Travel Reimbursement Policies for Nonprofit and Governmental Agencies

Nonprofit and governmental agencies are challenged with maintaining and managing travel policies and procedures.  Establishing a well-defined travel policy, communicating this policy to employees, and consistently applying this policy across your organization will help to lessen the headaches associated with such transactions.  According to a report by the Association of Certified Fraud Examiners, 14 percent of all asset misappropriation schemes were through expense reimbursement.  That percentage is even higher for nonprofit organizations, jumping up to 25 percent.  Seeing these statistics should light your fire to design proper policies and procedures for travel expense reimbursement.

Many variables should be considered when preparing your travel policy.  A great resource is the IRS Publication 463 that is updated each year.  This is an excellent starting point for any travel policy as it includes many best practices and it accounts for tax repercussions of travel reimbursements.  A travel reimbursement policy should define who it applies to and when.  The policy could apply to employees, board members, volunteers, and contractors.  One of the most important items for a solid travel policy is the type of documents required and when the documents are to be turned in for reimbursement.  Obtaining proper adequate documentation can be challenging.  However, with a well-defined travel policy, such challenges will be avoided.  Essentially, you are looking for supporting documentation that will prove the travel reimbursement is a valid expense to your organization.  The policy should address all travel expense possibilities such as airline travel, hotel stays, lodging, transportation, meals and entertainment, and what defines a non-reimbursable expense.

One tricky aspect common among organizations is issuing travel advances.  If an employee plans to travel, instead of issuing them a company credit card or reimbursing the employee when they return, the organization may estimate the costs to complete the trip and issue them funds upfront.  Travel advances can be handled in different ways, but the most important point is to lay out the expectations in the travel reimbursement policy and to complete the tracking of advances once employees return.  You may want to only issue a portion of the advance prior to their trip, and then reimburse the employee for the remainder when they provide supporting documentation.  If a travel advance is issued for more than the trip costs, or if the employee fails to supply documentation, make sure the policy describes what action will be taken to recoup those funds from the employee.

Once the polished travel reimbursement policy addresses all possible aspects for your organization, the final step is to have it approved by management or the board of directors.  It should then be included in an employee handbook or other such documents, which should be offered to employees annually, or when significant changes are made, so everyone is on the same page.  To minimize confrontation sometimes associated with travel reimbursements, the people in charge of administering the reimbursement should apply it consistently across the organization and be able to refer directly to the organization’s travel expense reimbursement policy.

Having a clear and effective travel reimbursement policy in place keeps people accountable, ensures the organization’s compliance with all legal and regulatory requirements, and could potentially save your organization money.

September 3, 2020

Cooking With DJ

Cooking is my favorite hobby and it’s so rewarding because you can share the outcome with everyone.  Now that nicer weather is here, it is the perfect time to go outside and tend to your garden or make use of the fresh summer produce currently available.  Here is one of my favorite summer recipes that brings vibrant colors and flavors together for an easy meal.

Chicken Pesto Pasta – serves 4

1 lb chicken breasts

2 cloves garlic, minced

1 tbsp olive oil

1 bundle asparagus, roughly 15 spears

½ cup roasted cherry tomatoes or sundried tomatoes (see Ingredient Note)

8 oz penne pasta

1 cup reserved pasta water

1 ½ cups Pesto Sauce – store bought or homemade (see recipe below)

Salt and pepper to taste

For the pesto sauce:

1 cup fresh basil leaves

1 cup spinach leaves

2 cloves garlic

½ cup roasted nuts (see Ingredient Note)

½ cup parmesan cheese

Salt to taste

1/3 cup olive oil

1.  To make the pesto sauce, add the basil, spinach, garlic, roasted nuts, parmesan cheese, and salt to a blender or food processor and blend until finely chopped.  Then, on low speed, slowly drizzle in olive oil until all ingredients combine and sauce forms.  You can add water or chicken stock to loosen the mixture, if necessary.  (You can make this sauce ahead of time and keep it in the refrigerator or even the freezer until ready to use)

2.  Remove woody ends of asparagus and discard.  Season asparagus and chicken with salt and pepper and grill for approximately 10 minutes, or until asparagus is lightly charred and chicken reaches an internal temp of 165 degrees. Once off the grill, cut chicken into bite-sized pieces and asparagus spears into ¼ inch pieces. 

