What your nonprofit board members need to know about Form 990

Transcription

1 What your nonprofit board members need to know about Form 990 Developing a better understanding of the Form 990: A deep dive into the data Prepared by: James P. Sweeney, CPA, MBA, MTAX; National Lead Partner, RSM US LLP; Exempt Organization Technical Tax Services, Washington, D.C. james.sweeney@rsmus.com, July 2017 This is a white paper series that will be offered in two parts. Part I, below, explains the disclosure requirements of Form 990. Part II will explain the disclosures in the 16 schedules that may be attached to a nonprofit s Form 990 based on the activities it enters into during any given tax period. Have you ever sat in an audit committee, finance committee, or board of directors meeting reviewing your tax-exempt organization s current Form 990 and wondered, What does all of this information mean and why do people believe that I need to review and approve it? Additional questions might include: What really is my fiduciary responsibility related to the Form 990 and its contents?, Does that responsibility go as far as confirmation of information contained in the Form 990?, and Is that responsibility something even more serious, like my certification related to whether or not the information contained in it is accurate and complete? One thing is for sure, when the call goes out to set up the annual Form 990 meeting for those stakeholders charged with its review, angst runs rampant. The reality: Form 990 is a 12-part core form, with the potential to have up to 16 schedules attached to it. Each of those schedules has numerous parts related to disclosures with more than 200 pages of total instructions that contain a glossary

2 of definitions of more than 150 terms which are required to be understood in order to adequately disclose appropriate information that the IRS requires in its contents. In addition, hours can be spent by high-level salaried personnel both internally at the organization and externally by tax professionals who are engaged to ensure that no stone is left unturned and that all tax period information required to be disclosed on Form 990 actually makes it into those numerous pages contained in its report. What is the important information that audit committee and finance committee members, and boards of directors, need to or should know about Form 990 and its contents and disclosures? Paramount in any review is an understanding of what interests the general public and other regulators in the nonprofit industry related to Form 990 disclosures. Therefore, committee and board members must first and foremost understand where that focus is, and actually, what Form 990 accomplishes in its annual filing. At RSM, we believe that understanding why certain information is disclosed on the Form 990 by internal decision-makers helps to provide all those involved with a better understanding of its contents. This enhanced understanding of the disclosure requirements provides for a more thorough and complete review process. The appendix to this white paper contains the most recent version of an unpopulated 2016 Form 990 and is intended to be used as a reference while gaining a more thorough understanding of Form 990, its contents and why your organization reports what it reports on an annual basis. The core Form 990 Part I Summary Part I is a summary of contents coming from other areas of the core Form 990. It provides the users of the form with a snapshot of the organization s financial activity during the period of reporting. It is set up in comparative format so that the observers can answer their own questions related to How did the organization do this year as compared to last year? Each line contains information that actually directs the user to that specific part of the core form, where the information presented is contained, complete with part, line and column location. There are really only three areas of the summary that are not contained elsewhere in the core form. First, organizations are given a choice on line 1 to describe the organization s mission or its most significant activities for the year that the organization wishes to highlight. It is important to know that most organizations present their respective mission statement (which is also disclosed on the next page on line 1, of Part III), but others provide a more in-depth narrative. It is important for the reviewer of Form 990 to make sure that if a more in-depth narrative of the organization s most significant activities is provided, that such a statement is concise and offers a clear picture to the reader of those activities. Line 6 asks the exempt organization to provide information related to its volunteers, specifically the number of the organization s volunteers that assist it in accomplishing its tax-exempt purpose. Organizations are given a choice, but are not required, to provide an explanation on Schedule O, of how it determined the number it reports on this line, the number of hours those volunteers served during the year and the types of services or benefits provided. This is purely an elective disclosure and we find a high percentage of tax-exempt organizations do not provide this additional detail. However, there is a trend to disclose an appreciation statement in such a disclosure aimed specifically at thanking those volunteers for their contributions to the organization and its accomplishment of its tax-exempt purposes during the organization s tax year. This appreciation statement is geared towards those volunteers that may look over the Form 990 annually as well as those persons who may be considering becoming volunteers to the organization. The last line in this summary that does not come forward from other areas of the core form is Line 7b, which reports the organization s net taxable income subject to the unrelated business income tax. This amount will come from a completely different tax form if the organization partakes in activities that are not substantially related to the accomplishment of its taxexempt purpose. Part III Statement of program service