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© 2014 The Dayton Foundation All rights reserved worldwide.
Phone: (937) 222-0410

The Dayton Foundation Voluntarily Adopts Applicable Sarbanes-Oxley Provisions

In 2002 Congress passed the Sarbanes-Oxley Act - also known as the American Competitiveness and Corporate Accountability Act of 2002 - in response to corporate and accounting scandals. The intent was to improve public confidence in the accuracy and integrity of the financial reporting of public companies and ensure the independence of auditors and accountants. While the law largely affects only publicly traded, for-profit corporations, some of the Act's provisions have relevance to the not-for-profit community.

The Dayton Foundation operates a broad program of stewardship to uphold the public's continued trust. As part of this, the Foundation has had in place or voluntarily adopted the following Sarbanes-Oxley measures that we think are good practices for nonprofits as well. The Dayton Foundation:

• voluntarily engages a third-party, independent auditor (currently Battelle & Battelle) to conduct an annual audit of all The Dayton Foundation's financial statements and operations;

• includes, as part of its volunteer governance structure, a Board-level Audit Committee, separate from the Board-level Finance Committee. Both committees are comprised of unpaid, volunteer members with strong accounting, financial and business backgrounds. The annual audit report is available to the full Board for review. The Foundation publishes audit results and makes its audited financial statements available to the public;

• limits the role of its auditors to providing only audit and tax preparation services. This assures that the auditors retain appropriate independence from the Foundation and do not anticipate receiving significant additional fees for other work done;

• has developed a more comprehensive overall records retention policy (including financial records), which includes guidelines for electronic files;

• has in place and enforces a conflict of interest policy for staff, Governing Board and appropriate Board committees, to assure independent practices and decision making, free of conflicts-of-interest;

• has established a "whistleblower" policy, enabling Foundation Board members and employees to come forward with credible information on any suspected illegal practices or irregularities, or any violations of the organization's adopted policies, without fear of reprisal or punishment.

Additional Actions

The Foundation has a policy strictly forbidding nepotism in the hiring of Foundation staff.

The Dayton Foundation also has established an executive compensation review process as follows.

1. The Foundation has a compensation committee; has developed a formal process to determine compensation; and reports compensation completely and accurately.

2. The compensation must be approved by the Foundation Governing Board Executive Committee serving on behalf of the Foundation Governing Board which must be comprised of persons who do not have a conflict of interest.

3. The Board Executive Committee must rely upon appropriate data (i.e., comparables) in deciding whether to approve the compensation.

4. The Board Executive Committee must document its actions.

The Dayton Foundation is nationally certified for its organizational and financial practices by the Council on Foundations and has earned the Ohio Association of Nonprofit Organizations Standards for Excellence certification for accountability and ethical business practices. Read more here.

The Dayton Foundation's federal tax returns (IRS Form 990 for each entity of the Foundation and 990-T) and audited financial statements are available upon request. For more information, contact Steve Darnell, vice president, Finance, at (937) 225-9969.

The Dayton Foundation. We Help You Help Others

File date: 10-13-2011
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