We’re pleased to bring you this guest blog post from Maribel Torres-Pinero, CPA, CEO & Director of Client Accounting Services at Lumix CPAs and Advisors. Maribel is a Standards for Excellence Peer Reviewer.
It is an honor being asked to be treasurer of the Board of a not-for-profit organization. What seems like a time-consuming task is truly an opportunity to make a fiscal difference for the organization you are invested in. As a CPA with an understanding of nonprofit experience, I have been lucky enough to serve on several Boards.
I served as a member of the Board for a particular nonprofit for about a year, allowing me to study the dynamics at the Board level and identify areas where, as a treasurer, I could make a difference. When the new slate of officers was elected, I immediately discussed my ideas with the president. These are a few of the changes we immediately implemented:
- Align Board meeting dates with logical financial reporting dates. This Board meets 4 times a year, including an all-day retreat. The financials were presented as of the day or week before the meeting. In addition, some Board meeting dates were a burden for the accounting staff who spent the first 10 days of the month preparing reimbursement requests for their government grants. Consequently, I requested that the Board meetings be held no earlier than the 20th of the month following the end of each fiscal quarter. This way the Board could examine reports closed at the end of each quarter and provided time for the staff to perform all necessary closing procedures.
- Present a full set of financial statements. This includes a Statement of Financial Position (equal to Balance Sheet), Statement of Activities (Profit and Loss), Statement of Cash Flows and Budget to Actual comparison for the quarter-to-date. Each of these statements presents a different and yet essential view of the organization’s financial health. The Board should have the opportunity to review all statements and ask question at each quarterly meeting
- Document Board’s actions and activities on financial discussions. Minutes of Board meetings should obviously include actions taken by the Board. They should also list the financial reports presented (by name), their dates and significant issues discussed in each. This demonstrates the organization’s transparency with its financial matters and the Board’s involvement and understanding of the relevant financial issues.
- Create meaningful dashboards. It is no secret that Board members have differing degrees of financial literacy. The financial statements listed above can be very confusing for many Board members. Dashboards present the same information contained in the financial statements in a way that is easily understood and highlights the key points, whether positive or negative. Three reminders when preparing dashboards: they must represent the exact data taken from the financial statements; they do not replace a full set of financial statements; and no more than two should be presented at each meeting.
These are a few ideas to get started with as you embark on your journey of helping the Board carry out their fiscal fiduciary duty. There are many more changes a treasurer can implement, and I plan to continue writing about them in future blogs. What changes have you successfully implemented as a board treasurer?