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A runner's guide to Uniform Guidance, year two

03.06.17

As we begin the second year of Uniform Guidance, here’s what we’ve learned from year one, and some strategies you can use to approach various challenges, all told from a runner's point of view.

A Runner’s Perspective

As I began writing this article, the parallels between strategies that I use when competing in road races — and the strategies that we have used in navigating the Uniform Guidance — started to emerge. I’ve been running competitively for six years, and one of the biggest lessons I’ve learned is that implementing real-time adjustments to various challenges that pop up during a race makes all the difference between crossing — or falling short of — the finish line. This lesson also applies to implementing Uniform Guidance. On your mark, get set, go!

Challenge #1: Unclear Documentation

Federal awarding agencies have been unclear in the documentation within original awards, or funding increments, making it hard to know which standards to follow: the previous cost circulars, or the Uniform Guidance?

Racing Strategy: Navigate Decision Points

Take the time to ask for directions. In a long race, if you’re apprehensive about what’s ahead, stop and ask a volunteer at the water station, or anywhere else along the route.

If there is a question about the route you need to take in order to remain compliant with the Uniform Guidance, it’s your responsibility to reach out to the respective agency single audit coordinators or program officials. Unlike in a race, where you have to ask questions on the fly, it’s best to document your Uniform Guidance questions and answers via email, and make sure to retain your documentation.  Taking the time to make sure you’re headed in the right direction will save you energy, and lost time, in the long run.    

Challenge #2: Subrecipient Monitoring

The responsibilities of pass-through entities (PTEs) have significantly increased under the Uniform Guidance with respect to subaward requirements. Under OMB Circular A-133, the guidance was not very explicit on what monitoring procedures needed to be completed with regard to subrecipients. However, it was clear that monitoring to some extent was a requirement.

Racing Strategy: Keep a Healthy Pace

Take the role of “pacer” in your relationships with subrecipients. In a long-distance race, pacers ensure a fast time and avoid excessive tactical racing. By taking on this role, you can more efficiently fulfill your responsibilities under the Uniform Guidance.

Under the Uniform Guidance, a PTE must:

  • Perform risk assessments on its subrecipients to determine where to devote the most time with its monitoring procedures.
  • Provide ongoing monitoring, which includes site visits, provide technical assistance and training as necessary, and arrange for agreed-upon procedures to the extent needed.
  • Verify subrecipients have been audited under Subpart F of the Uniform Guidance, if they meet the threshold.
  • Report and follow up on any noncompliance at the subrecipient level.
  • The time you spend determining the energy you need to expend, and the support you need to lend to your subrecipients will help your team perform at a healthy pace, and reach the finish line together.

Challenge #3: Procurement Standards

The procurement standards within the Uniform Guidance are similar to those under OMB Circular A-102, which applied to state and local governments. They are likely to have a bigger impact on those entities that were subject to OMB Circular A-110, which applied to higher education institutions, hospitals, and other not-for-profit organizations.

Racing Strategy: Choose the Right Equipment

Do your research before procuring goods and services. In the past, serious runners had limited options when it came to buying new shoes and food to boost energy. With the rise of e-commerce, we can now purchase everything faster and cheaper online than we can at our local running store. But is this really an improvement?

Under A-110, we were guided to make prudent decisions, but the requirements were less stringent. Now, under Uniform Guidance, we must follow prescribed guidelines.

Summarized below are some of the differences between A-110 and the Uniform Guidance:

A-110 UNIFORM GUIDANCE
Competition
Procurement transaction shall be conducted in a manner to provide, to the maximum extent practical, open and free competition.
Competition
Procurement transaction must be conducted in a manner providing full and open competition consistent with the standards of this section.
 
Procurement
Organizations must establish written procurement procedures, which avoid purchasing unnecessary items, determine whether lease or purchase is most economical and practical, and in solicitation provide requirements for awards.
Procurement
Organizations must use one of the methods provided in this section:
  1. Procurement by Micro Purchase (<$3,000)
  2. Procurement by Small Purchase Procedures (<$150,000)
  3. Procurement by Sealed Bids
  4. Procurement by Competitive Proposal
  5. Procurement by Noncompetitive Proposal

While the process is more stringent under the Uniform Guidance, you still have the opportunity to choose the vendor or product best suited to the job. Just make sure you have the documentation to back up your decision.

A Final Thought
Obviously, this article is not an all-inclusive list of the changes reflected in the Uniform Guidance. Yet we hope that it does provide direction as you look for new grant awards and revisit internal policies and procedures.

