Mark Koscinski Uncategorized

Financial Accounting Rules for NFP Organizations

Many financial executives are a little stunned to hear NFP organizations do not use fund accounting any more for their financial statements. To add to complexity of the situation some of the guidance produced by the Financial Accounting Standards Board has is not clear and confusing (at least to my mind).

To help out your understanding of the accounting requirements of your NFP organization I am sharing an article from Scot Levy, an outstanding financial professional, on the new accounting requirements for contributions received and contributions made. This new accounting guidance is effective for any NFP entities with a year-end of December 31, 2019. So, the new rules will need to be reflected in the financial statements your organization is preparing now. Is your organization ready? Good luck with implementation!

The article can be found at: https://www.linkedin.com/pulse/nonprofits-you-ready-new-contribution-guidance-scott-levy/

Mark Koscinski Uncategorized

New Year Wishes

As the New Year approaches,  here is my “Top Five”  NFP wish list for 2020:

5.  The Vatican finally arrives at a workable and fiscally responsible structure.   You may protest the Catholic Church should not be considered here.  After  all, it is a sovereign entity and the leadership of one of the world’s largest religious denominations.  The current  Vatican organization is one Roman Emperors would be familiar with.  Granted it has proven resilient but that doesn’t necessarily mean effective.   Pope Francis continues to struggle with the Vatican “Deep State” as he tinkers with the levers of power in the Vatican.  I hope he figures it out this year. 

4. The City of Baltimore  implements an adequate system of internal control.  I have written about the City of Baltimore at length in this blog and via articles.  If fact, I am making the City of Baltimore a case study in my  Advanced Accounting class this year.  Students will study such things as the  lack of a control environment in the City, poor cyber-security, and the resignation of the city auditor.   Before anyone can say I am picking on Baltimore,  please allow me to point out Baltimore is not alone when it comes to a genuine lack of cyber security.  Many cities and  NFP entities were subject to cyber-attacks, most often with ransomware.

3. The Financial Accounting Standards Board focuses on the Little Guy. Yes, the FASB is an NFP organization.  I do not want to rehash the arguments the FASB has become the captive of major corporations.  However, in an  era of deregulation, perhaps the FASB should consider lightening the burden on private companies.  At the end of the day, small business has been an engine of economic growth.  The FASB should help that along. 

2.  Increased funding for Centers for Independent Living.  Yes, this is a little parochial, since I have been a CIL chairperson. Even though I am not associated with MOCEANS CIL anymore, I still see the good work this and other CILs have done.   Perhaps I am a little out of line here by quoting the Bible, but the words there ring so true at a CIL: “Go back and report… what you hear and see: The blind receive sight, the lame walk, the lepers are cleansed, the deaf hear…” (Matthew 11:15).

1. Increased charitable contribution limitations for federal income tax purposes.  Yes, I know the recent tax law changes have increased the limits to 60% of adjusted gross income for individuals.  It should be more and it should be an adjustment to adjusted gross income.  The government should encourage giving to the needy.  And yes, the corporate limitation should go up as well.  I don’t know if I  agreed  with  the politics of Paul Newman ( or even knew what his politics was) , but if his company wanted to give away 100% of its earnings to a deserving charity, I am all for that.  I buy Newman’s salad dressing to this day.

Mark Koscinski Uncategorized

Another Round of Horseshoes

Time for Another Round of Horseshoes!

This blog started using horseshoe scoring for important events in the NFP and state government world.  Here is the result of the second round of horseshoes: 

A Double Ringer–that’s right, six points!  Rare indeed for this column. The double ringer was scored by the Bill  and Melinda Gates Foundation, combined with the Rotary. Yes, I know. I am not a big Bill Gates fan.  However, only the most bitter of critics would not acknowledge his foundation and the Rotary may commit  up to $1.5 billion to end childhood polio in the world. We in the United States have taken this for granted for a long time. Hopefully, the rest of the world will be able to do so as well soon. The following websites have more information:   

https://www.forbes.com/sites/michelatindera/2017/06/12/gates-foundation-and-rotary-pledge-additional-450-million-to-end-polio/#78aa249a65ec

https://www.gatesfoundation.org/what-we-do/global-development/polio

Missing the stake–Following the lead of several other states,  New Jersey is considering banning independent contractor status.  Businesses are already fleeing the State because of high tax rates and the inhospitable climate there.  The current Governor and his administration is devising yet another way to impose a burden on business. Governor Murphy is in line to receive the Grinch award at this holiday season.  Additional information can be found at:

https://www.washingtonexaminer.com/news/proposed-new-jersey-legislation-threatens-independent-contractors

