The Best of Boards: Sound Governance and Leadership for Nonprofit Organizations
Nonprofit organizations’ boards are justifiably passionate about their causes and eager to help their organizations. However, in today’s increasingly regulated climate, board members, who come from diverse backgrounds and may have little financial expertise, can feel overwhelmed by the regulations that are their duty to follow.
The Best of Boards: Sound Governance and Leadership for Nonprofit Organizations provides not-for-profit board members and financial managers with the essential fiduciary knowledge and indispensible leadership guidance that they need to meet the challenges of the current not-for-profit environment. This book contains:
- Financial and ethical guidance for real-life situations
- Practical leadership advice for novice and experienced board members
- Assistance for not-for-profit managers tasked with governance challenges
- Tools, checklists, and templates based on common sense management techniques
This publication will build ethically sound management knowledge in not-for-profit board members so that they can ensure the compliance and, ultimately, the success of their organization.
To anyone who has ever served as a volunteer board member or a harried nonprofit leader, these are no doubt familiar reasons for lack of oversight. But, in the eyes of the IRS, funding sources, donors, and the general public, there are no good reasons for such lapses, and there is no margin for error. Because the resources of a nonprofit belong to the community, nonprofits are accountable for what they do with them. And when grantors, whether federal, state, or foundation, are involved, compliance is a condition of funding.
Beyond these understandable, if dangerous, rationales for poor compliance, there is the issue of those who know the rules but choose not to follow them. The 2008 Health Care Industry Developments Audit Risk Alert6 notes that the Department of Health and Human Services’ Office of the Inspector General (OIG) and the U.S. Department of Justice are aggressively pursuing those institutions that are noncompliant with rules relative to time and effort reporting. This noncompliance generally takes the form of improper charges to grants for direct labor, fringe benefits, and related indirect costs. Because these are generally the largest costs in a grant, institutions may, for example, move time of employees from one grant to another grant that can absorb the cost even though the personnel did not work on the program. Behavior such as this is justified on the basis that the grant was “the researcher’s,” and so, therefore, was the money. Another common rationalization is that the both grants belong to the institution, so it’s not hurting anyone. However, these interpretations are at odds with funding agreements and, in the case of federal money, the law. As will be more fully discussed in chapter 9, the Office of Management and Budget created cost and administrative circulars prescribing the rules that those organizations receiving grants and contacts must follow. Therefore, claims for money improperly spent are, in fact, fraudulent claims.
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