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Blog > Financial Management Checklist for Boards

Financial Management Checklist for Boards

posted on Mar 4, 2019

By Maria Lahiffe

How does your organization rate when it comes to financial management? This is not something you can afford to let slide. The Canadian not-for-profit sector loses an average of 5-7% of its annual sector revenue every year due to fraud [1], accounting for median losses over $100,000 [2]. And you as a board member could potentially be sued to recover that loss.

The good news is, due diligence is not really that difficult. Start with this quick checklist [3] to find out how your organization is doing right now. Ideally, you should answer “yes” to everything on this list. Once you have your “no” answers, you have a set of measurable tasks to start working on.

  1. Has the board adopted a written policy stating the responsibilities and authorities it has delegated to the executive director? ___ yes ___ no
  2. Does the board periodically review the activity of the executive director to ensure s/he has not exceed the scope of her/his authority? ___ yes ___ no
  3. Does the board review the financial statements of the agency on a regular basis? ___ yes ___ no
  4. Have you recently read and understood your organization’s constitution and bylaws? ___ yes ___ no
  5. Are there members of staff who would benefit from an upgrading course on financial management? ___ yes ___ no
  6. Is your organization required to file annual reports to Canada Revenue Agency (CRA) (to maintain your tax-exempt status) or with any other government agency? If so, are they files on a timely basis? ___ yes ___ no
  7. Has the board of directors furnished all agency banks with resolutions authorizing bank accounts and designated cheque signers? ___ yes ___ no
  8. Does the board determine that agency activities remain consistent with those indicated in its operating budget? ___ yes ___ no
  9. Is your current budget consistent with your organization’s goals and plans? ___ yes ___ no
  10. Do you review on a monthly or quarterly basis, actual income and expenditure compared with your current budget? ___ yes ___ no
  11. Does the board of directors approve the operating and capital expenditures budget of the agency? ___ yes ___ no
  12. Must the board give its approval before the budgets can be exceeded? ___ yes ___ no
  13. Does your organization prepare a cash flow budget to predict cash flow problems? Do you know how deficit periods are dealt with? ___ yes ___ no
  14. Have your organization’s books been set up by a competent bookkeeper or accountant? ___ yes ___ no
  15. Is your organization eligible for registered charity status under the Income Tax Act? If so has a tax number been applied for and received? ___ yes ___ no
  16. Are funds which have been donated for special purposes kept separate from general funds?
  17. Does your organization use numbered cheques with its name and address printed on each cheque? So you know who has custody and control of unused cheques? ___ yes ___ no
  18. Are all disbursements, except from petty cash, made by pre-numbered cheques? ___ yes ___ no
  19. Are voided cheques preserved and filed after appropriate mutilation? ___ yes ___ no
  20. Are dual signatures required on cheques over a stated amount? (If so, state the amount: $_________) ___ yes ___ no
  21. Has the board of directors authorized the amount of the petty cash fund and adopted a policy as to the nature of the expenditures which should be paid from this fund? ___ yes ___ no
  22. Is adequate supporting documentation required for all disbursements? ___ yes ___ no
  23. Is access to petty cash limited to one person? ___ yes ___ no
  24. If the board of directors has established a dollar limit on disbursements, is this limit being observed? ___ yes ___ no
  25. Do you get proper financial statements frequently enough to present an accurate picture of the financial health of your organization? ___ yes ___ no
  26. Is your organization regularly audited? ___ yes ___ no

Volunteer Ottawa offers a number of courses designed to help you strengthen your skills as a board member.

How to Read Financial Statements

Click here to register Tuesday, June 18, 2019. 9:00 a.m. to 12:00 p.m.

Board 201: A Complete Look at Being on a Board of Directors

Click here to register Saturday, March 16, 2019. 9:00 a.m. to 4:00 p.m.

Organizational Risk Management

Click here to register Thursday, June 13, 2019. 9:00 a.m. to 11:30 a.m.

Want to learn more? Come to an upcoming workshop.

Click here for more information, and to register.

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Related blog posts:

[1] "Employee Fraud, Theft, and Embezzlement," Humanity Financial, [Online]. Available: [Accessed 26 October 2018]. [2] "Fraud in the not-for-profit environment," Chartered Professional Accountants Canada, 20 January 2016. [Online]. Available: [Accessed 25 October 2018]. [3] Muttart Foundation, "Board Development: Financial Responsibilities for Not-for-Profit Boards," The Muttart Foundation, Edmonton, AB, 2003.
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