Here is a sample annual checklist for a non-profit organization to use.

This form for internal use only by the compliance officer, and is used in seeking legal advice from the attorney for the organization.

Name of Organization______________________________________

1. Articles of Incorporation and corporate status checked?

2. Do articles of incorporation eliminate or limit the personal liability of a director of the corporation to the extent allowed by ARS 10-3203(B)?

3. Bylaws checked?

4. IRS advance determination letter ruling of 501c status received?

5. IRS final determination letter of 501c status received?

6. If not 501c exempt status, is organization a private supporting foundation or a private foundation?

7. Applied for and received Arizona state determination that income is not subject to state income taxes? Automatic status granted if determined by IRS that exempt under 501(c) of IRCode.

8. State sales exemptions in place?

9. State property tax exemptions in place?

10. Have there been changes in articles, bylaws, or purposes, since exemptions received?

11. Where are the corporate records kept and who keeps them?

12. Who is the designated compliance officer, and to whom does he/she report to?

13. Who is the designated director on the board of directors who is charged by the board with directly overseeing the work of the compliance officer?

14. Is there an ethics committee or a designated person with whom an employee faced with an ethics problem may discuss the matter?

1. Were there transactions with board members, officers, or other insiders? If so, did private inurement occur? 
2. Are activities in furtherance of exempt purposes? Do new activities need to be reported to IRS?
3. Are files maintained to document nature of activities? >Does the organization lobby? 
4. Does the organization engage in any political activity? Is there excessive unrelated business income? 

1. Is Federal Form 990 required to be filed annually? A penalty may be imposed for late filing or failure to file Form 990, and such penalty can be imposed upon directors and officers of the corporation.

2. If so, can and should EZ be filed? (Less than $100,000 gross receipts?)

3. Have changes in corporate structure (such as amended bylaws or articles) been submitted to I.R.S. with Form 990?

4. Has Form 990 been filed?

5. Is Form 990 for last three years available (as required by federal law) for public inspection and to be provided on payment of reasonable fee for copying?

6. Has informational tax report been filed with the Department of Revenue?

7. Are payroll and information returns filed?

8. Should extension of time to file be requested?

9. Has change of accounting method occurred?

10. Should tax filing year be changed?

11. Practice exist to give substantiation for charitable contributions?- A 501 (c)(3) charity receiving charitable cash donations of $250.00 or more must give written receipt. Receipt given by charitable organization for cash donation of $250.00 or more must describe any goods or services provided in exchange for the donation and must estimate value. If no goods or services, receipt must so state. (While not required, sending letters acknowledging small gifts builds good will and is good business practice.) In addition , a charity that receives in excess of $75 as payment partly as a contribution and partly in consideration for goods or services must give written statement to donor.

12. Is Form 8283 due to donor for non-cash tangible gifts, e.g., over $5000, received?

13. If donated non-cash item over $5000 is disposed of within 2 years, charity may also have to report disposition of donated asset on Form 8282.

14. Do fund solicitations reveal fair market value or no deductibility of benefits to donors? Charity receiving contribution which is part donation and part quid pro quo must give a written statement either when soliciting a donation or when receiving it which values the goods or services given to the donor (exception for intangible religious benefits).

15. If organization is part of a group, should group exemption be obtained?

16. .Has there been an IRS audit?

17. Has there been any state audit?

18. Has there been registration by charitable organizations with Arizona Secretary of State?

19. -- A.R.S. sec. 44-6551 et seq. The definition of charitable organization is very broad. Must register within three days after any solicitation (also broadly defined) and update information at least annually if there are changes or sooner if material changes occur. Violation of statute is a Class 6 felony.

20. Has there been Annual Report and Certificate of Disclosure filed with the Arizona Corporation Commission ? (A.R.S. sec. 10-11622). Ten dollar filing fee required. Generally, same reporting information as for-profit corporations.

• Have all officers and directors been polled re conflicts of interest? Must file the Certificate of Disclosure --. Must poll directors and officers to ensure accurate reporting on registration form.

• Conflict of interest - A member or director with a conflicting economic interest does not necessarily void a transaction if the conflict is disclosed and the transaction is approved by disinterested persons, or the transaction is fair and reasonable to the corporation based on known circumstances at the time the transaction was approved. A.R.S. sec. 10-3864. Note A.R.S. sec. 10- 3864 requires certain large nonprofit corporations (i.e. more than ten million dollar book value of assets or more than two million dollars gross receipts or revenues) to file conflict of interest policy with Arizona Corporation Commission.

EMPLOYMENT LAW ISSUES B 15 or more employees.

1. ADEA prohibits discrimination against employees 40 years of age or older.

2. ADA prohibits discrimination based on disability.

3. TITLE VII Civil Rights Act of 1964 prohibits discrimination based on race, color, religion, sex, pregnancy, or national origin

4. FMLA requires 12 weeks leave for eligible employees

EMPLOYMENT LAW ISSUES B 1 employee.

1. ARS 23-353 requires payment of wages to terminated or terminating employees

2. ARS 41-1461 civil rights act prohibits discrimination like federal but also includes disability.

3. State sexual harassment laws.

4. Common law contract claims

5. Do employment contracts and employee policy/handbook disclaim anything other than an at will employment and no entitlement to any existing employment practice or benefits?

6. Common law tort claims

1. Casualty insurance policies?

2. Directors and Officers insurance policies?

3. Liability insurance policies?

1. Who does the bookkeeping?

2. Who does any auditing?

3. Who prepares the profit and loss and balance sheets?

4. Is payroll tax withholding required?

5. Are procedures in place for payment of payroll taxes?

6. Has payroll tax been properly deposited and paid?

7. Are procedures in place for payment of other taxes.

8. Where are bank accounts? Money Market accounts? Other cash accounts? Investment accounts?

9. Has bank / investment account signature cards been updated?

10. Have check signing procedures been complied with?

11. Should changes be made in check signing procedures?

	Has bulk mailing permit been obtained? Should it be?
	Has organization listed with Guidestar.org or like Aexposure sites@
	Does organization need free transactional legal service from Arizona Community Legal Assistance (ACLA at 602/258-3434 ) ?
	Does organization have a website? Should it have?
	Think! Understand the organization! Then think of potential problem areas and discuss them.