> ## Documentation Index > Fetch the complete documentation index at: https://docs.encoreos.io/llms.txt > Use this file to discover all available pages before exploring further. # FA Financial Compliance Tracking > Version: 1.2.0 Last Updated: 2026-04-18 Status: Active Module: FA (Finance & Accounting) **Version:** 1.2.0\ **Last Updated:** 2026-04-18\ **Status:** Active\ **Module:** FA (Finance & Accounting) > **Cross-References:** > > * [REGULATORY\_COMPLIANCE\_TRACKER.md](REGULATORY_COMPLIANCE_TRACKER.md) — FA section and status legend > * [AGENTS.md](../../AGENTS.md) § Authoritative External References (Finance & Accounting Compliance) > * [FA-10 Tax Reporting & Compliance](../../specs/fa/specs/FA-10-tax-reporting-compliance.md) > * [FA-23 Financial Statement Customization (ASC 958)](../../specs/fa/specs/FA-23-financial-statement-customization.md) > * [FA-25 Financial Audit Trail & Compliance Reports](../../specs/fa/specs/FA-25-financial-audit-trail.md) > * [FA-13 Project Accounting & Grant Tracking](../../specs/fa/specs/FA-13-project-accounting-grant-tracking.md) > * **Latest deep review:** [`specs/fa/reports/fa-deep-review-20260417.md`](../../specs/fa/reports/fa-deep-review-20260417.md) — companion: [actions](../../specs/fa/reports/fa-deep-review-actions-20260417.md) > > **Published documentation hub** (audited 2026-04-18): > > * **End-user / admin guides:** [`packages/docs/docs/finance/`](../../packages/docs/docs/finance/) (32 user + 20 admin + 15 planned, with cross-links to the controls below) > * **Developer reference:** [`packages/docs/docs/developer/fa/`](../../packages/docs/docs/developer/fa/) (architecture, hooks, services, events, schema, edge-functions, security-model) > * **Security & compliance hub (this tracker's user-facing companion):** [`packages/docs/docs/security-compliance/fa/`](../../packages/docs/docs/security-compliance/fa/) > * [Overview](../../packages/docs/docs/security-compliance/fa/overview.md) > * [Internal Controls](../../packages/docs/docs/security-compliance/fa/internal-controls.md) — append-only ledger / period close / SoD > * [IRS Tax Reporting](../../packages/docs/docs/security-compliance/fa/irs-tax-reporting.md) — companion to §1 > * [GAAP / ASC 958](../../packages/docs/docs/security-compliance/fa/gaap-asc-958.md) — companion to §2 > * [OMB 2 CFR 200 Grants](../../packages/docs/docs/security-compliance/fa/omb-2-cfr-200-grants.md) — companion to §3 > * [Vendor Data Handling](../../packages/docs/docs/security-compliance/fa/vendor-data-handling.md) — financial PII (W-9 / SSN / EIN / NACHA / Plaid tokens) > * [PCI-DSS](../../packages/docs/docs/security-compliance/fa/pci-dss.md) — current posture + FA-32 roadmap > * [Role Matrix](../../packages/docs/docs/security-compliance/fa/role-matrix.md) — PF-30 permission keys × roles > * [RLS Catalog](../../packages/docs/docs/security-compliance/fa/rls-catalog.md) — `fa_*` table RLS posture > * [Audit Logs](../../packages/docs/docs/security-compliance/fa/audit-logs.md) — companion to §4.1 > > **Proposed specs to close named gaps in this tracker** (from 2026-04-17 deep review): > > * **FA-36 Federal Financial Reporting (FFR / SF-425, SEFA, Single Audit)** — closes §3.2 + §3.3 ("⏳ Not Started — No spec"). Preview: [`/docs/finance/planned/federal-financial-reporting`](../../packages/docs/docs/finance/planned/federal-financial-reporting.md). > * **FA-37 Subrecipient & Vendor Compliance (SAM.gov / OFAC / W-9)** — closes §3.5 ("⏳ Not Started"). Preview: [`/docs/finance/planned/subrecipient-vendor-compliance`](../../packages/docs/docs/finance/planned/subrecipient-vendor-compliance.md). > * **FA-38 ASC 842 Lease Accounting** — closes the "ASC 842 absent" gap noted in deep review Part 5. Preview: [`/docs/finance/planned/asc-842-lease-accounting`](../../packages/docs/docs/finance/planned/asc-842-lease-accounting.md). > * **FA-39 Bill Pay & Vendor Payment Rails (Bill.com / Mercury)** — supports NACHA + check + wire end-to-end. Preview: [`/docs/finance/planned/bill-pay-vendor-rails`](../../packages/docs/docs/finance/planned/bill-pay-vendor-rails.md). > * **FA-40 Multi-State Payroll Tax Withholding (PF-96-aligned)** — closes §1.2 multi-state row. Preview: [`/docs/finance/planned/multi-state-payroll`](../../packages/docs/docs/finance/planned/multi-state-payroll.md). > * **FA-EN-14 SoD Report + Auditor Export Bundle** — closes §4.1 (SoD report and auditor export, "⏳ Not Started"). *** ## Overview This document tracks Finance & Accounting (FA) regulatory compliance: IRS tax reporting, GAAP/FASB ASC 958 nonprofit reporting, OMB Uniform Guidance (grant compliance), and financial internal controls. Status and interim procedures are summarized in the main [REGULATORY\_COMPLIANCE\_TRACKER.md](REGULATORY_COMPLIANCE_TRACKER.md); this document provides detailed requirements and authoritative references. *** ## 1. IRS Tax Reporting Compliance Federal and state tax form generation and filing obligations supported by FA-10 (Tax Reporting & Compliance). FA-10 integrates with HR-07 (Payroll) for W-2 and 941/940 data. ### 1.1 Information Returns (1099-MISC / 1099-NEC) | Requirement | Deadline | Spec | Status | Notes | | -------------------------------------------- | --------------------------------------------- | ------------ | ---------------- | ----------------------------------------------- | | 1099-MISC/NEC generation for vendors ≥ \$600 | Jan 31 (filer copy); recipient copy by Jan 31 | FA-10 | 🟡 Partial (85%) | Generate via FA-10; e-file submission deferred. | | W-9 collection and TIN validation | Before payment / year-end | FA-03, FA-10 | 🟡 Partial | Vendor TIN stored; validation per FA-10. | | IRS e-file (FIRE/IRIS or Publication 1220) | Jan 31 | FA-10 | ⏳ Deferred | Interim: file paper or use third-party e-file. | ### 1.2 Wage and Payroll Tax (W-2, 941, 940) | Requirement | Deadline | Spec | Status | Notes | | ---------------------------------------- | ----------------------------------- | ------------ | ---------- | --------------------------------------------------------- | | W-2 to employees | Jan 31 | FA-10, HR-07 | 🟡 Partial | Generate from HR-07 data; distribution tracking in FA-10. | | W-2 to SSA (e-file) | Jan 31 | FA-10 | ⏳ Deferred | Interim: file via SSA portal or third party. | | Form 941 (quarterly federal payroll tax) | Last day of month after quarter end | FA-10 | 🟡 Partial | Prepare from payroll data; e-file deferred. | | Form 940 (annual FUTA) | Jan 31 | FA-10 | 🟡 Partial | Annual filing; e-file deferred. | | State payroll tax reports | Varies by state | FA-10 | 🟡 Partial | Multi-state withholding enhancements deferred. | ### 1.3 Out of Scope (per FA-10) * **Form 990** (annual information return for nonprofits) — Handled by external CPA. **Filing thresholds:** Form 990-N (gross receipts ≤ $50K); Form 990-EZ (receipts < $200K and assets \< $500K); Form 990 (receipts ≥ $200K or assets ≥ \$500K). FA-23 supports functional expense categorization (Program Services, G\&A, Fundraising) for 990 input; return preparation remains external. * **Form 990-T / Arizona Form 99T** (unrelated business income) — If unrelated business income is ≥ \$1,000, file 990-T (federal) and Arizona Form 99T; out of scope for FA-10; handle externally. * **Form 1040 / corporate tax returns** — Prepared externally. *** ## 2. GAAP / FASB ASC 958 Compliance Nonprofit financial reporting standards. Behavioral health and recovery housing organizations typically report under FASB ASC 958 (Not-for-Profit Entities). ### 2.1 Financial Statements | Requirement | Spec | Status | Notes | | --------------------------------------------------------- | ----- | ----------- | -------------------------------------------------------- | | Statement of Financial Position (balance sheet) | FA-23 | ✅ Compliant | Net assets with/without donor restrictions per ASC 958. | | Statement of Activities (with/without donor restrictions) | FA-23 | ✅ Compliant | ASC 958-aligned presentation. | | Statement of Functional Expenses | FA-23 | ✅ Compliant | Program, G\&A, Fundraising for Form 990 alignment. | | Trial Balance, fund-based reporting | FA-07 | 🟡 Planned | Core reporting in place; custom report builder deferred. | | Cash flow statement (indirect method) | FA-07 | 🟡 Planned | Per FA-07 spec. | ### 2.2 Fund Accounting | Requirement | Spec | Status | Notes | | ------------------------------------------ | ------------ | ----------- | ------------------------------------- | | Fund structure (unrestricted / restricted) | FA-01 | ✅ Compliant | Chart of accounts and fund hierarchy. | | Transaction-level fund tracking | FA-02 | ✅ Compliant | All GL entries carry fund\_id. | | Period close and lock | FA-02, FA-19 | ✅ Compliant | Prevents posting to closed periods. | *** ## 3. Grant Compliance (OMB Uniform Guidance — 2 CFR 200) Federal grant recipients must comply with 2 CFR 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements). FA-13 (Project Accounting & Grant Tracking) and FA-15 (Cost Allocation & Indirect Cost Rates) provide system support when implemented. ### 3.1 Allowable Costs and Cost Principles | Topic | Reference | Spec | Status | Notes | | ------------------------------------------- | ----------------- | ----- | ---------------- | ---------------------------------------------------------- | | Allowable cost categories (200.420–200.475) | 2 CFR 200 | FA-13 | ⏳ Not Started | Policy enforcement; FA-13 supports project-level tracking. | | Indirect cost rates (NICRA, de minimis 10%) | 2 CFR 200.414 | FA-15 | 🟡 Partial (90%) | IDC pools and allocation; NICRA proposal export deferred. | | Time and effort reporting | 2 CFR 200.430–431 | FA-13 | ⏳ Not Started | No dedicated spec; interim manual certification. | | Procurement standards | 2 CFR 200.317–327 | FA-04 | ✅ Compliant | PO approval, 3-way match; competitive bidding deferred. | ### 3.2 Single Audit (2 CFR 200 Subpart F) | Requirement | Spec | Status | Notes | | ------------------------------------------------- | ------- | ------------- | ----------------------------------------------------------------- | | Schedule of Expenditures of Federal Awards (SEFA) | No spec | ⏳ Not Started | Prepare manually or via external auditor until dedicated spec. | | Single Audit (when federal awards > \$750K) | No spec | ⏳ Not Started | Support via data export and audit trail (FA-25 when implemented). | ### 3.3 Federal Financial Report (FFR/SF-425) Federal grant recipients (e.g. SAMHSA, other federal awardees) must submit the Federal Financial Report (FFR, SF-425) via the Payment Management System (PMS). | Requirement | Deadline | Spec | Status | Notes | | ---------------------- | --------------------------------------- | -------------------- | ------------- | ---------------------------------------------------------------------------- | | Annual FFR | 90 days after end of each budget period | FA-13 (data support) | ⏳ Not Started | No dedicated FFR spec. FA-13 project/grant data can support FFR preparation. | | Final FFR | 120 days after end of project period | FA-13 (data support) | ⏳ Not Started | Same as above. | | FFR submission via PMS | Per award terms | — | ⏳ Not Started | Submit via federal PMS; deadlines may vary by program (e.g. SAMHSA). | **Interim:** Prepare FFR from grant/project and GL data manually; submit via PMS. Implement FA-13 (Project Accounting & Grant