accomplishments Part III is what many call the marketing part of Form 990. It houses information related to the activities of the organization and provides the organization with the freedom to demonstrate its value proposition and mission along with the great things it does for those served by the filing organization. This section is an important part of the Form 990. Many organizations utilize their marketing departments to assist in drafting language that puts the organization s best foot forward in describing its program accomplishments. Instructions require the tax-exempt organization to report statistics related to its accomplishments, e.g., number served, projects entered into, etc. If no statistics are present in the descriptions, reviewers of Form 990 should always ask why. Many organizations provide little or no statistics in their explanation of top programs as measured by the level of expenditures related to each, which in our experience is generally based on taking a lackadaisical approach to adequate disclosure. In addition, statistics may be reasonably estimated for the purposes of these disclosures. Above each program described is a line for certain financial information which summarizes the expenditures associated with that particular program, any grants or other allocations distributed that are associated with it, and revenue that is generated by that activity (disregarding contribution revenue given to the organization from donors). This information is only required to be disclosed by section 501(c)(3) and section 501(c)(4) organizations. The CODE indicated in Part III, Line 4, is not used by IRS and serves no purpose to date, so it is always left blank. 2

3 Part IV Checklist of required schedules This part identifies to the user of Form 990 which of the 16 schedules are attached to the Form 990. There is a limited chance a tax-exempt organization filing a Form 990 will mark YES to all of the boxes in this part. A YES answer identifies not only the schedule attached to the Form 990 filing, but also the specific part of that schedule that contains information as required by the instructions. The contents and reasons for the various schedules that may be attached to Form 990 are the focus of Part II of this white paper series. Part V Statements regarding other IRS filings and tax compliance There are many tax laws that the IRS deems important enough that it wishes management to focus on. Some of those tax laws are addressed in questions in Part I of this series. The intention of Part V is to force management to review these important tax laws that apply to tax-exempt organizations on an annual basis so that it is determined that the organization is not exposed to various penalties for failure to follow certain rules and regulations. A YES answer identifies that the organization is in compliance and a NO answer identifies that the organization is either not in compliance or such a provision does not apply. Audit committee members will notice that not all questions are answered in this part and some are left blank with no answer. This is because either the question contents do not apply to the organization, or a particular question applies to another type of tax-exempt organization (e.g., section 501(c)(7), 501(c)(29)). Part VI Governance, management and disclosure If there were ever a contentious part of the expanded Form 990 reporting that is discussed, it is Part VI. The IRS makes it known that although none of the questions in this part are addressed or required by the Internal Revenue Code, it goes on and states that the contents and questions address issues and practices that where present, provide an indication of a highly tax compliant organization. Generally, a YES answer in this part affirms that a certain practice or procedure is in place. Generally, a NO answer may mean either that the practice does not exist or that it does not apply. The danger of answers provided in a YES or NO format in this part is that such answers can easily be misconstrued. Audit committee members should observe the answers to these questions and if a question arises related to how the organization answers such a question, the organization should consider further explaining its answer for that particular question in Schedule O with a statement that provides clarity for the answer so that it will not be misconstrued. A solid Part VI will show: No independence issues among board members No family or business relationships between members of the board and/or with the organization That committees document decisions That board members may be contacted at the organization All policies and procedures mentioned in section B are in place Lastly, the more disclosure practices an organization discloses in section C, the more transparent the organization is perceived by not only the general public at large, but also by ratings agencies and charity navigators. An effective, completed sample Part VI is provided in the appendix and marked Exhibit A. Part VII Compensation of officers, directors, trustees, key employees, highest compensated employees and independent contractors This part of the Form 990 identifies who is governing the organization, members of management and the highest compensated employees. Board members who have the power to vote on matters of governance are required by the instructions to be listed first, followed by officers, key employees and then the five highest compensated employees earning more than $100,000 in annual W-2 wages. Instructions for this part dictate who is required to be listed after the board is listed based on position, hours devoted to that position and compensation and benefits levels. The entire compensatory arrangement is disclosed in columns D, E and F, related to salary and tax free benefits provided. Regardless of the organization s fiscal year-end, Part VII compensation is to be completed on a calendar year basis (year ending within year being filed). It is important that the organization get this part correct as it does receive the highest scrutiny over of any other part of Form 990. One thing