NIFA Conference Presentation – January 25, 2006

1. NIFA Conference Presentation – January 25, 2006 Jared Faltys, CPA, PFS CHRISTENSEN BROZEK FALTYS PC Email: jared@cpafirm.info Website: www.cpafirm.info Phone: 402-371-1160

2. Board Responsibility from a CPA’s Viewpoint Quorum – possibly have in bylaws to have supermajority (forget the quorum) • How many board members? 8/12/24 ? Minutes - • If you think it should be written, then write it down.

3. Conflict of Interest • Implement Policy • Carry out the policy • Hold Board members accountable about the policy • Board members could fill out a conflict of interest document annually

4. IRS/Tax Items • 501c 3’s put determination letter on website • Majority are subject to sales tax • Unrelated Business Income • Any trade or business not related to its tax exempt activities • Must be regularly carried on.

5. Items You Want as a New/Existing Board Member • Audited Financial Statement or Audit of Internal Controls INTERNAL CONTROLS CHECKLIST • Fund tracking (track grants) • Provide copies of: • Articles of Incorporation & Amendments • Current Bylaws • Form 1023 • IRS Determination Letter • Conflicts of Interest Policy • Recent 990 Tax Form • Directors & Officers Liability Policy • Investment Policy (if needed)

6. Audited Financial Statements • What is an audit? • What is a compilation? • What is a review?

7. Sample Nonprofit Audit Report Letter • INDEPENDENT AUDITORS’ REPORT • To the Board of Directors • XYZ Nonprofit Organization • Lincoln, Nebraska • We have audited the accompanying statement of financial position of XYZ Nonprofit Organization, as of December 31, 2006, and the related statement of activities, functional expenses and cash flows for the year then ended. These financial statements are the responsibility of the Organization’s management.Our responsibility is to express an opinion on these financial statements based on our audits. • We conducted our audit in accordance with U.S. generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion. • In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of XYZ Nonprofit Organization as of December 31, 2006, and the results of its activities and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. • CHRISTENSEN BROZEK FALTYS PC • Certified Public Accountants • April 22, 2005

8. Sample Nonprofit Compilation Letter • Board of Directors • XYZ Non-profit Corporation • Lincoln, Nebraska • ACCOUNTANTS' COMPILATION REPORT • We have compiled the accompanying balance sheets of XYZ Non-profit Corporation (a non-profit corporation), as of March 31, 2006, together with the related activity statement and statement of functional expenses for the quarter ended March 31, 2006, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. • A compilation is limited to presenting in the form of financial statements information that is the representation of management. We have not audited or performed review services on the accompanying financial statements and, accordingly, do not express an opinion or any other form of assurance on them. • Management has elected to omit the statement of cash flows and substantially all of the disclosures ordinarily included in financial statements. If the omitted statement of cash flows and disclosures were included in the financial statements, they might influence the user's conclusions about the Company's financial position and results of activity. Accordingly, these financial statements are not designed for those who are not informed about such matters. • CHRISTENSEN BROZEK FALTYS PC • Certified Public Accountants • July 25, 2006

9. Financial Statement Basics • SAMPLE HOUSING CORPORATION, INC • SAMPLE HOUSING CORPORATION, INC • 3 things to look for in a financial statement (what’s important to your organization?)

10. THANKS FOR COMING! • Jared Faltys, CPA, PFS • CHRISTENSEN BROZEK FALTYS PC • Email: jared@cpafirm.info • Website: www.cpafirm.info • Phone: 402-371-1160