About Me!! ED of the Support, Advocacy & Resource Center (SARC) for 18 years SARC is in Tri Cities,...

About Me!!ED of the Support,

Advocacy & Resource Center (SARC) for 18 years

SARC is in Tri Cities, Benton/Franklin Counties

Volunteer Advocate before being hired

BA in Business Administration

MBACertified Senior

Professional in Human Resources (SPHR)

Not an attorney

“Risk Reduction”

1. Identify the various risks agencies face.2. Components of a comprehensive Risk Reduction

Plan.3. How to create a Crisis Plan.4. How to create and complete a Sustainability Audit.5. What a Nonprofit Compliance Checklist is.6. How to develop a Document Destruction and

Retention Policy.7. Elements of a good Succession Plan.8. Various other strategies to reduce risk to your

agency.

Identify Various Risks to Agencies:

FinancialNegative pressLaw suits Natural disasterWork place

violenceTurn overFire, theft, etc

Why You Need a Risk Reduction Plan

Reduce potential of litigation.Reduce liability.Increase agency stability.Create a stronger and healthier agency –

fiscally and personnel.Assists with a positive culture.Allows for less chaos which in turn assists

direct services.Ensures continuity of services.

Why You Need a Risk Reduction Plan

Components of a Risk Reduction Plan

Crisis PlanSustainability AuditNonprofit Compliance Checklist

Document Destruction and Retention Policy

Succession Plan

Crisis PlanThe purpose of this

plan is to provide guidance when a crisis or potential crisis strikes.

It is the responsibility of all staff to be familiar with the plan.

Need specific staff to review on an annual meeting and provide training to staff.

Crisis Plan - Continued

Determination of Crisis: In situations such as fire, robbery, natural disaster, etc there is not a need to determine whether a crisis has been presented. In these situations the Crisis Response Plan is to be immediately activated.

In other circumstances, such as threat of a law suit; allegations of inappropriate and/or criminal conduct of a staff member, Board member, or volunteer advocate; negative media coverage of agency; etc. it must be determined if a crisis exists, and which portions of the Crisis Response Plan are relevant and are to be activated.

Crisis Plan Cont.Identify Existing Resources: Policies and guidance regarding immediate

response to crisis such as fire, robbery and theft, bomb threat, workplace violence, etc.

Policies pertaining to personnel management and client interactions.

Staff contact sheets. Employee Safety ManualFirst aid kits, fire extinguishers, exit signs, and

emergency evacuation routes Safety Committee

Crisis Plan Cont.

Crisis Plan Cont.

Point Person: Determine Point Person (PP)PP provides leadership to staff during

crisis, be the spokesperson for media and all other entities requesting information, and to provide any needed notifications to partner agencies, clients, etc.

What authority does the PP have? Can the PP deviate from the Crisis Response Plan if necessary.

Who all does the PP have to communicate with and when?

Crisis Plan Cont. Point Person Deputy: Determine Point Person Deputy (PPD)PPD will provide direct assistance to the Point Person and step in

as leader if the Point Person is no longer able to fulfill her/his duties.

What else do you want the PPD to be responsible for? Emotional health of staff and PP? Monitoring behaviors of PP in case there is a problem?

Have a list that delineates the Point Person and the Point Person Deputy in order of priority/preference/availability. As the Point Person is identified the next in order is the identified Point Person Deputy:

Executive DirectorProgram DirectorOffice AdministratorAvailable staff person

Crisis Plan Cont.

Crisis Plan Cont. Situation Assessment:What is the situation? What will happen next?Who on staff needs to be involved?What immediate steps need to be taken?Who will begin the staff and board communications?What is known and who already knows it?Is there potential public interest? Does the issue have traction?

(Does it have potential to become anything more than a quick story on the evening news?)

Who will be affected?What are people feeling?What information is needed and who beyond organizational staff

needs to get it? When will it be available?What should your agency do about it? Proactive vs reactive?

Contact or refer to another agency?What can and can’t be said?Is legal or public relations counsel needed?

Crisis Plan Cont.

Crisis Plan Cont.Communication Strategy: Who implements strategy? Who can

speak on behalf of the agency?

Communication messages must:Establish a clear position or explanation of circumstance. Be honestBe conciseLook forward to the solutionDo not assign blame

Decide which methods of communication can be used, how and under what circumstances.