And here’s one last tip: Do you know the most striking parallel that I see between running a race and implementing the Uniform Guidance? The value of knowing yourself.

It’s important to know what your challenges are, and to have the self-awareness to see when and where you will need help. And if you ever need someone to help you navigate, set the pace, or provide an objective perspective on purchasing equipment, let us know. We’re with you all the way to the finish line.

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Read this if your organization operates under the Governmental Accounting Standards Board (GASB).

Along with COVID-19 related accounting changes that require our constant attention, we need to continue to keep our eyes on the changes that routinely emerge from the Governmental Accounting Standards Board (GASB). Here is a brief overview of what GASB Statement No. 93, Replacement of Interbank Offered Rates, Statement No. 96, Subscription-Based Information Technology Arrangements, and Statement No. 97 Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans, may mean to you. If you want more detail, we’ve included links to more analyses and in-depth explanation of what you need to know now.

GASB 93

We have all heard that by the end of 2021, LIBOR will cease to exist in its current form. In March 2020, the GASB provided guidance to address the accounting treatment and financial reporting impacts of the replacement of interbank offered rates (IBORs) with other referenced rates, while maintaining reliable and comparable information. Statement No. 93 specifically addresses previously issued Statement Nos. 53 and 87 to provide updated guidance on how a change to the reference rate impacts the accounting for hedging transactions and lease arrangements.  Read more in our article The Clock is Ticking on LIBOR. Now What?

GASB 96

GASB Statement No. 96 defines the term Subscription-Based Information Technology Agreements (SBITA) as “A contract that conveys control of the right to use another party’s (a SBITA vendor’s) information technology (IT) software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of time in an exchange or exchange-like transaction.”

GASB Statement No. 96 determines when a subscription should be recognized as a right-to-use subscription, and also determines the corresponding liability, capitalization criteria, and required disclosures. Learn why this matters and what you need to do next: Our Take on SBITA: Making Accounting for Cloud-Based Software Less Nebulous.

GASB 97

GASB Statement 97 addresses specific practice issues that have arisen related to retirement plans. The standard is roughly divided into two parts—component units and Section 457 plans—each of which focus on a different aspect of governmental retirement plan accounting. Help your organization gain an understanding of the standard with our article GASB 97: What's new, what to do, and what you need to know.

If you have questions about these pronouncements and what they mean to your organization, please contact Grant Ballantyne.

Article
Update for GASB-governed organizations: Lease accounting, LIBOR transition, SBITA, and Section 457 plans

Read this if your organization, business, or institution is receiving financial assistance as a direct result of the COVID-19 pandemic.

For companies and organizations that received federal funding to assist them during the COVID-19 pandemic, there have been some updates on Uniform Guidance. Here is a brief summary of those updates, audit threshold, federal funds subject to that threshold, and other pertinent information regarding the guidance.

Audit threshold

Non-federal entities that expend federal funds of $750,000 or more are required to have an audit in accordance with Subpart F of Title 2, U.S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).

Funds subject to threshold

  • 93.498 Provider Relief Fund
  • 21.019 Coronavirus Relief Fund
  • 84.425 Higher Education Stabilization Fund
  • 32.006 COVID-19 Telehealth Program
  • 84.184C CARES Act Project SERV
  • 93.461 COVID-19 Testing for the Uninsured
  • 93.527 Grants for New and Expanded Services under Health Center Program
  • 93.665 Emergency Grants to Address Mental and Substance Use Disorders During COVID-19
  • 93.967 COVID-19 Testing for Rural Health Clinics

Funds exempt from threshold

  • 59.073 (Small Business Administration) Payroll Protection Loan Program
  • 59.072 Economic Injury Disaster Loan Emergency Advance

Audit options

  • Single Audit in accordance with Uniform Guidance
  • Program-specific audit (only applicable if the non-federal entity expends Federal awards under one single CFDA)

Reporting timetables

  • Automatic three-month audit submission extension for Single Audits of 2020 year-ends through September 30, 2020 (only if recipient received some form of COVID-19 funding subject to Uniform Guidance)
    • Example, a June 30, 2020 year-end’s initial date is March 31, 2021, however this was extended to June 30, 2021

Compliance supplement addendum takeaways

  • Released December 22, 2020
  • Provides guidance on auditing above CFDAs
  • For organizations with year-ends prior to December 31, 2020, above funding will be reported in the Schedule of Expenditures of Federal Awards (SEFA) for fiscal years ending in 2021

