Employee Benefits Plans: Preparing for Your First Audit

The federal Employee Retirement Income Security Act (ERISA) generally requires employee benefit Plans (EBPs) with more than 100 participants who have account balances at the beginning of the Plan year to undergo an independent audit. Here is what you need to know if you are facing your first EBP audit. The Basic Requirement Plan Sponsors […]

The Great Regret Urges Plan Sponsors To Review Their Benefits Lineup

We have all heard of the “Great Resignation,” a term coined to describe the millions of employees that left their jobs since the onset of the COVID-19 pandemic in 2020. Many employees who moved on to another job are having second thoughts about their decision — a new phenomenon that is being referred to as […]

Data Analytics: Using Technology To Meet Your Organization’s Goals

In today’s technologically advanced world, data rules. But simply having highly relevant information will be of little use if your board of directors, management and staff do not know what to do with it. So how can your organization harness the power of data? You can use it in day-to-day decision-making and strategic planning. You […]

Plan Sponsor Alert: Revisiting De-Risking Options

Thanks to better returns and an uptick in discount rates used to value plan liabilities, defined benefit plans’ funding statuses have improved to some of their highest levels since the Great Recession. Many plan sponsors are eager to preserve these gains and want to take risk off their balance sheet by implementing “de-risking strategies.” Because […]

Is Your Plan’s Matching Contribution Formula Delivering Results?

Offering matching contributions under a 401(k) plan can serve two purposes: 1) Provide a valuable benefit to your employees; and 2) Encourage plan participants to play a meaningful role in preparing for their own retirements. The trick is to do both in a way that is affordable for both you and your employees. How can […]

Do Not Let Fraud Prevention Slide

The ongoing pandemic has strained many not-for-profit organizations, forcing them to cut corners to survive. But fraud prevention is one critical area that organizations cannot afford to overlook. If anything, antifraud measures are more important now than ever. Vulnerabilities of not-for-profit organizations The Association of Certified Fraud Examiners’ (ACFE) recent study, Report to the Nations: […]

Is Your Cybersecurity Policy Up to the Task?

Do you have a robust cybersecurity policy to keep your retirement plan safe from cybercriminals? The 2020 Cyber Security Risk Report by Aon finds that, “organizations often have a false sense of confidence regarding data security, particularly when it comes to risks potentially posed by third-party service providers.” The ever-growing magnitude of the threat and […]

Questions and Concerns Board Members Should Consider in the Current Environment – Fiduciary Responsibilities and Investments

In my recent Not-For-Profit newsletter, Questions and Concerns Board Members Should Consider in the Current Environment, I shared some items and questions that not-for-profit organizations should consider in 2021. We then shared Questions and Concerns Board Members Should Consider in the Current Environment – Cybersecurity, a blog from Mishaal Khan, Cybersecurity Practice Leader and Solution […]

Questions and Concerns Board Members Should Consider in the Current Environment – Cybersecurity

In my recent Not-For-Profit newsletter, Questions and Concerns Board Members Should Consider in the Current Environment, I shared some items and questions that not-for-profit organizations should consider in 2021. This blog focuses on one area that has, and continues to be, a prime area of concern for all organizations — cybersecurity. Mishaal Khan, Cybersecurity Practice […]

Should You Establish a Retirement Plan Governance Committee?

Retirement plan governance is the system through which key decisions are made about strategy and operations, including plan design, administration and investment choices. Typically, at the core of plan governance is an official plan governance committee. Although the Department of Labor (DOL) and IRS do not require a plan to have a plan governance committee, […]

The CARES Act Provides Some Relief to Not-For-Profit Organizations

Much of the economy is reeling from the novel coronavirus (COVID-19) pandemic, and the not-for-profit sector is not immune from the effects. Fortunately, Congress recognized this need when drafting the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The law, enacted in late March 2020, contains several provisions that might help distressed not-for-profit organizations […]

SECURE Act 101: New Law Changes Plan Policies, Creates Design Options

Defined contribution plan sponsors have some important decisions to make and opportunities to consider in the wake of the enactment of the Setting Every Community Up for Retirement Enhancement (SECURE) Act at the end of 2019. The Act is intended to boost retirement financial security on several fronts. Offering safe harbor for annuities The SECURE […]

New Exempt Status Salary Threshold Could Impact 401(k) Plan Costs

If your 401(k) plan employer contribution formula for hourly employees includes overtime pay, your plan costs may increase next year — along with your overtime pay outlays. That is because the U.S. Department of Labor (DOL) issued a final ruling that increases the salary threshold for overtime pay eligibility.

