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Certificate IV in Business GovernanceDay Two -
Planning
Mr Patrick Moriarty Director Training
Development Our Community
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Todays Learning Objectives

• An Understanding and appreciation of
• Set directions for the future of the organisation
• Set Goals and Objectives
• Develop and adopt, Business Plan, Fundraising
  Plan and Budgets
• Successfully Managing Projects
• Monitor and Review Plans

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• Planning is required by every organisation.
• A plan can be made for many years in advance and
  then regularly reviewed. Although Committee
  members and staff come and go, the organisation
  is always moving steadily ahead according to its
  plan.
• The organisational plan is different from a
  business plan. An organisational plan covers a
  longer period of time, approximately 5 to 10
  years or even longer. An organisational plan is a
  vision for the future with broad strategies on
  how to get there.

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• A business plan is developed usually with a
  shorter time frame, between 1 to 5 years. It
  contains a lot more specific detail about how
  individual strategies should be carried out, by
  when and by whom and the specific resources
  required.
• A business plan is written after the
  organisational plan. It is written to
  specifically carry out the objectives of the
  organisational plan. It is not an entirely
  different plan with different objectives.

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The Strategic Planning Process
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At all times any organisation should know?

• What its goals and objectives are?
• Who are our stakeholders/How do we deal with
  them?
• External Factors impacting in orgn
• How much are we spending? On what?
• How much do we owe? To whom?
• What stuff do we own? What is it worth?
• How are we doing against our budget?
• Importantly you as a committee or board member
  should be provided with this information on a
  regular basis and review it.

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Who should we involve?

• The first step is to work out who will be
  involved in the planning process.
• For example, do you include the Governing
  Committee and just the Chief Executive Officer
  and Senior Managers or do you also include the
  middle managers and other staff/volunteers?

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• It is the Boards role to
• determine the strategic planning process
• lead the review of mission and values statements
• actively contribute to and decide strategic goals
  (key result areas and objectives)
• endorse the Strategic Plan
• monitor (their own, the Agencys and the CEOs)
  performance against the strategic goals.

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• The Board role in setting strategic direction is
  made easier if members
• are familiar with an agreed strategic planning
  process
• have a shared vision for what they want to
  achieve and realistic expectations about what can
  be achieved
• know that it is the bigger picture that is the
  focus of strategic planning, and can separate
  strategic directions from operations
• know what questions to ask and what information
  is needed are aware of the key internal and
  external influences are knowledgeable about
  stakeholder concerns and needs
• have a good working-relationship with the CEO and
  provide clear instruction about expectations and
  information needs in relation to the strategic
  planning process
• use the talents of each Board member in the
  planning process
• commit sufficient time so as to ensure the
  strategic plan is thorough and well considered.

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• How are the community going to be involved?
• What about getting feedback from clients?
• It is important to include all the stakeholders
  of an organisation in the planning process. Each
  stakeholder will come to the process with a
  different picture of what they think should
  happen.

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• Who would you involve for your groups ?

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• I firmly believe that any organization in order
  to survive and achieve success must have a sound
  set of beliefs on which it premises all its
  policies and actions...
• Next I believe that the most important single
  factor in corporate success is faithful adherence
  to those beliefs...
• And, finally I believe if an organization is to
  meet the challenge of a changing world, it must
  be prepared to change everything about itself
  except those beliefs as it moves through
  corporate life. Thomas Watson, Jr.
• Founder of IBM

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Environmental Analysis

• Basically look at all of the factors that will
  impact your organisation
• Social
• Political
• Environmental
• Legal
• Technological

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What factors will impact your organisation

• Lets discuss and see how you could take these
  into account in your strategic plan

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SWOT

• Strengths
• Weaknesses
• Opportunities
• Threats

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(No Transcript)
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• SWOT EXERCISE

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Goals

• Define the key areas in which to expect strategic
  results and what is expected.
• Not measurable as stated, but contain factors
  that will be measurable as Objectives.
• With Mission determine what Objectives should be
  selected.

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What are your goals?

• Do any of you know?
• How relevant is your current strategic plan?

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Objectives

• Statement of measurable results.
• Tied to Goals, provide the basis for operational
  planning and budgeting.
• Four general characteristics
• Starts with the word To
• Specifies a single measurable result
• Specifies a target date or time span for
  Completion
• Must be realistic and attainable, but represents
  a significant challenge.