that the organization has on its side related to any media inquiries related to compensation packages disclosed in Part VII is that the instructions are many and very technical in interpretation, so generalizations are usually baseless if made by someone that is not familiar with how such information is determined to be reported in this part. The number of persons reportable on Part VII is determined by the instructions, but a simple rule of thumb is anyone that is a board member at any time during the tax reporting year is included (which means those who may have stepped down from their positions, midyear, are included), all officers (as determined by the bylaws as to who is classified as an officer, except the top management official and the top financial official are treated as officers even though the bylaws may not consider them officers under state law), up to 20 key employees as defined in the instructions (generally focused on management power), followed by the top five paid employees that are not classified as key employees. Section B of this part sets forth the five highest paid independent contractors that provided services to the organization and paid more than $100,000 for the calendar year ended within the tax year of reporting on Form 990. Part VIII Statement of revenue This part categorizes the various types of income the organization received during the year. It also highlights the type of income across categories as related to the exempt purposes of the organization (column B), income that is unrelated to the accomplishment of exempt purposes for which the organization is recognized by the IRS and taxable and reportable on the Form 990-T (column C) (where the T in the form description means taxable ) and income which may not necessarily be related to exempt purposes, but also pursuant to 3

4 various sections of the Internal Revenue Code is excluded from treatment as taxable income (column D). Part IX Statement of functional expenses Part IX focuses on highlights of where the organization spends its money. The categories provided are established by the IRS in its instructions to Form 990. The expenditures are required to be further broken down by section 501(c)(3) and section 501(c) (4) organizations across columns as expenditures that assist the organization in accomplishment of its tax-exempt purpose (column B), expenses incurred in managing the organization (column C) and those expenditures incurred in raising funds for the organization (column D). An important ratio that charity watchdog agencies deem important from the disclosures of amounts in this part is the ratio of column B to column A (total program expenses divided by total expenses). This ratio indicates how much of the organization s total expenses were incurred in its tax-exempt programs. A ratio of 75 percent or greater is considered strong and an organization that is focused on accomplishing its overall exempt purposes. Part X Balance sheet This part sets forth the balance sheet for the organization. There are no real differences in classification from its audited financial statement balance sheets except that certain related party receivables and payables are required to be separately stated in this part of the Form 990. Part XI Reconciliation of net assets The instructions to Form 990 and the IRS regulations do not wish for all financial statement information to be presented on Form 990 as it could skew financial results for users of Form 990 information. Examples of such items that are reported on your audited financial statements that are not reported on Form 990 include the value of services provided to the organization as revenue and offsetting expense as well as any unrealized gain or loss on the organization s investments. This reconciliation takes these items into account and reconciles back to the net assets of the organization as presented on the balance sheet in Part X, Line 33. Part XII Financial statements and reporting These are miscellaneous questions ranging from the accounting method used in preparing Form 990 to the form of financial statements received by the organization (compiled, reviewed or audited) and whether or not there is an audit committee in place. Conclusion As can be seen by the explanations related to the core form, a thorough understanding of what the form requires and why can assist members of the board and other select committees charged with reviewing its contents. Understanding more about Form 990 can make the reviewing responsibility a much less stressful process. Stay tuned for Part II of this series where we will explore the 16 schedules that can be attached to Form 990 and the areas of focus for board members rsmus.com This document contains general information, may be based on authorities that are subject to change, and is not a substitute for professional advice or services. This document does not constitute audit, tax, consulting, business, financial, investment, legal or other professional advice, and you should consult a qualified professional advisor before taking any action based on the information herein. RSM US LLP, its affiliates and related entities are not responsible for any loss resulting from or relating to reliance on this document by any person. Internal Revenue Service rules require us to inform you that this communication may be deemed a solicitation to provide tax services. This communication is being sent to individuals who have subscribed to receive it or who we believe would have an interest in the topics discussed. RSM US LLP is a limited liability partnership and the U.S. member firm of RSM International, a global network of independent audit, tax and consulting firms. The member firms of RSM International collaborate to provide services to global clients, but are separate and distinct legal entities that cannot obligate each other. Each member firm is responsible only for its own acts and omissions, and not those of any other party. Visit rsmus.com/aboutus for more information regarding RSM US LLP and RSM International. RSM and the RSM logo are registered trademarks of RSM International Association. The power of being understood is a registered trademark of RSM US LLP RSM US LLP. All Rights Reserved. wp-nt-tax-nfp-0717

