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Monday, May 13, 2013
News from State Comptroller Thomas P. DiNapoli
Thursday, May 9, 2013
RISK eNews From The NonProfit Risk Management Center
Thank You to our Generous 2013 Risk SUMMIT Sponsors!
The 2013 Risk SUMMIT will convene this August 25 – 27 in Boston, MA. This annual educational and networking event would not be possible without the generous support of the SUMMIT Corporate Sponsors:
HCA Asset Management, LLC, 501c Agencies Trust, Tangram and ProSight Specialty Insurance, Great American Insurance Group, Canfield and NPIP, Charity First Insurance Services, Inc., First Nonprofit Insurance Company, Chubb Group of Insurance Companies, Munich Reinsurance America, Inc., Philadelphia Insurance Companies, Riverport Insurance Company, Hanover Insurance Group, Inc., andArthur J. Gallagher & Co. and our Group of Companies. If you are interested in joining the line-up of sponsors, contact Jennifer Walther, Director of Client Solutions at (202)-785-3891 or at Jennifer@nonprofitrisk.org.
Inspired by Risk
By Erin Gloeckner
The staff members at the Nonprofit Risk Management Center find inspiration from many sources. We are moved by the ambitious missions of our consulting clients. We admire the unwavering dedication of our volunteer board. We marvel at the steadfast commitment of nonprofit leaders who embrace our tough love advice about risk management. Another source of inspiration is the creativity of risk thought leaders who engage their peers in the development or implementation of risk management strategies.
We also try to inspire our clients and AFFILIATE members to embrace risk-taking as a key to mission fulfillment. With risk and mission in mind, I wrote a poem for this week’s RISK eNews.
Molly Up to Bat
An event, a surprise, a fear come to life.
The big moment at the softball game.
My sister steps up, lights glaring, her breath visible in the cold night air.
Copying the others by slapping her bat on the plate. She never did that before.
The man beside me eagerly munches his hot dog.
A tasty reward after watching his son run home.
I squint my eyes, peering at my sister under bright field lights.
I hear the umpire yell twice: “STRIKE!”
Is it fate or chance? Will she strike out or win?
The boy on the mound winds up with a grin.
Focus is written in the lines of my sister’s face as she readies herself to take a swing of faith.
Children cheer in the stands as I shiver, chilly with uncertainty.
I watch, though I am tempted to look away, cowardly.
The ball takes years to cross the neatly trimmed grass, slowed by my nerves… my motherly concern.
I twist the tassels of my scarf as I wait to hear the call…
Then the ‘CRACK’ rings loud as her bat hits the ball!
Her coach screams “HOME!” and she stumbles into a giddy run.
Adrenaline surges through my heart as I begin to jump.
The painted diamond lights her way as she streaks past third.
Smiling ear to ear, she slides into the dirt.
Crowds chant my sister’s name at her first game of softball.
“Molly! Molly! Molly!”
Three swings to risk it all.
If you’re looking for inspiration for your risk management program, read one of our popular eBooks:
Step Up to the Plate
If you have a story of inspired risk management you want to share with your peers, complete the online speaker proposal form for the 2013 Risk SUMMIT: www.nonprofitrisk.org/summit/
Erin Gloeckner is Project Manager at the Nonprofit Risk Management Center, where she coordinates and supports consulting projects for a diverse array of clients. She’s also working on a brand-new book on managing partnership and fundraising risks. Erin welcomes your feedback on this article or questions about risk issues at erin@nonprofitrisk.org or (202) 785-3891.
Monday, May 6, 2013
Comptroller Thomas P. DiNapoli's Weekly News
Entergy Shareholders To Take Up DiNapoli Proposal On Nuclear Power Safety
New York State Comptroller Thomas P. DiNapoli Friday raised concerns with the storage of nuclear fuel at Entergy Inc.’s annual shareholder meeting in Little Rock, Ark. DiNapoli’s shareholder proposal calls for the company to implement a policy to minimize the amount of nuclear waste it stores in spent fuel pools and transfer that waste into dry cask storage.
DiNapoli: State Overtime Costs on the Rise
Overtime earnings at state agencies rose nearly 11 percent in 2012 to $529 million, escalating a trend that began in 2009, according to a report released Tuesday by New York State Comptroller Thomas P. DiNapoli.
DiNapoli: State Ends Fiscal Year in Solid Position But Challenges Remain
Despite unexpected costs from Superstorm Sandy and a weaker than expected economy, New York State ended state fiscal year 2012–13 in a stable cash position compared to recent years, according to an end of the year report released Monday by New York State Comptroller Thomas P. DiNapoli.
