The Initial Electronic Version of Our Non-Profit Newsletter

This is our initial "Non-Profit E-News Update" which replaces the "Smith Schafer Non-Profit Update" we have issued since 1998.

We are excited about this new format as it should help us keep our non-profit clients informed regarding current accounting and administrative issues as they arise.

Hopefully you will find this to be a useful tool in the fiscal management of your Organization. Please contact me with any comments or suggestions or if any additional contacts within your Organization would like to be included on our email list (t.wente@smithschafer.com).

Tom Wente,

Principal

Rochester, Minnesota

New IRS Form 990 Applies to More Non-Profit Organizations in 2009

More non-profits will be required to file the new expanded IRS Form 990 in 2009. The Organizations that are required to file the new form for 2009 and 2010 are as follows:

2009 - Organizations with gross receipts exceeding $500,000 and total assets exceeding $1,250,000.

2010 - Organizations with gross receipts exceeding $200,000 and total assets exceeding $500,000.

American Recovery and Reinvestment Act of 2009 Significantly Impacts Single Audits

The American Recovery and Reinvestment Act of 2009 (ARRA) provided almost $800 billion in stimulus funds, some of which will pass through state governments to subrecipients such as local governments or non-profit organizations in the form of grants, loans, loan guarantees, interest rate subsidies, and other types of assistance.

ARRA included specific language related to the Single Audits performed by an Organization's independent auditors. Some of the changes impacting future single audits are:

CFDA Numbers Federal agencies are required to specifically identify ARRA awards, even if the funding is provided under an existing CFDA number. New CFDA numbers will be used for (a) new ARRA programs and (b) existing programs with significant changes in compliance requirements.

Clusters of Programs The OMB plans to update the clusters of programs described in the Compliance Supplement to address ARRA awards because they share common compliance requirements with existing programs even though they will have new ARRA CFDA numbers.

Major Program Determination Federal agencies are required to perform a risk analysis of all ARRA programs and request OMB to designate any high risk programs as major programs (which would require additonal auditing procedures).

Award Terms and Conditions and Compliance Requirements Federal agencies must provide information about the requirements for ARRA awards in the award terms and conditions. Pass-through entities are responsible for informing subrecipients of the requirements.

Schedule of Expenditures of Federal Awards Recipients (and subrecipients) must separately track ARRA funds from the time they are received. Expenditures of ARRA funds have to be reported separately on the schedule of expenditures of federal awards.