Steve Hermes, CPA & Heather Carpenter, MMNA 12/15/2009
Syllabus EDLD503 2010.doc
Course Title: Financial Management for Nonprofit Organizations / EDLD 503 Class Meets:
Pre-Session 1: Monday, January 25th, 6:00 – 9:00pm Pre-Session 2: Saturday, January 30th, 9:00 to 11:00am Regular Sessions: Mondays, February 1 thru May 17, 2010, 6:00 - 9:00pm
Faculty: Stephen (Steve) C. Hermes, (760) 739-1827, hermes1521@cox.net Office Hours: Flexible - Call or email for an appointment. Heather Carpenter, (925) 984-7705, hcarpenter@sandiego.edu Office Hours: Mondays 4:00 – 5:00 pm, Thursday 10:00 am to 5:00 pm, or by appointment. At Caster Family Center for Nonprofit Research, MRH271 Campus Classroom: SCST 129 Summary Description: This course will prepare students to oversee the financial management of nonprofit organizations by focusing on four areas: key financial concepts, financial statement presentation, accounting and reporting, and operational issues – emphasizing the links between accounting staff, program staff, fundraising staff and board of directors. You took a self-assessment test so that we could gauge your level of knowledge and expertise in nonprofit finance. If you received an e-mail from us, you are required to attend the Pre-Session to learn and gain an understanding of the basic nonprofit financial management concepts. Based on your participation and learning during the Pre-Session you may or may not be required to attend a tutorial session. Course Objectives: To provide students with working knowledge of: • Key Financial Concepts (covered during Pre-Session) including: Cash versus accrual basis accounting, funding accounting and internal financial accounting, fixed assets, investment income, gains and losses and endowment funds, contributions, pledges and non-cash contributions. • Financial Statement Presentation including: balance sheets, income statements, cash flow statements, year to-date financial statements, comparative financial statements. • Accounting and Reporting including: cost accounting, selecting an independent auditor, reading audited financial statements, government reporting requirements. • Operations including: the role of the board and treasurer, budgeting, cash flow management, internal controls, investments and profit, communication systems that link program with accounting, capacity building systems for boards and staff. Required Materials: • Management Control in Nonprofit Organizations – David W. Young, The Crimson Press, Eighth edition, ISBN 978-0-615-24252-1 • Streetsmart Financial Basics for Nonprofit Managers - Thomas A. McLaughlin, John Wiley & Sons, Inc., Third edition, ISBN 978-0-470-41499-6 • The AICPA Audit Committee Toolkit: Not-For-Profit Organizations – Internal Control: A Tool for the Audit Committee (pgs. 41-53) – on eReserves • Nonprofit Operations Toolkit – on eReserves • Nonprofit Management, Principles and Practice - Michael J. Worth, Chapter 12 – on eReserves • Nonprofit Unified Chart of Accounts - http://nccs.urban.org/projects/ucoa.cfm Plagiarizing & Recycling: Copying, plagiarizing, and/or recycling of other works including student projects is not allowed. You must cite your references. Violations will be reported to the University in accordance with University policy.
Steve Hermes, CPA & Heather Carpenter, MMNA 12/15/2009
Syllabus EDLD503 2010.doc
Required Assignments and Grading Criteria: 1) Homework Case Assignments – 15 points There are three assigned cases and you are to answer the questions to each case. Case studies are each worth 5 points. 2) Mid-Term Exam (Take Home) - 15 points This will be a take home case study to gauge your understanding of the concepts learned in class and through your case studies. 3) Final Exam - 30 points This is to test your grasp of the financial concepts, principles, and terms covered in this class and demonstrate your ability to interpret financial information. You will be required to answer multiple choice and short answer questions based on reading, handouts, and lectures. 4) Final Project with Team - 30 points (Outline - 5 points; Written Report – 15 points; Presentation – 10 points) You will work in teams and be required to assess an organization’s internal controls using the concepts and materials learned in class. The project will be graded based on: 1. Outline: Due in Class 7 - teams will submit the outline for their internal controls assessment and report to the class the progress they have made to date, as well as any challenges they have had along the way. 2. Report: The project should include a written report in APA format about your assessment of internal controls utilizing The AICPA Audit Committee Toolkit: Internal Control – A Tool for the Audit Committee handout – and include this completed handout as Appendix A in your report. a. Teams are required to complete all steps and analyze organizational level internal controls as well as choose one area to analyze activity level controls. b. Most reports are 15 to 30 pages in length including Appendix A. c. Reports must include a 1 to 2 page reflection paper written by EACH member of the team about the project process. This reflection paper should connect your learning’s of leadership to the project (e.g. how leadership was used working as a team, how leadership was used working with the organization). 3. Presentation - A ten-minute oral presentation. You will present to your classmates as if they were your nonprofit organization’s Board or senior staff, explaining your project research, findings, results and recommendations. You are expected to be comprehensive in your written report but brief in providing an overview in your oral presentation. Do not provide an overview of the organization during your presentation as we only want to hear about the internal control findings and your team’s recommendations. You will be graded by your instructor and your classmates. 4. Schedule: a. Class 1 – Form student teams and decide on an organization (This must be an organization in which you have access to its financials as well as information about its financial and operational practices.). b. Class 6 — Meet with team on project outline. c. Class 7 – Internal Controls Outline due – Teams will submit the outline for their internal controls assessment and report to the class on the progress they have made so far as well as any challenges they have had to date. d. Class 12 - Final Project Report due and Class Presentation – Hard copy report and 10-minute oral presentation to class. 5) Class Attendance & Participation – 10 points Attending class and actively participating in class discussion is a course requirement. There are no “excused” absences. If you miss class, see a classmate for handouts, info, or recording. Late Assignments – Loses credit at 20% per day. Homework must be printed and turned in to the instructor. Emailing homework is NOT permitted, unless permission is given in advance by instructor.
