The executive director engaged us to provide interim financial leadership. As we dug into the numbers and the underlying challenges, it became clear the organization’s financial challenges were deeper than just a payment timing issue. A key error had been made in the accounting for a newly built housing project, which created an inaccurate representation of the organization’s income. An error of over $1 million allowed the Board of Directors to believe the organization was running a surplus. In reality, it was overstaffed for its current level of contracts and had higher expenses than current funding allowed.
As we studied the numbers and the related contracts, we found additional opportunities to protect and improve the organization’s finances. For example, a quick review of insurance coverage revealed the organization was paying twice for redundant insurance on their primary office space, yet did not have sufficient coverage for the newly built residential housing complex, leaving them at substantial risk.

One of the most rewarding findings was discovered while reviewing the agency’s workers compensation coverage. When the agency was founded in the mid-1980’s, they provided home health care, a relatively risky line of work. As a result, the agency was paying a high rate on its workers compensation insurance at an annual expense of roughly $80,000 for its 85 employees. Over the years, their services gradually shifted away from home health care to almost solely office and desk-based social services. The change was so gradual that no one on the management team thought about the potential impact on workers compensation insurance. By asking the state to conduct an audit of the organization’s coverage, we found that they were overpaying by $72,000 a year. With the audit, the state agreed to refund overpayments for the previous three years – a total of $216,000! This was equal to roughly the entire private donations made in a year…and it allowed the organization to catch up on all its past due vendor invoices.