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EisnerAmper Blog

Not-for-Profit Trends and Tips Blog

PA Auditor General Issues Special Report Regarding Potential Lost Revenue from Tax Exempt Properties

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January 21, 2015 

Collins_BrianBy Brian Collins, CPA


In December, Pennsylvania’s Auditor General Eugene DePasquale released a special report on property tax exemptions that might be costing local municipalities, counties and school districts billions of dollars a year.  The Pennsylvania Department of the Auditor General wrote the report in an effort to provide taxpayers with data on the potential tax revenue from the properties that are currently exempt from property taxes.

The special report found that more than $1.5 billion in property tax revenue is potentially lost in the 10-county sample examined for the report.  The report reflects potential property tax liability in the county, municipality and school district where each property is located.

The special report also provides a background regarding the ongoing tug-of-war between the Pennsylvania General Assembly and the Pennsylvania Supreme Court to define a “purely public charity.”  When an organization is defined as a purely public charity they are exempt from property taxes at all levels, including at the county, municipal, and school district levels.  Currently, as defined by the Pennsylvania Supreme Court, organization must meet all five factors of the “HUP Test” (see Note 1) in order to be considered a purely public charity.  However, the Pennsylvania General Assembly at this time is attempting to pass a constitutional amendment to give the Pennsylvania legislature the sole authority to define a purely public charity.

The Auditor General report concludes that, although the debate over how purely public charity is defined is ongoing, taxpayers, local government, school districts, and charitable institutions themselves should all have a say in the debate on how a purely public charity is defined.

Click here for the PA Auditor General’s “Review of Potential Lost Revenue Due to Property Tax Exemptions” report.

Note 1 - The five factors of the HUP Test are the following:

  1. advances a charitable purpose
  2. donates or renders gratuitously a substantial portion of its services
  3.  benefits a substantial and indefinite class of persons who are legitimate subjects of charity
  4. relieves the government of some of its burden
  5. operates entirely free from private profit motive.

New Legislation Amending PA Form BCO-10 Due Date

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November 25, 2014

By Brian Collins, CPA


Collins_BrianOn October 14, 2014, Governor Corbett signed House Bill No. 359 into law, changing the due dates for certain fundraising registrations required under Pennsylvania law.  The new legislation will go into effect on December 13, 2014 and effects not-for-profit organizations that are required to submit the Charitable Organization Registration Statement – Form BCO-10.  The legislation makes the due dates for filing annual registration statements, such as Form BCO-10, with the Pennsylvania Bureau of Corporations and Charitable Organizations consistent with the due dates for filing Form 990 Returns with the IRS. 

Social Media Policy for Not-for-Profit Organizations

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November 12, 2014

Social media can be a powerful tool for not-for-profits in ‘sharing their message,’ whether they’re trying to build brand awareness, raise funds, or increase engagement. However, as the saying goes, with great power comes great responsibility. Having an effective social media policy can go a long way toward achieving goals and protecting an organization from legal or reputational risks. Amy MacFadyen and Stefanie Franovic, two professionals from EisnerAmper’s Not-for-Profit Services Practice, have written a series of articles developed to help not-for-profits effectively harness the power of social media. Find out about creating your social media policy, and don’t forget to check back for more in the coming weeks.

Nonprofit Organizations Event Broadcast November 5th

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October 31, 2014

By Kristen Lewis

EisnerAmper Partner Julie Floch is one of the co-chairs for a Practising Law Institute event entitled Nonprofit Organizations 2014: Governance, Form 990 Reporting, and Compensation Issues. The program will provide insights on the developments impacting nonprofit organizations today. The session will be hosted live as well as broadcast via webcast on November 5, 2014 from 9:00 am – 12:15 pm ET. Attendees can earn CLE, CPE and CPD credit. To learn more and register, please visit the event website.

