Not-for-profit Entity: Man in the Mirror, Government Entity for CAFR project: Calvert County, MD

Remember, the NFP PowerPoint presentation is due in week 7 and the corresponding NFP paper/CCR is due in week 8. See the “Project Descriptions – CAFR and NFP” in the week 1 folder. The way I would approach the presentation is to imagine that you had to describe the NFP financials to a friend who has studied accounting but who is not familiar with NFP accounting (or seen a NFP report). The week 4 discussion postings should assist you with the creation of you r projects. Possible questions to answer (in no particular order) are posted below. However, please do not limit yourself to these questions. Remember, instead of writing a paper, you can create a Citizen Centric Report. The CCR based project is formalized at the AGA website. The guidance given is for government entities however you can correlate the guidance for a NFP. Audit/preparer 1) What public accounting firm performed the audit of the entity’s financial statements? 2) Who prepared the form 990. 3) What are the balance sheet dates of the 990 and audited financials. What date did the preparer/auditor sign the reports? 4) Does the form 990 have a schedule A. Does it identify the reason for the charity status? What is the reason? Financials 1) On the audited financials, what “Program” accounted for the largest expense? Is this what you would have expected. 2) Does the organization have temporarily and permanently restricted net assets? What is the nature of these restrictions? 3) Where is this organization receiving most of its support? 4) What financial statements are included in the audit report. 5) What was the source of the accounting principals? Ratios/performance 1) What is the program expense ratio of this organization? Pro gram expense ratio = program service expenses/ total expenses. Calculate this number using both the audited financials and the form 990. Are the ratios different? Why? For most organizations this number should be at least 65%. 2) What are the proportion of resources being used for fundraising activities (fundraising expenses divided by total expenses)? 3) What are your thoughts on the financial condition of this organization? You can look at liquidity, size of its liabilities, where is the entity receiving its revenue and support, its access to other fiscal resources. Other 1) Who do you think these reports are created for? 2) What did you learn from the “Notes” of the financials? Look for and summarize key issues addressed in the “Notes” section of the NFP. 3) Check out the “Compensation of Officers” on the 990. Is this what you would have ex pected? 4) What statement (990 or audited financials) do you prefer to get information from? In other words, if a friend asked you to evaluate a not-for-profit, what would you pull up first, the 990 or the audited financials?