2018 Yellow Book and New Independence Rules for Auditors

Many organizations are subject to reporting under generally accepted government auditing standards, also known as the Yellow Book. This reporting applies to all organizations that are subject to Single Audit reporting, HUD audits, most charter/contract schools and many social service agencies that receive state funding. The 2018 Yellow Book was recently updated and includes a […]

Proposed IRS Regulations Liberalize Rules for Hardship Withdrawals

How hard should a hardship be to justify a hardship withdrawal from a 401(k) plan?  Proposed IRS regulations could enable eligible plan participants “to access their money more quickly with a minimum of red tape,” according to the IRS. Below summarizes several key provisions of the proposed regulations. The status quo To provide context for […]

Identity Theft Puts Plan Participants and Sponsors at Risk

News of commercial database hackings involving personal information seems all too common. While many of these stories focus on bank and credit card accounts, many plan sponsors and participants do not realize that 401(k) plan assets may also be at risk.

ASU 2016-14: Liquidity and Availability Disclosures

In an effort to provide more useful information to donors, grantors, creditors and other users of the financial statements, the Financial Accounting Standards Board (FASB) released ASU 2016-14 Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities (the ASU), which is effective for not-for-profit organizations with a calendar year-end of December 31, 2018 or a fiscal year-end in 2019. While the ASU focuses on five main areas that are changing, this article will highlight just one: liquidity and availability disclosure.

Target Date Funds – Confusion?

The proliferation of target date fund (TDF) varieties can confuse many plan sponsors. One survey found that while nearly two-thirds of plan sponsors consider investment performance the most important selection criterion when choosing a TDF for their participants, more than half are not confident that they have a solid basis for benchmarking the TDFs against […]

All Charitable Deductions are Not Created Equal

With the end of the year approaching, your supporters may be thinking about making charitable contributions they can deduct on their 2017 federal tax returns. Here is some information your supporters may find helpful when thinking about different types of donations, some of which are not tax deductible at all.

Avoid Litigation with Attention to Common ‘Red Flags’

Any size retirement plan can run into serious trouble when sponsors are not careful. With some planning, however, a qualified retirement plan can avoid ERISA litigation. This article reviews some of the most common red flags leading to litigation and reminds plan sponsors of the importance of regularly reviewing fees and expenses.

Eight Tips for Writing, or Revising, a Whistleblower Policy

Whistleblower policies encourage staff, volunteers and others to discreetly provide credible information on concerns of illegal practices or violations of organizational policies. They protect individuals who risk their careers to report illegal or unethical practices. This article offers eight suggestions for writing or refining an organization’s whistleblower policy.

Let’s Play Ball! It’s Time to Step Up to the Plate to Review Fiduciary Status and Fiduciary Duties

Are you a fiduciary for your company or organization’s retirement plan? If yes, you may find it challenging to “cover all the bases” in understanding your fiduciary duties. Some common duties that get overlooked include failing to identify the plan’s fiduciaries and insufficiently training fiduciaries on their responsibilities.

How to “Score an A” on Your Board Meeting Minutes

Minutes of your board’s meetings may seem like a mere formality; however they are much more than that. Board meeting minutes reflect on your board of directors and your organization’s actions. Savvy not-for-profit organizations do not settle for a passing grade when creating these documents, they go for the “top of the class.” This article discusses some best practices for developing minutes that will document your meetings clearly and accurately.

Give Employees More Bang for Their Buck: How to More Effectively Use Default Deferral Rates and Auto-Escalation Clauses

According to a Plan Sponsor Council of America survey, only 46% of defined contribution plans automatically enroll participants. The most common default deferral rate for those that do is 3%. Are plan sponsors telling employees that they can afford to retire by saving just 3% of their salary each year? Some participants may think so. This article discusses how to use default deferral rates and auto-escalation clauses to boost participants’ retirement savings.

Cybercrime: Get Ready to Fight Back

Cyber thieves do not physically grab keys or force an entry into a business, but the damage they do to an organization can be just as consequential. If a not-for-profit organization becomes the victim of cybercrime, it could suffer a blow to its reputation that is impossible to overcome. So it is important that a not-for-profit organization assess its risks of data breaches carefully and implement effective security policies and procedures. This article discusses some key considerations.

401(k) Plan Management vs. Fiduciary Duties

Fees charged by record keepers and asset managers for 401(k) plan services paid from plan assets have come under greater scrutiny in recent years. The Department of Labor (DOL) has released fee disclosure regulations, and courts have reviewed high-profile litigation over the issue. The topic is not likely to settle down anytime soon.

Understanding Bonds: What Do Your Plan Participants Know?

