INTRODUCTION
Accountability in a nonprofit organization is a vital aspect as it determines the credibility and future of the organization. It can be divided into two parts; individual board member accountability, and the board's collective responsibilities. As the board of directors is the organization's face in the sense that in some organizations, they have the powers to make and amend the organization's rules and regulations, they should be accountable for monitoring the organization's running and performance. Therefore, it is essential to look into how a board can, individually or collectively, deal with accountability issues.
However, it is also vital to consider the fact that although the board is responsible for the smooth running of any organization, it cannot perform all functions by itself; thus, in most cases, duties are delegated to different individuals or committees in the organization. Many committees can be appointed or formed to perform various functions. For example, in terms of accountability, a board can (unless the constitution & bylaws call for an election) decide on the appointment or employment of an accountability officer or committee to ensure accountability in the organization while helping the board monitor accountability. This article aims to discuss how nonprofit boards can monitor accountability in nonprofit organizations through an accountability committee. However, it is vital to discuss accountability issues that affect nonprofit organizations first. They include;
Neglect of duties
Most individuals who volunteer to work in a nonprofit organization do so without knowing the duties and responsibilities they may be expected to perform. Therefore, it is true that neglect of duty may result from a lack of knowledge or arrogance.
Abuse and misuse of power
Most nonprofit organizations experience abuse and misuse of power. This is most evident in cases where employees of lower ranks are exploited by being asked or forced into performing or not performing by the individuals from higher ranks. Abuse and misuse of power can also be seen in cases where conflict of interest arises. In such as case, those in power may use their abilities to ensure that the final decision favors their interest while neglecting the welfare of junior employees even when the fulfillment of the welfare of others would have brought about more positivity.
How a Committee Selected by the Board can Help Bring About Accountability in the Organization
In dealing with these issues concerning accountability, a board may appoint or employ an accountability committee to oversee and ensure accountability in the organization. This will ease the monitoring process given that tasks will be divided into manageable tasks assigned to specific people rather than having the whole committee monitoring the entire organization. It will also give the board a chance to elect people who are experienced with the practical aspect of each of the activities carried out in every department, thus increasing the chances of success of the monitoring process. The sole purpose of this committee will be to ensure that everyone in the organization is accountable for their success or failures. It is, therefore, necessary for the board to give the committee the authority and the powers to act on behalf of it. Following the selection, and empowerment of the committee members based on their knowledge of the various activities carried out at each of the departments they monitor; they should employ the following monitoring methodologies to ensure accountability in the organization;
Field inspections
General inspections
Evaluation and performance inspection.
Self-regulation and
Social auditing.
Mandatory reporting
Some of the above methods were adopted from practices employed by credit unions in ensuring accountability in their organization. For example, social auditing was adopted by the Vancouver City Savings and Credit Union to improve performance and accountability. These methods have been employed in the past; hence they have been proven to be effective.
General Inspections
In nonprofit organizations, every individual has a role that they play. The board of directors, for example, has the responsibility to a duty of care, loyalty, and obedience. There are also other individuals and parties employed under a contract (executive director/CEO, staff, or contractors) to perform specific roles to ensure the smooth running of the organization. In the past years, nonprofit organizations were not monitored; hence there were many mismanagements of funds. Many nonprofit organizations were closed down as a result of fraud, abuse, and misuse of power. Misuse, abuse of power can be related to primary individuals at the higher ranks, given that they are the ones to make most decisions and take appropriate actions in case of a problem.
Through the establishment of an accountability committee, board members can be able to curb these offenses. For instance, in 1993, a set of standards of practice were developed in the USA by InterAction, a US private voluntary organization membership association. The standards provided the groundwork for governance, public communication, organizational integrity, hiring practices, disclosure management, and finances. For example, the integrity standards require honest and truthful conduct and for every organization to formulate written standards for their directors, employees, and volunteers. The responsibility was given to the committee to ensure that every member follows the set standards. Therefore, the accountability committee vets the conduct of all nonprofit organization members, from directors of the organization to clients and members benefiting from the organization’s services. Nevertheless, the accountability committee ensured that services rendered and products given are of the expected quality.
