CONFLICT OF INTEREST:
2018 CONFLICT OF INTEREST/RELATED PARTY QUESTIONNAIRE
Conflict of Interest/Related Parties:
Document refers to you, your spouse, family members, business interests, and/or associates. Conflicts of interest may arise when one party has the ability to significantly influence the management or operating policies of the other, to the extent that one of the transacting parties might be prevented from fully pursuing the interests of Medical Ambassadors (MAI) rather than his/her own separate or related party interests.
Considering the period from November 18, 2017 – September 15, 2018:
|1. I (or a related party of mine) held, directly or indirectly, a position of financial interest in an outside concern from which MAI secures goods or services.|
|2. I (or a related party of mine) rendered directive, managerial, or consultative services to, or an employee of, any outside concern that does business with MAI.|
|3. I have accepted gifts or other benefits from any outside concern that does or is seeking to do business with MAI.|
|4. I have participated in management decisions concerning transactions that affect or benefit me, my family, or my personal financial interests. (Other than ordinary management decisions on employment matters such as compensation.)|
|5. I (or a related party of mine) have been indebted to MAI at some time during the above stated period. If so, please note the nature, date, terms and amount.|
|6. MAI has been indebted to me (or a related party of mine) at some time during the above stated period. If so, please note the nature, date, terms and amount.|
Click here to print the 2018 Conflict of Interest Statement
MAI follows the guidelines of ECFA for Executive Compensation
Based on the public perception that some charity leaders are paid excessively, there continues to be a keen interest in the compensation of nonprofit executives. While attention centers on high salaries and benefits, many nonprofits experience too many needs and too few resources. This often results in executive compensation that is exceedingly low.
Establishing a fair and reasonable compensation plan for executives is not accomplished in one step; it a process. If an organization is embarking on this process or is reviewing its existing plan, the following compensation planning checklist may be helpful:
Prepare a compensation philosophy statement. A clear, well-articulated executive compensation statement serves many beneficial purposes, including the following:
- The philosophy can demonstrate the value the ministry places on spiritual leadership—possibly the most valuable contribution a CEO or other executive can make to your ministry.
- The philosophy can reflect the long-term principles by which executive compensation will be determined. Although subject to periodic board review, this consensus should survive both annual board turnover and fluctuations in personal viewpoints on compensation issues.
- The philosophy should support the ministry’s foundational strategies. There should be linkage between the compensation philosophy and the satisfaction of the charitable mission or the ministry.
- The philosophy can provide greater stability to the executive compensation arrangement, which will assist in recruiting and retaining executive talent.
- The philosophy can demonstrate the ministry’s commitment to measure compensation based on comparable levels of responsibility, performance, and results, which will help to negate any perceptions concerning overly generous compensation.
- The statement can articulate the ministry’s view on executive pay in relation to other levels of employees. For example, some organizations address this matter by establishing limits on the variance between the highest and lowest paid employees in the organization in terms of salary multiples, e.g., the CEO will not be paid more than 10 times the pay the lowest paid employee receives.
Determine comparable compensation data for other organizations. Try to compare like services provided to like organizations under like circumstances. In your comparisons, consider the duties, amount of time devoted to work, size of organization (gross revenues, staff, program services), experience, familiarity with the organization’s mission, educational requirements, economic conditions, and even public stature.
Research organizations that appear to have successful compensation strategies. The CEOs of other ministries often will share information on their compensation plans. But do not expect to replicate their plans, because each organization is different.
Be clear that compensation is more than base salary. It is important to understand the components of taxable compensation so you can report the proper amount for payroll reporting purposes (Forms 941 and W-2). However, there are a host of compensation elements that must be considered in addition to taxable compensation.
When determining whether compensation is reasonable or excessive, certain fringe benefits (e.g., contributions to qualified retirement plans, health benefits, and the like) and the reimbursement of business-related (as opposed to personal) expenses (e.g., moving expenses, meals or lodging provided for the convenience of the employer, expenses reimbursed under an accountable plan, and educational expenses) are not generally considered. However, some compensation elements that must be considered include:
- Value of the personal use of an organization-owned vehicle
- Bonuses and incentive pay
- Nonaccountable business expense reimbursements, advances, or allowances
- Below-market rate loans of $10,000 or more by the organization to the executive
- Below-market rate transfers of property by the organization to the executive
- Reimbursement of any portion of a minister’s self-employment taxes
- Taxable fringe benefits
- Assignment of income
- Christmas and other special occasion gifts
- Retirement gifts and most severance pay packages
- Forgiveness of debt
- Sabbatical pay
- Personal expenses of an executive that are paid by the organization
- Employer reimbursements of travel expenses for an executive’s spouse or children not representing bona fide business expense
Strive for independence in setting compensation. There should be clear evidence that the CEO’s salary and benefits are set in an "arm’s length" agreement. The CEO should not have undue influence over the board in setting his or her own compensation level. Records should reveal that the board has acted independently, without any conflict of interest.
