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Erin Carter

What many not-for-profits may not be aware of is that accepting federal funds may trigger the need to comply with single audit requirements. Or, that some state funds may instead originate from the federal government, thus triggering the single audit. Especially with trillions in COVID-related funding having been distributed, not-for-profit executives and Board members may need to brush up on their knowledge of single audits – and what to do if the organization is subject to one. To help clients, prospects, and others, Wilson Lewis has provided a summary of the key details below.

During the closing months of the year, many Atlanta individuals look for opportunities to reduce federal income taxes. It is a common practice to review both federal and state tax credits and deductions to identify where opportunities may exist. In fact, 2021 appears to be the last year to leverage many of the now-expired federal COVID-19 tax credit programs. Despite the options, many taxpayers reduce taxes simply by contributing to a tax-deferred retirement plan such as a 401(k), 403(b), 457, or a Thrift Savings Plan. Often increasing the elective deferral amount and accelerating contributions at year-end can go a long way towards tax planning goals. However, it is necessary to be aware of the annual contribution maximums.

Many Atlanta businesses have already started the process of complying with the new ASC 606 Revenue Recognition standard. Originally scheduled to become effective earlier, the Financial Accounting Standards Board (FASB) voted to delay the implementation one year due to the COVID pandemic. As the implementation deadline approaches many businesses are working through the steps of examining contracts to identify where revenue recognition changes may need to be made. While there has been extensive guidance and information made available on how to identify, assess, and report revenue recognition changes, including the 5-step process, fewer details are available on how to account for revenue-generating contracts in a business combination.

Fraud is a persistent threat that severely impacts the financial performance of an enterprise. When it is discovered a trusted employee, staff member, or executive has been stealing money, products, or services, it can have a lasting effect. This can manifest in the form of damage to the brand, or worse yet, adversely impact employee trust. For this reason, many companies in Atlanta and across Georgia regularly update fraud prevention programs. To help with this task, the Association of Certified Fraud Examiners (ACFE) published the 2020 Report to Nations – Global Study on Occupational Fraud.

For many years there has been concern about the accuracy, consistency, and quality of ERISA plan audits. Originally introduced as part of the Employee Retirement Income Security Act (ERSA), the audits are designed to ensure plans comply with established governance, financial reporting, and other standards. The depth of the problem came into focus when the DOL published, Assessing the Quality of Employee Benefit Plan Audits in 2015. In the report, it was found that 40% of audits contained major deficiencies. The report was full of such unfavorable findings which called into question the effectiveness of both the audit standards and firms providing the service.

As the pandemic continues to abate, the way many Atlanta businesses operate has significantly changed over the last 18 months. The unexpected restrictions preventing customers, employees, and vendors from directly interacting created unexpected operational challenges. New social distancing requirements forced organizations to make significant changes to achieve compliance. This meant some businesses (restaurants) had to move to a take-out-only format, and others had to limit production runs, while several companies transitioned to a virtual office environment. The ability to move to a virtual format allowed employees the opportunity to stay productive while working from home. This new operating format met regulations while serving customers in a whole new way.

Saving for retirement is an important step that every Atlanta individual and family needs should prioritize, at the right time, to ensure there will be enough for the golden years. Unfortunately, when seismic events like an unexpected global pandemic, even the best-laid plans can be cast aside. The unfortunate result of the forced business closures and stay-at-home orders meant that unemployment increased at robust rates. Many were left in unexpected situations where retirement savings was likely not top of mind. Despite these conditions, it appears optimism about meeting retirement savings goals was not impacted.

Organizations that spent $750,000 or more in federal funds with fiscal year-ends beginning after June 30, 2021, may need to abide by updated requirements from the Office of Management and Budget (OMB). The agency’s recently issued guidelines, the 2021 Compliance Supplement, supersede previously issued guidelines from November 2020. Given the increase in the number of organizations that have accepted funding from federal programs, an update was needed to ensure the proper reporting, testing, and compliance is occurring.

The COVID-19 pandemic created significant financial challenges for many businesses, individuals, and families. In January 2020, the unemployment rate in Atlanta was 3.2% but by June it had more than doubled to 7.6%.  These numbers reflect how the fear of virus transmission and new government orders conspired to create adverse circumstances. While companies were busy adapting operations to find new ways to serve customers, individuals and families were re-assessing financial priorities to weather the storm.

Many Atlanta businesses understand the complex challenges associated with managing a 401(k), 403(b), or other employee benefit plan. Maintaining compliance with the requirements set forth in the Employee Retirement Income Security Act (ERISA), ongoing DOL guidance, and IRS regulations is complicated often requiring the assistance of one, or more, outside consultants. The purpose of these regulations is to provide comprehensive protection of participant interests in several areas from plan communications and amendments to investments and loan procedures. Although Atlanta plan sponsors never intend to make a mistake, it is more than likely that at some point one will happen.