Not all board members need to be familiar with financial terms and concepts, but eachorganization needs to develop a clear and explicit agreement for how financial accountability will be ensured. The following is a starting point for an agreement that the board and staff can make to ensure a partnership for accountability.
Starting with this template, a discussion on the finance committee with the executive director and the finance staff will go a long way towards clarifying roles.
Sample Board-Staff Agreement for Financial Accountability
This agreement should be discussed and renewed when there is a new board treasurer or a new staff head of finance.
Jan Masaoka is editor-in-chief of Blue Avocado. Her background includes serving as a finance director for nonprofits, as executive director of CompassPoint, and as a PTA treasurer for her children's elementary school. This article is adapted from a segment of Best of the Board Cafe, Second Edition, published by Fieldstone Press.
See also in Blue Avocado:
- Finance Fear Factor Ratios
- Five Internal Controls for the Very Small Nonprofit
- A Nonprofit Dashboard and Signal Light for Boards
- The Nonprofit Board's Role in HR