Reference no: EM132175313

Respond to each peer initial post and question at the end with a response about 3-4 sentences long.

Peer #1

Financial management in a nonprofit organization is very vital to the organization overall. A nonprofit organization must track both revenue and expenditures for better financial management (South University, 2018)0. When an organization has a budget this allows the organization to proper plan to meet the organization's goal.

A nonprofit organization's managers must pay attention to their organization's financial condition so as to ensure achievement of the organization's mission or the survival of the organization might be threatened (South University, 2018).

In order for a Nonprofit to be successful, they must carry out and fulfill a mission. In order to properly fulfill a mission, the organization must have an adequate amount of support and financial stability. When some people think of nonprofit they think of volunteers must in actuality the organization must have paid staff and a service to properly support their stakeholders.

Sarbanes-Oxley Act was implicated July 30, 2002, by the Securities and Exchange Commission to prevent corporate fraud. The act bans company loans to executives and gives job protection to the organizations' whistleblowers; a Whistleblower is a person who exposed any kind of information or activity that is deemed illegal, unethical, or not correct within an organization that is either private or public (National Whistleblower Center, 2018).

The Sarbanes-Oxley Act strengthens the independence and financial literacy of corporate boards, which holds CEO personally responsible for errors in accounting audits (Amadeo, 2018). The act requires public corporations to hire an independent auditor to review their accounting practices. SOX protects employees that report fraud and testify in court against their employers. Companies are not allowed to change the terms and conditions of their employment. So what does SOX legally mean for nonprofit organizations?

Due to nonprofit organizations being exempt from taxation. Individuals may believe it easier to conduct fraud within the organization which is not ethical. Each organization must follow their own code of ethics and be truthful about the organization's financial revenue. The first start of being ethical is being accountable. One must take full responsibility for their actions. Having a private auditor (requirement of SOX) will not conflict the organization's financial responsibility and reduce fraud and theft within the organization.

Peer #2

Non-profit Organizations (NPO) are essential and necessary in most communities. They may be the backbone for most underprivileged areas. NPO's must have the financial backing to support and help those in need. Without funding, there is no way they will be able to live up to their mission.

The mission statement is essential, but I feel being financially fit is more important. NPO financial capacity consists of resources that give an organization the ability to seize opportunities and react to unexpected threats while maintaining general operations of the organization (Morganti, Sontag-Padilla, & Staplefoote,2012).

When it comes to financing, you must have the right people in place. Your organization does not want to be subject to any financial woes or misdeeds. If NPOs do not govern their financials appropriately, the government will step in. Some elements of the Sarbanes-Oxley Act of 2002 can be applied to help keep nonprofits on track.

According to GuideStar (2018), nonprofit leaders should look carefully at the provisions of Sarbanes-Oxley and determine whether their organizations ought to voluntarily adopt particular governance practices. This resource will review those provisions and assess their relevance to nonprofit organizations. Under this act CEOs and CFOs must certify the appropriateness of financial statements and that they fairly present the financial condition and operations of the company.

As stated earlier, the mission is critical, but financial sustainability is just as important.

Peer #3

Predicting or forecasting the direction of the economy may vary significantly in form and content: qualitative conditional predictions. These predictions are far from being accurate. But a manager of a state agency should apply them very seriously because they should be mindful of the future, not just the present. Their state agency budget is the single most important document that is produced each year, and it receives close public scrutiny. Separating responsibilities can be an effective way to control money because it's a way of protecting cash. No single person has control over the entire cash process.

This will decrease or have no concealed errors or irregularities going unchecked. Nor lost or stolen cash receipts. Separating responsibilities also allows accountability. The difference between managing the financial system and using the financial system to manage the organization is straightforward.

Maintaining the financial system is like controlling the operation. Financial managers monitor and regulate how efficiently and effectively an organization and its members are performing the activities necessary to achieve organizational goals. While using the financial system to manage the organization is making sure the organization complies with regulations. A budget director of a nonprofit organization of a city or state agency spend more of his or her time on; planning/preparation Allocation, operations, reporting, and auditing.

Peer #4

The predictions for the economy can be unreliable because their can unforeseen issues, that can take place that will influence economy. A financial manager of a state agency should not on base predications on current trends but also considered past financial trends and future ones.

They should also budget for issues outside of their control and leave a leeway. "One of the most significant reasons that economics as a discipline is flawed and horribly inept at predicting future behavior is that most economic models are based on a set of assumptions. Paramount in these assumptions is that the parties involved in the model are rational actors. However, people in general are not rational when making consumer choices."

Separating responsibilities would be an effective way to control money because one person wouldn't be in control of 100% of the funds. I think this would cut down on fraud and misuse of funds because there are additional persons to keep one accountable. A budget director should spend most of their time, keeping track of the budget that their responsible for.

They should keep track of all funds that are being used, what they're being used for, and what department the funds is going to.