Who approves the approver?
February 27, 2014 9:43 AM   Subscribe

Fellow nonprofit pros, who approves time sheets submitted by your president/ED/CEO? After some recent personnel changes at our nonprofit we're having an internal debate, and I could use some input. Options so far: - Have the board chair approve (accounting likes, prez doesn't) - Have me (HR) scan for general accuracy of data entry (which lacks oversight) - Multiple approval process by small committee (yay! another committee!) An internet search has turned up precious little in the way of best practices. Any thoughts?
posted by vverse23 to Work & Money (17 answers total) 2 users marked this as a favorite
No one approves them for our ED though HR makes sure that they are submitted correctly (and on time.) An automated system controls our leave balances but I would guess if the ED ran over, HR would contact her. There's no real oversight -the ED is in and out a lot for meetings and travel and none of that is tracked - only sick and vacation days. She is generally trusted to do her job without direct management.
posted by cessair at 9:52 AM on February 27, 2014 [3 favorites]

In the last non-profit I worked for, the accounts person did this for the ED.
posted by DarlingBri at 9:55 AM on February 27, 2014

Our VP of HR approves for our CEO, with the board only getting involved for things like expenses above a certain threshold and extensive vacation times (typically 3 weeks or more, which never happens anyway).
posted by routergirl at 10:08 AM on February 27, 2014

I would suggest that your ED should be a salaried and not an hourly employee. I would also suggest that the ED should be trusted to accurately report sick/vacation time used.

If there is a need for oversight on these matters, there are bigger problems.

(this was the system used at the NPO I was ED of, our auditors had NO problem with it).
posted by HuronBob at 10:11 AM on February 27, 2014 [10 favorites]

I have admined at several NPOs. For most, the ED was salaried, and nobody approved their timesheet (although at one our external accountant reviewed her expenses and reported them to the board as part of the routine monthly financial reports). They were presumed to be working what they needed to work, and requests for vacation time, etc. were self-managed (ie: they informed, nobody approved, but payroll/hr tracked vacation/sick as they did with all employees).

At one, we were a regional branch of a larger org, and the Regional VP approved our State ED's time, vacation, etc.

If it's just a question of making sure time is submitted in the correct format, the person who does payroll should be able to do that (or HR).
posted by anastasiav at 10:20 AM on February 27, 2014

I agree with HuronBob, that an ED should be salaried (textbook case of a position that should be salaried, I'd think).

When I had that position at a nonprofit, the only time a board member needed to be involved was to approve cash reimbursements for my expenses. My office manager kept track of everyone's vacation and sick days.
posted by BillMcMurdo at 10:24 AM on February 27, 2014

ED/CEOs were salaried and didn't submit timesheets at any of the NPOs I've worked at.

Obviously you know your board best, but since you asked for data points I can't imagine any board chair I've ever interacted with being willing to regularly approve hours worked. That kind of accounting seems like an HR/office manager task. Is your board chair actually in the office? If not and it would just be a pro forma approval, I'd agree with everyone else that you should look at dispensing with timesheets for your ED entirely.
posted by superfluousm at 10:33 AM on February 27, 2014

I can't imagine a CEO/ED submitting a time sheet? I assume that at most companies, NP or not, all upper management is salaried.
posted by radioamy at 10:41 AM on February 27, 2014

These are very helpful responses. Just to clarify, the ED is salaried. The time sheet is primarily intended to track percentage of effort worked and vacation/sick days used.

Internally, the debate seems to be boiling down to whether a time sheet is an effective tool for a board to exercise its responsibility (as written in the bylaws) to maintain "oversight" of the President's activities. My opinion at this point is that while it could be in theory, in practice this will not work out well.
posted by vverse23 at 10:42 AM on February 27, 2014 [2 favorites]

Everything else aside, the Board Chair shouldn't be involved in this or in any day-to-day business. That's not what boards are for.
posted by alms at 10:51 AM on February 27, 2014 [3 favorites]

I don't have any good insight on ED time-tracking (although I question the value of it), but having worked at a nonprofit with a micromanaging board, PLEASE do not make this a board (or even board officer) activity. alms has the right perspective - keep boards out of day-to-day operations. They should be focused on strategic direction and support of the organization. There are better ways to keep executive management accountable, and focusing on their ability to achieve organizational goals, rather than their activity output, is a better tack to take.

