2024 Edition

For-Profit Administration and Financial Management Introduction

Purpose

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

Introduction

The practices set forth in COA’s For-Profit Administration and Financial Management (CA-AFM) standards represent the multi-faceted functions of the leadership within a for-profit human service providing organization. The standards guide the organization’s owners, chief executive, and management staff to implement practices that contribute to effective management, and that promote accountability to its community and the people it serves.
EAP

Interpretation

In the context of Employee Assistance Program (CA-EAP) services, the community, as used in these standards, is defined more specifically as the host or customer organization, subcontracting organizations, and the covered individuals eligible to receive services from the EAP. It can also be defined by the customer organizations’ workplace demographics.

Note:The great majority of for-profit organizations providing human services are owned by a single individual or a small group of individuals. In many of these organizations, the owner, or one of the owners, assumes the role of chief executive officer. However, even when the owner or owners assume no administrative responsibilities at all, and hire a chief executive to be responsible for all administrative and management functions, they must be available to be interviewed by Review Team during the Site Visit.


Note: COA’s Administration and Financial Management (CA-AFM) standards apply to for-profit organizations only. COA's Financial Management (CA-FIN) and Governance (CA-GOV) standards are not applicable to organizations that are assigned the CA-AFM standards. 


Note:  Please see the CA-AFM Reference List for the research that informed the development of these standards. 


Note: For information made about changes in the 2020 Edition, please see the CA-AFM crosswalk. See also the ETH crosswalk for Ethical Practice standards that are now found in CA-AFM.

2024 Edition

For-Profit Administration and Financial Management (CA-AFM) 1: Purpose

The organization has a written mission or purpose statement that:
  1. delineates the scope of services provided;
  2. is responsive to the needs and aspirations of the community; and
  3. serves as a benchmark of organizational effectiveness.

1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
  • The purpose or mission statement is in effect and useful in guiding the organization, but it needs updating and is currently under review.
3
Practice requires significant improvement; e.g.,
  • The purpose or mission statement is poorly written or outdated and as a result, it has limited use in guiding organizational decisions; or
  • Provision of human services are not identified as a major component or focus of the organization.
4
There is no written purpose or mission statement or the organization's practices and services are at odds with its stated mission or purpose.
2024 Edition

For-Profit Administration and Financial Management (CA-AFM) 2: Strategic and Annual Planning

The organization engages in an inclusive, long-term, strategic planning process and annually conducts short-term planning in support of the long-term goals and objectives.

Note:Please see the Governance Standards Tool Kit - Strategic Plan Template for additional guidance on this standard.

1
The organization's practices fully meet the standard, as indicated by full implementation of the practices outlined in the CA-AFM 2 Practice standards.
2
Practices are basically sound but there is room for improvement, as noted in the ratings for the CA-AFM 2 Practice standards.
3
Practice requires significant improvement, as noted in the ratings for the CA-AFM 2 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 2 Practice standards.
 
Fundamental Practice

CA-AFM 2.01

Strategic planning includes:
  1. envisioning and setting the organization’s strategic direction; and
  2. engaging in inclusive, management-directed, organization-wide long-term planning at least every four years.

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 standard's elements is not fully implemented.
3
Practice requires significant improvement; e.g.,
  • Long-term planning has not been done in more than four years; or
  • One element is not addressed at all.
4
Implementation of the standard is minimal or there is no evidence of implementation at all; e.g.,
  • Long-term planning has not been done for more than five years; or
  • The strategic plan is wholly inadequate or nonexistent.
 
Fundamental Practice

CA-AFM 2.02

The organization’s long-term planning process includes:

  1. a review of the organization’s purpose or mission, values, mandates, and strategic direction;
  2. a review of the demographics of its defined service population;
  3. an assessment of strengths and weaknesses;
  4. an assessment of equity , diversity, and inclusion strategies;  
  5. measurable goals and objectives that flow from its purpose and mandated responsibilities; and
  6. appropriate strategies for meeting identified goals, including the need to redirect, eliminate, or expand services to respond to changing community demographics and the needs of persons served.
EAP Interpretation: In an EAP demographic information should be representative of its customer base.

