Archive for the ‘Ohio’ 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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Were You Overcharged By The Ohio BWC?

Wednesday, July 30th, 2014

Countless small businesses soon may find that they have money coming back to them. The Ohio Bureau of Workers’ Compensation (BWC) has decided to settle a class action lawsuit alleging that the BWC, over the course of many years, had a system of group rating in place that improperly overcharged many Ohio businesses. A lower trial court originally ruled in favor of the plaintiffs with possible damages exceeding $800 million. While the ruling was upheld on appeal, the appeals court sent the decision back to the initial court to better address the issue of damages.

Now the BWC has agreed to pay out $420 million to those affected by the state agency’s practice of overcharging for workers’ compensation premiums between the years of 2001 and 2008.

To fulfill its obligation under the settlement agreement, the BWC said it 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 An Ohio BWC 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 be receiving a notice that indicated their status as class members and how to make a claim.  A website where claim information can be submitting is currently under development.

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. More details are coming, so stay tuned!

If you’re entitled to a portion of the BWC settlement, make sure you understand your rights and know how to follow the transaction process. If you’d like more information about how to claim what’s yours, email Rea & Associates and ask for information about this process.

Author: Joseph Popp, JD, LLM (Dublin 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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How Effective Is Your Nonprofit Organization?

Tuesday, June 10th, 2014

You’re busy. Your staff is busy. Everyone is busy. It’s easy to get bogged down in the day-to-day tasks and responsibilities of your organization. Meeting with prospective donors, educating groups on the mission of your organization, and managing volunteers. But let me ask you, when did you last spend time evaluating the effectiveness of your nonprofit organization? Has your donor base increased? Are you seeing an increase in volunteers and people who want to support your organization? Are you truly living out your organization’s mission and vision?

Evaluate Your Not-For-Profit’s Effectiveness

Can’t remember the last time you considered the effectiveness of your organization? Now is probably a good time. If after evaluating you discover that your organization has some areas for improvement, considering asking yourself the five questions below. Addressing these questions and areas may help you create a more effective nonprofit organization.

  1. Are we communicating our organization’s accomplishments?

    Many organizations make a lot of effort to communicate how much money they’ve raised, and how they use their funds. The focus seems to mostly be on the money and percentages. And while it’s important to communicate this information, don’t forget to talk about what your organization is actually doing. How are you carrying out the mission of your organization? What key accomplishments has your organization achieved? Place a greater emphasis on communicating your organization’s accomplishments.

  2. Is our organization’s board of directors actively engaged in the organization?

    When you conduct board meetings, do you sense that your board in engaged in the meeting? Are your board members asking questions and providing insight on how to strengthen the organization? Are they participating in and attending organization activities and fundraisers? If you can’t provide answers to these questions or the answer is “no,” then maybe you need to evaluate how you’re communicating and interacting with your board. A strong, engaged board can help drive the effectiveness of your organization.

  3. Is our organization’s mission and vision statements clearly defined and communicated to our audiences?

    If you were to survey your donor base, prospective donors, volunteers and others throughout the communities you serve, would you find that people understand your organization and its mission? Not sure what kind of responses you would get? One reason that your organization may not be as effective as it could be is because your audiences may not fully understand the mission and vision of your organization. Take a look at your mission and vision statements and see if you need to make some revisions.

  4. Do we clearly and timely communicate to our board of directors?

    This question really ties into whether or not you feel like you have an engaged board. One of the reasons you may not have an engaged board is because you’re not clearly and timely communicating with them. If there are important decisions that need to be made, make sure that you providing them with the necessary information to make the decision within a timely manner.

  5. How strong are our organization’s internal controls?

    Unfortunately, internal fraud is a real concern within nonprofit organizations. Few nonprofits have strong internal controls. As organizations grow, the internal controls need changing. Make sure the controls are operating at a level that will deter and detect fraud. Establish a code of conduct that will create a clear understanding of what is expected of all employees. Even if your organization only has a few employees, it is still possible to implement a system of checks and balances. These controls should help safeguard assets, produce accurate reports and improve administrative effectiveness. 

Ohio Non-For-Profit Help

Effective nonprofit organizations are impacting the communities they serve. If you are questioning the effectiveness of your organization, contact Rea & Associates. Our Ohio non-for-profit team can help you evaluate your organization and where you can increase your efficiency and effectiveness.

Author: Mark Van Benschoten, CPA (Dublin office)

 

Looking for more nonprofit organization tips and best practices? Check these blog posts out:

Which 990 Policies Do Non-Profits Need?

