Sarbanes-Oxley and Nonprofit Organizations 2649

  • There are two provisions applicable to NPO’s…whistle blowing and document destruction. What has been your experience in working with NPO’s and compliance? How do you guide them in considering and implementing the other relevant provisions? Any case studies?

  • Only very few sections of the Sarbanes-Oxley Act that insert new crimes or modify existing crimes in the Federal Penal Code (i.e. title 18 of the US Code) and that do not specifically refer to companies with securities registered with the SEC or a reporting obligation to the SEC, would apply to NPOs.
    However, neither the implementation of a whistleblower system by the board of directors, nor the reinstatement of fired whistleblowers apply to NPOs. Only the punishment of retaliatory interference with a persons’s employment for providing information to a law enforcement officer relating to a federal offense also applies to NPOs.
    18 USC Sec. 1513(e) Whoever knowingly, with the intent to retaliate, takes any action harmful to any person, including interference with the
    lawful employment or livelihood of any person, for providing to a law enforcement officer any truthful information relating to the commission or possible commission of any Federal offense, shall be fined under this title or imprisoned not more than 10 years, or both.
    18 USC Sec. 1512© Whoever corruptly
    ˜˜(1) alters, destroys, mutilates, or conceals a record, document, or other object, or attempts to do so, with the intent to impair the object’s integrity or availability for use in an official proceeding; or
    ˜˜(2) otherwise obstructs, influences, or impedes any official proceeding, or attempts to do so, shall be fined under this title or imprisoned not more than 20 years, or both.
    Sec. 902, 902 or 904 also increase existing penalties for violations of laws (e.g. the Employee Retirement Income Security Act).

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