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How To Minimize and Manage Risk
Picking the Right Auditor
The first step for an organization in getting its money's worth from an
auditor is to make sure it hires the right one. In her book All the Way to
the Bank: Smart Nonprofit Money Management, published by the Larson
Allen Public Service Group, Susan Kenny Stevens offers four steps to find
the right firm or individual for the job.
Narrow the field. Develop a list of several reputable CPS firms that have experience providing financial services to other nonprofit organizations. To narrow the list, find firms that have experience with organizations in your specific field.
Interview potential firms. After you have received proposals, set up
interviews with the firms you believe will provide your organization
with the desired results. Find out about the individual who will
oversee and perform the audit. Is that person willing and able to
assist with questions that come up during the rest of the year?
Evaluate costs. Keep in mind that you often get what you pay for,
so don't automatically choose the lowest bid. A pro bono audit may
be free but often is not timely. It may also raise concerns with
funders if the accountant performing the audit does not understand
nonprofit issues.
Put the agreement in writing. Ask for an engagement letter that details the following:
- The work they are agreeing to perform,
- The price of their services, and
- Any other items agreed on, such as work may need to complete before the audit can begin.
(Source: NonProfit Times Weekly)
Checklist for Accountability
Independent Sector, a Washington, D.C.-based coalition of nonprofits, foundations, and corporate philanthropy programs, has released a list of steps charitable organizations can take to demonstrate and improve their accountability.
The steps in the Checklist for Accountability, which also includes a list of resources available as models, are intended to help charitable organizations reassure their stakeholders of their commitment to uphold the public trust. The checklist, which builds on the work of the IS-convened Panel on the Nonprofit Sector, calls on charitable organizations to develop a culture of accountability and transparency; adopt a statement of values, code of ethics, and conflict of interest policy; ensure that the board of directors understands and can fulfill its financial responsibilities; conduct independent financial reviews, particularly audits; ensure the accuracy of and make public their Forms 990; establish and support a whistleblower protection policy; and remain current with all laws and regulations governing the sector.
"Nonprofit boards and staff want to be sure their organizations meet the highest standards of ethics, transparency, and governance," said IS president and CEO Diana Aviv. "This is an impartial tool to help organizations meet that goal."
Read the Checklist for Accountability
Resources
Nonprofit Risk Management Center (www.nonprofitrisk.org) was established in 1990 to provide assistance and resources for community-serving nonprofit organizations. Services include free technical assistance by telephone or e-mail; publications; web-based, interactive risk assessment software program; newsletter; local workshops; regional and national conferences; and consulting services.
Virginia Business Emergency Survival Toolkit (www.vaemergency.com/business.index.cfm) explains types of emergencies and potential problems they pose; gives information about how to prepare for them and to recover from them; and provides a framework for putting it all together in an emergency preparedness plan.
Virginia “Good Samaritan” Law protects healthcare providers and other rescuers from being sued when they are giving emergency help to a victim provided the person uses reasonable, prudent guidelines for care using the resources they have available at the time of the accident. To trigger the protection of this law, several conditions must be satisfied: it must be a voluntary act, the person receiving the help must not object to being helped, and the actions of the rescuer must be a good-faith effort to help. The law can be found in the Code of Virginia, Section 8.01-225, Chapter 493.