Accounting Standards for Nonprofit Organizations
By: Vickie Young Beam, CPA, Principal
Nonprofit organizations are entities that perform charitable services by accepting funds from the general public. To help regulate activities and encourage proper use of funds, accounting standards are in place to assist management and auditors when preparing financial statements and to ensure the organization’s operations are compliant and protected by strong internal controls.
I recently presented a webinar sponsored by DANA (Delaware Alliance for Nonprofit Advancement). We took the content and broke it down into three key areas: Back to Basics, Financial Reporting, and Internal Controls. We then created excerpts to make it easier for you to find answers to a specific topic within each area.
Whether you are new to a nonprofit or want to get a refresher on accounting standards for nonprofit organizations and foundations, I hope you find these videos helpful!
Section 1 – Back to Basics
This section is targeted to someone who is new to a nonprofit organization or a nonprofit organization that’s just starting up. They’re trying to figure out how to organize records and activities so everyone understands how the organization works. What do you need to know? How do you know what you don’t know?
- Setting up the organization’s bank account (1:30)
- Sources of contributions / funding (1:05)
- What are you doing with your funding? (1:00)
Section 2 – Financial Reporting
You provide information to a board of directors and others in leadership at the nonprofit that plays an important role in decisions made and the strategic direction of the organization. This section covers preparation of monthly financial reports and preparing for the review meeting.
- End of month reporting checklist (1:46)
- Preparing for the end of month report review meeting (3:10)
- Monthly reports (4:06)
Section 3 – Internal Controls (Segregation of Duties)
Many people think fraud could never happen within their organization. Think again! Every organization, no matter the size, needs to have proper internal controls in place.
- Practical definition (1:20)
- Reality (2:45)
- Who, what, where, when, why and how of internal controls (3:00)
- Basic financial systems and potential problems (3:45)
- Safeguarding assets (2:30)
- Segregation of duties (8:45)
Vickie Young Beam is a Principal in the Audit Department at Cover & Rossiter where she leads audits of many of the region’s most prestigious not-for-profit organizations. She is a Board member of Delaware Alliance for Nonprofit Advancement (DANA) and currently serves as the Board Treasurer.