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Team Welter

Oct 14
0

The Basics of an Effective Policies and Procedures Manual for Nonprofits

By | Nonprofit | No Comments
binders on desk labeled policies and procedure

When was the last time you updated your organization’s Policies and Procedures manual?

Wait … you don’t have one?

The importance of a Policies and Procedures manual cannot be underestimated. P & P documents help your organization with communication, clarity, and compliance. Without a written manual accessible by all employees, you run the risk of confusion (at best) and legal action against your organization (at worst) for gray areas. Here’s what should go into a P&P manual and how to get started.

Dedicate Time and Effort to Creating the Manual

One thing that often gets in the way of an organization completing and issuing their Policies and Procedures manual is simply time. With budgets stretched thin and staff stretched equally as thin, it’s hard to find the right person to craft the manual or the budget to hire someone to do so.

Look within your human resources or operations teams to begin work on a Policies and Procedures manual. Employees in these departments may have worked on a similar document in a previous company and know what should be included.

If you need a consultant to create one, look for a freelancer or independent contractor who focuses on human resources documentation. Be sure to have someone knowledgeable in the legal and HR requirements included in the manual review of their work.

Start with Existing Documents

To begin the process of creating a Policies and Procedure manual, start with the existing documents at your organization. Such documents may include:

  • Vacation, sick, and paid time off
  • Holiday schedules
  • Work-related guidelines, such as use of equipment
  • Computer and IT documents
  • Others

Gather these documents into one place while you assemble your team.

Brief the Team

Brief the team working on the manual to ensure a shared understanding of why they are working on the manual, the goals, and the process. Then, create a timeline with roles and responsiblities outlined, sections each person should focus on, and deadlines.

What to Include

What to include in your organization’s Policies and Procedures manual may vary from company to company. Ask the board, trustees, staff, consultants, and legal counsel for their input.

As you develop your plan, consider the areas of risk facing your organization. Do you face legal risks from working with the public? Hosting events? Dealing with healthcare issues? Maintaining privacy and confidentiality of constituents facing challenging issues such as mental health, physical health, or other needs? Each item must be addressed in the P & P manual.

Some general areas common to most Policies & Procedures manuals include:

  • Employment procedures from hiring to voluntary or involuntary termination
  • Cash/Accounting procedures such as how to handle revenue, etc.
  • Cybersecurity, device policies, and remote work policies
  • Vacation and paid time off policies
  • Payment procedures
  • Code of Conduct
  • Internal Controls
  • Other areas specific to your organization

As you put together a Policies & Procedures manual, a few considerations:

  • Clear organization and structure of the final manual is essential. A logical sequence of information, good design with clear headlines, and a searchable index for digital documents is essential to help people find the information they need quickly.
  • Minimize heavy blocks of text. Use headlines, subheadlines, and bullet points as much as possible.
  • Better still, use graphics, if possible, to ensure full understanding of the information. Financial policies often benefit from simple workflow graphics to demonstrate how information, resources, or financial materials flow through a system.

Accessibility

Once the final manual is complete, it is a smart idea to have your legal counsel review the final draft. They may be able to suggest edits that clarify areas or add to policies to enhance clarity and compliance.

Lastly, ensure the final document is always accessible to all employees. Keep a link to the digital document prominent, such as on the HR Portal or bookmarked on a company intranet. Employees should never have to hunt for the manual that guides their work. The easier it is to find and use, the better.

Oct 07
0

Remote, Hybrid, and In-Office Work: Are Nonprofits Returning to the Office?

By | Nonprofit | No Comments
people working at table with laptops and papers in an office setting

As more and more companies are urging a return to the office, other companies, including nonprofits, struggle with the decision. It’s not a decision to be taken lightly: over 1 million people have died from COVID 19. Even with vaccinations, the risk remains for some individuals, notably the elderly and those with various health conditions. Determining if or when to require employees to return to the office requires thought and weighing the pros and cons.

Considerations for the Return to In-Person Work

There’s a long list of considerations for organizations to ponder before inviting (or requiring) staff to return to the office. While this list is not exhaustive, it should provide a basis for the ensuing discussions among the senior leadership team at your organization.

Federal, State and Local Health Department Guidelines

Consider the federal, state, and local health department guidelines for COVID-19. In some parts of the country, the pandemic has slowed, but in others, variants are emerging that again cause an increase in the number of ill and hospitalized people. Follow the guidelines for the region in consideration with other aspects of your work.

