COVID-19’s Lasting Effects on Nonprofits – Audit and Tax Issues
The pandemic may have also affected the operation of internal controls at your organization. For example, if staff members were laid off or terminated, controls designed for segregation of duties may not have operated effectively. Likewise, increased health and financial insecurity may have increased the motivation of some individuals to commit fraud.
COVID-19’s Lasting Effects on Nonprofits – Management and Governance
Probably the single most important management issue put in the spotlight by the pandemic has been cash management. Nonprofit managers should focus on building their operating reserves by reviewing billing and collection processes, as well as implementing cost reduction strategies.
COVID-19’s Lasting Effects on Nonprofits – Financial Reporting
Nonprofits should consider the impact of COVID-19 on the organization’s accounting and reporting for areas like fair value measurement, modifications of liabilities, and going concern evaluations.
COVID-19’s Lasting Effects on Nonprofits – Relief Programs
The American Rescue Plan Act of 2021 made many large nonprofit organizations eligible to apply for PPP loans for the first time. The legislation also provided new or extended employment-related programs (such as the Employee Retention Credit) and allocated federal funding for many programs championed by nonprofits, such as childcare, arts and humanities, food assistance and services for the homeless.