NAVREF encourages NPCs to call or email the NAVREF office when they are contacted by the NPPO to schedule their review.  We can share experiences to date, match you up with a similarly sized NPC that has already undergone a visit and otherwise support you through the review and follow up.  We also encourage NPCs that have gone through an investigation or site visit but have not yet contacted the NAVREF office to let us know about your experiences and outcomes.

Links:    2011 NPC Annual Report Template – REVISED 10-05-11

               Internal Controls Questionnaire 9-30-11

               NPPO – Operations Oversight Questionnaire 9-30-11

With the assistance of Mary Rauschenberg, executive director of the VA Connecticut Research and Education Foundation, and Zunner Soliz, finance manager for the South Florida VA Foundation for Research and Education (Miami), and input from members of the NAVREF board of directors, NAVREF has updated its NPC S.A.T. to reflect changes made in the NPC authorizing statute and subsequent re-publication of Handbook 1200.17. 

The NPC S.A.T. is a user-friendly means for NPCs to assess four main areas of typical operations including programs, governance, finances and selected management topics.  Along with items required under the NPC authorizing statute and VA policy reflected in VHA Handbook 1200.17 or required by other oversight or regulatory organizations, this tool offers additional standards that reflect a higher, but not required, level of competence. 

 Please take a few minutes to review and comment on the draft NPC S.A.T. posted at http://www.navref.org/bestpractices/om_main.htm.  After incorporating member comments received prior to January 2, 2012, the NPC S.A.T. will be finalized and reposted. 

To assist NPCs in complying with IRS requirements regarding justification of executive compensation, each year NAVREF compiles the publicly available executive director compensation data provided in NPCs’ IRS Form 990s.  This year’s spreadsheet reflects NPCs’ most recently completed 990s using the year 2009 or 2010 IRS form, depending on each NPC’s fiscal year start date.   

To assist in identifying appropriate comparable compensation, the spreadsheet contains the following data:  NPC location, total revenues, number of employees, employer contributions to employee benefits, total executive director compensation (actual), number of hours worked per week, and annualized compensation.

If you would like a copy of the 2011 NPC executive director comparability Excel spreadsheet, please send an email to dmccue@navref.org.

Fall is audit and 990 preparation time for many NPCs.  As you begin, please be aware of the following tips to ensure full compliance with IRS requirements.  This is particularly important as the IRS transitions to electronic compilation of 990 data which makes it easier for the IRS to identify missing information and anomalies.  Please watch for a couple of other tips in the next newsletter.

·        Part VII of the core form requires organizations to provide compensation (salary and benefits) paid to board members, officers (i.e., executive director) and key employees as well as the number of hours worked per week.  Please be sure to report accurate hours.  Some accountants use programs that round to the nearest hour.  If actual board member hours are less than .5 per week, then round UP to 1 hour per week to avoid “0” hours appearing on your 990 and to demonstrate active engagement in NPC governance. Also, reporting accurate hours is important for part-time executive directors.  Using a number that reflects the actual hours worked per week allows accurate calculation of annualized compensation.  If hours reported are not accurate, then annualized income can be skewed too high or too low, which becomes difficult to justify as reasonable.

·        Line 18 of Part IX of the core form requires organizations to report Payments of travel and entertainment expenses for any federal, state, or local public officials.  Watch out - the definition of federal or public official is not what you think!  The instructions for Part IX, Line 18 require nonprofits to report travel reimbursements paid to government officials whose total government compensation exceeds a specific threshold, currently $145,700.  Consequently, the IRS definition of government officials includes VA investigators who earn more than $145,700 in compensation from VA and/or a state university, and most NPCs should be reporting an expense amount on this line.  For additional details that you can share with your accountant and auditor, please click here. 

In their 2011 Annual Conference evaluation forms, a number of attendees asked where they can find more “nuts and bolts” training on federal funds management.  Please be aware that Management Concepts (https://www.managementconcepts.com) offers in-depth training on federal funds management, including a certificate track for recipients of federal grants and contracts.  The Society of Research Administrators International (SRA International - http://www.srainternational.org) and the National Grants Management Association (www.ngma.org) are additional resources for training, professional certification and networking. 

7.      2011 NAVREF IDC Lobbying Deduction. 

NPCs administering federal awards (NIH, DoD, etc.,) are likely to be aware that organizational expenses related to lobbying are unallowable for federal reimbursement under OMB Circular A-122 (2 CFR 230), Cost Principles for Nonprofit Organizations.  However, please also be aware that NPCs should be deducting from their federal indirect cost rate proposals the percentage of their NAVREF dues – and dues paid to any other organizations that lobby - applied to lobbying.  For the NAVREF fiscal year ending September 30, 2010, the percentage was a modest 2%.  The remaining 98% of NAVREF dues are an allowable cost under the A-122 rules.  End of Year Financial Statements.  

Because NAVREF’s 2011 Annual Membership Meeting occurred before the end of NAVREF’s last fiscal year, the Treasurer’s Report given at the meeting reflected only three quarters of a year of financial information.  Please click here for complete end-of-year financial statements and NAVREF’s budget for the current fiscal year.  Please contact the NAVREF office if you have questions.

9.      Holiday Wishes and Vacation Plans.  

The NAVREF staff wishes everyone associated with NPCs and NAVREF a bountiful and enjoyable Thanksgiving.  It is our pleasure to work with the NPC staffs and board members who comprise the NAVREF community.  I know I say it every year, but we are thankful and honored to work with people so dedicated to veterans and the role NPCs play in supporting VA research and education.

The NAVREF office will be closed on Thanksgiving Day and on Friday, November 26.  Barbara will be on vacation December 7-23.  Angela and/or Diana will be in the office during this time.  Don’t hesitate to send an email or call the office if you have questions or anything you would like to discuss during the holidays.

Best wishes for a happy and safe holiday season.