Presenting a live 110 ‐ minute teleconference with interactive Q&A Non ‐ Profit Cost Allocation Plan Strategies Mastering the State's Tax Reform and Planning for Flow ‐ Through Income, Tax Credits and Other Issues TUESDAY, JULY 26, 2011 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Hydeh Ghaffari, Senior Partner, Ghaffari Zaragoza , Oakland, Calif. Hydeh Ghaffari Senior Partner Ghaffari Zaragoza Oakland Calif Colette Kamps, Senior Manager, Henry & Horne , Scottsdale, Ariz. Jean Gilbert, Outsourcing Senior Manager, Raffa, P .C. , Washington, D.C. For this program, attendees must listen to the audio over the telephone. Please refer to the instructions emailed to the registrant for the dial-in information. Attendees can still view the presentation slides online. If you have any questions, please contact Customer Service at1-800-926-7926 ext. 10 .
Conference Materials If you have not printed the conference materials for this program, please complete the following steps: Click on the + sign next to “Conference Materials” in the middle of the left- • hand column on your screen hand column on your screen. Click on the tab labeled “Handouts” that appears, and there you will see a • PDF of the slides for today's program. Double click on the PDF and a separate page will open. Double click on the PDF and a separate page will open. • Print the slides by clicking on the printer icon. •
Continuing Education Credits FOR LIVE EVENT ONLY Attendees must listen to the audio over the telephone . Attendees can still view the presentation slides online but there is no online audio for this program. Attendees must stay on the line for at least 100 minutes in order to qualify for a full 2 credits of CPE. Attendance is monitored as required by NASBA. Please refer to the instructions emailed to the registrant for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 . at 1 800 926 7926 ext. 10 .
Tips for Optimal Quality S S ound Qualit y d Q lit For this program, you must listen via the telephone by dialing 1-866-873-1442 and entering your PIN when prompted. There will be no sound over the web co connection. ect o . If you dialed in and have any difficulties during the call, press *0 for assistance. You may also send us a chat or e-mail sound@ straffordpub.com immediately so we can address the problem. Viewing Qualit y To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again press the F11 key again.
N Non ‐ Profit Cost Allocation Plan P fit C t All ti Pl Strategies Seminar July 26, 2011 Hydeh Ghaffari, Ghaffari Zarogoza Colette Kamps, Henry & Horne hydeh@ gzaaccounting.com colettek@ hhcpa.com Jean Gilbert, Raffa, P .C. jgilbert@ raffa.com
Today’s Program Tying Together Three Frameworks Slide 7 – Slide 15 [Hydeh Ghaffari] Definitions Of Relevant Concepts Slide 16 – Slide 26 [Colet t e Kamps] GAAP/Tax Differences And Federal Awards Slide 27 – Slide 36 [Hydeh Ghaffari] Slide 37 – Slide 47 Determining An Allocation Methodology [Jean Gilbert ]
Hydeh Ghaffari, Ghaffari Zaragoza TYING TOGETHER THREE TYING TOGETHER THREE FRAMEWORKS
Allocating Costs: Information Availability Financial statements • Audited financial statements open to public inspection in • some states so e states Made available to funding sources by management • Increasingly posted on NFPs’ websites • Tax returns • Form 990 is open for public inspection Form 990 is open for public inspection • Posted at Guidestar • 8
Allocating Costs: Importance Measure of stewardship • Increasing public scrutiny Increasing public scrutiny • • Watchdog groups • Donors • Advisors • Faulty bookkeeping Faulty bookkeeping • • Intentional misrepresentation • 9
Allocating Costs: Uses Informed decision-making • Externally • ― Governmental funding sources Governmental funding sources ― Private funding sources ― Watchdog groups (rating) Internally • ― Cost of program activity or a project within the activity ― Full recovery of costs Full recovery of costs ― Whether to respond to an RFP ― Self-evaluation 10
Allocating Costs: Framework Cost assignment • Cost directly benefits the final cost objective Cost directly benefits the final cost objective. • • Cost allocation • Cost benefits two or more final cost objectives, to a • degree. ― Cost allocation basis Cost allocation basis ― Cost allocation methods 11
