By Cheryl R. Olson and David Ashenfarb

There are many ways certified public accountants can provide pro bono services to a not-for-profit organization, from serving on an advisory board to performing an audit or providing bookkeeping services. In addition to providing financial support, CPAs like to volunteer their time for many different reasons. Some want to make a difference in their community, while others are passionate about the mission of an organization. Some wish to take advantage of affiliated networking opportunities, and others hope to enhance their skills and resume. Whatever the motivation, the free services CPAs provide to not-for-profit organizations are invaluable.

Many not-for-profit organizations have small budgets and attempt to direct the majority of their expenses to program services. They often feel reluctant to spend money for administrative purposes. Though not-for-profits may seek a CPA’s expertise to perform pro bono or discounted work concerning regulatory requirements, such as an annual audit or informational and corporate returns for federal and state purposes, many do not understand the valuable role a CPA could play in their organization.

Even more alarming is that many not-for-profits hire CPA firms to perform audits based solely on the fact that they charge the least for the service. The accounting profession must continue to teach not-for-profit organizations the value of CPA advice and service in the not-for-profit arena. The profession must establish a climate that acknowledges the CPA as the client’s trusted advisor.

This article addresses three types of pro bono activities provided by the CPA: serving in a governance role, providing day-to-day financial tasks, and performing annual services. The CPA can serve in a governance role by providing informal financial expertise as a member of a board of directors, advisory board, finance committee, or audit committee. In today’s climate, donors, government contractors and others in the public expect a not-for-profit organization to act with integrity and trust. The need for a CPA to serve on a board’s audit and/or finance committee is more vital than ever. A CPA could be critical in helping a not-for-profit organization create a strong control environment. Some of the more important areas a CPA could evaluate include whether the organization has accurate financial policies, meaningful financial statements, adequate insurance and, of course, a strong system of internal financial controls. Not many volunteers other than a CPA are qualified to make these important assessments. One word of caution for any volunteer is to always become familiar with the volunteer liability statutes in the state, and keep in mind that directors’ and officers’ insurance does not protect board members against all actions.

The second type of activity that a CPA can provide involves day-to-day financial tasks. This could include cleaning up the books from prior accounting disasters, performing daily bookkeeping functions or providing month-end reviews of the books. Once an accounting mess has been cleaned up, an organization must decide who is going to carry on the responsibility of day-to-day bookkeeping so that another mess does not occur. Many not-for-profits worry that if the volunteer CPA performs day-to-day tasks, the organization will have trouble setting performance standards or demanding timeliness from the volunteer. If a member of the board performs these tasks, the lines could become blurred between governance and management. More often than not, when volunteers perform the day-to-day tasks, the staff does not understand the financial information since they don’t have a stake in the process. However, since the financial statements belong to management, they have the ultimate responsibility for making financial decisions, not the volunteer.

The third type of pro bono activity that a CPA can provide is year-end services. This would include issuing an attest statement or signing an informational or corporate return. Given the increased scrutiny by watchdog groups and the state Attorney General’s office, does a not-for-profit organization really want their audit and tax return, which is available to the public, performed by a CPA for free? This could be a formula for disaster for both the not-for-profit and the volunteer. Both parties should consider certain questions such as: Would the volunteer be able to give the necessary time and effort? Would the volunteer spend enough time documenting audit procedures to meet professional standards? Does a pro bono audit raise the issue of a possible impairment of independence or give rise to the appearance of one? In deciding whether a pro bono audit makes sense, the not-for-profit and the volunteer both must be fully aware of the risks.

In summary, there are several different ways a CPA can perform pro bono services for not-for-profit organizations. If a CPA does his or her own due diligence and works with a reputable charity, the experience could be very rewarding for both parties. As certified public accountants, we must be concerned with the integrity of the profession and our personal work. We must weigh the rewards of helping not-for-profit organizations in our community with the risks that come with it. Only then can both the not-for profit organization and the CPA fulfill their goals.

If you or your firm is interested in providing pro bono services to not-for-profit organizations, you are encouraged to contact Lois Whitehead, NYSSCPA public relations manager, at lwhitehead@nysscpa.org or 212-719-8405.