Mark Koscinski Uncategorized

Still Waiting

The April 29, 2022  issue of the Warren Reporter, a newspaper affiliated with NJ.com,  contained a very balanced article written by Ted Sherman about the investigation of clergy abuse of minors in the State of New Jersey. State officials created a task force in September 2018 to investigate the allegations against clergy dating back decades. We need not go into the details of the allegations here as they are well known already.  Suffice it to say there have been only three prosecutions as a result of this task force and the promised final report on the matter has not materialized.  As a result of such a small number of indictments, many have doubted a special grand jury to investigate this matter was even empaneled.  We can only hope and pray the absence of prosecutions was the abuse was not as widespread as has been suspected or reported.  We also hope church officials have taken their duty to protect minors make appropriate disclosures as seriously as they should. 

As heinous as these crimes may be, I want to focus on another insidious aspect of this situation: the financial devastation such mismanagement has caused. NPR reported that by 2018 this scandal has already Catholic Church $3 billion.  That total has continued to grow in the last four years. Recently, the Roman Catholic Diocese of Camden, like many other Catholic dioceses, was forced to declare bankruptcy because of the projected cost of litigation surrounding the abuse of minors by its clergy. The diocese recently announced the settlement of such lawsuits and the creation of an $87.5 million dollar fund to come into existence over the next four years to pay out survivors of such abuse.  The source of these funds was not reported and the settlement must still be approved by the bankruptcy court.  

With such vast sums of money being thrown around, the question arises: Is this why donors contribute to religious organizations? To fund such horrible management by its leaders? It is high time large religious organizations are required to file a Form 990 with the Internal Revenue Service.  All charitable organizations except for religious organizations must file the Form 990 every year. Religious organizations are specifically exempted from this filing. While no one wants the federal government  mucking around in Church affairs, the Form 990 contains information any contributor and/or member of the congregation would generally be interested in.  This, form requires not only financial disclosures but also information about the adequacy of internal controls.  As of right now, many religious organizations do not release financial information.  Perhaps some sunshine on the matter would make those who run religious organizations a little more cautious when it comes to spending the hard earned donations of its members.  For example, do members of the Diocese of Camden know a substantial amount of their donations over the next four years will probably be directed to this fund? Will the Diocese of Camden disclose where the funds will be coming from?  We shall certainly see. 

While there has been a lot of attention aimed at the abuse issue, financial frauds and scandals often “fly under the radar”.   Again, we need not go into the details of such events as they are documented elsewhere, but my sense is these are but the tip of the iceberg, an opinion I formed being connected to the financial management of several  religious and Not-For-Profit organizations.  The lack of internal controls and the weak control environment can often be frightening.   I hate to recommend this, but it is time for the government to compel financial disclosure from the larger religious organizations.  As for the objection that this will be expensive,  let me counter this by saying somewhat tongue in cheek that Rome wasn’t built in one day.  Perhaps the reporting would only be required for any organization with gross receipts in excess of $1 million (or some other appropriate number).  At the end of the day the cost incurred for preparing such a report will be more than made up for by the tighter financial controls religious organizations will have to put into place to make the proper reporting.

Mark Koscinski Uncategorized

Joining the Vibrant Publishers Advisory Board

I am very proud to join the Vibrant Publishers Advisory Board. Vibrant is a growing publisher with a varied content! Here is the text of the press release:

This board is made up of industry leaders and subject-matter experts with a combined experience of more than 75 years working in academia and industry. The Board will assist Vibrant Publishers in developing rich academic material and educational resources.

Vibrant Publishers is focused on presenting the best texts about technology and business and books for standardized test preparation.

The New Board Will Provide Strategic Insights to Co-Create an Array of Practical, Actionable, and Affordable Learning Tools

Formation of the board is a direct reflection of our commitment to making a wider range of top-quality books available for our customers.”

