Learn about key changes to nonprofit operating in the state of New York including a mandatory conflict of interest policy, whistleblower policy and require audit committee functions - O'Connor Davies CPAs - NY CPA Firm.
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NY Nonprofit Revitalization Act 2014
1. January 2014
Private Foundation Newsletter
First California, Now New York
Changes in State Nonprofit Requirements
Contact:
New York, NY
212.286.2600
212.867.8000
Harrison, NY
914.381.8900
Stamford, CT
203.323.2400
Paramus, NJ
201.712.9800
Cranford, NJ
908.272.6200
New Windsor, NY
845.220.2400
Wethersfield, CT
860.257.1870
Nearly 10 years after California signed into law California’s Nonprofit Integrity Act of 2004,
New York State Governor Andrew Cuomo has signed into law the New York Nonprofit
Revitalization Act of 2013. The rest of the country might see this as an indicator of changes to
come for their respective states. As with many laws (e.g. employment law), once California
and New York move toward a major change, others follow.
The New York Nonprofit Revitalization Act will have an important impact in modernizing the
New York Not-For-Profit Corporation Law, which has not had major revisions in four decades.
The Act goes into effect on July 1, 2014.
Mandatory Conflict of Interest Policy – All nonprofits will need to adopt and follow a conflict
of interest policy that meets the criteria of the Act.
Whistleblower Policy – All nonprofits with 20 or more employees and annual revenues in
excess of $1,000,000 must adopt a whistleblower policy that meets the criteria of the Act.
Audit Committee Functions – Nonprofits with annual revenues in excess of $500,000 must
have an audit committee which annually approves the retention of an independent auditor
and reviews with the auditor the results of the audit. In the absence of a separate audit
committee, the entire board may perform these activities. If an organization’s revenues
exceed $1,000,000 annually, additional matters, such as the scope and planning of the audit
as well other matters, would need to be discussed with the Audit Committee.
NOTE: We believe these requirements should not have a significant impact on the scope of
activity of audit committees presently in existence. However, an important outcome of the
Act is to allow the New York Attorney General new powers to oversee and act on apparent
violations of good governance practice.
Most, if not all, of the aspects of good governance included in the New York Act are referred
to in IRS Form 990, as revised in 2008. However, those governance questions in the Form 990
do not represent aspects of law, at either the state or Federal level. This Act will change that
dramatically for nonprofit charities operating in New York State.
Click here to see a copy of the Act. For the Attorney General press release, including
comments by leaders in the nonprofit sector, see this link.
If you have any questions about the Act, please contact Tom Blaney tblaney@odpkf.com or
Chris Petermann cpetermann@odpkf.com, Co-Directors of the Private Foundation practice at
O’Connor Davies.
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