Board Development

Finance Committee Template

Composition: Members of the board, staff support person (if appropriate). Some organizations will also invite members of the public. The finance committee reports to the board. It is appropriate for the CFO to staff the committee.

Optimal size: Six

Chair: Current treasurer or other appointee with approval of the board

Meets: Boards typically meet either monthly or quarterly (depending on the organization’s needs). The committee should meet one week prior to the board meeting.

Duties of the finance committee chair:

• Work directly with the assigned staff member to determine meeting frequency and agendas
• Convene meetings, develop the agenda, and facilitate meetings

Duties of primary staff:

• Work directly with the committee chair to assure timely information is delivered for a productive meeting
• Handle meeting logistics and notifications
• Take minutes and provide follow-­‐up communication for action items and board member assignments

Report frequency:

• The committee will submit reports to the board as part of the overall board packet including, at a minimum, the yearly budget to date, a report on revenue and spending, a current cash flow statement, and balance sheet.

---

Primary Responsibilities of the Committee

The finance committee will ensure the board has accurate and timely financial information and that all required financial filings are properly submitted. Specifically, the committee will:

1. Ensure complete and accurate financial records are maintained and monitor those records
2. Review annual budget and recommend approval to full board
3. Provide sufficient information before each board meeting so the board can effectively monitor the budget on a regular basis
4. Communicate financial status to the full board and make sure the board understands the financial picture
   • Present all relevant financial documents (budget, balance sheet, cash flow)
   • Ensure that financial statements are clear and concise
   • Consistently highlight the difference between unrestricted, temporarily restricted, and permanently restricted cash
5. Ensure compliance with local, state, and federal regulations governing nonprofit financial reporting
6. Protect financial assets and make sure that any investments are managed carefully
7. Ensure the CFO and audit committee are contracting with an independent auditor to perform the annual audit, review the audit report, and accept audit finding
8. Review 990 and ensure submission
9. Ensure payroll taxes are paid

Optional Responsibilities

• Provide training to the full board on nonprofit financial statements
• Draft budget scenario plans to ensure the organization is prepared to deliver their services and programs
• Review and recommend policies to protect assets for board approval (as necessary)