5 Form 990 Return of Organization Exempt From Income Tax OMB No Under section 501(c), 527, or 4947(a)(1) of the Internal Revenue Code (except private foundations) 2016 Do not enter social security numbers on this form as it may be made public. Open to Public Department of the Treasury Internal Revenue Service Information about Form 990 and its instructions is at Inspection A For the 2016 calendar year, or tax year beginning, 2016, and ending, 20 B Check if applicable: C Name of organization D Employer identification number Address change Doing business as Name change Number and street (or P.O. box if mail is not delivered to street address) Room/suite E Telephone number Initial return Final return/terminated City or town, state or province, country, and ZIP or foreign postal code Amended return G Gross receipts $ Application pending F Name and address of principal officer: H(a) Is this a group return for subordinates? Yes No I Tax-exempt status: 501(c)(3) 501(c) ( ) (insert no.) 4947(a)(1) or 527 H(b) Are all subordinates included? Yes No If No, attach a list. (see instructions) J Website: H(c) Group exemption number K Form of organization: Corporation Trust Association Other L Year of formation: M State of legal domicile: Part I Summary 1 Briefly describe the organization s mission or most significant activities: Activities & Governance Revenue Expenses Net Assets or Fund Balances 2 Check this box if the organization discontinued its operations or disposed of more than 25% of its net assets. 3 Number of voting members of the governing body (Part VI, line 1a) Number of independent voting members of the governing body (Part VI, line 1b) Total number of individuals employed in calendar year 2016 (Part V, line 2a) Total number of volunteers (estimate if necessary) a Total unrelated business revenue from Part VIII, column (C), line a b Net unrelated business taxable income from Form 990-T, line b Prior Year Current Year 8 Contributions and grants (Part VIII, line 1h) Program service revenue (Part VIII, line 2g) Investment income (Part VIII, column (A), lines 3, 4, and 7d) Other revenue (Part VIII, column (A), lines 5, 6d, 8c, 9c, 10c, and 11e) Total revenue add lines 8 through 11 (must equal Part VIII, column (A), line 12) 13 Grants and similar amounts paid (Part IX, column (A), lines 1 3) Benefits paid to or for members (Part IX, column (A), line 4) Salaries, other compensation, employee benefits (Part IX, column (A), lines 5 10) 16a Professional fundraising fees (Part IX, column (A), line 11e) b Total fundraising expenses (Part IX, column (D), line 25) 17 Other expenses (Part IX, column (A), lines 11a 11d, 11f 24e) Total expenses. Add lines (must equal Part IX, column (A), line 25). 19 Revenue less expenses. Subtract line 18 from line Total assets (Part X, line 16) Total liabilities (Part X, line 26) Net assets or fund balances. Subtract line 21 from line Part II Signature Block Beginning of Current Year End of Year Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than officer) is based on all information of which preparer has any knowledge. Sign Here Paid Preparer Use Only Signature of officer Type or print name and title Print/Type preparer s name Preparer's signature Date Date PTIN Check if self-employed Firm s name Firm's EIN Firm's address Phone no. May the IRS discuss this return with the preparer shown above? (see instructions) Yes No For Paperwork Reduction Act Notice, see the separate instructions. Cat. No Y

6 Page 2 Part III Statement of Program Service Accomplishments Check if Schedule O contains a response or note to any line in this Part III Briefly describe the organization s mission: 2 Did the organization undertake any significant program services during the year which were not listed on the prior Form 990 or 990-EZ? Yes No If Yes, describe these new services on Schedule O. 3 Did the organization cease conducting, or make significant changes in how it conducts, any program services? Yes No If Yes, describe these changes on Schedule O. 4 Describe the organization's program service accomplishments for each of its three largest program services, as measured by expenses. Section 501(c)(3) and 501(c)(4) organizations are required to report the amount of grants and allocations to others, the total expenses, and revenue, if any, for each program service reported. 4 a (Code: ) (Expenses $ including grants of $ ) (Revenue $ ) 4b (Code: ) (Expenses $ including grants of $ ) (Revenue $ ) 4 c (Code: ) (Expenses $ including grants of $ ) (Revenue $ ) 4d 4e Other program services (Describe in Schedule O.) (Expenses $ including grants of $ ) (Revenue $ ) Total program service expenses

7 Page 3 Part IV Checklist of Required Schedules 1 Is the organization described in section 501(c)(3) or 4947(a)(1) (other than a private foundation)? If Yes, complete Schedule A Is the organization required to complete Schedule B, Schedule of Contributors (see instructions)? Did the organization engage in direct or indirect political campaign activities on behalf of or in opposition to candidates for public office? If Yes, complete Schedule C, Part I Section 501(c)(3) organizations. Did the organization engage in lobbying activities, or have a section 501(h) election in effect during the tax year? If Yes, complete Schedule C, Part II Is the organization a section 501(c)(4), 501(c)(5), or 501(c)(6) organization that receives membership dues, assessments, or similar amounts as defined in Revenue Procedure 98-19? If Yes, complete Schedule C, Part III Did the organization maintain any donor advised funds or any similar funds or accounts for which donors have the right to provide advice on the distribution or investment of amounts in such funds or accounts? If Yes, complete Schedule D, Part I Did the organization receive or hold a conservation easement, including easements to preserve open space, the environment, historic land areas, or historic structures? If Yes, complete Schedule D, Part II Did the organization