My career as a forensic accountant has not been dull. Our clients’ engagements have included everything from misappropriation of funds, financial mismanagement to financial-oversight. Our portfolio of clients range from charter- schools to membership organizations and partnerships.
The number one reason why nonprofits’ tax exempt status are revoked, is they do not have the paper work on hand to show where the funding came from or how it was expensed.
Getting my feet wet or did they push me into the pool? One of my first forensic audits, involved a nonprofit teetering on bond default, due to not meeting their financial reporting requirements. Our findings were:
- There was no accounting records allocating revenues and expenses.
- Sales receipts and invoices were thrown away.
- The nonprofit failed to file 990s three years consecutively.
- Their 501c3, tax exempt status was revoked.
Oh! Did I mention the USDOJ? With all these deficiencies in play, the USDOJ questioned the financial dealings of this organization. Rightly so. Our job was to substantiate and prove that the revenue and expenses were legitimate. Needless to say, we did. The end results were:
- USDOJ probe ceased.
- The nonprofit met its bond compliance obligations.
- We filed the required 990s and petition for their 501c3 tax exempt status.
- The nonprofit’s 501c3 tax exempt status was reinstated.
We welcome the opportunity to learn how we can help your business meet it’s compliance obligations. Learn More.
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