Examples: To enhance its assessment, organizations can draw upon the findings of other external needs assessments, such as those conducted by the United Way, municipal planning boards, universities, or other organizations with a community-wide focus.

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 is not fully addressed; or
  • The review of service population demographics did not include all populations served or geographic locations; or
  • The strategy (element (f)) for meeting one or two of the identified goals needs greater specificity.
3

Practice requires significant improvement; e.g.,

  • One of the elements is not addressed at all; or
  • The organization did not review the demographics of its service population; or
  • Identified goals and objectives are vague; or
  • Most identified goals and objectives are not measurable; or
  • Strategies for meeting identified goals are cursory and do not provide a sufficient framework for success; or
  • Long-term planning has not been done in more than four years.
4

Implementation of the standard is minimal or there is no evidence of implementation at all; e.g.

  • Two of the elements are not addressed at all; or
  • Long-term planning has not been done for more than five years; or
  • The strategic plan is wholly inadequate or nonexistent.
 
Fundamental Practice

CA-AFM 2.03

The organization develops and implements an annual plan that supports its mission or purpose and integrates the priorities and objectives of each of its departments and programs, and:
  1. operationalizes the goals and objectives of the long-term strategic plan;
  2. reflects organizational responses to changing conditions and needs such as, resource allocation, funding and regulatory changes; and
  3. responds to information from PQI activities.
Related Standards:

Examples: Annual plans can also incorporate other regular planning processes, including:
  1. HR planning;
  2. evaluation of training needs;
  3. budget planning;
  4. technology and information management planning; and
  5. PQI summary reports.

1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
  • Departmental priorities and objectives could be better defined; or
  • While department and program plans are not integrated into an organization-wide annual plan, all but one or two departments or programs have developed a comprehensive annual plan.
3
Practice requires significant improvement; e.g.,
  • Management objectives are not included; or
  • Several departments or programs are not included in the most recent annual plan or have not done an annual plan; or
  • One of the elements is not addressed at all.
4
Implementation of the standard is minimal or there is no evidence of implementation at all; e.g.,
  • Two of the elements are not addressed at all.
 

CA-AFM 2.04

The organization develops an equity statement outlining its commitment to equity, diversity, and inclusion (EDI) that is shared with its stakeholders.

Interpretation: The equity statement should reflect the organization’s history, connect EDI to its mission, and outline how the organization demonstrates its commitment to EDI.

1

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

2

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

  • The organization has an equity statement, but it has not been shared with its stakeholders.


3

Practice requires significant improvement; e.g.,

  • The organization has begun the process of developing an equity statement, but the process is not yet complete.


4

Implementation of the standard is minimal or there is no evidence of implementation at all; e.g.,

  • The organization does not have an equity statement and little to no work has begun to create one.


2024 Edition

For-Profit Administration and Financial Management (CA-AFM) 3: Community Involvement and Advocacy

The organization:
  1. informs the public of its purpose;
  2. remains informed about community needs and strengths; and
  3. advocates for comprehensive and coordinated service delivery within its community.
Interpretation: The standards in CA-AFM 3 describe a variety of activities related to the organization’s role within the community, including: outreach and education, participation in community-wide advocacy efforts, and advocacy on behalf of service recipients who need help navigating the system. Given the broad range of activities outlined in CA-AFM 2, activities conducted by the organization are the responsibility of the owner, CEO, stakeholder advisory group, management, direct service personnel, and/or other personnel, as appropriate to the activity and their role.

1
The organization's practices fully meet the standard, as indicated by full implementation of the practices outlined in the CA-AFM 3 Practice standards.
2
Practices are basically sound but there is room for improvement, as noted in the ratings for the CA-AFM 3 Practice standards.
3
Practice requires significant improvement, as noted in the ratings for the CA-AFM 3 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 3 Practice standards.
 

