announced that it has posted end of life for its Microsoft Server 2003 and Server 2003 R2 systems. These two server operating systems will no longer be supported after July 14, 2015. So if your business uses these systems, you have a little under a year to plan and implement a replacement strategy for these servers. The consequence for not replacing? Serious security issues.

In many industries the use of these operating systems on servers could lead to non-compliance issues.  When looking at your upgrade options, consider using virtualization software such as VMWare or Hyper V or server operating systems like Linux, UNIX, Windows Server 2008 and Windows Server 2012.

What You Can Do To Prepare For The Microsoft 2003 Server Expiration

It’s important you work with your application vendors to make sure that your current applications will transfer over and operate correctly on the replacement server operating system you decide upon. It is recommended that your entity do an analysis of critical business applications currently being used on Microsoft Windows 2003 and Windows 2003 R2 servers and determine the best replacement option as well as conversion process.

IT Audit Help

Not sure what server(s) your business is running on? Or are you unsure how this Microsoft server expiration will affect your business? Contact Rea & Associates. Our IT audit team can assess your business’s IT systems and help you determine how these changes will affect you moving forward. Don’t delay in updating your servers. It could be the difference between a safe IT environment and an unsecured one.

Author: Joe Welker, CISA (New Philadelphia office)

 

Looking for more information on how you can keep your business environment safe? Check out these blog posts:

8 Tips For Crafting A Strong Password

Do You Know Who Has Access To Your IT Network?

How Can I Protect My Business From A Data Security Breach?

 

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Why It’s Important To Have A Good Banker As Part of Your Business Advisory Team

Thursday, July 3rd, 2014

You want the best for your business, so it only makes sense that you surround yourself with like-minded individuals. As a business owner it’s important to get support from business advisors who have expertise in specific areas to help you make your business successful. Your CPA plays a critical role for you, but don’t forget about the others. It’s also important to cultivate relationships with a business attorney and business banker.

Your CPA can make sure that you have systems to capture and report timely, reliable financial information and, if needed, even provide assurance regarding your financial statements. A good attorney can help safeguard your business assets and provide assistance in drafting agreements, contracts and other legal proceedings. A business banker can provide lines of credit or loans to help meet the cash flow needs of your business.

The Importance of Your Banking Relationship

Strong banking relationships are built over time through regular two-way communication. You should be well-versed in upcoming cash needs, such as expanding inventory or the increased needs of personnel cost, and communicate these to your banker. As you keep them informed of business decisions and trends, this helps to build a lender’s confidence in your ability to manage your business. A well-informed and communicative business owner may be given extra consideration when business financial issues arise.

Four Key Indicators That Help Bankers Evaluate Your Ability To Repay

Banking is a low-risk industry and they have one major concern when lending money: your repayment. They evaluate your ability to repay based on these four areas:

  1. Cash Flow – This is a key indicator of your ability to repay the original loan. If you have strong cash flow, the chances are high that you are able to repay your loan.
  2. Collateral – When a loan is originated, it’s never the goal for the loan to be foreclosed on and collateral seized, but it is required as security.
  3. Credit – Another key indicator is your credit history and track record of your past ability and willingness to fulfill prior financial obligations. If you have a good credit score, you’ll be given more favorable treatment in both the receipt of a loan and the amount of interest charged.
  4. Character – Your relationship with your banker allows them to consider your integrity.  It’s critical to let your actions meet or exceed the expectations your words establish on a regular basis.

A good business banker is your advocate – they’re in your corner. Like CPAs, business bankers are exposed to multiple businesses and industries and they can be a great sounding board for ideas and help you strategize on ways to reach your financial objectives.

Business Relationship Help

Need to round out your business advisory team? Contact Rea & Associates. We can provide accounting services and business consulting services to your business, but we can also connect you to other business professionals that can help you complete your business advisory team.

Author: Chris Roush, CPA (Millersburg office)

 

Looking for more information on how to strengthen your business? Check out these blog posts:

Building Bridges: The Power of Networking

How Can You Build And Develop Your Organization?

Do Your Business Metrics Need an Oil Change?

 

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