How Positive Coaching Alliance Built Operational Resilience and Financial Rigor with Scrubbed
How a national sports non-profit eliminated single points of failure, standardized complex post-merger accounting, and gained scalable financial support.
The Challenge
Post-Merger Complexity and Staffing Continuity
"Losing a key finance team member often means losing vital institutional knowledge... Rodríguez needed a structural solution that offered redundancy and rigorous process standardization to prevent loss of institutional memory."
— Luis Rodríguez, Fractional CFO
The Partnership
Selecting a Partner with Nonprofit Expertise
PCA chose to partner with Scrubbed based on three distinct value drivers: operational redundancy, cost-efficiency, and a proven track record in the nonprofit sector. Unlike hiring a single internal employee, Scrubbed provided a team approach—ensuring that if a team member had a life event or went on vacation, work continued without interruption while delivering specialized regulatory knowledge.
"Looking for a partner like this that has the continuity, that has the operational and policy rigor, and just the broad team to provide support at a very affordable rate seems like a logical move."
Luis Rodriguez
Fractional Chief Financial Officer, Positive Coaching Alliance
The Results
Key Benefits of the Scrubbed Partnership
Operational Redundancy
The offshore team model eliminated the "single point of failure" risk, ensuring seamless business continuity and daily accounting momentum regardless of individual staff availability.
Audit-Ready Documentation
Offloading transactional tasks like backend payroll enabled PCA’s internal staff to pivot to high-value analysis, such as investigating regional trainer cost trends instead of churning through cycles.
Fresh Perspectives
As a team working across multiple clients, Scrubbed introduced new best practices, tools, and systems to streamline legacy processes and improve operational efficiency.
Cost Savings on Compliance
Scrubbed took over complex state-level tax reporting for the national organization, delivering significant cost savings compared to using full-time internal resources.
Why Scrubbed
A Seamless Extension of the Team
For Luis Rodríguez and the PCA team, Scrubbed stood out not just for their technical accounting capabilities, but for how deeply they integrated into the organization's culture:
Cultural Integration
Scrubbed team members are treated as true partners, receiving annual invitations to PCA's all-hands meetings to foster real, face-to-face relationships.
Process Standardization
Scrubbed brought "rigor" to financial practices, helping visualize inefficiencies and creating standardized workflows that protect institutional knowledge.
Strategic Alignment
By building trust and rigor early, PCA confidently expanded the partnership scope to encompass full ownership of monthly close processes and controller reporting.
A Foundation for Future Growth
"The goal has been to ensure they aren't just 'an email behind the scenes,' but a visible, valued part of the organization."
Luis Rodríguez
Fractional Chief Financial Officer, Positive Coaching Alliance
Related Insights
Outsourced Accounting for Nonprofits: Choosing a Partner with the Right Expertise
Nonprofits have unique accounting needs. Meeting the financial requirements of donors, board members, regulators, and other stakeholders takes effective, precise accounting practices that demonstrate both fiscal integrity and compliance with governing tax laws.Like most organizations in the private sector, many nonprofits do not have the expertise or bandwidth in-house to manage the complexities of their accounting needs. Unlike for-profit firms, nonprofits are under heightened regulatory scrutiny to maintain their tax-exempt status, which means their accounting requirements can be much more extensive.Accordingly, an outsourced accounting model is a great option for many nonprofits. Selecting the right partner can be tricky, though, as not all accounting firms fully understand the breadth of financial pressures nonprofits face.So, what skills and expertise should nonprofits look for on an outsourced accounting partner – and what other attributes are essential to a successful relationship?Sector, Regulatory ExperienceThe accounting firm you select should have deep experience working with nonprofit organizations and have experts on staff who are well versed in all governing tax laws. Ultimately, the partner you choose must be able to help your organization:Maintain transparency with stakeholdersEnsure that funds are properly used to support the missionMeet all U.S. GAAP standardsStay compliant, check out our Nonprofit accounting page and see how Scrubbed can help your NPO.Reporting ExpertiseFinancial reporting is key to helping your nonprofit maintain compliance and communicate well with stakeholders. To that end, your outsourced accounting partner must have the expertise and staffing capacity to help you both keep complete, up-to-date financial records and create the many reports donors, board members, regulators, and other stakeholders require.Perhaps the most important financial statement a nonprofit must produce is the Form 990, which is filed annually with the IRS and must be accessible to the public as well. This form is used to demonstrate that the nonprofit qualifies for tax-exempt status, that its funding is, in fact, directed toward its underlying mission, and that the organization is not in any way abusing its tax-exempt status. Board members, donors, the media, and members of the general public may request a nonprofit’s Form 990 as well to see how funds are used and assess the organization’s overall financial health.Other key reports your accounting firm must be experienced at creating include:Statement of Activities[LW1]Statement of Financial PositionCash Flow StatementFunctional Expenses StatementBudget-to-actual reports are also recommended for nonprofits for both evaluating operating practices and future strategic planning.Beyond ReportingWhile reporting, planning, and regulatory compliance are critically important to your nonprofit’s success, the partner you select should also be there for the day-to-day financial tasks that keep your organization running smoothly, including:Building and managing your budgetTracking donor-restricted fundingManaging government grantsFiling invoices and reimbursementsProviding comprehensive audit supportAs a nonprofit, though, your organization is about much more than money management. Nonprofits are expected to operate with the utmost integrity and transparency, which is why the reputation of the accounting firm you select is so critical. So, be sure to check references and confirm that you are working with a partner that shares your values and that brings to your organization the ethical standards that define your mission and that your donors and communities deserve.
