Q&A
Clarification on MOCS and DSS review processes for nonprofit executive salaries
1:46:30
·
130 sec
Council Member Julie Won seeks clarification on MOCS and DSS review processes for nonprofit executive salaries. Both agencies confirm they do not directly review or approve these salaries.
- MOCS explains they don't provide guidance on reasonableness of salaries as they don't directly pay them.
- DSS reiterates that executive compensation is not a line item they pay or review.
- Both agencies acknowledge the issue but emphasize current limitations in their oversight capabilities.
Julie Won
1:46:30
Okay.
1:46:30
So if I'm hearing correctly, there for executive compensation, there are no guidelines or benchmarks used by DHS or MOCs to determine reasonableness for executive compensation.
1:46:40
And, can you help me understand how frequently does MOCs review nonprofit executive salaries, if at all, And what steps are taken to ensure that there's compliance with public funding requirements?
Charles Diamond
1:46:52
So I'll take the first one.
1:46:53
I would say I would disagree with your characterization as, regarding MOX not checking reasonableness.
1:46:58
As I I think you just said, the IRS clearly has a level of reasonableness that people are then interpreting against.
1:47:03
To be very clear, MOX is not, is not put in a position at any point to be to be proclaiming on the reasonableness of that, executive salary.
Julie Won
1:47:13
So you don't provide any further guidance on reasonableness?
Charles Diamond
1:47:17
In particular, I think as the as the commissioner said, because that is not something that the city directly pays.
1:47:22
So there would be nothing to therefore issue guidance on.
1:47:25
Regarding a different paradigm in which the city does do so, as I said, we would be very interested in continuing the discussions about how to effectively do that.
1:47:29
But to be very clear, again, I think you, discussions about how to effectively do that.
1:47:33
But to be very clear, again, I think you, chair, you know, there is not something that is not being done.
1:47:37
It is not a tool in our tool chest.
1:47:39
It's not one of our, costs that we pay.
1:47:42
It's through that indirect rate.
1:47:44
And we absolutely recognize the issue and would definitely value further conversations on how you think we can we can best address the negative outcomes.
1:47:51
But there, but, yes, to to to reiterate what what what the commissioner said, that is not a line item that we are paying out, and it makes it's just a little bit different than the line item
UNKNOWN
1:48:00
that we are paying out.
Julie Won
1:48:00
Since it's indirect, it's safe for me to say that you don't review nonprofit executive salaries, Lynn, for compliance issues?
Charles Diamond
1:48:08
Mox does not directly review that for any compliance issues.
1:48:11
I don't
Julie Won
1:48:12
Or neither does the agency?
Molly Wasow Park
1:48:15
We don't pay it, and that would very much correct.
1:48:18
We don't pay it, so there isn't a review policy.
Julie Won
1:48:21
Thank you.
1:48:21
And does Mox evaluate or does the agency evaluate any methodologies or conclusions that third party hired nonprofits use to justify executive pay?
1:48:32
The way that
Charles Diamond
1:48:32
Once again, we do not review or approve any executive salary for a city nonprofit.
1:48:37
It's not a line item in our in our contracts.
Julie Won
1:48:40
Okay.
1:48:40
Because the DOI report does recommend that DHS to develop more specific guidance for agencies on executive compensation and consider setting a cap and other parameters on city funded executive compensation.
