WHO IS ACCREDITED?

Private Organization Accreditation

Children's Home Society of Florida delivers a unique spectrum of social services designed to protect children at risk of abuse, neglect or abandonment; to strengthen and stabilize families; to help young people break the cycle of abuse and neglect; and to find safe, loving homes for children.
read more >>

ORGANIZATION TESTIMONIAL

ClearPoint Credit Counseling Solutions

Tim Spearin, Vice President, Quality Assurance

ClearPoint Credit Counseling Solutions has been accredited by the Council on Accreditation (COA) since 1996.  Reaccreditation attests that a member organization continues to meet the highest national operating standards as set by the COA.  It also provides assurance that ClearPoint Credit Counseling Solutions is performing services which the community needs, conducting its operations and funds successfully.
read more>>

Purpose

Sound governance increases the nonprofit organization’s viability and sustainability.

FOC
GOV 9: Separate Legal Entities

The organization properly plans for, oversees, and monitors the activities of separate legal entities established on its behalf in accordance with applicable law and regulation. 

Update:

  • Revised Standard - 02/15/17
    The title of this core concept was changed from "Parent and Subsidiary Relationships" to "Separate Legal Entities".

Interpretation: The standards in GOV 9 are intended to address foundations, not-for-profit corporations, for-profit subsidiaries, holding companies, and other legal subsidiary entities established on the organization’s behalf. There are a number of reasons organizations choose to form subsidiaries, whether for fundraising or asset management purposes, or to conduct distinct programming. The standards in GOV 9 are not intended to address corporate acquisitions or mergers that result in a singular legal entity. 

NA The organization has established no separate legal entities.

Rating Indicators
1
The organization's practices fully meet the standard, as indicated by full implementation of the practices outlined in the GOV 9 Practice standards.
2
Practices are basically sound but there is room for improvement, as noted in the ratings for the GOV 9 Practice standards.
3
Practice requires significant improvement, as noted in the ratings for the GOV 9 Practice standards.
4
Implementation of the standard is minimal or there is no evidence of implementation at all, as noted in the ratings for the GOV 9 Practice standards. 

Table of Evidence

Self-Study Evidence On-Site Evidence On-Site Activities
    • See Governance Narrative element (b)
    • Feasibility study
    • Business plan
    • Strategic plan (if applicable)
    • Policy regarding the acquisition, use, and distribution of subsidiary revenue
    • Written agreement describing the relationship between the organization's governing body and the separate legal entity
    • Governing body meeting minutes
    • Interview: 
    1. CEO/Governing Body Chair
    2. Chief Financial Officer
    3. Senior Management

  • GOV 9.01

    Prior to forming a separate legal entity, the organization: 

    1. conducts a feasibility study which includes, but is not limited to, a cost-benefit analysis and an assessment of the legal implications involved;
    2. creates a business plan and, as appropriate, revises its strategic plan highlighting the purpose of the entity and how the relationship fits into the organization’s goals;
    3. determines whether the proposed venture has sufficient capital, resources, and marketability to ensure success; and
    4. obtains approval from the governing body for the venture.

    Update:

    • Added NA - 02/15/17

    NA The organization’s legal entities were established prior to the organization’s first application for COA accreditation. 

    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; e.g.,
    • It is unclear how a subsidiary fits with the organization's long term strategic goals
    • One or two of the elements are not fully addressed.
    3
    Practice requires significant improvement; e.g.,
    • Some aspect of planning for the venture (feasibility study, business plan, or assessment of sufficient capital, etc.) was insufficient and as a result, the organization may be at risk, however the management and the governing body are actively working toward a resolution; or
    • Formation of a separate legal entity was not approved by the governing body; or
    • One of the elements is not addressed at all.
    4
    Implementation of the standard is minimal or there is no evidence of implementation at all; e.g.,
    • At least two of the elements are not addressed at all; or
    • The organization is at serious risk due to clearly inadequate planning or due diligence related to element (a) (b) (c), and/or (d). 

  • GOV 9.02

    The organization: 

    1. exercises legally permissible oversight of any entity that raises or holds funds or assets on its behalf; 
    2. has a written agreement that clearly describes the relationship between the organization’s governing body and the separate legal entity;
    3. clearly articulates the corporate structure, the roles, relationships, and responsibilities of all parties; and
    4. adopts a policy regarding the acquisition, use, and distribution of revenue generated by the entity consistent with all applicable legal, regulatory, contractual, and funding obligations. 

    Update:

    • Revised Standard - 02/15/17
      Element (d) was moved from GOV 9.01 to 9.02. 

    Interpretation: With regard to element (b), issues to be addressed within the written agreement include, but are not limited to: policy authority, budgetary authority, compliance and quality oversight, dispute resolution, the authority of the organization to appoint governing body members to the separate legal entity, and the authority of the organization to dissolve the entity.

    Interpretation: Corporate structure, roles, relationships, and responsibilities should be developed and executed in accordance with applicable laws and regulations.

    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.,
    • Some aspect of the written agreement requires greater specificity or clarity.
    3
    Practice requires significant improvement; e.g.,
    • Lines of accountability and legal responsibility between the organization and the entity are unclear; or
    • The written agreement is does not address one of the standard's elements; or
    • The policy regarding subsidiary revenue was not approved by the governing body.
    4
    Implementation of the standard is minimal or there is no evidence of implementation at all; e.g.,
    • There is no written agreement or the agreement is completely inadequate.

  • GOV 9.03

    Leadership of the organization has regular and ongoing communication with the leadership of separate legal entities.

    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., 
    • Communication is informal and/or documentation of discussions is cursory, e.g., does not include a summary of topics discussed.
    3
    Practice requires significant improvement; e.g., 
    • Communication occurs but is infrequent; or
    • Communication records are not maintained.
    4
    Communication between leadership of the organization and the entity is rare or nonexistent.

  • GOV 9.04

    At least annually, the governing body of the organization reviews its relationship to any separate legal entities to determine whether the relationship(s) continue to serve the best interests of both the organization and its external stakeholders, including persons and families served.

    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., 
    • Some aspect of the review process requires clarification.
    3
    Practice requires significant improvement, e.g., 
    • The review has not been conducted within the last eighteen months; or
    • The last review did not include all separate legal entities; or
    • The review is conducted by management without governing body review or approval; or
    • Documentation of the review as reflected in governing body minutes is minimal or nonexistent; or
    • The review is cursory or does not consider the interests of service recipients.
    4
    Implementation of the standard is minimal or there is no evidence of implementation at all; e.g., 
    • The review is not conducted; or
    • Evidence that the relationship no longer serves the best interests of the organization or one of its key stakeholders has been ignored.
Copyright © 2017 Council on Accreditation. All Rights Reserved.  Privacy Policy and Terms of Use