As discussed in the previous post about the evaluation of the finance subcommittee, now is a great time to begin planning for the future.  In particular, it’s time to assess the performance of the finance subcommittee and its relevance and contribution to the meeting of organisational goals.

This is an overview of some key issues that the evaluation can focus on.

  • Are the right finance reports being prepared?  Often the profit and loss report and balance sheet are prepared yet a cash flow isn’t.  The importance of the cash flow report is that it helps with the management of the liquidity of the organisation.
  • Is a budget prepared each year and then each month or at least each quarter the actual versus budget report is prepared to review why variations have occurred.
  • Are reconciliations completed on a regular that helps to confirm the accuracy of the financial reports?
  • Are the financial policies and procedures complied with?
  • What internal controls are in place and is there a regular review whether they are still effective.
  • If you receive government grants do you track how funds are spent, when acquittals need to be completed as well when new applications must be submitted.
  • Are the financial reports understood by all members of the committee of management?  Even though you may have a finance subcommittee it is still the responsibility of all members of the committee of management to understand finances of the organisation.
  • Identify gaps in knowledge and ensure training is provided to address those gaps.

While it is a good idea for this evaluation to take place at the start of the financial year there should be a constant review throughout the year to identify the need for changes, improvements or training to occur.  As such, take the time to undertake this evaluation and even have it as a regular agenda item to ensure it is discussed at committee of management meetings throughout the year.