maintain collections of works of art, historical treasures, or other similar assets? If Yes, complete Schedule D, Part III Did the organization report an amount in Part X, line 21, for escrow or custodial account liability, serve as a custodian for amounts not listed in Part X; or provide credit counseling, debt management, credit repair, or debt negotiation services? If Yes, complete Schedule D, Part IV Did the organization, directly or through a related organization, hold assets in temporarily restricted endowments, permanent endowments, or quasi-endowments? If Yes, complete Schedule D, Part V If the organization s answer to any of the following questions is Yes, then complete Schedule D, Parts VI, VII, VIII, IX, or X as applicable. a Did the organization report an amount for land, buildings, and equipment in Part X, line 10? If Yes, complete Schedule D, Part VI a b Did the organization report an amount for investments other securities in Part X, line 12 that is 5% or more of its total assets reported in Part X, line 16? If Yes, complete Schedule D, Part VII b c Did the organization report an amount for investments program related in Part X, line 13 that is 5% or more of its total assets reported in Part X, line 16? If Yes, complete Schedule D, Part VIII c d Did the organization report an amount for other assets in Part X, line 15 that is 5% or more of its total assets reported in Part X, line 16? If Yes, complete Schedule D, Part IX d e Did the organization report an amount for other liabilities in Part X, line 25? If Yes, complete Schedule D, Part X 11e f Did the organization s separate or consolidated financial statements for the tax year include a footnote that addresses the organization s liability for uncertain tax positions under FIN 48 (ASC 740)? If Yes, complete Schedule D, Part X. 11f 12 a Did the organization obtain separate, independent audited financial statements for the tax year? If Yes, complete Schedule D, Parts XI and XII a b Was the organization included in consolidated, independent audited financial statements for the tax year? If Yes, and if the organization answered No to line 12a, then completing Schedule D, Parts XI and XII is optional 12b 13 Is the organization a school described in section 170(b)(1)(A)(ii)? If Yes, complete Schedule E a Did the organization maintain an office, employees, or agents outside of the United States? a b Did the organization have aggregate revenues or expenses of more than $10,000 from grantmaking, fundraising, business, investment, and program service activities outside the United States, or aggregate foreign investments valued at $100,000 or more? If Yes, complete Schedule F, Parts I and IV b 15 Did the organization report on Part IX, column (A), line 3, more than $5,000 of grants or other assistance to or for any foreign organization? If Yes, complete Schedule F, Parts II and IV Did the organization report on Part IX, column (A), line 3, more than $5,000 of aggregate grants or other assistance to or for foreign individuals? If Yes, complete Schedule F, Parts III and IV Did the organization report a total of more than $15,000 of expenses for professional fundraising services on Part IX, column (A), lines 6 and 11e? If Yes, complete Schedule G, Part I (see instructions) Did the organization report more than $15,000 total of fundraising event gross income and contributions on Part VIII, lines 1c and 8a? If Yes, complete Schedule G, Part II Did the organization report more than $15,000 of gross income from gaming activities on Part VIII, line 9a? If Yes, complete Schedule G, Part III Yes No

8 Page 4 Part IV Checklist of Required Schedules (continued) 20 a Did the organization operate one or more hospital facilities? If Yes, complete Schedule H a b If Yes to line 20a, did the organization attach a copy of its audited financial statements to this return?. 20b 21 Did the organization report more than $5,000 of grants or other assistance to any domestic organization or domestic government on Part IX, column (A), line 1? If Yes, complete Schedule I, Parts I and II Did the organization report more than $5,000 of grants or other assistance to or for domestic individuals on Part IX, column (A), line 2? If Yes, complete Schedule I, Parts I and III Did the organization answer Yes to Part VII, Section A, line 3, 4, or 5 about compensation of the organization s current and former officers, directors, trustees, key employees, and highest compensated employees? If Yes, complete Schedule J a Did the organization have a tax-exempt bond issue with an outstanding principal amount of more than $100,000 as of the last day of the year, that was issued after December 31, 2002? If Yes, answer lines 24b through 24d and complete Schedule K. If No, go to line 25a a b Did the organization invest any proceeds of tax-exempt bonds beyond a temporary period exception?.. 24b c Did the organization maintain an escrow account other than a refunding escrow at any time during the year to defease any tax-exempt bonds? c d Did the organization act as an on behalf of issuer for bonds outstanding at any time during the year?.. 24d 25a Section 501(c)(3), 501(c)(4), and 501(c)(29) organizations. Did the organization engage in an excess benefit transaction with a disqualified person during the year? If Yes, complete Schedule L, Part I a b Is the organization aware that it engaged in an excess benefit transaction with a disqualified person in a prior year, and that the transaction has not been reported on any of the organization s prior Forms 990 or 990-EZ? If Yes, complete Schedule L, Part I b 26 Did the organization report any amount on Part X, line 5, 6, or 22 for receivables from or payables to any current or former officers, directors, trustees, key employees, highest compensated employees, or disqualified persons? If Yes, complete Schedule L, Part II Did the organization provide a grant or other assistance to an officer, director, trustee, key employee, substantial contributor or employee thereof, a grant selection committee member, or to a 35% controlled entity or family member of any of these persons? If