COVID-19 caused changes that we could not have imagined. In this webinar Samantha Hoyte will explore risks along with the impact on operations over the past year, including long-term and permanent changes.

1. The Risks of COVID-19: One
Year Later
Samantha Hoyte, CPA, CFE, MBA
Audit Manager
(929) 376-6236
shoyte@withum.com
Presented by:
June 2021

2. Today’s Discussion
Potential business and economic risks resulting from
COVID-19
Understanding the risk assessment process
Results of risk mitigation
Addressing lingering implications

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BUSINESS RISKS INDENTIFIED
• Working remotely
• Securing company, client, donor information
• Achieving company objectives (both short and long term)
• Cash management
• Adapting in an ever-changing environment
• Loss of funding
• New funding utilizing CARES Act and other relief money
• Reopening and resuming normal operations, if possible

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PANDEMIC’S IMPACT ON THE ECONOMY
28256
23724
26428 26502
29983
3226 2831 3271 3270 3714
9151 8605
10745 10912
13071
0
5000
10000
15000
20000
25000
30000
35000
1-Jan-20 1-Feb-20 1-Mar-20 1-Apr-20 1-May-20 1-Jun-20 1-Jul-20 1-Aug-20 1-Sep-20 1-Oct-20 1-Nov-20 1-Dec-20 1-Jan-21
Dow Jones S&P 500 Nasdaq
Source: Google Finance

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FURTHER IMPACT ON
THE ECONOMY
• Failure of some companies to recover
• Permanent changes in operations
• Consumer confidence
• Delay in impact of the pandemic on:
• Prices
• Availability of resources
• Reduction in disposable income

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POLLING QUESTION #1

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WORKING REMOTELY
• Onsite vs. Remote Activities
• Staff Productivity
• Management Oversight and Monitoring
• IT Environment
Time to Reflect:
What work and what did not work?

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SECURING INFORMATION
Potential Challenges
Lack of a
secure way of
transferring
information
Strength of
staff’s home
network
protection
Use of
company
equipment vs
personal
equipment
Compliance
with privacy
rules
Security of
physical
records
Access to files
and other
critical
information

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Company
Objectives
Growth
• Expansion
• Technology updates
• Marketing
Stabilization
• Technology updates
• Continued cash flow

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CASH MANAGEMENT
Collection uncertainty Projected income Payment management
Reduction in expenses
(without service
interruption)
Stability of government
funding (large amount
of funding from CARES
Act and other Funding)
Changes required to
facilitate making and
receiving payments

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EVER-CHANGING ENVIRONMENT
Increase in
fraud
Reduction in
government
stimulus
Non-essential
services
reopening
(vary by state)
Increase in
client base
and need for
services
Employee
expectations
Logistics

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POLLING QUESTION #2

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HOW CAN WE MITIGATE THESE RISKS?
Assess risk consistently and routinely
Communicate often and effectively
Analyze operations in real time
Review temporary solutions for more permanent options
Leverage lessons learned

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RISK ASSESSMENT AND OUTCOMES
Objectives Features Benefits
• Identify business risks and controls
• Measure and prioritize the
identified risks
• Determine appetite and capacity for
risks to the business and its
processes
• Identify appropriate activities
(internal audit and other) to monitor
potential risks and controls
• Process and risk focused
• Uses multidisciplinary teams,
including subject matter
professionals, to conduct interviews
of specific process owners
• Establishes a common definition of
risk tolerance, to be applied entity-
wide
• Provides a basis for prioritizing
internal audit resource allocation
• Drives the skill sets and resource
requirements necessary to execute
activities based on realistic
expectations
• Links risks to overall strategic
objectives
• Brings to light better practices to
help improve the organization
• Helps improve the efficiency and
value of individual audit and
compliance activities

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RISK ASSESSMENT
When is it required?
• COSO internal control framework
• Federal Uniform Guidance
• Generally Accepted Government Auditing Standards (Yellowbook)
• Many grant contracts
• Good corporate governance
Regular risk assessment is often required, such as for:
• https://www.withum.com/resources/a-common-risk-not-assessing-risk
A Common Risk: Not Assessing Risk

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Internal and External Risk Examples
Internal:
• Technology disruption
• Turnover in key personnel
• Theft or fraud
• Improperly designed internal controls
• Insufficient training
External:
• Public expectations
• Legislative changes
• Natural disasters
• Economic factors Sustainability
Political and
Economic
Factors
Compliance
Requirements
Talent
Management
Market
Competition
Environmental
Changes
Vision and
Mission
Intensive
Rapid Growth

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POLLING QUESTION #3

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EFFECTIVE COMMUNICATION
Tailored Communications by Audience
• Employees
- Organization expectations
- Changes in policy and/or protocols
- As frequent as necessary
• Clients
- Service changes
- Payment options
• Donors
- Company changes effecting donors
- Payment options

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EFFECTIVE COMMUNICATION (Continued)
• Vendors
 Any changes in services received
 Electronic invoicing and payment options
 Any Company changes effecting vendors
• Others
 Company changes effecting them
 Changes in services, if applicable

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REAL TIME ANALYSIS OF OPERATIONS
• Budget review and revisions
• Frequency of monitoring and review
• Changes in service volume (increasing or decreasing)

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Temporary vs. Permanent Solutions
Temporary
 Use of personal equipment when
working remotely
 Get the work done
 Take physical files off site
Permanent
 Use of Company equipment
secured by IT
 Develop Company process to get it
done
 Scan all physical files and store
electronic copies in a location
where they can be securely
accessed

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POLLING QUESTION #4

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RESULTS OF RISK MITIGATION
INCREASE IN
DONOR AND
EMPLOYEE
CONFIDENCE
PREVENTION AND
DETECTION OF
FRAUD AND
OTHER BREACHES
CONTINUOUS
IMPROVEMENT OF
ORGANIZATION,
POLICIES AND
PROCEDURES
POSITIVE
FINANCIAL
RESULTS
REALIZATION OF
GOALS AND
OBJECTIVES

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LINGERING IMPLICATIONS
• Know what your clients are thinking.
 Changes in services
 Comfort levels
• Know what your donors are thinking.
 Ability to maintain funding
• Revise long-term plans as necessary
 Revisit expansion/growth timing
• Think about what the ‘new normal’ will be
 Continue working remotely
 Reduction in office space
 Moving to a paperless system

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TRIVIA QUESTION
During the Great Recession of
2008 and 2009, total charitable
giving decreased by how much?
(state as a percent)

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Questions and
Follow Up
Samantha Hoyte, CPA, CFE, MBA
Audit Manager
(929) 376-6236
shoyte@withum.com
Visit our COVID-19 Resource Center at www.withum.com
for additional resources and new developments.