Tracking) to improve data availability for FFR. ### 3.4 Record retention (2 CFR 200.334) Recipients and subrecipients must retain federal award records for **3 years from the date of submission of the final financial report** (2 CFR 200.334). Records must be retained longer if litigation, claims, or audit findings exist until resolution. **Alignment:** [FA-SECURITY-CONSIDERATIONS.md](../fa/FA-SECURITY-CONSIDERATIONS.md) requires audit logs to be retained for **7 years**, which satisfies and exceeds 2 CFR 200.334 for financial and compliance records. No additional tracker row required. **Reference:** eCFR [2 CFR 200.334](https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D#p-200.334) — Retention requirements for records. ### 3.5 Subrecipient monitoring (pass-through entities) Under 2 CFR 200.331–200.332, pass-through entities must verify that subrecipients are not excluded (e.g. via SAM.gov), and ensure each subaward is clearly identified and documented (federal award id, subrecipient name/UEI, and other required information). | Requirement | Spec | Status | Notes | | ----------------------------------------- | ------- | ------------- | --------------------------------------------------------------------- | | SAM.gov exclusion/debarment verification | No spec | ⏳ Not Started | If org passes federal funds to subrecipients, verify before subaward. | | Subaward identification and documentation | No spec | ⏳ Not Started | Document subawards with required elements per 2 CFR 200.332. | **Interim:** If the organization passes federal funds to subrecipients: perform SAM.gov exclusion checks and maintain subaward documentation outside the system until a dedicated spec exists (future FA or GR). *** ### 4. Financial Controls & Audit Readiness Internal controls and audit trail support for external audits and SOX-analogous expectations (segregation of duties, immutable audit trail). **State and local — Arizona:** Arizona nonprofits must file an Annual Report with the Arizona Corporation Commission by the **formation anniversary date** (ARS 10-11622). Content includes directors/officers, principal office, activities, certificate of disclosure, and a statement that all corporate income tax returns have been filed. Extension up to 6 months available. No system automation; use org profile/board data. See Authoritative External References: Arizona Corporation Commission, ARS 10-11622. ### 4.1 Audit Trail and Reporting | Requirement | Spec | Status | Notes | | --------------------------------------------------- | ----- | ------------- | --------------------------------------------------------- | | Append-only general ledger (no destructive updates) | FA-02 | ✅ Compliant | Corrections via reversing entries. | | Journal entry audit trail (who, when, reversal ref) | FA-25 | ⏳ Not Started | Spec complete; implementation pending. | | Audit log viewer (filterable, searchable) | FA-25 | ⏳ Not Started | Phase 1 scope. | | Unposted entries report | FA-25 | ⏳ Not Started | Draft JEs with aging. | | Segregation of duties report | FA-25 | ⏳ Not Started | Phase 2; identify users who create and approve same type. | | Export-to-auditor package (PDF + CSV) | FA-25 | ⏳ Not Started | Phase 3. | ### 4.2 Period and Close Controls | Requirement | Spec | Status | Notes | | -------------------------------------------------- | ------------ | ----------- | ----------------------------------- | | Fiscal period status (open / soft\_close / closed) | FA-02, FA-19 | ✅ Compliant | Prevents posting to closed periods. | | Close checklist and task tracking | FA-19 | ✅ Compliant | Financial close management. | ### 4.3 Access and Security * **FA security:** [FA-SECURITY-CONSIDERATIONS.md](../fa/FA-SECURITY-CONSIDERATIONS.md) — Audit logs retained 7 years; permission-gated