Mining Nonfinancial Information from
Financial Statements
William B. Ford, CPA
Director, Nonprofit Advisory & Assurance Services
February 24, 2016
G.T. Reilly & Company is a full-service certified public accounting firm that has
served the needs of nonprofit organizations for 60 years.
Our clients in the nonprofit community include:

Human service agencies

Private schools

Professional associations
Community action and housing organizations


Education and advocacy organizations


Cultural/charitable foundations
Religious organizations and houses of
worship

Healthcare providers and advocacy groups
Among the services we provide to nonprofit organizations are :
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
Financial statement audits, including audits under Government Auditing
Standards & Uniform Guidance (formerly OMB Circular A-133)

Assistance with preparation of the Massachusetts UFR

Management advisory services

Financial and strategic planning

Tax compliance and planning

Human resource consulting

Employee benefit plan consulting, design and implementation

IT services
William B. Ford, CPA
Director, Nonprofit Advisory & Assurance Services
Accounting & Auditing Director
With more than 30 years of experience providing auditing, accounting and consulting
services for nonprofits, Bill Ford has helped scores of organizations find ways to
fulfill their missions with ever-tighter resources. He draws satisfaction from
helping them maximize efficiencies so they can continue to deliver services to their
communities and members.
Nonprofit organizations are a significant portion of Bill’s client group, and he is
uniquely qualified with regard to Government Auditing Standards, including Uniform
Guidance (formerly OMB Circular A-133), and the Massachusetts Uniform Financial
Report, as well as federal and state tax filings.
Bill earned his Bachelor’s Degree in Accounting from Bentley College in 1980, and
joined G.T. Reilly in 1988. He is a member of the Massachusetts Society of Certified
Public Accountants Nonprofit Accounting & Auditing Committee.
Bill understands the needs of nonprofit organizations first-hand, as he is the board
treasurer for the Watertown Community Foundation. Additionally, Bill has volunteered
his time as a financial analyst for United Way of Massachusetts Bay & Merrimack
Valley.
A devoted football fan, Bill holds season tickets for the New England Patriots and
Boston College football. He also enjoys yoga and is an amateur gardener. He lives in
Watertown.
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Poll Question #1
 Is your role in your organization:





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Finance
Executive/Management
Board member/officer
Funder
Regulatory authority
Statement of Financial Position

Objective: To report the assets, liabilities and net assets of organization at a
particular point in time.
 Statement of Financial Position items:
o Assets
o Liabilities
o Net Assets
 Classified vs. Nonclassified Statement of
Financial Position
o Distinction between ‘current’ and ‘non-current’
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Statement of Financial Position
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Board Perspective
 The ‘Picture’
 Summary of organization’s financial information at a particular
point in time
 Comparative
o A two-presentation for comparison and trend analysis
 Performance indicators
o Liquidity and financial strength
• Cash on hand
• Current ratio
• Cash reserves
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Statement of Activities and Changes in Net Assets

Objective: Reports the surplus or deficiency for an
organization typically for a 12-month period.
 Revenue and Support
o Revenues
• Government contracts (federal, state, local)
• Fees for service
• Interest, dividends, realized and unrealized investment gains and losses
o Support
•
•
•
•
Grants
Donations
Fundraising
Special events
o Restricted vs. Unrestricted Support
o Expenses
o Change in Net Assets
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Statement of Activities and Changes in Net Assets
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Statement of Activities and Changes in Net Assets
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Board Perspective
 The ‘Movie’
 Summary of organization’s financial data throughout the year
 Comparative
 Performance indicators
o Change in net assets
o Diversity of funding
o Indication of growth or contraction
o Group analysis
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Statement of Functional Expenses

Objective: Reports expenses by group by natural
classification. Provides the detail of an organization’s
spending.
 Currently only required by voluntary, health and welfare
organizations.
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Statement of Functional Expenses
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Statement of Functional Expenses
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Board Perspective
 Salaries and wages
 Review on a comparative basis
o By group or individual program
o As a percent of total expenses
 Significant line items
 Justifiable/reasonable
o No surprises!
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Statement of Cash Flows

Objective: To convert accrual basis financial statements to the cash basis and
present financial data in three separate categories.
 Cash flows provided by (used in) operating activities
 Cash flows provided from (used in) investing activities
 Cash flows provided from (used in) financing activities
 Other items
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Statement of Cash Flows
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Board Perspective
 Cash flows from operations
o Positive
o Negative
 Negative
o Source of funding
• Investment activities
• Financing activities
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Notes to Financial Statements

Objective: To provide supporting narratives and numeric
detail disclosures to the basic financial statements
 Nature of operations
 Significant accounting policies
 Expanded detail for statement of financial position
 Other significant items
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Board Perspective
 Read the Notes!
 Non-statement financial
information
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o
Leases
o
Lawsuits
o
Uses and balances
of restricted funds
Poll Question #2
 Do you feel your organization’s board has a good understanding
of the organization’s financials?
 Yes
 No
 Sometimes
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Schedule of Supplementary Information

Objective: To provide financial information in a nonprescribed format that is ‘user-friendly’ to the reader.
 Schedule of Revenues, Support and Expenses by Program and
Supporting Services
 Comparative Schedule of Functional Expenses
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Schedule of Supplementary Information
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Board Perspective
 If not in financial statement, request from management
o Depicts surplus or deficiency by program
• What program is making money?
• What program is losing money?
• Is fundraising and development sufficient
to subsidize program losses?
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Poll Question #3
 Is your board currently using the organization’s financial
reports effectively to address weaknesses and deficiencies?
 Yes
 No
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Thank you!
 G.T. Reilly & Company serves a wide variety of nonprofit organizations with
accounting, auditing, tax and consulting services.
 Please visit us on the web at www.GTReilly.com.
 Contact information:
William B. Ford, CPA
Accounting & Auditing Director
Director, Nonprofit Advisory & Assurance Services
WBF@gtreilly.com
617-696-8900
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G.T. Reilly & Company
424 Adams Street
Milton MA 02186
617-696-8900