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An example of tying goals and objectives
Goal One To educate community about the benefits
of playing bocce, facilitate their joining a
club, and encourage participation. Objectives/Stra
tegies 1.1 To create a media kit for distribution
to key newspapers, magazines by July 10
2006. 1.2 To host a Melbourne Leader editors
event Bocce Blows Bowls" for August 10,
2006. 1.3 To explore partnerships with like
minded industry associations for the purpose of
producing a jointly sponsored media
campaign. 1.4 To evaluate and report on the
possibility of a BCV web page by August 31, 2006
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• Setting Priorities Exercise

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Action Plans

• Specify steps or actions required to attain an
  objective.
• Designate who will be held accountable for seeing
  the each step or action is completed.
• Define when these steps or actions will be
  carried out.
• Define resources needed to be allocated in order
  to carry out the required steps or actions.
• Define feedback mechanisms needed to monitor
  progress within each action step.

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Case Study

• The manager of the Connewarre Farming Cooperative
  was unable to organise the planting of fruit
  trees in time for regular rains. This resulted in
  the trees having a bad start and not growing
  well. Many fruit trees died.
• Unfortunately there was no monitoring process in
  place. The manager did not tell his Board of
  Management that the trees had not been planted
  until six months later. The Board thought
  everything was going well and by then it was too
  late to do anything about it.
• What should have happened?
• What strategies could have been implemented to
  change the end result?

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Is this your organisation funding?
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• It is dangerous to rely too heavily on any one
  source of fundssimple question
• What happens if this is removed?

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A Fundraising Menu

• Just like any menu you dont have to pick the lot
  .
• Pick what works for you but always be
  challenged.

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• How do your groups currently raise funds?

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• You need to raise 15,000 for play equipment at
  your local child care centre
• You can get this through 3 forms of fundraising
  one must be sponsorship
• Identify what fundraising options you would
  recommend
• Identify an appropriate sponsor

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Entree

• Grants Federal, State, Local Gov, Corporate,
  Philanthropic
• Stakeholders - members, friends, supporters
• Take a moment to detail who you think your
  members, friends and supporters are?

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Have some forethought what do you need
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• What I want you to do now is to think of that
  previous slide?
• I want you to write up one problem/issue/challeng
  e facing your organisation today?

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• Now move through each of those other columns.
• How would you solve them?
• (NOT JUST ONE SOLUTION)
• How much (roughly) will it cost?
• How long will it take to do?

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A basic winning grant process

• Identify that grants are a legitimate fundraising
  strategy (Dont do it half hearted)
• Agenda item bring up at meetings/ roles
  responsibilities
• Nominate a scout to search for grants

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Thinking of the grantmaker

• What is the main theme of the organisation whose
  money you want
• What are they most proud of
• What qualities do they feature in their annual
  report
• What is their motivation for this grants area
• If the grantmaker was to invent their ideal
  program what would it be?

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Thinking of the grantmaker

• Identify your common interests
• Identify where your aims and interests overlap
• Identify where your activities help achieve their
  aims and how
• HOW COULD YOU DO THIS?

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Looking Beyond the Narrow Category View

• Think outside the square.
• Your constituency who? What programs?
• Do you encourage healthy practices? An anti-drug,
  anti-alcohol, anti-obesity message?
• Do you service a large indigenous or
  multicultural group?
• Do you provide opportunities for youth to learn
  leadership skills/responsibility/decision-making?
• Are you inclusive? (elderly/indigenous/ women/
  disability/low socio-economic groups)

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Lateral thinking about grants
For example integration of elderly into school
dance program
Are you doing anything innovative/ inclusive?
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The Grants Template
(really its your core information in one spot)

• Vibrant Description of Organisation
• Re-use for most applications and for marketing
  and communication
• Why is your group the best in the world?
• What is your group on the earth for?
• Who loves your group and why?
• Your staff and board
• Your annual budget

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Template contents

• Corporate Info (ABN, GST, Annual reports)
• Mailing address/Contact details
• Board Member details (brief)
• Previous grant wins
• Demographic data (group/town/city/region)
• Testimonials (gov, community, corp)

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For further information on this topic refer to
your Top 10 tips on grantwriting
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• What do you currently ask of your members,
  friends and supporters?

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Main Course

• Individuals
• Donations
• Wills
• Bequests
• Community events
• Sausage sizzle vs Major Dinner
• Trivia Night
• Community Market

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Dessert

• Sponsorships
• - Major
• - Minor
• Partnerships
• Community
• Business
• Service Clubs
• Government

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After Dinner Mints

• Tenders
• Ground/Park Maintenance
• Catering
• Fee for service

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• It is important that you consider all of the ways
  that you can make your organisations more
  sustainable not just in terms of fundraising.
  Others may include
• Profile
• Governance
• Position in the community
• Networks
• Think broadly when funders ask how a project is
  sustainable

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• Aims of Sound Financial Management

• The aims of sound financial management are to
  ensure that your organisation
• Can meet all of its financial obligations
• Is prudent and has processes to protect against
  fraud
• complies with all relevant legislation
• ensure that you are professionally managed and
  directed
• This will assist in your organisation being
  recognised through your community as one that is
  worth supporting and belonging to.
• You are also enhancing your organisation ability
  to survive.