Many organizations establish a board subcommittee for compensation review. No one on the committee should be a staff member, related to staff, or have any relationship with staff that could present a conflict of interest. It is often helpful to include one or more committee members who are knowledgeable on compensation matters.
Understand the "excessive compensation" rules. Federal law prohibits charities from paying unreasonable compensation to any officer or employee. A violation of this standard can jeopardize the charity’s tax-exempt status. In addition, the IRS can impose "intermediate sanctions" against officers who receive excessive compensation, as well as against the board members who authorize it.
Officers and governing boards may rely on a "presumption of reasonableness" with respect to a compensation arrangement, if it was approved by a board of directors (or committee of the board) that: (1) was composed entirely of individuals unrelated to, and not subject to the control of, the disqualified person involved in the arrangement; (2) adequately documented the basis for its decision; and (3) obtained and relied upon objective "comparability" information, such as (a) compensation paid by similar organizations, both taxable and tax-exempt, for comparable positions, (b) independent compensation surveys by nationally recognized independent firms, or (c) actual written offers from similar institutions competing for the services of the disqualified person.
Involve the entire board in the compensation-determination process. The responsibility for compensation of the CEO begins and ends with the nonprofit board. Consistent with the principles of openness and accountability, it is important that all board members, not just the executive committee or a salary committee, know the full details of the CEO’s compensation package and have the opportunity to discuss and approve it.
The board’s determination of non-CEO salaries and fringe benefits generally depends on the size of the organization. In smaller ministries, direct board involvement in salary administration below the CEO level may be more extensive. In many larger nonprofits, the board generally only approves the compensation package for the CEO, or in some situations, the CEO and the first tier of executives who report to the CEO.
Review executive compensation annually. The full board should annually review, discuss, and approve executive compensation. The board often will delegate the performance evaluation to a subcommittee, which then will bring a recommendation to the board. The affected executives and any other related parties should not be present when the executive compensation package is discussed or voted. The results of the compensation review should be formally recorded.
Put the agreement in writing. Once agreement has been reached concerning executive compensation, formalize the agreement with a written document executed by the organization and the executive(s). This may be in a document separate from the employment agreement or contract; for example, when compensation changes are made more frequently than changes to the basic employment agreement are made.
Decide how to treat outside honoraria. Many nonprofit executives speak at various conferences and events. They often receive honoraria for such appearances. Should the executive keep these honoraria? If so, what if any impact should this have on the executive’s compensation? If the executive is not permitted to retain the honoraria, what happens to them? If they are assigned back to the employer, have you taken steps to be sure that they are not reported as taxable income to the executive as a result of the "assignment of income" doctrine? Such a result can be avoided if the organization or executive informs the payer prior to the date of the appearance that any honorarium should be paid directly to the employer.
Decide how to handle publications or music produced "on ministry time." Executives who are authors or composers often are shocked to learn that their employer may be the copyright owner of works that they create. Section 201 of the Copyright Act specifies that "the employer . . . is considered the author" of a "work made for hire" and "owns all the rights comprised in the copyright," unless the employer and the employee "have expressly agreed otherwise in a written instrument signed by them." The Act defines a “work made for hire" as "a work prepared by an employee within the scope of his or her employment." Governing boards should establish a "work made for hire policy" that addresses ownership of works produced by executives and other employees, within the scope of their employment.
Summary. Excessive compensation for executives is rarely an issue for Christian ministries. Conversely, low executive compensation frequently threatens the development and maintenance of essential services provided by members.
The challenge to ministry boards remains to carefully establish and document the executive compensation process, then balance fair and reasonable compensation within the budgetary constraints of the organization.
Steps to take in Planning and Fulfilling an Executive Compensation Plan
1. Determine the executive compensation philosophy for your organization and put it in writing.
2. Obtain data on comparable positions in other organizations.
3. Set the compensation amounts, including all fringe benefits, for executives in an independent setting at the governing board level. Annually review executive compensation.
4. Place all specifics of the compensation package(s) in writing, including the treatment of outside honoraria and published works created on ministry time.
5. Be alert to the dangers of excessive compensation.
6. Determine if competency-related pay plans would be effective for your ministry.
This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.
