Having an excellent Treasurer is every trustee’s responsibility

The Chair of a major charity once said that having an excellent treasurer meant that she could rest easy at nights, confident that the financial aspects of the charity were under control. Clearly confidence in finances is something for which every charity would wish to aim, but is it really all down to the treasurer? What is the responsibility of trustees to ensure that they have an excellent treasurer?

The simple answer might seem to be that the trustees recruit a treasurer who is very good and then everyone else can relax and ‘rest easy at nights’. But isn’t that abdicating the responsibility for finances for which all trustees are accountable? So what are the alternatives? Here are some thoughts on how to make having an excellent treasurer a reality.

1.You need to be confident the accounts are correct

Getting right to the basics about the accounting system and the accounting processes: are you confident that you have an accounting system package or spreadsheet which is capable of tracking the income, expenses and assets of the charity. Are there clear processes to enter information and is there a way of automatically producing management reports for board meetings.

Your treasurer might also be the book-keeper or you may have someone else looking after the accounts. In either case it will primarily be the treasurer’s responsibility to ensure that the trustees can be confident that the accounts are correct, however, the treasurer needs the support of the board to ensure that these systems and processes are in place.

2.You need to understand the numbers put before you

At Board meetings do your eye glaze when the finance section starts? Are you happy that the treasurer understands everything so you don’t need to worry? Have you tried to understand the numbers but failed and don’t want to appear ignorant by asking questions?

A good treasurer is someone you can trust to ensure that the finances are presented in a way that you can understand to enable you to make decisions about what the charity should do next.

If you’re not sure about the terminology, such as ‘designated’ or ‘restricted’ funds, ask for training. It may be offered as part of your induction, but certainly you need the knowledge to be able to fulfil your role as trustee. The finances should be presented in a way that you can understand (not too much detail) and an explanation given by the treasurer as to what the figures mean and where there may be areas for concern or discussion needed, such as a shortfall against forecast income. Ask questions if you are uncertain about how much is in the bank, what is the cashflow, whether the charity is solvent and has enough money to pay its expenses.

Treasurers generally are not flattered by trustees relying totally on their skills. They would prefer to be constructively questioned and to share responsibility with other trustees.

3.You need to have financial policies and controls in place

Do you regularly review policies as a board? There are a number of financial policies needed depending on the size and the work of the charity, such as banking and investments policies. These may be made the responsibility of the treasurer or developed by working groups but need to be approved by the Board.

It is important to ensure that there are financial controls in place to safeguard against fraud, especially where there are a small number of people who are handling money. It is a sad fact that charities are increasingly seen as an easy target for fraud and lack of financial controls makes pickings even easier. Financial controls help to protect the treasurer and the whole charity.

4.You need a good Independent Examiner

Is the appointment of the Independent Examiner(IE) a board item? The treasurer is often responsible for finding the IE, however, in smaller charities it is doubly important that the trustees ensure that the IE is qualified and truly independent.

5.You need to report the numbers and impact at least annually

Is the treasurer solely responsible for the Annual Report and returns? The Annual Report is often seen as primarily about presenting the end of year accounts and made the responsibility of the treasurer. It is also the opportunity to promote the work of the charity and its impact. It’s the chance to let all your supporters and beneficiaries know about your successes and the sections of the report can be developed by a wider group of trustees.

In summary, a good treasurer will have good financial skills but to have an excellent treasurer requires working collegiately with the rest of the board. So if you want an excellent treasurer, then learn how to work with and support your treasurer to ensure they excel!

Denise Fellows is chief executive of The Honorary Treasurers Forum. She is a Senior Visiting Fellow at Cass CCE and has authored and edited several books including the Honorary Treasurers Handbook which can be downloaded from the Forum’s website. Amongst many voluntary roles, Denise is a founder liveryman of the Worshipful Company of Management Consultants and Treasurer of their charitable fund.