From the category archives:

Compliance

Penalties for Late Consolidated Fiscal Reports

November 18, 2011

Do you receive payments from the New York State Office for People With Developmental Disabilities (OPWDD), Medicaid payments from the NYS Office of Mental Health (OMH), or the NYS Office of Alcoholism and Substance Abuse Services (OASAS)?

If so, you’ll want to investigate late filing penalties association with Consolidated Fiscal Reports (CFR).

In the November MP&S Nonprofit Alert from Marks Paneth & Shron, the following was reported:

The New York State Office for People With Developmental Disabilities (OPWDD) is planning to implement a 2% penalty for late submission of the Consolidated Fiscal Report (CFR).  A not-for-profit service provider’s reimbursement will be cut by 2% and the rate will be restored only upon submission of the CFR.  There will be no refund on the money lost during the overdue period.

According to the New York State Consolidated Fiscal Reporting and Claiming Manual, all service providers must submit their completed CFR to the applicable State funding agencies not later than 120 days after the end of the reporting period.  If an extension is submitted, the due date is not later than 150 days after the end of the reporting period.  An extension request must be electronically submitted.  For example, a June 30, 2011 CFR, with an extension is due on December 1, 2011.  Late submissions of a CFR, including all certifications and attachments, may result in a sanction or penalty being imposed against the service provider.

Providers who receive Medicaid payments from the NYS Office of Mental Health (OMH) relative to certified program services can have their payments temporarily withheld up to 20% for the first month under sanction.  Such reductions will be increased in each subsequent month by 10% until the CFR is submitted.  Providers who receive payments under contract with OMH can have their entire quarterly payments withheld until a satisfactory submission has been received.

Similarly, the NYS Office of Alcoholism and Substance Abuse Services (OASAS) can impose sanctions for late filing of the CFR as prescribed in OASAS Local Services Bulletin 2001-05.

The current regulations allow OPWDD to withhold up to 5% of the revenue in certain programs; however, it was not strictly enforced.  Now OPWDD is planning to impose a sanction of 2% on all programs.  Originally, OPWDD planned to implement a 10% cash hold-back policy on all programs but that proposal was rejected.

New York Nonprofits: Are You In Compliance?

April 16, 2011

In September, the New York Prudent Management of Institutional Funds Act (NYPMIFA) went into effect for New York nonprofits.  Since then, the Office of the Attorney General has published information and guidelines in a booklet available for free titled “A Practical Guide to the New York Prudent Management of Institutional Funds Act.”

As a professional knowledge firm that serves over 2,000 nonprofit organizations, we understand that compliance is a critical area of concern for nonprofits.   If you need help with compliance, JMT Consulting Group can help.  We are an email info@jmtconsulting.com or phone call 888-368-2463 away.

Is Your Nonprofit Ready for New Tax Form Filing Rules?

November 23, 2010

If you pay a vendor more than $600 over the course of the year, you will need to submit a form 1099 Misc.  This is a requirement that came when Congress passed the 2010 Patient Protection and Affordable Care Act.  This will go into effect January 1, 2012, however now is the time to begin looking at your systems and processes and begin to prepare.

In her article Take Time Now to Prepare for New Tax Form Filings Rules, Irene Wachsler gives some great examples of some of the things you will eventually have to report on, she also makes three suggestions of what you should start doing right now:  Start to collect W-9s from everyone; write checks to pay your vendors; and keep track of each vendor for reimbursement of all employee expenses.

Speaking of 1099s – if you use Sage MIP Fund Accounting, we’re having a training session on MIP 1099 Tax Reporting on December 15.

 

 

Commercial or Fund Accounting Software: Which is Best Suited for Your Nonprofit?

October 3, 2010

It’s the ultimate in convenience, or so it seems at first.  Buying commercial accounting software can seem like the perfect solution since it is used by so many for profit organizations.

However, numerous nonprofits find themselves in need of features that commercial software cannot offer.  Because nonprofits can have extremely specific accounting and reporting needs they oftentimes move beyond their ability to efficiently use commercial products.  When that happens, a move to a fund accounting software solution is necessary.

How do you know when to make the switch?  If you use commercial software when should you upgrade to fund accounting software?  Should you buy fund accounting software right from the start?  Let’s look at three aspects of software: differences, function and training.  This comparison should give you a clear idea of what to use and why.

Differences

The primary difference between commercial software and fund accounting software are the types of tracking and reporting they offer.  Nonprofits are responsible for more types of reporting than commercial businesses are.  Therefore features such as tracking of restricted funds and their use, or separating and tracking funds for grants are not offered in commercial software packages.

Additionally, you may need the ability to track incoming monies across different time periods, easily produce reports that comply with both the Financial and Governmental Accounting Boards (FASB), and generate additional reports that verify the application and use of restricted contributions and grants.

Attempting to use a commercial program to separate, track and report on donations, grants and other contributions is like forcing a square peg into a round hole.

Function

The biggest question to consider is “Will this software perform the tasks we need it to perform?”  Look for tell-tale signs to decide if your commercial product is lacking in features.  For instance:

  • Is your staff repeatedly spending excessive amounts of time to produce reports or financial statements?
  • Is it difficult to maintain budgets, track restrictions for contributions or reconcile balances?
  • Is lack of security an issue?
  • Do you have grants for which you need to track and reports expenses?
  • Do you need to track and account for your fundraising activities?
  • Do you or your staff members constantly make the statement “I wish this software would…?”

If so, chances are you have outgrown the functionality of commercial products.

Training

Other than an integrated user’s manual and help index, some accounting products don’t offer training tailored to your organization’s needs.  Most nonprofits would find it beneficial to receive customized training in order to use the accounting package to its fullest potential.

Before making a decision, verify that your fund accounting software vendor offers multiple options like in-person, web-based and classroom training, for example.  It is also important to ask what types of support are available for the software as well as the cost (if any) for updates.

Other things to consider?

Confirm that whichever product you choose is FASB compliant.  You’ll also want to ensure your accountant is comfortable with your decision and that she or he is capable of operating within the software you plan to use.

Before making any decision, consider what accounting functions you go through in a typical day.  Outline any special needs you will have in the future due to downsizing, expansion, grants, etc.  Write down you questions and training requirements then compare the commercial and fund accounting products you’re evaluating to find the one that is best suited for your needs.

New York Nonprofits Now Subject to Uniform Prudent Management of Institutional Funds Act

September 26, 2010

On September 17, 2010, New York became the 46th state to enact the Uniform Prudent Management of Institutional Funds Act (UPMIFA) when Governor David Paterson signed A. 7907-D/S.7448-C into law.  If your organization’s fiscal year ends September 30, you will have to act quickly to ensure compliance as the law took effect immediately.

Accounting Management Solutions summarized the impact on New York nonprofits:

“Overall, UPMIFA requires a reclassification of unspent earnings from unrestricted to temporarily restricted, which can have a major impact on financial statements and debt coverage ratio.  In addition, the biggest difference between NYPMIFA and other UPMIFA legislation is that NYPMIFA requires organizations to develop written policies.  Nonprofit groups, foundations and charitable trusts will be required to adhere to new regulations, creating written financial policies and communicating with all donors with regard to tapping an underwater endowment.  Since the law takes effect immediately, organizations whose fiscal year ends on September 30, 2010 need to act now in order to be in compliance with NYPMIFA.”

Background on the Rules can be found at The Nonprofit Times.