You’re safe. You can open your mouth. There will be no retaliation for tattle-tales. That’s right. If staff members of your nonprofit organization think they have some worthy information to relay to management, Federal law prohibits organizations from retaliating against whistleblowers who reveal any information or pursuit that is unethical or illegal.
If some individual blows the whistle on your organization’s mismanagement of funds or accounting practices, you cannot take revenge against that person. Most states have laws that prohibit organizations from retaliating against whistleblowers in the workplace.
Because of this law, it is wise to establish an internal policy for handling complaints about mishandling monies or questionable financial procedures. You must protect whistleblowers and a policy stating this keeps you in compliance with federal and state laws.
The Sarbanes-Oxley Act
The official name of the act that protects whistleblowers is the Sarbanes-Oxley Act.
Dishonest and questionable behavior by various corporations precipitated this Act. Provisions in this Act impact nonprofit organizations. Nonprofits cannot retaliate against a whistleblower who exposes questionable practices of your accounting methods.
It is in the best interest of your organization to have a whistleblower policy in place. Create guidelines for handling complaints and emphasize protecting whistleblowers. Having these guidelines protect your organization from violating state and federal whistleblower laws. If your organization gets a grievance, you should investigate, take action, and correct the situation.
Having these guidelines shows staff that you are open to discuss protests or criticisms. The guidelines remove the fear of retaliation for being honest with your management. Establishing standards of no retaliation motivates staff to be open and feel safe.
Staff members can feel safe bringing concerns about accounting practices, discrimination on the job, or unhealthy/unsafe office environments.
It is important for your organization to have a non-retaliation policy and guidelines. It is a form of risk management. This written policy provides a way for staff to remedy a situation before it gets out-of-hand. Good governance of your organization includes establishing an environment where employees can report concerns without retaliation.
The IRS applauds organizations
with whistleblower policies.
Blowing the whistle is a good thing. Permit your employees to be the coach or referee and blow the whistle on illegal violations or unsavory actions within your organization. Courage plus legal protection makes for good governance by your organization.
If you have any questions about whistleblower laws keep in touch with our blog. We have ideas to share and solutions to management and organizational questions. If you have questions about any other not-for-profit industry topics, contact our not-for-profit team leader at trent@tbfosteraccounting.com.
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