The Rescue Mission's Financial Management Team

The Rescue Mission Financial Management Team

A.    Board of Directors

Ultimately, the Board of Directors has the primary responsibility for managing the rescue mission’s financial affairs. The way they actually do this is 1) by hiring and supervising an Executive Director and 2) by adopting an annual budget, and 3) by regularly reviewing reports on the mission’s financial status.

Their main duty is to ensure the rescue mission effectively manages its financial resources in order to fulfill the charitable purposes for which it was granted tax exempt status and to be careful that its activities in no way benefit any private individual, but instead are promoting the "public good".

The typical financial management functions of the Board of Directors include:

• Developing and reviewing the rescue mission’s mission statement, goals, and operating plan;
• Approving the annual budget;
• Approving the rescue mission’s major commitments, such as grants, leases, loans and major purchases;
• Establishing program direction, priorities and methods, and reviewing progress toward program and financial goals;
• Establishing fund raising programs and policies; and
• Hiring, establishing appropriate compensation for, and evaluating the Executive Directgor, discharging when necessary.

Good financial information that is presented accurately is the basis for effective Board decisions on such matters as whether to reduce expenses, buy a building, or add new programs. They must be able to obtain and to interpret the financial information needed to take action on such items. .

One special problem is that rescue missions seldom recruit Board members because they posses financial expertise. They tend to look for people of influence in the community and those who can help them with raising funds. As a result, too many rescue mission boards lack people with a good understanding of financial matters.

B. The Finance Committee.

The main group on the rescue mission’s board that deals with money matters is the Finance Committee. Their job is to study and review financial matters in depth and bring their recommendations to the full board. This committee often also serves as the Audit Committee, as well, by reviewing the mission’s annual CPA audit.

Ideally, this is a group of 2-5 board members made up of people with special financial expertise, such as CPAs, attorneys, bankers, businessman, etc.)

The main duties of the Finance Committee are:

• Help ensure integrity of financial information.
• Help ensure financial accountability.
• Assist the board in fulfilling its fiduciary responsibilities.
• Establishing financial guidelines and policies;
• Assisting in designing financial reports;
• Overseeing investment policies and performance;
• Overseeing internal controls;
• Reviewing budgets initially prepared by staff;
• Approving the selection of independent auditors;
• Reviewing annual audit reports and management letters; and
• Reviewing significant transactions, such as insurance, leases, property, and other.

Other concerns that the Finance Committee deal with are:

• The overall financial condition of the rescue mission?
• Potential tax or legal problems
• Special financial problems or opportunities
• Tracking revenue, expenses and services in light of the approved budget – and recommending necessary adjustments from time to time.
• Actions necessary to ensure the rescue missions immediate and long-range financial health

C Treasurer

The Treasurer is the officer on the Board of Directors who is responsible for general oversight of the rescue mission’s financial affairs and alerting the board to problems or important fiscal issues. The major responsibilities include:

• Supervising the management of cash and investments.
• Supervising the keeping of funds, including signing checks, maintenance of bank accounts, etc.
• Supervising receivables and payables.
• Negotiating and executing transactions, including property, leases, insurance, loans, etc.
• Maintaining internal controls.
• Safekeeping of corporate documents.
• Safeguarding of assets.
• Financial reporting to the board.

D. Executive Director (or Chief Executive Officer)

The Executive Director is responsible for the mission’s day-to-day financial affairs. These responsibilities include:

• Making sure that financial practices conform with established policies.
• Keeping reliable financial records.
• Preparing accurate and meaningful financial statements.
• Anticipating financial problems and initiating corrective action.
• Safeguarding and managing the rescue mission’s assets.

These responsibilities may be further defined into areas typically associated with a Treasurer and Controller. In smaller NPO’s one individual may perform all functions.

E. The Controller (or Chief Financial Officer)

While not always carrying the title "Controller" or "CFO", every rescue mission has one employee, apart from the Executive Director, who is responsible for financial management functions. This person is primarily responsible for maintaining an effective financial accounting system and preparing financial reports for department heads, the Executive Director, and the board.  They make sure that the rescue mission is staying on track with the budget and is abiding by its policies and governmental laws and regulations. The main duties of this position are:

• Maintaining financial accounting systems.
• Preparing financial reports to meet the needs of management, the board, the public, and others.
• Preparation of budgets for board approval and approval of expenditures to comply with budgets.
• Preparation of corporate tax returns and all required governmental filings.
• Countersigning of checks.
• Internal audits.
• Working with external auditors.

Adapted from Financial Management for Nonprofit Leaders by Gregg Capin, CPA (Chrisian Camping Intl.)