Expense Misreporting in Nonprofit Organizations

Krishnan, R. S.; Yetman, Michelle; Yetman, Robert J.

doi:10.2139/ssrn.590963

Cited by 81 publications

(102 citation statements)

References 20 publications

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“…Furthermore, previous studies have concluded that the incentives to misreport in an informational return can result in significant discrepancies between actual and reported amounts. As an example, Krishnan et al (2006) presented evidence of manipulation in program ratios as reported in Form 990s, while amounts reported in the audited financial statements were found to be more reliable. Specifically, they found that many nonprofit organizations receiving public support reported zero fundraising activities, 40% of which were determined to be misreporting those activities as program activities.…”

Section: Policy Recommendationsmentioning

confidence: 92%

“…Second, the level of assurance associated with the external audits and the transparency associated with Single Audit hospitals lends credibility to our measure of charity care. Unlike 990 data, which does not come with the same assurance afforded by an external audit and which has been determined to be subject to manipulation (e.g., Krishnan et al 2006), data from Single Audit reports implies potentially greater accuracy.…”

Section: Figurementioning

confidence: 99%

“…Moreover, as identified by Schlesinger et al (2004), public trust in our healthcare system has diminished which may have implications for charitable giving to hospitals. Given the sensitivity that donations have to the program ratio, which represents a widely used efficiency measure in nonprofits (Krishnan et al 2006), we believe that increased transparency may have benefits for hospital giving. We believe that these factors, taken together, support the merits of additional disclosures.…”

mentioning

confidence: 99%

See 2 more Smart Citations

Tax Exemptions for Nonprofit Hospitals: Toward Transparency and Accountability

Waymire¹,

Christensen²

2011

Nonprofit Policy Forum

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Whether nonprofit hospitals fulfill their implicit obligation to provide benefits to the public that are commensurate with the benefits associated with their tax exemptions is an important policy question. To contribute to this discussion, we examine the variation in charity care provided, scaled by net patient revenues and by imputed federal income taxes, in a sample of nonprofit hospitals that are subject to Single Audit requirements. We find that small hospitals tend to provide more charity care than large hospitals, and that rural hospitals tend to provide more charity care than urban hospitals. Interestingly enough, we find little difference in charity care amounts provided by hospitals in high income areas v. low income areas, suggesting that demand for charity care, at least in this setting, has little effect on hospital behavior regarding the provision of charity care. As a result of our analyses, we make recommendations for increased availability of hospital financial statements, as well as specific disclosures of other components of community benefits, which represent the applicable standard for evaluating tax exemptions. These recommended disclosures and increased transparency would permit more meaningful policy analysis regarding nonprofit hospitals as well as a comparison to for-profit and governmental hospitals.

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Section: Policy Recommendationsmentioning

confidence: 92%

Section: Figurementioning

confidence: 99%

mentioning

confidence: 99%

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Tax Exemptions for Nonprofit Hospitals: Toward Transparency and Accountability

Waymire¹,

Christensen²

2011

Nonprofit Policy Forum

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“…They indicate that differences exist because: (1) GAAP requires the consolidation of related entities that may have separate tax-exempt status; (2) there are differences between some 990 reporting rules and nonprofit GAAP; and (3) there is a lack of understanding on the part of some preparers that results in failure to comply with 990 instructions. In fact, research documents that large organizations (Froelich & Knoepfle, 1996;Keating et al, 2008), those that pay executives relatively high salaries (Keating et al, 2008); and organizations that pay an external accountant (Krishnan et al, 2006;Keating et al, 2008) are more likely prepare high quality 990s.…”

Section: Issues With Form 990mentioning

confidence: 99%

Using archival data sources to conduct nonprofit accounting research

Feng

Ling²,

Neely³

et al. 2014

Journal of Public Budgeting, Accounting &Amp; Financial Management

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Research in nonprofit accounting is steadily increasing as more data is available. In an effort to broaden the awareness of the data sources and ensure the quality of nonprofit research, we discuss archival data sources available to nonprofit researchers, data issues, and potential resolutions to those problems. Overall, our paper should raise awareness of data sources in the nonprofit area, increase production, and enhance the quality of nonprofit research.

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“…Similarly, Krishnan et al . 29 identify that many charities report zero fundraising costs despite engaging in fundraising activities. They also document that nonprofi t hospitals in California report greater programme spending on their Form 990s than they do in state regulatory fi lings, which are subject to audit by the State government.…”

Section: Is Greater Accountability Needed?mentioning

confidence: 99%

The true cost of fundraising: Should donors care?

Sargeant¹,

Jay²

2008

J Direct Data Digit Mark Pract

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In response for calls for greater accountability and transparency in the voluntary sector, this paper reports the results of a major new benchmarking study of the fundraising performance of the UK ' s Top 500 charities. It focuses on the performance of the key direct marketing media and in the light of the results, highlights a number of critical lessons that must be conveyed by charities seeking to gain the public trust.

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Expense Misreporting in Nonprofit Organizations

Cited by 81 publications

References 20 publications

Tax Exemptions for Nonprofit Hospitals: Toward Transparency and Accountability

Tax Exemptions for Nonprofit Hospitals: Toward Transparency and Accountability

Using archival data sources to conduct nonprofit accounting research

The true cost of fundraising: Should donors care?

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