ACCOUNTABILITY

The extent to which an organization is answerable for its processes and outcomes to a variety of relevant stakeholders including: consumers, community representatives, governing bodies, and governmental regulators.		  
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  MANAGEMENT

See ADMINISTRATION		  
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  PRACTICE

Established actions or ways of proceeding in the regular performance of organizational duties. Policies and procedures often guide practice.		  
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  PROCEDURES

Written instructions that outline the steps for performing a task(s) or operationalizing an administrative or service delivery process. A procedure can be written as a step-by-step set of instructions or as a narrative description of a process. A procedure tells someone how to do something not just what to do.

Unlike policies, procedures do not need to be approved or reviewed by the governing body, and need not be associated with a specific policy. For example, whereas a broad anti-discrimination policy requires grievance or other procedures in order to be operationalized within an organization, assessment procedures do not require a governing body approved assessment policy.

Note: Procedures are sometimes referred to as administrative policies.

  
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  SERVICE

One or more organization-operated programs or activities that have a common general objective and deploy the organization's material and human resources in a planned and systematic manner. An organization that publicly promotes or identifies itself in writing as offering a service, is licensed to deliver a service, assigns personnel and/or space to a service, or allocates financial resources to a service is considered to offer that service.		  
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  GOVERNING BODY

A person or persons with the legal authority and responsibility to set policy and oversee the operations of an organization. Generally, the governing body is a group, such as a board of directors or board of trustees. While the exact responsibilities of the governing body depend on the nature and character of the organization, the governing body has minimum fiduciary responsibilities to the organization set by statute, regulation, and case law, and typically assume responsibilities for long term planning, risk management, and evaluation and effectiveness of management.		  
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  POLICY

A written statement of principles, values, or intent that provides a basis for consistent decision making and guides the actions of staff, management, and board of trustees. A policy is intentionally broad in its language and application. The following is an example of an anti-discrimination policy:

"[Organization Name] shall not discriminate on the basis of race, color, religion (creed), gender, age, national origin (ancestry), disability, marital status, sexual orientation, or military status, in any of its activities or operations. These activities include, but are not limited to, hiring and firing of staff, selection of volunteers, selection of vendors, and provision of services."

In contrast, a procedure is a detailed, step-by-step description of a process. It tells the reader how to do something. Generally, policies are implemented through procedures. For example, the above anti-discrimination policy would require a detailed grievance procedure in order to operationalize it within an organization.

The governing body has the fiduciary responsibility for setting organizational policy. Therefore, policies must be approved and periodically reviewed by the organization's governing body. However, the governing body typically delegates (via policy) the responsibility for policy development to management. In owner-operated for-profit companies, the owner can act as the company's governing body, depending on the company's corporate structure.

In a public agency the responsibility for setting and reviewing policies may belong to the agency's management team, elected officials, another governmental agency, or as is often the case, a combination of the above.

  
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  PERSONNEL

The body of employees and/or volunteers that carries out the organization's tasks under the organization's administration and/or supervision. This definition does not include foster parents who are specifically referenced in relevant standards		  
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  CLIENT

See service recipient.		  
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  SERVICE RECIPIENT

The individuals, groups, organizations, or communities that use, receive, or benefit from programs and services. Service recipients can include consumers, patients, family members, legal guardians, advocates, public/private organizations, employers, and purchasers. All are regarded as significant stakeholders served in a variety of agencies and practice settings.		  
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  VENDOR

An organization or person that sells services. 		 
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  FEE FOR SERVICE

A charge made to service recipients, or those responsible as their fiscal intermediaries, for a specific service.		  
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  CONTRACT

A formal written agreement between two or more parties that specifies the services, space, or products to be provided in exchange for some form of compensation. Also known as "purchase of service arrangement."		  
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Financial Management
  
Private Org Public Agency  

FIN 7: Financial Management System

 
Positive financial outcomes are achieved through a financial management system that receives, disburses, and accounts for funds consistent with sound financial practices.
related RPM 5,  RPM 6

FIN 7.01

 
Annual financial statements are prepared in accordance with Generally Accepted Accounting Principles.

