Blog
Employee pickup of SPDs isn’t a good idea
Many organizations have employees who become eligible for benefits during their employment. At such time, the employer must provide them with a summary plan description (SPD) of any health benefits plan (or retirement plan) covered by the Employee Retirement Income Security Act (ERISA). One commonly asked question in this situation is: Can we just put a stack of SPDs in the HR office and tell employees to come pick one up instead of furnishing the SPDs by mail or electronically? Although having a supply of SPDs available in HR isn’t necessarily a bad idea, it’s not an advisable approach
Should you revise your nonprofit’s bylaws?
Your not-for-profit has likely grown and evolved since it was founded. Have your bylaws kept pace? Bylaws are the rules and principles that define your organization — and, if you haven’t revisited them recently, they may not be as effective as they could be. Rules and procedures Typically, bylaws cover such topics as the broad charitable purpose of an organization. They also include rules about the size and function of the board; election terms and duties of directors and officers; and basic guidelines for voting, holding meetings, electing directors and appointing officers. Without being too specific, your bylaws should
AUP engagements: A middle ground between audits and consulting services
Your CPA offers a wide menu of services. An audit is a familiar type of attestation service that provides a formal opinion about whether the company’s financial statements conform to U.S. Generally Accepted Accounting Principles (GAAP). Consulting services, in contrast, provide advice or technical assistance that’s only for internal purposes. That is, lenders and other third parties can’t rely on the findings, conclusions and recommendations presented during a consulting project. If you need a report that falls somewhere between these alternatives, consider an agreed upon procedures (AUP) engagement. Scope An AUP engagement uses procedures similar to an audit, but
Have the States Gone Too Far?
As the Wayfair decision begins to settle in and more and more States write regulations to follow with what items they feel are subject to sales tax in there state for out-of-state sellers, it appears the trend is just getting started. Employers BEWARE! The Wayfair decision has definitely changed how many employers need to keep records for sales taxation and the large new paperwork burden it is placing on them. However, what's next? Many believe the Wayfair decision will directly impact income tax filing regulations as well many more companies subject to state income tax filing obligations as well.
Fiduciary duties: What your board members need to know
Not-for-profit board members — whether compensated or not — have a fiduciary duty to the organization. Some states have laws governing the activities of nonprofit boards and other fiduciaries. But not all board members are aware of their responsibilities. To protect your nonprofit’s financial health and integrity, it’s important that you help them understand. Primary responsibilities In general, a fiduciary has three primary responsibilities: Duty of care. Board members must exercise reasonable care in overseeing the organization’s financial and operational activities. Although disengaged from day-to-day affairs, they should understand its mission, programs and structure, make informed decisions, and consult
Measuring “fair value” for financial reporting purposes
The standard for valuing certain assets and liabilities under U.S. Generally Accepted Accounting Principles (GAAP) is “fair value.” This differs from other valuation standards that may apply when valuing a security or business interest in a litigation or mergers and acquisitions (M&A) setting. FASB guidance The Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC) Topic 820, Fair Value Measurements and Disclosures , in 2006. It defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The
Does your nonprofit need a CFO?
Your not-for-profit’s ability to pursue its mission depends greatly on its financial health and integrity. If your nonprofit is growing and your executives are struggling to juggle financial responsibilities, it may be time to hire a chief financial officer (CFO). Core responsibilities Generally, the nonprofit CFO (also known as the director of finance) is a senior-level position charged with oversight of accounting and finances. He or she works closely with the executive director, finance committee and treasurer and serves as a business partner to your program heads. A CFO reports to the executive director or board of directors on
The Ever Evolving World of Sales Tax
Each year politicians at the Federal and State level are often torn between increasing taxes or cutting services. Although the Federal government has the ability to run a deficit, avoid raising taxes AND avoid cutting services, the States do not, since they must balance their budgets. In the past, most taxpayers in Wisconsin have focused their tax "complaints" on income and property taxes, since Wisconsin has been historically high on both fronts. As the global landscapes continue to evolve, we see the politicians following that lead while trying to avoid cutting services. To that end, many Wisconsin politicians have turned
How does an employee’s military leave affect 401(k) loan repayments?
When 401(k) plan participants are called to active duty, they often request to suspend their 401(k) plan loan repayments during their military leaves. Many employers may wonder whether the rules for suspending loan repayments during a military leave differ from those applicable to a regular leave of absence. Indeed, they do. Basic rules The rules for suspending loan repayments during a military leave of absence are broader and more flexible than for a regular leave of absence. For a regular leave, the maximum suspension period is one year and the entire loan must be repaid within the maximum permissible
Close-up on financial statements
There are three types of financial statements under U.S. Generally Accepted Accounting Principles (GAAP). Each one reveals different, but equally important, information about your company’s financial performance. And, together, they can be analyzed to help owners, management, lenders and investors make informed business decisions. Profit or loss The income statement shows revenue and expenses over the accounting period. A commonly used term when discussing income statements is “net income,“ which is the income remaining after all expenses (including taxes) have been paid. It’s also important to check out the company’s “gross profit.“ This is the income earned after subtracting
