Non-operating expenses are split into two separate categories in the CDP survey: personnel and non-personnel.
Non-operating Personnel expenses are incurred outside of the normal business operations of your organization, including personnel costs related to capital campaigns and other capital projects.
Examples of non-operating personnel expenses include:
- Personnel hired to conduct or manage a capital campaign
- The portion of an employee’s time spent working on a capital project
- A consultant hired to help with reorganization
- A lawyer hired to manage a lawsuit
Non-operating non-personnel expenses are incurred outside of the normal business operations of your organization, such as unusual or one-time costs associated with capital campaigns, property sales, business reorganizations, or lawsuits.
Examples of non-operating non-personnel expenses include:
- capital campaign expenses
- expenses related to the sale of a property
- business reorganization expenses
- expenses due to a lawsuit
How to find Non-Operating Expenses in an Audit
Expenses, including non-operating expenses, are listed on the Income Statement or Statement of Activities. Non-operating expenses may or may not be listed separately from operating expenses on your audit. You may find non-operating expenses at the bottom of your Statement of Activities below revenue, expenses, and change in net assets. This area may or may not be labeled “Non-operating”. Occasionally, non-operating expenses are separated from operating expenses on your audit’s Statement of Functional Expenses.
If it is not clear which of your expenses are non-operating on your audit, or whether you have non-operating expenses, have a conversation with your auditor to determine if these lines apply to your organization.