Through inspection, the committee also serves as a ‘watchdog’ on behalf of board members and the organization in ensuring all stakeholders uphold the needed standards of practice and codes of conduct. This is possible through general inspections done by the committee in investigating cases of abuse of power, misuse of power, and fraud. After a thorough investigation is done, conclusions are made from the findings of the investigation. The next course of action is based on the results. In cases where a party is found to have engaged in any form of misconduct, the committee has the authority to report the case and liaise with law enforcement in ensuring legal action is taken against the perpetrators. By acting as inspector general, the committee enables the minority board to keep the organization in check, everyone being held accountable for their decisions and actions.
Field Inspections
In the USA, nonprofit organizations are required to produce disclosure statements and report if they are to be exempted from paying federal taxes as a requirement of section 501(c)(3).
Disclosure statements and reports are tools used for maintaining the accountability of nonprofit organizations by the federal and state governments. Nonprofit organizations must provide detailed information on their programs, finance, and structure to demonstrate that they are purely educational, religious, charitable, or engaging in activities that are meant for scientific purposes.
These legal disclosures ensure the accountability of nonprofit organizations as information regarding the organization is open and easily accessible to the donors, members, and clients interested in the information.
However, reports can also be demanded by different donors or funders of specific projects in which case they vary according to the type of project and the interest of the donors. The committee should work to ensure that such reports on progress or performance in a particular field need are updated from time to time for accountability purposes. Given that donors demand reports to ensure that their finances are put to proper use—the committee should work to ensure that no party in nonprofit organizations drafts misleading reports. As such, the accountability committee should not only conduct field inspections to review recorded information, but it should also ensure accountability by matching recorded data to the actual operations being done by the organization.
To ensure this does not happen, the accountability committee should conduct regular field inspections. These field inspections should ensure that standards of practice and code of conduct are adhered to. Field inspections should also carry out report verification to ensure that the data on the report represents the projects and actions taken by the parties involved. Moreover, field inspections ensure compliance with the company's policies and procedures hence accountability of all stakeholders.
Through Conducting of Social Auditing
In attempts to ensure accountability in an organization, accountability committees can conduct social auditing to determine the organization's efficiency. Social auditing can be defined as the processes in which an organization evaluates, reports, and improves the organization's social performance and ethical behavior. It is mainly done through stakeholder dialogue. However, other feedback mechanisms can be used. For example, surveys, interviews, or focus groups. These mechanisms aim to gather information, perspective, and opinions from the people they serve to address downward accountability.
Social auditing by an accountability committee offers the board a chance to assess its efficiency in delivering services through the evaluation of the feedback provided by the customers that consume the services the organization provides. Auditing for a nonprofit organization means scrutiny of the organization from one project or program to the organization as a unit. Conducting social auditing can therefore be used as an accountability tool by the board in assessing its performance in service delivery. Reports from social auditing help the board and organization check on areas that may need skilled and experienced experts to improve them. It also helps to hold every member of the organization responsible for the outcomes presented in the reports.
Feedback mechanisms also allow the organization to measure its performance concerning its vision and mission. Therefore, keeping the organization on track and accountable for the progress and delays in the organization's objectives.
Evaluation and Performance Assessment
Performance assessment and evaluation in nonprofit organizations are used to measure whether or to what extent the goals and objectives of a project(s) have been achieved. Performance assessment and evaluation, in some cases, determine the future funding of a nonprofit organization. These assessments may be done to choose either the short-term or long-term progress of a project. Nonprofit organizations carry out performance assessments and evaluations for various reasons, such as deciding progress on projects or determining the achievement of the organization's mission, goals, and objectives. As such, the committee on accountability should work closely with the finance committee to ensure that adequate internal controls are in place and that there is a budget that is in place and being followed.
The accountability committee is responsible for carrying out performance assessments and evaluations. Moreover, it is also held accountable for assessing the progress made and to what extent the project's objectives have been achieved. This committee should be directed on the mode of assessment; tangible products or relevance. The accountability committee should be responsible for ensuring that the progress of all projects, funds, and programs are accounted for by the parties involved. Members and stakeholders in nonprofit organizations are held responsible for the success and failures of the projects and programs evaluated. Where changes need to be made, or a strategy needs to be changed, reports should be made to the board to take timely action and respond.
Board members can monitor the organization's accountability through instruction to the accountability committee conducting performance assessment and evaluation. The review and assessment of current projects and programs can measure the organization's efficiency and effectiveness in delivering products and services. Through performance assessment and evaluation, various stakeholders are accountable for progress in programs and projects, delays, and poor service delivery. In both ways, all stakeholders are answerable to the board on progress on programs and the organization's goals and objectives.