For-profit considerations

  • Department of Health and Human Services (HHS) has determined for-profit commercial organizations (which envelopes hospitals, senior living facilities, and other health facilities) are required to include PRF payments in determining the $750,000 threshold for a compliance audit requirement
  • Currently, HHS guidance makes reference to organizations “receiving” not “expending” PRF, which is not in line with current Uniform Guidance definitions – AICPA has reached out for clarification
  • There is a third option under HHS guidance for organizations to have a financial audit performed in accordance with US generally accepted auditing standards and US generally accepted governmental auditing standards. However, there is uncertainty as to the specifics of this option and if this option would receive reporting extensions discussed above – AICPA has reached out for clarification

If you have questions about accounting for, or reporting on, funds that you have received as a result of the COVID-19 pandemic, please contact a member of our Single Audit Team. We’re here to help.

Article
Uniform Guidance—where we are today

Read this if your organization, business, or institution is receiving financial assistance as a direct result of the COVID-19 pandemic.

Updated: August 5, 2020

Many for-profit and not-for-profit organizations are receiving financial assistance as a direct result of the COVID-19 pandemic. While there has been some guidance, there are still many unanswered questions. One unanswered question has been whether or not any of this financial assistance will be subject to the Single Audit Act. Good news―there’s finally some guidance:

  • For organizations receiving financial assistance through the Small Business Administration (SBA) Payroll Protection Program (PPP), the SBA made the determination that financial assistance is not subject to the Single Audit.
  • The other common type of financial assistance through the SBA is the Emergency Injury Disaster Loan (EIDL) program. The SBA has made the determination that as these are direct loans with the federal government, they will be subject to the Single Audit. 

It is unlikely there will be guidance within the 2020 Office of Management and Budget (OMB) Compliance Supplement related to testing the EIDL program, as the Compliance Supplement anticipated in June 2020 will not have any specific information relative to COVID-19. The OMB announced they will likely be issuing an addendum to the June supplement information specific to COVID-19 by September 2020.

Small- and medium-sized for-profit organizations, and now not-for-profit organizations, are able to access funds through the Main Street Lending Program, which is comprised of the Main Street New Loan Facility, the Main Street Priority Loan Facility, the Main Street Expanded Loan Facility, the Nonprofit Organization New Loan Facility, and the Nonprofit Organization Expanded Loan Facility. We do not currently know how, or if, the Single Audit Act will apply to these loans. Term sheets and frequently asked questions can be accessed on the Federal Reserve web page for the Main Street Lending Program.

Not-for-profits have also received additional financial assistance to help during the COVID-19 pandemic, through Medicare and Medicaid, and through the Higher Education Emergency Relief Fund (HEERF). While no definitive guidance has been received, HEERF funds, which are distributed through the Department of Education’s Education Stabilization Fund, have been assigned numbers in the Catalog of Federal Domestic Assistance, which seems to indicate they will be subject to audit. We are currently awaiting guidance if these programs will be subject to the Single Audit Act and will update this blog as that information becomes available.

Healthcare providers are able to access Provider Relief Funds (PRF) through the US Department of Health & Human Services. PRF help with healthcare-related expenses or lost revenue attributable to COVID-19. Guidance on what qualifies as a healthcare-related expense or lost revenue is still in process, and regular updates are posted on the FAQs of the US Department of Health & Human Services website. According to the Health Resources and Services Administration (HRSA), PRF funds will be subject to the Single Audit Act requirements. It is important to note that while an organization may have received funds exceeding the threshold, it is the expenditure of these funds that counts toward the Single Audit threshold.

If you have questions about accounting for, or reporting on, funds that you have received as a result of the COVID-19 pandemic, please contact a member of our Single Audit Team. We’re here to help.

Article
COVID-19: Single audit and uniform guidance clarifications

Read this if your organization, business, or institution is receiving financial assistance as a direct result of the COVID-19 pandemic.

Updated: September 8, 2020

We expect to receive guidance on how to determine what qualifies as lost revenue sometime in the fall, and will post additional information when that becomes available. If you would like the information sent to you directly, please contact Grant Ballantyne.

New information continues to surface about the reporting requirements of the CARES Act Provider Relief Funds (PRFs). The most recent news published by the Health Resources and Services Administration (HRSA) states the funds will be subject to the Single Audit Act requirements. What does this mean and how does it impact your organization? Here’s a brief synopsis. 

