On December 22, 2017, Governor Wolf signed two bills into law that amend the Solicitation of Funds for Charitable Purposes Act (Charities Act). Both Acts become effective in 60 days from the date they are signed by the Governor, which is February 20, 2018.
Act 71 (HB 1420) amends the Charities Act to raise the thresholds for an audit, review or compilation of the financial reports required to be submitted by charitable organizations that are registered under the Charities Act.
An audit of the financial records of a registered charitable organization by an independent certified public accountant or public accountant is not required until the gross annual contributions meet or exceed $750,000 (audit threshold was previously $300,000). Charitable organizations which receive annual contributions of at least $250,000, but less than $750,000, will be required to have a review or audit of their financial statements performed by an independent certified public accountant or public accountant. Lastly, charitable organizations which receive annual contributions of at least $100,000, but less than $250,000, are required to have a compilation, review or audit of their financial statements performed by an independent certified public accountant or public accountant. A compilation, audit or review is optional for any charitable organization which receives annual contributions of less than $100,000.
Act 71 thresholds for audit, review or compilation of financial reports will be applied to all charitable registration renewals due February 15, 2018 (3/31/2017 FYE) and all subsequent renewals and to all new charitable organization registrations for all other fiscal year ends filed on or after February 20, 2018.
Act 72 (HB 1421) clarifies that annual registration statements for charitable organizations must be refiled annually based on the postmark date instead of the date received at the Bureau. This change will put the Bureau in line with the Internal Revenue Service (IRS), which goes by postmark date for timeliness in filing taxes. For example, if a registration statement is due to be refiled on May 15, 2018, it must be postmarked by May 15, 2018. Act 72 due dates will be applied to all charitable organization registration renewals due February 15, 2018 (3/31/2017 FYE) and all subsequent renewals and to all new charitable organization registrations for all other fiscal year ends filed on or after February 20, 2018. This change should help charitable organizations to comply with registration deadlines and eliminate late filing fees. Act 72 also increases the deemed approved time for charitable organization, solicitor and fundraising counsel registration filings from 10 to 15 days, giving the Bureau more time to review and process registration filings.
More information from the Bureau of Corporations and Charitable Organizations can be found here: http://www.dos.pa.gov/BusinessCharities/Charities/Pages/default.aspx