BUSINESS ALOA’s 2020 Financial Audit – Statement of Activities Expenses: - in dollars Program services Supporting services Total expenses Change in net assets Net assets at beginning of year F/Y 2020 1,476,065 345,117 ________ 1,821,182 _________ (252,030) 1,163,252 _________ Net assets at end of year 911,222 F/Y 2019 2,266,750 420,229 that provides more detailed categories of allocated expense. Incidentally, although most folks aren’t aware of it, non- _________ 2,686,979 _________ 121,724 1,050,378 _________ 1,172,102 As we examine the Expenses side of this Statement of Activities (similar to a for-profit company’s Income Statement or P&L), you should be aware that the Accounting Standards board changed the prescribed reporting format a few years ago. Essentially, in- stead of the historical more detailed expense line-item breakdown listing of various types of expense categories, the revised format requires a summary listing of only two expense categories: Pro- gram services and Supporting services. However, as you’ll see later, there is a supplemental Statement of Functional Expenses 14 KEYNOTES SEPTEMBER 2021 profit companies are typically required to file an IRS Form 990 (Return of Organization Exempt from Income Tax) report each year. This sometimes-lengthy report is made available to the public so that potential donors can see de- tails about a nonprofit company — information such as who the officers are, how much they are paid and lots of details about the revenue and expenses, in a prescribed format that makes comparison of several entities much easier and frus- trates attempts at concealing financial information. Per- haps the most important function of this publicly available information is that it essentially tells a reader (or potential donor) how much of the money collected is being used to fund what’s known as “the mission.” The audited financial statements report also includes a spreadsheet featuring a breakdown of all expenses, known as a Statement of Functional Expenses. Space limitations require that this be broken down into two parts. Let’s take a closer look. Program services (Part One) are allocated expenses incurred providing mission services. In other words, in ALOA’s instance, money that is used to provide various services to its members. WWW.ALOA.ORG
