EisnerAmper Blog

Not-for-Profit Trends and Tips Blog

Risk Management Steps to Consider When Using Volunteers

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September 23, 2016

It is fairly straightforward to manage the risks surrounding your volunteers. In fact, most of what’s involved simply reflects sound management practices. Consider these easily implemented steps: 

Put policies in place. Develop a risk management policy that clearly establishes proper procedures for volunteers to follow — including appropriate use of the organization's equipment, such as vehicles and computers. Ditto for a volunteer code of conduct. Have the board formally adopt the policy and then create a volunteer handbook outlining everything. 

Align skills. As you seek to fill volunteer positions, look to align the right people with the right jobs, taking into consideration each volunteer’s experience and talents. For example, you probably wouldn't want to assign a newly licensed teenager to run the van for your after-school program.  

Dig deep with background checks. Volunteers who will be working with youth, seniors or other vulnerable populations should receive more vigorous screening, including a criminal background check. 

Disclose known risks. Disclose any potential safety concerns associated with volunteer activities. You might go as far as having volunteers sign a formal waiver acknowledgment of the risks.  

Partner up. Partner new volunteers with more experienced colleagues to minimize the chance of “rookie mistakes.”  

Train them. Conduct an orientation specifically for new volunteers. Train them in their specific duties, emphasizing risk management. And make sure they understand the chain of command and who to notify about unsafe conditions or potential hazards.  

Inform them. Volunteers should also be made aware of any whistleblower policy (for reporting suspected fraud) or any other policies in place to protect the not-for-profit’s reputation. Likewise, have them sign confidentiality agreements just as you would do if they were employees or board members. 

Pull the plug on risky activities. Consider eliminating any program or activity that is excessively risky. At the very least, temporarily suspend it until a thorough risk assessment can be conducted. 

Effectively managing volunteers is really no different than managing paid staff. Treat them with respect, give them the training they need and supervise them appropriately.


EisnerAmper Presents: Not-for-Profit Industry Update

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September 16, 2016

By Brian Collins, CPA  

As a result of recent guidance from the Financial Accounting Standards Board (FASB), the landscape of not-for-profit financial statements will change in the foreseeable future.  EisnerAmper is presenting a Not-for-Profit Industry Update that will focus on two of the FASB’s recent guidance:  ASU 2016-02: Leases and ASU 2016-14: Presentation of Financial Statements of Not-for-Profit Entities. 

The objective of the update is to provide participants with an understanding of the guidance and its impact on not-for-profit organizations.  If you are interested in attending, click here to register.   2.5 CPE credits in accounting will be provided for those who attend.

Speakers: Jimmy Mo, Director, EisnerAmper LLP

        Heather Taylor, Director, EisnerAmper LLP

Date: Tuesday, October 11, 2016

Time: 8:15 am – 11:00 am

Location: EisnerAmper LLP

        One Logan Square

       130 North 18th Street, Suite 3000

       Philadelphia, PA 19103 

The key points of ASU 2016-02, Leases (Topic 842) are the following: 

  • Requires entities that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases;
  • The new standard will be effective for annual reporting periods issued for fiscal years beginning after December 15, 2019. 

The key points of ASU 2016-14, Not-for-Profit Entities (Subtopic 958): Presentation of Financial Statements of Not-for-Profit Entities are the following: 

  • Amends the presentation and disclosures to help not-for-profit organizations provide more relevant information about their resources (and the changes in those resources) to donors, grantors, creditors, and other users; and
  • Includes qualitative and quantitative requirements in the following areas: net asset classes, investment return, expenses, liquidity, availability of resources, and presentation of operating cash flow; and
  • The new standard will be effective for annual reporting periods issued for fiscal years beginning after December 15, 2017.

Are You Protecting Your “Good Standing”?

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While not-for-profits are certainly answerable to the IRS, they also have distinct reporting responsibilities at the state level. In fact, most states require not-for-profits that are organized as corporations to file annual reports or updates, including: 

  • Corporate filings,
  • Financial reports,
  • Reports on fundraising activities, and
  • Filings for state sales/use or property tax exemptions.   

Piercing the Corporate Veil 

Allowing your annual reports or tax obligations to lapse could result in your organization losing its certificate of “good standing” with the state(s) in which you are incorporated. Depending on the state, your organization could then be classified as “delinquent,” “suspended” or “dissolved.”  