— Deep Udeshi, CEO of Vibrant Publishers

BROOMFIELD, CO, UNITED STATES, February 9, 2022 /EINPresswire.com/ — Vibrant Publishers, a publishing company with a focus on educational books, is excited to announce the formation of a strategic Advisory Board. This board is made up of industry leaders and subject-matter experts with a combined experience of more than 75 years working in academia and industry. The Board will assist Vibrant Publishers in developing rich academic material and educational resources for current and future generations of learners.

Vibrant Publishers’ Advisory Board is made up of the following respected leaders, who each bring a wealth of knowledge and decades of real-world experience to the company: Mark Koscinski, Carrie Picardi, and Dr. Denean Robinson.

Mark Koscinski is a certified public accountant with over forty years of experience in the corporate and not-for-profit worlds. An assistant professor of accounting practice at Moravian College in Bethlehem, Pennsylvania, Mark teaches undergraduate courses in accounting and decision analysis on a graduate level. He served as chief financial officer and corporate controller of companies in the toy, banking/investment banking and defense-contracting industries. Mark earned a doctorate from Drew University.

Carrie A. Picardi, Ph.D. is an Industrial/ Organizational Psychologist with over 25 years of experience including human resource management positions within the manufacturing and education sectors, as an organizational research analyst and consultant, and as a professor of management. She has designed and led initiatives in the areas of talent acquisition and retention, job analysis and design, training and development, compensation strategy, performance management, employee engagement, leadership development, and technology/systems assessment. In addition to several peer-reviewed research publications, Carrie is the author of three textbooks: Research Methods-Designing and Conducting Research with Real-World Focus (Sage, 2013); Recruitment and Selection: Strategies for Workforce Planning and Assessment (Sage, 2019); and Leadership Essentials (Vibrant Publishers, 2021). She holds a Ph.D. in Applied Organizational Psychology from Hofstra University and a certificate in Human Resource Management from Cornell University.

Dr. Deanean Robinson has been teaching Management, Marketing, Business and Education classes at various colleges and universities across the Washington D.C metropolitan area over the last 17 years. In addition, Dr. Robinson has developed corporate and educational training programs for various government and private agencies. Her training has been implemented in the areas of career development, personal management, strategic planning, and organizational development.

Vibrant’s Advisory Board aims to unite the best of academia and industry expertise to create accessible and affordable educational material for learners from all walks of life. As Carrie Picardi states, “As an Advisory Board member, I am looking forward to collaborating on relevant and forward-thinking educational resources for current and future learner needs. I am honored and excited to share my expertise with Vibrant Publishers and fellow board members as we work to co-create an array of learning tools that are practical and actionable as well as rigorous, with ease of use for both learners and educators.”

“I am honored to welcome these industry experts to our advisory board,” said Vibrant Publishers’ CEO Deep Udeshi. “Formation of the board is a direct reflection of our commitment to making a wider range of top-quality books available for our customers. Right from the start, we have focused on reducing students’ debt by introducing low-cost, concise top-quality management textbooks. With this Board, we plan to introduce books for community colleges & university courses, thereby reducing a lot of debt for students. Vibrant’s eBooks sell as low as $9.99, & Paperbacks are sold at around $25-$30, in comparison to the $200+ textbooks published by other publishers.” Board member Dr. Denean Robinson’s statement reflects her commitment to this cause. She says, “I joined the Board of Directors for Vibrant to be a change agent and voice for the underserved student population.”

We are excited to have this trio onboard to assist us in improving our brand legacy. Here’s to a new era of collaboration, learning, and positive impact in the world of educational book publishing!

About Vibrant Publishers
Vibrant Publishers, Colorado, is a publishing house with a focus on high-quality books for entrepreneurs, professionals, and students. Vibrant Publishers has redefined how rich content is made available to today’s fast-paced generation. We have three academic book series, dedicated to Self-Learning Management, Job Interview Questions, and Test Prep.