EmailPress ReleaseFace bookWebsite

Crisis Plan Cont. Command Center

Crisis Plan Cont.Command Station:

Where is Command Station if Agency can not be occupied? Back up Command Station? How will staff be notified?

If it is possible to enter agency who is responsible for picking up items such as: client database flash drives, client log book, current fiscal year client files, etc?

Crisis Plan Cont. – After Crisis Review

Crisis Plan Cont.After Crisis Review: The Post Crisis Review Meeting signals the transition to normal operations and

that the crisis has ended. The review is an opportunity to see what was learned for the crisis and provide update to risk management and crisis response planning.

The review may answer the following questions: If any, what were the early warning signs of the crisis?Could we have recognized it earlier?What were our weaknesses and vulnerable points?How effective were our communications?Did we have the right people as the Point Person and Point

Person Deputy?How well did our leaders function?What could we have done differently?How can we better prepare for a similar situation in the future?

Sustainability AuditTakes an inventory of all of the policies,

procedures and practices of an organization and compares these to the best practices in their industry.

An audit is a gap analysis and a maturity analysis of the sustainability practices of an organization.

It is meant to document ‘what you are doing’ and ‘to what extent’ across a wide range of sustainability categories.

Sustainability Audit

Sustainability AuditOrganizational Sustainability Audit/Screening Date Conducted: _______________________________ Conducted By: _________________________________

Organizational Identity We have a vision that is the overarching dream for which our agency aims. We have a mission statement that tells others how the agency works towards realizing our vision. Our values tell the world how the agency operates, its philosophy and the core principles. We have identified our niche. Our agency is identifiable to the public through our logo and look of our publications. The leadership of the agency is well known and respected by community partners and leaders.

Accountability We check our compliance with all IRS 501c3 requirements at least annually. We have a checklist for all contract, grant, and program requirements and deliverables and ensure our compliance on at least quarterly. We can justify all expenditures and back them up with a receipt tied directly to a specific funding source. We have an outside audit once a year. The Board of Directors approves an annual budget. The Executive Director provides financial reports at the Board meetings.

Financial Security We know exactly how much money we need to sustain our work for the upcoming year. We know what it costs to run our organization of one month. We have operating funds on hand or available for the next 3 months. No one funding source makes up more than 30% of our budget. We have had more revenue than expenses in the last 7 out of 10 years. We actively seek to identify methods of leveraging our resources We have a financial investment strategy and policies.

Organizational Operations We have a current strategic plan and update it on a regular basis. As part of the strategic planning process we assess the external environment and analyze the internal strengths and weaknesses. Our mission, vision and niche are revisited on a regular basis to assess whether they are still relevant. We have long term goals and objectives aligned to help us reach our goals. Operating plans are developed each year in alignment with the strategic plan. We have the necessary staff or volunteers to accomplish our mission. We have the staff that was outlined in funded grant applications. We have written organizational policies and procedures that are updated annually. We have the necessary office space and equipment to accomplish our mission. We do an annual review of all organizational operations and strategize ways to strengthen the organization.

Sustainability Audit Cont.Relationships We have the partners necessary to reach our mission and vision. We have an outreach plan to engage our target populations. We ensure the voice of underrepresented populations in all levels of our organizations planning,

development, and evaluation. Our organizational governance is comprised of the populations we serve. We do an annual survey of the perceptions of the populations and communities we serve, our

partners, and funders and make necessary adjustments to improve our capacity, outreach, and visibility.

Board of Directors A needs assessment is conducted annually. The Board conducts a self-evaluation each year. Board recruitment is an on-going process and is tasked to a sub-committee of the Board. All new board members are provided an orientation to the agency. Board members are nurtured and cultivated with the goal of creating strong team relationships.

Staff Development and Culture Needs assessment, evaluation and review, training, team building Management regularly communicates with staff to assess staff needs. Staff is provided with regular feedback regarding their performance. Staff receives the necessary training to be effective in their positions. Intentional team building efforts are built into the agency’s strategic/operating plan(s).

Sustainability Audit Cont. Areas of Concern or Need of Focus:

Organizational Identity AccountabilityFinancial SecurityOrganizational Operations RelationshipsBoard of DirectorsStaff Development and Culture

Non Profit Compliance Checklist

Required Disclosures Do the Office Administrator and Executive Director understand that the Form 990, schedules, and attachments must be made available to the public

upon request and on the same day as requested? Are the Form 990, schedules and attachments available to public upon request? Do the Office Administrator and Executive Director understand that the letter from the IRS ruling that the agency has exempt status must be made

available to the public upon request and on the same day as requested? Is the letter from the IRS ruling that the agency has exempt status made available to the public upon request? Is a disclosure statement provided to all contributors who donate more than $75 with the donor receiving a good and/or service?