FIN 7.02

 

The organization's financial reporting system is capable of providing information that:

  1. is useful in making business and economic decisions;
  2. is understandable and will aid in predicting future cash flows; and
  3. includes data about the organization's economic resources, claims to those resources (obligations), and the effects of transactions, events, and circumstances that change resources and claims to resources.

FIN 7.03

 

Accounting practices and procedures include:

  1. prompt, accurate, and complete recording of revenues and expenses;
  2. an inclusive and descriptive chart of accounts;
  3. information on all funds, including source information and pertinent regulations;
  4. timely payment of financial obligations;
  5. policies for recognizing revenues and expenses; and
  6. disbursement and receipt of monies.
Interpretation: Please note that these procedures must address cash, checks, and other accounts.

FIN 7.04

 

The organization seeks to conserve its fiscal resources by:

  1. taking advantage of tax exemptions, where applicable;
  2. maintaining sound practices regarding purchasing and inventory control;
  3. coordinating the purchase of goods or services among internal divisions; and
  4. using competitive bidding, when applicable, according to governing body policy and law or regulation.

FIN 7.05

 

Accounting records are kept up-to-date and balanced on a monthly basis, as demonstrated by:

  1. reconciliation of the bank statement and subsidiary records to the general ledger;
  2. up-to-date posting of cash receipts and disbursements;
  3. monthly updating of the general ledger; and
  4. review of the bank reconciliation by at least two personnel, one of whom is not involved in maintaining the accounting records.
Interpretation: Subsidiary records include, but are not limited to: accounts receivable, accounts payable, and property plant & equipment.

FIN 7.06

 
The organization uses the accrual method of accounting, at least at the end of the year.

FIN 7.07

 

Oversight and management of the organization’s accounting system require:

  1. a fiscal officer or business manager who is responsible for maintaining the financial accounts has prior accounting and bookkeeping experience, and/or an accounting degree, C.P.A. credential, or other recognized accounting/financial certification, as appropriate to the size and complexity of the organization;
  2. all personnel who use the system to receive initial and ongoing training on its use;
  3. a proper audit trail; and
  4. secure access, controlled by user IDs, passwords, and permissible logon times.

FIN 7.08

 

Where applicable, the organization makes timely payments to, or provides proof of exemption from, the following taxing authorities:

  1. the Internal Revenue Service;
  2. state and local employment tax bodies;
  3. FICA; and
  4. property tax assessors.
related RPM 1,  RPM 2.01

FIN 7.09

 

An organization that assumes fiduciary responsibility for client funds, or disburses client or non-fee-for-service funds to service recipients:

  1. segregates client funds; and
  2. complies with applicable legislative, regulatory, judicial, and governmental requirements.
Interpretation: Maintenance or allowance funds are examples of funds disbursed to service recipients.
NA The organization does not assume fiduciary responsibility for, or disburse client or non-fee-for-service funds to service recipients.

FIN 7.10

 

The organization that provides services as a vendor establishes safeguards against over- and under-billing that include:

  1. an accurate account of units of service provided;
  2. timely submission of invoices and required documents; and
  3. compliance with applicable regulations.
NA The organization is not a vendor of services.

FIN 7.11

 
The organization determines the basis for any denial of coverage or payment under insurance or contractual arrangements and follows up with timely appeals and communication with the service recipient, as applicable.
NA The organization only accepts fee for service clients.

FIN 7.12

 

The network management entity:

  1. has a process for verifying the accuracy of network services billed by subcontracting service providers; and
  2. maintains a formal mechanism through which subcontracting providers can appeal payment denials and that includes timely written notification of the resolution and an explanation of any further appeal, rights, or recourse.
NA The organization is not a network management entity or is a network management entity that does not manage contracts.

FIN 7.13

 
Contracted providers are informed in a timely manner if delays in payment to the network by the purchaser may result in delays in payment to providers.
NA The organization is not a network management entity, or is a network management entity that does not manage contracts.
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PURPOSE: The organization’s financial accountability and viability are achieved through the application of sound financial management practices that accord with legal and regulatory requirements.
 
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