Not only missing the stake, but the entire horseshoe pit— The former mayor of Baltimore was indicted on eleven counts of  fraud, conspiracy and tax evasion charges. To be sure, the mayor is entitled to the presumption of innocence and her day in court. The articles on this webpage have talked about the need for internal control in NFP and governmental entities. The most critical component of internal control is the control environment, often referred to as the “tone at the top”.  If the head of the organization and the executive management exhibit a concern for effective internal control then the rest of the organization will too. Perhaps this sounds a bit cynical, but if the person at the top of the pyramid is alleged to be defrauding other people, including NFP entities, the finance department and the auditors may want to be a little more cautious as they are carrying out their duties. 

https://www.baltimoresun.com/politics/bs-md-pol-pugh-20191120-kzmc2v7cafetjladglhgnyusdy-story.html

Mark Koscinski Uncategorized

Another Good Semester at Stitches

Clubs and voluntary associations have been with us for a long time and have had a profound influence on the world.   For instance, many scholars believe the early Christian Church was organized in much the same way ancient Roman clubs were organized.   Many of these associations were for eleemosynary purposes.  This tradition goes on to this day.  A great deal of charitable work is still done by voluntary associations and clubs such as fire departments, emergency rescue squads, and the Coast Guard Auxiliary just to mention a few.  Members of these organizations demonstrate the best qualities of humanity, contributing their time, talent, and treasure to improve the lives of others.

I have been proud to be the faculty adviser to the Moravian craft club, Stitches. Though this club is not as old as Roman clubs (by maybe two millennia…), Stitches’ members have crocheted clothing items for those in need now for years.  Their devotion has been remarkable. As this semester winds down, I want to give a special shout out to another member of the Moravian faculty, Dr. Kristin Baxter, associate professor of art for giving her time and talent to the club this semester.  All members surely appreciated her presence.  The officers of the club all worked hard this semester.  Special thanks go to Gabriela Landi, the group president.  She will be going off into the working world at the end of this semester.  We wish her all the best! I congratulate the new president and executive board as they undertake their new duties at the end of this semester. I can’t mention everyone and their contribution here, but you know I appreciate your participation and I look forward to next semester.

Note: Moravian student clubs decorate the benches at the College.  The picture is the bench decorated by Stitches.

Mark Koscinski Uncategorized

Horseshoes

Horseshoes is a familiar lawn game in the United States, especially during the summer holiday seasons.  The rules of the game and scoring are simple. Players throw the horseshoe at a stake about forty feet away.  A horseshoe completely enveloping the stake (called a “ringer”) is worth three points; one leaning on the stake (called a “leaner”) is worth two points; and the closest to the stake is worth one point if there are no ringers or leaners.   I will be using this scale to rate some Not-For-Profit (“NFP”) entities in the news recently.

A Ringer:  Grant Thornton, an international accounting firm, announced it will help smaller NFP entities with financing.  Larger NFP organizations can find funding more easily than smaller entities. A smaller entity might be doing excellent work in a niche area and may never attain enough critical mass to attract funders.  Alternatively, an NFP might be in a start-up phase and is struggling with working capital.  Grant Thornton is graciously funding selected NFPs through its Purple Paladin program. For more information, please see their website at: https://www.thenonprofittimes.com/foundations/grant-thornton-launches-funding-for-emerging-npos/. This is wonderful news from a great organization. 

A Leaner:  Amtrak anticipates breaking even in 2020, fantastic news for this railroad system since it has run losses for almost fifty years.   The most recent year saw Amtrak posting an operating loss of approximately $30 million (that’s right—million with an “m” and not billion with a “b”) dollars, setting the stage for its first breakeven year.  This would be fantastic, not only for the taxpayers and Amtrak riders, but for those with a sense of nostalgia.  W.W. Rostow (who was unfortunately called ‘Bomber Rostow” by one of my professors because of his support of the Vietnam War) claimed railroads were a leading industry in the development of the United States.  While this theory has drawn much criticism, it is fair to say the railroads were an important part of American history.

Completely Missing the Stake:  The U. S. Post Office estimated its loss for this fiscal year could be $8 billion.  Even worse, there is no turnaround in sight. The amount of first-class mail will continue to decline, and its unfunded pension liability has been estimated to be about $40 billion.  You don’t have to be a business school graduate to figure out declining revenues with big liabilities is not a good thing.

If you have any other favorites, please forward them to me for my next game of horseshoes!

