The time to verify your recordkeeping systems are in place and working well is BEFORE the crash.
The case below is a vital reminder for nonprofits of the value of keeping proper records about your organization:
Failure to keep accurate records about what employees do cost this small business almost $70,000 in higher worker's comp premiums.
The only differences between that business and most nonprofits are
(1) that the business will definitely learn from the experience, and
(2) that the business will have the resources to pay the higher assessment until the records are straightened out, if they aren't already.
If your nonprofit thinks keeping timely and accurate records is just something to aspire to, you and your group are probably at risk in any number of areas. Remember, the prime duty of a board member for a nonprofit is to do what a reasonable and prudent person would do to oversee the affairs of the organization, which means paying attention, which requires timely and accurate records.
As a board member, you don't have to check every record yourself, but you have to assure yourself that there is a SYSTEM to make sure that the records are being kept, that there is a SYSTEM so that they are checked as much as necessary to give you confidence that they are accurate, and (most important) that there is a SYSTEM in place so that, if they aren't kept or are being kept poorly, you will quickly know it --- before you get the $70,000 bill.
Failure to keep accurate records about what employees do cost this small business almost $70,000 in higher worker's comp premiums.
The only differences between that business and most nonprofits are
(1) that the business will definitely learn from the experience, and
(2) that the business will have the resources to pay the higher assessment until the records are straightened out, if they aren't already.
If your nonprofit thinks keeping timely and accurate records is just something to aspire to, you and your group are probably at risk in any number of areas. Remember, the prime duty of a board member for a nonprofit is to do what a reasonable and prudent person would do to oversee the affairs of the organization, which means paying attention, which requires timely and accurate records.
As a board member, you don't have to check every record yourself, but you have to assure yourself that there is a SYSTEM to make sure that the records are being kept, that there is a SYSTEM so that they are checked as much as necessary to give you confidence that they are accurate, and (most important) that there is a SYSTEM in place so that, if they aren't kept or are being kept poorly, you will quickly know it --- before you get the $70,000 bill.
| employment_law_-_why_you_must_keep_good_records_in_your_nonprofit_a145610.pdf |
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