Managing a tax-exempt organization was strenuous prior to the global pandemic. Organization leaders are now struggling with new challenges that continue to arise on a daily basis. Finances, operations, and personnel are being tested like never before. Below is a list of ten things to consider when navigating through this time of uncertainty:
- Technology Infrastructure: Do you have the infrastructure in place for adequate cybersecurity; for compliance with applicable laws and regulations including HIPAA (Health Insurance Portability and Accountability Act) and the SHIELD Act (NYS Stop Hacks and Improve Electronic Data Security Act); and the hardware, software, and procedures for those working remotely to do so effectively and securely?
- Internal Controls: Has your internal control system been updated to maintain segregation of duties, proper oversight, and documentation of control procedures performed, even in cases where employment numbers have been reduced or finance/management staff are working remotely?
- Cash Flow Management: Cash is king at a time when there are so many uncertainties in the current economy. Do you have a cash management plan that takes into account reducing days receivables are outstanding, extending payables days outstanding to the extent allowed, revenue-generating opportunities, expense reduction strategies, and favorable borrowing arrangements? Have you inquired with vendors, lessors, and lenders about payment plans or possible forgiveness of certain debts? Have you thought about new methods of fundraising that can be accomplished during COVID-19?
- Managing Restricted Funds: Many non-profits have donor-restricted funds including endowments and funds with purpose and/or time restrictions. Have you maintained these restricted funds in accordance with donor stipulations and applicable laws?
- COVID-19 Relief Programs: Have you taken advantage of the numerous relief programs available through federal, state, and local governments and community organizations? Relief programs include the Paycheck Protection Program (PPP); Economic Injury Disaster Loan (EIDL); Employee Retention Credit; Sick and FMLA Leave Credits; Payroll Tax Deferral of employer social security taxes; HHS Funding to cover COVID-19 expenses and lost revenues for organizations who normally receive Medicare or Medicaid funding; FEMA assistance; FCC telehealth grants; and Foundation (ex. Mother Cabrini, Community Foundations), County and City grant and loan programs.
- Compliance Program: Have you maintained an adequate compliance plan with proper documentation, processes, and procedures? If you are now performing services in a virtual environment and you hadn’t in the past, did you establish new procedures to document those telehealth/telemedicine services appropriately?
- Disaster Recovery Plan: Do you have a disaster recovery plan that addresses the organization’s physical locations, employee safety, IT infrastructure, and data protection? What if there is a flood, a power outage, your organization gets hit with malware/ransomware or a global pandemic? Does your disaster recovery plan include a blueprint for dealing with the variety of disasters that could occur?
- Mergers and Affiliations: Is your organization going strong through the pandemic or, on the other end of the spectrum, struggling to survive? A real but unfortunate effect of COVID-19 will be the loss of certain organizations that could not survive the financial disruption. If you’re one of the organizations going strong, have you considered the opportunities to merge or affiliate with a less fortunate organization that is in need of assistance to ensure their mission is continued? The tax-exempt community should work together to protect the individuals they serve and maintain the crucial services they provide.
- Internal Communications and Employee Health: Are you communicating routinely with your employees regarding changes to procedures, responsibilities, and protocols for continuing operations during the Coronavirus outbreak? Stress levels are high throughout the workforce. Have you checked in with your employees to encourage maintenance of work-life balance?
- Sanitization Equipment and Procedures: Do you have the personal protective equipment, cleaning supplies, and sanitization procedures in place and a plan to maintain the supply of those items and oversight of the procedures for the months to come in accordance with CDC, state and local regulations?
The pandemic has caused change at a rapid pace with a daily flood of information. While there are extensive challenges to overcome, there are also opportunities to strengthen your organization by developing more effective strategies and efficient ways to accomplish your goals. Please reach out to your Bonadio engagement team if you have questions or need assistance navigating through these considerations.
The information and advice we are providing for this matter relates to COVID-19 legislative relief measures. Because legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that could modify some of the advice and information provided to you, after the conclusion of our engagement. We, therefore, make no warranties, expressed or implied, on the services provided hereunder.
