Just Having a Disaster Recovery or Contingency Plan is Not Enough

David Anderson is principal of David Anderson & Associates, a Philadelphia forensic accounting firm that provides a full range of forensic accounting services including business valuation, fraud investigation, and fraud deterrence programs in Philadelphia and the Delaware Valley.

Hurricanes; Tornados; Active Shooter/Shelter in Place; Fires; Floods; Terrorist Attacks; Sexual Harassment Scandals; Financial Impropriety.

In today’s world, businesses, governments, and other organizations need to have plans in place to deal with these disasters as well as other unexpected threats.  Sadly, most do not have such plans.  But, even many of those that do find their plans are ineffective.

Why is this so?  Primarily because they have failed to regularly test and update their disaster recovery and contingency plans.

Two weeks ago, the city of Sioux Falls, South Dakota was hit by tornadoes, and activated its contingency plans.  Those plans included setting off sirens to warn the populace.  However, most of the sirens were not activated because, among other failures, Sioux Falls did not regularly test its emergency plans.

Recently when visiting a new business client, I asked whether they had a disaster recovery or contingency plan.  They proudly showed me their plan.  But, when I read through the plan, I noted several serious problems:

  • The plan coordinator no longer worked at the company, and the position had never been reassigned;
  • The company had moved to its present location two years ago, but the plan addressed disasters occurring at the old location;
  • The plan was over five years old.

Additionally, the CEO admitted the plan never had been tested, and that new employees had never been trained to implement the plan.

Regular testing and updating of disaster recovery and contingency plans are main reasons why first responders and many organizations regularly schedule drills (remember fire drills from grade school?). The purpose of such drills is not only to run through the plan, but also to observe problems with the plan (including being outdated) so they can be fixed and tested again.

For example, when I worked for the Resolution Trust Corporation (RTC), we regularly had fire drills.  Each floor of the office building I worked in had a fire drill coordinator who was responsible for making sure that everyone had vacated the floor.

However, in the middle of one day’s drill, the fire drill coordinator was out sick, and the backup person identified in the fire drill plan had previously left the organization.  This problem was identified because of the drill, and a backup person was quickly put in place.  Had the RTC not done so on a timely basis and a real fire occurred, someone might have been hurt.

If your organization does not have a disaster recovery or contingency plan in place, you need to start putting one together now.  But even if you do have such a plan, it needs to be regularly tested and updated in order to continue to protect your organization and employees.

If you need a comprehensive contingency and disaster recovery plan or require any other forensic accounting services in Philadelphia and the Delaware Valley, please contact the Philadelphia forensic accounting firm of David Anderson & Associates by calling David Anderson at 267-207-3597 or emailing him at

About David Anderson & Associates

David Anderson & Associates is a Philadelphia forensic accounting firm that provides a full range of forensic accounting services in Philadelphia and the Delaware Valley.  The experienced professionals at David Anderson & Associates provide forensic accounting, business valuation, fraud investigation, litigation support, economic damage analysis, business consulting and outsourced CFO services.  Company principal David Anderson has more than 30 years of experience in financial and operational leadership positions and is a Certified Public Accountant, a Certified Fraud Examiner and a Certified Valuation Analyst.