CA-AFM 3.01

The organization provides the public with clear, timely, and accurate information about the organization’s purpose, programs, activities, service recipients, and finances.

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 social media or the website provides accurate information, some written materials that continue to be distributed are outdated; or
  • Some segments of the general public do not have access to accurate and timely information.
3
Practice requires significant improvement; e.g., 
  • Generally, public information is not current; or
  • Some important information is not available to the public.
4
Implementation of the standard is minimal or there is no evidence of implementation at all.
 

CA-AFM 3.02

The organization conducts ongoing community outreach and education to:
  1. communicate its purpose, role, functions, capacities, and scope of services;
  2. provide information about the strengths, needs, and challenges of the individuals, families, and groups it serves; and
  3. build community support and presence and maintain effective partnerships.

Examples: Examples of public outreach and education activities may include:
  1. regular communication with the media and the general public;
  2. informing the public of the positive impact agency programs are having on the community and its residents; and
  3. fostering positive relationships with the local media.

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 is not fully addressed; or
  • The organization has an ongoing program of community education, but it does not cover some of its programs or services.
3
Community outreach and education efforts need significant improvement; e.g.
  • Efforts are informal and infrequent; or
  • Efforts only address some of the organizations programs or services, or populations served; or
  • Element (a) or (b) is not addressed at all.
4
Implementation of the standard is minimal or there is no evidence of implementation at all.
 

CA-AFM 3.03

The organization collaborates with community members and persons served to address unmet needs in the community and advocate for issues of mutual concern consistent with the organization’s purpose, such as:
  1. improvements to existing services;
  2. filling gaps in service to offer a full array of community supports;
  3. the full and appropriate implementation of applicable laws and regulations regarding issues concerning the service population;
  4. improved support and accommodations for people with special needs;
  5. improved access to needed services for underserved populations and marginalized communities;
  6. solutions to community-specific needs including racial equity and cultural and linguistic diversity;
  7. service coordination; and
  8. a coordinated community response to public health emergencies.

Examples: The organization can work at several levels to advocate with, and on behalf of, persons, groups, and families served. For example, direct service personnel can be given the time to carry out advocacy activities so they can support persons and families served to solve problems related to their individual cases. Advisory board members, management, and other personnel, along with persons served, can engage in legislative and other system-wide advocacy activities. They may also work collaboratively with other community organizations to monitor federal, provincial/territorial, and/or local activity that impacts the service population.

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 is not addressed at all.
3
Practice requires significant improvement; e.g.,
  • Two of the elements are not addressed at all.
4
Implementation of the standard is minimal or there is no evidence of implementation at all; e.g.,
  • Little or no effort is made to collaborate with community members or persons served as described in the standard.
 
Fundamental Practice

CA-AFM 3.04

The organization establishes and maintains a stakeholder advisory group that serves as a bridge between the organization and the community, and it:
  1. includes representatives of relevant community groups, consumers, service providers, advocates, and others with an interest in the success of the organization achieving its purpose; and 
  2. provides information and feedback to the organization about services, outcomes, the perception of the organization within the community, and other information that would help the organization better serve its defined population and the community.
Interpretation: In order for advisory groups to function well the organization should:
  1. establish clear and transparent recruitment and selection guidelines;
  2. have reasonable expectations about what the group can accomplish within the parameters of its purpose and available resources; and
  3. actively consider and respond to the group's input, feedback, or recommendations.

1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
  • The group is not utilized to the extent that it could be; or
  • Advisory group members report a need for better communication or lack of clear objectives or timeframes.
3
Practice requires significant improvement; e.g.,
  • Advisory group members report being confused about the purpose of the group and/or about their roles and functions; or
  • Insufficient community representation results in limited effectiveness; or
  • Group members do not know whether or not their feedback or recommendations are being used or considered.
4
Implementation of the standard is minimal or there is no evidence of implementation at all.
2024 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.

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.
 

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.
2024 Edition

For-Profit Administration and Financial Management (CA-AFM) 5: Conflict of Interest

The organization prevents the enrichment of insiders and other abuses through the adoption and enforcement of a conflict of interest policy.

