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Common Financial Reporting Deficiencies (Part 1)

EisnerAmper’s Phil Bergamo, Senior Manager, and Jessica Dima, Senior, recently presented a webinar titled “Common Financial Reporting Deficiencies for Not-for-Profit Organizations.” The objective was to identify common reporting deficiencies noted in the financial statements of not-for-profits and identify resources to help attendees stay up-to-date on accounting guidance and applications.

Some common errors identified in the Statement of Financial Position were as follows:

 Common Error Proper Reporting
Restricted cash reported as unrestricted/available for current use. Amounts that should be segregated as restricted cash:
  • Cash received with donor or grant restrictions limiting their use to long-term purposes.
  • Funds required to be established and segregated in accordance with debt agreements, legal documents or other contracts.
 
Recognition of conditional promise to give where the condition has not yet been met. Conditional promises should only be recognized when the conditions of the promise to give have been satisfied.
Unrestricted, but board-designated amounts are reported as temporarily or permanently restricted. All board designated amounts should be reported as unrestricted, even if functioning as a board designated endowment.

The webinar also provided a number of resources to help not-for-profit auditors and accountants stay informed on accounting pronouncements and applications affecting not-for-profit accounting. A short list of the resources shared includes:

Brian Collins is an Audit Manager with over 10 years of public accounting experience. He performs audit, review, compilation, and tax services for a wide range of clients in various industries, including not-for-profits and automotive dealerships.

Contact Brian

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