Registered charities don’t succeed by accident, they take effective planning and volunteers working to the utmost of standards. The board of trustees carries the obligation to see that the charity operates effectively and efficiently.
None on the board is more accountable or has a harder role than the treasurer. This position is the pin that holds all the work together as they oversee the day to day handling of finances and the crucial reports necessary for oversight.
Suffice it to say, it takes a lot of strong characteristics to be a treasurer. They must be beyond reproach in character and also accurate in their accounting. It doesn’t hurt to have a finely tuned radar for changes in the social fabric, either.
Read on to learn more about the roles, obligations, and characteristics of being a treasurer.
Charity Treasurer Roles
Treasurers act as a nexus for an organisation. They both approve the decisions of the board above and around them as well as see that financial transactions complete. A treasurer doesn’t simply handle money but establishes principles for tracking money as it enters, sits, and leaves the coffers.
The role of treasure in a small charity can be difficult to pin down because so much of what they do is part of the actions of the board as a whole. It’s best to think of the treasurer as a hand attached to a body. It may not make all of the decisions independently, but it is the final actor for many of those decisions.
A treasure takes care of finances across a number of channels and specifically:
- Keeps effective and accurate records of financial procedures
- Monitors the financial health
- Produces financial reports
- Deals with the accounts and audits thereof
- Conducts financial affairs in accordance with legal structures and best practices
A treasure may be in charge of these roles as a singular individual or as the overseer of a team.
Treasurer Obligations
A treasure is a member of a board of charity trustees for a charity. They inherit the same duties as other trustees and those duties become a component of their role.
The following provides a treasurer-specific overview of these duties.
Meet Trustee Requirements
All trustees for charities must be 18 (or 16 for a CIO). They must not have a disqualification either logged or pending against them.
For charities working with at-risk demographics and children passing a DBS check is also required.
Trustees must also be properly appointed according to the governing documents of the organisation.
Ensure Public Benefit
All trustees must ensure that the charity works for the public benefit. For the treasurer, this means confirming that funds are allocated to reputable vendors and services that comport to the charity’s mission.
The most important signifier of a charity carrying out their mission to the public good is how their finances are spent. This makes this both the most important role and the gravest obligation for the treasurer.
To this end, it is vital that the treasurer know the charity’s objectives and forming the language of the governing document. This obligation extends further, funding sources need to also be evaluated to prevent conflict.
Finally, a treasurer needs to establish a system for evaluating the efficacy of the charity in achieving its benefit. This includes reevaluating goals and supplying documentation and reasoning for changes. It’s crucial to document when changes in efficiency cross into changes in objects.
Comply with Governing Document and Laws
The trustees draft a governing document to guide the charity. Trustees thereafter must comply with this document. The document itself must also comply with legal requirements applicable to the charity.
This includes language on the powers of the charity, what the charity does, the structure of the charity, and the roles of trustees.
This document also needs to list how the document can be changed and what steps to take to close the charity. This last requirement heavily involves the treasurer that must make a full accounting of funds in the event of a close down.
A treasure needs to also look out for how facilities, vehicles, and other resources are used to ensure they comply with percentage use and don’t fall into gratis areas.
Act in Best Interest
The treasurer must be vigilant that they carry out actions in the best interest of the charity.
Most of the treasurer’s obligations contribute to this goal. Still, it’s best to be beyond reproach in actions that could influence other committee members, beneficiaries, or donors.
The final decision to merge the charity or dissolve it is not the treasurers but they have roles and responsibilities for suggesting such actions if it will benefit the interest of the charity.
Treasurers are often called to investigate an evaluate conflicts of interest and loyalty with other trustees and charity members.
Manage Risks
Risk management falls to all trustees but the treasurer is the final consultant in investing and borrowing strategies. Establishing, evaluating, and restructuring the risk policy should be done frequently and under the purview of the treasurer.
Treasurer Characteristics
To meet the challenges of these roles and the severity of their obligations, a treasurer needs to possess several prominent characteristics.
Foremost, they need to be knowledgeable about the role of finances and skilled in financial terminology and law.
They also need to be able to communicate simply and effectively with diverse styles. A treasurer needs to report accurately to governing agencies but also deal with subordinates clearly.
The ability to plan and strategize help the treasurer take an active role in charity management with the other trustees. While a treasure can be effective if they only understand how to report they do better when they can guide operations.
Successful charities require a spark of imagination and foresight to gauge trends and plan for changes.
Seek Guidance
Given the vital nature of a treasurer within a charity, it pays to find one that meets expected criteria. A young or small charity may not have access to someone with the involved knowledge of accounting required to process reports and navigate audits.
When making this decision and going through the conversion process, it’s important to keep everything in order and proceed with confidence.
The professionals at KG Accountants have dealt with this process and know what to avoid and how to provide guidance.
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