SVSJ Expense Allocations presented by the Not-for-Profit Committee (N2201109)

All nonprofit organizations are required to report expenses by their functional classification in the financial statements to help financial statement users assess the organizations' service efforts. Join us as our speakers Dan Moors and Mike Spence lead a discussion of expense allocations.

We will cover specific GAAP requirements, audit procedures, best practices, and cost effective solutions to streamline and simplify the process.

In addition, we will briefly cover how selected charity watchdog groups (e.g. Charity Navigator, American Institute of Philanthropy, and Better Business Bureau Wise Giving Alliance) use the Statement of Functional Expenses to rate a nonprofit's "Organizational Efficiency".

• Learn how to effectively allocate expenses by function including allocating salaries of individuals who spend time in more than one function and how to use common allocation bases to streamline the allocation of non-payroll expenses.
• Gain basic knowledge of how allocation methods are used; discuss how the allocations are reviewed by grantors; discuss what controls might be put into place to monitor that allocations are reasonable and rational.
• Understand common methods used in the industry by others; how allocation methods can be applied on a regular basis and how the compliance standards might apply.

• Allocation methods (commonly used in the industry)
• Common audit procedures used in testing allocations
• A-133 auditing and vs. A-133 audits
• Allowable cost objectives
• Benefits of dual testing and how one might use allocations for more than one program
• Importance of reviewing allocation methods on a regular basis and common overhead allocation exceptions and or question costs
• Proper documentation of allocation methods to support the audit process