A Single Audit (often referred to as a Uniform Guidance audit) is required when total federal grant expenditures for an organization exceed $750,000 in a fiscal year. It is important to note that while an organization may have received funds exceeding the threshold, it is the expenditure of these funds that counts toward the Single Audit threshold.  

PRFs help with healthcare-related expenses or lost revenue attributable to COVID-19. Guidance on what qualifies as a healthcare-related expense or lost revenue is still in process, and regular updates are posted on the FAQs of the US Department of Health & Human Services website.

You may remember, there were originally quarterly reporting requirements related to PRFs. On June 13, 2020 HHS updated their FAQ document to reflect a change in quarterly reporting requirements related to PRFs. According to the updated language, “Recipients of Provider Relief Fund payments do not need to submit a separate quarterly report to HHS or the Pandemic Response Accountability Committee. HHS will develop a report containing all information necessary for recipients of Provider Relief Fund payments to comply with this provision.”

Organizations that receive more than $150,000 in PRFs must still submit reports to ensure compliance with the conditions of the relief funds, but the content of the reports and dates on which these are due is yet to be determined (as of August 4, 2020). The key distinction to remember here is that this limit is based on total funds received, regardless of whether or not expenditures have been made. 

As more information comes out, we will update our website. At the moment the main takeaways are:

  • Expending $750,000 of combined relief funds and other federal awards will trigger a Single Audit
  • Receiving $150,000 of PRFs will cause reporting requirements, on a to-be-determined basis
  • Tracking PRF expenditures throughout the fiscal year will be essential for the dual purpose of reporting expenditures and accumulating any potential Single Audit support

If you would like to speak with a BerryDunn professional about reporting under the Single Audit Act, please contact a member of our Single Audit Team.

Article
Provider Relief Funds Single Audit

Read this if your organization, business, or institution has leases and you’ve been eagerly awaiting and planning for the implementation of the new lease standards.

Ready? Set? Not yet. As we have prepared for and experienced delays related to Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 842, Leases, and Governmental Accounting Standards Board (GASB) Statement No. 87, Leases, we thought the time had finally come for implementation. With the challenges that COVID-19 has brought to everyone, the FASB and GASB recognize the significant impact COVID-19 has had on commercial businesses, state and local governments, and not-for-profits and both have proposed delays in effective dates for various accounting standards, including both lease standards.

But wait, there’s more! In response to feedback FASB received during the comment period for the lease standard, the revenue recognition standard has also been extended. We didn’t see that coming, and expect that many organizations that didn’t opt for early adoption will breathe a collective sigh of relief.

FASB details and a deeper dive

On May 20, 2020, FASB voted to delay the effective date of the lease standard and the revenue recognition standard. A formal Accounting Standards Update (ASU) summarizing these changes will be released early June. Here’s what we know now:

  • Revenue recognition―for entities that have not yet issued financial statements, the effective date of the application of FASB Accounting Standards Codification (ASC) Topic 606, Revenue Recognition, has been delayed by 12 months (effective for reporting periods beginning after December 15, 2019). This does not apply to public entities or nonpublic entities that are conduit debt obligors who previously adopted this guidance.
  • Leases―for entities that have not yet adopted the guidance from ASC 842, Leases, the effective date has been extended by 12 months (effective for reporting periods beginning after December 15, 2021).
  • Early adoption of either standard is still allowed.

FASB has also provided clarity on lease concessions that are highlighted in Topic 842. 

We recognize many lessors are making concessions due to the pandemic. Under current guidance in Topics 840 and 842, changes to lease contracts that were not included in the original lease are generally accounted for as lease modifications and, therefore, a separate contract. This would require remeasurement of the new lease contract and related right-of-use asset. 

FASB recognized this issue and has published a FASB Staff Questions and Answers (Q&A) Document, Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic. Under this new guidance, if lease concessions are made relating to COVID-19, entities do not need to analyze each contract to determine if a new contract has been entered into, and will have the option to apply, or not to apply, the lease modification provisions of Topics 840 and 842.

GASB details

On May 8, 2020, GASB issued Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance. GASB 95 extends the implementation dates of several pronouncements including:
•    Statement No. 84, Fiduciary Activities―extended by 12 months (effective for reporting periods beginning after December 15, 2019)
•    Statement No. 87, Leases―extended by 18 months (effective for reporting periods beginning after June 15, 2021)

More information

If you have questions, please contact a member of our financial statement audit team. For other COVID-19 related resources, please refer to BerryDunn’s COVID-19 Resources Page.
 

