to the

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Welcome to the Fundraising Institute of New
Zealand Not-for-Profit Financial
Management Workshop Presenter Lindsay Jeffs
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(No Transcript)
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Financial Management Hot topics!!! If you have
any hot topics please write them on the Post-it
note on your chair
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• Key Governance Financial Responsibilities
• The Governing body is ultimately responsible for
  the organisations financial state. They have a
  number of legal responsibilities depending on the
  legal structure and founding documents.
• Each member of the Governing Body is individually
  and equally responsible and accountable for the
  financial health of the organisation (fiduciary
  duties).
• All members must be diligent in their duties by
  being able to read and understand financial
  statements and take an active role in monitoring
  the organisations financial planning and
  performance.
• All members collectively must ensure prudent
  financial management and accounting processes to
  ensure transparency.
• Note Governing Body Members are not able to
  delegate these responsibilities.

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• Key Management Financial Responsibilities
• Maintain proper financial systems and processes
  and prepare adequate and appropriate financial
  reports for the Governing Body, Relevant
  Stakeholders and Statutory Authorities.
• To appoint competent personnel to maintain
  accurate and complete financial records.
• Safeguard the organisations financial assets
  (internal controls, asset registers, purchasing
  and cash management controls)

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• Key Accounting Staff, Other Staff and Volunteers
  Financial Responsibilities.
• Fulfilling their duties by being responsible for
  their activities and following financial policies
  and procedures.
• Behaving in an honest and transparent manner.
• Ensuring adequate source documents and records
  are maintained and controlled
• Protecting the organisations assets.

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Financial Accounting Financial accounting is
that discipline which measures, records, reports
and interprets financial and other information
about an entity to interested parties to enable
them to make appropriate decisions.
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• Functions of Accounting
• Communicating financial information
• Supplying financial information to
• assist decision-making
• Establishing accountability
• Providing a financial control device
• Assisting external and internal parties
• to assess the financial well-being of
• the organisation.

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• Accounting Standards
• Financial Reporting Standards
• Generally Accepted Accounting Practices
• (GAAP)

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• Accounting Concepts
• Accounting entity
• Monetary
• Historical cost
• Continuity (going concern)
• Accounting period
• Conservatism
• Disclosure

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The Accounting Equation The accounting equation
is the relationship between the total assets,
total liabilities and equity of an organisation
at a certain date. This relationship is always an
equality (it always balances). The equation is
usually expressed as Assets - Liabilities
Accumulated funds or equity
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The Accounting Cycle
Transactions Implementing Workplan DOING
Record on source documents
Annual Report (To AGM and the appropriate
Ministry)
Enter in Journals (CASHBOOK) Manual or computer
Audit
Balance Sheet
Monthly Bank Reconciliation
Income and Expenditure Statement
End of year adjustments (Accruals)
Trial Balance End of Year
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• Accounting Objectives
• To record and keep accurate count of all
  transactions.
• To classify and summarise the transaction, into
  their basic nature of
• Income, Expenses, Assets, Liabilities and
  Accumulated funds
• To determine the profit or loss (surplus/deficit)
  from providing services or trading over the
  defined financial period (usually a year). This
  is the
• Statement of Financial Performance.
• To ascertain the net worth of the
  organisation/entity at a point of time, usually
  at the end of the financial period. This is the
  Statement of Financial Position.

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Financial Planning Involves the preparation of
budgets, cashflow forecasts, costing and pricing
and the management of investments.
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Budgets
A budget is a forecast or plan expressed in
numerical terms eg. money, time, or units. In
practical terms a forecast is a best guess of
future outcomes.
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Budgets cont.

• Budgets are used as
• A planning tool
• A management tool linking work plans and
• financial events.
• A tool for monitoring and evaluation both during
  the
• budget cycle and at its completion.

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Costing The process used to arrive at the price
to be charged or recovered for the service or
product provided. It should normally cover all
costs and yield a surplus to cover contingencies.
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Financial Monitoring Involves the use of
variance analysis, monthly and annual accounts,
financial accounting ratios, audits, internal
controls, management reports on performance,
annual reports, reports to funders, risk
management, financial policies and procedures,
compliance issues and insurance.
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Organisational Financial Health Checks Used to
benchmark the performance of the organisation
against various benchmarks. For example,
Brinkerhoff Keys to Financial Empowerment, UK
Charities Commission Hallmarks of a Well-Run
Charity and United Way of Minneapolis Checklist
of Nonprofit Organisational Indicators.