Nonprofit Constituents

It is vital to protect your constituents’ health, especially if you work with the elderly, immune compromised people, and other at-risk populations. The cost of inadvertently exposing them to COVID via an asymptotic yet infected staff person can be high. It may be better to err on the side of caution and encourage remote or hybrid work for all but essential personnel if your organization serves highly vulnerable populations.

Role within the Organization

The individual’s role within the organization is also a factor in whether mandating a return to work is in order. Does the individual provide hands-on services that can only be delivered in person? Caregivers, doctors, nurses, teachers, childcare workers, and those fulfilling similar duties must, by the nature of their work, meet with constituents and provide services from a central location.

Others, such as operations, accounting, finance, marketing, donor support, and similar roles may be well-suited to remote or hybrid work.

Ask Your Employees

Lastly, be sure to ask your employees how they feel about returning to in-person work. Listen to their concerns. Ask questions. Be prepared to explore their fears and apprehensions. Keep an open mind about how to approach such conversations without shame, blame, or pressure on anyone. Everyone wants the same thing: for the organization, its employees, and constituents to thrive. Engaging your teams in conversation about the return to work is a thoughtful and considerate way to include them in the decision.

Ensure Full Controls and Safeguards Remain in Place

No matter which model you choose—remote, hybrid, or in-person—keep all the safeguards, internal controls, and similar security measures you implemented during the pandemic. This includes:

  1. Secure cloud-based systems for accounting, finance, donor, marketing, and operational tasks
  2. Internal controls that guide the handling of all financial matters
  3. Guidelines for employees on the use of technology, whether using their own devices or taking authorized devices home for work

Among these, we cannot emphasize enough the importance of full security measures for any technology utilized by employees. Employees working remotely may log in from a relatively safe and secure home office or they may take their laptop to a café with a shared public Wi-Fi. You never know how they will be using their system and interfacing with your organization’s technology. Some access points are more vulnerable to hacking, attacks, password theft, and so on. Guidelines are important, but so too is a good cloud-based system that protects against many common cyber-attacks.

The choice of whether to return to in-person work is a personal one both for your organization and its employees. Take your time, consider the interests of all, and make the decision that’s best for you and your organization’s future.

Sep 30
0

SEFA: What You Need to Know About Federal Expenditures

By | Audit, Nonprofit | No Comments
woman looking at paperwork in front of a laptop at desk

Is your nonprofit subject to a Schedule of Expenditures of Federal Awards (SEFA)?

Over the past several years, many nonprofits availed themselves of federal grants. These funds may have been related to the pandemic relief programs or separate programs intended to support the work of nonprofits. However, the increase in federal grant programs, and the number of nonprofits tapping into them, may mean that your organization is now subject to the Single Audit. To determine whether you now complete a Single Audit, you should first complete the SEFA.

What Is SEFA?

SEFA is a separate document required as part of an audited financial statement. It may be presented in the accrual or cash-based method of accounting.

If federal grants total more than $75,000 over an organization’s fiscal year, the organization is then subject to the Single Audit. SEFA must be completed as part of the Code of Uniform Guidance.

What should be included in the SEFA? According to the guidelines, federal expenditures to be included should be based on when the federal award is considered “expended.”

Determining which funds should be included is a bit more complex than looking over your awards and determining which came from federal sources. The Uniform Guidelines categorize the following to be included:

  • Grants
  • Cost-based Contracts under Federal Acquisition Regulations (FAR)
  • Cooperative Agreements
  • Direct Appropriations

Loans and Loan Guarantees

Loans and loan guarantees should also be considered under SEFA. The basis of determining them may be found in 2 CFR Part 200.502 as:

  • Value of new loans made or received during the audit period; plus
  • Beginning of the audit period balance of loans from previous years for which the federal government imposes continuing compliance requirements; plus
  • Any interest subsidy, cash, or administrative cost allowance received

Donated Personal Protective Equipment (PPE)

If your organization received a donation of PPE, you must account for its value. Calculate the fair market value at the time of the donation and include it as a footnote on the SEFA.

Note that the amount of the donated PPE should not count towards the determination of a Single Audit.

Donated Property and Donated Food

Donated property and food follow similar guidelines to PPE. The fair market value should be calculated at the time of the donation.

