To a large degree, the financial responsibility for the organization will be a shared responsibility. Even so, you need clearly defined roles to avoid conflict. Particularly in the start-up phase, the board president, the treasurer, and the person who is overseeing day-to-day operations need to collaborate to develop the budget. An executive director, if you have one, needs to be directly involved with the board members to provide the real-world guidance they may need.
Chapter 9 explored the actual development of the budget. Now for the budget to work, everyone must understand that a fine line exists between cooperation and micromanaging. It is time to choose the best people for the tasks. The monthly board meeting is the traditional time to discuss the financial health of the organization. If you are using standard accounting software, monthly financial statements are a simple matter to produce, but there is no guidance on interpretation.Staff Presenting Financial Information
Many organizations have a staff person present financial updates to the board, either in a narrative form or with copies of the financial documentation produced using accounting software such as Quick Books.
This reporting method is not without problems. It can go right over the heads of board members who may not have been following the operations as closely as staff does. It also places an artificial barrier between the board and the staff person who presents the information precisely when all barriers need to be removed so honest assessments can take place. The monthly reporting needs to be as free from potential conflict as possible.
Regardless of who actually presents the financial information, consider setting up a formal one-day class for your board on reading and understanding financial data. Far too few boards of directors understand modern accounting or learned how to read a profit and loss statement, but pride or embarrassment keeps them from speaking up.
An excellent alternative to having a staff person present the financial report to the board is to have the treasurer open the conversation by presenting the report. This option offers a completely level playing field to discuss your finances because a peer makes the presentation.
Of course, the treasurer needs to be completely conversant with the details of the budget and must know how to read a spreadsheet to lead the discussion. Discuss who should present the financials with the board and ideally with any staff directly involved in preparing the monthly reports. This strategy enables you to reach a decision that meets everyone's needs.