Dafferns

Internal Financial Controls CC8

If a charity is to achieve its aims, its trustees need to ensure its assets are properly used, its funds are spent effectively and its financial affairs are well managed.

Risk can never be fully eliminated, however, internal financial controls will mitigate and reduce the risk, and may even help the charity achieve value for money. 

To be successful it is important that the correct “tone” is set from the top, and that controls are reviewed regularly and a response is given when they fail so that consequences of non-compliance are understood.

The guidance in CC8 provides examples of commonly used internal financial controls. These essential checks and procedures will help charity trustees:

  • Meet their legal duties to safeguard the charity’s assets
  • Administer the charity’s finances and assets in a way that identifies and manages risk
  • Ensure the quality of financial reporting, by keeping adequate accounting records and preparing timely and relevant financial information

Where a charity works internationally, there will be additional challenges that need to be considered and these are covered in Charities: how to manage risks when working internationally

Larger charities may have more complex arrangements and activities requiring a more tailored professional review of their existing process. If you would like to discuss this further please contact our Charities Team who will be happy to assist.