Non-Profit Regulatory Update

Two new initiatives that will reduce the burden on non-profits regarding audit thresholds and a reduction in fines and penalties associated with the filing of state registration statements (BCO-10) have now been passed by Pennsylvania’s state legislature (House Bills 1420 and 1421).

House Bill 1420

House Bill 1420 (approved by the Governor on December 22, 2017) proposes new thresholds for which non-profits are required to conduct an audit. The prior thresholds were:

Audit – $300,000 or more in gross annual national charitable contributions
Review – $100,000 to less than $300,000 in gross annual national charitable contributions
Compilation – $50,000 to less than $100,000 in gross annual national charitable contributions.

The new thresholds have been increased as follows:

Audit – $750,000 or more in gross annual national charitable contributions
Review – $250,000 to less than $750,000 in gross annual national charitable contributions
Compilation – $100,000 to less than $250,000 in gross annual national charitable contributions

House Bill 1421

House Bill 1421 (approved by the Governor on December 22, 2017) finalized technical changes that will assist non-profits filing their BCO-10’s by reducing fines and penalties. This legislation clarifies that any registration postmarked on or before the renewal date will be considered timely filed and will not accrue late fees. Additionally, the bill provides a uniform 15-day review period by the BCCO (Bureau of Corporations and Charitable Organizations).