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• Sound Financial Management Characteristics

• The following tasks characterise sound financial
  management
• Analysing and assessing the financial impact of
  management decision both prior and subsequent to
  implementation
• Ensuring the necessary cash flow to finance
  planned activities and operations
• Safeguarding resources through appropriate
  financial controls
• Providing a financial framework for planning
  future activities and operations

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Sound Financial Management Characteristics

• Managing transaction processing systems which
  produce information for the control of planned
  activities and operations
• Ensuring legality and regularity in the use of
  funds
• Paying attention to concepts of efficiency and
  effectiveness
• Reporting and interpreting the results of
  activities and operations measured in financial
  terms and thereafter ex post audit and
  evaluation.

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• What is a Budget?

• A time-limited, financial plan of action or
  blueprint
• A living-breathing guide for dollars to be
  raised spent
• Reflects your organisational objectives and
  priorities

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Elements of a Good Budget

• Realistic - based on past performance along with
  future projections opportunities (if you dont
  have history it should be conservative)
• Balanced or shows positive financial health
• Developed as a Director-Board Partnership
• Organised in line with financial statements
• Includes supportive services program budgets
• Projects cash flow
• Adopted before financial year starts

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Budgeting Tips

• Know fixed (rent) vs. variable costs (office
  supplies)
• Make worst best case scenarios (what ifs)
• Know financial impact of policy decisions
• Note grant FYs that differ budget deadlines
• Keep overheads down maximize program
• DO NOT fill deficit gap without realistic
  fundraising plan
• Maintain maneuverability - Be prepared to revise
  or change course
• Monitor progress against the budget and act where
  necessary

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Discussion Point

• How do you develop a budget?
• Where do you start?

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How do you prepare a budget?

• Gather past financial performance if you have it?
• Break this down into categories
• Revenue what and where do you get your revenue
  (sales, grants, consultancy, fundraising)
• Costs what and where do your costs come from
  (wages, administration expenses, IT, development)
• Can you break these down into where they fall
• (e.g. rent every month, telephone in July,
  October, January)
• Assess your Income and Expenses for likely
  increases and decreases and allow for accordingly

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How do you prepare a budget - cont

• Place all of these into a spreadsheet into the
  months in which they fall (see the example
  provided)
• Undertake some what ifs What if we need
  another staff member what will happen? what if we
  lose a grant?
• How does this impact what can we do?
• Check with your Treasurer and/or Accountant
• Have budget signed off by your board (minutes)
• Monitor performance against the budget monthly

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You may need to not only develop a budget for
your organisation but most funding bodies will
require you to develop a budget for each project
you are funded for.
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Key Financial Reports

• They may be more detailed than those associated
  with your organisation but are provided for
  illustrative purposes only.
• All such reports should be provided by
  experienced personnel and audited by an
  independent accountant.

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Key Financial Reports
Statement of financial position (Balance Sheet)
shows the financial position at a point in
time. Statement of financial performance (Profit
and Loss statement) measures performance over a
period of time by matching revenue earned with
expenses incurred. Shows how profitable a firm
has been over the past year. statement of cash
flows shows the sources and uses of cash during
the period.

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Statement of financial position (balance sheet)

• Three main elements
• Assets what you own
• Liabilities what you owe
• Equity - The owners interest in the
  organisation
• Shows resources (assets) and claims on those
  resources (liabilities and equity) at a point in
  time.

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Statement of financial position (as at 30 June
2005)
Assets Cash 5,000 Accounts receivable
1,000 Inventory 5,000 Property, plant
and equipment 100,000 Total assets 111,000
Liabilities Shareholders Equity Liabilities Acc
ounts Payable 14,000 Wages Payable
2,000 Provision for Employee Entitlements
3,000 Long Term Debt 25,000 Total
Liabilities 44,000 Shareholders Equity Share
Capital (membership) 2,000 Retained Surplus
65,000 67,000 Total Liabilities and
Shareholders Equity 111,000
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Statement of financial performance (profit loss)
A Statement of Financial Performance reports
revenues earned during a period of time with
expenses incurred in earning that revenue.

• The following slides present information for you
  to gain knowledge of the major financial reports
  normally associated with any organisation.

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Statement of financial performance (profit loss)
Revenue 120,000 Less Cost of Goods Sold
20,000 Gross Profit 100,000 Less Operating
Expenses Wages 60,000 Rent
6,000 Electricity 3,000 IT
2,000 Postage 1,000 72,000 Net
Surplus/Deficit 28,000
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Statement of cash flows

• Statements of cash flows provide details of
  movements in an organisations cash balance.
• The cash flows are normally categorised into
• operating activities
• investing activities
• financing activities.

