Quiz 18: Accounting and Reporting for Private Not-For-Profit Organizations


The charity selected for this analysis is United Cerebral Palsy. 1. No. of program services listed were four, namely. • Support to affiliates • Public policy analysis/ advocacy. • Public education. • Non-federal grants. 2. Percentage of supporting services expenses to total expenses: img Therefore, 45% of total expenditure was used for supporting services. 3. No, there were no contributed services recognized by UCP. 4. $1,052,209 were spent on fundraising. 5. Year-end totals of unrestricted net assets were $2,033,703, temporarily restricted net assets were $$2,261,505 and permanently restricted net assets were $4,666,642. 6. The net assets released from restrictions amounted to $428,176.

To ensure accountability and transparency, a not for profit should make their policies, procedures and take such actions so to be inline of the following points. • Organization should have board of directors who can provide adequate oversight of NFP's performance. • CEO's performance appraisal must be done from time to time. • Organization should have proper disbursement policies, internal controls, fundraising policies etc. • Organization should have a proper accounting system, where it can safeguard charity's finances. • Organizations should have a board size of at least 5 members. So that adequate control over the charity's functions is there. • Board shall meet at least three times to review and direct the organization in better achievement of its goals. • There should be adequate policies laid out for the transactions having conflict of interests. • There should be performance appraisal of the charity within every two years. This will ensure whether the charity is working in accordance to its mission. • There should be a policy made for the above performance appraisal. Above are some of the points a not for profit organization has to consider to ensure its accountability and transparency.

Accounting for patient service revenue: Patient service revenue is the largest source of revenue for health care organizations. There are certain deductions to be deducted from the service revenue for services rendered to patients such as contractual adjustments and bad debts resulting in net service revenue. Calculate net patient service revenue of the organization: img Hence, net patient service revenue of the organization is $690,000. As other options are incorrect, correct option is (C) - img .