Substantial restrictions may be imposed on your not-for-profit. These include not being permitted to make major changes like amending your articles of incorporation, changing your organization’s name, or merging/dissolving the corporation. Just as important, once the “corporate veil” is pierced, your not-for-profit may lose the limited liability protection that shields your officers and directors. 

File Your Forms  

Of course, each state’s law is slightly different, so you’ll need to work directly with your secretary of state or attorney general’s office. Summaries of filing requirements may also be available from your state’s association of not-for-profits. 

In practice, maintaining these annual filings doesn't require much effort. It might be as simple as confirming or updating your organization’s mailing address and the names of responsible parties. It might also include filing employment forms with the state Department of Labor if you have employees.   

As year-end approaches, take the time to ensure that all state-level filings are up to date. Also check to see if you are “doing business” in any additional jurisdictions that may require registration and reporting. 

The Final Rule – The New Overtime Regulations

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August 18, 2016

By Brian Collins, CPA  

In May 2016, the U.S. Department of Labor published its long-awaited Final Rule revising the standards needed to meet the new white collar exemptions. The Final Rule is the DOL's first major revision to white collar exemptions since 2004 and will result in millions of workers gaining eligibility for overtime. With this rule going into effect in December 2016, the DOL will virtually double the minimum monetary threshold needed for employees to qualify for exemption from overtime under the white collar exemptions.  This is a substantial change from the standards in place for the last decade and will force employers to make hard decisions on how to handle the numerous employees who will now become overtime-eligible.  

  • The Final Rule on the new overtime regulations focuses primarily on updating the salary and compensation levels needed for executive, administrative, and professional workers to be exempt. The key points of the Final Rule are the following:Sets the standard salary level at $913 per week; $47,476 annually for a full-year worker;
  • Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test from $100,000 to $134,004; and
  • Has an effective date of December 1, 2016. 

If you’d like to learn more about the new overtime regulations, EisnerAmper is offering a webinar titled “The New Overtime Regulations: How to Prepare and What it Means for Your Business.”  The objective of the webinar is to get participants to assess the risk related to the new overtime regulations and understand restricting strategies to minimize regulation impact on the workforce.  The webinar is scheduled for Wednesday, September 21, from 12:00 PM - 1:00 PM EDT.  If you are interested in participating, click here to register. 

Proposed Amendments to New York’s Not-for-Profit Corporation Law Awaiting Governor’s Signature

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By Stephen Gorombey

July 15, 2016 

In June 2016, the New York State Assembly and Senate passed bill A.10365-B/S.7913-B, amending the current Not-for-Profit Corporation Law (the “NPCL”) and the Estates, Powers and Trusts Law (the “EPTL”) to clarify and refine some of the changes to both laws effected as part of the 2013 New York Non-Profit Revitalization Act (the “NPRA”).  Modifications to this bill address related party transactions, key employees, audit committee and independent directors, formation of a committee, employees as board chairs, and conflict-of-interest and whistleblower policies.  Below is a summary of the major changes as quoted from the bill: 

Related Party Transaction  

  • Exclusions to the definition of “related party transactions” would include, (i) transactions or related party interest that has little or no value, (ii) transactions in the ordinary course of business which are similarly available to others, not normally reviewed by the Board and (iii) act as a charitable benefit to a member of the charitable class which benefit is available to those in the same class on the same terms. 

Key Employee

  • Replacing the term “key employee” with “key person” whereas this person, (i) exercises powers, or influences over the Organization similar to those of directors and officers, and (ii) manages alone or with others a substantial part of the Organization.   

Audit Committee/Independent Directors   

  • Establishing thresholds for financially interested individuals, prohibiting them from qualifying as independent directors if the amount received or paid by the corporation in any of the last three fiscal years exceeded the (i) lesser of $10,000 or 2% of the entity’s gross revenues if less than $500,000, (ii) $25,000 or 2% of revenue greater than $500,000 but less than $10,000,000 and (iii) $100,000 or 2% if gross revenues are over $10,000,000.
  • Modifications to the term “payment” when dealing with independent director would exclude payments to the entity for services rendered if the services are available to the public on the same term and are not available from another source.
  • Modifications to the term “compensation” when dealing with independent director would exclude expense for reimbursement that were reasonably incurred as a director or reasonable compensation for service as a director. 
Formation of a Committee
  • Appointment of members of the committee shall be made by the majority of the board, in the case of a board of thirty or more, the appointment shall be made by at least three-quarters of the directors present at the time of a vote, if a quorum is present.
  • Ex officio directors will be placed on certain committees of the board. 

