WHO IS ACCREDITED?

Private Organization Accreditation

Germaine Lawrence is a residential treatment center for girls ages 12-18 with complex behavioral, psychological and learning challenges.   Girls live at our programs while receiving special education, individual, family and group therapy; psychiatric and primary medical care; and a wide variety of therapeutic activities and interventions.
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ORGANIZATION TESTIMONIAL

Advantage Credit Counseling Service

Mary Loftus, VP, Agency Service

Our agency is preparing for reaccreditation under the Eighth Edition Standards. The COA site is well organized and very easy to use. Our team of employees working on the reaccreditation process has found the tools index to be very helpful, particularly some of the templates.
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Purpose

The nonprofit organization’s financial accountability and viability are achieved through the application of sound financial management practices that accord with legal and regulatory requirements.

FOC
FIN 6: Financial Accountability

The organization is accountable for the management and performance of its finances to its governing body, the community, and applicable regulatory bodies. 

Update:

  • Revised Rating Indicators - 07/19/17
Rating Indicators
1
The organization's practices fully meet the standard, as indicated by full implementation of the practices outlined in the FIN 6 Practice standards.
2
Practices are basically sound but there is room for improvement, as noted in the ratings for the FIN 6 Practice standards.
3
Practice requires significant improvement, as noted in the ratings for the FIN 6 Practice standards; and/or
  • FIN 6.02 received a rating of 3 or 4. 
4
Implementation of the standard is minimal or there is no evidence of implementation at all, as noted in the ratings for the FIN 6 Practice standards.

Table of Evidence

Self-Study Evidence On-Site Evidence On-Site Activities
    • Most recent audit and management letter
    • List of Audit Committee members and Finance Committee members
    • Annual report of fiscal, statistical, and service data
    • Current IRS Form 990 (FIN 6.04)
    • Governing Body minutes
    • Minutes of audit and finance committees
    • Interview:
      1. Governing Body
      2. CEO/CFO

  • FIN 6.01

    The organization makes available an annual report of fiscal, statistical, and service data that includes summary information regarding its financial position, that is provided upon request. 

    Note: Audited financial statements and IRS Form 990 should be easily accessible for review.

    Rating Indicators
    1
    The organization's practices reflect full implementation of the standard.
    2
    Practices are basically sound but there is room for improvement; e.g., 
    • The organization is committed to full disclosure when requested and has data available but does not disseminate or publicize the report.
    3
    Practice requires significant improvement; e.g., 
    • The organization provides limited information about its financial position in written form, although it does provide some fiscal and service data.
    4
    The standard has not been implemented; e.g.,
    • The organization does not disclose such information to the public.

  • FIN 6.02

    The organization receives an audit of its financial statements that is conducted within 180 days of the end of each fiscal year by an independent, certified public accountant.

    Update:

    • Revised Standard - 07/19/17
      The standard and interpretation were revised and a research note was added to clarify COA's expectations regarding a financial audit. 

    Interpretation: There are three levels of financial statement services offered by CPAs: audits, reviews, and compilations, each of which should be conducted by an independent CPA. In order to receive a 2 rating, the organization must conduct either the audit or review. Each results in a formal written report.  An organization that is pursuing reaccreditation can receive a 2 rating if it has completed an audit or review of financial statements for the most recent auditable year but did not conduct an audit or review for any or all of the intervening years since their last accreditation. All new organizations must have an audit or review of financial statements from their most recent auditable year in order to receive a 2 rating. 

    Interpretation: Credit counseling organizations are required to have an annual audit to achieve accreditation.

    Research Note: Best practices in the financial industry indicates that an independent auditor, who is a certified public accountant (CPA) or chartered accountant (CA), examines the financial records and business transactions of a company with which s/he is not affiliated to avoid conflicts of interest and to ensure the integrity of the services performed. Following an audit or review the CPA provides a formal report that indicates their findings.
     
    An audit provides the highest level of assurance on an organization’s financial statements. An audit provides assurance that an organization’s financial statements are free of material misstatement and are fairly presented based upon the application of generally accepted accounting principles. An audit includes:

    • confirmation with outside parties
    • testing selected transactions by examining supporting documents
    • completing physical inspections and observations
    • considering and evaluating the internal control system of the organization  
    Following an audit the CPA issues a formal report that expresses an opinion on whether the financial statements are presented fairly, in all material aspects, in accordance with the applicable financial reporting framework; and indicate any significant or material weaknesses in the internal control. 
     