DiNapoli: St. Lawrence County Needs Long–Range Financial Plan
St. Lawrence County is coping with cash flow difficulties and a sharp decline in surplus funds, according to anaudit issued Thursday by State Comptroller Thomas P. DiNapoli. The audit notes that the county’s weakening fiscal health has resulted in program cuts, tax increases and a potential operating deficit.
Comptroller DiNapoli Releases Municipal Audits
New York State Comptroller Thomas P. DiNapoli Wednesday announced his office completed the following audits: the Village of Dresden; the Village of Hempstead; the Village of Middleburgh; the Town of Newfield; theTown of Pulteney; and, the Village of Whitney Point.
Comptroller DiNapoli School Releases Audits
New York State Comptroller Thomas P. DiNapoli Wednesday announced his office completed audits of the the Campbell–Savona Central School District; and, the Maine Endwell Central School District.
To see more news online click here.
New York State Comptroller Thomas P. DiNapoli Friday raised concerns with the storage of nuclear fuel at Entergy Inc.’s annual shareholder meeting in Little Rock, Ark. DiNapoli’s shareholder proposal calls for the company to implement a policy to minimize the amount of nuclear waste it stores in spent fuel pools and transfer that waste into dry cask storage.
DiNapoli: State Overtime Costs on the Rise
Overtime earnings at state agencies rose nearly 11 percent in 2012 to $529 million, escalating a trend that began in 2009, according to a report released Tuesday by New York State Comptroller Thomas P. DiNapoli.
DiNapoli: State Ends Fiscal Year in Solid Position But Challenges Remain
Despite unexpected costs from Superstorm Sandy and a weaker than expected economy, New York State ended state fiscal year 2012–13 in a stable cash position compared to recent years, according to an end of the year report released Monday by New York State Comptroller Thomas P. DiNapoli.
DiNapoli: St. Lawrence County Needs Long–Range Financial Plan
St. Lawrence County is coping with cash flow difficulties and a sharp decline in surplus funds, according to anaudit issued Thursday by State Comptroller Thomas P. DiNapoli. The audit notes that the county’s weakening fiscal health has resulted in program cuts, tax increases and a potential operating deficit.
Comptroller DiNapoli Releases Municipal Audits
New York State Comptroller Thomas P. DiNapoli Wednesday announced his office completed the following audits: the Village of Dresden; the Village of Hempstead; the Village of Middleburgh; the Town of Newfield; theTown of Pulteney; and, the Village of Whitney Point.
Comptroller DiNapoli School Releases Audits
New York State Comptroller Thomas P. DiNapoli Wednesday announced his office completed audits of the the Campbell–Savona Central School District; and, the Maine Endwell Central School District.
To see more news online click here.
Sunday, May 5, 2013
New Webinars to Start Summer Off Right from NYCON
Wednesday, May 1, 2013
News from The Non-Profit Times
Audits Show Widespread Underreporting of UBI
Unreported unrelated business income in higher education was found in almost every case examined by the Internal Revenue Service (IRS).
“The audits identified some significant compliance issues at the colleges and universities examined,” said Lois Lerner, director, Exempt Organizations division of the IRS. “Because these issues may well be present elsewhere across the tax-exempt sector, all exempt organizations need to be aware of the importance of accurately reporting unrelated business income and providing appropriate executive compensation.”
This is part of the multi-year project on tax-exempt colleges and universities. The Colleges and Universities Compliance Project was launched in 2008 with the distribution of detailed questionnaires to 400 randomly-selected colleges and universities. The IRS selected 34 of the 400 for examination because their questionnaire responses and Form 990 reporting indicated potential noncompliance in the areas of unrelated business income and executive compensation.
Unrelated business income (UBI) is the income from a trade or business regularly conducted by an exempt organization and not substantially related to its exempt purpose. Unrelated business taxable income is the UBI that is taxable after deducting expenses directly connected to the trade or business. Because UBTI is calculated by totaling the UBI from all activities and subtracting the total allowable deductions, losses from one activity can offset profits from another. Examinations have resulted in:
- Increases to UBTI for 90 percent of colleges and universities examined totaling about $90 million;
- More than 180 changes to the amounts of UBTI reported by colleges and universities on Form 990-T; and
- Disallowance of more than $170 million in losses and Net Operating Losses (NOLs, i.e., losses reported in one year that are used to offset profits in other years), which could amount to more than $60 million in assessed taxes.
The primary reasons for increases to UBTI in the completed exams were:
- Disallowing expenses that were not connected to unrelated business activities.