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1
The organization's practices fully meet the standard, as indicated by full implementation of the practices outlined in the CA-AFM 5 Practice standards.
2
Practices are basically sound but there is room for improvement, as noted in the ratings for the CA-AFM 5 Practice standards.
3
Practice requires significant improvement, as noted in the ratings for the CA-AFM 5 Practice standards; e.g.
  • Conflict of interest policy provides minimal guidance to stakeholders due to lack of specificity, significant missing elements, or significant stakeholders not covered; or
  • Minor conflict of interest concerns are noted.
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 5 Practice standards; e.g.,
  • Significant conflict of interest concerns have been reported.
 
Fundamental Practice

CA-AFM 5.01

A conflict of interest policy is tailored to the organization’s specific needs and characteristics, and:
  1. defines conflict of interest;
  2. identifies groups of individuals within the organization covered by the policy;
  3. addresses policy enforcement;
  4. provides a framework for evaluating situations that may constitute a conflict; and
  5. invests management with developing procedures that facilitate disclosure of information to prevent and manage potential and apparent conflicts of interest.

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 standard's elements is not fully addressed.
3
Practice requires significant improvement; e.g.,
  • The policy provides minimal guidance to stakeholders due to lack of specificity; or
  • Stakeholders are unaware of the policy; or
  • Two of the elements are not fully addressed; or
  • One of the elements is not addressed at all.
4
Implementation of the standard is minimal or there is no evidence of implementation at all; e.g.,
  • No policy exists; or
  • The policy is not enforced or is ignored in practice.
 
Fundamental Practice

CA-AFM 5.02

The conflict of interest policy requires governing body members, advisory group members, personnel, and consultants who have a financial interest in the organization’s assets, business transactions, leases, or professional services to:
  1. disclose this information; and
  2. not participate in any discussion or vote taken with respect to such interests.

1
The organization’s conflict of interest policy fully addresses the requirement for disclosure of conflicts of interest and for recusal from decisions related to such interests.
2
Practices are basically sound but there is room for improvement; e.g.,
  • The policy related to one of the standard’s elements needs clarifying.
3
Practice requires significant improvement; e.g.,
  • Applicable stakeholders are not identified; or
  • The types of transactions that must be disclosed are not delineated; or
  • Safeguards regarding disclosure or recusal are insufficient; or
  • Important stakeholders are not aware of the policy.
4
Implementation of the standard is minimal or there is no evidence of implementation at all; e.g.,
  • Conflict of interest violations have occurred.
 

CA-AFM 5.03

The conflict of interest policy addresses nepotism with regard to hiring, supervision, and promotion.
Interpretation:This standard permits the hiring of relatives, provided that relatives are qualified and do not work within the same hierarchy of supervision.

1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
  • Some aspect of the policy requires clarification.
3
Practice requires significant improvement; e.g.,
  • Staff report that there have been instances of nepotism or preferential treatment; or
  • The organization chart indicates that at least one person is directly supervised by a relative.
4
Implementation of the standard is minimal or there is no evidence of implementation at all.
 

CA-AFM 5.04

The organization prohibits:
  1. making or accepting payment or other consideration in exchange for referrals;
  2. preferential treatment of organization members, community partners, members of the organization's governing body, advisory groups, personnel, or consultants applying for and receiving the organization’s services; and
  3. steering or directing referrals to private practices in which personnel, consultants, or the immediate families of personnel and consultants are engaged.
Interpretation: It is permissible to include on referral lists personnel and consultants with private practices, or family members of personnel and consultants, but the organization may not actively direct service recipients to the practices of these individuals and must clarify in writing the relationship between the private practitioners and the organization.