    A review provides limited assurance on an organization’s financial statements.  During a review, inquiries and analytical procedures present a reasonable basis for expressing limited assurance that no material modifications to the financial statements are necessary; they are in conformity with generally accepted accounting principles.  Following a review engagement, the CPA will issue a formal report that includes a conclusion as to whether, based on the review, he is aware of any material modifications that should be made to the financial statements in order for them to be in accordance with the applicable financial reporting framework.
     
    A compilation provides no assurance on an organization’s financial statements and does not meet the requirements of the standard.

    Rating Indicators
    1
    The organization's practices reflect full implementation of the standard.

    Organizations seeking reaccreditation have completed audits for each intervening year since their last accreditation.
    2
    Practices are basically sound but there is room for improvement; e.g., 
    • The organization undergoing reaccreditation completed an audit or review of financial statements for the most recent auditable fiscal year; however it did not conduct one for any or all of the intervening years since their last accreditation;
    • The organization completed the audit or review of financial statements; however it was not completed within eight months of the end of the fiscal year, but the organization implemented procedures to ensure timely completion for future audits. 
    3
    Practice requires significant improvement; e.g., 
    • The audit for the most recent auditable year is scheduled but has not been completed; or
    • The most recent audit was completed more than eight months after the end of the fiscal year.
    4
    An audit for the most recent auditable year not been completed nor has one been scheduled.

  • FIN 6.03

    The governing body has an independent audit committee that: 
    1. oversees the financial reporting process;
    2. selects an independent auditor; 
    3. meets with the auditor to review the findings of the audit, accompanying financial information, and any accompanying management letter; 
    4. formally accepts the auditor’s report within 180 days of the close of the fiscal year; 
    5. reports the findings and makes recommendations at the next official meeting of the governing body; 
    6. assures that the executive director promptly acts upon recommendations in the management letter, if any; and 
    7. does not include organization staff or relatives of staff.

    Interpretation: To receive a rating of 1 for FIN 6.03 the audit committee must be independent of the finance committee in order to minimize potential conflict of interest, and may not be a committee comprised of the entire governing body as a whole.

    If the audit committee is not independent of the finance committee, an organization may be able to receive a rating of 2 if:
    1. the selection and oversight of the auditor (elements (b), (c), and (d)) is managed by a board sub-committee that:
      • is chaired by a board member who is not also the chair of the finance or executive committee; and
      • includes at least one person who is not a member of the finance committee; and
    2. no organization staff, including the CEO and CFO, or relatives of staff, participate in selection of the auditor or oversight of the audit process.
    See the interpretation for FIN 1 for a discussion of the functions of the audit and finance committees.

    The American Institute of CPAs recommends that an auditing firm not provide both auditing and non-auditing services, such as bookkeeping and actuarial services to the same organization.

    Rating Indicators
    1
    The organization's practices reflect full implementation of the standard.
    2
    Practices are basically sound but there is room for improvement; e.g.,
    • The audit committee is not fully independent as per the interpretation.
    3
    Practice requires significant improvement; e.g., 
    • Organization staff or relatives of staff are members of the audit committee; or
    • Documentation of the audit process is vague or incomplete; or
    • The governing body has acted on some of the recommendations in the management letter, but has not addressed others.
    4
    Implementation of the standard is minimal or there is no evidence of implementation at all; e.g., 
    • No steps have been taken to act on serious recommendations contained in a critical management letter; or
    • There is no audit committee and the audit process is managed by staff.

  • FIN 6.04

    The executive director and financial officers confirm in writing that, to the best of their knowledge, financial statements are accurate and fairly represent the financial condition and operations of the organization.

    Interpretation: For nonprofits, IRS Form 990 is sufficient evidence to meet the requirements of the standard. Both the CEO and CFO of nonprofit organizations should review IRS Form 990 before it is submitted to ensure that it is accurate, complete and filed on time.  

    Rating Indicators
    1
    The organization's practices reflect full implementation of each of the standard's elements.
    2
    Practices are basically sound but there is room for improvement.
    3
    Practice requires significant improvement.
    4
    Implementation of the standard is minimal or there is no evidence of implementation at all.
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