IPOL 8530—Spring 2010 <br />The Finance Function in Nonprofit & Public Organizations<br />Alfredo Ortiz<br />
Module 1.3<br />Financial controls and procedures <br /><ul><li>Policies and procedures
Risk management and internal controls
Procurement</li></ul>2<br />MIIS--IPOL 8530, "The Finance Function in Social Change Organizations"<br />
Module 1.3—Financial controls and procedures<br /><ul><li>This module presents an introduction to risk management, interna...
What types of “systems instructions” can financial policies and procedures provide?
What are the financial management risks associated with NP and public organizations, and what controls and mechanisms exis...
Why is the contracting function (procurement) so important in financial management of NP and public organizations?
What are the proper steps needed to guarantee an effective, accountable procurement process?</li></ul>3<br />MIIS--IPOL 85...
Policies and procedures<br />Principles and processes for financial management <br />4<br />MIIS--IPOL 8530, "The Finance ...
Policies and procedures<br />MIIS--IPOL 8530, "The Finance Function in Social Change Organizations"<br />5<br />Financial ...
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1 of 2--Policies & Procedures Intro to Internal Controls Sp 2010

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Short presentation on the principles of policies and procedures for the class IPOL 8530 'The Finance Function' in Social Change Organizations'. This class is part of the Master of Public Administration (MPA) program in the Graduate School of International Policy & Management at the Monterey Institute of International Studies (MIIS). Presentation created by Alfredo Ortiz Aragón, adjunct professor.

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1 of 2--Policies & Procedures Intro to Internal Controls Sp 2010

  1. 1. IPOL 8530—Spring 2010 <br />The Finance Function in Nonprofit & Public Organizations<br />Alfredo Ortiz<br />
  2. 2. Module 1.3<br />Financial controls and procedures <br /><ul><li>Policies and procedures
  3. 3. Risk management and internal controls
  4. 4. Procurement</li></ul>2<br />MIIS--IPOL 8530, "The Finance Function in Social Change Organizations"<br />
  5. 5. Module 1.3—Financial controls and procedures<br /><ul><li>This module presents an introduction to risk management, internal controls and procurement, and specifically attempts to answer the following questions:
  6. 6. What types of “systems instructions” can financial policies and procedures provide?
  7. 7. What are the financial management risks associated with NP and public organizations, and what controls and mechanisms exist to respond to those risks?
  8. 8. Why is the contracting function (procurement) so important in financial management of NP and public organizations?
  9. 9. What are the proper steps needed to guarantee an effective, accountable procurement process?</li></ul>3<br />MIIS--IPOL 8530, "The Finance Function in Social Change Organizations"<br />
  10. 10. Policies and procedures<br />Principles and processes for financial management <br />4<br />MIIS--IPOL 8530, "The Finance Function in Social Change Organizations"<br />
  11. 11. Policies and procedures<br />MIIS--IPOL 8530, "The Finance Function in Social Change Organizations"<br />5<br />Financial systems need instructions in order to function efficiently, consistently and transparently <br />These instructions need to be based on the system architecture, based on:<br />Work flows and processes indentified in the value chain(s)<br />An organization’s cost structure map<br />Decision makers’ identified needs<br />“Good” practices, where applicable<br />External stakeholder needs<br />
  12. 12. Financial systems instructions—Policies and procedures<br />6<br />The main two purposes of policies and procedures are to improve organizational effectiveness/efficiency and to improve organizational accountability/transparency. Specifically, we want to: <br />Add structure and instructions to decision making around work process flows and systems (HAS) to increase operational efficiency<br />Can be developed for any major organizational process. In FM, procurement (including A/P), accounting (including A/R)and travel are common. <br />Most also have a control need<br />Add “governance” and controls to work process flows to improve organizational transparency and safeguard organizational assets  <br />Often classified as internal controls<br />MIIS--IPOL 8530, "The Finance Function in Social Change Organizations"<br />
  13. 13. Policies and procedures—two foci<br />7<br />MIIS--IPOL 8530, "The Finance Function in Social Change Organizations"<br />
  14. 14. Definitions<br />Policies<br />Written and unwritten principles, statements, and rules that govern organizational behavior<br />E.g. Policies on corruption and transparency, quality of services, documentation, professionalism (and dress), frugality, etc.<br />Procedures<br />Written and unwritten instructions on how to carry out specific policies or processes<br />E.g. procedures on procurement, internal controls, monitoring and evaluation, documentation, etc.<br />8<br />MIIS--IPOL 8530, "The Finance Function in Social Change Organizations"<br />
  15. 15. Policies and procedures<br />9<br />Organizational systems<br />Policies and Procedures<br />Human interface<br />MIIS--IPOL 8530, "The Finance Function in Social Change Organizations"<br />
  16. 16. Policies and Procedures<br />10<br />MIIS--IPOL 8530, "The Finance Function in Social Change Organizations"<br />
  17. 17. Understanding broad organizational processes—Where FM fits in<br />11<br />Purposefulness (non-linear)<br />Meaningful financial information, relations, processes & systems?<br />Purposefulness<br />(non-linear)<br />

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