Help me gain better administrative skills at my nonprofit -- audits, accounting, and taxes

August 5, 2009 12:59 PM

Help me with my nonprofit's accounting and audit practices. Just looking for some general tips on (1) learning the basics on accounting; (2) learning how to prepare audits most efficiently; and (3) bonus points for help on the more stringent 2008 IRS filing requirements for nonprofits.

I run an arts nonprofit and in a month, my part-time administrative director is leaving. While she is not a bookkeeper or an accountant, she does a variety of related services, such as preparing our files for our audit, paying our bills, doing bank deposits, entering invoices and deposits into Quickbooks, etc.

She and I are planning to put together a new system that will probably involve hiring a part-time bookkeeper, but I will probably have to take on more administrative responsibilities, including the 2008 returns (we got an extension) and the 2008 audit. While we do employ an accountant to help prepare our books for the audit (as well as, of course, our auditing firm), I'd appreciate any advice on the following:

1. How to get a general knowledge of accounting and related business practices. I currently do the budgets (and took a college accounting class), but I'd like to be less intimidated by bookkeeping practices, software, and general administrative process involved with running a small business.

2. Best practices on how to do an audit.

3. Tips on the new more stringent 2008 IRS filing requirements for nonprofits.

I'm generally looking for links to websites or pdfs that might be educational, as well as general tips & suggestions based on your best practices. Thanks!

posted by johnasdf to work & money (4 comments total)

For the basics (especially terminology and concepts), I found these books helpful: Essentials of Accounting and Essentials of Accounting Review (basically worksheets that go along with the first book).
posted by peanut_mcgillicuty at 1:20 PM on August 5 [1 favorite]

I would suggest that you depend on your audit firm a bit more.

I operate a 501(c)3 nonprofit with a budget just over a million $ per year... We spend about 13k per year on our audit... for that price I expect our audit firm to provide significant advice in these matters...

We also spend about 13k per year in fees to a local entity (in this case the local intermediate school district) to do our accounting... it might be cheaper to contract this function than to hire a part time book keeper.. but, I've no idea what your annual budget is...

Feel free to mefi mail me if you want to discuss this further...
posted by HuronBob at 6:53 PM on August 5

"... 3. Tips on the new more stringent 2008 IRS filing requirements for nonprofits. ..."

You can hardly do better than IRS Web site for non-profits, in terms of general information. But the key issue, for you personally, as an executive of a non-profit with financial authority and a record of action on behalf of your organization, is to have proper legal and accounting advice, and to be sure you are not doing things for which you don't have proper training or experience. This is not just a matter of protecting yourself, personally. It is at least equally in the interests of your organization, that it is protected from any honest mistakes, on your part.

Most non-profit organizations, therefore, check with legal counsel and accounting professionals, upon the departure of key executive personnel. You need advice about an operational plan in a reduced head count environment, and possibly, new contract responsibilities for your accounting organizations, in case the position(s) being vacated by your soon-to-be-ex administrative director will not be replaced.

Don't be the well meaning person, interested in the greater "mission" of a non-profit organization, who tries to "pick up" a bit of accounting and other responsibilities, on the departure of a key administrative employee, and who then becomes accountable for greater problems by trying to keep a ship afloat, that should have sunk.
posted by paulsc at 2:30 AM on August 7

1. Your auditor might have some generic suggestions. I think a smart play would be to reach out into the community, find a somewhat-decent CPA to put on your Board of Directors who can spend some time helping organize the accounting/business practices.

2. Talk to your auditors. They will tell you exactly what they need. Auditors are not evil. If you help them what they need quickly, they will try to be in and out.

3. Talk to your auditors or tax preparer. They should be aware of the new filing requirements. The new Form 990 is not just a tax return. It is going to ask a lot of other information regarding governance, policies and procedure, etc. Whomever prepares your tax return(s) will do as much as he/she/they can, but the tax return is going to be a joint project with you. Even if they have performing the audit and completing the tax return for a number of years, they likely do not know enough about you to complete the return. Work with them.
posted by Ding! at 7:39 AM on August 9