BOARD REVIEW OF FORM 990

  Print Version

By Angela Crawford, CPA – Manager

If receiving the draft 990 strikes fear in the hearts of your board members, read on. Instead of simply emailing a copy of Form 990 to the board so Part VI, line 11 can be checked yes, offer a suggested list of items a board member should review in perusing the 990.

First, assure the board that management has reviewed the 990 in detail. Then guide them to mission statements, program service accomplishments, and governance.

• Has the mission statement been adopted by the board and is it concise and positive?

• Do the program service accomplishments accurately reflect your organization's activities and are they consistent with information on your website?
  • Take advantage of this section to freely advertise your organization's accomplishments.

• From Part V, are there any tax compliance issues?

• Part VI
  • Has the organization implemented and followed all the listed policies?
  • Does the compensation determination policy meet the requirements to answer yes to line 15 regarding compensation policies for officers and key employees?

Schedules attached to the 990 will vary by organization. Some more frequent schedules of interest to the board:

• Schedule C: Political Campaign and Lobbying Activities
  • If the organization is exempt under 501(c)(3), are there policies in place that prevent participation in activities that could jeopardize exempt status?
  • Is the organization participating in activities consistent with its mission?

• Schedule J: Compensation Information
  • If any boxes are checked on line 1a (i.e. first class travel, housing allowances, etc.), are the benefits warranted given the individual's position? Are lines 1b (written policy) and 2 (requiring substantiation) checked yes?
  • Line 3, methods of determining compensation for the CEO/Executive Director, are there multiple boxes checked?
  • Compensation committees are relatively painless to establish as a subcommittee of the Board of Directors.
  • Forms 990 of other organizations are easily viewed on Guidestar.org

• Schedule L: Transactions with Interested Persons
  • Are all transactions listed on this schedule properly reported and described in supplemental information?

This list is by no means all inclusive as each organization is unique. Blue personnel can provide our clients with a board checklist and present the 990 at a board meeting to answer any questions. Contact your accounting professional at Blue for more information.