Consider Issuing a Schedule of Program Accomplishments
By Frank A Monti, CPA
Typically, expenses of the nonprofit are presented on a functional basis. The organization reports the total expenses for each of the different programs or initiatives it has undertaken. While this reporting, certified as being fairly stated by independent auditors, is essential to this sector of the economy, many believe that an additional Schedule of Program Service Accomplishments should also be published by these organizations.
Simply put, this schedule would provide the reader, e.g., potential or current funding sources, with statistical information regarding the outcomes achieved from the dollars expended in program efforts.
While creating a schedule of program services will consume time and cost money, experience shows that the process sharpens the focus of the entire staff on outcomes and away from process. In addition, if organizations can document their value-added by certifying program achievement to outcome objectives, their search for funding will likely meet with greater success, as funders themselves increasingly focus on mission impact.
Reporting that ABC Agency spent $113,000 on counseling pregnant teenagers is not as useful to a reader as knowing that 400 teenagers participated in three counseling sessions. Even better reporting would be that the teenager's knowledge of prenatal care increased as a result of the counseling and that behavioral change followed new information. If this type of data were available, it could become part of the audited performance by an independent certified public accountant (CPA). It also could be presented along with traditional financial statements.
Creating a Schedule of Program Accomplishments
Creating a Schedule of Program Service Accomplishments for audit by an independent CPA is not a task to be left to the end of the year. A series of complex reporting standards apply to reporting program service accomplishments just as they do in financial reporting. It is these standards, promulgated by the American Institute of Certified Public Accountants (AICPA), that give nonprofits certified financial statements credibility with potential funding sources. Likewise, adhering to standards of reporting for program service accomplishments will impart similar credibility to those statistics.
When reasonable outcome criteria from sources external to the reporting organization do not exist, the organization itself may have to develop its own outcome criteria. In such a situation, the CPA must determine if the established criteria are reasonable. Reasonable criteria are those that yield useful information. The usefulness of information depends on an appropriate balance between relevance and reliability.
If your organization is formulating its own outcome criteria, the concepts of relevance and reliability must be understood and incorporated into those criteria.
Reliability is achieved through adherence to four goals: