Your SlideShare is downloading. ×
Youth3 financialsystems
Youth3 financialsystems
Youth3 financialsystems
Youth3 financialsystems
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Youth3 financialsystems

177

Published on

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
177
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
11
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Financial Systems One in a series of briefs for civil society organizations, written from a funder’s perspective, and intended to stimulate inquiry, rather than provide rigid instructions.Budgeting Grant Proposal Writing Project Development Resource MobilizationTips for preparing a Tips for developing Tips for developing and Tips for mobilizingbudget with an emphasis and writing a proposal, implementing a project resources closer toon its purpose, steps, and including critical elements and key questions to ask in home to strengthencomponents. to facilitate project success. the process. organizational capacity and deliver benefits to theFinancial Systems Monitoring & Evaluation Reporting to Funders community.Tips for establishing an Tips for reviewing and Tips for maintainingaccountable and assessing progress and strengthening yourtransparent financial towards objectives, relationship with funderssystem to build financial identifying problems and following a grant award.sustainability. strategies, and making adjustments to plans.PURPOSE OF FINANCIAL SYSTEMSFinancial systems help inform your organization’s organization to make sound decisions based onplanning and action plans. Financial systems cash flow and available resourcesalso help you track and manage the resources  Monitoring funds, or comparing actual incomerequired to successfully complete your work. and expenses versus budgeted amounts, helpsThese tips provide basic practices you will managers ensure that the necessary funds are inneed to build financial sustainability in your place to complete an activityorganization.  Most governments require that registered, charitable organizations create accounts that track income andDemonstrating good stewardship of resources assists expensesCSOs in efforts to be accountable to stakeholders  Funders require reports that demonstrate thatand funders, and helps build confidence that your grants were used for intended purposesorganization is a good place for funders to invest.  Establishing financial controls and clear accountingOther reasons why developing financial systems are procedures help ensure that funds are used forimportant include: intended purposes  Transparency, clear planning and realistic projectionsFinancial systems and capacity help the contributes to the credibility of the organization.
  • 2. Tips for Strengthening Organizational CapacityFINANCIAL CONTROLS AND MONITORING 2. Financial Planning: Financial planning convertsFinancial controls and monitoring methods have a your organization’s objectives into a budget.dual role in supporting internal needs and external The budget serves as a critical planning guiderequirements. There are five key aspects to financial for your staff and governing board. It is a publiccontrols and monitoring. These include: record for funders of how you intend to spend the funds received. Financial planning allows1. Accounting Records (or Accounts Receivable you to review your organization, examining and Payable): Establish a process that records successes and challenges in the past. Planning every financial transaction by maintaining paper also enables you to make projections and set files, an electronic database, and copying all targets, informing strategies for future success. records in a virtual library. Your organization needs to be able to demonstrate what funds 3. Financial Monitoring and Reporting: Drawing were received and how funds were spent. from the information in the accounting records, your organization can create internal reports Accounting records should be consistent. that help monitor progress by comparing Choose a method and regular schedule for budgets to actual expenses. Frequent reviews tracking income and expenses that works for and monitoring allows the governing board and your organization. This is important in case the staff to measure your organization’s progress organization is audited or if a funder requests and helps inform decisionmaking about the information for a specific item or transaction. organization’s or a project’s future. Internal reports, sometimes called management reports, A system should also be developed to track allow you to be forward thinking as you assess donations from individuals to keep donors the financial status of the organization and updated of the organization’s progress or to what will be needed to realize your goals. solicit annual and repeat contributions. A separate accounting system should be developed Accounting records are also the source for creating for funding from foundations with the original external financial reports that demonstrate to proposal and budget, dates of receipt of funds, funders and other stakeholders how funds have notes on allowable expenditures, and reporting been spent. Funders may require financial reports requirements so that you can respond to funders’ at the completion of the project or periodically requests for financial records or in case of audits. during the project’s implementation.
  • 3. Tips for Strengthening Organizational Capacity4. Governing Board: A governing board, whether organization’s resources. Governing boards comprised by a board of directors or leadership should participate in approving budgets, financial from the community, serves as stewards of an monitoring and reviews, and agree upon and Examples of Internal Controls Examples of how to ensure that funds are spent transparently and in a manner for which they are intended:  Have two people, such as the director and board treasurer, approve and sign the expenses over a certain amount of money  Keep records that can not be altered by numbering receipts, using a system where the data entry corresponds with a specific invoice or contract  Assign qualified and experienced personnel to manage accounts  Assign different staff in your organization distinct responsibilities related to managing income. For example, one person is responsible for authorizing expenses, another is responsible for handling cash, and another is responsible for recording transactions  Develop a procedural manual for record-keeping  Post your financial statements in a public space so that all stakeholders are aware of external funds that may have been received in the community’s name  Have an external accounting or auditing firm conduct regular reviews of financial monitoring and systems Curt Carnemark/The World Bank
  • 4. Tips for Strengthening Organizational Capacity ensure that internal controls are implemented. assist in your periodic reviews and planning sessions. The board treasurer who has skills in accounting It also helps build confidence among stakeholders should be the lead person in working with the that you have a long-term vision and plan for your staff in ensuring financial accountability. organization’s operations.5. Internal Controls: Controls are organizational Employing financial systems that help build checks practices that help safeguard your assets and and balances, support your program planning abil- ensure that money is being handled properly. ity, and increase your success with budgeting and Controls help detect errors in accounting, pre- assessing progress in programming, can significantly vent fraud or theft, and help support the people advance an organization’s capacity to begin thinking responsible for handling your organization’s fi- about long-term plans and financial sustainability. nances. See box for examples of internal con- trols. FOR MORE INFORMATION For information on strengthening financial manage-ADDITIONAL TIPS ment systems of NGOs, see the website for Mango,Just as organizations create a plan, you may wish Management Accounting for Non Governmentalto document your financial systems, your methods Organizations or www.mango.org.uk.for financial management, and your plans forsustainability. A written document can serve as an For a toolkit on Financial Control and Accountability,important reference point for your organization and see CIVICUS’ website www.civicus.org. The Social Development Civil Society Fund (CSF) is one of the few global programs of the World Bank that provides direct grants to civil society organizations through the World Bank’s Country Offices. CSF seeds and supports activities related to civic engagement that empower and enable citizens to take initiatives to influence development outcomes. www.worldbank.org/civilsocietyfund | Social Development Department | The World Bank Tips by Yumi Sera and Susan Beaudry, 2007

×