Bonds have a place in retirement portfolios. However, recent research suggests that many 401(k) plan participants may have some misperceptions about what that place is — and how bonds perform under various market conditions. This blog reviews the research and suggests that taking the pulse of your 401(k) participants might be a prudent thing to do.

Wrapping up a Gift Acceptance Policy

Having a gift acceptance policy to refer to and using it to decide if you should accept a donation is important to your organization’s financial position as well as to its reputation. This blog discusses the elements of a good gift acceptance policy and the particular considerations that may be involved with different kinds of gifts.

The Investment Manager: Finding the Right Fish in the Sea

It is a challenge for a not-for-profit organization to find the best person to make prudent investments while meeting investment goals. This article offers guidance regarding where to look for qualified candidates, what questions to ask them and how they should be compensated.

Interest Rates Must Be More Than Interesting

Plan loans are governed by many IRS and Department of Labor (DOL) rules and regulations. Even though they are an optional plan feature, if you choose to offer plan loans to your participants, your plan document must comply with the current laws, including the interest rate charged on these loans. Some plan documents stipulate an interest rate, while others do not. This short article discusses the rules pertaining to plan loan interest rates.

Let’s Go For A Ride

Some of you may remember an amusement park called Riverview Park, which operated in Chicago from 1904 to 1967. Although it was before my time, I remember my parents telling me about the fun times they had at Riverview Park riding The Bobs wooden roller coaster or the Pair-O-Chutes. Although you may not get the same adrenaline rush that you would zipping down the tracks of a roller coaster or slowly rising above the horizon atop a ferris wheel, reading and understanding your organization’s financial statements should be no less “fun.”

The Role of the Audit Committee

Since the Sarbanes-Oxley Act was passed in 2002 and the Form 990 was redesigned in 2008, there has been an increased focus on the importance of corporate governance within not-for-profit organizations. A not-for-profit’s board of directors is charged with oversight of the organization’s governance and fiscal accountability. A strong audit committee can assist the board in their oversight of these areas.

Why Preparing for Your Annual Not-For-Profit Audit is Like Planning a BBQ

With the Cubs and White Sox playing ball, kids looking forward to summer break and the weather warming up outside, we know that BBQ season has arrived. Summer is also the time when most not-for-profit organizations begin planning for their annual audits. In the spirit of summer, this blog is devoted to two of my favorite topics and the similarities that they share.

Cover-ups and Whistleblowers. Oh, My!

The Sarbanes-Oxley Act of 2002 was enacted on July 30, 2002, less than one year after the first announcement of problems at Enron.

The Act applies to “Issuers”, namely publicly-traded companies, as defined in the SEC Act of 1934. However, the Act includes two provisions that are applicable to all corporate entities, including not-for-profit organizations: document retention and destruction and whistleblower protection.

The Health Care Tax Credit is Nothing to Sneeze At

Has your not-for profit organization taken advantage of the new health care tax credit? If not, you may be missing out on an opportunity to keep your organizations employees and your bottom line healthy.

Under the Affordable Care Act that was enacted on March 23, 2010, a new small business health care tax credit is now available to both small businesses as well as small tax-exempt organizations and is targeted to those employing low and moderate-income workers. The credit is designed to encourage small employers to offer health insurance coverage for the first time or to maintain coverage that they already provide.

Not-For-Profit Group Newsletter – Winter 2024

ORBA’s Not-For-Profit Group’s 2024 Winter Newsletter covers new resources for not-for-profit organizations, including AI tools, and provides insight into what factors a not-for-profit should consider before taking out a loan.

Not-For-Profit Group Newsletter – Spring 2023

ORBA’s Not-For-Profit Group’s 2023 Spring Newsletter highlights what steps not-for-profit organizations should take in order to prepare for a possible ERC audit and reviews what factors they should consider once their board meets the state’s size requirement.

Not-For-Profit Group Newsletter – Winter 2021

Our Not-For-Profit Group Newsletter provides a series of questions designed to assist board members in the execution of their oversight roles and covers the Employee Retention Credit.

Not-For-Profit Group Newsletter – Fall 2018

Our Not-For-Profit Group’s Fall Newsletter discusses tax liabilities for volunteers, as well as tips for avoiding unrelated business income tax for your organization.

Not-For-Profit Group Newsletter – Spring 2017

ORBA’s Not-For-Profit Group Newsletter is a quarterly publication focused on effective not-for-profit organization management. The Spring 2017 issue includes two articles: “Using Audit Techniques Can Help You Shape Your Future” and “Newsbits: Spring 2017.’”

