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Posts Tagged ‘transparency’

AICPA Survey Points to Big Data, Increased Scrutiny as Big Concerns for CPAs

August 7th, 2014 No comments

Although “big data” has been sort of a buzzword in the business world, it’s becoming more and more of a concern for accountants, including those working in the nonprofit sector. In a past blog post we’ve discussed ways nonprofits can leverage big data, and it appears that the issue of analyzing electronic data is only going to become more important in the near future.

According to The 2014 AICPA Survey on International Trends, published July 30, 85% of CPAs in forensic and valuation services cited big data as their biggest concern going forward. This is a shift from past surveys, which typically placed hiring and retention as the top priority.

Data numbers and line graph

The second most pressing concern for respondents of the survey was increased complexity and scrutiny, coming from different sources such as judges and governing bodies.

Although accountants working for NFPs and NGOs were not included in the survey, these two issues—big data and increased complexity and scrutiny—are big concerns for the nonprofit sector. Peter Brinckerhoff, a former Executive Director of two regional nonprofits and author and internationally renowned lecturer on nonprofit management issues, has stated that transparency and accuracy are two of the most pressing issues for nonprofit financial management.

The Importance of Transparency for Nonprofits
In a whitepaper written for Serenic Software, Brinckerhoff states, “Transparency is no longer optional, either inside or outside the organization.”

Nonprofits, if anything, are under more scrutiny than private sector companies. As Brinkerhoff states, your financials are “on public display at many nonprofit watchdog websites, such as GuideStar and Charity Navigator.”

Reporting requirements are getting more complex, as well. Nonprofits work directly with auditors, and they need to stay on top of all state and federal requirements for reporting, including new requirements for IRS forms 990, 990N, and 990T.

“You might as well have a reporting system that facilitates this easily,” writes Brinkerhoff, “not one that you have to spend hours pulling numbers from.”

The Opportunities of Big Data for Nonprofits
Financial information is a huge part of big data, and making sense of it is a unique challenge that CFOs, board members, and accountants must grapple with.

Brinkerhoff writes, “You still can’t manage what you don’t measure, and like it or not, financial measurements are part of the mission outcome.”  Increasingly, the ability to measure and analyze big data will be crucial to a nonprofit’s financial goals and overall mission.

The biggest opportunity for big data is the potential to gather and analyze financial data in real time, and use it to make important organizational decisions.

Only advanced software solutions give your nonprofit organization the capability to both analyze big data and provide the necessary reporting for complete transparency.

 

Photo by: Tom

 

Transparency and Preparing for Your NFP’s Audit

December 2nd, 2013 No comments

In previous posts, we’ve discussed the nature of an audit, taking the pain out of your audit, and the goals or your organization when providing evidence and access to your auditor.  Here we share the importance of being transparent and the end result:  the financial statement. Read more…

Transparency, Inside the Organization and Out

Nonprofit leaders know that being “transparent” is crucial to success in today’s world. We hear and read about the term constantly. But what does transparency really mean? Is it just filing your IRS 990 form on time? Is it adding more information on your website? Who needs to see what? Let’s take a minute to briefly look at what transparency should be.

First, let’s leave behind any resistance to letting people look at what your organization is doing. Why? Because in a very real sense, it’s their money. You’ve heard the word “stewardship”? It has to do with managing the resources of others and nowhere is this more true than in nonprofits. We get funds from the community and spend them on the community…so the community should expect to be able to see what we’re doing.

With that settled, let’s look at what transparency is: In brief, it’s letting people see what goes on inside the organization, how much of its mission it accomplishes, how much impact it has, how the organization’s money is being spent, and what its plans are. To get started, you should have the following items available to review on your website, (and in handout form if people prefer that):

  • Your vision, mission, and organizational values
  • Your last two IRS 990 forms
  • Your last two audits
  • Your current strategic plan (in summary if need be)
  • Letters of accreditation (if that pertains to your organization)
  • Biographical information on senior staff
  • Biographical information on Board members
  • Concise program summaries
  • Outcome measures and their meaning with data for the past three years

Remember, this list is just a place to start. In almost every case, more is better.

The final thing to remember is that a policy of transparency starts inside the organization. You can’t be touting your openness if you don’t let staff and non-governing volunteers see what’s going on.

Transparency is good for nonprofits, since it makes us more accountable. More importantly, by keeping us accountable, it’s good for the people we serve.

–Peter Brinckerhoff (biography), a Serenic Software Blog content contributor