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Mark Koscinski NFP

Form 1099-NEC

his is just a kind reminder to our friends out there in  small NFP organizations getting ready to send out W-2s to employees and 1099s to other individuals who received payments of various types in the past year about the new Form 1099-NEC.  Prior to 2021, your organization was required to provide a Form 1099-MISC to independent contractors who received payments. The IRS now requires Form 1099-NEC  be used instead of Form 1099-MISC when reporting independent contractor income, now labeled “non-employee compensation”  or “NEC”.  NEC is  defined as payments to individuals not on payroll on a contract basis to complete a project or assignment. This is a very common occurrence at small NFP organizations, where independent contractors,  gig workers, or otherwise self-employed individuals receive stipends for services rendered.   

The due date for the 1099-NEC is January 31, which is right around the corner.  The 1099-MISC is due March 1 if filed by paper and March 31 if filed electronically.  The familiar $600 threshold is still in place.  If your organization paid an independent contractor more than $600 in 2021, it must  provide that contractor with a Form 1099-NEC unless the independent contractor is a C corporation or S corporation. You can find this on the Form W-9 you are required to collect from the independent contractor. 

 Copy A of Form 1099-NEC is filed with the IRS and Copy B is sent to the independent contractor. Most states also require all Form 1099s  be filed with them.  You will need to consult your tax advisor to see if your state requires this.  States have been extremely active in auditing independent contractor payments in  recent years.  Many states contend all independent contractors should be classified as employees and applicable payroll taxes be remitted.  For instance, the State of New Jersey wanted information on the royalties I received on my books published through Amazon to see if I was in fact an employee rather than an independent contractor.  Sadly, I am not that great of an author and my royalties were less than $100 for the year.  The implementation of Form 1099-NEC should reduce this confusion in the future. 

There are significant penalties for being late and misclassifying employees as independent contractors so NFPs do need to pay attention to these requirements. Again, it is critical that NFPs consult their tax advisors. 

Mark Koscinski fraud, NFP

Cash in the Plumbing

Cash in the Bathroom Plumbing?

Lest anyone believe I only pick on the Catholic Church, let’s look at the recent revelation a plumber found $600,000 stashed away behind a toilet in  Joel Osteen’s church.  To be clear, the original theft had been reported to the authorities, and no one is claiming Osteen or any of his staff is connected to this theft. Nevertheless, the sheer size of Osteen’s church and the amount at stake has caused a stir. 

I used this situation as a case study in my forensic accounting and auditing class. I showed the class  some of the videos about this sordid affair.  An example of one of these follows. 

The class came back with some interesting  comments.  I have included some of these as well as my thoughts about them. 

  • Another NFP fraud?  It seems NFP organizations do not take internal controls seriously.  Sadly, this is often the case.  Many NFPs are way too trusting.  No reputable person should balk at being subject to internal controls. “Trust but verify” not only works in Strategic Arms Limitations, but also in running an organization.  What donor wants to see their hard earned and generously donated money simply disappear?  Donors have been known to stop giving after such an event. 
  • How could you leave that much money in a safe?  Any bank would be willing to come each Sunday and pick up this deposit.  To be sure, that is certainly a correct comment.  I have participated in NFP fundraising events involving  less than one-tenth of that amount of money.  The local  bank was more than willing to come and pick up the deposit right away as an accommodation to a good customer. 
  • What does the Fraud Triangle tell you about potential persons of interest?  The Fraud Triangle states any fraud is the result of someone feeling financial pressure, having the means and ability to rationalize the theft. Given the fact the safe seems to have been easily opened and the perpetrators knew where to hide the money, we would be looking at an inside job. This perhaps establishes the means.  What was the pressure and the rationalization though?  
  • Why was the loot never retrieved?  The person(s) who hid the funds was not able to retrieve the money.  Why?  Were they fired for other causes? Did someone suspect them of the theft?  An “outsider” to the organization would not count on being able to access the bathroom again, and accordingly, the funds. Could this be a “spite” theft, where the perpetrator(s) were simply doing this to embarrass the church and really didn’t want the money? In any event, any checks became stale long ago (the original theft occurred in 2014!) or the makers have put a stop on them. 

