Napoli & Long, PC provides a wide array of services to nonprofit organizations including auditing and accounting, tax services, computer consulting, internal control consulting. We have compiled a list of nonprofit resources we believe will be a valuable to you.


Nonprofit accounting tip

Nonprofit audit preparation checklist

Computer & technology consulting

Nonprofit links

March 2006 - Donated materials, contributed services and use of facilities

FASB Statement No. 116, Accounting for Contributions Received and Made addresses accounting treatment for all contributions including donated materials, contributed services and contributed use of facilities. Many non-profit organizations receive a significant amount of donated services, materials and facilities. For example, donations include supplies, food, clothes, bargain purchase of equipment or facilities at prices less than fair market value. Donated materials and use of facilities may be restricted for specific purposes or specified time.

Donated Materials:

Donated materials and supplies, such as inventory and other items used in the organization's operations, should be recorded in the period received at fair market value if there is a determinable fair value at the date of donation. FASB Statement No. 116 also requires unconditional promises to give materials, such as inventory, to be recorded as contributions even though the assets may not be received until a future period. Nonprofit organizations should maintain receiving records and other supporting documentation showing the date of receipt, description of the items, quantity, fair market value, and any restrictions on use.

Contributed Services:

FASB Statement No. 116 states that for the value of donated services to be recognized in the financial statements, the services must either

  • create or enhance a nonfinancial asset (such as a building) or
  • be specialized skills, provided by entities or persons possessing those skills, that would be purchased if they were not donated.

Donated services should recorded at their fair market value. Donation of services that create or enhance a nonfinancial asset to be recorded at the donated services fair market value or the fair value of the nonfinancial asset created (or the increase in fair value of an enhanced asset). Donated services that neither create or enhance a nonfinancial asset must be specialized to be recorded. Examples of specialized services are services provided by accountants, attorneys, physicians, nurses, architects, engineers, and other professionals. Donated services that do not meet the above criteria should not be recognized.

Contributed Use of Facilities:

Many nonprofit organizations receive free or discounted use of facilities or free use of telephones and utilities. Organizations that receive free use of facilities should record a contribution in the period received at the fair market value of the free use. Unconditional promises to provide free or discounted use of facilities for a specified number of periods should be reported as contributions receivable and as restricted support which increases temporarily restricted net assets

Accounting standards governing contributed materials, services and facilities are very complex. We have provided only a brief summary of the standards. Your specific situations should be evaluated and appropriate research conducted to ensure proper accounting treatment.

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Are you ready for the auditors? Preparation for an audit can be a very time consuming process for the accounting staff of nonprofit organizations. The most important thing you can do to help you make the process run smoother set up a meeting with your auditors before the year end and obtain an understanding of the auditor's expectations and timeframe to begin the audit. Being fully prepared for the auditors will significantly improve audit efficiency and will help keep audit fees to a minimum. Another thing that can make the process is to request that the auditor perform interim procedures a couple months before year end. Many audit procedures can be accomplishes two or three months before year end such as cash disbursements testing, mailing of confirmations of donations, review board meeting minutes, and perform internal control evaluation.

Ask your auditor to prepare a comprehensive list of the items that will be required to conduct the audit. We have prepared a checklist of items we use in our firm's nonprofit audit engagements. Feel free to print this checklist and use it and modify it to meet your needs.

Click here to see the checklist.

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The technological advances in the last 10 years have created many opportunities for businesses. Those opportunities are also available to nonprofit organizations. The fastest growing technology seems to be anything and everything related to the internet. A presence on the internet will soon be the rule rather than the exception for both for profit and nonprofit entities alike. A nonprofit organization can use the internet in many different ways such as fund raising efforts, technical research, advertising, human resources management, and general communications. E-mail is one the greatest communication tools available. A nonprofit organization can communicate and send files instantly to affiliates in other cities, states or even other countries for a very low cost. We can provide you with the ideas and the resources to start a presence on the internet. We can advise you on how to register a domain name on the internet, help with web site design.

The constantly changing accounting standards and government requirements dictate that organizations must take advantage of technology in order to be competitive. We would like to assist you in developing a technology plan. We can assist you in gathering information about the specific reporting needs of the organization. We can provide you with information that will show you the benefits of using spreadsheets, word processing and database technology in your organization. We are resellers of MAS90 Accounting Software.

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The internet has many resources available to nonprofit organizations and auditors of nonprofit organizations. We have searched the net and compiled a list of what we believe may be items of interest to nonprofit organizations and auditors. If you have any suggestions about other sites, please drop us a line and maybe we will add the site to our links.

The Non-Profit Resource Center A web site that provides access to various resources for non-profit organizations including government documents, accounting standards and other links.

The Internet Non-Profit Center Provides a database of non-profit organizations and links to their web sites. It also provides guidance on fund raising and volunteers.

OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations Provides auditing standards for organizations receiving $500,000 or more in federal grant awards.

OMB Circular A-122, Cost Principles for Non-Profit Organizations Provides guidance on which costs are allowable and unallowable charges to federal grant awards.

OMB Circular A-110, Uniform Administrative Requirements for grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations Provides administrative requirements for recipients of federal grant awards such are procurement standards and property standards.

Searchable Catalog of Federal Domestic Assistance

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