Standards for private organizations

2020 Edition

Financial Management (FIN) 1: Governing Body Financial Responsibilities

The organization's governing body or designated committee of the governing body, as appropriate:
  1. approves the annual budget and any revisions to the budget;
  2. reviews quarterly and annual financial statements/summaries provided by management;
  3. reviews accounting policies and procedures;
  4. reviews recommendations of the organization’s auditors, and management's response to the recommendations;
  5. annually evaluates the executive director’s management of the organization’s financial affairs; and
  6. reviews and approves the IRS Form 990.

Interpretation

Minutes of governing body and its committee meetings should reflect active oversight of the organization's finances.
2020 Edition

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Purpose

The organization's ability to achieve its mission is based on sound financial management practices that ensure efficient, data-informed use of its resources.
1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
  • One of the elements is not fully addressed.
3
Practice requires significant improvement; e.g.,
  • Two elements are not fully addressed; or
  • One element is not addressed at all.
4
Implementation of the standard is minimal or there is no evidence of implementation at all; e.g.,
  • Three or more elements are not fully addressed;
  • Or at least two elements are not addressed at all.
Self-Study EvidenceOn-Site EvidenceOn-Site Activities
No Self-Study Evidence
  • Governing Body minutes demonstrating active oversight of finances
  • Interviews may include:
    1. Governing body members
    2. Governing body treasurer
    3. CEO
    4. CFO