2022 Edition

For-Profit Administration and Financial Management (CA-AFM) 4: Administrative Oversight

The owner or designee effectively manages the organization in the achievement of its purpose by establishing policies and ensuring adequate resources.

Currently viewing: FOR-PROFIT ADMINISTRATION AND FINANCIAL MANAGEMENT (CA-AFM)

Viewing: CA-AFM 4 - Administrative Oversight
Previous: CA-AFM 3 - Community Involvement and AdvocacyNext: CA-AFM 5 - Conflict of Interest

VIEW THE STANDARDS

Purpose

The for-profit organization ensures accountability through effective administration and management, and sound financial management practices.

1
The organization's practices fully meet the standard, as indicated by full implementation of the practices outlined in the CA-AFM 4 Practice standards.
2
Practices are basically sound but there is room for improvement, as noted in the ratings for the CA-AFM 4 Practice standards.
3
Practice requires significant improvement, as noted in the ratings for the CA-AFM 4 Practice standards.
4
Implementation of the standard is minimal or there is no evidence of implementation at all, as noted in the ratings for the CA-AFM 4 Practice standards.
Self-Study EvidenceOn-Site EvidenceOn-Site Activities
  • Chart indicating who is responsible for the following:
    1. Adopting and updating organizational policy
    2. Strategic and annual planning
    3. Budget planning and approving the annual budget
    4. Reviewing monthly/quarterly financial reports Selecting the auditor and acting on management letter recommendations
    5. Financial management
    6. Risk management
    7. Human resource management
  • Description of the role of the owner(s) in day-to-day operations
  • Policy manual
  • For organizations with a governing body, a list of board or governing body members with title, affiliation, and a brief biography
  • For organizations with a governing body, documentation delineating how the board functions, including roles and responsibilities (e.g., by-laws, board manual, etc)
  • Interviews may include:
    1. Owner
    2. CEO or designee
 

CA-AFM 4.01

The organization's owner or designee:
  1. establishes policies; and
  2. reviews policies periodically and when legal requirements or regulations change.

1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
  • One of the elements could be strengthened in some minor way.
3
Practice requires significant improvement; e.g.,
  • A systematic review of policies has not been conducted for more than four years.
4
Implementation of the standard is minimal or there is no evidence of implementation at all.
 

CA-AFM 4.02

Resource development responsibilities of the owner or designee include:
  1. establishing targets and goals; and
  2. ensuring adequate resources to support the organization’s services.

1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
  • One of the elements has not been fully addressed.
3
Practice requires significant improvement; e.g.,
  • One of the elements has not been addressed at all.
4
Implementation of the standard is minimal or there is no evidence of implementation at all.
 

CA-AFM 4.03

The owner or designee annually assesses overall risk to the organization, including the organization's continuing ability to pursue strategic goals.

Related Standards:

Interpretation

 Organization staff may be responsible for assessing different areas of risk throughout the year and sending the results of the assessments to the owner or designee to inform the annual review of overall risks.

Examples: Areas of potential risk can include, but are not limited to:
  1. compliance with legal requirements;
  2. disruption of operations due to a public health emergency;
  3. technology and information management;
  4. insurance and liability;
  5. health and safety of administrative and service environments;
  6. human resources practices, including use of independent contractors and volunteers;
  7. contracting practices and compliance;
  8. client rights and confidentiality issues;
  9. financial risks;
  10. public relations, branding, and reputation; and
  11. conflicts of interest.
Financial risk assessment involves the identification of factors or conditions related to funding and financial health that may pose a threat to the achievement of an organization’s objectives and purpose including, for example, the effectiveness and efficiency of financial operations and the reliability of financial reporting. Areas of known financial risk include:
  1. fraud and misuse of funds;
  2. investments;
  3. tax liabilities;
  4. physical assets and financial information;
  5. fundraising practices;
  6. funding of benefits, including health retirement benefits, pensions, etc.; and
  7. deferred revenue.

1
The organization's practices reflect full implementation of the standard.
2

Practices are basically sound but there is room for improvement; e.g., 

  • While the owner or designee assesses risk annually, risk related to different aspects of the organization are reviewed by the owner or designee at different times of year, inhibiting their capacity to comprehensively assess overall risk.
3
Practice requires significant improvement.
4
Implementation of the standard is minimal or there is no evidence of implementation at all.