Understanding the BCCO and 7 tips for Compliance

By David J. Manbeck, CPA

It is mandatory for all nonprofit organizations incorporated in the state of Pennsylvania to register with the Pennsylvania Bureau of Corporations and Charitable Organizations (BCCO) to conduct business in the state.

The BCCO ensures that nonprofits are operating in compliance with state laws, and it also maintains a public database of all registered charities. By registering with the BCCO, nonprofits can demonstrate their commitment to transparency and accountability, which can help them build trust with donors and supporters.

When does BCCO require CPA Assurance?

The BCCO has specific requirements for the level of assurance needed for a nonprofit's financial statements. For nonprofits with gross annual contributions of $25,000 to less than $100,000, internally-prepared financial statements may be sufficient. However, if the nonprofit receives gross annual contributions between $100,000 and less than $250,000, the BCCO requires compiled, reviewed or audited financial statements prepared by an independent accountant. For nonprofits receiving gross annual contributions between $250,000 to less than $750,000, the BCCO requires reviewed or audited financial statements, which involve a higher level of assurance than compiled statements. Finally, nonprofits with gross annual contributions exceeding $750,000 are required to file audited financial statements, which provide the highest level of assurance.

It is important for nonprofits to understand these requirements and ensure that their financial statements are prepared in accordance with the appropriate level of assurance. Nonprofits that fail to comply with these requirements may be subject to penalties or fines. Additionally, accurate and transparent financial reporting is important for maintaining the trust and support of donors and stakeholders, and can ultimately help nonprofits achieve their mission and goals.

Beyond financial statement compliance, nonprofits may need to deal with the BCCO when they want to make changes to their organization, such as amending their bylaws, changing their name, or dissolving their organization. The BCCO must approve any changes to a nonprofit's registration, and failure to comply with the agency's regulations can result in penalties or fines.

Therefore, it is important for nonprofits to maintain good communication with the BCCO and ensure that all necessary paperwork and filings are completed accurately and on time. But doing so is not always easy. Patience, persistence, and being proactive are the keys to success for nonprofits when dealing with the BCCO.

Here are seven “insider” tips to deal with the BCCO:

1. Update your information on file: After a nonprofit applies to register with the state, the BCCO has 15 days to get in touch about any deficiencies. If the BCCO’s contact information is incorrect, that’s the nonprofit’s problem, not the BCCO’s. Best to notify the BCCO of any changes in email addresses or phone numbers and call to make sure that your file is updated.
2. Be persistent: BCCO staffing straddles the charity and corporation oversight sides, so if you call for assistance, you might get someone whose expertise isn’t in charities. If you encounter that problem, call back, and keep calling back until you reach someone who understands charities.
3. Register anyway: Nonprofits that meet specific criteria, such as raising $25,000 a year, must register with the BCCO. Still, it’s easy to lose track and let a registration lapse as circumstances change. The simplest path to compliance is registering and staying registered, regardless of whether your nonprofit has crossed any threshold requirements.
4. File early: BCCO staff are handling large numbers of applications, so when registering, submit documentation early to avoid potential delays in processing.
5. Respond quickly: Don’t ignore any correspondence from the BCCO and address any deficiencies promptly.
6. Double check: If you do not hear from BCCO, check online to ensure you received approved status. If you still haven’t received the certificate, be sure to call. Nonprofits have been known to operate for long periods, assuming that an old registration is still valid. If it’s not, you could owe late fees and penalties.
7. Register your counsel: Nonprofits that lack administrative staff (such as fire companies), often hire professional solicitors and fundraising counsels to do their soliciting. Those counsels must also be registered with the BCCO.

Staying compliant is essential for several reasons, not the least of which ensures favorable grant consideration. Granting agencies commonly check compliance status with the BCCO; any issues could hold up the approval process. Compliance also minimizes the risk that BCCO’s enforcement division will investigate the suspected unregistered activity.

To learn more about Boyer & Ritter’s commitment to excellence in nonprofit accounting, visit www.cpabr.com. Dave Manbeck is chair of the firm’s nonprofit practice and can be reached at dmanbeck@cpabr.com.