The organization conducts its operations in a fiscally responsible manner, acknowledging its responsibilities to all stakeholders.
- The organization has implemented fiscal policies, financial management systems, and accounting controls that help to ensure fiscal responsibility and long-term viability.
- Obtain and review the financial policies and procedures manual. Document understanding of accounting controls in place.
- Review the most recently audited financial statements and related management letter.
- Obtain investment policy and determine if provisions are made for socially responsible investing. Is the composition of the portfolio communicated to all concerned stakeholders?
- Obtain managementï¿½s representation and attorney letter concerning whether any lawsuits have been adjudicated or are pending related to financial management and anti-trust law.
The organization makes a commitment to accurate, clear and timely financial reporting. Responsible companies report its financial position in plain language to employees at least annually (and to other stakeholders if required by law).
- Interview management to determine if any form of open book management is practiced. Discuss with BOD member the BODï¿½s involvement in financial reporting.
- Determine whether the organization reports on pension or other benefit programs to employees in plain language periodically.
- For not-for-profit organizations, determine if the amount of program versus administrative expense is reported to donors and grantors.