The Operational Services Division (OSD) of the Executive Office for Administration and Finance just released its FY 2019 UFR Audit and Preparation Manual, FY 2019 UFR Auditor’s Compliance Supplement, and FY 2019 Excel UFR Templates. The FY 2019 Manual is effective July 1, 2018 for the UFRs to be filed for FY 2019. Visit Mass.gov UFR Resources Center to access all information related to the UFR filing.
In the Notice of Policy Changes to FY 2019 UFR Audit and Preparation Manual, OSD outlines various items in the UFR Manual that have changed since the last version. AAFCPAs has outlined the significant changes for your convenience:
- Compensation disclosure in UFR Schedule A – The filing entity is required to disclose its principals’ compensation from the filing entity, its parent organization, related parties and affiliates. The compensation now consists of salaries, fees and bonuses, severance, and all other items included as personal income. This includes benefit packages, all forms of deferred compensation, and all payments by your organization to employee benefits plans and retirement plans. This also includes health insurance, vehicles, consultant payments, loans, and other items identified as employee compensation in IRS Publication 525 Taxable and Nontaxable Income of the Internal Revenue Service.
- Certain expense account line items reported in Supplemental Schedules A & B are now consolidated:
- Line 18E Direct Care Program Consultant and Line 19E Temporary Help are consolidated and the total will be reported in Line 18E.
- Program vehicle insurance (formerly included in Line 25E Client Transportation) now must be reported in UFR Line 26E Vehicle Expenses.
- Non-charitable expenses (formerly included in Line 34E Non Chartable Expenses) are defined as expenses related to activities that are not consistent with the charitable purpose as stated in the not-for-profit organization’s articles of organization, and should be shown as non-reimbursable costs in accordance with 808 CMR 1.05 and reported in Line 54E Direct State/Federal Non-Reimbursable Expense or Line 55E Allocation of State/Federal Non-Reimbursable Expense.
- Line 37E Management Fees and Line 41E Management Consultant are consolidated and the total will be reported in Line 37E.
- Line 39E Legal Fees and Line 42E Other Professional Fees and Other Administrative Expenses are consolidated and the total will be reported in Line 42E.
- Line 47E Director & Officers Insurance and Line 49E Professional Insurance are consolidated and the total will be reported in Line 47E.
- Certain staffing account line items reported in Supplemental Schedules B are now consolidated:
- Line 1S Program Director, Line 2S Program Function Manager, Line 3S Assistant Program Director and Line 4S Supervising Professional are consolidated and the total will be reported in Line 2S.
- Line 36S Maintenance, Housekeeping/Groundskeeping, Cook and Line 37S Direct Care/Driver Staff are consolidated and the total will be reported in Line 36S.
- Certain non-reimbursable expense account line items reported in Supplemental Schedules A & B are now consolidated:
- Line 3N Direct Other Program/Operating Expense and Line 6N Direct Other Expense are consolidated and the total will be reported in Line 3N.
- Other changes:
- A separate detail schedule for Line 35E Other Expense is only required if the total amount is over $5,000.
- The salary cap for officers and managers as defined by OSD is increased from $178,036.35 in FY 2018 to $183,448.93 in FY 2019.
- A separate schedule for Lines 26E and 45E Vehicle Expenses and Administrative Vehicle Expenses detailing the passenger vehicles is not required for 7 persons and greater passenger vans and vehicles. Previously it was not required for 8 persons and greater passenger vans and vehicles.
In addition to the above changes, OSD has updated its UFR Excel Templates to reflect the net asset classes changes made by ASU 2016-14. There are only two net asset classes: Without Donor Restrictions and With Donor Restrictions.
We advise you to review these changes and determine whether any changes need to be made to your financial reporting systems in order to gather the information necessary to prepare an accurate UFR based upon these new rules.