This story just seems so odd my students (and I) believe more will come out. Stay tuned.  

Unfortunately, there can be collateral damage to all NFP organizations from such an event.  Some believe situations such as this are a reason why churches should be taxed.  While this seems like a non sequitur, stranger things have happened.

https://www.foxbusiness.com/politics/osteen-faces-ridicule-of-social-media-after-plumber-claims-to-find-cash-behind-church-toilet

NFP management needs to understand that theft and fraud of such consequence will often result in not only bad press for that organization, but for all NFP organizations.  During this Pandemic any decrease in donations or other revenue resulting from such bad press can have catastrophic consequences to an NFP, even if the organization was not the cause of the bad press.  The major lesson for all NFP management:  Let’s be careful about internal controls.  You don’t want to be on the front page of a local newspaper, sheepishly discussing why the hard earned money of the donors ended up missing because of a fraud or theft. 

Mark Koscinski NFP

Tax Law Changes in 2022 Affecting NFP Stakeholders

As we begin the New Year, changes in the federal income tax law could negatively impact NFP organizations.   Let’s start with charitable contributions.  First, the $300 ($600 for married couples) charitable contribution for nonitemizers is set to lapse.  Smaller donors may be less willing to make donations to their favorite charities.  On a larger scale, the cap on corporate charitable contributions will be reduced from 25% of taxable income before charitable contributions to 15% of the same number.  Additionally, individuals could donate 100% of their adjusted gross income to charity in 2021.  That cap will be reduced to 60% in 2022.  

 These provisions were enacted to assist NFP organizations during the pandemic. Retaining them does not seem to have been a high priority in the recent negotiations between the Biden Administration and Congress in passing the infrastructure bill and Build Back Better proposals. It seems fairly certain that these provisions will in fact lapse since there doesn’t seem to be a lot of momentum behind them.  The Biden Administration campaigned on increasing corporate taxes and taxpayers with an adjusted gross income over $400,000, those more likely to donate a higher percentage of their AGI to charity.  It seems unlikely there will be any wind behind the sails of giving additional tax deductions to those groups the Administration  said were not paying their fair share of taxes already. 

On the cost side of the ledger, the IRS mileage reimbursement rate will increase by 2.5 cents from 2021 to 58.5 cents in 2022, an almost 4.5% increase.  This jump reflects the recent inflation experienced in the American economy. The new rate will continue to put cost pressure on NFP organizations who may not be able to afford even the current reimbursement rates for their employees. The aforementioned inflation can also deter donations to NFP organizations as salaries and wages struggle to keep up with increased costs.  

Many other provisions of the tax code potentially affecting  NFP organization stakeholders such as the enhanced child tax credit and earned income tax credit were included in the Build Back Better bill, recently torpedoed by the projected “No” vote of Senator Joe Manchin. NFP management will need to watch what happens to the bill in 2022.  The best bet at this point is for Democrat Congressional leaders to break up the bill into smaller pieces and then try to sell them one at a time to Manchin, who would provide the crucial vote for passage in the Senate. If this were to happen, perhaps some of the current provisions would be reintroduced and become retroactive to the beginning of the year. Only time will tell if this will happen. This course of action seems unlikely in the heated political discussions of today, but cooler heads may prevail in the months ahead.

Mark Koscinski NFP

NFP New Year’s Resolution: Get to Know Your CPA!