Sustainability Beyond Profit: ESG Trends for Nonprofit Organizations
Environmental, Social, and Governance (ESG) principles have traditionally been associated with for-profit businesses. However, in recent years, there has been a growing recognition of ESG’s relevance for nonprofit organizations (NPOs) as well.Why ESG Matters for NPOsFor NPOs, ESG can be a strategic opportunity. As businesses and investors become more ESG-focused, they will be more selective in choosing NPO partners. NPOs with strong governance frameworks and clearly defined ESG practices will be seen as more trustworthy and impactful.ESG reporting also plays a role in enhancing transparency and accountability for NPOs, which can align well with your mission and reputation. Since following reporting standards also allows NPOs to be held to the same expectations as other sectors, it can also be seen as a way to strengthen your legitimacy and credibility. Internally, ESG reporting can also help focus your NPO constructively on self-assessment, measuring your impact, and continuously improving your practices.ESG in Day-To-Day OperationsSome NPOs are already integrating ESG considerations into their day-to-day operations. Here are some ways they are doing this:Aligning mission and action: By their nature, NPOs address social or environmental issues. Integrating ESG ensures your organization’s business practices directly support your goals. For example, an environmental NPO might adopt sustainable practices in its offices, like using recycled paper or energy-efficient appliances.Proactive risk management: Thinking through ESG metrics helps NPOs identify and mitigate potential risks. This includes reputational risks tied to environmental practices, social justice concerns, or even regulatory compliance. Strong ESG practices can make your NPO more resilient.Boosting efficiency: Sustainable operations can lead to cost savings. This could mean reducing energy consumption, minimizing waste, or implementing a recycling program. These practices not only benefit the environment but also free up resources that NPOs can then direct towards the core mission.Building trust with stakeholders: A strong ESG commitment can increase donor and grantor confidence in your organization. Being transparent about your ESG practices fosters trust and credibility, leading to more fundraising opportunities and greater community involvement.Strengthening governance: Clear policies, procedures, and reporting mechanisms around ESG enhance the smooth running of your organization and provide greater transparency and accountability. Demonstrating strong governance makes your organization more efficient and also improves stakeholder trust and public support for your mission.Ensuring long-term viability: By embracing ESG, NPOs become more adaptable and sustainable in the long run. Strong ESG practices can help position your organization to navigate future challenges and continue delivering on your mission.Navigating Guidance and FrameworksSeveral frameworks have been developed to guide ESG reporting. While these tend to be aimed at the for-profit sector, they can still be valuable resources for NPOs.Global Reporting Initiative (GRI): GRI offers general sustainability reporting guidelines that NPOs can adapt. These guidelines cover strategy, organizational profile, material aspects, stakeholder engagement, and more. The GRI website also provides implementation guidance.GRI Sector Disclosure G4 for NGOs: This GRI guidance specifically addresses reporting for NPOs. It recommends focusing on disclosures most relevant to the NPO’s mission and activities.The guidance suggests that specific standard disclosures per category should only be reported if they have been identified as material, in addition to the general standard disclosures mentioned.Task Force on Climate-related Financial Disclosures (TCFD): NPOs can use the TCFD framework to improve their reporting on climate-related risks and opportunities. TCFD offers a structured approach to assessing and communicating climate risks and opportunities.Carbon Disclosure Project (CDP): The CDP platform encourages organizations to disclose environmental impacts, risks, and opportunities. While often used by corporations, it is also a valuable tool for NPOs seeking to be more environmentally transparent.Industry-Specific GuidanceAs non-profit organizations (NPOs) operate across various sectors, each catering to different societal needs, specific disclosure requirements are necessary, differing from the standard disclosures for the for-profit industry. The Sustainability Accounting Standards Board (SASB) delineates detailed requirements per sector, such as healthcare, education, home builders and more. For instance, in healthcare, additional disclosures focus on patient privacy, electronic health records, and quality of care, also necessitating qualitative descriptions of policies and practices for securing personal health data and quantitative data on data breaches and patient readmissions. Similarly, education sector disclosures cover the quality of education and gainful employment, mandating disclosure of graduation and job placement rates. Furthermore, the home-building sector demands disclosures on the community impacts of new developments, encompassing details such as the total number of controlled lots and delivered homes. These tailored requirements reflect the unique operational landscapes and stakeholder interests of NPOs in various sectors that are not typically seen in the same sectors in the for-profit industry.We would also suggest following other NPOs that have already begun integrating ESG reporting into their work. For example, the American Red Cross has published a comprehensive ESG report that aligns with GRI standards and sets a baseline for the Red Cross to measure future progress.Currently, NPOs are free to tailor the forms and content of reporting as long as they meet the minimum requirements of the standard they opt to use and disclose only credible and factual information.ESG is no longer just a concern for for-profit businesses; it is becoming increasingly important for NPOs. By embracing ESG principles, NPOs can enhance transparency, strengthen stakeholder confidence, improve operational efficiency, and position themselves for long-term success.
