Table of Contents >
Chapter 43. Managing Finances >
Section 5. Creating a Financial and Audit Committee >
| Creating a Financial and Audit Committee
|
Tools & Checklists | Contributed by Phil Rabinowitz Edited by Bill Berkowitz |
Checklist
Here you will find a checklist summarizing the important points of the section.
What is a Finance Committee?
__ You use a standing committee, which may include both members and non-members of your board, to oversee your organization's financial operation.
Why do you need a Finance Committee?
You establish a Finance Committee because:
__ A Finance Committee helps a board fulfill its fiduciary responsibility.
__ A Finance Committee can protect the organization from legal challenges and liability.
__ An alert and informed committee should be able to catch both intentional and unintentional mismanagement of funds.
__ A Finance Committee can protect the organization from actual or apparent conflict of interest.
__ A Finance Committee acts as the board's eyes and ears in the financial operation.
__ A Finance Committee can act as an advisory panel to the financial operation.
__ A Finance Committee can evaluate both the financial operation and the people in charge of it from a position of knowledge.
__ A Finance Committee can be helpful in the hiring of fiscal staff or a new director.
__ A Finance Committee can make the audit easier.
__ A Finance Committee can interpret the audit for the rest of the board.
__ A Finance Committee can be helpful in recommending the hiring, retention, or firing of potential or current auditors.
Who should be involved in a Finance Committee?
__ You recruit board members who have a financial background, and who want to serve on the committee - CPA's, lawyers, financial analysts, bankers, etc.
__ You recruit non-board members who would be valuable to the committee and with whom your board can benefit by establishing relations.
__ You recruit board members who are financially less sophisticated, and who might therefore represent the board at large, and ask the kinds of questions they might ask.
__ You recruit people who, by their known integrity and community standing, can lend credibility to the committee.