Outlining Government Expectations for Financial Accountability

Tuesday March 2, 2021 comments Tags: organization, nonprofit, deliverables, podcast, subcontract, government, mississippi, interrogate, i

Any accounting business and tax advice contained in this podcast is not intended as a thorough in depth analysis of specific issues. Nor is it a substitute for forming information. Nor is it sufficient to avoid tax related penalties. If you have specific questions that you need advice for, be sure to schedule a strategy session and not solely rely on information in this podcast. All right, back to the episode. Are you a nonprofit leader, wanting to get a better handle of your finances and how the mission and the money are connected? Check out Impact Basics. It's a 12 week course that combines an online learning platform with live instruction. So you'll have your modules that you can go through at your own pace and then there are office hours where you can bring any question from the modules or what's happening in the day to day for your organization that we can work through together, the next cohort starts soon so be sure to check out the link in the show notes to get more information. 

Hey, it's Chyla Graham, welcome to another episode of Nonprofit Nuggets Podcast this week, we are in Mississippi. So the article title is Nonprofits get welfare money after Davis left. So in this case, there is the director of the Mississippi Department of Human Services and the way the agency was set up they were dispersing monies, to two nonprofits, or to organizations to subcontract and do the work. So this is not unheard of it is very common that the government does not have the capacity to do something. And so they say, hey, nonprofit, you're doing this amazing work, here is the money to do it. That’s not a problem, you're not going to end up in the news because the government gave you money to help them carry out programs. 

What is concerning, though, is that there are two organizations who are still getting money. And there are issues with them. So one of the organizations was a Subcommittee and Education Center. And in this case, officials of the organization were arrested, along with the former director, this Davis person that they said, as part of an embezzlement scheme. So that's a problem. What this means to me is that there aren't controls in place that said, Hey, this thing happened. Let's stop. So again, very frequently, we go onto autopilot and we don't take a critical stance to say like, hey, should we interrogate why we're still doing this? And I'm not saying that the Mississippi Community Education Center shouldn't get this money. Because again, this season, we're just talking about what happened, how you can prevent it from happening to your and other organizations, not whether or not it's true or factual. And all that because, again, right now, I'm not going into any investigations, I just want to make sure that you are not in the news for something similar. So I'm not saying that the organization shouldn't rightfully get the funds. 

However, you should be sure to interrogate is this still the right place for this to happen, considering any concerns? If they're still doing the work, if they're still turning in the documentation and reporting that you need, they might go for it. But if they're not, I would raise like, should we still be doing this? This next one, though, this is the one that I have an issue with. So the second largest recipient was the National Strategic Planning and Analysis Research Center. They received almost $2 million to provide technical analysis but the director of the Human Services Department, so the department that is giving them this money, said that they do not have the numbers. So the axe is placed to Hey, give us some data, tell us what you're doing. And they did not. Again, they did not produce those reports. So this is an idea of like, I paid you to do a service. We need to be clear about what the deliverables are. If your organization is being subcontracted by the government to do something, be sure that it's very clear about what the milestones and deliverables on said project are because you want to be sure to meet them. You want to be sure to turn it in because you don't want to end up on the news because the government says, Hey, we paid these people to do a thing, but they didn't do it and I have no idea where it is in the process. Okay, this is not what you want to be on the news for. 

Be sure that you have that documented upfront. So what are the takeaways for today? If you are a government body, I don't know if any government bodies are listening to the podcast, that makes me very nervous. But if you're a governing body and you are distributing grants, you want to make sure that it's clearly outlined, what your expectations are, what the deadlines for deliverables are going to be. And that you have in place a process to interrogate when things happen, when you are learning about concerns that your system, your accounting system, your financial process, has a way to check that this is one of the reasons that I don't believe accounting will ever be fully automated, because I'm not sure how you would put those triggers in there. You need a person, at some point, to go through and look at the records and say, This doesn't look right, because I know I'm aware of these types of things and I don't, I want to at least have a conversation out loud. 

The second piece is making so you want to make sure that you are having some triggering effects. You're being clear about what the deliverables are. And you're following up on getting those deliverables. So it's not enough to just say like, Oh, yeah, they're meeting the thing. When people are not meeting them. What is the what happens next? Are they responsible for returning my funds? There are lots of examples out there of funders who say like if you do not spend the money, and the way we said you spend the money, you have to give the money back. Consider, if you as a funder, some sort of updated language to do that. 

I thought this was a very interesting dynamic, because we had two cases of like, hey, when organization there's no evidence, they don't mention like them not behaving, not doing the things correctly. As far as how the grant monies were spent. It was a matter of the people involved put them at risk and the other case being like, Hey, I'm not getting the thing I said we were going to get. So that is the thing you should be mindful of is making sure that you are staying on top of those data points. All right, then, have a great week. Please not end up on the news for something like what we just talked about today. Bye. Thanks for tuning in to another episode of the Nonprofit Nuggets Podcast.

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Link to Article:Nonprofits got welfare money after Davis left



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