Article
May 2020 accounting standard delay status: GASB and FASB

Read this if your organization, business, or institution has leases and you’ve been eagerly awaiting and planning for the implementation of the new lease standards.

Ready? Set? Not yet. As we have prepared for and experienced delays related to Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 842, Leases, we thought the time had finally come for implementation. With the challenges that COVID-19 has brought to everyone, the FASB recognizes the significant impact COVID-19 has brought to commercial businesses and not-for-profits and is proposing a one-year delay in implementation, as described in this article posted to the Journal of Accountancy: FASB effective date delay proposals to include private company lease accounting.

But what about lease concessions? We all recognize many lessors are making concessions due to the pandemic. Under current guidance in Topics 840 and 842, changes to lease contracts that were not included in the original lease are generally accounted for as lease modifications and, therefore, a separate contract. This would require remeasurement of the new lease contract and related right-of-use asset. FASB recognized this issue and has published a FASB Staff Questions and Answers (Q&A) Document,  Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic. Under this new guidance, if lease concessions are made relating to COVID-19, entities do not need to analyze each contract to determine if a new contract has been entered into, and will have the option to apply, or not to apply, the lease modification provisions of Topics 840 and 842.

Implementation of the lease accounting standard will most likely be delayed for Governmental Accounting Standards Board (GASB) entities as well. On April 15, 2020, the GASB issued an exposure draft that would delay most GASB statements and implementation guides due to be implemented for fiscal years 2019 and later. Most notably, this includes Statement 84, Fiduciary Activities, and Statement 87, Leases. Comments on the proposal will be accepted through April 30, and the board plans to consider a final statement for issuance on May 8. More information may be found in this article from the Journal of Accountancy: GASB proposes postponing effective dates due to pandemic.

More information

Whether you are a FASB or GASB entity, you can expect a delay in the implementation of the lease standard. If you have questions, please contact a member of our financial statement audit team. For other COVID-19 related resources, please refer to BerryDunn’s COVID-19 Resources Page.

Article
FASB and GASB news: Postponement of the lease accounting standards

BerryDunn’s Healthcare/Not-for-Profit Practice Group members have been working closely with our clients as they navigate the effect the COVID-19 pandemic will have on their ability to sustain and advance their missions.

We have collected several of the questions we received, and the answers provided, so that you may also benefit from this information. We will be updating our COVID-19 Resources page regularly. If you have a question you would like to have answered, please contact Sarah Belliveau, Not-for-Profit Practice Area leader, at sbelliveau@berrydunn.com.

The following questions and answers have been compiled into categories: stabilization, cash flow, financial reporting, endowments and investments, employee benefits, and additional considerations.

STABILIZATION
Q: Is all relief focused on small to mid-size organizations? What can larger nonprofit organizations participate in for relief?
A:

We have learned that there is an as-yet-to-be-defined loan program for mid-sized employers between 500-10,000 employees. You can find information in the Loans Available for Nonprofits section (link below) of  the CARES Act as well as on the Independent Sector CARES Act web page, which will be updated regularly.

Q: Should I perform financial modeling so I can understand the impact this will have on my organization? Things are moving so fast, how do I know what federal programs are available to provide assistance?
A:

The first step in developing a short-term model to navigate the next few months is to gain an understanding of the programs available to provide assistance. These resources summarize some information about available programs:

Loans Available for Nonprofits in the CARES Act
Families First Coronavirus Response Act (FFCRA): FAQs for Businesses
CARES Act Tax Provisions for Not-for-Profit Organizations

The next step is to develop scenarios ranging from best case to worst case to analyze the potential impact of revenue and/or cost reductions on the organization. Modeling the various options available to you will help to determine which program is best for your organization. Each program achieves a different objective – for instance:

  • The Paycheck Protection Program can assist in retaining employees in the short term.
  • The Emergency Economic Injury Grants are helpful in covering a small immediate liquidity need.
  • The Small Business Debt Relief Program provides aid to those concerned with making SBA loan payments.

Additionally, consider non-federal options, such as discussing short-term deferrals with your current bank.

Q: How should I create a financial forecast/model for the next year?
A:

If you have the benefit of waiting, this is likely a time period in which it makes sense to delay significant in-depth forecasting efforts, particularly if your business environment is complicated or subject to significantly volatility as a result of recent events. The concern with beginning to model for future periods, outside of the next three-to-six months, is that you’ll be using information that is incomplete and ever-changing. This could lead to snap judgments that are short-term in nature and detrimental to long-term planning and success of your organization. 