The IRS found that examined colleges and universities were reporting certain losses as connected to unrelated business activities when they were not. The misreporting occurred in two ways:
1. Lack of profit motive: The IRS found that organizations were claiming losses from activities that did not qualify as a trade or business. Nearly 70 percent of examined colleges and universities reported losses from activities for which expenses had consistently exceeded UBI for many years. UBI must be generated by a trade or business.
An activity qualifies as a trade or business only if, among other things, the taxpayer engaged in the activity with the intent to make a profit. A pattern of recurring losses indicates a lack of profit motive. The IRS disallowed reporting of activities for which the taxpayer failed to show a profit motive. Those losses no longer offset profits from other activities in the current year or in future years, with more than $150 million of NOLs disallowed.
2. Improper expense allocation: The IRS also found that on nearly 60 percent of the Form 990-Ts examined, colleges and universities had misallocated expenses to offset UBI for specific activities. Organizations may allocate expenses that are used to carry on both exempt and unrelated business activities, but they must do so on a reasonable basis and the expenses offsetting UBI must be directly connected to the UBI activities. In many cases, the IRS found that claimed expenses, which generated losses, were not connected to the unrelated business activity.
The IRS checked the calculations for all NOLs reported on returns under exam and found that NOLs were either improperly calculated or unsubstantiated on more than a third of returns. As a result, the IRS disallowed nearly $19 million in NOLs.
The IRS also determined that nearly 40 percent of colleges and universities examined had misclassified certain activities as exempt or otherwise not reportable on Form 990-T. Fewer than 20 percent of these activities generated a loss. The examinations resulted in the reclassification of nearly $4 million in income as unrelated, subjecting those activities to tax.
Examinations resulted in more than 180 changes to UBTI reported for specific activities by colleges and universities. More than 30 different activities were connected to the changes. The majority of these adjustments came from the following activities: Fitness, recreation centers and sports camps; advertising; facility rentals; arenas; and, golf.
To see the online aricle click here.
Comptroller Thomas P. DiNapoli's Weekly News
DiNapoli Audit Finds $7.7 Million in Questionable Charges by Special Education Providers
The Lake Grove School and the Mountain Lake Children’s Residence, two special education providers run by the same company, overcharged taxpayers by as much as $7.7 million over a four–year period, according to an audit released Friday by New York State Comptroller Thomas P. DiNapoli.
DiNapoli: State’s Brownfield Cleanup Program Needs To Reach More Sites; Be More Cost–Effective
The New York State Legislature should examine options to restructure the state’s primary program to revitalize contaminated properties – the Brownfield Cleanup Program – in order to fully achieve the important economic, public health and environmental goals set when the program was created, according to a report released Monday by State Comptroller Thomas P. DiNapoli.
DiNapoli Supports Lobbying Disclosure and Independent Director Proposals at Peabody Energy
New York State Comptroller Thomas P. DiNapoli Tuesday announced support for two shareholder proposals at Peabody Energy Corporation’s annual meeting on April 29 calling for Peabody to disclose corporate lobbying expenses and to require the chairman of the board to be an independent director.
DiNapoli Refers Investigation of Substance Abuse Provider to U.S. Attorney
Phoenix Houses of New York, Inc. provided inappropriate perks to its executives exceeding $223,000 while under contract with the Office of Alcoholism and Substance Abuse Services, according to a report released Wednesday by State Comptroller Thomas P. DiNapoli. DiNapoli referred the findings to U.S. Attorney Preet Bharara’s office for review.
Comptroller DiNapoli Releases Municipal Audits
New York State Comptroller Thomas P. DiNapoli Wednesday announced his office completed the following audits: the Bloomingburg Joint Fire District; the Village of Depew; the Essex County Probation Department; theEssex County Sheriff’s Department; the Town of Johnsburg; the Town of North Castle; the Town of Owego Fire District; the Rescue Fire Company, Inc.; and, the Village of Village of the Branch.
Comptroller DiNapoli Releases Audits
New York State Comptroller Thomas P. DiNapoli Wednesday announced his office completed audits of the the Beacon City School District; the Chenango Valley Central School District; the Fairport Central School District; the Monroe–Woodbury Central School District; and, the Oppenheim–Ephratah Central School District.
The Lake Grove School and the Mountain Lake Children’s Residence, two special education providers run by the same company, overcharged taxpayers by as much as $7.7 million over a four–year period, according to an audit released Friday by New York State Comptroller Thomas P. DiNapoli.
DiNapoli: State’s Brownfield Cleanup Program Needs To Reach More Sites; Be More Cost–Effective
The New York State Legislature should examine options to restructure the state’s primary program to revitalize contaminated properties – the Brownfield Cleanup Program – in order to fully achieve the important economic, public health and environmental goals set when the program was created, according to a report released Monday by State Comptroller Thomas P. DiNapoli.
