Saturday, September 30, 2006

HB 632, Auditing of Charities and Nonprofits

Two organizations I have come to trust have both weighed in on a bill this week. While the second organization does not specify a position on the bill, it does provide a little more information, and is mentioned as part of a coalition with the first organization. I think the amendment sounds like a fine idea.

From the Pennsylvania Association of Nonprofit Organizations

The charitable audit threshold bill HB 632 (PN3824) has been placed on the Senate Calendar for Third Consideration and may be put to a Final Vote on Tuesday, October 3. The bill was reported out Committee on September 26 without any amendments.

HB 632 (PN3824) will increase the audit triggering threshold for all charitable nonprofits from the current $125,000 in annual contributions to $300,000. This bill will enable smaller charities to direct more of their charitable dollars to programs and services, rather than to costly audits.

PANO's proposed amendment would require a review for charities raising between $100,000 and $300,000, and a compilation for charities raising between $50,000 and $100,000. Establishing some level of disclosure for organizations that fall below the $300,000 threshold, will help maintain the public trust.

PANO has promoted this bill with a coalition of organizations including the Association of Fundraising Professionals (AFP), the Pennsylvania Institute of Certified Public Accountants (PICPA) and the Greater Pittsburgh Nonprofit Partnership (GPNP).

There is more information on their website's public policy page.

The Pennsylvania Institute of CPA's, the nice folks whose weekly legislative report is one links I provide in my weekly legislative update, have this to say.

The Senate State Government Committee approved House Bill 632 on Tues., Sept. 26, without amendments, sending it to the full Senate for consideration.

House Bill 632 amends the Solicitation of Funds for Charitable Purposes Act of 1990 by removing the exemption for first responder organizations, such as veterans’, volunteer fireman’s, ambulance and rescue squad organizations.

The bill also increases the audit threshold for organizations that receive annual contributions of more than $300,000—up from $125,000. Organizations that receive annual contributions of between $50,000 and $300,000 would be required to have a compilation, review or audit of their financial statements.

If any of our state senators are reading, this is something I, speaking as a community activist and someone who works in and with a number of these smaller nonprofits, strongly support.

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