Yes, complete Schedule L, Part III Was the organization a party to a business transaction with one of the following parties (see Schedule L, Part IV instructions for applicable filing thresholds, conditions, and exceptions): a A current or former officer, director, trustee, or key employee? If Yes, complete Schedule L, Part IV.. 28a b A family member of a current or former officer, director, trustee, or key employee? If Yes, complete Schedule L, Part IV b c An entity of which a current or former officer, director, trustee, or key employee (or a family member thereof) was an officer, director, trustee, or direct or indirect owner? If Yes, complete Schedule L, Part IV... 28c 29 Did the organization receive more than $25,000 in non-cash contributions? If Yes, complete Schedule M Did the organization receive contributions of art, historical treasures, or other similar assets, or qualified conservation contributions? If Yes, complete Schedule M Did the organization liquidate, terminate, or dissolve and cease operations? If Yes, complete Schedule N, Part I Did the organization sell, exchange, dispose of, or transfer more than 25% of its net assets? If Yes, complete Schedule N, Part II Did the organization own 100% of an entity disregarded as separate from the organization under Regulations sections and ? If Yes, complete Schedule R, Part I Was the organization related to any tax-exempt or taxable entity? If Yes, complete Schedule R, Part II, III, or IV, and Part V, line a Did the organization have a controlled entity within the meaning of section 512(b)(13)? a b If Yes to line 35a, did the organization receive any payment from or engage in any transaction with a controlled entity within the meaning of section 512(b)(13)? If Yes, complete Schedule R, Part V, line b 36 Section 501(c)(3) organizations. Did the organization make any transfers to an exempt non-charitable related organization? If Yes, complete Schedule R, Part V, line Did the organization conduct more than 5% of its activities through an entity that is not a related organization and that is treated as a partnership for federal income tax purposes? If Yes, complete Schedule R, Part VI Did the organization complete Schedule O and provide explanations in Schedule O for Part VI, lines 11b and 19? Note. All Form 990 filers are required to complete Schedule O. 38 Yes No

9 Page 5 Part V Statements Regarding Other IRS Filings and Tax Compliance Check if Schedule O contains a response or note to any line in this Part V Yes 1a Enter the number reported in Box 3 of Form Enter -0- if not applicable.... 1a b Enter the number of Forms W-2G included in line 1a. Enter -0- if not applicable.... 1b c Did the organization comply with backup withholding rules for reportable payments to vendors and reportable gaming (gambling) winnings to prize winners? c 2a Enter the number of employees reported on Form W-3, Transmittal of Wage and Tax Statements, filed for the calendar year ending with or within the year covered by this return 2a b If at least one is reported on line 2a, did the organization file all required federal employment tax returns?. 2b Note. If the sum of lines 1a and 2a is greater than 250, you may be required to e-file (see instructions).. 3a Did the organization have unrelated business gross income of $1,000 or more during the year?.... 3a b If Yes, has it filed a Form 990-T for this year? If No to line 3b, provide an explanation in Schedule O.. 3b 4a At any time during the calendar year, did the organization have an interest in, or a signature or other authority over, a financial account in a foreign country (such as a bank account, securities account, or other financial account)? a b If Yes, enter the name of the foreign country: See instructions for filing requirements for FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). 5a Was the organization a party to a prohibited tax shelter transaction at any time during the tax year?... 5a b Did any taxable party notify the organization that it was or is a party to a prohibited tax shelter transaction? 5b c If Yes to line 5a or 5b, did the organization file Form 8886-T? c 6a Does the organization have annual gross receipts that are normally greater than $100,000, and did the organization solicit any contributions that were not tax deductible as charitable contributions? a b If Yes, did the organization include with every solicitation an express statement that such contributions or gifts were not tax deductible? b 7 Organizations that may receive deductible contributions under section 170(c). a Did the organization receive a payment in excess of $75 made partly as a contribution and partly for goods and services provided to the payor? a b If Yes, did the organization notify the donor of the value of the goods or services provided? b c Did the organization sell, exchange, or otherwise dispose of tangible personal property for which it was required to file Form 8282? c d If Yes, indicate the number of Forms 8282 filed during the year d e Did the organization receive any funds, directly or indirectly, to pay premiums on a personal benefit contract? 7e f Did the organization, during the year, pay premiums, directly or indirectly, on a personal benefit contract?. 7f g If the organization received a contribution of qualified intellectual property, did the organization file Form 8899 as required? 7g h If the organization received a contribution of cars, boats, airplanes, or other vehicles, did the organization file a Form 1098-C? 7h 8 Sponsoring organizations maintaining donor advised funds. Did a donor advised fund maintained by the sponsoring organization have excess business holdings at any time during the year? Sponsoring organizations maintaining donor advised funds. a Did the sponsoring organization make any taxable distributions under section 4966? a b Did the sponsoring organization make a distribution to a donor, donor advisor, or related person?... 9b 10 Section 501(c)(7) organizations. Enter: a Initiation fees and capital contributions included on Part VIII, line a b Gross receipts, included on Form 990, Part VIII, line 12, for public use of club facilities. 