Meaningful Financial Reports

Leigh Wintz

One of the most important roles of the board of directors is its financial oversight responsibilities. But, they can only fulfill this role if they are provided with meaningful financial reports. Financial oversight responsibilities are usually best carried out with quarterly financial reports that accompany narrative reports about progress on the strategic plan. This progress report should do more than just say how money was spent, but also include a look ahead. Do we need to adjust our strategy for certain initiatives based on our experience over the last quarter? Do we need more (or less) resources (money, staff, volunteers)?

However, management should still review monthly reports to closely track things like cash flow, reserve targets, membership, sales, meeting registration, etc. Some groups have the volunteer finance chair or Treasurer receive these reports; many do not.

Some organization use an operating mark benchmarks, for example, a + or – 10% to trigger a report that something has deviated from the budget. But if a board is receiving good quarterly narrative reports, they would already be aware of deviations from the plan/budget and already have an explanation of what conditions have changed since the budget was developed.

More strategic boards are not approving their budgets until after the annual review and update of the strategic plan late in the 4th quarter of the fiscal year. All an operating benchmark does is tell you how well you guessed at a particular income or expense line item at the time the budget was approved. In our opinion, that is less important than the board assuring they have allocated sufficient resources (money, staff and volunteer time) to the strategic initiatives that they think will help them achieve the desired outcomes and make adjustments as needed. Formally amending the budget is usually a waste of time, but taking timely action to make a correction as needed is essential.


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About the Author

Leigh Wintz

Leigh is a Principal Consultant with Tecker International. She has 25 years experience in association management. She has led international organizations and guided US organizations with international expansions. She has expertise in healthcare, hospital administration, fundraising and corporate sponsorship.