Measuring the Impact of Your Social Media Campaigns

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October 28, 2015

 

By Amy MacFadyen, CPA and Stefanie Franovic

Franovic, StefanieMacFadyen_AmyNot-for-profits face significant challenges in building brand awareness, raising funds, and increasing engagement—and social media can have a significant impact in helping to achieve these goals. But, like any other business process, social media takes commitment, planning, and the correct tools, as well as the ability to measure the impact of a campaign.

Two of our professionals, Amy MacFadyen and Stefanie Franovic, have written a series of articles developed to help not-for-profits effectively harness the power of social media. Read the first post here and check back over the next few weeks for more.

City of Philadelphia -- OCDEL Rescinds Requirement Regarding Audits

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October 2, 2014

By Brian Collins, CPA


Collins_BrianThe City of Philadelphia Department of Behavioral Health (DBH) and Intellectual Disability Services (IDS) Office of Child Development and Early Learning (OCDEL) issued Announcement EI-2010 #01 on September 25, 2014, which was addressed to executive and fiscal directors of all agencies participating in the Early Intervention Program (EIP).  The announcement stated that, effective for fiscal year ending June 30, 2014, OCDEL had rescinded requirements for EIP fee-for-service vendors to provide a Single Audit, Yellow Book, or Compliance Attestation.  Accordingly, DBH/IDS audit requirements for EIP fee-for-service providers were rescinded as well.  This announcement pertains only to agencies that provide direct services whose reimbursements are based purely on a fee schedule.

Five BASIC Steps to the Truth (Part 2 of 2)

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September 25, 2014

 

By Brian Collins, CPA


Collins_BrianAt the recent American Institute of Certified Public Accountants (AICPA) Not-for-Profit-Industry Conference in Washington, D.C., Nancy Young, of accounting firm Moss Adams, gave a presentation on “Fraud: Spotting the Liar” which discussed steps for obtaining the truth from an untruthful suspect who may be perpetrating a fraud.

In Part 1 of this blog series, we discussed the nine clues to spot a liar that Young shared with us.  Now we will explore Young’s Five BASIC steps to the truth, also shared during her presentation.  As opposed to “Nine clues to deceit” that rely on an individual’s expressions and body language, five steps to the truth can be used by an interrogator to divulge the truth when speaking to a suspect believed to have committed a fraudulent act.

The 5 BASIC steps to the truth are:

  • Baseline Behavior – When sitting down with a suspect whom during an inquiry about a possible fraud, you want to get a feeling for their normal mannerisms and speech before you ask probing questions related to the possible fraud.  You should start with basic questions such as “How long have you been with the organization?” or “What are your duties within the organization?  While asking these questions, observe the suspect’s body language and speech pattern and compare to the suspect’s reaction when asking more probing questions.  These questions can also help put the suspect at ease and help give you a feel for their baseline behavior.
  • Ask Open-Ended Questions – You want to go into the discussion asking questions that help you get to the truth.  You don’t want to receive one word responses to your questions.  Open-ended  questioning engages people to tell their story through a conversation. You are more likely to find out what you want to know rather than receiving “yes and no” responses.
  • Study the Clusters – During a conversation, watch the suspect’s facial, behavioral, and verbal clues.  Also look for when there are inconsistencies between verbal and nonverbal behavior, the nonverbal is generally the more accurate.
  • Intuit the Gaps – Young recommends being aware of gaps in the suspect’s statements, logic, behavior, and emotion.  It may be helpful to have two people conduct an interrogation so that one person can monitor gaps in the suspect’s statements and logic and the other can look for gaps in the suspect’s behavior and emotion.
  • Confirm – A suspect’s story should be validated and revalidated.  This can be done by asking the same fact seeking question repeatedly but differently.  Young recommends having the suspect repeat details of their actions backwards to see if they line up with their first report of their story.

It is important to note these “Nine clues to deceit” and ”Five BASIC steps to the truth” are not only useful when trying to detect fraud in the workplace, but they can also be useful at home when trying to  figure out if your kids did their homework.

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