1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
  • Some aspects of the policy are vaguely written, but there have been no ethical violations of the principles outlined in the standard.
3
Practice requires significant improvement; e.g.,
  • Significant aspects of the policy are vaguely written or confusing; or
  • The policy does not address at least one of the standards elements; or
  • The policy exists but enforcement is lax and there have been a few instances where it has been violated; or
  • The policy is generally understood but it is an unwritten expectation.
4
Implementation of the standard is minimal or there is no evidence of implementation at all; e.g.,
  • No policy exists; or
  • The policy is not enforced or is ignored in practice.
2024 Edition

For-Profit Administration and Financial Management (CA-AFM) 6: Protection of Reporters of Suspected Misconduct

The organization prohibits employment-related retaliation against employees, and others affiliated with the organization, who come forward with information about suspected misconduct or questionable practices, and provides an appropriate, confidential channel for reporting such information.

1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
  • The definition of what constitutes a reportable violation lacks specificity.
3
Practice requires significant improvement; e.g.,
  • There is a perception among staff that procedures do not adequately protect anonymity; or
  • Procedures are not readily available or staff and board members are not aware they exist; or
  • Procedures do not adequately protect against retaliation.
4
Implementation of the standard is minimal or there is no evidence of implementation at all; e.g.,
  • Staff report feeling afraid or intimidated.
2024 Edition

For-Profit Administration and Financial Management (CA-AFM) 7: Internal Control Environment

The organization establishes an internal control environment that promotes ethical financial management and includes mechanisms for:
  1. conducting ongoing monitoring of the effectiveness of internal control policies and procedures;
  2. management review by more than one individual;
  3. assuring that management directives are carried out;
  4. prevention of error, mismanagement, or fraud;
  5. safeguarding and verification of assets; and
  6. segregation of duties to the extent possible.

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 are not fully addressed.
3
Practice requires significant improvement; e.g.,
  • Two elements are not fully addressed; or 
  • One element is not addressed at all. 
4
Implementation of the standard is minimal or there is no evidence of implementation at all; e.g.,
  • Fraudulent practices or serious financial mismanagement have occurred, and problems have not been remediated; or
  • Three or more elements are not fully addressed; or
  • Two elements are not addressed at all.
2024 Edition

For-Profit Administration and Financial Management (CA-AFM) 8: Revenue and Investments

The organization works towards its future success through the active pursuit of revenue and proper management of investments.

1
The organization's practices fully meet the standard, as indicated by full implementation of the practices outlined in the CA-AFM 8 Practice standards.
2
Practices are basically sound but there is room for improvement, as noted in the ratings for the CA-AFM 8 Practice standards.
3
Practice requires significant improvement, as noted in the ratings for the CA-AFM 8 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 8 Practice standards.
 

CA-AFM 8.01

The organization pursues stable, predictable sources of revenue through diversification and balance in funding streams consistent with the organization’s purpose and programs.
Interpretation: Organizations meet the intent of the standard if they can demonstrate that they are actively pursuing stable and predictable sources of revenue, even if they have not yet achieved that goal.

1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
  • The organization makes active efforts to diversify or strengthen resources but still relies primarily on one or two major funding sources.
3
Practice requires significant improvement; e.g.,
  • Minimal efforts have been made to expand, diversify or strengthen the organization’s resource base.
4
Implementation of the standard is minimal or there is no evidence of implementation at all; e.g., 
  • The organization has no “fallback” position and has made little or no effort to protect itself from the consequences of dependence on a single source of revenue.
 

CA-AFM 8.02

The organization has procedures to ensure proper management of funds and/or investments that:
  1. outline acceptable levels of risk;
  2. include criteria for making short- and long-term investments, maintaining cash reserves, etc.;
  3. address the management, purchase, or sale of real estate, securities, and other assets; and
  4. ensure practices conform to applicable legal and regulatory requirements.
Related Standards:

Examples: Investments and/or funds can include short-term investments like savings accounts, longer-term investments like stock, bonds, and mutual funds, as well as properties and other assets owned by the organization. The investment policy would, for example, specify how much of the organizations funds will be placed into savings accounts, which provide immediate access to those funds, versus longer term investments.