Potentially Jeopardizing Activities Does the agency refrain from participating in political campaigns? Are lobbying activities restricted to an insubstantial part of its activities? Does the agency ensure that earnings do not benefit private shareholders or individuals? Does the agency provide commercial-type insurance as a substantial part of its activities? Does the agency operate for the benefit of private interests such as the founder, the founder’s family, shareholders or persons controlled by such

interests? Does the agency operate for a primary purpose not related to its exempt purpose? Does the agency have a purpose or activities that are illegal or violate fundamental public policy?

Required Filings Is an annual 990 tax return filed? Does the agency receive unrelated business income tax? If the agency receives unrelated business income tax is the form 990-T filed?

Employment Taxes Is the Executive Director properly trained to understand the difference between an individual being an independent contractor or an employee? Does the agency withhold and make payments of federal income taxes, social security taxes and Medicare taxes? Are employees who have no federal income tax withheld notified that they may be able to claim the Earned Income Credit? Does the agency file Form 941 quarterly? Does the agency provide W-2s to all employees before January 31? Does the agency provide Form W-3 to the Social Security Administration by the last day of February? (If filed electronically the form may be

submitted by March 31.) Does the agency submit Form 1099-misc as needed?

Retirement Plan Compliance Does the agency meet all retirement plan requirements?



Purpose: The purpose of this policy is to eliminate accidental or innocent destruction of records, ensure that agency manages data in an efficient and effective manner, maintains historical records related to its financial and administrative operations, and purges documents as part of its normal management process. By establishing a specific timeline for document purging, this shall also ensure compliance with the Sarbanes-Oxley Act, which prohibits the alterations, falsification or destruction of documents that are part of any official proceeding.

“Record” and “Document”: Refers to any item listed in the table below, in either hard copy, or electronic form. Electronic files also include those in audio/visual or emailed forms.

Labeling and Storage: All files, both hard copy and electronic, shall be labeled by topic and year (if applicable). Electronic copies shall be saved in appropriate folders on appropriate computer. Hard copies shall be stored in file cabinets, or archived in the storage unit in Pasco. If documents of similar type and with the same retention and destruction requirements are stored together, they shall also be labeled with a “destroy after” date so that they do not have to be reviewed additional times.

Review and Purging: Review and purging of files may take place in an ongoing manner, but must occur at least every two years in odd numbered years, and must follow the minimum retention requirements stated below. Such review and purging must also occur prior to archival storage of any files.

Document Drafts: Once the final copy of a document has been completed, the drafts may be recycled or deleted, unless they are documents of legal value. For documents determined to be of legal value, drafts containing comments shall be saved for a minimum of two years, and drafts without comment may be destroyed once the final version is complete.

Compliance: Failure on the part of employees to follow this policy can result in possible civil and criminal sanctions against the SARC and its employees and possible disciplinary action against responsible individuals. The Executive Director will periodically review these procedures with legal counsel or the


Cont. Corporate Records Retention Requirement Annual Reports to Secretary of State/Attorney General

PermanentArticles of Incorporation Permanent Board Meeting and Board Committee Minutes PermanentBoard Policies/Resolutions Permanent Bylaws PermanentConstruction Documents PermanentFixed Asset Records PermanentIRS Application for Tax-Exempt Status (Form 1023) Permanent Contracts with invoices (after expiration) 10 yearsCorrespondence (general) 4 years


Accounting Records Retention Requirement Annual Audits and Financial Statements (end of year) Permanent Depreciation Schedules 10 years IRS For 990 Tax Returns Permanent Budgets 7 years General Ledgers Permanent Accounts Payable Ledgers and Schedules 10 years Accounts Receivable Ledgers and Schedules 10 years Business Expense Records 7 years IRS Form 1099 7 years Journal Entries 10 years Invoices 10 years Sales Records (books) 10 years Petty Cash Vouchers 3 years Cash Receipts 5 years Credit Card Receipts 5 years


Bank Records Retention Requirement

Check Registers 7 years

Bank Deposit Slips 10 years

Bank Statement and Reconciliation 10 years

Electronic Fund Transfer Documents 7 years


Payroll and Employment Tax Records Retention Requir.

