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A major financial crisis can emerge from a tax levy that fails, a grant that was not renewed, a significant tax assessment, or perhaps embezzlement. Below is a menu of questions to help you to respond quickly and constructively to a financial crisis.
- Have you taken immediate steps to buy time so that you can establish control over the current situation so you do not become a passive victim of additional evolving developments?
- Since it is prudent to expect to encounter more problems, have you established a process that will allow the staff and board to spot new and emerging problems as quickly as possible?
- Have you instituted changes in reporting and governance so that your ability to anticipate problems and respond in the early stages will be stronger next time?
- Have you disrupted purchasing and hiring in order to buy time to address the crisis?
- Have you established close monitoring of revenues and spending so that emerging problems will receive immediate attention at the highest levels?
- Have you determined whether temporary financing is needed until your revenue and expense changes reach full savings potential?
- Do you have a plan to utilize the media to maintain public awareness of your crisis and support of your response?
- Have you initiated analysis of why the problem became a crisis and how this can be avoided in the future?
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