Federation Committee
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n response to past trouble with
its affiliated nursing homes
and bus transportation, the
Jewish Federation of Metro-
politan Detroit has established a
system of monitoring the finan-
cial operations of its beneficiary
agencies.
The system, called Business
Practices, operates under Feder-
ation's department of finance. Put
in place earlier this year, it is de-
signed to assure that agencies re-
ceiving dollars from the Allied
Jewish Campaign are function-
ing in compliance with tax laws,
and that services they provide are
carried out efficiently and in ac-
cordance with state and federal
regulations.
The new system, which comes
on the heels of multimillion dol-
lar losses from Borman Hall
nursing home and UHS Trans-
portation, functions on two levels.
The first entails auditing and
supervision. The second involves
Federation assistance to agencies
with questions about finances,
personnel and day-to-day opera-
tions.
Staff in Federation's finance
department will ask for the open
books and financial statements
of all beneficiary agencies. Fed-
eration also has drafted annual
checklists to help agency direc-
tors complete government re-
quirements, such as filling out
"990" nonprofit forms at tax time
or keeping up with health and
safety rules. The latter area is
where Borman Hall ran into
most of its problems in the ear-
ly 1990s.
"That was a situation where
government regulation was get-
ting more and more invasive and
we just weren't on top of that
type of business," says Bob Kim-
sal, a certified public accountant
serving as the full-time manag-
er of Business Practices at Fed-
eration.
With an updated rules and
regulations checklist, produced
by Federation, agencies like nurs-
ing homes are more likely to pass
state inspections and remain vi-
tal without black marks on their
records, Mr. Kimsal believes.
"We're trying to promote this
as a partnership effort between
Federation and its agencies," he
says. "We're trying not to have
the policing approach be the main
focus, though it is one aspect."
Agency for Jewish Education
Executive Director Howard Gel-
berd supports the new protocol.
"When agencies are not finan-
cially resnonsible and_are not

body. They don't operate in a vac-
uum," he says. "Our books are
open. Our expenditures are open.
We need to be accountable for
Jewish monies that are very hard
to raise."
Alan Goodman, executive di-
rector of Jewish Family Service,
considers Business Practices a
good idea, although it will de-
mand more staff time.
"There's probably one month
of the year that we're not prepar-
ing for one audit or another," he
says. "I think the idea is, on its
face, a sound one. We have to be
accountable. The interesting
piece will be to see what happens
next. Will Federation say, 'If you
want funding, you'll have to do x,
y and z'?"
The two agency executives are
not worried about Federation be-
coming overly intrusive. Mr. Gel-
berd says "maybe it's time for
Federation to be intrusive in
places wherever money hasn't
been spent appropri, tely."
Federation learned a lesson
the hard way after United He-
brew School Transportation

"I think the
response has
been fairly
conciliatory."

— Bob Kimsal

closed in late spring of 1994.
Federation officials say this was
a case in which the faltering
agency, which provided sub-
sidized rides for schoolchildren
and the elderly, did not send out
distress signals loudly and clear-
ly enough to get timely assis-
tance.
"I think that regular monitor-
ing of financial information would
have given a true account of the
situation earlier," Mr. Kimsal
says.
Prior to the creation of Busi-
ness Practices, agencies were re-
quired to report their financial
status to Federation. However,
the rule was adhered to on what
Mr. Kimsal calls a "hit or miss"
basis.
He and Federation Chief Fi-
nancial Officer Mark Davidoff
stress that the Business Practices
system also is intended as a re-
source bank.
"For instance, if a longstand-
ing employee leaves an agency,