Standard 1: Oversight of Operations and Staff - Organizations shall have a board of directors that provides adequate oversight of the charity's operations and its staff. Indication of adequate oversight includes, but is not limited to, regularly scheduled appraisals of the CEO's performance, evidence of disbursement controls such as board approval of the budget, fund raising practices, establishment of a conflict of interest policy, and establishment of accounting procedures sufficient to safeguard charity finances.
ACFI does not meet this Standard because its board of directors does not:
- Have an approved conflict of interest policy.
Standard 3: Frequency and Attendance of Board Meetings - An organization shall have a minimum of three evenly spaced meetings per year of the full governing body with a majority in attendance, with face-to-face participation. A conference call of the full board can substitute for one of the three meetings of the governing body. For all meetings, alternative modes of participation are acceptable for those with physical disabilities.
ACFI does not meet this Standard because:
- The board of directors held one meeting of the full governing board in the past year.
Standard 4: Compensated Board Members - Not more than one or 10% (whichever is greater) directly or indirectly compensated person(s) serving as voting member(s) of the board. Compensated members shall not serve as the board's chair or treasurer.
ACFI does not meet this Standard because:
- Two out of the seven (29%) board members are directly compensated. In addition, the paid chief executive officer also serves as the chair of the board of directors.
Standard 11: Financial Statements - Make available to all, on request, complete annual financial statements prepared in accordance with generally accepted accounting principles. When total annual gross income exceeds $250,000, these statements should be audited in accordance with generally accepted auditing standards. For charities whose annual gross income is less than $250,000, a review by a certified public accountant is sufficient to meet this standard. For charities whose annual gross income is less than $100,000, an internally produced, complete financial statement is sufficient to meet this standard.
ACFI does not meet this Standard because:
- Although the charity received more than $100,000 in contributions, it does not have financial statements that were reviewed by a certified public accountant (CPA). A review is an accounting service providing some assurance to interested parties as to the reliability of financial data without the CPA conducting an examination in accordance with Generally Accepted Auditing Standards (GAAS).
Standard 12: Detailed Functional Breakdown of Expenses - Include in the financial statements a breakdown of expenses (e.g., salaries, travel, postage, etc.) that shows what portion of these expenses was allocated to program, fund raising, and administrative activities. If the charity has more than one major program category, the schedule should provide a breakdown for each category.
ACFI does not meet this Standard because, in the organization's Form 990, a detailed functional breakdown of expenses:
- Was not included in its internally produced financial statement. A detailed functional breakdown shows expenses by natural classification (e.g., salaries, travel, postage, etc.) and indicates what portion of these expenses was allocated to program, fund raising, and administrative activities).
Standard 14: Budget - Have a board-approved annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising, and administration.
ACFI does not meet this Standard because, when the organization provided budget information, it indicated that the budget:
- Did not identify total projected program service expenses.
- Did not identify total projected fund raising expenses.
Standard 16: Annual Report - Have an annual report available to all, on request, that includes: (a) the organization's mission statement, (b) a summary of the past year's program service accomplishments, (c) a roster of the officers and members of the board of directors, (d) financial information that includes (i) total income in the past fiscal year, (ii) expenses in the same program, fund raising and administrative categories as in the financial statements, and (iii) ending net assets.
ACFI does not meet this standard because the most recent annual report did not include:
- A roster of the board of directors
- Total income.
- Total expenses for each program activity
- Total fund raising expenses.
- Total administrative expenses.
- Total end of year net assets.