NFP New Year’s Resolution:  Get to Know Your CPA

It is time for NFP organizations’ New Year’s resolutions.  I am proposing a novel one:  Get to really know your CPA, and see what help she can provide!.   You might ask, Why?  Let me give you a few  key reasons:

  • The IRS is requiring more and more tax forms used by NFP organizations to be filed online.  For instance, see this article from  the  Accountingtoday Daily Briefing. As reported in this article, the IRS has experienced problems in keeping its systems up to date, causing frustration with many NFP organizations. The IRS is also experiencing a backlog in processing returns.  Your CPA is better equipped to deal with electronic filing requirements and the IRS (if needed) than you may be. 
  • Implementation of the new lease accounting standard is required for fiscal years beginning after December 15, 2021. This accounting will fundamentally change your balance sheet if you have a lot of leased equipment or premises. Do not underestimate the amount of work required for this effort. Interim financial statements beginning one year later will also need to be converted to this accounting, so you don’t have much time.  Additionally, the impact of the new lease accounting on prior years’ financial statements will also need to be calculated and reported on.  A CPA will be able to estimate the impact of and implement the new accounting. Additionally, your CPA can  help your organization negotiate any debt modifications with lenders if you have outstanding debt or a credit line from a financial institution. 
  • NFP mergers and acquisitions continue apace. One strategy for an NFP organization to grow quickly is by acquiring another organization.  To say this is complicated would be to understate that  complexity, especially when the NFP acquires a for-profit entity. Your CPA can help guide you through the acquisition process.  For instance, a CPA can provide financial modeling, due diligence, and strategic advisory services if you are considering an acquisition. 
  • Your CPA can advise you about the level of attest services your organization may need.  Audits are expensive.  A lesser level of professional accounting service may be appropriate.  Stakeholders understand this has been a rough spell for NFP organizations.  Perhaps they  do not need audited statements.  Reviewed or even compiled financial statements may be adequate for their needs  at a much reduced cost.  Your CPA can advise you on this issue. 
  • Lax internal control can lead to the potential for serious frauds and some bad press. In the current economic climate, news of squandered resources lost through lax internal processes or defalcations can cause donations to dry up quickly.  This could cause a great deal of disruption to your mission, if not catastrophic. Your CPA can provide information and advice about internal control best practices.  
  • Your CPA can be a source of volunteers.  Professional accounting organizations encourage CPAs to “give back” to their community and volunteer to work at worthwhile causes. CPAs not only make excellent financial officers (treasurers, controllers and internal auditors) and board members, but often have a large network of clients that also want to volunteer.  In effect, your CPA can act like a volunteer clearinghouse for your organization

These are just a few of the reasons why it makes sense for you to get to know your CPA in 2022!

Mark Koscinski NFP

Dear Santa…

December 21, 2021

Dear Santa:

It truly has been a tough year, but we were all good.  We worked hard to keep our organization going, often on a shoestring budget.  So, when you are making your rounds tonight and come to town, could you please bring us:

  • A Web designer.  We need to update our website so we can get our message out more effectively and to more people.  Oh yes, we have to  add a donation button to the website as well.  Could you see to that as well? 
  • A Cyber security expert.  Obviously, if we get a new website we need to make sure it is hacker resistant. Data security is so important these days.  We can’t afford to get our website hacked and held for ransom. 
  • A CPA.  Who can understand the PPP rules, not to mention that new lease accounting we have to figure out?  Maybe those guys at the FASB will leave us alone this year?  If they have any bright ideas about new accounting standards in 2022 we hope they keep them to themselves. 
  • A whole bunch of volunteers.  That includes the first four people on this list and a lot of others to help us carry out our mission this year.  
  • People willing to serve on our board.  We know these are far and few between. We also know this is a big time commitment for someone.   You have a pretty wide network of friends.  Perhaps you can convince some of them to donate their time and talent to help us out?  

Of course, you don’t have to drop them down the chimney.  They can knock on the front door and we will let them in. If you want though, could you leave us five gallons of hand sanitizer and wipes?  You can definitely leave those under the tree in the office. If that isn’t possible because of supply chain issues,  perhaps you can just leave a check to help us balance our budget this year? 

