Ask the right financial questions

dollar sign

Humour is a personal thing, so bear with me. A guy travels over the Ambassador Bridge in Windsor every day with a wheelbarrow full of cow manure. The Customs officer and staff analyze the manure for contraband and other duty issues. No illicit chemicals are ever discovered. The guy does this for years, and the Customs officials can’t find a thing. Finally, the Customs officer retires and meets the guy on the street and says, “OK, I’m retired and have no official position, so what were you smuggling across the border?” The guy answers, “wheelbarrows.”

My point is that volunteer board leaders often look at the wrong things when asking financial questions. And it stinks. Too often they’ll spend 30 minutes questioning the expenses for the annual general meeting, golf tournament or catering, and then take only three minutes to approve the entire annual budget.

What are the right questions? Try these for a start:
– Are we on budget overall? What is over and under? What’s coming up?
– Do we have enough reserves? What kind of reserves do we have?
– What is our investment strategy?
– What are our financial risks?
– Do we have proper financial policies in place? Who signs cheques and approves invoices? Do we have a clear expense account policy?
– For large contracts do we acquire three quotes? Who reviews them?
– If our membership dropped 20%, what would we do?
– Are we paying competitive salaries? Do we staff have good financial background and oversight?
– Do we have appropriate insurance?

Are you asking questions about the manure or the wheelbarrows? Take a whiff.

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