360° Approach to Libor Transition
What you need to know:London Interbank Offered Rate (LIBOR) ends on December 31, 2021.ASU 2020-04 – Reference Rate Reform (Topic 848) provides temporary optional expedients and exceptions to the US GAAP guidance on contract modifications and hedge accounting. The ASU is effective immediately and all entities would be able to apply it until December 31, 2022.Cessation of LIBOR would expose businesses to various risks such as liquidity risk, technology risk, operational risk, and financial reporting and compliance risk.The U.S. Treasury Department and Internal Revenue Service (IRS) released the Proposed Interbank Offered Rate (IBOR) Regulations in October 2019 to address the tax treatment of alterations made to instruments to replace an IBOR-based rate with an alternative rate.LIBOR is currently produced in 7 tenors (overnight/spot next, one week, one month, two months, three months, six months, and 12 months) across 5 currencies. In the US and global markets, LIBOR is widely used as a reference interest rate in commercial agreements and a broad range of financial instruments. However, in 2017, the U.K. Financial Conduct Authority announced that all currency and term variants of LIBOR (IBORs) are expected to cease after the end of 2021. This decision was made due to the increasing absence of active underlying markets and the scarcity of term unsecured deposit transactions which led to serious questions about the future sustainability of the LIBOR benchmarks.FASB proposed optional expedients and exceptions to the guidance in U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform.In March 2020, the Financial accounting Standards Board (FASB) released ASU No. 2020-04 in response to the cessation of the LIBOR. Several issues and challenges that are likely to arise due to this were raised by stakeholders:Voluminous contracts and other arrangements will need to be modified to replace reference rates.Application of existing accounting standards to contracts and other arrangements could be costly and burdensome. The inability to apply hedge accounting because of reference rate reform could result in financial reporting outcomes that do not reflect entities’ intended hedging strategies. Key Considerations Include:Affected ContractOptional Expedients and ExceptionsCriteria Contract Modifications —Allows an entity to account for and present the modified contract as a continuation of the contract that existed before the modification rather than a derecognition or extinguishment—The contract references LIBOR or another reference interest rate that is expected to be discontinued due to reference rate reform.—Consider embedded features to be clearly and closely related to the host contract without reassessment.—Any contemporaneous changes to other contract terms (i.e., those that do not directly replace or have the potential to replace a reference rate) that change, or have the potential to change, the amount and timing of contractual cash flows must be related to the replacement of the reference rate. Hedging AccountingeCritical terms of hedging relationships—Provide optional expedients to enable entities to change critical terms and continue to apply hedge accountingFair value hedges—Allows an entity to change the designated benchmark interest rate documented at hedge inception to a different eligible benchmark interest rate under Subtopic 815-20—An entity may disregard certain qualifying conditions for the shortcut method that are not met because of reference rate reform and may continue to disregard those qualifying conditions for the remainder of the fair value hedging relationship (including for the remainder of hedging relationships that end after December 31, 2022).Cash flow hedges—Allows an entity to assert that it remains probable that the hedged forecasted transaction will occur.—Continue hedge accounting upon a change in the hedged risk as long as the hedge is still highly effective—Allows an entity may revert to hedge accounting requirements in Subtopics 815-20 and 815-30 without de-designating the hedging relationshipCritical terms of hedging relationships —Perform some effectiveness assessments in ways that disregard certain potential sources of ineffectiveness.Fair value hedges—The hedge is expected to remain highly effective—The optional expedients for fair value hedging relationships may be elected on an individual hedging relationship basisCash flow hedges—An entity may continue hedge accounting for a cash flow hedge for which the hedged interest rate risk changes if either the hedge is highly effective under an assessment method in Subtopics 815-20 and 815-30 or an optional expedient method in this Update is elected.