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Management represents that it would not hire paid staff; or it is obvious from the nancial condition of the organization that it is unlikely that nancial resources would be available to pay for the services
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Auditors are reminded that management representations alone do not normally constitute suf cient competent evidential matter to support audit assertions; however, they may be considered in conjunction with other evidence Factors particularly relevant in situations where the volunteer services are provided directly to charitable or other bene ciaries of the reporting organization s program services (eg, Legal Aid Society) rather than to the organization itself: 12 The reporting organization assumes responsibility for the volunteers with regard to workers compensation and liability insurance, errors or omissions in the work, satisfactory completion of the work 13 The reporting organization maintains ongoing involvement with the activities of the volunteers The organization has explicitly disclaimed such responsibility
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The organization functions mainly as a clearinghouse for putting volunteers in touch with persons or other organizations needing help, but has little ongoing involvement
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NOT-FOR-PROFIT ORGANIZATIONS
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APPENDIX 354: FACTORS TO BE CONSIDERED IN ASSESSING WHETHER A DONOR HAS MADE A BONA FIDE PLEDGE TO A DONEE
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Following is a list of factors that may be helpful to donees, in assessing whether a pledge (unconditional promise to give, as contemplated in pars 5 7, 22, 23 of SFAS No 116) has, in fact, been made These factors may also help auditors in assessing the appropriateness of the client s judgment This list of factors is not intended to be used in deciding on proper accounting (for either the pledge asset or the related revenue/net assets) or to assess collectibility, although some of the factors may be relevant to those decisions as well In many cases, no one of these factors is necessarily determinative by itself; all relevant factors should be considered together
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Factors Whose Presence May Indicate a Bona Fide Pledge Was Made 1 Factors related to the solicitation process: a There is evidence that the recipient explicitly solicited formal pledges b Public announcement1 of the pledge has been made (by donor or donee) c Partial payment on the pledge has been made (or full payment after balance sheet date) 2 Factors related to the pledge itself: a Written evidence created by the donor clearly supports the existence of an unconditional promise to give (D) b The evidence includes words such as: promise agree will binding, c The pledge appears to be legally enforceable (Consult an attorney if necessary) (Note also factor 4a) d There is a clearly-de ned payment schedule stated in terms of either calendar dates or the occurrence of speci ed events whose occurrence is reasonably probable e The calendar dates or events comprising the payment schedule will (are expected to) occur within a relatively short time3 after the balance sheet date (or in the case of events, have already occurred) f The amount of the pledge is clearly speci ed or readily computable
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Factors Whose Presence May Indicate a Bona Fide Pledge Was Not Made
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The pledge was unsolicited, or the solicitation did not refer to pledges No public announcement has been made No payments have yet been made, or payments have been irregular, late, or less than scheduled amounts
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There is no written evidence;2 the only written evidence was prepared by the donee, or written evidence is unclear
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Legal enforceability is questionable or explicitly denied A payment schedule is not clearly de ned, or events are relatively unlikely to occur
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The time (period) of payment contemplated by the donor is relatively far in the future
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The amount is not clear or readily computable
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355 APPENDIX 354 Factors Whose Presence May Indicate a Bona Fide Pledge Was Made g The donor has clearly speci ed a particular purpose for the gift, eg, endowment, xed assets, loan fund, retire long-term debt, speci c program service The purpose is consistent with ongoing done activities 3 Factors relating to the donor: a There is no reason to question the donor s ability or intent to ful ll the pledge b The donor has a history of making and ful lling pledges to the donee of similar or larger amounts 4 Factors relating to the donee: a The donee has indicated that it would take legal action to enforce collection if necessary, or has a history of doing so b The donee has already taken speci c action in reliance on the pledge or publicly1 announced that it intends to do so4
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Factors Whose Presence May Indicate a Bona Fide Pledge Was Not Made The purpose is vaguely or not speci ed, or inconsistent with donee activities
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