With that said, we recognize that delaying this analysis will be unsettling to many CFOs and business managers who need to have a strategy moving forward. In developing this model for next year, consider the following elements of a strong model:

  1. Flexible and dynamic – Allow room for the model to adapt as more information is available and as additional insight is requested by your constituents (board members, department heads, lenders, etc.).
  2. Prioritize – Start with your big-ticket items. These should be the items that drive results for the organization. Determine what your top two to three revenue and expense categories are and focus on wrapping your arms around the future of those. From there, look for other revenue and expense sources that show correlation with one of the big two to three. Using a dynamic model, these should be automatically updated when assumptions on correlated items change. Don’t waste time on items that likely don’t impact decision making. Finally, build consensus on baseline assumptions, whether it be through management or accounting team, the board, or finance committee.
  3. Stress-test – Provide for the reality that your assumptions, and thus model, will be wrong. Develop scenarios that run from best-case to worst-case. Be honest with your assumptions.
  4. Identify levers – As you complete stress-testing, identify your action plan under different circumstances. What are expenditures that can be deferred in a worst-case scenario? What does staffing look like at various levels?
  5. Cash is king – The focus on forecasting and modeling is often on the net income of the organization and the cash flows generated. In a time such as this, the exercise is likely to focus on future liquidity. Remember to consider your non-income and expense items that impact cash flow, such as principal payments on debt service, planned additions to property & equipment, receipts on pledge payments, and others.  
CASH FLOW
Q: How can I alleviate cash flow strain in the near term?
A:

While the House and Senate have reacted quickly to bring needed relief to individuals and businesses across the country, the reality for most is that more will need to be done to stabilize. Operationally, obvious responses in the short term should be to eliminate all nonessential purchasing and maximize the billing and collection functions in accounts receivable. Another option is to utilize or increase an existing line of credit, or establish a new line of credit, to alleviate short term cash flow shortfalls. Organizations with investment portfolios can consider the prudence of increasing the spending draw on those funds. Rather than making a few drastic changes, organizations should take a multi-faceted approach to reduce the strain on cash flow while protecting the long term sustainability of the mission.

Q: How can I increase my organization’s reach to help with disaster relief? If we establish a special purpose fund, what should my organization be thinking about?
A:

Many organizations are looking for ways to increase their direct impact and give funding to individuals or organizations they may not have historically supported. For those who are want to expand their grant or gift making or want to establish a disaster relief fund, there are things to consider when doing so to help protect the organization. The nonprofit experts at Hemenway & Barnes share their thoughts on just how to do that.

FINANCIAL REPORTING
Q: What accounting standards have been delayed or are in the process of being delayed?
A:

FASB:
The $2.2 trillion stimulus package includes a provision that would allow banks the temporary option to delay compliance with the current expected credit losses (CECL) accounting standard. This would be delayed until the earlier end of the fiscal year or the end of the coronavirus national emergency.

GASB:
On March 26, 2020, the Governmental Accounting Standards Board (GASB) announced it has added a project to its current technical agenda to consider postponing all Statement and Implementation Guide provisions with an effective date that begins on or after reporting periods beginning after June 15, 2018. The GASB has received numerous requests from state and local government officials and public accounting firms regarding postponing the upcoming effective dates of pronouncements as these state and local government offices are closed and officials do not have access to the information needed to implement the Statements. Most notably this would include Statement No. 84, Fiduciary Activities, and Statement No. 87, Leases.

The Board plans to consider an Exposure Draft for issuance in April and finalize the guidance in May 2020.

ENDOWMENTS AND INVESTMENTS 
Q: What should I consider with regard to endowments?
A:

Many nonprofits with endowments are considering ways to balance an increased reliance on their investment portfolios with the responsibility to protect and preserve the spending power of donor-restricted gifts. Some things to think about include the existence (or absence) of true restrictions, spending variations under the Uniform Prudent Management of Institutional Funds Act (UPMIFA) applicable in your state, borrowing from an endowment, or requesting from the donor the release of restrictions. All need to be balanced with the intended duration and preservation of the endowment fund. Hemenway & Barnes shares their thoughts relative to the utilization of endowments during this time of need.

