Article

Employee Protection (Whistleblower) Policy

Financial Management and Accounting

Whistleblower Policy Requirements

 

The Public Company Accounting Reform and Investor Protection Act of 2002, commonly known as Sarbanes-Oxley (in reference to its Congressional sponsors) or SOX, has two key provisions that apply directly to all organizations, including nonprofit organizations. One of those provisions is the requirement that all organizations have a documented “whistleblower” protection policy.

 

This policy must establish a process for collecting, retaining and resolving claims related to accounting, internal accounting controls and auditing matters. The policy and procedures must allow for concerns to be submitted anonymously. Many organizations have generalized the policy to encompass all ethical and legal violations.

 

At a minimum, the policy must contain the following provisions to be compliant with Sarbanes-Oxley:

1.   There must be a confidential process available for reporting suspected fraud, waste or abuse.

2.    A process must be established to investigate all reports.

3.    The procedures must define how the findings from the investigation will be shared.

4.    The whistleblower (officer, employee or volunteer) who makes the complaint cannot be terminated, fired, harassed, or have promotional opportunities jeopardized because he/she made a legitimate complaint.

5.    Even if the findings do not support the complaint, the reporting individual will not suffer repercussions as long as the complaint was made in good faith, and was not deliberately erroneous.

 

All employees and volunteers should have a copy of the whistleblower policy, and it should be covered during employee and volunteer orientation programs. It should be posted in clear view in the facility.

 

The organization should develop policy language appropriate to the circumstances, preferably in consultation with legal counsel.

REFERENCES Jackson, Peggy M. Nonprofit Management and Contingency Planning: Done in a Day Strategies. Wiley, 2006. pp. 6-9. Kipnis, Elliott, "Sarbanes Oxley Compliance and Non-Profit Organizations." Written 8/05/05. Retrieved December 10, 2008, from http://www.onphilanthropy.com/site/News2?page=NewsArticle&id+5358 INTERNET LINK WARNING Please note that by selecting an Internet link you will be directed to an external site, and the Pass It on Center does not control the content of the site.

 

DISCLAIMER

This work is supported under a five-year cooperative agreement # H235V060016 awarded by the U.S. Department of Education, Office of Special Education and Rehabilitative Services, and is administered by the Pass It On Center of the Georgia Department of Labor – Tools for Life.  However, the contents of this publication do not necessarily represent the policy or opinions of the Department of Education, or the Georgia Department of Labor, and you should not assume endorsements of this document by the Federal government or the Georgia Department of Labor.

 

 

 

 

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Other Information

Title: Employee Protection (Whistleblower) Policy
Module: Finance/Accounting
Author: Trish Redmon
Audience: Administrator
Sub Title: Sarbanes-Oxley requirement
Procedure: Guidelines for policy development
Organization Source: Pass It On Center
Last Reviewed: 10-25-2009 7:11 PM