Q:       How does the Ohio Charitable Trust Act affect me?

A:        The Ohio Charitable Trust Act gives authority to the Ohio Attorney General to oversee charitable organizations.  Under this law, the Attorney General can investigate charities to ensure they are being operated appropriately, their assets are used properly and their donors and beneficiaries are protected.  Every Ohio charity must meet certain obligations under the Charitable Trust Act in addition to following IRS rules.

Q:       I am starting a charitable organization. What are my obligations under the Charitable Trust Act?

A:        Charitable organizations have registration and reporting obligations.  They must register one time with the Attorney General’s office, a straightforward process that must be completed online at www.ohioattorneygeneral.gov/charitableregistration.  The Attorney General’s website resources will guide you through the process.  You will need to provide basic information including the charity’s  address, taxpayer identification number, date of formation, state charter number, bingo license number (if you have one), description and value of assets and copies of your organizational documents (articles of incorporation, federal tax exemption letter, bylaws, etc.).

Once you create an online account and register, you must file a report with the Ohio Attorney General each year.  This report is in addition to the Form 990 you may file with the IRS, but asks for much of the same information and is due at the same time each year. 

Q:       Are there fees involved in registration and reporting?

A:        There is no cost to create an online account and register with the Attorney General’s office, but a fee is due at the time you file your annual report.  The fee varies based on your assets and ranges from $50 for small organizations up to $200 for large organizations.

Q:       Must every Ohio charity register and file reports?

A:        Certain organizations are exempt from registration and reporting.  These include schools, churches and booster clubs or PTAs with less than $25,000 in assets and gross receipts. If you are not sure if you are exempt, ask the Attorney General’s office or request an exemption through the online system.

Q:       Exactly how does the Attorney General get involved with charities?

A:        The Charitable Trust Act allows the Attorney General to investigate a charity when board members, key staff or officers fail to meet their fiduciary duties and donors or beneficiary interests are threatened.  The Attorney General’s office also offers educational resources to help those involved with charities understand their duties and obligations.   

Q:       What are fiduciary duties and who has them?

A:       The Ohio Attorney General recognizes four fiduciary duties that must be followed by anyone in a position of authority with a charitable organization (including board members, officers and senior staff):

1)    Duty of Loyalty – you must put the interests of the charity first and avoid conflicts of interest;

2)    Duty of Care – you must be active in the governance of the charity and understand its mission and programs;

3)    Duty of Compliance – you must confirm the charity follows the law and meets its legal obligations of registration, reporting and filing tax forms;

4)    Duty to Manage Accounts – you must ensure the charity makes sound financial decisions and has responsible fiscal policies in place.

Q:       What educational resources does the Ohio Attorney General’s office provide for charities?

A:        The Attorney General offers resources through its website at www.ohioattorneygeneral.gov/Business/Services-for-Charities.  These materials explain fiduciary duties, help you avoid theft in your organization and clarify registration and reporting obligations.  The Attorney General’s office also publishes a newsletter and hosts webinars to discuss obligations and duties under the Charitable Trust Act.  You can also ask someone from the Attorney General’s office to provide in-person trainings in your community by calling 800-282-0515.

            The Attorney General also provides information for those wishing to donate to charitable organizations.  You can research specific charities through the website and can find “good giving” articles and brochures to help you make informed decisions about making contributions. You can find this information at www.ohioattorneygeneral.gov/Business-and-Non-Profits/Charity/Good-Giving.aspx.

Q:       What if my charity solicits donations or runs bingo games?

A:        In addition to its duties according to the Ohio Charitable Trust Act, the Attorney General regulates charitable solicitations through the Ohio Solicitations Act. Many charities hire professional fundraisers and solicitors to help them raise money. In Ohio, these professional fundraisers must be licensed and follow certain laws found at www.ohioattorneygeneral.gov/Business/Professional-Solicitors-and-Fundraisers.

            If you host bingo games to raise funds for your charity, you must comply with bingo license laws.  Learn more through the Attorney General’s “Bingo School” and online at www.ohioattorneygeneral.gov/Business-and-Non-Profits/Bingo-Operator.aspx.

This “Law You Can Use” consumer legal information column was provided by the Ohio State Bar Association (OSBA). It was prepared by attorney Mary Gallagher of the Ohio Hospital Association. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek the advice of a licensed attorney.

Q:       What, exactly, is Medicaid fraud?

A:        Medicaid fraud involves making false or misleading statements, or causing such statements to be made, in order to get Medicaid reimbursement. Medicaid fraud may include such acts as billing for, but not providing, services or goods, and providing medically unnecessary services. Medicaid fraud schemes also may involve billing for a more expensive product or service than was actually delivered, billing separately for services that should be billed together, and billing twice for the same product or service. It is also illegal to: dispense generic medications while billing for more expensive brand-name drugs; submit false information on Medicaid cost reports; charge co-pays; and provide kickbacks or rebates for goods or services for which Medicaid reimbursement will be sought. Managed care organizations cannot deny service to eligible Medicaid recipients or fail to provide the level of service medically necessary or required.

Q:       What are the penalties for Medicaid fraud?

A:        Medicaid fraud is a crime. If the fraud involves sums greater than $150,000, it is a third-degree felony. Fraud involving sums of more than $7,500 but less than $150,000 is a fourth-degree felony. Fraud involving sums of more than $1,000 but less than $7,500 is a fifth-degree felony. Penalties may include fines, community control sanctions and, in some cases, prison. Individuals and entities convicted of Medicaid fraud and related crimes are required to be excluded from participation in all federal health care programs.

Q:       What does the Ohio Attorney General’s Office do about Medicaid fraud?

A:        Federal law authorizes Medicaid Fraud Control Units across the country to investigate allegations of fraud and abuse involving the Medicaid program. Forty-nine states and the District of Columbia have such units, and each is subject to annual recertification by the U.S. Department of Health and Human Services. In 1978, the Ohio General Assembly authorized the Attorney General to create and oversee the Ohio Medicaid Fraud Control Unit, and Ohio law grants this unit original criminal jurisdiction to investigate and prosecute Medicaid fraud statewide. The unit’s staff of more than 60 includes special agents, ana­lysts, nurses and attorneys.  

Q:       What can I do if I suspect a health care provider of Medicaid fraud?

A:        If you know about any instances of Medicaid fraud, you can contact the Ohio Attorney General’s Office at 614/466-0722 or 800-282-0515, send a fax to 614-644-9973, or visit www.OhioAttorneyGeneral.gov/ReportMedicaidFraud.

This “Law You Can Use” column was provided by the Ohio Attorney General’s Office and prepared by the Ohio State Bar Association. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.