Employees as Board Chairs  

  • Employees can serve as board chairs if the current board approves by a two-thirds vote as well as having this basis of approval in writing. 

Conflict-of-Interest and Whistleblower Policies  

  • Directors who are employees are unable to participate in any board or committee votes relating to the whistleblower policy. 
  • Any subject of the whistleblower complaint must not be present at or participate in the board or committee deliberations on this vote. If approved by the Governor, all changes would be effective within 180 days from the date of approval.





Pennsylvania Volunteer Clearance Requirements

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June 23,  2016

By Brian Collins, CPA  

In July 2015, Pennsylvania Governor Tom Wolf signed into law new state rules clarifying background check requirements for employees and volunteers overseeing children.  For volunteers age 18 or older, criminal background checks and child abuse clearances are required if the individual volunteers with a child care service activity or service responsible for a child’s welfare or having a direct volunteer contact with children. 

Examples of a volunteer responsible for the welfare of a child or having direct contact with children can include but are not limited to: 

  • Parent/Guardian chaperones for schools
  • Girl Scouts/Boy Scouts
  • Agency volunteers that help with transportation or other services (volunteer school bus driver or assistant)
  • Big Brother/Big Sisters
  • Literacy programs
  • Little League coaches 

All prospective volunteers most obtain the following certifications: 

  • Report of criminal history from the Pennsylvania State Police; and 
  • Child Abuse History certification from the Department of Human Services (Child Abuse).  

If the volunteer has not been a resident of the Pennsylvania for the entirety of the previous 10 years, a fingerprint-based federal criminal history must be obtained from the FBI. 

As of August 25, 2015, organizations were required to have background checks and clearances for all first time or new volunteers to the organization.  Existing or ongoing volunteers are not required to have background checks and clearances until July 1, 2016.  The background checks and clearances need to be renewed every 5 years. Governor Wolf has waived the fees for criminal background checks and child abuse clearances for volunteers.  FBI federal criminal history certification will cost approximately $26. 

For questions related to the clearance requirements for volunteers or the Pennsylvania Child Abuse History Clearance, contact the Child Line Verification Unit at 717-783-6211 or 877-371-5422. 


Keep KidsSafe.PA.gov

Pennsylvania Department of Human Services


FASB Update for Private Companies and Not-for-Profit Organizations Webcast

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June 15, 2016
By Brian Collins, CPA  
The Financial Accounting Standards Board is offering a webcast to provide an update on the FASB’s standards projects pertaining to private companies and not-for-profit organizations.  The webcast, In Focus: FASB Update for Private Companies and Not-for-Profit Organizations, will take place on Monday, June 20, 2016 from 1:00 to 2:40 p.m.  The webcast is being offered free of charge to those who preregister.  Participants will also be eligible for up to 2 hours of Continuing Professional Education (“CPE”) credits.
It’s expected that the FASB will discuss the Not-for-Profit Financial Reporting: Financial Statements Project.  The project objective is to reexamine existing standards for financial statements presentation by not-for-profits with a focus on:
  • Net asset classification requirements
  • Information provided in financial statements and notes about liquidity, financial performance and cash flows. 
The areas to be covered during the webcast include:
  1. Overview of FASB’s current agenda
  2. Private Company Council (“PCC”) efforts
  3. Not-for-profit update
  4. FASB simplification and Disclosure Framework projects
  5. Revenue Recognition implementation activities
  6. Update on the Financial Instruments and Leases ASUs and projects
  7. Audience question-and answer session. 
If you are unable to listen on the live webcast on June 20, an archive of the webcast will be available on the FASB website through September 17, 2016.
EisnerAmper will also be hosting a webinar on September 22, 2016 from noon to 1 pm on the latest coming out of the FASB on the Accounting Standards Update (ASU) No. 2015-230, Not-for-Profit Entities (Topic 958) and Health Care Entities (Topic 954): Presentation of Financial Statements of Not-for-Profit Entities.  Registration for the webinar will be available in August—watch for more information in this blog.
Links to register for the FASB webcast:  

EisnerAmper is an independent member of Allinial Global.
EisnerAmper is an independent member of EisnerAmper Global.