mining nonfinancial information from financial statements william b. ford, cpa director, nonprofit...
DESCRIPTION
William B. Ford, CPA Director, Nonprofit Advisory & Assurance Services Accounting & Auditing Director With more than 30 years of experience providing auditing, accounting and consulting services for nonprofits, Bill Ford has helped scores of organizations find ways to fulfill their missions with ever-tighter resources. He draws satisfaction from helping them maximize efficiencies so they can continue to deliver services to their communities and members. Nonprofit organizations are a significant portion of Bill’s client group, and he is uniquely qualified with regard to Government Auditing Standards, including Uniform Guidance (formerly OMB Circular A-133), and the Massachusetts Uniform Financial Report, as well as federal and state tax filings. Bill earned his Bachelor’s Degree in Accounting from Bentley College in 1980, and joined G.T. Reilly in He is a member of the Massachusetts Society of Certified Public Accountants Nonprofit Accounting & Auditing Committee. Bill understands the needs of nonprofit organizations first-hand, as he is the board treasurer for the Watertown Community Foundation. Additionally, Bill has volunteered his time as a financial analyst for United Way of Massachusetts Bay & Merrimack Valley. A devoted football fan, Bill holds season tickets for the New England Patriots and Boston College football. He also enjoys yoga and is an amateur gardener. He lives in Watertown. 2TRANSCRIPT
Mining Nonfinancial Information from Financial StatementsWilliam B. Ford, CPADirector, Nonprofit Advisory & Assurance Services
February 24, 2016
G.T. Reilly & Company is a full-service certified public accounting firm that has served the needs of nonprofit organizations for 60 years.
Our clients in the nonprofit community include: Human service agencies Private schools Education and advocacy organizations Cultural/charitable foundations
Among the services we provide to nonprofit organizations are : Financial statement audits, including audits under Government Auditing Standards &
Uniform Guidance (formerly OMB Circular A-133) Assistance with preparation of the Massachusetts UFR Management advisory services Financial and strategic planning Tax compliance and planning Human resource consulting Employee benefit plan consulting, design and implementation IT services
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Professional associations Community action and housing organizations Healthcare providers and advocacy groups Religious organizations and houses of worship
William B. Ford, CPADirector, Nonprofit Advisory & Assurance ServicesAccounting & Auditing Director
With more than 30 years of experience providing auditing, accounting and consulting services for nonprofits, Bill Ford has helped scores of organizations find ways to fulfill their missions with ever-tighter resources. He draws satisfaction from helping them maximize efficiencies so they can continue to deliver services to their communities and members.
Nonprofit organizations are a significant portion of Bill’s client group, and he is uniquely qualified with regard to Government Auditing Standards, including Uniform Guidance (formerly OMB Circular A-133), and the Massachusetts Uniform Financial Report, as well as federal and state tax filings.
Bill earned his Bachelor’s Degree in Accounting from Bentley College in 1980, and joined G.T. Reilly in 1988. He is a member of the Massachusetts Society of Certified Public Accountants Nonprofit Accounting & Auditing Committee.
Bill understands the needs of nonprofit organizations first-hand, as he is the board treasurer for the Watertown Community Foundation. Additionally, Bill has volunteered his time as a financial analyst for United Way of Massachusetts Bay & Merrimack Valley.
A devoted football fan, Bill holds season tickets for the New England Patriots and Boston College football. He also enjoys yoga and is an amateur gardener. He lives in Watertown.
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Poll Question #1
Is your role in your organization:
Finance Executive/Management Board member/officer Funder Regulatory authority
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Statement of Financial Position
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Objective: To report the assets, liabilities and net assets of organization at a particular point in time. Statement of Financial Position items:
o Assetso Liabilitieso Net Assets
Classified vs. Nonclassified Statement of Financial Positiono Distinction between ‘current’ and ‘non-current’
Statement of Financial Position
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Board Perspective
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The ‘Picture’ Summary of organization’s financial information at a particular
point in time Comparative
o A two-presentation for comparison and trend analysis Performance indicators
o Liquidity and financial strength• Cash on hand• Current ratio• Cash reserves
Statement of Activities and Changes in Net Assets
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Objective: Reports the surplus or deficiency for an organization typically for a 12-month period. Revenue and Support
o Revenues• Government contracts (federal, state, local)• Fees for service• Interest, dividends, realized and unrealized investment gains and losses
o Support• Grants• Donations• Fundraising• Special events
o Restricted vs. Unrestricted Supporto Expenseso Change in Net Assets
Statement of Activities and Changes in Net Assets
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Statement of Activities and Changes in Net Assets
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Board Perspective
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The ‘Movie’ Summary of organization’s financial data throughout the year Comparative Performance indicators
o Change in net assetso Diversity of fundingo Indication of growth or contractiono Group analysis
Statement of Functional Expenses
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Objective: Reports expenses by group by natural classification. Provides the detail of an organization’s spending.
Currently only required by voluntary, health and welfare organizations.
Statement of Functional Expenses
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Statement of Functional Expenses
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Board Perspective
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Salaries and wages Review on a comparative basis
o By group or individual programo As a percent of total expenses
Significant line items Justifiable/reasonable
o No surprises!
Statement of Cash Flows
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Objective: To convert accrual basis financial statements to the cash basis and present financial data in three separate categories. Cash flows provided by (used in) operating activities
Cash flows provided from (used in) investing activities Cash flows provided from (used in) financing activities
Other items
Statement of Cash Flows
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Board Perspective
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Cash flows from operationso Positiveo Negative
Negativeo Source of funding
• Investment activities• Financing activities
Notes to Financial Statements
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Objective: To provide supporting narratives and numeric detail disclosures to the basic financial statements Nature of operations Significant accounting policies Expanded detail for statement of financial position Other significant items
Board Perspective
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Read the Notes! Non-statement financial
informationo Leaseso Lawsuitso Uses and balances
of restricted funds
Poll Question #2
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Do you feel your organization’s board has a good understanding of the organization’s financials?
Yes No Sometimes
Schedule of Supplementary Information
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Objective: To provide financial information in a non-prescribed format that is ‘user-friendly’ to the reader. Schedule of Revenues, Support and Expenses by Program and
Supporting Services Comparative Schedule of Functional Expenses
Schedule of Supplementary Information
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Board Perspective
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If not in financial statement, request from managemento Depicts surplus or deficiency by program
• What program is making money?• What program is losing money?• Is fundraising and development sufficient
to subsidize program losses?
Poll Question #3
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Is your board currently using the organization’s financial reports effectively to address weaknesses and deficiencies?
Yes No
Thank you!
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G.T. Reilly & Company serves a wide variety of nonprofit organizations with accounting, auditing, tax and consulting services.
Please visit us on the web at www.GTReilly.com.
Contact information:
William B. Ford, CPAAccounting & Auditing DirectorDirector, Nonprofit Advisory & Assurance [email protected]
G.T. Reilly & Company424 Adams StreetMilton MA 02186617-696-8900