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Being that a budget is a financial plan that ensures that the outcome one desires, I would say the financial conditions is very essential in the relation to its mission (South University Online, para 2). An organization should be held accountable for their actions. This includes following legal and ethical requirements (South University Online, para 3). Renz (2016) stated that “government contracting can have serious effects on nonprofit organization goverence.” The management challenges for nonprofit agencies created by contracting in the context of an era of greater competition and uncertainty with challenges are potential strategies nonprofit agencies may adopt to effectively cope with the higher accountability demands of government while successfully maintaining a sustainable, effective organization with an ongoing commitment to community building and citizen engagement (Renz, 2016).
The current contracting environment more competitive today than it was in the 1960’s. They are gradually becoming performance-based, with government specifying contract goals and priorities that nonprofits are required to meet in an effort to receive reimbursement for the services they provide. An increased level of competition for funding is another direct and/or indirect effect of the restructuring of government support itself. The idyllic type of executive for a nonprofit service agency would not be determined without understanding the particular characteristics and needs of the specific organization.
Nonprofit agencies, usually represent at their founding the efforts of like-minded people to address a problem (Renz, 2016). These organizations are sometimes not a representative of their community as a whole. Many agencies are directed by people from a particular political, ideological, ethnic, or income group in a community.
The Sarbanes-Oxley Act of 2002 is mandatory. ALL organizations, large and small, MUST comply. The legislation came into force in 2002 and introduced major changes to the regulation of financial practice and corporate governance. Named after Senator Paul Sarbanes and Representative Michael Oxley, who were its main architects, it also set a number of deadlines for compliance (sowlaw.com). According to section 401 of this legislation, financial statements are to be published by issuers and are required to be accurate and presented in a manner that does not contain incorrect statements or admit to state material information (soxlaw.com). These financial statements should also include all material off-balance sheet liabilities, obligations or transactions.
All sections are essential to the financial stability of all organizations to ensure all financial information is maintained current and everyone has to comply with it.
Renz, D. O. (2016). The Jossey-Bass Handbook of Nonprofit Leadership and Management, 4th Ed. Retrieved from https://digitalbookshelf.southuniversity.edu/#/books/9781118852941/
South University Online. Management of Nonprofit organizations. The Budgeting Process Week 3.