10b 11 Section 501(c)(12) organizations. Enter: a Gross income from members or shareholders a b Gross income from other sources (Do not net amounts due or paid to other sources against amounts due or received from them.) b 12a Section 4947(a)(1) non-exempt charitable trusts. Is the organization filing Form 990 in lieu of Form 1041? 12a b If Yes, enter the amount of tax-exempt interest received or accrued during the year.. 12b 13 Section 501(c)(29) qualified nonprofit health insurance issuers. a Is the organization licensed to issue qualified health plans in more than one state? a Note. See the instructions for additional information the organization must report on Schedule O. b Enter the amount of reserves the organization is required to maintain by the states in which the organization is licensed to issue qualified health plans b c Enter the amount of reserves on hand c 14a Did the organization receive any payments for indoor tanning services during the tax year? a b If Yes, has it filed a Form 720 to report these payments? If No, provide an explanation in Schedule O. 14b No

10 Exhibit A Page 6 Part VI Governance, Management, and Disclosure For each Yes response to lines 2 through 7b below, and for a No response to line 8a, 8b, or 10b below, describe the circumstances, processes, or changes in Schedule O. See instructions. Check if Schedule O contains a response or note to any line in this Part VI Section A. Governing Body and Management 1a Enter the number of voting members of the governing body at the end of the tax year.. 1a 10 If there are material differences in voting rights among members of the governing body, or if the governing body delegated broad authority to an executive committee or similar committee, explain in Schedule O. b Enter the number of voting members included in line 1a, above, who are independent. 1b 10 2 Did any officer, director, trustee, or key employee have a family relationship or a business relationship with any other officer, director, trustee, or key employee? Did the organization delegate control over management duties customarily performed by or under the direct supervision of officers, directors, or trustees, or key employees to a management company or other person?. 3 4 Did the organization make any significant changes to its governing documents since the prior Form 990 was filed? 4 5 Did the organization become aware during the year of a significant diversion of the organization s assets?. 5 6 Did the organization have members or stockholders? a Did the organization have members, stockholders, or other persons who had the power to elect or appoint one or more members of the governing body? a b Are any governance decisions of the organization reserved to (or subject to approval by) members, stockholders, or persons other than the governing body? b 8 Did the organization contemporaneously document the meetings held or written actions undertaken during the year by the following: a The governing body? a b Each committee with authority to act on behalf of the governing body? b 9 Is there any officer, director, trustee, or key employee listed in Part VII, Section A, who cannot be reached at the organization s mailing address? If Yes, provide the names and addresses in Schedule O Section B. Policies (This Section B requests information about policies not required by the Internal Revenue Code.) Yes No 10a Did the organization have local chapters, branches, or affiliates? a b If Yes, did the organization have written policies and procedures governing the activities of such chapters, affiliates, and branches to ensure their operations are consistent with the organization's exempt purposes? 10b 11a Has the organization provided a complete copy of this Form 990 to all members of its governing body before filing the form? 11a b Describe in Schedule O the process, if any, used by the organization to review this Form a Did the organization have a written conflict of interest policy? If No, go to line a b Were officers, directors, or trustees, and key employees required to disclose annually interests that could give rise to conflicts? 12b c Did the organization regularly and consistently monitor and enforce compliance with the policy? If Yes, describe in Schedule O how this was done c 13 Did the organization have a written whistleblower policy? Did the organization have a written document retention and destruction policy? Did the process for determining compensation of the following persons include a review and approval by independent persons, comparability data, and contemporaneous substantiation of the deliberation and decision? a The organization s CEO, Executive Director, or top management official a b Other officers or key employees of the organization b If Yes to line 15a or 15b, describe the process in Schedule O (see instructions). 16a Did the organization invest in, contribute assets to, or participate in a joint venture or similar arrangement with a taxable entity during the year? a b If Yes, did the organization follow a written policy or procedure requiring the organization to evaluate its participation in joint venture arrangements under applicable federal tax law, and take steps to safeguard the organization s exempt status with respect to such arrangements? b Section C. Disclosure 17 List the states with which a copy of this Form 990 is required to be filed 18 Section 6104 requires an organization to make its Forms 1023 (or 1024 if applicable), 990, and 990-T (Section 501(c)(3)s only) available for public inspection. Indicate how you made these available. Check all that apply. Own website Another s website Upon request Other (explain in Schedule O) 19 Describe in Schedule O whether (and if so, how) the organization made its governing documents, conflict of interest policy, and financial statements available to the public during the tax year. 20 State the name, address, and telephone number of the person who possesses the organization's books and records: Joe CFO, organization's name and address and phone number Yes No