1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
  • Investment procedures were last reviewed and/or updated between two and three years ago.
3
Practice requires significant improvement; e.g., 
  • The investment procedures have not been reviewed or updated within the last three years.
4
Implementation of the standard is minimal or there is no evidence of implementation at all; e.g., 
  • There are no investment procedures.
2024 Edition

For-Profit Administration and Financial Management (CA-AFM) 9: Financial Planning

Planning for the current fiscal cycle is organization-wide and involves key stakeholders.

1
The organization's practices fully meet the standard, as indicated by full implementation of the practices outlined in the CA-AFM 9 Practice standards.
2
Practices are basically sound but there is room for improvement, as noted in the ratings for the CA-AFM 9 Practice standards.
3
Practice requires significant improvement, as noted in the ratings for the CA-AFM 9 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 9 Practice standards.
 
Fundamental Practice

CA-AFM 9.01

The annual planning and budget cycle includes participation of management and other relevant stakeholders and is based on: 
  1. the organization's mission and strategic priorities;
  2. performance improvement and outcomes data;
  3. direct and indirect operating expenditures; 
  4. contractual requirements; 
  5. changing costs and conditions; and
  6. anticipated revenue for the program year.

Examples: Performance improvement and outcomes data in this context refers to the use of program and client outcomes data in planning and budgeting decisions. Such data may be used, for example, to direct available resources toward programs or interventions that have the strongest impact on individuals and families served.

Note: See CA-AFM 2.03 for more information on annual planning and how budget and annual planning cycles can support the agency’s mission and strategic priorities. 

1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
  • The process could be made more comprehensive or changing conditions could be better addressed.
3
Practice requires significant improvement; e.g., 
  • The budget planning process is not comprehensive or formalized in one of the standard's elements. 
4
Implementation of the standard is minimal or there is no evidence of implementation at all.
 
Fundamental Practice

CA-AFM 9.02

Financial information is routinely analyzed and the information includes: 
  1. a monthly and annual analysis of financial performance against budget projection with budget-to-actual variance analyses performed on interim financial statements of activities; 
  2. cash reserves in alignment with an operating reserves policy;
  3. service revenues and actual service delivery costs; and 
  4. an annual inventory of significant assets, including securities. 

1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
  • The organization routinely analyzes financial information but is not always stringent about comparing it with data about actual service delivery costs; or
  • Financial analyses are conducted quarterly and annually.
3
Practice requires significant improvement; e.g.,
  • Analysis of financial performance is not performed at least quarterly; or
  • Analysis of financial performance is not done annually; or
  • The organization does not analyze service revenue information and service delivery costs.
4
Implementation of the standard is minimal or there is no evidence of implementation at all; e.g.,
  • The organization makes no attempt to either keep adequate service revenue information or to analyze it.
2024 Edition

For-Profit Administration and Financial Management (CA-AFM) 10: Financial Accountability

The organization is accountable for the management and performance of its finances to stakeholders and applicable regulatory bodies.

1
The organization's practices fully meet the standard, as indicated by full implementation of the practices outlined in the CA-AFM 10 Practice standards.
2
Practices are basically sound but there is room for improvement, as noted in the ratings for the CA-AFM 10 Practice standards.
3
Practice requires significant improvement, as noted in the ratings for the CA-AFM 10 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 10 Practice standards.
 
Fundamental Practice

CA-AFM 10.01

The organization receives an audit or review of its financial statements that is conducted within 180 days of the end of each fiscal year by an independent, certified public accountant.

Examples: There are three levels of financial statement services offered by CPAs: audits, reviews, and compilations, each of which should be conducted by an independent CPA.
 
An audit provides the highest level of assurance on an organization's financial statements. An audit provides assurance that an organization's financial statements are free of material misstatement and are fairly presented based upon the application of generally accepted accounting principles. An audit includes:
  1. confirmation with outside parties;
  2. testing selected transactions by examining supporting documents;
  3. completing physical inspections and observations; and
  4. considering and evaluating the internal control system of the organization.
A review of financial statements provides limited assurance on an organization's financial statements. During a review, inquiries and analytical procedures present a reasonable basis for expressing limited assurance that no material modifications to the financial statements are necessary and that they are in conformity with generally accepted accounting principles. Following a review engagement, the CPA will issue a formal report that includes a conclusion as to whether, based on the review, the CPA is aware of any material modifications that should be made to the financial statements to bring them in accordance with the applicable financial reporting framework.
 
