Financial questions for trustees or Directors to ask

We have set out some sample financial related questions that trustees should regularly ask at board and trustee meetings to help raise important issues.

Charitable and community objectives

  • How are we meeting our charitable or community objectives
  • What difference are we making and how is it being measured?
  • Do our objects meet today’s needs and priorities?

Strategy and governance

  • What is our strategy and when was it last reviewed?
  • Is the strategy relevant to the current external environment?
  • Is it time to review our governance structures and policies?

Business model and contracts

  • What are the main income streams?
  • What are the implications of personal budgets, payment by results ans other new contracts and funding streams?
  • Does the income cover the costs of delivery?
  • What opportunities are there for making efficiencies and savings?

Income

  • How is our income compared to budget last year/other similar organisations?
  • What proportion of income is at risk this year/next year?
  • Have there been or expected to be any major changes for our income?
  • Is any income restricted?
  • What is our forecast surplus or deficit for the year?

Cashflow

  • What is our cashflow position?
  • What does the forecast over the next six to 12 months look like?
  • Are we struggling to pay suppliers and contractors?
  • Is PAYE and VAT up to date?
  • Are we satisfied that VAT is correct?
  • What is our liquidity ratio?
  • Are there any outstanding debtors?

Fixed assets and reserves

  • What is our reserves policy and is it relevant to our current needs?
  • Are we in compliance with our reserves policy?
  • Can we see a summary of the movements and balances on restricted funds?
  • What is the split between restricted, designated and unrestricted funds?
  • Are there any major changes to or issues with our fixed assets?

Capital projects

  • What governance and financial monitoring controls are in place?
  • Can we see a regular process report including costs compared to budget?
  • Is the project fully on track or are there delays, overspends or anticipated issues?

Audit and compliance

  • Can you give me an update on progress on the issues set out in the most recent audit management letter?
  • Do we always comply with filing and other compliance, tax and other requirements?
  • Having had the same auditors for 10 years, it seems time to review and tender.

Staff

  • What proportion of income are the staff costs?
  • If significantly above or below average, or compared to last year or the budget, then what are the reasons?
  • Do we have the right structure and staffing levels to deliver our services?

Developed by Neal Howard Ltd, Growing Social Enterprises