by Heather Phillips, CPA and Amanda Meko, CPA | Team Members of the Not for Profit Services Group
Does your not-for-profit receive funding from the State of Indiana? If so, are you aware of your annual filing requirement with the State for these funds?
Nongovernmental organizations receiving financial assistance from governmental sources in the form of grants, contracts, subsidies, contributions, reimbursements, or loans are required by Indiana Code (IC 5-11-1-4) to file an Entity Annual Report (Form E-1) with the Indiana State Board of Accounts. This is a separate filing from the Secretary of State’s Business Entity Report, which is annually sent to the Secretary of State’s office with a filing fee of $10. A link to the Form E-1 can be found at http://www.in.gov/sboa/3104.htm.
The Entity Annual Report must be completed and submitted to the State Board of Accounts within 60 days of year-end. The State Board of Accounts uses the information reported on the E-1 to determine the state audit and reporting requirements placed on an organization by Indiana Code 5-11-1-9. Shortly after the E-1 is filed, an organization will be notified if a state audit is required or if the organization qualifies for a waiver from a state audit. An organization may be asked to supply additional financial information before a final waiver determination made via letter is granted.
An organization should report as “governmental funds” on the E-1 all cash received from any state or local government. These funds may be direct awards of state and local monies or they may include federal funds that are “passed-through” state or local agencies. Direct federal financial assistance should not be reported on the E-1. Also, non-federal funding arrangements that are considered “purchase of service” agreements should not be reported on the E-1. “Purchase of service” agreements, or vendor-type contracts, are those were an organization is being reimbursed on a “per diem” or “per unit” rate for services provided by the organization. It is important to distinguish “per diem” and “per unit” reimbursement-type agreements from those where a government unit contracts with an organization to provide services for a flat fee or contract amount. These latter agreements are not considered “purchase of service” agreements and should be included on the E-1.
While the E-1 is not an overly long or complex form to complete, many organizations – particularly small not-for-profits or those receiving government funding for the first time – neglect to file this report. Failure to timely file this form may threaten future government financial assistance that is important to an organization. If you have a question about the form or your organization’s need to file, please contact us. We’d be happy to help you “fall” into place with this state requirement!