 Please kindly remember all of our volunteers,donors, employees,  clients, vendors and other stakeholders  this year as well.   We couldn’t have done it without them. A few of them might deserve coal in their stocking like the members of the FASB, but please overlook this. They have had a tough year too.  On second thought, perhaps the FASB board members do deserve coal in their stocking for that lease accounting decision they made last month. We’ll leave that up to you.  

 Santa, if it is not too much to ask, can you please bring an end to this Pandemic?  We keep hearing about the “new normal”.  However, the “old normal” was difficult enough for all of our clients and us.  This new world is really putting a strain on the delivery of services to those who are most in need of them. Perhaps you can put a vaccine that works on all mutations of the COVID virus in our stockings?  We know this sounds magical, but we also know you use magic to carry all of those presents in your sleigh.

Finally Santa, we are sad to tell you that there will be no milk and cookies for you tonight.  The Governor won’t let anyone eat or drink in the office.  Unfortunately, that includes you.  When you drop in tonight, you have to wear a mask in the office as well.  By the way, are you vaccinated? 

Have a wonderful and restful Christmas Santa.  We hope Mrs. Klaus, the elves, and you all have a great New Year as well.  

Very truly yours,

The Board and Management

Any NFP Organization

PS.  Don’t forget to get the elves vaccinated if there are more than 100 of them! We don’t want OSHA coming after you. 

Mark Koscinski NFP

And the Runner Up for Grinch Is….

NFP organizations, like other employers, had a rough spell the last two years. In recognition of that, Congress provided for a deferral of the employer portion of payroll taxes due from March 27, 2020 until December 31, 2020 in the CARES Act. This was a deferral, and not a a forgiveness of these taxes. The chicken has now come home to roost. This is a reminder that 50% of the deferred balances must be deposited by December 31, 2021, with the balance due by December 31, 2022. Employers who do not make this deposit by year end will be subject to interest and penalties.

Given the fact the pandemic is still impacting many organizations, shouldn’t the IRS consider providing a more lenient repayment schedule? I can understand that remission of payroll taxes is out of the question, but many businesses and NFPs may struggle to make these payments. So, the runner-up in the 2021 Grinch election has to be the IRS.

Mark Koscinski NFP, Uncategorized

Who is the New Grinch This Christmas?

The Financial Accounting Standards Board (FASB) recently delivered an unwelcome holiday season body blow to the NFP world (and privately owned companies as well). 
Working hard to earn the title of Grinch, the FASB  decided on November 10 not to defer the new lease accounting standard for a third time.  The previous justifiable deferrals of the original implementation date were caused by the Pandemic, as many organizations were shut down or forced to adapt to their new reality. 

The new lease accounting will take effect for fiscal years beginning after December 15, 2021, and for interim fiscal periods beginning one year later. This standard requires all lease obligations to be recognized on the balance sheet of the organization, with only minor exceptions. Management could be in for some surprises  as bank loan covenants might be impacted because of the new debt on the balance sheet.  Additionally, an NFP organization will need to not only implement the lease accounting for future years but also to retroactively recalculate the impact of the new accounting for prior  years. This is required even if the NFP decides to adopt a “cumulative change” approach to implementation.  In short, NFPs shouldn’t underestimate the amount of work involved in this effort. Many organizations have already found the implementation more difficult than they originally anticipated. 

To say I disagree with the Grinch’s action is to put it mildly.  Many NFP organizations have been operating on a shoestring budget for extended periods of time, not to mention the fact the job market for accountants is extremely tight.  This means just finding the bodies to do the work is a difficult proposition. Mercifully, many NFP organizations have fiscal years such as June 30, giving them some more time to complete the required work. Nevertheless, it is imperative to begin working on this project as soon as possible so the delivery of financial statements to donors and other stakeholders is not delayed.  

Perhaps the FASB should adopt green as its new official color?