3. Bring 1 gallon of water and 2 tbsp salt to a boil in a large pot and cook penne pasta according to instructions on box or until al dente.  Reserve 1 cup of pasta water, and then drain.

4.  Combine the minced garlic, olive oil, grilled chicken, grilled asparagus, and roasted tomatoes together in a large pot and cook over medium heat for just a few minutes.  Add the pasta, reserved pasta water, and pesto sauce and mix everything together.  Season with salt and pepper to taste.

5. Top with parmesan cheese and enjoy!

Ingredient Notes:

Roasting cherry tomatoes is as easy as putting them on a skewer and throwing them on a grill until lightly charred.  This enhances their sweetness, which perfectly balances this dish.

You may use the traditional pine nuts for this sauce, or you could also use almonds or walnuts as well.  It is absolutely essential to roast your nuts prior to blending as it releases the natural oils of the nuts and gives the pesto sauce a more robust flavor.  Do this by spreading them out on a baking tray in a single layer, and roast in the oven at 425 degrees for 12 minutes or until fragrant.

August 5, 2020

WY Relief Fund to Offer More Funding

The Wyoming Business Council is set to open the next wave of COVID-19 funding for small businesses and nonprofits impacted by the pandemic on Aug. 4.

Eligible businesses and nonprofits can apply for both the Relief Fund and the Mitigation Fund but applicants cannot apply more than one time per fund. Businesses that received a stipend from the Interruption Fund can also apply for these next funds. Recipients are not required to pay back the funds; however, all funds received through the COVID-19 Business Relief Program are considered taxable income.

Click the link below to the Wyoming Business Council site with the Relief Fund details including: application details, eligibility explanation, example scenarios, FAQs, calculating worksheets, and a glossary.

https://www.wyobizrelief.org/relief-fund

Remember, our experienced CPAs in our Gillette Office are available to assist with any questions or concerns.

July 31, 2020
News
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Merle’s Mustache Mob – Walking Miles to Defeat ALS

Our friend and former KTLLP Partner, Merle Karen, has been diagnosed with ALS.  Join us in showing support for this caring and generous man (with a distinguished and well-known mustache) who has given so much to KT and our community.

Join Merle’s Mustache Mob — Walking Miles to Defeat ALS! There are several ways to show support:

  • Join the KTLLP Team
    (All proceeds raised go to the ALS Foundation)
  • Or Sponsor a KTLLP walker listed on the Team Roster
    (All proceeds raised go to the ALS Foundation)
  • Share the KTLLP Team Page with family & friends.
  • Take a mustache selfie w/ the banner in front of the KTLLP RC office building at 810 Quincy St. July 27 – Aug. 1. Post your selfie on social media using the #WalkYourWaytoDefeatALS, #MerlesMustacheMob, and #ktllp hashtags.
  • Follow KTLLP social media for updates

Please consider joining our team in the Walk to Defeat ALS® or choose a team member from the list and donate to our cause. 
Our team is committed to raising money to support people in our community with ALS and spread awareness of the urgency to find treatments and a cure. 

WHY WE NEED YOUR HELP 

Every 90 minutes a person in this country is diagnosed with ALS and every 90 minutes another person will lose their battle against this disease. ALS occurs throughout the world with no racial, ethnic, or socioeconomic boundaries. 

That’s why we’re participating in the Walk to Defeat ALS. To bring hope. To raise awareness. To provide resources and services to families free of charge. To help unlock the mystery of ALS and find the key to treatments a cure. Will you join us? 

ABOUT ALS 

Amyotrophic lateral sclerosis (ALS) is a progressive, fatal neuromuscular disease that slowly robs the body of its ability to walk, speak, swallow and breathe. The life expectancy of a person with ALS averages 2 to 5 years from the time of diagnosis. 

ALS can strike anyone. Presently there is no known cause of the disease, yet it still costs loved ones an average of $250,000 a year to provide the care people living with ALS and their families need. Join the movement to provide help and hope today!

July 23, 2020

Governmental Accounting Standards Board (GASB) Statement No. 95

In order to provide some temporary relief to governments during the COVID-19 pandemic, the Governmental Accounting Standards Board (GASB) passed Statement No. 95, which is effective immediately and provides extensions to many upcoming standards.