Steve Hermes, CPA & Heather Carpenter, MMNA 12/15/2009
Syllabus EDLD503 2010.doc
Curriculum January 25: Pre-Session 1 • Accounting Basics • Nonprofit Financial Concepts January 30: Pre-Session 2 • Financial Statements February 1 - Class 1: Orientation Advance Readings: • Young - Chapter 1 • McLaughlin – Chapter 18 • Nonprofit Operations Toolkit • The AICPA Audit Committee Toolkit: Not-For-Profit Organizations – Pages 41 to 53 In Class: • Introductions: Background and Expectations • Review Syllabus: Assignments, Exams, Grading • Form Teams for Class Project • Internal Control Overview February 8 - Class 2: Operations and Internal Controls Advance Readings: • Young – Chapter 11 • McLaughlin – Chapter 17 In Class: Operations • 10 Nonprofit Operations Success Steps • Insurance • Risk Management • Banking Internal Controls • Selecting an Accountant • Segregation of Duties • Filing/Record Keeping and Expenses Case Analysis: Hamilton Hospital – Due February 15 February 15 - Class 3: Financial Statements and Analysis Advance Readings: • Young – Chapters 5 and 6 • Worth – Chapter 12 • Sample Financial Statements (available on line). Homework due: Case Analysis - Hamilton Hospital In Class: Review Hamilton Hospital Case Financial Statement Analysis • Use key ratios covered in McLaughlin (current ratio, quick ratio, reserve ratio, fundraising return ratio) • Resources • Cash Flow Liquidity/Capital • Budget vs. Actual • Activity by Funding Source • Investments
Steve Hermes, CPA & Heather Carpenter, MMNA 12/15/2009
Syllabus EDLD503 2010.doc
February 22 - Class 4: Financial Statements and Analysis In Class: • Financial Statement Analysis March 1 - Class 5: Financial Statement Analysis In Class: • Sample Financial Statements • Financial Statement Footnotes March 7 – No class March 15 – Class 6: Cost Accounting Advance Readings: • Young – Chapters 3 and 4 • McLaughlin – Chapter 8 In Class: • Mission Center Costs • Service Center Costs • Direct and Indirect Costs • Fixed and Variable Costs • Allocation of Service Center Costs • Meet with Project Team on project outline. March 22 – Class 7: Cost Accounting Homework Due: Team Project outline In Class: • Review Jefferson High School case • Handout Take Home Midterm: Case Analysis – The Athenaeum School March 29 – Class 8 Midterm Due: Case Analysis – The Athenaeum School In Class: • Go over midterm case • Team Meetings April 5 – No class April 12 - Class 9: Budgeting Advance Readings: • Young - Chapter 10 • McLaughlin – Chapters 12 and 13 In Class: Creating an Organizational Budget • Budget Planning • Estimating Costs o Personnel o Program Specific o Administrative o Fundraising
Steve Hermes, CPA & Heather Carpenter, MMNA 12/15/2009
Syllabus EDLD503 2010.doc
April 19 – Class 10: Budgeting In Class: • Forecasting Revenues • Cash Flow Projection April 26 – Class 11: Pricing and Profit Advance Readings: • Young - Chapter 5 • McLaughlin - Chapters 14 and 15 Homework Due: Case Analysis - Urban Arts Institute In Class: • Pricing • Profit • Capitalization and Deprecation May 3 - Class 12: Team Project Presentations Homework Cue: Team Project Reports and Presentations In Class: Students present final projects for 10 minutes each. Present as if you were presenting to your nonprofit management team or the Board of Directors. Allow for questions and answers from classmates. Attendance is mandatory. May 10 - Class 13: Form 990 and Audits Advance Reading: • McLaughlin – Chapter 9 • GuideStar In Class: • Overview of the IRS Form 990 - Carol Stachwick • Meet with Team on class project. May 17 – Class 14: Final Exam Attendance is mandatory.