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Role of the Governing Board
Government regulations in deferent jurisdictions across the globe have redefined their involvement and regulation of both profit and nonprofit organizations in the recent past. The environment in which nonprofit organizations operate in has greatly changed in the recent past. It is mainly characterized by great public awareness as well as scrutiny of the organization’s operations, increased partnership with profit-making organizations, fine-tuned regulatory laws as well as advancement in information technology. Moreover, it demands great accountability from non-profit making organization both to governments and to the public (Hodge & Piccolo, 2011). Therefore, the governing boards must be fully involved in the in monitoring the accounting process and the overall financial management.
Governing boards can be involved in the financial management of the organizations in various ways. First, the board must plan for the sources of funds as well as their utilization fostering the achievement of organization’s objectives. One of the fundamental roles of the governing board is to plan for the strategies in which the organization will achieve its objectives (Tigas & Wei, 2015). Such planning must incorporate the financial utilization to enhance the objective of accountability that has become universal among all nonprofit organizations. The planning will ensure proper utilization of finances within the framework of the organization’s objectives.
Secondly, the...
This includes availing proper financial statements to the public, government agencies as well as other stakeholders both periodically and upon request (Blackwood & Roeger, (2011). The transparency will foster an environment of proper financial management in the organization.
Thirdly, the board must be involved in undertaking fiscal responsibilities. They include approving budgets for the organization, monitoring the organization’s expenditure, overseeing assets and liability stewardship for the organization among other (Hodge & Piccolo, 2011). Therefore, it helps the organization to maintain proper financial management practices.
Overall, the managing board of the nonprofit organization plays a critical role in the financial management of the organization. In fostering such financial management practices, the board ought to undertake financial planning, monitor expenditure, approve budgets and report financial statements to the relevant stakeholders.
References
Blackwood, A., & Roeger, K. (2011). Revoked: A snapshot of organizations that lost their tax-exempt status. Urban Institute. Retrieved from http://www.urban.org/UploadedPDF/412386-Organizations-that-Lost-their-Tax-ExemptStatus.pdf
Hodge, M. M., & Piccolo, R. F. (2011). Nonprofit board effectiveness, private philanthropy, and financial vulnerability. Public Administration Quarterly, 35(4), 520–550.
Tigas, M., & Wei, S. (2015). Nonprofit explorer: Research tax-exempt organizations. ProPublica. Retrieved from https://projects.propublica.org/nonprofits/
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