access to tax and financial data. * **HR offboarding:** Financial system access revoked on termination per SOX-related controls (see [HR\_IT\_OFFBOARDING.md](../architecture/integrations/HR_IT_OFFBOARDING.md)). *** ## 5. Authoritative External References Use these sources for implementation and spec review. Full table also in root [AGENTS.md](../../AGENTS.md) § Authoritative External References (Finance & Accounting Compliance). | Source | URL | Used By | | ----------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------- | | IRS Publication 1220 (1099 e-file specifications) | [https://www.irs.gov/pub/irs-pdf/p1220.pdf](https://www.irs.gov/pub/irs-pdf/p1220.pdf) | FA-10 | | IRS Publication 15-T (Federal Income Tax Withholding) | [https://www.irs.gov/ht/forms-pubs/about-publication-15-t](https://www.irs.gov/ht/forms-pubs/about-publication-15-t) | FA-10, HR-07 | | IRS FIRE (Filing Information Returns Electronically) | [https://www.irs.gov/e-file-providers/filing-information-returns-electronically-fire](https://www.irs.gov/e-file-providers/filing-information-returns-electronically-fire) | FA-10 | | IRS IRIS (E-file Information Returns) | [https://www.irs.gov/filing/e-file-information-returns-with-iris](https://www.irs.gov/filing/e-file-information-returns-with-iris) | FA-10 | | FASB ASC 958 (Not-for-Profit Entities) | [https://www.fasb.org/page/PageContent?pageId=/standards/accounting-standards-codification.html](https://www.fasb.org/page/PageContent?pageId=/standards/accounting-standards-codification.html) | FA-23, FA-07 | | OMB 2 CFR 200 (Uniform Administrative Requirements) | [https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200](https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200) | FA-13, FA-15 | | 2 CFR 200.334 (Record retention) | [https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D#p-200.334](https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D#p-200.334) | FA-13, grant compliance | | Single Audit (2 CFR 200 Subpart F) | [https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-F](https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-F) | FA-13 (future) | | SAMHSA Post-Award Reporting (FFR/SF-425) | [https://www.samhsa.gov/grants/grants-management/reporting-requirements](https://www.samhsa.gov/grants/grants-management/reporting-requirements) | FA-13 | | IRS Form 990 Instructions | [https://www.irs.gov/forms-pubs/about-form-990](https://www.irs.gov/forms-pubs/about-form-990) | FA-10 (deferred) | | Arizona Corporation Commission (Nonprofit) | [https://azcc.gov/divisions/corporations/](https://azcc.gov/divisions/corporations/) | FA (general) | | Arizona ARS 10-11622 (Annual report) | [https://www.azleg.gov/ars/10/11622.htm](https://www.azleg.gov/ars/10/11622.htm) | FA (state nonprofit) | *** ## Version History ### 1.1.0 (2026-02-27) * Added Federal Financial Report (FFR/SF-425) subsection and tracker row; SAMHSA FFR authoritative reference. * Added 2 CFR 200.334 record retention subsection and alignment with 7-year policy. * Added subrecipient monitoring (2 CFR 200.331–332) subsection; added pass-through branch to AGENTS.md decision tree. * Expanded Arizona ACC annual report in tracker and state/local note; added ARS 10-11622 reference. * Expanded Form 990 thresholds (990-N, 990-EZ, 990) and 990-T/AZ 99T in Out of scope. ### 1.0.0 (2026-02-27) * Initial FA financial compliance tracking document * IRS tax reporting (1099, W-2, 941, 940) per FA-10 * GAAP/FASB ASC 958 and fund accounting per FA-01, FA-02, FA-23, FA-07 * Grant compliance (OMB 2 CFR 200) and Single Audit per FA-13, FA-15 * Financial controls and audit readiness per FA-25, FA-19 * Authoritative external references aligned with AGENTS.md *** **Last Updated:** 2026-04-18 **Next Review:** 2026-05-27