Academic journal article Journal of Accountancy

Not-for-Profit Governance

Academic journal article Journal of Accountancy

Not-for-Profit Governance

Article excerpt

Not-for-profits (NFPs) can be so focused on serving their cause that they don't make time to put in place sound governance policies. BDO Assurance Partner Laurie Arena Rocha, CPA, and BDO Tax Exempt Senior Director Rebekuh Eley, CPA, presented the following tips for good NFP governance at the AICPA Not-for-Profit Industry Conference in June.

[check] State the organization's values in a written code of ethics for board members and present it to them during the orientation process. The code should become part of the not-for-profit's culture rather than a stale document that is easily forgotten.

[check] Maintain a conflict-of-interest policy for board members that requires periodic disclosures and consistent monitoring. Some boards read the policy before every meeting, and some have quarterly or semiannual reminders.

[check] Develop a whistleblower policy. This should allow everyone associated with the organization to come forward without fear of retaliation.

[check] Establish a document retention and destruction policy. This should undergo legal review to make sure it complies with state and federal laws, and requires regular compliance monitoring.

[check] Carefully monitor expense reimbursement. This should conform to the rules of Internal Revenue Code Sec. 62(a) and follow IRS guidelines, requiring documentation and receipts for all purchases over a specific dollar amount, which often is $25.

[check] Maintain a gift acceptance policy. This also should be reviewed by legal counsel, and potential gifts should be screened to determine whether ethics, financial circumstances, or other interests are compromised by the acceptance of the gift.

[check] Review tax returns. All board members should be allowed to review Form 990, Return of Organization Exempt From Income Tax, before it is filed. …

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