DOCUMENT RETENTION AND DESTRUCTION:
A ministry’s records policy should ensure that necessary records and documents are adequately protected and maintained and ensure that records that are no longer needed or are of no value are discarded at the proper time. In addition, it can aid employees in understanding their obligations in retaining electronic documents—including e-mail, Web files, text files, sound and movie files, PDF documents, and all Microsoft Office or other formatted files.
RECORD RETENTION AND DESTRUCTION POLICY
This Policy represents Medical Ambassadors International’s (MAI) policy regarding the retention and disposal of records and electronic documents.
Attached as Appendix A is a Record Retention Schedule that is approved as the initial maintenance, retention, and disposal schedule for physical records of MAI and the retention and disposal of electronic documents. The Controller is the officer in charge of the administration of this Policy and the implementation of processes and procedures to ensure that the Record Retention Schedule is followed.
The Controller is also authorized to
- make modifications to the Record Retention Schedule from time to time to ensure that it is in compliance with local, state, and federal laws and includes the appropriate document and record categories for MAI;
- monitor local, state, and federal laws affecting record retention;
- annually review the record retention and disposal program; and
- monitor compliance with this Policy.
3. Suspension of Record Disposal in Event of Litigation or Claims
In the event MAI is served with any subpoena or request for documents or any employee becomes aware of a governmental investigation or audit concerning MAI or may reasonably be aware of any anticipated litigation against or concerning MAI, such employee shall inform the Controller and any further disposal of documents shall be suspended until such time as the Controller, with the advice of counsel, determines otherwise. The Controller shall take such steps as is necessary to promptly inform all staff of any suspension in the further disposal of documents.
This Policy applies to all physical and electronic documents and records generated in the course of MAI’s operation, including both original documents and reproductions.
RECORD RETENTION SCHEDULE
The Record Retention Schedule is organized as follows:
A. Accounting and Finance
C. Corporate Records
D. Electronic Documents
E. Payroll Documents
F. Personnel Records
G. Property Records
H. Tax Records
I. Contribution Records
The following are some common retention periods. These apply to both physical and electronic documents. If no physical copy of an electronic document is retained, the means to “read” the electronic document must also be retained.
A. ACCOUNTING AND FINANCE
|Record Type||Retention Period|
|Accounts Payable & Accounts Receivable ledgers and schedules||7 years|
|Annual Audit Reports and Financial Statements||Permanent|
|Annual Audit Records, including work papers and other documents that relate to the audit||7 years after completion of audit|
|Bank Statements and Canceled Checks||7 years
|Credit card numbers||Full credit card numbers should not be retained any longer than immediate business needs and merchant account agreements dictate.|
|Employee Expense Reports||7 years|
|Notes Receivable ledgers and schedules||7 years|
|Investment Records||7 years after sale of investment|
|Record Type||Retention Period|
|Contracts and Related Correspondence (including any proposal that resulted in the contract and all other supportive documentation)||7 years after expiration or termination|
C. CORPORATE RECORDS
|Record Type||Retention Period|
|Corporate Records (minute books, signed minutes of the Board and all committees, corporate seals, articles of incorporation, bylaws, annual corporate reports)||Permanent|
|Licenses and Permits||Permanent|
D. ELECTRONIC DOCUMENTS
1. Electronic Mail: Not all e-mail needs to be retained, depending on the subject matter
- All e-mail—from internal or external sources—is to be deleted after 12 months.
- Staff will strive to keep all but an insignificant minority of their e-mail related to business issues.
- MAI will archive e-mail for six months after staff have deleted it, after which time the e-mail will be permanently deleted.
- All MAI business-related email should be downloaded to a service center or user directory on the server.
- Staff will not store or transfer MAI-related e-mail on non-work-related computers except as necessary or appropriate for MAI purposes.
- Staff will take care not to send confidential/proprietary MAI information to outside sources.
- Any e-mail staff deems vital to the performance of their job should be copied to the staff’s network drive folder, and printed and stored in the employee’s workspace
2. Electronic Documents: including Microsoft Office Suite and PDF files. Retention depends on the subject matter.
3. Web Page Files: Internet Cookies
- All workstations: Web browsers should be scheduled to delete cookies once per month.
If an electronic document is reproduced into paper form, the official document will be considered the electronic document.
