Your charter school is a multimillion-dollar business, and financial oversight is a critically important function for your board. The number one reason charter schools fail across the country remains financial mismanagement.
In addition to a Development Committee, having a Finance Committee is essential to ensure the organization has the financial resources to fulfill its mission.
What are the key responsibilities of the Finance Committee?
The Finance Committee is commissioned by and responsible to the board of trustees.
The Financial Committee is responsible for:
- Overseeing and providing accountability over the public assets and resources
- Ensuring compliance with all state and federal regulations
- Working with the CEO to develop and monitoring the organization’s financial health
- Educating the full board to conduct proper oversight of the financial health of the organization
Spefically, it has the responsibility of working with the CEO and the organization’s Chief Financial Officer (CFO) to create the upcoming fiscal year budget, presenting budget recommendations to the board, monitoring implementation of the approved budget on a regular basis, recommending proposed budget revisions, and recommending to the board appropriate policies for the management of the organization’s assets.
Sample Financial Committee Goals and Tasks
As with any committee, your Finance Committee’s work should be organized around goals and tasks.
One of your committee’s primary goals might be:
Create multiyear scenarios to improve salary scale and other benefits.
And, to ensure you meet that goal, you might assign specific committee members the following tasks:
- CEO shares thoughts about areas to strengthen and recommended approach at the board retreat
- Faculty and staff complete survey
- List of non-financial benefits compiled and prioritized.
- Provisional plan created
- Plan shared with full board for feedback
Best Practices For Making Your Finance Committee a Success
Full Board Responsibility
The full board is on the hook for the long-term financial viability of the organization. A Finance Committee is not a substitute for the full board understanding and carefully reviewing the organization’s financial statements and financial health.
Multiple Perspectives on the Committee
A robust Finance Committee is absolutely essential. The number one reason why charter schools fail is financial mismanagement. This committee should be large enough to bring several different perspectives and a variety of financial skills to the important task of financial oversight. With the proper size, finances will be a strength for your organization.
Collaborate with Paid Staff Managers
It is essential that the finances be properly handled by a paid professional staff member of the organization. The Finance Committee should not “manage” the organization’s finances. Instead, the best organizations have the committee will partner closely with this individual to accomplish its objectives.
Educate the full board
Just as every member of the full board of trustees is equally responsible for the financial oversight and long-term viability of the organization, we rely upon the Finance Committee to lead the board in these efforts. A key aspect of this leadership includes educating the full board on the financial health of the organization and how to conduct proper oversight.
Your organization requires financial stability. Having a strategic Finance Committee in place provides the necessary support for optimal growth.