Jackie McLaughlin, CPA Quality Control and Learning Manager at Chazin and Company, discusses the accounting and financial questions that nonprofit board members should be asking. Jackie elaborates on the importance of active board engagement and the need for board members to ask questions. She begins with a brief story about the Enron collapse to highlight the consequences of not asking important financial questions.
With questioning from Julia Patrick, Jackie discuss the concept of fiduciary responsibility, comparing it to being a parent and making decisions in the best interest of the organization. Jackie explains that board members should approach their role as stewards of the organization and ensure that their decisions are in the best interest of the nonprofit.
The conversation then shifts to budget-related questions. Jackie encourages board members to ask "who, what, when, where, why, and how" to gain a better understanding of the organization's financial activities and decision-making process. They also touch on the importance of budget assumptions and the need to question them to ensure realistic financial planning.
The topic of controls is addressed, with Jackie explaining that controls are in place to prevent and catch mistakes in financial processes. She highlights the importance of internal controls, such as bank reconciliations, and the role they play in detecting errors and deterring fraud. The external component of controls, such as bank statements and audits, is also discussed.
The conversation wraps up by mentioning the significance of policies, including conflict of interest and whistleblower policies, and the need for board members to be aware of these policies. Jackie emphasizes the importance of transparency and board involvement in matters related to executive directors' finances
Jackie McLaughlin, CPA Quality Control and Learning Manager at Chazin and Company, discusses the accounting and financial questions that nonprofit board members should be asking. Jackie elaborates on the importance of active board engagement and the need for board members to ask questions. She begins with a brief story about the Enron collapse to highlight the consequences of not asking important financial questions.
With questioning from Julia Patrick, Jackie discuss the concept of fiduciary responsibility, comparing it to being a parent and making decisions in the best interest of the organization. Jackie explains that board members should approach their role as stewards of the organization and ensure that their decisions are in the best interest of the nonprofit.
The conversation then shifts to budget-related questions. Jackie encourages board members to ask "who, what, when, where, why, and how" to gain a better understanding of the organization's financial activities and decision-making process. They also touch on the importance of budget assumptions and the need to question them to ensure realistic financial planning.
The topic of controls is addressed, with Jackie explaining that controls are in place to prevent and catch mistakes in financial processes. She highlights the importance of internal controls, such as bank reconciliations, and the role they play in detecting errors and deterring fraud. The external component of controls, such as bank statements and audits, is also discussed.
The conversation wraps up by mentioning the significance of policies, including conflict of interest and whistleblower policies, and the need for board members to be aware of these policies. Jackie emphasizes the importance of transparency and board involvement in matters related to executive directors' finances