DiNapoli Supports Lobbying Disclosure and Independent Director Proposals at Peabody Energy
New York State Comptroller Thomas P. DiNapoli Tuesday announced support for two shareholder proposals at Peabody Energy Corporation’s annual meeting on April 29 calling for Peabody to disclose corporate lobbying expenses and to require the chairman of the board to be an independent director.
DiNapoli Refers Investigation of Substance Abuse Provider to U.S. Attorney
Phoenix Houses of New York, Inc. provided inappropriate perks to its executives exceeding $223,000 while under contract with the Office of Alcoholism and Substance Abuse Services, according to a report released Wednesday by State Comptroller Thomas P. DiNapoli. DiNapoli referred the findings to U.S. Attorney Preet Bharara’s office for review.
Comptroller DiNapoli Releases Municipal Audits
New York State Comptroller Thomas P. DiNapoli Wednesday announced his office completed the following audits: the Bloomingburg Joint Fire District; the Village of Depew; the Essex County Probation Department; theEssex County Sheriff’s Department; the Town of Johnsburg; the Town of North Castle; the Town of Owego Fire District; the Rescue Fire Company, Inc.; and, the Village of Village of the Branch.
Comptroller DiNapoli Releases Audits
New York State Comptroller Thomas P. DiNapoli Wednesday announced his office completed audits of the the Beacon City School District; the Chenango Valley Central School District; the Fairport Central School District; the Monroe–Woodbury Central School District; and, the Oppenheim–Ephratah Central School District.
The Greatest Risk of All from the Non-Profit Risk Management Center
Got Risk Insight? Submit a Session Proposal Today
If you’ve figured out how to identify risks, teach safety and risk management to the board, or engage staff members in risk management initiatives… we want you on the faculty of the 2013 Risk SUMMIT. Visit the conference webpage and complete the workshop proposal form before the May 1 deadline.
The Greatest Risk of All
“I’m only human
Of flesh and blood I’m made
Human
Born to make mistakes”
Of flesh and blood I’m made
Human
Born to make mistakes”
– Human, The Human League, © Universal Music Publishing Group, Kobalt Music Publishing Ltd., EMI Music Publishing.
Many leaders of leading nonprofits worry excessively about external threats: competing organizations, fickle institutional funders, increased government regulations, the unpredictable global economy, radical political changes, and the like. Yet the most serious threats to a nonprofit mission arise from the humanity of our workforce. After all, we’re only human. Avoiding conflict, burying mistakes and feeling apprehensive about risk-taking are familiar components of human DNA.
What’s the Risk of Being Human?
· Conflict: When we ignore conflicting opinions or work styles at the board table or in the staff work room, we may rob our nonprofits of the contributions of creative leaders.
· Mistakes: When we severely punish employees for their errors, we may inadvertently cause staff to bury their mistakes.
· Risk Aversion: When we allow fear to extinguish proposed action that is risky, but potentially mission-advancing, we fail to leverage our reputation and assets.
Don’t Eliminate the Greatest Risk
If the greatest risk facing your nonprofit is its human DNA, how can you manage human nature? Here are a few strategies to consider:
· Embrace Conflict: Identify examples of unresolved conflict in your nonprofit and reflect on the consequences. What toll has conflict avoidance taken on your mission? Have high-performing staff or volunteer leaders walked away in frustration? Acknowledge that conflict is normal. Instead of pretending that everyone agrees, dig deep to find the wisdom in disagreement. Applaud the team member who has the courage to say “I disagree, and here’s why,” when everyone else has voted “yes.”
· Bring Mistakes to the Surface: Unearth mistakes and face them head on. Provide a comfortable space in which to step up and fess up to a mistake. Is that comfortable space consistent in the divisions, departments or functions of your nonprofit? How might you reward staff who bring errors, oversights or even wrongful assumptions to light?
· Resolve to Take More Risk: How often is a creative idea dismissed as “too risky?” Instead of allowing gut reactions or protests from your risk manager to stifle creative ideas, reflect on ways to encourage and inspire risk-taking.
The Center offers numerous resources on the topic of human-inspired risk, including the upcoming webinar on HR Risk: Take the High Road without Getting Lost. Join me live on May 1st at 2 pm Eastern, or register to watch the recording at your convenience. You can also check out some of our articles exploring HR risk and reward:
Melanie Lockwood Herman is Executive Director of the Nonprofit Risk Management Center. She welcomes your comments about people and risk or your questions about the Center’s services at Melanie@nonprofitrisk.orgor (202) 785-3891. The Center provides risk management Cloud tools and resources at www.nonprofitrisk.org and offers custom consulting assistance to organizations unwilling to leave their missions to chance.
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