—An entity should disregard the potential change in the designated hedged interest rate risk that may occur because of reference rate reform when the entity assesses whether the hedged forecasted transaction is probable in accordance with the requirements of Topic 815. Debt securities classified as Held-to maturity —An entity may make a one-time election to sell, transfer, or both sell and transfer debt securities classified as held to maturity that reference a rate affected by reference rate reform and that are classified as held to maturity before January 1, 2020. Contract modifications: The following decision tree summarizes whether a contract modification is eligible to apply for the optional relief in ASC 848-20-55-1. ASU No. 2020-04 also provides optional expedients for applying the requirements of certain topics that require analysis of contract modification:Modifications of contracts within the scope of Topics 310, Receivables and Topic 470, Debt should be accounted for by prospectively adjusting the effective interest rate Modifications of contracts within the scope of Topics 840, Leases and Topic 842, Leases should be accounted for as a continuation of the existing contracts with no reassessments of the lease classification and the discount rate (for example, the incremental borrowing rate) or remeasurements of lease payments that otherwise would be required under those Topics for modifications not accounted for as separate contracts; and Modifications of contracts do not require an entity to reassess its original conclusion about whether that contract contains an embedded derivative that is clearly and closely related to the economic characteristics and risks of the host contract under Subtopic 815-15, Derivatives and Hedging— Embedded Derivatives.Changes that are related to the replacement of a reference rate To be eligible for the optional expedients in Subtopic 848-20, modifications of contractual terms that change (or have the potential to change) the amount or timing of contractual cash flows must be related to the replacement of a reference rate. Changes made to effect the transition for reference rate reform are considered related to replacement of the reference rate and, therefore, are in the scope of the ASU. Changes to terms that are the result of new business decisions separate from the transition for reference rate reform are not considered related and, therefore, are not in scope. The ASU includes examples of changes that are related and unrelated to the replacement of the reference rate.Tax Implications of Elimination of LIBORA. Modification of Terms of Debt Instruments or Non-Debt Contracts.Under IRS proposed regulations, if the terms of a debt instrument or non-debt contract are modified to replace, or to provide a fallback to, a LIBOR-referencing rate and the modification does not change the fair market value, there is no gain or loss under the recognition of gain or loss rules. These rules apply regardless of whether the modification occurs by an amendment to the terms of the instrument or agreement or by replacing the existing debt instrument or contract with a new one.B. Qualified RateThe proposed regulations also provide the rules for determining whether a rate is a qualified rate. The rules provide that the fair market value of a debt instrument or derivative may be determined by any reasonable valuation method, as long as that reasonable valuation method is applied consistently and takes into account any one-time payment made in lieu of a spread adjustment.The debt instrument or non-debt contract are considered equivalent in value after the modification if:at the time of the modification the historic average of the LIBOR-referencing rate is within 25 basis points of the historic average of the rate that replaces it; orthe parties to the debt instrument or non-debt contract are not related and, through bona fide, arm’s length negotiations, determine that the fair market value of modified instrument or contract is substantially equivalent to the fair market value prior to the modification.C. Transactions and HedgesThe proposed regulations clarify that a taxpayer is permitted to alter the terms of a debt instrument or modify one or more of the other components of an integrated or hedged transaction to replace a rate referencing an IBOR with a qualified rate without affecting the tax treatment of either the underlying transaction or the hedge.D. One-Time PaymentUnder the proposed regulations, the source and character of a one-time payment that is made in connection with a modification described above will be the same as the source and character that would otherwise apply to a payment made by a payor with respect to the debt instrument or non-debt contract that is altered or modified.E. Grandfathered AgreementsBecause proposed regulations prevent debt instruments and non-debt contracts from being treated as reissued following a deemed exchange, the debt instrument or contract would not lose its grandfathered status as a result of any modifications made in connection with the elimination of LIBOR.F. Original Issue Discount (OID) and Qualified Floating RateProposed regulations stipulate three special rules for determining the amount and accrual of OID in the case of a variable rate debt instrument that provides both for interest at a LIBOR-referencing qualified floating rate and for a fallback rate that is triggered when the LIBOR becomes unavailable or unreliable.G. Real Estate Mortgage Investment Conduit (REMIC)Proposed regulations permit an interest in a REMIC to retain its status as a regular interest despite certain alterations and contingencies.H. Interest in Foreign CorporationsThe proposed regulations amend the election to allow a foreign corporation that is a bank to compute interest expense attributable to excess U.S.