The NYS Division of Library Development has shared a new ruling from the State Education Department’s Office of Counsel in regards to whether or not the audit portion of the Non-Profit Revitalization Act applies to public and/or association libraries – it does not apply to either type of library. The ruling remains that the only portion of this law that impacts libraries is the requirements surrounding a conflict of interest policy and whistleblower protection.
“Are public and association libraries and library systems subject to the financial reporting and auditing requirements outlined in the Non-Profit Revitalization Act of 2013?
No. The Non-Profit Revitalization Act of 2013 added a new Not-for-Profit Corporation Law §712-a that requires a board of trustees, or a designated audit committee of the board comprised solely of independent directors, to oversee the accounting and financial reporting processes of a corporation and the audit of the corporation’s financial statements, and to annually retain or renew the retention of an independent auditor to conduct the audit. However, this provision applies only to a corporation that is required to file an independent certified public accountant’s audit report with the Attorney General under Executive Law §172-b(1), which applies to organizations registered with the Attorney General’s Charities Bureau.
Public and association libraries, public library systems and reference and research library resources systems that file annual reports with the State Education Department (SED) are NOT required to register with or file audit reports with the Attorney General’s Charities Bureau and therefore are NOT subject to the financial oversight / audit requirements of the Not-for-Profit Corporation Law §712-a.”
For more information and to read the entire opinion please visit http://www.nysl.nysed.gov/libdev/trustees/coi-faq.htm