Forming powerpoint english 2013 update for distribution
Overview For New Board Members
1. NOT FOR PROFIT ACCOUNTING 1 Presented to: Arts and Business Council Saturday, March 26, 2011
2. Agenda What is the role of a not for profit board member? How is a not for profit different financially from for profit businesses? What do we need to file with the IRS and other entities? What occurs during an audit? 2
3. What is a Board Member’s Role? Fundraising Strategic planning Oversight of programs The IRS believes that a well-governed organization is more likely to be compliant. 3
4. Oversight of Programs General Oversight Be aware of how the organization is run Be aware of processes potential areas of fraud Have an active role in helping to mitigate risks Fiduciary Oversight Help set financial policies Be familiar with the financial statements Be able to review and understand the form 990 4
5. Policies of a Not For Profit Conflict of interest policy Policy regarding reimbursement of travel and entertainment expenses Executive compensation policy Investment policy 5
6. Agenda What is the role of a not for profit board member? How is a not for profit different financially from for profit businesses? What do we need to file with the IRS and other entities? What occurs during an audit? 6
7. Financial Differences Financial statements Statement of Financial Position Statement of Activities Statement of Functional Expenses Endowments 7
8. Statement of Financial Position Short-term investments Long-term investments Accrued income taxes Net assets Unrestricted Board Designated Undesignated Temporarily Restricted Permanently Restricted 8
9. Statement of Activities Allocations into restricted classes Realized and unrealized gains/losses on investments Assets released from restrictions Expense allocations 9
11. Endowments Protecting the original contribution Contributions and expenditures Investment income Requirements Policies and standards 11
12. Agenda What is the role of a not for profit board member? How is a not for profit different financially from for profit businesses? What do we need to file with the IRS and other entities? What occurs during an audit? 12
13. What is Required to be Filed? Internal Revenue Service Illinois Attorney General Other states 13
14. The Form 990 Full 990 or 990-EZ 12-page core form & 16 schedules Additional questions on governance, policies, and procedures 14
15. AG-990-IL Any 501(c)(3) organization that collects contributions from anyone in Illinois Audited financial statements required if gross receipts is greater than $300,000 15
16. Unrelated Business Income Tax Certain activities by not for profits may be subject to taxes Advertising in publications Rental income Sales of merchandise not directly related to program activities 16
17. Agenda What is the role of a not for profit board member? How is a not for profit different financially from for profit businesses? What do we need to file with the IRS and other entities? What occurs during an audit? 17
18. What Occurs During an Audit? Understanding of entity controls Examination and testing of statement of financial position and statement of activities Fraud inquiries Communication with board of directors 18
19. Communication with the Auditor Review financial statements and footnotes and inquire if additional understanding is necessary Discuss the audit process Ask about areas of possible improvement 19
20. Specializing in Financial Statement Audits, Reviews and Compilations Income Tax Planning, Research and Preparation Pension and Profit Sharing Plans Monthly Accounting, QuickBooks and Accounting Software Setup and Training 20
Notas del editor
IRS suggests that an ideal board of directors would be between 5 and 7 members and would not be more than 15 members
Discuss at beginning the source of these policies… 990 and how the 990 is structured… with asking if policies & additional information required if necessary
Permanent endowment – established by a donor restricted gift
IRS suggests that an ideal board of directors would be between 5 and 7 members and would not be more than 15 members
IRS suggests that an ideal board of directors would be between 5 and 7 members and would not be more than 15 members
IRS suggests that an ideal board of directors would be between 5 and 7 members and would not be more than 15 members
IRS suggests that an ideal board of directors would be between 5 and 7 members and would not be more than 15 members
IRS suggests that an ideal board of directors would be between 5 and 7 members and would not be more than 15 members
IRS suggests that an ideal board of directors would be between 5 and 7 members and would not be more than 15 members
