With MHA, we have created Keeping Your Charity on the Right Track, a 12 month programme to help you improve your organisational governance in a stepped and measured way. Each month’s article covers an area of charity governance for review and leads you through good practice.
Often as board members rotate, the new trustees simply accept what has gone before and receive the same financial reports without question. Month 2 of Keeping Your Charity on the Right Track covers financial reporting, and includes the following suggestions of areas for a charity to look at:
• Is financial information readily available and up to date, or is it received several weeks following a month end?
a. What information is being received (performance and/or position)?
b. What is the basis of preparation (receipts & payments or accruals)?
• Do the management team and board fully understand the financial information or is any form of training required (annual or one-off)?
• Is your current accounting software giving you what you need in terms of the reports?
a. Or does someone need to manipulate the data prior to sending the financial information to the board?
b. How much resource is required to keep the finances up to date – does this seem excessive?
• Do the board have a clear channel of communication with the auditor/independent examiner and are any auditor recommendations (from the annual audit feedback report) being actioned to improve financial accuracy?