Payroll Registers PermanentState Unemployment Tax Records

PermanentEarnings Records 7 yearsGarnishment Records 7 years Payroll Tax Returns 7 yearsW-2 Statements 7 years


Employee Records Retention Requirement

Personnel Files 10 years after termination Retirement and Pension Plan Documents PermanentAccident Reports and Worker’s Compensation Records 5 yearsSalary Schedules 5 yearsEmployment Resumes 3 yearsTime Cards 10 years after terminationVolunteer Advocate Files 5 years after terminationBoard of Director Files 5 years after termination


Personnel Related Documents Retention Requirement

Job Descriptions 10 years

Personnel Policies 10 years


Donor and Grant Records Retention Requirement

Donation records of endowment funds and of significant restricted funds Permanent

Donor Records and Acknowledgement Letters 10 years

Grant Applications and Contracts 7 years after completion

Rejected grant proposals, correspondence, etc. 3 years after rejection

Fundraising Documentation Summary Permanent


Legal, Insurance, and Safety Records Retention Requir.

Appraisals Permanent Copyright Registration Permanent Environment Studies Permanent Insurance Policies Permanent Real Estate Documents Permanent Stock and Bond Records Permanent Trademark Registrations Permanent Leases 10 years after expiration OSHA Documents 5 years General Contracts 10 years after termination Safety Meeting Minutes 5 years


Client Related Records Retention Requirement

Counseling Files 10 years Client (Advocate) Files 10 years Support Group Folder 10 years Subpoenas 10 years SHIP Participation Documentation 4 years

Counseling Referral Forms 4 years


Program Records Retention Requirement Agency Newsletters Permanent Program Statistics (End of Year) Permanent Program Outcomes (End of Year) Permanent Returned outcome surveys After end of year outcome reports are

done Annual Reports Permanent Volunteer Advocate Newsletters 4 years Third Party Call Records 4 years Volunteer Staffing Schedules 4 years Education Presentation Binders 4 years Information and Awareness Binders 4 years Staff Meeting Minutes Permanent Strategic/Operating/Diversity Plans Permanent


Accreditation Records Retention Requirement

OCVA Accreditation Final Reports Permanent

OCVA Accreditation Back Up Documentation Current accreditation only

National Children’s Alliance Final Reports Permanent

NCA Accreditation Application Permanent

Succession Plan

Succession PlanPurpose: Ensure that your agency continues to operate effectively

when individuals occupying critical positions depart.

Not a technique to plan individual career advancement opportunities or a reward for high performers.

The plan is strategic in both investment of resources devoted to it and in the kinds of talent it focuses on.

Will be reviewed and updated on an annual basis to reflect a current analysis of critical positions and the ability of current staff members to fill or assist with gaps if employment of a staff member in a critical position occurs.

Succession Plan Cont.Critical Positions with Position Analysis: Determine which positions are absolutely critical to

run the agency. Based on such factors as job responsibility skill base, and ease to backfill position.

ED – Specific training required for financials, personnel management, education requirement, agency knowledge

Program Director – Could be vacant for a short period of time; however, needed for direct supervision, program reports

Office Administrator – Needed to process payroll, invoice grants, accounting

Succession Plan Cont.

Action Steps:For each position – determine what training

can be done to prepare current staff to help fill gaps in skills in case of a position opening.

E.g. For next fiscal year the Program Director will be provided with additional training on leadership. Assuming that she continues to excel and is ready, a focus on beginning to teach the financial management piece may be incorporated into the next succession plan.

Succession Plan Cont.To prepare for an expected absence that is longer

than 30 days, and expecting that the Executive Director will return to regular full time employment:

To prepare for an unexpected absence that is longer than 30 days, yet expecting that the Executive Director will return to regular full time employment:

To prepare for termination of the Executive Director’s employment:

Do the above for each critical position

Additional Strategies to Reduce Risk

Have positive relationships with staff, volunteers, community members

Develop Policies and Procedures (e.g. Personnel Policies, Direct Services Handbook)

Have appropriate and adequate insuranceEnsure that all staff and Board of Directors are

well trained on Risk Reduction PlanEnsure that Executive Director, or other

responsible person, receives appropriate training on areas of potential risk

Safety and Health Committee

Questions??

JoDee Garretson, Executive Director

Support, Advocacy & Resource Ctr

509-374-5391

[email protected]

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