Good financial management is an essential ingredient for service delivery in the not-for-profit community. An important aspect of effective financial management is creating and maintaining a financial cushion sufficient to weather stormy periods of financial uncertainty and dwindling financial resources.
Risk management is a hot topic in the commercial sector, especially in light of the recent losses of some multi-national corporations. Some significant lessons can be learned from these incidents and can be applied towards improving risk management in not-for-profit organizations. This article defines risk as it relates to the not-for-profit community and discusses how […]
Every now and then an event jars us into remembering how susceptible to theft many not-for-profit organizations are. Recently we were involved with a small not-for-profit organization that was shocked to discover its bank account had been cleaned out. Ten blank cheques were stolen, signatures poorly forged and the cheques cashed through ATMs over a […]
Regulations regarding recognition of revenue by not-for-profit organizations, effective since April 1, 1997, are complex and often misunderstood. Confusion can arise at the time annual financial statements are prepared, especially where revenue recognized in the audited statements is significantly different from that expected by management. This article will attempt to shed some light on revenue […]
To the uninitiated, annual financial statements can be confusing and intimidating. This article is intended to help financial statement readers understand the content and limitations of financial statements. It should also help with the interpretation of the information contained in the statements. While the article is not a comprehensive guide to reading and interpreting financial […]
Mergers of not-for-profit organizations are becoming popular in the wake of funding cutbacks. Organizations often site the ability both to offer better and more comprehensive services and to reduce overhead and administration costs as reasons for merging. While the motivations may be valid, improvements in service and savings may not always be realized.
An organization’s books and records are often costly and cumbersome to store. We frequently receive questions as to what must be kept and what can be discarded. This article summarizes the rules and regulations of the more common Acts governing not-for-profit organizations in Ontario regarding the retention of books and records.
Many not-for-profit organizations operating in multiple locations have branch networks. We are often asked what the “correct” accounting systems and controls are for an organization with several branch locations. In this article we will briefly look at some of the fundamental underlying issues and address a number of specific concerns.
All levels of government are taking more care to ensure that grant money is spent as intended. If your organization finds itself with unspent money at the end of a grant program there is a good chance you will have to return it. In this article we will look at strategies you can use to […]
Clear financial reporting to the Board of Directors is essential for good financial management in any organization. Budgets and accurate day-to-day financial records are of limited use if the information they contain is not communicated clearly to the Board and those people responsible for managing the organization.
All organizations must deal with financial uncertainty. The key, as always, is to maximize the level of services provided given your financial resources. The fundamental restructuring of delivery and funding of social services in Ontario has resulted in a state of chaos for many government funded not-for-profit organizations. The degree of uncertainty makes financial management […]
Most of the incorporated not-for-profit organizations in Ontario are governed by either the Ontario Corporations Act or the Canada Corporations Act. Both pieces of governing legislation require that all organizations have an annual audit. Under these pieces of legislation there are no exemptions from audit.
It is critical that you use all the resources of your organization as intended. In a childcare setting you want to ensure that all cash, food, supplies and other items are only used for childcare. Your Board of Directors is ultimately responsible for ensuring that resources are used appropriately. The major issue is the control […]
The budgeting process is often intimidating because it is seen as being technical and time consuming. A budget for a not-for-profit organization need not be complex to be effective and can be prepared by the Finance Committee or any person on the Board of Directors. This article presents a framework for preparation of your budget, […]
This article is the first in a series describing how your Board of Directors can use internal controls to improve the financial efficiency of your childcare centre. Over the next few months we will be looking at a variety of ways to make the most of your financial resources.
Centres almost never get into financial difficulty overnight. Financial difficulty generally builds over many months. If financial difficulties come as a surprise then there has probably been a lack of attention to finances on the part of the Board of Directors and staff. Following are a few early warning signs that, in our experience, generally […]
What does the future hold in store? 1. Do you prepare an annual budget? 2. Is it prepared before the year starts? 3. Is it approved by the board? 4. Is it updated periodically? 5. Do you have a monthly cash flow forecast? 6. Is it used by the board in settling fee/expense policy? 7. […]
JANUARY Assemble payroll information for T4/T4-A preparation FEBRUARY Final date for T4/T4A submission is month end Review monthly cash flow assumptions and adjust monthly cash flow forecast if necessary (*)