Financial Health Check Financial Health Check How financially fit is your non-profit organisation? Are its financial resources well managed? How healthy are your financial control systems? This checklist will diagnose the health of your organisation's systems of financial management. Welcome to your test Name Business Email Phone Number 1. The governing body of our organisation (board, management committee, etc.) carefully reviews the financial status of our organisation when it meets by reviewing financial reports. Not at all/unsure Seldom, Sporadically (reports delayed, inaccurate) Briefly or uncertainly (needs improvement) Regularly at most meetings In detail at every quarterly meeting 2. Programme managers or project coordinators of the organisation receive and review monthly reports showing income and expenditure against budget and other key financial information for their area of work. Not at all/unsure Seldom, Sporadically (reports delayed, inaccurate) Briefly or uncertainly (needs improvement) Carefully most months Confidently every month 3. When problems are identified through the financial reports, corrective action is taken by the appropriate persons to institute better controls or reduce costs. Show level of confidence: Not at all/unsure Struggling Needs improvement Confident Strongly confident 4. The organisation relies on the external auditors to detect errors or fraud. (Choose the extent on which you rely on the audit to detect error or fraud). Solely rely Strongly rely Uncertain Not at all Partly rely 5. The organisation has the support of a person (other than staff members) who possesses qualifications and experience in accounting or financial management and who takes an active role in the organisation. Not at all/unsure Seldom Occasionally Regularly Always 6. An independent person in our organisation (not the administrator or bookkeeper) reviews the bank reconciliations on a monthly basis and monitors all outstanding items. Not at all/unsure Seldom Occasionally Most months Every month 7. We issue receipts for all money we receive from grants, donations, gifts and all other forms of income. Not at all/unsure Seldom Only for money received at the office Mostly Always 8. All money received is banked in full as soon as possible. (No cash received is spent) Unsure/money spent and not banked Cash received is spent (not banked) and recorded Occasionally Banked in full regularly Always banked in full asap linked to receipts 9. Two signatories are required to authorise ALL cheques and payment instructions in the form of two signatories or two password holders releasing payment. Not at all/unsure Not usually Generally Mostly Always 10. Staff MAY NOT make financial commitments on behalf of the organisation (place orders or incur costs) WITHOUT prior approval or authorisation. Choose level of confidence. Not at all Uncertain Hopeful Fairly positive – experienced difficulties Strongly confident 11. We feel confident that the South African Revenue Services would be completely happy with our employee’s tax and/or VAT accounting. Choose level of confidence. Not at all Uncertain Hopeful (we would love to be more sure) Confident (knowledge of requirements needs updating) Strongly confident (up to date) 12.The organisation has effective procedures in place to ensure that all income due to the organisation is received in full and on time. Choose level of confidence. Not at all Uncertain Hopeful Fairly positive Strongly confident 13. Staff members are prevented from receiving remuneration and/or honoraria from outside the organisation, which may be seen as “double” or inappropriate payment. Choose level of confidence: Unknown Staff are trusted Difficulties have been experienced Fairly positive (high level of awareness) Strongly confident 14. The organisation has projected cash flow and prepares forecasts at least one year in advance. Choose frequency of this exercise. Not at all unknown Occasionally Annually Quarterly Monthly 15. We keep a register of all our capital items (computers, furniture, vehicles, etc.) and have effective control mechanisms in place to ensure proper use of these items. Choose level of confidence. No register kept – rely on staff honesty Uncertain Hopeful – we are committed but not sure of controls Fairly positive Strongly confident 16. We use donor funds strictly according to the contracts and only for the purposes for which the money was given and are able to clearly demonstrate this. Choose level of confidence. Not at all Uncertain Hopeful Confident Strongly confident 17. All funders receive narrative and financial reports or audited statements on a timely basis, when due. Never or unsure Sporadic - mostly initiated by funders or desperate need for funds Almost on time and often in a panic Mostly but stressful or difficult Always 18. We rate our ability to prepare realistic budgets based on the cost of future activities planned (considering our record of the past). Poor or unsure Weak Needs improvement Good Excellent 19. The program managers and other program staff participate fully in development of budgets. Not at all To a limited extent Participation is fairly weak Involved but not confident Thoroughly but confidently 20. The use of cash (including cash or uncrossed cheques) to pay costs is limited and controlled. Indicate what describes your organisation best. Unsure Most payments are made this way Too many and difficult to control Few – aware of the risks Isolated payments – strictly controlled 21. Original vouchers and or documents support all payments and clearly show the purpose for the payment and that goods and services were received by the organisation and/or organisational purposes. Not at all Uncertain – not sure what to keep Hopeful – sometimes struggle to get originals Often/mostly - some documents need to be chased Always – checked when payment made 22. If all donors’ funding were to end today, how long would present resources sustain the organisation? <6 mths or Not sure 6 – 9 mths 9 – 12 mths One Year > One year 23. The director and project managers make important decisions with financial implications based on accurate financial reports and forecasts. Choose the level of confidence. Not at all Uncertain Hopeful Confident Strongly confident 24. The funding base of the organisation is diversified and we are not dependent on one major funding source. 1 source only Not sure 2 – 3 sources 3 – 10 source > 10 sources Many sources 25. Financial and administrative staff have opportunities to acquire additional skills and to receive ongoing support in their work. Not sure/No Seldom Occasionally Regularly Always 26. Bank balances and balance of all amounts owing to or by the organisation are formally reviewed and explained to senior management. Never/ not sure Annually Occasionally Most months Every month or more often