Standard 10: Ending Net Assets - Avoid accumulating funds that could be used for current program activities. To meet this standard, the charity's unrestricted net assets available for use should not be more than three times the size of the past year's expenses or three times the size of the current year's budget, whichever is higher.
NEFTN does not meet this Standard because:
- According to its audited financial statements for the fiscal year ending March 31, 2011, the organization's total unrestricted net assets were $3,315,616, or 7 times the charity's total expenses of $485,555.
Standard 11: Financial Statements - Make available to all, on request, complete annual financial statements prepared in accordance with generally accepted accounting principles. When total annual gross income exceeds $250,000, these statements should be audited in accordance with generally accepted auditing standards. For charities whose annual gross income is less than $250,000, a review by a certified public accountant is sufficient to meet this standard. For charities whose annual gross income is less than $100,000, an internally produced, complete financial statement is sufficient to meet this standard.
NEFTN does not meet this Standard because:
- The organization's audited financial statements were not prepared in accordance with generally accepted accounting principles. According to the audit: ". . . the accompanying financial statements have been prepared on a modified cash basis of accounting. That basis differs from generally accepted accounting principles primarily because New Eyes for the Needy recognizes revenues and donations when received and certain expenses are recognized when paid rather than when earned."
Standard 12: Detailed Functional Breakdown of Expenses - Include in the financial statements a breakdown of expenses (e.g., salaries, travel, postage, etc.) that shows what portion of these expenses was allocated to program, fund raising, and administrative activities. If the charity has more than one major program category, the schedule should provide a breakdown for each category.
NEFTN does not meet this Standard because, in the organization's financial statements, the detailed functional breakdown of expenses:
- Was not included. A detailed functional breakdown shows expenses by natural classification (e.g., salaries, travel, postage, etc.) and indicates what portion of these expenses was allocated to program, fund raising, and administrative activities).
Standard 14: Budget - Have a board-approved annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising, and administration.
NEFTN does not meet this Standard because, when the organization provided budget information, it indicated that the fiscal year 2012 budget:
- Did not identify total projected fund raising expenses.
- Did not identify total projected administrative expenses.
- Did not identify total projected expenses.
Standard 16: Annual Report - Have an annual report available to all, on request, that includes: (a) the organization's mission statement, (b) a summary of the past year's program service accomplishments, (c) a roster of the officers and members of the board of directors, (d) financial information that includes (i) total income in the past fiscal year, (ii) expenses in the same program, fund raising and administrative categories as in the financial statements, and (iii) ending net assets.
NEFTN does not meet this Standard because the 2011 annual report did not include:
- Total income.
- Total end of year net assets.