Have you looked at ASAE's resources at all? I don't know if your nonprofit is an association or not, but they have some excellent information regarding executive leadership and board involvement that you may want to check out.
posted by bowtiesarecool at 11:03 AM on February 27, 2014 [1 favorite]

PLEASE do not make this a board (or even board officer) activity.

Agreed. Thanks for pointing out the importance of not blurring the lines in this way.
posted by vverse23 at 11:09 AM on February 27, 2014

nthing what alms and bowtiesarecool have said. FWIW, I have been on the board of a number of NFPs (and chaired a couple) over the past several years and also been the senior staffperson that reports to a board. I've never seen a system like what you are describing, nor do I think it is an effective one.

The board does need to maintain strategic level oversight of the senior executive (ED/CEO/GM) but that should be done through some sort of performance management system or a formal review process. Reviewing time sheets will not give the board the opportunity to review the ED's performance and their ability to achieve the needed outcomes for the organization. The board sets the strategic direction in an NFP, including goals and desired outcomes. The ED is supposed to run the organization so that those goals are achieved. That's what the board should be evaluating in your ED. Checking time sheets is not an effective measurement tool in this regard.
posted by Cyrie at 11:11 AM on February 27, 2014 [3 favorites]

Let me understand this better. Is this the question the board is asking? "How is the ED's time allocated to administrative, fundraising and mission activities?"

If they're trying to understand how the ED spends her time, then that's the question they should ask. Time sheets are a crude tool if they're looking for a nuanced understanding of the work the ED performs.
posted by 26.2 at 12:54 PM on February 27, 2014

The reason that this came up is that we have a new President and fairly new Finance Manager, and a few processes (such as this one) are being deliberated. Both have a lot of experience, and come at this from different angles, and everyone's being nothing but amiable, which is nice. The FM says that every previous employer has done this Board Chair approval business, the President has never seen it done before; nor, for that matter has the Board Chair.

The consensus that is developing is that time sheets are a necessary evil for certain accounting purposes but a subpar tool for the board to fulfill oversight responsibilities as outlined in the bylaws, not to mention unnecessary administrivia for the Board Chair and, at worst, a blurring of the board/staff responsibility division. The fact of the matter is that the board has good procedures in place for regular communication and oversight as well as a solid performance review procedure. The data collected by the reporting tool could actually come in handy if the review committee does ask how the ED's time relative to administrative, fundraising and mission activities is spent.

I suppose that this is a conversation that had to be had, and apart from being a little time consuming no feathers were ruffled. Although I'm realizing that this could have been averted if the internal procedures weren't silent on the matter, a situation I'll rectify.
posted by vverse23 at 1:27 PM on February 27, 2014

Aside from regular leave which should cover the normal proceedures, it makes far more sense for senior staff to submit monthly reports linked to some kind of KPI goals to evaluate them. Then the board might look at the ED's reports regularly, but a timesheet is a waste of time unless there is hourly/daily billing to consider or some kind of regulation to follow.

Senior staff in the other country do the leave/HR stuff with me as the next layer of seniority above. If you have an ED who can't be trusted not to abuse the privilege of approving their own leave etc on a weekly/monthly basis with say quarterly checks by the board to review (a one page sign off form at most), then you have MUCH bigger problems. The ED should be the one person in the entire organisation who can be trusted to follow HR policy and do this.

If you needed an audit work around, you could set it up so the HR person who logs the leave etc is empowered to report directly to the board if they believe the ED is abusing the privilege.
posted by viggorlijah at 10:53 PM on February 27, 2014 [1 favorite]

In my experience, board oversight means reviewing reports on this sort of thing, either quarterly or annually, not signing off weekly.
posted by judith at 9:51 AM on March 1, 2014

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