EMPLOYEE BENEFITS
Q: We are going to suspend our retirement plan match through June 30, 2020 and I picked a start date of April 1st. What we need help with is our bi-weekly payroll (which is for HOURLY employees). Their next pay date is April 3rd, for time worked through March 28th. Time worked March 29-31 would be paid on April 17th. How should we handle the match during this period for the hourly employees?
A:

The key for determining what to include for the matching calculation is when it is paid, not when it was earned. If the amendment is effective April 1st, then any amounts paid after April 1st would not have matching contributions calculated. This means that the amounts paid on April 3rd would not have any matching contributions calculated.

Q: Can you please provide guidance on the Families First Coronavirus Response Act (FFCRA) and how it may impact my organization?
A:

On March 30th, BerryDunn published a blog post to help answer your questions around the FFCRA.

If you have additional questions, please contact one of our Employee Benefit Plan professionals

ADDITIONAL CONSIDERATIONS
Q: I heard there was going to be an incentive for charitable giving in the new act. What's that all about?
A:

According to Sections 2204 and 2205 of the CARES Act:

  • Up to $300 of charitable contributions can be taken as a deduction in calculating adjusted gross income (AGI) for the 2020 tax year. This will provide a tax benefit even to those who do not itemize.
  • For the 2020 tax year, the tax cap has been lifted for:
    • Individuals-from 60% of AGI to 100%
    • Corporations-annual limit is raised from 10% to 25% (for food donations this is raised from 15% to 25%)
Q: Have you heard if the May 15th tax deadline will be extended?
A:

Unfortunately, we have not heard. As of April 6th, the deadline has not been extended.

Q: Could you please summarize for me the tax provisions in the CARES Act that you think are most applicable to not-for-profits?
A: Absolutely! Our not-for-profit tax professionals have compiled this document, which provides a high-level outline of tax provisions in the CARES Act that we believe would be of interest to our clients.

We are here to help
Please contact the BerryDunn not-for-profit team if you have any questions, or would like to discuss your specific situation.

Article
COVID-19 FAQs—Not-for-Profit Edition

Read this if you use QuickBooks online.

There are always more things to learn about the applications we use every day. Here are some tips for expanding your use of QuickBooks Online. 

We tend to fall into the same old patterns once we’ve learned how to make a computer application work for us. We learn the features we need and rarely venture beyond those unless we find we need the software or website to do more. 

QuickBooks Online is no exception. It makes its capabilities known through an understandable system of menus and icons, labeled columns and fields, and links. But do we really see what else it can do? Expanding your knowledge about what QuickBooks Online can do may help you shave some time off your accounting tasks and better manage the forms, transactions, and reports that you work with every day. Here are some tips.

Edit lines in transactions. Have you ever been almost done with a transaction and realize you need to make some changes farther up in the list of line items? Don’t delete the transaction and start over. QuickBooks Online comes with simple editing tools, including:

  • Delete a line. Click the trash can icon to the right of the line. 
  • Reorder lines. Click the icon to the left of the line, hold it, and guide it to the new position. This is tricky. You may have to work with it a bit.
  • Clear all lines and Add lines. Click the buttons below your line items, to the left.


Click the More link at the bottom of a saved transaction to see what your options are.

Explore the More menu. Saved transactions in QuickBooks Online have a link at the bottom of the screen labeled More, as pictured above. Click it, and you can Copy the transaction or Void or Delete it. You can also view the Transaction journal, which displays the behind-the-scenes accounting work, and see an Audit history, which lists any actions taken on the transaction. 

Create new tabs. Do you ever wish you could display more than one screen simultaneously so you can flip back and forth between them? You can. Right click on any link in QuickBooks Online, like Sales | Customers, and select Open link in new tab

Use keyboard shortcuts. Not everyone is a fan of these, mostly because they can’t remember them. Hold down these three keys together to see a list: Ctrl+Alt+?. Some common ones include those for invoices (Ctrl+Alt+i) and for expenses (Ctrl+Alt+x).

Modify your sales forms. Do you need more flexibility than what’s offered in your sales forms? It may be there. Click the gear icon in the upper right and select Account and settings under Your Company. Click the Sales tab. In the section labeled Sales form content, notice that you can add fields for Shipping, Discounts, and Deposits by clicking on their on/off switches. You can also add Custom fields and Custom transaction numbers.

Add attachments. Sometimes it’s helpful to have a copy of a source document when you enter a transaction. To attach a receipt to an expense, for example, look in the lower left corner of the transaction. Click Attachments and browse your system folders to find the file, then double click on it.