Through Self-Regulation Activities by The Accountability Committee
Self-regulation helps an organization to deal with its issues internally while at the same time upholding the integrity and credibility of the company. Every nonprofit organization has codes of conduct to be adhered to by the stakeholders in the organization. There are standards of practice that guide governance, integrity, contracting, finances, organizational structures, and management. There are also guidelines regarding equal employment opportunities, ethical considerations, diversity and people with disabilities, and public policy involvement. Implementation of these policies and procedures is dependent on self-certification, but it is subject to review.
In monitoring accountability through self-regulation, the membership elects or the board appoints or employs an accountability committee as appropriate. The nonprofit's accountability committee should be given the powers and the authority to conduct investigations about ethical, internal, character, and equal employment opportunity complaints against members of the organization.
The committee must conduct a thorough, fair and follow-up on these complaints and develop detailed findings to be presented to the board. It should also formulate the right strategies to hold parties responsible for offenses and injustices committed. In most organizations, the engagement in acts against organizational policies and procedures is subject to disciplinary actions.
Furthermore, legal actions can be taken against the involved parties if the actions taken in question are against the policies of the organization as indicated in the contract signed by the employees and the organization. As such, the committee should ensure that everyone understands the expectations of the contract between such an individual and the organization and that those terms are legally binding. By carrying out investigations that monitor ethical and legal considerations and compliance by members of an organization, the committee enables accountability through self-regulation while allowing the board to monitor accountability in the organization.
Mandatory Reporting.
The accountability committee works similarly to an audit committee. For instance, such a committee should review the staff and organization functions and report back to the board members. The committee is expected to give feedback on findings when an investigation is conducted. The findings should then be subject to review by the board members. Following this, robust reporting and accounting on issues requiring more technical analyses should be forwarded to the appropriate channel to evaluate whether the reports are complete and accurate.
The committee is mandated to report to the board and the organization on all the vital issues about any segment of the organization, including; information technology issues, operational matters, and financial issues. Nevertheless, the committee must meet privately with the board members in case of problems that need privacy and confidentiality. The committee must report issues even in cases where the issues involve one of the board members, given that a proper accountability committee is required to be impartial and objective in conducting its duties and responsibilities. Therefore, the committee is required to report every detail of investigations carried out.
In cases where there is criminal conduct or administrative law violations, the committee must follow the laid down standard protocol for reporting the employee or member in question to the relevant authorities. Furthermore, they are required to report the matter to the appropriate authorities. To ensure that the committee is kept up to check, it should be provided that legal actions may be taken on the committee if it fails to report the criminal offenses committed by either a member of the organization or itself.
Conclusion
For an organization to ensure accountability, the following should be checked regularly and be updated;
Financial expenditures
Financial resources and reserves
Annual budgeting of the funds
Reviews on staff and organization competency in service delivery
General reports on financial management.
Given the need to ensure that prevention is given a first priority rather than curation, the responsibility rests on the accountability committee to critically analyze data to develop possible risks that the organization may be facing and forecasting those it might face. It should then present the different risks it has identified to the organization’s board, assessing the risk and developing possible actions, remedies, or events that could prevent damage that might come about, such as the organization’s reputation and credibility. Nevertheless, depending on the reports generated, the board can determine a disciplinary action that can be taken or measures to prevent a similar occurrence in the future. These actions should be followed up to ensure that the desired outcome is achieved. In some cases, board members may seek professional expertise in determining a course of action.
Additionally, the organization needs to employ technologies that will ease the monitoring process. For example, a nonprofit organization should implement internal control systems to manage misuse and abuse of power, fraud, and associated risks. The accountability committee should coordinate and control these systems and activities with those responsible for addressing accounting issues and the organization’s deficiency in a particular area.
However, one of the most critical points to consider is that accountability is an aspect that should not be left for auditors or an accountability committee to handle if the organization is looking forward to being genuinely accountable at any given time. Every individual and department in a nonprofit organization has an ethical and legal duty to promote honesty and integrity when performing their duties and responsibilities.
It should be noted that there are myriad nonprofit structures. The committee on accountability can be elected by the members with annual and incidental reports made to the body, or the organization through their constitution and bylaws could have the committee appointed by the board of directors and reporting to the same. In as much as there are no organizational time limitations on prior offenses, it is strongly recommended that past presidents (chairs) or executive directors (CEOs) not serve on committees on accountability.