Allocating Costs: Framework (Cont.) GAAP • ASC 958-720-45 • AICPA A&A Guide, Chap. 13 • Required at entity level • ― Program activities ― Administration (management and general) ― Fundraising ― Membership Internal Revenue Service • Part IX: Statement of Functional Expenses • ― Program services ― Management and general ― Fundraising R Required for 501(c)(3) and 501(c)(4) organizations and certain trusts i d f 501( )(3) d 501( )(4) i ti d t i t t • 12
Allocating Costs: Cost Assignment Activities (GAAP) ( ) • Program activities (not a funding source) • ― Provider trainings ― Respite services Respite services ― Daycare services Administration (management and general) • ― Overall administration of the organization (governance, marketing, strategic decision-making, financing, etc.) ― Obtaining and responding to RFP related to exchange transactions Fundraising • ― Solicitation of contributions Membership development (Not donor development) • 13
Allocating Costs: Cost Allocation Cost benefiting one or more activities as defined in the previous slide • Facility-related costs • ― Operations (copier, rent, postage, etc.) ( ) ― Cost of people maintaining the facility Joint activities • ― Cost of an activity with a fundraising component ― Cost of an activity with a fundraising component Cost benefiting several projects within an activity • Provider training • Training the trainers h • Cost benefiting various population served within an activity • E.g., residents of Alameda County • People affected by HIV virus • 14
Allocating Costs: Definition Final cost objective Final cost objective • A project, or • A program activity, or • Certain population, or • An award, or • Another direct activity of an entity for which costs can be Another direct activity of an entity for which costs can be • • accumulated Direct cost • Cost that can be assigned directly to a final cost objective • Shared • Cost for which a cost allocation method and basis should Cost for which a cost allocation method and basis should • be used 15
Colette Kamps, Henry & Horne DEFINITIONS OF RELEVANT DEFINITIONS OF RELEVANT CONCEPTS
Allocating Costs: What situations require cost allocations? • Natural vs. functional • Accounting standards • Require nonprofits to report expenses by functional classification l f • Voluntary health and welfare organizations are required to present a Statement of Functional Expenses ― Voluntary health and welfare organization: Formed for V l t h lth d lf i ti F d f the purpose of performing voluntary services for various segments of society; organized for the benefit of the public. It concentrates efforts in attempt to solve health public. It concentrates efforts in attempt to solve health and welfare problems. 17
Allocating Costs: Definitions and descriptions Program expenses • Supporting services expenses • Management and general expenses • F Fundraising expenses d i i • 18
Allocating Costs: Definitions and descriptions (Cont.) • Program expenses: Expenses related to activities carried out to fulfill the mission; include both direct and indirect expenses • Reporting by functional classification includes reporting by b f l l f l d b major program and supporting expenses • Need to determine the organization’s major programs • R Requires judgment and knowledge of the organization i j d t d k l d f th i ti 19
Allocating Costs: Definitions and descriptions (Cont.) • Considerations in determining major programs • • Report as a separate program if revenues or expenses are Report as a separate program if revenues or expenses are > 10% • Separately report programs making up (in total) at least 75% 75% of total program expenses f t t l • Is discrete program financial info available? • Does management separately evaluate? g p y • Form 990 requires disclosure/description of three largest programs • M More than 10 may become overly detailed th 10 b l d t il d 20
Allocating Costs: Definitions and descriptions (Cont.) • Supporting services expenses • Management and general • Fundraising • M Membership development b hi d l 21
Allocating Costs: Definitions and descriptions (Cont.) • Management and general expenses • • Relate to the overall direction of the organization Relate to the overall direction of the organization • Although indispensible to the organization, they are not identifiable with a specific program and are not a fundraising activity. • Include oversight , business management, record keeping, budgeting, financing 22
Recommend
More recommend
