The Organization: A foundation that is part of a public school system in a large eastern Massachusetts city
The Challenge: Restricted pledges, Executive Director's compensation
When the previous accounting firm was dismissed, Edelstein & Company was called upon to do a comprehensive review of the school system's financial statement. "One of the first things we found when doing the field work," says Scott Kaplowitch, "was that the temporary and permanently restricted funds were in the wrong buckets." The discovery pointed out a problem. "Unless you do a lot of this," Scott says, "it's easy to make these kinds of mistakes."
Edelstein & Company eventually reviewed every gift letter associated with pledges in order to create a financial statement that more accurately reflected the school system's financial position.
The firm was also asked to perform a salary study for the Board, which was interested in determining whether the Executive Director was being appropriately compensated. This required an assessment of compensation relative to the total revenue and operating budget of the system. The conclusion was yes, he is being paid fairly.
"Having the ability to interact with the Board is critical in situations involving nonprofits," Scott concludes.