The following standards are postponed by one year from their original effective date:

  • Statement No. 83, Certain Asset Retirement Obligations
  • Statement No. 84, Fiduciary Activities
  • Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements
  • Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period
  • Statement No. 90, Majority Equity Interests
  • Statement No. 91, Conduit Debt Obligations
  • Statement No. 92, Omnibus 2020
  • Statement No. 93, Replacement of Interbank Offered Rates
  • Implementation Guide No. 2017-3, Accounting and Financial Reporting for Postemployment Benefits Other than Pensions (and Certain Issues Related to OPEB Plan Reporting)
  • Implementation Guide No. 2018-1, Implementation Guidance Update – 2018
  • Implementation Guide No. 2019-1, Implementation Guidance Update – 2019
  • Implementation Guide No. 2019-2, Fiduciary Activities

The following standards are postponed by 18 months:

  • Statement No. 87, Leases
  • Implementation Guide No. 2019-3, Leases

Early application is permitted, but only to the extent it was allowed in each of the original, individual statements.  However, if any of the standards listed above are implemented prior to their newly extended dates, they must be disclosed as having been “early implemented.”

July 23, 2020
News
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KTLLP Closed July 3

In observance and celebration of the 4th of July, KTLLP offices will be closed on July 3rd. Please have a fun and safe holiday weekend.

July 2, 2020

KTLLP Presidential Trivia

July 4th is right around the corner! To get you in the mood, we’ve put together a couple trivia questions that will appear in the Black Hills Pioneer on Monday, June 29th.

Q. How many Presidents have visited or spoken at Mt. Rushmore? Bonus: Which ones?

A. 5 Presidents have visited Mt. Rushmore.

August 2002: George W. Bush

President George W. Bush spoke at Mount Rushmore National Memorial on Aug. 15, 2002.

July 1991: George Bush

President George Bush spoke during the 50th anniversary celebration of the completion of Mount Rushmore on July 3, 1991.            

June 1953: Eisenhower

President Dwight Eisenhower visited the Black Hills on this day 65 years ago. Eisenhower was the first president to visit South Dakota via airplane. He stayed at the Hotel Alex Johnson, held a parade in downtown Rapid City, visited Mount Rushmore National Memorial and fished in Custer State.

 August 1936: FDR

President Franklin D. Roosevelt visited South Dakota from Aug. 28-30, 1936, starting in Aberdeen then spending two days in Rapid City. He visited Mount Rushmore and its chief sculptor, Gutzon Borglum.

 August 1927: Coolidge

President Calvin Coolidge speaks during the ceremonial first drilling at Mount Rushmore on Aug. 10, 1927.

Q. Who is older, Mt. Rushmore or Ketel Thorstenson, LLP?

A. In 1936, Harold Heims started the accounting firm which would later go by the current name, Ketel Thorstenson, LLP. Mt Rushmore opened Oct 31, 1941.

We wish you all a happy and safe 4th of July. Now, who’s ready for some fireworks and hot dogs!

June 26, 2020

Revised Yellow Book for Governmental Auditing Standards (2018 Version)

The Yellow Book, which covers the Generally Accepted Government Auditing Standards (GAGAS), was revised in July 2018 and supersedes the 2011 version.  This new version is applicable for financial statement audits and attestation engagements (examinations, reviews, and agreed-upon procedures) for periods ending on or after June 30, 2020.  It is important to note early implementation is not permitted.

This revision has been in the works for years and is intended to make it easier for people to find information when researching.  Reformatted and realigned chapters make the look of the 2018 Yellow Book different than its predecessor.  For example, requirements are displayed in a box, with related application guidance underneath.  There are two categories of requirements – ones using “must” and ones using “should.”  When standards are described with “must” they are considered unconditional requirements and must be completed.  Standards using “should” are considered presumptively mandatory.  If it is determined the “should” standards cannot be met, auditors should provide documentation discussing how alternative procedures sufficiently accomplished the objective.  The “must” and “should” language existed within the 2011 Yellow Book and continue to be good reminders when determining audit procedures to be performed.

The most significant change to the Yellow Book involves the requirement for auditors to evaluate a significant threat to independence from performing non-audit services.  Non-audit services include:  preparing accounting records and financial statements, internal audit assistance, internal control monitoring, IT systems services, valuation services, etc.  The requirement to follow the conceptual framework still exists, but auditors must evaluate the safeguards to reduce the threat to an acceptable level.  This is likely an analysis that auditors have already been performing, but documentation of this specific item is key to comply with the new Yellow Book.

The revised Yellow Book modified the peer review standard to require organizations comply with their respective affiliated organization’s peer review requirements and GAGAS peer review requirements.  Organizations should comply with the peer review requirements of the applicable affiliated organizations:

  • American Institute of Certified Public Accountants
  • Council of the Inspectors General on Integrity and Efficiency
  • Association of Local Government Auditors
  • International Organization of Supreme Audit Institutions
  • National State Auditors Association

Another revision in the 2018 Yellow Book covers “waste” within fraud, waste, and abuse.  Waste was defined as “the act of using or expending resources carelessly, extravagantly, or to no purpose.”  It had been referenced in previous Yellow Books with fraud and abuse, but it had never been defined.  Waste can include activities which are not abuse and do not necessarily involve a violation of law.  If waste is detected, it must be reported as a written audit finding.

Please feel free to contact a governmental team member at Ketel Thorstenson, LLP for more specific questions regarding this topic.

June 5, 2020

Fraud in Non Profit Organizations

Fraud may occur in any organization, by anyone, and in many ways. It can have a major impact in all areas of the business. Fraud can be either misappropriation of assets or fraudulent financial reporting. Fraudulent activities occur when there is opportunity, rationalization, and pressure.

Fraud in nonprofits is not only detrimental to the financial side of an organization, it can have a significant impact to the nonprofit’s reputation and fundraising efforts. It is vital to keep an eye on areas where potential fraud could occur and have a plan in place if it does. But why would anyone target a nonprofit? What signs should organizations look for? What can a nonprofit do to mitigate the risk of fraud?

Nonprofit organizations are considered “easy targets” for fraudulent activities for several reasons. Why? Nonprofit organizations typically involve handling cash and a variety of people with different levels of involvement, from the Board of Directors to individual volunteers. There are also several processes, such as fundraising, that could present opportunities for fraudulent activities to occur. These activities are vital to the success of many nonprofit organizations and eliminating these activities due to the risk of fraud, isn’t feasible. Therefore, it is important to be aware of opportunities and signs of fraud. It is also vital to know how to prevent and detect fraudulent activities.

The signs do not necessarily mean that there is fraud, but it is important to be aware of them to protect the organization. Fraudulent activities may be committed by anyone associated with the organization, and significant changes in their behavior or lifestyle may be a tell-tale sign. If an employee or volunteer is living beyond their means, unwilling to share duties, has a defensive behavior, or unusual, close relationships form with vendors, it might be worth looking into.

There are many steps an organization can take to mitigate the risk of fraud. Overall, it is best to introduce strong controls that are monitored and adapted as needed. An example of this is to ensure segregation of duties. If an organization does not have enough people to maintain strong controls, it may be necessary to require the Board of Director’s participation in certain activities. An audit committee should play an important role in ensuring that controls are working as expected. Another step an organization may take is to ensure that the ethical tone begins with the Board of Directors and flows through the organization to the employees and volunteers. Encouraging ethical actions from the top down, may eliminate the rationalization aspect in some fraudulent activities. To encourage ethical actions, creating an anonymous hotline for employees and volunteers to report suspected fraudulent activities may be a useful control.

Fraud is a difficult topic to assess and deal with, but it is necessary to consider the risks and implement proper controls in order to protect an organization. Knowing where fraud may occur, the signs of someone that may be participating in these activities, and how to prevent and detect it are vital to ensuring the nonprofit’s continued success.

June 5, 2020

Great PPP News for Small Businesses!

QA #46 was published May 13, 2020, which is a regulation and has the force of law.    Now with clarity, any PPP borrower with a loan under $2 million will be protected under a “safe harbor” that they have borrowed the funds in “good faith.”

Prior the publication of this regulation, many such smaller borrowers were worried of the repercussions of SBA audit, if it was later found that the borrower did not need the money.

Now for any such small borrower, there will be no second-guessing of the good faith certification, and there is no chance of audit of the certification.

https://www.sba.gov/sites/default/files/2020-05/Paycheck-Protection-Program-Frequently-Asked-Questions_05%2013%2020.pdf

May 13, 2020