Not-For-Profit Group Newsletter — Winter 2016

ORBA’s Not-For-Profit Group Newsletter is a quarterly publication focused on effective not-for-profit organization management. The Winter 2016 issue includes two articles: “Corporate Sponsorship Money: Is It Taxable?” and “Time to ‘Go to School’ Regarding the Use of Credit Cards.’”

Not-For-Profit Group Newsletter – Spring 2014

The Affordable Care Act’s (ACA’s) shared-responsibility provision, commonly referred to as “play or pay” — requiring that “large” employers offer their employees affordable health insurance or pay a penalty — has been delayed until 2015. But that means that now is the time for not-for-profit organizations to determine what it will mean for their bottom line. This article explains who qualifies as a large employer and how “affordable” is defined. A Sidebar discusses how smaller not-for-profit organizations can qualify for the Small Business Health Care Tax Credit.

Illinois Office of the Attorney General Clarifies Revised Reporting Requirements

The Illinois Office of the Attorney General has provided additional information on recent amendments to the Solicitation for Charity Act that will be effective January 1, 2024. According to the Office, the new requirements will apply to annual reports that have an initial due date after the January 1, 2024 effective date.

Single Audit Extension

On March 19, 2021 the Office of Management and Budget (OMB) issued Memorandum M-21-20 that includes a six-month extension (beyond the normal due date) for single audit submissions of organizations with fiscal year-ends through June 30, 2021. The extension applies to organizations that have not yet submitted their single audit submission to the Federal Audit Clearinghouse as of March 19, 2021.

Grants for Shuttered Venue Operators

The Consolidated Appropriations Act of 2021 (the Act), signed into law on December 27, 2020, includes $15 billion for Grants for Shuttered Venue Operators.

Accounting for PPP Loans

The Coronavirus Aid, Relief, and Economic Security (CARES) Act created the Paycheck Protection Program (PPP) to provide eligible entities, including small businesses and not-for-profit (NFP) organizations, with liquidity to support their operations and to keep their employees paid.  PPP loans may be forgiven, in whole or in part, if certain conditions are satisfied including spending the PPP funds on qualifying expenses and maintaining specified levels of payroll and employment.

OMB Revisions to Single Audit Submission Extensions and Other Updates

In a memorandum dated June 18, 2020, the U.S. Office of Management and Budget (OMB) revised and reversed their flexibility on Single Audit submission extensions.

Federal Single Audit and Illinois’ GATA Deadlines Extended

In a memorandum from the U.S. Office of Management and Budget (OMB) on March 19, 2020, OMB provided short-term relief to recipients affected by COVID-19. The relief provisions are related to various administrative, financial management and audit requirements under the Uniform Guidance.

Financial Relief Programs and Resources Available to Not-For-Profit Organizations

Although we all are facing major changes and challenges in our school, work and homes caused by the spread of COVID-19, it is not-for-profit (NFP) organizations that are often on the “front lines,” working with our youngest, oldest and most vulnerable populations. Fortunately, there have been significant responses from our state, local and federal governments in terms of financial support.

How the Tax Cuts and Jobs Act Provisions Impact Not-For-Profits

The Tax Cuts and Jobs Act has several provisions that may affect your not-for-profit organization. Major changes regarding UBIT, excise taxes and the impact on donor community are listed below:

Changes to Not-for-Profit Financial Reporting

On August 18, 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-14 (ASU 2016-14) on Presentation of Financial Statements of Not-for-Profit Entities. ASU 2016-14 (the Update) represents the most significant changes to not-for-profit financial reporting since 1993.

FASB Proposes Accounting Standards Update

On April 22, 2015, the Financial Accounting Standards Board (FASB) issued a proposed Accounting Standards Update (ASU) entitled Not-for-Profit Entities (Topic 958) and Health Care Entities (Topic 954): Presentation of Financial Statements of Not-for-Profit Entities.

BenefitsLink

Jim Quaid‘s blog, “Proposed IRS Regulations Liberalize Rules for Hardship Withdrawals,” was included in the BenefitsLink Retirement Plan Newsletter.

Crain’s Chicago Business

ORBA’s Jim Quaid was quoted in the Nov. 26 issue of Crain’s Chicago Business, in an article titled “Rating the Rater: How Accurate is Charity Navigator?” Jim provided his insight on Charity Navigator, a website that rates not-for-profit organizations on their financial performance, donor dollar allocation and other criteria.

Crain’s Chicago Business

ORBA’s Jim Quaid was quoted in the Nov. 16 issue of Crain’s Chicago Business, in an article titled “IRS audits Navy Pier.” Jim provided his insight on the matter of business income of not-for-profit organizations as it relates to the IRS’ audit of the not-for-profit organization that manages Navy Pier.