Welcome to The CPA Journal Archives

Visit cpajournal.com to read the very latest from The CPA Journal


A New Look at Nonprofits

Joanne S. Barry, CAE

For the second year in a row, New York State Attorney General Eric T. Schneiderman has taken on the grossly out-of-date laws that govern not-for-profit organizations with his proposed legislation, the Nonprofit Revitalization Act.

Although last year's attempt stalled in the legislative process before it could reach the floor, Schneiderman made great strides in the 2013 session and introduced comprehensive legislation (S.5845-13/A.8072-13) that was sponsored on both sides of the aisle in both state legislative houses, and was passed at the end of the legislative session.

The Society's membership had a very big stake in this process. Many members count not-for-profit organizations as part of their client base or work directly for such entities as CFOs, among other positions. In addition, not-for-profit organizations often call upon CPAs in their community to serve as members of their respective boards of directors in order to utilize their financial expertise. The NYSSCPA Not-for-Profit Organizations Committee reflects the size and scope of CPAs' involvement: it is one of the Society's most active committees, and its annual conferences in New York City and Rochester attract more than 600 attendees.

The Proposal Process

This legislation is a welcome first step for all of the state's nonprofits. For years, CPAs involved with not-for-profit organizations have had to navigate a system governed by archaic rules and regulations that drained resources from mission-critical programs, especially those providing important social services to New Yorkers. The need for these services has only grown in recent years, as New York has faced a variety of challenges, from the 2007–2009 recession to Hurricane Sandy.

In brief, the legislation recommends a number of commonsense modernization rule changes for tasks such as meeting notification guidelines. In addition, it contains vital new audit guidance to provide a clearer road map for CPAs tasked with checking not-for-profit organizations' books. The bill also proposes an increase in the audit threshold in order to provide relief for smaller organizations unduly burdened with unrealistic audit requirements. The new audit guidelines, along with improved conflict-of-interest and whistleblower policies, would improve transparency and increase nonprofits' accountability to the public.

Since Schneiderman first broached the idea of nonprofit reform last year, the Society has offered assistance on the matter and has been communicating with the State Attorney General's office. Recognizing our expertise in this area and our increased presence in Albany on other legislative issues, the bill's sponsors—State Senator Michael Ranzenhofer (R-61) and Assemblyman James Brennan (D-44)—invited the NYSSCPA to take part in the public hearing process. Following the invitation, members of the Society's Not-for-Profit Organizations Committee and Legislative Task Force put together a basic response to the proposed bill and crafted those comments into testimony that Society members Kevin McCoy and Ethan Kahn delivered in May 2013 before the New York State Senate and Assembly Committees on Corporations, Authorities, and Commissions.

The Society supported the overall concept of the legislation; the members who reviewed it said that it provided a refresh for the 21st century. Their technical recommendations centered on the desire to see increased unification and consistency in the language of audit standards and related guidance. Following the testimony, one of the bill sponsors and the State Attorney General's office asked the Society to submit further technical comments and to present its overall impression of the bill; this signifies a great stride both for the Society and the accounting profession in increasing our involvement in the legislative process.

Getting Involved in Government

The Society's involvement in the early stages of this bill is a direct result of our improved, proactive, and member-responsive approach to government relations. Through member support, we are able to establish connections and influence with lawmakers and officials in Albany, so that when the call goes out for relevant subject matter experts, we are on the list.

The NYSSCPA is playing a greater role in the legislative process. Presenting public testimony during the initial rollout of related legislation is now another tool that the Society can use to spread the word about the level of expertise that CPAs possess in many legislative topic areas. For far too long, lawmakers in Albany have undervalued the voice of CPAs, even when subjects directly related to the profession are discussed and codified into law. Our efforts on a variety of bills this past legislative session—one of the most active for the Society—illustrate the valuable progress we are making in establishing ourselves as a trusted resource for lawmakers.

Joanne S. Barry, CAE. Publisher. The CPA Journal Executive Director, NYSSCPA, jbarry@nysscpa.org.

Search for archived articles, authors, and topics below:


Login or create a new account