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

How Do You Protect Your Non-profit’s Donations from Fraud?

 

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Do Your Business Metrics Need an Oil Change?

Friday, May 23rd, 2014

Did you ever notice that little sticker in the upper left-hand corner of your windshield? The one that informs you your next service date for changing the oil and tire rotation. As you fire up the ignition, the fuel gauge is activated and the miles per gallon information is displayed. The on-board computer lets you know that the headlights are in the automatic position and the tires are properly inflated. The navigation system may even provide a weather update or a construction delay on the interstate. Within a matter of seconds of entering your vehicle, you have virtually all of the important metrics for your upcoming road trip.

Your business metrics and performance indicators should be as easy as locating your vehicle’s metrics. The metrics need to be meaningful to you and your team and used as a decision making tool in the day-to-day operations of the business. Many business owners and managers use daily and quarterly metrics more frequently than the monthly financial statements to run the day to day operations.

Business Metrics To Consider

Your business’s on-board computer can churn metric after metric and ratio after ratio. However, the quality of the metrics is far more important than the quantity. One recommendation is to identify four to six ratios that are unique to your business and industry and continue to study the trends on a daily or weekly basis. As a general rule, every business should consider metrics in the following areas:

  • Customer Metrics: How many new customers have you acquired over the last six months? How many customers have you lost? What is the average profit margin for each customer?
  • Cash Flow Metrics: These metrics should be designed to measure the company’s ability to meet obligations as they come due. For example: Is your inventory turning? How old are your accounts receivable?
  • Sales Metrics: A company should have sales metrics to measure sales and whether the sales are satisfactory for the company.
  • Employee Metrics: These metrics could be designed to measure how effectively the company is hiring and managing its employees.
  • Borrowing Metrics: This metric will measure how the company is effectively managing its debt. 

Once the metrics have been determined than a “windshield sticker” or dashboard can be affixed to your technology devices and reviewed by the management team on a regular basis. In addition, an industry scorecard can be developed to measure how the business compares to the industry.

Just like the oil in a car, the business metrics will need to be changed or enhanced on a regular basis to reflect changes in the economy and the business cycle.

Safe travels and be on the look-out for orange construction barrels and detours. Check your metrics!

Business Metrics Help

If you need help determine which business metrics are right for your business, contact Rea & Associates. Our team of Ohio business consultants can help you determine which business metrics are needed for the success and growth of your business.

Author: Dave Cain, CPA (Dublin office)

 

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What Should You Do After Tax Season?

Monday, April 14th, 2014

Now that most of you have either filed your 2013 tax return or at least gathered your tax information and sent it off to your CPA, I know what you’re thinking. Phew! I’m done with my taxes for yet another year! But guess what? No, you aren’t!

Now is the time to start planning for next year. The sooner you plan ahead and strategize for next year’s tax season, the better off you may be. Not happy with the amount of taxes that you had to pay this past year? Not happy that you seem to work harder and harder only to pay more in taxes and get further behind? Start planning now for future tax seasons!

Tax Planning For the Future

Here are a few things you can start working on now to help create a better tax experience for yourself next year:

  • Develop an investment strategy. Most people don’t understand the affect this can have on your tax return. You can control when and how to take gains from your investments. You should work on developing a long-term investment strategy with your investment advisor.
  • Create a plan to sell property. Are you considering selling property sometime in the future? Did you know that there are ways to minimize taxes that need to be paid on the sale of property? This isn’t done by calling your financial advisor and letting them know you just sold some property. Get them involved now and discuss that you plan to sell some property in three to five years. Your financial advisor can help you structure the property sale and ultimately help you control the tax effect.
  • Establish a business plan. If you’re thinking about starting a new business, work with your financial advisor now to determine what tax savings you may be able to realize. Depending on the type of entity there could be significant tax savings down the road. 

Tax Planning Help

While there’s no single quick fix to solving all of your business and tax woes, planning now will certainly help you when tax season rolls around next year – and the year after that and so on. If you need help with your tax planning, contact Rea & Associates. Our team of Ohio tax planning professionals can help you develop a tax strategy that best suits you for years to come.

Author: Dave McCarthy, CPA, CSEP (Medina office)

 

Want to read some more articles related to tax planning? Check these posts out?

What Is The Difference Between Fixed Asset Expensing And Capitalization?

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How Will A Tax Credits and Incentives Plan Benefit Your Business?

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