Transcript South Carolina Association of Hazard Mitigation Annual

Financial Responsibilities of Board Members
February 21-23, 2012
Ft. Worth, TX
Ingrid Danler, CFM
Associate Director Operations, ASFPM
www.floods.org
Today’s Objectives
1. Understand role of Board and their
responsibilities for finances;
2. Identify Financial Risk and how to
minimize them;
3. Assessing financial health and looking for
red flags.
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What is governance?
“In essence, governance is about
ensuring the fit between the
organization's mission and its activities
and performance.”
-Anheir, Non-Profit Organization: Theory, Management, Practice
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Board Member Duties
Board members must meet standards
of conduct when carrying out duties:
Duty of Care
Duty of Loyalty
Duty of Obedience
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Duty of Care
Same level of care as an “ordinarily prudent”
person would exercise in a like position
under similar circumstances.
Example….you can take risks, and you can also
be occasionally wrong, but you should be informed
and use common sense.
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IRS Check Sheet reference
Duty of Care means:
• Attend Board meetings regularly – CS11
• Make sure meetings reflect attendance – CS25
• Be informed, vote independently, and follow-up
regularly.
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Duty of Loyalty
Board members must give
undivided allegiance to their
organization when making
decisions that affect the
organization.
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IRS Check Sheet reference
Duty of Loyalty means:
• Board members cannot put personal interests
above those of the organization – CS16
 Family
 Associated business interests
 Other nonprofit interests
• Conflicts of interest – CS18
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Duty of Obedience
Board members have a duty to
ensure that the organization
remains true to its central purpose.
Keep organization focused, in compliance
and make sure it follows its governing
documents.
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IRS Check Sheet reference
Duty of Obedience means:
Board members must be in alignment with:
 Articles of Incorporation – CS8, CS9
 Bylaws – CS8, CS9
 Mission Statement – CS7
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Board Financial Responsibilities
Ask Questions such as:
•
•
•
•
•
•
•
•
Do we have a sound financial plan?
Do we have enough cash?
Are our reserves sufficient?
Are our major expenses in line?
Are we meeting our budget?
Have we paid our payroll taxes?
Are we insured adequately against
risk?
How do we compare to our peers –
benchmarking?
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Specific responsibilities
Organizational
•
•
•
•
Budget
Strategic Plan
Build reserves
Manage resources
Assure organizational Internal
Controls maintained
Opportunity
INTERNAL
CONTROLS
Monitoring
• Accounting policies and
procedures
• External audits
• Committee responsible for
oversight
Fraud
Triangle
Pressure
(can’t
control)
Rationalization
(can’t control)
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Financial Statements
Financial literacy is different for
everyone……
But….that does not mean that you
are not responsible or have to be
an expert.
Duty of Care
Duty of Loyalty
Duty of Obedience
Photo Courtesy of FEMA
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Conclusion
Many thanks to:
Wegner LLP, CPAs & Consultants
Madison, WI
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