Mark Koscinski Uncategorized

Thanksgiving

At this time of the year, we pause and give thanks for the many blessings we have in the United States. Besides being thankful for our friends and family, I especially want to give thanks for the following:

  • Not-For-Profit organizations such as MOCEANS Center for Independent Living, that provide necessary services to those in need or are disadvantaged in many ways; 
  • Volunteer associations such as the Coast Guard Auxiliary, fire departments,  and EMT crews that save lives;
  • Federal, State, County, and municipal governments that provide essential services to modern societies; and
  • Religious organizations  of all denominations that feed the poor and comfort the afflicted. 

These organizations are filled with hard-working, well meaning people who generally strive to improve the conditions of humanity in the United States and the rest of the world.  This is not to say these organizations are above criticism. Indeed, this blog often provides critique and commentary about not-for-profit organizational management. However, it behooves us to understand and remember  these entities often operate with limited budgets, personnel, and resources. Even with all the constraints they often perform miracles. We have reason to be thankful for their efforts during this holiday season.

Mark Koscinski Uncategorized

Can I Get a Pizza With the Works?

The United States Supreme Court declined to hear an appeal of an ADA case from a famous pizza company, thereby upholding the Ninth Circuit Court of Appeals. The court case revolved around whether the website of the company needed to be ADA compliant. The Ninth Circuit required the pizza company to make its website compliant with the ADA. The plaintiff in the case was visually impaired and couldn’t navigate the company website. The pizza company argued there were many alternative methods of ordering a pizza, ranging from voice activated applications to text messaging. In the end, the court disagreed with this analysis. I can clearly sympathize with the company as this will be an additional operating cost in a very competitive industry. Nevertheless, the digital world is becoming more and more prevalent as a “workplace”. Look at the growth of Amazon as an example. From a purely humanitarian (and now legal) basis, the Supreme Court got this one right.

Mark Koscinski Uncategorized

We Interrupt Our Coverage….

This blog is normally used for commentary on not-for-profit management issues. However, today I am going to make a shameless plug for two of my books, both of which can be found on Amazon:

The Gospel Of James And Other Gems of Eastern Christianity: Pearls Of Great Wisdom From The Eastern Church  – August 3, 2019

https://www.amazon.com/gp/product/1087260744/ref=ppx_yo_dt_b_asin_image_o00_s00?ie=UTF8&psc=1

This is an anthology of my writings for my former parish website and adult education classes.  Most Western Christians know extraordinarily little about Eastern Christianity.  Very few people understand its vibrant and rich history.  This book brings Eastern Christianity alive, discussing a wide range of topics germane to the religious world today.  

Living The Eastern Christian Faith: A Guide for Byzantine Christians – July 2, 2019

This is a small workbook useful in a four- week adult education course on Eastern Christianity.

I am also in the process of editing and developing textbooks for management courses in conjunction with a great publisher.  More on that later.  Stay tuned.

Mark Koscinski Uncategorized

Digital Disaster As Cyber Attacks Spread

As if operating an NFP entity is not tough enough, a whole new challenge has appeared on the scene.  Recent coordinated cyber-attacks on over twenty Texas cities show how vulnerable municipal governments and NFP entities can be to ransomware attacks.  The targets of these attacks have generally been small rural towns not having the sophistication or budget to secure their information processing systems.  Sadly, this description could apply to many smaller NFP entities as well.  Put another way, the next round of targets could be your NFP organization.  Hospitals have already been targeted, so it is just a matter of time before other NFPs are. This is an appropriate time to make sure your systems are backed up and your disaster recovery plans are up to date. Board members and trustees, it is your responsibility to make sure your organization is protected against these attacks.  Could your organization survive such an incursion?  How long would it be before business would grind to a halt?  How would regulators view a data breach of medical records or the inability to provide services your organization is contracted to perform?  These are all questions your executive director needs to provide answers to.  Waking up one morning and finding your organization’s systems have been hacked or shut down due to ransomware is not what wise trustees or directors do.

Mark Koscinski Uncategorized

Baltimore

In the middle of the back and forth between the President of the United States and officials from Maryland and Baltimore about the fiscal management of Baltimore, critical issues are not being openly discussed.  Three months ago (before the current political nastiness started) I authored an article about the accounting and auditing issues Baltimore had encountered.  The article was written from a clinical perspective, analyzing some of the deficiencies in Baltimore’s internal controls.  The lack of an appropriate control environment was the gravest.  The link to the article is: https://wordpress.com/block-editor/page/mark-koscinski.com/534