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NJ Raises Charities' Audit Threshold to $500,000
Charitable Registration & Investigation Section (CRIS) of the New Jersey Division of Consumer Affairs recently re-issued its regulations governing charities operating in New Jersey. Most of the changes are cosmetic in nature or conform the regulations to the accepted practices the CRIS has been following. Perhaps the most significant change for smaller nonprofits is the increase in the dollar threshold for when charities must prepare and submit to CRIS audited financial statements with their annual charity renewal registrations.
In New Jersey, a charity that raises more than $10,000 in gross contributions during its fiscal year generally must register with CRIS within 30 days of exceeding $10,000. Thereafter, the charity must file annual renewal registrations. If gross contributions exceed $25,000, the charity must use the "long form" for its initial and renewal registrations.
As part of the annual renewal registration process, a long-form filer must submit an annual financial report with CRIS. If the charity received more than $500,000 in gross revenues during its fiscal year, then the financial report must be audited by an independent certified accountant. Prior to the amendments, the threshold was $250,000. The new, higher threshold is effective as of February 22, 2011.
Most of the other substantive changes to the regulations pertain to fund raising counsel and independent paid fund raisers, and the contracts they have with charities.
The final revised regulations issued by CRIS (43 N.J.R. 439(a)) are available at www.nj.gov/lps/ca/adoption/charado_022211.htm. To see the actual changes that were made by CRIS in highlighted mode, read the proposed amendments (42 N.J.R. 1676(a)), which were all adopted as proposed, at www.nj.gov/oag/ca/proposal/charitiespro_080210.htm.
To read more about charitable registration in New Jersey, see the Pro Bono Partnership's article on the topic at
http://www.probonopartner.org/publications.htm under the Tax, Fundraising, and Registration section.
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