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Statement of cash flows
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Key Elements of a Financial Report to the Board

• Comprehensive but concise and understandable
• Covers reporting period
• Functional by program
• Compares actual to date with budgeted figures -
  notes variances
• Provide a commentary on the organisations
  finances Treasurer is the watchdog you should
  bark if there is trouble or wag your tail if
  youre happy.
• Provide the bank statement for verification of
  the cash position
• If you have people who dont understand finance
  paint them a picture
• Is provided to members with time to interpret

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Template Report
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Financial Reports - Key Questions to Consider

• Are there any unbudgeted or unusual revenue or
  expense trends or spikes?
• What is our cash balance? Are payments made in a
  timely manner, including payroll taxes
  superannuation?
• Are we using reserves or restricted funds? Are we
  using credit?
• Is there any revenue booked or projected that is
  not fully approved or in question?
• What is the level of debtors? Are they being
  chased?

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Financial control procedures

• Separation of recording and handling cash.
• Separation of receiving and paying cash.
• All cash receipts banked intact daily.
• All payments (except petty cash) made by cheque.
• Authorised supporting documentation for payments.
• Cheques countersigned.
• Pay on invoice (or terms as requested)
• Physical safeguards over cash (Safe, procedures)
• Reconcile bank accounts regularly be
  transparent.
• Spending Limits Fin Accountability (who decides)

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Annual Audit
The External Audit is to provide assurance that
the financial statements of the company represent
a true and fair position of the organisations
financial position, performance and cash flow
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What will the auditor want to see?

• Generally an auditor will provide you with a list
  of items that they will want to see. The
  objective is to keep supporting records for all
  receipts and payments
• This may include some or all of the following
• Petty Cash Records and receipts
• Cheque Books (who has authority to sign)
• Financial Statements
• Asset Register
• Bank Statements and Reconciliations
• GST Records
• Source records classified according to each grant
  provided

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Whats in your filing cabinet?

• Running record of monies recd and expenses paid
• Bank Sments, cheque and deposit books
• Funding agreements documentation supporting
  monies received
• Copies of invoices supporting payments made
• Payroll records (if applicable)
• Asset register
• Copies of financial statements
• General meeting minutes and members register

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Appropriate Controls

• Invoices paid should be made to your organisation
• 2 signatories for approval of payment and cheques
• Reimbursement of expenses paid on behalf of your
  group should be tabled at general meeting and
  approved
• Focus on documenting payments cheque
  requisition ideal complete audit trail (See
  example handout)
• Detailed minute taking in meetings

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GST

• NPOs must register for GST if their annual
  turnover is greater than 100k
• It turnover is less than 100k NPOs may choose
  to register (our recommendation is to not)
• GST registered orgs can claim tax credits for
  the GST element of goods purchased and remit the
  GST element of monies received
• If registered a Business Activity Statement (BAS)
  is required to be lodges with ATO each quarter

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GST

• BAS is a record of all GST collected on monies
  received and Paid on expenses incurred
• Upon lodgment of BAS the difference between GST
  collected and paid is forwarded to ATO
• Monies raised from and expenses incurred in
  running fundraising events are exempt form GST
• Your filing cabinet records should be sufficient
  documentation to support the information
  contained in your BAS.

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Project management
WHAT THE ?
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Background What is project management?

• Who, what, when, and why for projects
• Roadmap for deliverables
• Roles and responsibilities
• Common language for communication relative to
  project phases, tracking and reporting
• Processes to enable communication, accomplish the
  work, facilitate issue resolution and risk
  mitigation

Project management tools help the project manager
and team to organize, document, track and report
on project tasks and progress.
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Project Management

• How do you make a cup of coffee?
• How do you prepare and harvest a crop?
• How do you grow and harvest a herd or flock?
• How do you grow a tree?

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Stages to Managing a Project Successfully

• Define the Scope
• Determine Available Resources
• Check the Timeline
• Assemble Your Project Team
• List the Big Steps
• List the Smaller Steps

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Managing a Project Successfully

• Develop a Preliminary Plan
• Create Your Baseline Plan
• Request Project Adjustments
• Work Your Plan, But Don't Die For It
• Monitor Your Team's Progress
• Document Everything
• Keep Everyone Informed

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Project Framework
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Project Management Tips KPIs

• What Are Key Performance Indicators (KPIs)
• Key Performance Indicators are quantifiable
  measurements, agreed to beforehand, that reflect
  the critical success factors of a project. They
  will differ from project to project.
• Key Performance Indicators Reflect The Project
  Goals
• Key Performance Indicators Must Be Quantifiable

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Key Performance Indicators

• Make sure that KPIs are achievable
• If you have FASA read them and be sure that
  before you sign them you agree with KPIs.