Determining Receipt of Income

The receipt of income date is determined for the SEFA by assessing the date by which the income from a federal source was received or used by the program.

Endowment Funds

Endowment funds from federal sources should be reported on the SEFA at the cumulative year-end balance if the restriction applies.

Medicare and Medicaid

Check with your state’s regulations or consult with a nonprofit accountant. In many cases, Medicare and Medicaid funding is not counted towards SEFA calculations. However, state guidelines may make your state an exception to the rule.

Presenting the SEFA

To ensure clarity and transparency, it is vital to report the information on the SEFA according to the Uniform Guidelines. The Guidelines specify that organizations should list each individual federal program by federal agency, and you can group a cluster of programs together. You must also note the name of any passthrough entities and identifying numbers if the organization received funds through a passthrough entity. The same applies if your organization passes funds through to another entity—you’ll be required to provide the total amounts provided to each subrecipient.

The totals on the SEFA are required for each federal program and Assistance Listing (AL) number (formerly the Catalog of Domestic Assistance, CFDA). If the AL number is not available, organizations can use another identifying number. Each cluster reported on the SEFA must also provide a total.

Lastly, footnotes: yes, they’re required. Nonprofits must disclose the outstanding balance of any loan and loan guarantees reported on the SEFA as of the end of the audit period. Additionally, organizations are required to disclose whether they utilized the de minimis indirect recovery during the year.

AICPA provides a checklist to help guide you through the complexities of SEFA preparation.

Preparing the SEFA properly requires a great deal of time and attention to detail, not to mention nonprofit accounting expertise. We highly recommend contacting us for assistance to ensure full compliance and the best preparation of these important documents.

Sep 13
0

Nonprofit Accounting Topics to Watch

By | Accounting, Nonprofit | No Comments

One of our goals is to ensure that our clients are always up to date on the most important nonprofit accounting topics. To that end, we bring you this update on trends of note. Additional information will be shared on similar topics as it becomes available.

Financial Impacts of COVID-19

Although much of the nation has returned to “business as usual,” the effects of the global COVID-19 pandemic are still being felt throughout much of the accounting and financial world.

Financial managers, auditors, accountants, and others leading finance and accounting at nonprofits must be aware of the following.

  1. Paycheck Protection Program (PPP)

In March 2020, the government passed the CARES Act, which set aside $2 trillion in funding. This was followed by the American Rescue Plan Act in March 2021 with $1.9 trillion in funding.

Under the aegis of these programs come many sub-programs, such as the Paycheck Protection Program. Many nonprofits availed themselves of this program which enabled them to tap into the SBA’s loan program for forgivable loans. These loans could be used to cover payroll, mortgages, rent, and utilities—in other words, necessary expenses to keep a business or nonprofit afloat.

Additionally, the American Rescue Plan Act of 2021 enabled many large NFPs to apply for PPP loans for the first time. This act provided additional or extended employment-related funding and benefits, as well as provided additional federal funding for numerous nonprofit programs (e.g., childcare, arts and humanities, food assistance, and homeless prevention).

  1. Charitable Giving Threshold Changed

Also, under the CARES Act came added incentives for charitable giving. The Act raised the limitations on deductible charitable contributions of cash by individuals who itemize. It also included a $300 above-the-line deduction to individuals who do not itemize and raised the cap for deductible charitable contributions of cash by corporation. These changes were intended to increase charitable gifts to assist nonprofits.

  1. Extended Family Leave

Also, as part of the pandemic response, the Families First Coronavirus Response Act was signed into law on March 18, 2022. It temporarily expanded the Family and Medical Leave Act, permitting certain employees to take up to 12 weeks of leave for specified reasons relating to COVID-19.

  1. Grants for Venues Forced to Close

Many nonprofit organizations such as galleries, performing art venues, and similar artistic services were forced to close during the pandemic to ensure patron safety. The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act was enacted in December 2020 and provided grants to venues temporarily closed due to the pandemic. Included in this act was $15 billion in grants for museums, zoos, aquariums, and performing arts organizations who meet the criteria outlined in the grant. Entities who qualified for this grant were able to apply for 45% of their gross earned revenue (up to $10 million).

Did Your Organization Avail Itself of These Opportunities?

If your organization took advantage of these opportunities to make it through the pandemic, it is important to note how to account for such finances, whether funds need to be repaid, and so on.

Here are several resources.

About Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.