The Purpose and Benefits of Financial Policies and Procedures

Does your organization have a complete set of financial policies and procedures? If so, when was the last time you reviewed them?

Effective financial policies and procedures can help provide efficient financial management, risk mitigation, and the alignment of financial operations with the overall mission of the organization. Before you begin creating financial policies and procedures or reviewing them for your organization, it is important to understand what these are, the intended purpose and benefits, how to implement them, and when they should be reviewed.

What Are Financial Policies and Procedures?

Financial policies are the rules that govern the financial activities within an organization.

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Finance and Development Collaboration

The information provided by the finance departments and the development departments at not-for-profit organizations often does not agree and it doesn’t have to. What does have to happen is the numbers must be able to be reconciled from one to the other, especially if two separate reports are being provided to the Board of Directors. Organizational practices are intended to benefit the organization as a whole and not just one department. While many finance and development departments work well together, here are four areas to collaboratively focus on for better data and compliance.

1. Year-end Cut Off

Establish a collaborative process for proper donation cut-off to ensure recording in the correct year for both the organization and donor,

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Is It Too Late for a Governance and Financial Policy New Year’s Resolution?

By Cheryl Olson, CPA, CGMA

Now that we’re in March, many of us have given up on our New Year’s resolutions. Some of us didn’t make resolutions to begin with based on past history. That said, It’s not too late to make a 2017 commitment to create, review, or update your organization’s key governance and financial policies.

To be most effective, policies need to be kept current so they reflect your organization’s internal culture and external environment. While this can be an overwhelming task, following these five tips will help you to get your policies in healthy shape.

Policy Index

Create a policy index that lists all of the organization’s policies in one place,

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3 Key Organizational Policies: Why Your Organization Needs Them and Tips for Creating Them

By Sarah Wine, CPA

As auditors of not-for-profit organizations, we are often asked what policies are critical for organizations. Though much depends on the type and size of the organization, there are three key policies that all not-for-profits should have:

  1. Code of ethics
  2. Whistleblower policy
  3. Record retention and document destruction policy

Code of Ethics

One of the most valuable assets of a not-for-profit is its reputation.  In recent years more and more organizations have had public scandals that have impacted the organization by severely reducing its contributions or grants or by making the organization close its doors forever.

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Do You Have a Whistle-Blower Policy and, More Importantly, is it Working?

By Mitch Hansen, CPA, CMA, CFE

If you want some real scary reading, put down your Steven King novel and read the Report to the Nations on Occupational Fraud and Abuse that is put out biannually by the Association of Certified Fraud Examiners. According to this study of 1,388 organizations where fraud occurred, the typical organization loses 5% of its revenues annually to fraud. Of the fraud cases studied, the median fraud loss for religious, charitable, or social service organizations was $85,000, and was $200,000 for health care organizations. The report goes on to say that tips are the number one way frauds are detected,

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