11 Page 7 Part VII Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors Check if Schedule O contains a response or note to any line in this Part VII Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees 1a Complete this table for all persons required to be listed. Report compensation for the calendar year ending with or within the organization s tax year. List all of the organization s current officers, directors, trustees (whether individuals or organizations), regardless of amount of compensation. Enter -0- in columns (D), (E), and (F) if no compensation was paid. List all of the organization s current key employees, if any. See instructions for definition of key employee. List the organization s five current highest compensated employees (other than an officer, director, trustee, or key employee) who received reportable compensation (Box 5 of Form W-2 and/or Box 7 of Form 1099-MISC) of more than $100,000 from the organization and any related organizations. List all of the organization s former officers, key employees, and highest compensated employees who received more than $100,000 of reportable compensation from the organization and any related organizations. List all of the organization s former directors or trustees that received, in the capacity as a former director or trustee of the organization, more than $10,000 of reportable compensation from the organization and any related organizations. List persons in the following order: individual trustees or directors; institutional trustees; officers; key employees; highest compensated employees; and former such persons. Check this box if neither the organization nor any related organization compensated any current officer, director, or trustee. (A) Name and Title (B) Average hours per week (list any hours for related organizations below dotted line) (C) Position (do not check more than one box, unless person is both an officer and a director/trustee) Individual trustee or director Institutional trustee Officer Key employee Highest compensated employee Former (D) Reportable compensation from the organization (W-2/1099-MISC) (E) Reportable compensation from related organizations (W-2/1099-MISC) (F) Estimated amount of other compensation from the organization and related organizations (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)

12 Page 8 Part VII (15) Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees (continued) (C) (A) Name and title (B) Average hours per week (list any hours for related organizations below dotted line) Position (do not check more than one box, unless person is both an officer and a director/trustee) Individual trustee or director Institutional trustee Officer Key employee Highest compensated employee Former (D) Reportable compensation from the organization (W-2/1099-MISC) (E) Reportable compensation from related organizations (W-2/1099-MISC) (F) Estimated amount of other compensation from the organization and related organizations (16) (17) (18) (19) (20) (21) (22) (23) (24) (25) 1b Sub-total c Total from continuation sheets to Part VII, Section A..... d Total (add lines 1b and 1c) Total number of individuals (including but not limited to those listed above) who received more than $100,000 of reportable compensation from the organization Yes No 3 Did the organization list any former officer, director, or trustee, key employee, or highest compensated employee on line 1a? If Yes, complete Schedule J for such individual For any individual listed on line 1a, is the sum of reportable compensation and other compensation from the organization and related organizations greater than $150,000? If Yes, complete Schedule J for such individual Did any person listed on line 1a receive or accrue compensation from any unrelated organization or individual for services rendered to the organization? If Yes, complete Schedule J for such person Section B. Independent Contractors 1 Complete this table for your five highest compensated independent contractors that received more than $100,000 of compensation from the organization. Report compensation for the calendar year ending with or within the organization's tax year. (A) Name and business address (B) Description of services (C) Compensation 2 Total number of independent contractors (including but not limited to those listed above) who received more than $100,000 of compensation from the organization

13 Page 9 Part VIII Contributions, Gifts, Grants and Other Similar Amounts Program Service Revenue Statement of Revenue Check if Schedule O contains a response or note to any line in this Part VIII a Federated campaigns... 1a b Membership dues.... 1b c Fundraising events.... 1c d Related organizations... 1d e Government grants (contributions) 1e f All other contributions, gifts, grants, and similar amounts not included above 1f g Noncash contributions included in lines 1a-1f: $ h Total. Add lines 1a 1f Business Code 2a b c d e f All other program service revenue. g Total. Add lines 2a 2f Investment income (including dividends, interest, and other similar amounts) Income from investment of tax-exempt bond proceeds 5 Royalties (i) Real (ii) Personal 6a Gross rents.. b Less: rental expenses c Rental income or (loss) d Net rental income or (loss) a Gross amount from sales of (i) Securities (ii) Other assets other than inventory b Less: cost or other basis and sales expenses. c Gain or (loss).. d Net gain or (loss) (A) Total revenue (B) Related or exempt function revenue (C) Unrelated business revenue (D) Revenue excluded from tax under sections Other Revenue 8a Gross income from fundraising events (not including $ of contributions reported on line 1c). See Part IV, line a b Less: direct expenses.... b c Net income or (loss) from fundraising events. 9a Gross income from gaming activities. See Part IV, line a b Less: direct expenses.... b c Net income or (loss) from gaming activities.. 10a Gross sales of inventory, less returns and allowances... a b Less: cost of goods sold... b c Net income or (loss) from sales of inventory.. Miscellaneous Revenue Business Code 11a b c d All other revenue..... e Total. Add lines 11a 11d Total revenue. See instructions......