PDFWAC 230-07-055
Prorating expenses when gambling funds are not kept separate.
When charitable or nonprofit organizations do not keep gambling income separate from all other income of the organization, the amount of net gambling income required to provide functional expenses in the fiscal year under review must be the pro rata portion of net gambling income compared to the total net revenue from all sources. (Example: In the chart below, Organization X has revenue of five thousand dollars. They must calculate the pro rata reduction by adjusting the total by the percentages of support services, program services, and functional expenses.)
Revenue | ||||||||||
Fees paid by public | $5,000 | |||||||||
Calculation: | ||||||||||
Expenses | Unadjusted Amount | % of Total | Pro Rata Reduction Fees Paid by Public ($5,000) | % of Total | Adjusted Amount | |||||
Support Service Expense | $35,000 | 32% | ($1,591) | 32% | $33,409 | |||||
Program Service Expense | $75,000 | 68% | ($3,409) | 68% | $71,591 | |||||
Functional Expenses | $110,000 | 100% | ($5,000) | 100% | $105,000 | |||||
[Statutory Authority: RCW 9.46.070. WSR 07-10-032 (Order 609), § 230-07-055, filed 4/24/07, effective 1/1/08.]