A compilation provides no assurance on an organization's financial statements and does not meet the requirements of the standard.

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

Organizations seeking reaccreditation have completed audits or reviews of financial statements for each intervening year since their last accreditation.
2
Practices are basically sound but there is room for improvement; e.g.,
  • The organization undergoing accreditation completed an audit or review of financial statements for the most recent auditable fiscal year; however, it did not conduct an audit for any or all of the intervening years since their last accreditation; or 
  • The organization undergoing accreditation for the first time completed an audit or review of financial statements in the most recent auditable year; or
  • The organization completed the audit or review; however, it was not conducted within eight months of the end of the fiscal year, but the organization implemented procedures to ensure timely completion for future audits.
3
Practice requires significant improvement; e.g.,
  • The audit or review for the most recent auditable year is scheduled but has not been completed; or
  • The most recent audit or review was completed more than eight months after the end of the fiscal year, and no plan is in place to ensure timely completion of future audits.
4
Implementation of the standard is minimal or there is no evidence of implementation at all; e.g.,
  • An audit or review for the most recent auditable year has not been completed nor has one been scheduled.
 

CA-AFM 10.02

The owner and financial officers confirm in writing that, to the best of their knowledge, financial statements are accurate and fairly represent the financial condition and operations of the organization.

1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement.
3
Practice requires significant improvement.
4
Implementation of the standard is minimal or there is no evidence of implementation at all.
2024 Edition

For-Profit Administration and Financial Management (CA-AFM) 11: Financial Management

Positive financial outcomes are achieved through a financial management system that receives, disburses, and accounts for funds consistent with sound financial practices.
Related Standards:

1
The organization's practices fully meet the standard, as indicated by full implementation of the practices outlined in the CA-AFM 11 Practice standards.
2
Practices are basically sound but there is room for improvement, as noted in the ratings for the CA-AFM 11 Practice standards.
3
Practice requires significant improvement, as noted in the ratings for the CA-AFM 11 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 11 Practice standards.
 
Fundamental Practice

CA-AFM 11.01

Accounting records are kept up-to-date and balanced on a monthly basis, as demonstrated by:
  1. timely reconciliation of bank statements 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 a person other than the person who performs the reconciliation and who is not authorized to sign checks.

1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
  • The organization has an occasional, minor problem in compliance such as short delays in posting receipts and disbursements or slightly overdue updates to the general ledger.
3
Practice requires significant improvement; e.g.,
  • Bank reconciliation is not regularly reviewed by two people as required.
4
Implementation of the standard is minimal or there is no evidence of implementation at all.
 

CA-AFM 11.02

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

1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement.
3
Practice requires significant improvement.
4
Implementation of the standard is minimal or there is no evidence of implementation at all.
 

CA-AFM 11.03

Oversight and management of the organization’s accounting system require:
  1. a financial officer or business manager to maintain the financial accounts who has prior accounting and bookkeeping experience, or an accounting degree, C.P.A. credential, or other recognized accounting/financial certification, as appropriate to the size and complexity of the organization; and
  2. all personnel who use the system to receive initial and ongoing training on its use.

1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
  • Ongoing staff training needs strengthening.
3
Practice requires significant improvement; e.g.,
  • The organization has a qualified financial officer, but the system is deficient in some significant regard, such as lack of training for some personnel.
4
Implementation of the standard is minimal or there is no evidence of implementation at all.
 