E. PAYROLL DOCUMENTS
|Record Type||Retention Period|
|Employee Deduction Authorizations||4 years after termination|
|Payroll Deductions||Termination + 7 years|
|W-2 and W-4 Forms||Termination + 7 years|
|Garnishments, Assignments, Attachments||Termination + 7 years|
|Payroll Registers (gross and net)||7 years|
|Time Cards/Sheets||2 years|
|Unclaimed Wage Records||6 years|
F. PERSONNEL RECORDS
|Record Type||Retention Period|
|EEO‑ I/EEO‑2 – Employer Information Reports||2 years after superseded or filing (whichever is longer)|
|Employee Earnings Records||Separation + 7 years|
|Employee Handbooks||1 copy kept permanently|
|Employee Personnel Records (including individual attendance records, application forms, job or status change records, performance evaluations, termination papers, withholding information, garnishments, test results, training and qualification records)||6 years after separation|
|Employment Contracts – Individual||7 years after separation|
|Employment Records ‑ Correspondence with Employment Agencies and Advertisements for Job Openings||3 years from date of hiring decision|
|Employment Records ‑ All Non‑Hired Applicants (including all applications and resumes – whether solicited or unsolicited, results of post‑offer, pre‑employment physicals, results of background investigations, if any, related correspondence)||2-4 years (4 years if file contains any correspondence which might be construed as an offer)|
|Job Descriptions||3 years after superseded|
|Personnel Count Records||3 years|
|Forms I-9||3 years after hiring, or 1 year after separation if later|
G. PROPERTY RECORDS
|Record Type||Retention Period|
|Correspondence, Property Deeds, Assessments, Licenses, Rights of Way||Permanent|
|Property Insurance Policies||Permanent|
H. TAX RECORDS
|Record Type||Retention Period|
|Tax-Exemption Documents and Related Correspondence||Permanent|
|Excise Tax Records||7 years|
|Payroll Tax Records||7 years|
|Tax Bills, Receipts, Statements||7 years|
|Tax Returns – Income, Franchise, Property||Permanent|
|Tax Workpaper Packages – Originals||7 years|
|Sales/Use Tax Records||7 years|
|Annual Information Returns - Federal and State||Permanent|
|IRS or other Government Audit Records||Permanent|
I. CONTRIBUTION RECORDS
|Record Type||Retention Period|
|Records of Contributions||7 years|
|Documents evidencing terms, conditions, or restrictions on gifts||7 years after funds are expended|
Whistleblowers Are Protected
It is the public policy of the State of California to encourage employees to notify an appropriate government or law enforcement agency, person with authority over the employee, or another employee with authority to investigate, discover, or correct the violation or noncompliance, and to provide information to and testify before a public body conducting an investigation, hearing or inquiry, when they have reason to believe their employer is violating a state or federal statute, or violating or not complying with a local, state or federal rule or regulation.
WHO IS PROTECTED?
Pursuant to California Labor Code Section 1102.5, employees are the protected class of individuals. “Employee” means any person employed by an employer, private or public, including, but not limited to, individuals employed by the state or any subdivision thereof, any county, city, city and county, including any charter city or county, and any school district, community college district, municipal or public corporation, political subdivision, or the University of California.
[California Labor Code Section 1106]
WHAT IS A WHISTLEBLOWER?
A “whistleblower” is any employee who discloses information to a government or law enforcement agency, person with authority over the employee, or to another employee with authority to investigate, discover, or correct the violation or noncompliance, or who provides information to or testifies before a public boyd conducting an investigation, hearing or inquiry, where the employee has reasonable cause to believe that the information discloses:
1. A violation of a state or federal statute,
2. A violation or noncompliance with local, state or federal rule or regulation, or
3. With reference to employee safety or health, unsafe working conditions or work practices in the employee’s employment or place of employment.
A whistleblower can also be an employee who refuses to participate in an activity that would result in a violation of a state or federal statute, or a violation of or noncompliance with a local, state or federal rule or regulation.
WHAT PROTECTIONS ARE AFFORDED TO WHISTLEBLOWERS?
1. An employer may not make, adopt, or enforce any rule, regulation, or policy preventing an employee from being a whistleblower.
2. An employer may not retaliate against an employee who is a whistleblower.
3. An employer may not retaliate against any employee for refusing to participate in any activity that would result in a violation of state or federal statutes, or a violation or noncompliance with a state or federal rule or regulation.
4. An employer may not retaliate against an employee for having exercised his or her rights as a whistleblower in any former employment.
5. An employer may not retaliate against an employee because the employee is a family member of a person who has engaged in protected whistleblowing activities
Under California Labor Code Section 1102.5, if an employer retaliates against a whistleblower, the employer may be required to reinstate the employee’s employment and work benefits, pay lost wages, and take other steps necessary to comply with the law.
HOW TO REPORT IMPROPER ACTS
If you have information regarding possible violations of state or federal statutes, rules, or regulations, or violations of fiduciary responsibility by a corporation or limited liability company to its shareholders, investors, or employees, call the California State Attorney General’s Whistleblower Hotline at 1-800-952-5225. The Attorney General will refer your call to the appropriate government authority for review and possible investigation.