By Kathleen Kaminski, CPA

Syracuse , NY – January, 18, 2008 - Not-for-profit organizations are an important part of our community. The board of directors of these organizations is vital in developing policies that ensure the organization is run effectively, legally, and ethically. An individual's primary role as a board member is to implement its mission and give direction to the organization through policy-making, planning, and monitoring. Before deciding to serve on a not-for-profit board, you should answer a number of questions about the organization and yourself.

• Do you strongly believe in the organization's mission? It is important that the mission of the organization be compatible with one's own values and beliefs. Otherwise, you cannot be a strong supporter for the organization and receive gratification from providing service to the organization.

• Prospective board members should identify and understand the organization's internal control procedures. This includes asking whether adequate control procedures exist and are implemented by management. The board should monitor and review the procedures on a regular basis. In addition, does the organization have an efficient and effective accounting system to account for utilization of its assets and the proper use of restricted funds?

• Is the organization current with its tax filings and does it properly file its Form 990 each year and pay its payroll taxes?

• You must evaluate your position as well as other board members to determine if potential conflicts of interest exist. That is, when an individual's personal interest is served at the expense of the best interest of those the charitable entity serves. If so, you may be held liable for improper or inefficient use of contributed assets.

• Are board meetings recorded with proper minutes? Important insights about an organization can be gained by reviewing the minutes of board meetings. The quality of the minutes can allow a prospective board member to gain understanding of the operating environment of the organization. You should be concerned if minutes are inadequate or nonexistent.

• Does the organization have any pending legal matters that could impact future board members? You should review minutes and request permission to contact the organization's legal counsel to determine if there are pending legal issues.

• Does the organization carry adequate liability insurance to cover its directors? You must be certain that you will be protected from possible damage in the case of litigation against the organization.

• Does the organization have a stable management and solid operating environment? Request a discussion with the executive director in order to gain insight on the day-to-day nuts and bolts of operations.

• Are the other board members knowledgeable about the organization's operations, or is the board disengaged from its fiduciary obligations? An effective nonprofit board must be involved and informed about the organization's performance.

• Are you compatible with other board members so you can work cooperatively? Serving on a nonprofit board as a form of community service should be a pleasant and gratifying experience. Conflicts among board members inhibit the board from fulfilling the organization's mission.

So, welcome aboard! Your service will be greatly rewarded in knowing that you are serving the community and enriching lives with your decisions.

Kathleen Kaminski, CPA, is a manager at Green & Seifter, Certified Public Accountants, PLLC. She specializes in tax planning and preparation for individuals and not-for-profit organizations. She can be contacted at KKaminski@GreenSeifterCPAs.com or 315.701.6322.

Green and Seifter CPAs offers a wide array of professional services spanning decades of experience in the areas of accounting, auditing, bookkeeping, financial planning, fraud, and taxation to individuals and businesses throughout Central New York.

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