Fundamental Practice

CA-AFM 11.04

An organization that assumes fiduciary responsibility for, or disburses client funds:

  1. segregates client funds from other organization funds; and
  2. protects client assets.
Related Standards:

Interpretation: Fiduciary responsibility refers to an individual’s or organization’s responsibility to act in good faith on behalf of another person. The fiduciary is legally or ethically trusted to make decisions in the best interest of the person and may not use their role to benefit themselves. Examples of fiduciary relationships include those of a guardian and ward or representative payee and beneficiary.

NA The organization does not assume fiduciary responsibility for, or disburse client or non-fee-for-service funds to service recipients.

Examples: Examples of the types of funds that organizations may assume responsibility for or disburse to clients include:

  1. allowances for children and youth in out-of-home care;
  2. funds under the control of the organization in guardianship cases; and
  3. benefits when the organization serves as the representative payee.

1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
  • Procedures for segregation of funds or protection of client assets need strengthening.
3
Practice requires significant improvement; e.g.,
  • One of the elements is not addressed at all.
4
Implementation of the standard is minimal or there is no evidence of implementation at all; e.g.,
  • The organization has no written procedures, and adequate protection and guidelines have not been developed to protect assets of persons served; or
  • There have been instances in which funds for which the organization had a fiduciary responsibility appear to have been misused, e.g., assets or funds have been inappropriately co-mingled or disbursed inconsistently.
2024 Edition

For-Profit Administration and Financial Management (CA-AFM) 12: Fundraising

An organization that raises funds by individual solicitation from the general public conducts fundraising activities in an ethical, fiscally-responsible manner.
Interpretation: This section is applicable to organizations that solicit or receive money from private individuals, including, but not limited to, capital campaigns and contribution plans. This section is not applicable to money raised from private or public grants and contracts.
NA The organization does not raise funds through solicitations or general funding events.

Examples: Organizations can reconcile fundraising practices with prevailing ethical practices of national bodies, such as the Association of Fundraising Professionals.

1
The organization's practices fully meet the standard, as indicated by full implementation of the practices outlined in the CA-AFM 12 Practice standards.
2
Practices are basically sound but there is room for improvement, as noted in the ratings for the CA-AFM 12 Practice Standards.
3
Practice requires significant improvement, as noted in the ratings for the CA-AFM 12 Practice standards; e.g.,
  • Staff are unaware of the organization's fundraising policies and/or procedures; or
  • Fundraising practices may pose a risk to the organization.
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 12 Practice standards.
 
Fundamental Practice

CA-AFM 12.01

The organization:
  1. accurately describes the purpose for which solicitations are being made;
  2. spends funds for the purposes they were solicited, with the exception of reasonable costs for administration of the fundraising program;
  3. maintains accounting segregation for restricted funds; and
  4. respects donor confidentiality requests, and ensures that such donors’ names are not published in publicly available documents.

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 is not fully addressed, but the organization has taken steps to strengthen practice; or
  • The organization has a system of controls that may need strengthening; however, contributions are appropriately recorded and acknowledged.
3
Practice requires significant improvement; e.g.,
  • There have been some violations of donor requests for confidentiality; or
  • One of the elements is not addressed at all.
4
Implementation of the standard is minimal or there is no evidence of implementation at all; e.g.,
  • Unethical or deceptive practices regarding costs in relation to funds raised exist; or
  • The organization does not accurately describe the uses of the funds; or
  • Two or more of the standards' elements have not been addressed.
 

CA-AFM 12.02

The organization collects and maintains data that supports sound fund-development decisions by its leadership and allows for the costs and benefits of each fundraising activity to be analyzed, including the reasonableness of fundraising costs in comparison to dollars raised.

Examples: Factors that may affect the reasonableness of fundraising costs to dollars raised include, but are not limited to: the differential costs of donor solicitation, donor renewal, large bequests, or donations that would obscure true fundraising costs.

1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
  • Some fundraising costs are not sufficiently reviewed for full analysis.
3
Practice requires significant improvement; e.g.,
  • The organization does not routinely analyze the costs and benefits of its separate fund-raising activities.
4
Implementation of the standard is minimal or there is no evidence of implementation at all.
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