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BUDGET AND FINANCE COMMITTEE
Discussion
This committee oversees all finance-related
issues (i.e., review all financial policies and procedures and recommend changes
for the full board to approve; review investment issues, etc). It should work
with the management staff to establish an operational budget for the next fiscal
year. Committee members review projected revenue income and operational expenses
for the current year and recommend an operational budget for the full board to
approve.
Some boards may argue that their NPC cannot estimate the revenue income that will be generated during the next year, and therefore cannot formulate a budget. This is an excellent reason for the board to consider some strategic long-term financial planning. Board members have a responsibility to make sure the NPC is financially sound. Furthermore, the board has a responsibility to ensure that adequate resources are dedicated to the sound financial operation of the organization. Nonprofit best practices require board approval of an
annual operational budget.
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