Financial Management - HUD

U.S. Department of Housing and Urban Development Center for Faith Based and Neighborhood Partnerships THE HUD PARTNERSHIP CENTER’S CAPACITY BUILDING WORKSHOP SERIES: FINANCIAL MANAGEMENT MODULE 2 Financial Management and Budgeting for Nonprofit Organizations Managing financial records is critically important for the long-term health and sustainability of any nonprofit organization. For a nonprofit, long-term stability means having the ability to meet financial obligations such as payroll, rent, the cost of implementing and maintaining programs, etc.. An organization’s financial transactions must be appropriately recorded and maintained. An analysis of all financial data should yield information that will help guide the organization and allow it to properly plan for current and future activities. List some key tasks associated with the financial management of

your organization? Financial activities can be different from one organization to another depending on its size and how complex its programs are. There are three general areas for financial activities: Transaction Handling and Recordkeeping Planning and Budgeting Financial Management Transaction Handling and Recordkeeping Transaction handling and recordkeeping are the bookkeeping and accounting areas of financial activity. Checks must be written to pay bills; incoming payments must be deposited; records of transactions must be kept. Key Tasks Develop and maintain a system for recording financial transactions Determine and track the funds needed to operate Properly allocate funds to specific programs Manage the organizations cash flow Pay its debts Manage assets and inventory Financial Activities Transaction Handling and Record Keeping Timely and accurate billing for services performed Timely and accurate payment of goods and services Prompt deposit of receipts Proper authorization of payments Proper recording of transactions Timely and accurate preparation of financial reports 3 Planning and Budgeting Planning and Budgeting are processes in which organizations set goals and objectives, chooses programs and decides how those programs will be operated. The budgeting process relies on both financial information about past performance and the organization’s future plans. In this area, your organization should be concerned with: How are you involved with your organization’s financial activities? There are a number of things an organization must consider as it establishes or grows its fiscal office. You will need to decide who will be the “keeper of the records”? Should you hire a bookkeeper? Should you contract with an outside organization for things such as payroll? Should the executive director also serve as the fiscal officer? Will you need to have an audit? As your organization grows and develops you will need to reevaluate how your fiscal responsibilities will change. You will need to be ready to adjust your system to address compliance requirements of new funding sources or curtail activities if funding support decreases. Program planning is often viewed as the job of the director, or the program directors and the board. Fiscal management is usually assigned to the bookkeeper, accounting personnel, and maybe the board treasurer. At times, fiscal staffs’ view program planners as unable to understand how their decisions can place undue strain on the organization’s “bottom line.” Financial Activities Planning and Budgeting Involve people who can assist with the budgeting process Consider both internal and external factors in the budget process Use...

Website: grant.nv.gov | Filesize: 798kb
No of Page(s): 20
Download Financial Management - HUD.pdf