Record expenses made with credit cards. Who doesn’t use credit cards for expenses sometimes? You can track these purchases in QuickBooks Online, as pictured above. Click the gear icon in the upper right and select Chart of Accounts under Your Company, then click New in the upper right. Select Credit Card from the drop-down list under Account Type. Enter Owner Purchase in the Name field and then Save and Close. When you create an expense, select Owner Purchase as the Payment account

Previous Transaction Button. Are you trying to find a transaction that you entered recently but don’t want to do a full-on search? With a transaction of the same type open, click the clock icon in the top left corner. A list of Recent Expenses will drop down. Click on the one you want.

Whether you’re new to QuickBooks Online or you’ve been using it for years, there’s always more to explore. We’d be happy to help you expand your use of QuickBooks Online by introducing you to new features, building on what you’re already doing on the site to improve your overall financial management. Contact our Outsourced Accounting team to schedule some time.

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Eight QuickBooks online tips

Read this if you use QuickBooks. 

Want to break up an estimate into multiple invoices? QuickBooks Online supports progress invoicing.

If you do large, multi-part projects for customers, you may not want to wait until absolutely everything is done before you send an invoice. This can be especially problematic when you have to purchase a lot of materials for a job that will eventually be billed to the customers.

QuickBooks Online has a solution for this: progress invoicing. Once you’ve had an estimate approved, you can split it into as many pieces as you need, sending partial invoices to your customer for products and services as you provide them, rather than waiting until the project is complete. If cash flow is a problem for you, this can be a very effective solution. You might be able to take on work that you otherwise couldn’t because you’ll be getting paid periodically.

Setup Required

Progress invoicing requires some special setup steps. First, you’ll need to see whether QuickBooks Online is prepared for the task. Click the gear icon in the upper right and select Account and settings under Your Company. Click the Sales tab and scroll down to Progress Invoicing. It may just say On to the right of Create multiple partial invoices from a single estimate. If it doesn’t, click the pencil icon to the right and turn it on. Then click Save and Done.

You’ll also have to choose a different template than the one you use for standard invoices. Click the gear icon and select Custom form styles. Click New style in the upper right and then click Invoice. Enter a new name for the template to replace My INVOICE Template, like Progress Invoice. Then click Dive in with a template or Change up the template under the Design tab. Select Airy new by clicking on it. This is the only template you can use for progress invoicing.

When you’re creating a template for your progress invoices, you’ll have to select Airy new.

Now, click on Edit print settings (or When in doubt, print it out). Make sure there’s no checkmark in the box in front of Fit printed form with pay stub in window envelope or Fit to window envelope. Then click on the Content tab. You’ll see a preview of the template (grayed out) to the right. Click the pencil icon in the middle section. Select the Show more activity options link at the bottom of the screen.

If you want to Group activity by (Day, Week, Month, or Type), check that box and select your preference. Go through the other options here and check or uncheck the boxes to meet your needs. Then click Done. You’ll see your new template in the list of Custom form styles.

QuickBooks Online allows you to designate one form style as the default. This is the form that will open when you create a new invoice or estimate template. If you plan to send a lot of progress invoices, you might want to make that the default. To do this, find your new template in the list on this page and click the down arrow next to Edit in the Action column. Click Make default. If you leave your standard invoice as the default, you can always switch when you’re creating an invoice by clicking the Customize button at the bottom of the screen.

Creating a Progress Invoice


You can see what your options are for your progress invoice.

Invoice and estimate forms in QuickBooks Online are very similar. The only major difference is that estimates contain a field for Expiration date. To start the process of progress invoicing, select an estimate that you want to bill that way. Click the Sales tab and select All Sales. Find your estimate and click on Create invoice in the Action column. A window like the one in the above image will appear.

You can bill a percentage of each line item or enter a custom amount for each line.  If you choose the latter, the invoice that opens will have zeroes in the Due column. You can alter the amount due for any of these by either a percentage or an amount and/or leave them at zero if you don’t want to bill a particular product or service. Either way, the Balance due will reflect your changes. When you’ve come to the last invoice for the project, you’ll check Remaining total of all lines.

Once you’ve chosen one of these options, click Create invoice. Double-check the form and then save it. You can now treat it as any other invoice. To see a list of your progress invoices, run the Estimates & Progress Invoicing Summary by Customer report.

As you can see, there are numerous steps involved in creating progress invoices. Each has to be done with precision, so the customer is billed the exact total amount due at the end. We can help you accomplish this. We’re also available to help with any other QuickBooks Online issues you have. Contact our Outsourced Accounting team to set up a consultation.

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How does progress invoicing work in QuickBooks Online?