Posts Tagged ‘Not-For-Profit’

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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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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How Do I Apply For Ohio’s Honor Project Trust?

Wednesday, February 19th, 2014

Could your nonprofit use some “extra cash”? I’m sure most of you answered “yes” to that question. And the timing couldn’t be better. A few months back I wrote a blog post about Ohio’s Honor Project Trust. The Honor Project Trust was created as a result of a lawsuit settlement. Excess settlement proceeds from the lawsuit totaling approximately $9 million were earmarked for Ohio nonprofits. The trust’s mission is to identify and providing funding to not-for-profit charitable organizations that have a societal impact in the State of Ohio.  (more…)

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How Can My Nonprofit Organization Benefit From Ohio’s Honor Project Trust?

Thursday, October 10th, 2013

Nonprofit organizations in Ohio may soon have “free money” coming to them. Who’s giving out the money? The State of Ohio. The Honor Project Trust was created as a result of a recent lawsuit settlement. Excess settlement proceeds from the lawsuit totaling approximately $9 million were earmarked for Ohio nonprofits. The trust’s mission is to identify and providing funding to not-for-profit charitable organizations that have a societal impact in the State of Ohio. So how do you know if you qualify for this grant and get a piece of the pie? (more…)

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Can Your Charity Profit from Instant Bingo?

Monday, March 25th, 2013

Between the new Ohio casinos, Ohio Lottery drawings and instant games, legalized gambling is all over the place. Have you ever considered how this pastime could benefit your charitable organization?

Qualifying charitable organizations can benefit from properly structured bingo operations, but the requirements could prove to be a burden. As an alternative, qualifying charitable organizations can receive proceeds from instant bingo activities. (more…)

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