Question

What is the responsibility of the board finance committee? Describe the relationship between the finance director and development director?

Answer 1

The responsibility of the board finance committee

The role of the finance committee is primarily to provide financial oversight for the organization. Typical task areas for small and midsized groups include budgeting and financial planning, financial reporting, and the creation and monitoring of internal controls and accountability policies.

1. Budgeting and Financial Planning:-

• Monitor adherence to the budget.
• Approve the budget within the finance committee.
• Develop multi-year operating budgets that integrate strategic plan objectives and initiatives

2. Reporting:-

• Work with staff to develop a list of desired reports noting the level of detail, frequency, deadlines, and recipients of these reports.
• Work with staff to understand the implications of the reports.

3. Internal Controls and Accountability Policies:-

• Ensure policies and procedures for financial transactions are documented in a manual, and the manual is reviewed annually, and updated as necessary.
• Ensure approved financial policies and procedures are being followed.

Finance committees are also often charged with ensuring compliance and/or developing other policies that further serve to protect the organization and manage its exposure to risk. These include establishing policies surrounding:

• Personnel policies
• Executive compensation packages (in the absence of a separate human resources committee)
• Long-term contracts or leases
• Loans or lines of credit
• Internet use and computer security
• Capital purchases
• Disposition of donated stock

The relationship between the finance director and development director