-connected liabilities using a yearly average Secured Overnight Financing Rate (SOFR) in addition to the 30-day LIBOR.Applicability DateThis section applies to an alteration of the terms of a debt instrument or a modification of the terms of a non-debt contract that occurs on or after the date of publication of a Treasury decision adopting these rules as final regulations in the Federal Register. Taxpayers and their related parties may apply this section to an alteration of the terms of a debt instrument or a modification of the terms of a non-debt contract that occurs before the date of publication of a Treasury decision adopting these rules as final regulations in the Federal Register, provided that the taxpayers and their related parties consistently apply the rules of this section before that date.Risks Related to the Elimination of LIBORContract Risk:Risk that contracts which has stipulations dependent in LIBOR will be affected causing inconsistencies and disruption in the execution of it.To mitigate the risk, make a list of all the contracts that may be affected. However, for some it will be challenging if there is no repository of these contracts.Negotiate terms with counterparties for those stipulations relating to LIBOR, although some counterparties may be unknown or difficult to reach.Liquidity Risk:Risk that LIBOR cessation will make it more difficult for existing products to be traded, with more costs and uncertainties.Because of this, companies have to reassess their investment and financing strategies as soon as possible in order to prepare for the cessation of LIBOR.Basis Risk and Value TransferRisk that differences in the timing and terms for similar contracts will result in gaps and inconsistencies in the contracts and value transferSince there is a shift of basis for LIBOR-dependent contracts, the difference will cause value-transfer because of timing concerns, necessity for practical expedients, and differing term structures.To mitigate basis risk, the gaps may be hedged to additional derivatives.Reputational RisksThere is a risk that improper transition plans will result to besmirched reputation to important stakeholders.There should be clear communication with investors, creditors, customers, regulators and other counterparties of the extent of exposure, as well as transition plans that include controls as well as disclosures.Operational and Technology RiskRisk that modification to current operating models and systems that are heavily reliant on LIBOR will result to inaccurate inconsistent outputsDetermine all items that are affected by the cessation, including inventory, IT systems both internal and external, and other data and plan for the capabilities existing and needed for the transition, including control changes.Financial Reporting and Tax RiskRisk of incomplete and inaccurate reporting to accounting bodies and tax authorities.Certain financial reporting and tax reliefs are being proposed by regulators. Therefore, there is a need to study on how these reliefs can be infused in the transition plans.Certain financial instruments with dependence in LIBOR may need to reassess the fair value considerations due to changes in the observability of LIBOR transactions.Disclosures are necessary for all relevant items in the transition plan that have significant accounting impact to policies currently in place. Refer to the discussion above for more details on the accounting and Tax implications of LIBOR cessation.We’d love to help.To ensure that all factors are considered in the pursuit of reliable financial reporting, effective and efficient operations, and compliance with law and regulations, our services can be scaled to accommodate your business needs, especially in considering the impacts of LIBOR Transition. Our Corporate Finance Advisory services, together with our Technical accounting Group, provide a thorough of factors outside the normal course of business, with a strong emphasis on risk and SOX compliance.E-mail us at [email protected] for full consultancy assessment.About the AuthorsTo have a thorough discussion on the matter, please contact:Jezaniah Castro has extensive experience in preparation and filing of federal, state and local income tax returns for businesses and high net-worth individuals and other business-related filings, including sales and use tax in compliance with applicable US federal and state tax laws and regulations. She has also dealt with IRS and State tax notices, tax legislation, or audit workpapers in advocating taxpayer’s position to the taxing authorities.JM Miclat has years of Advisory experience with EY Philippines mainly focused on leading SOX 404 compliance and top-risk audit engagements from one of the largest Fast Moving Consumer Goods (FMCG) company. He has extensive knowledge in applying Topics 606 and 842 of US GAAP to business processes. He ranked 9th in the CPA Board Examinations (PH) in 2016.DisclaimerThe information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. It is not intended to be relied upon as accounting, tax, or other professional service. Please refer to your advisors for specific advice. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.