Senior managers

Guide to Financial Management

Senior managers

All senior managers have important financial management responsibilities - because they are employed to use an NGO's resources to achieve its goals.

This includes chief executive officers (CEOs), programme managers and fundraisers as well as finance managers.

This section provides a checklist of senior managers' main financial management responsibilities. They focus on actively running the organisation:

  1. Making sure that resources are used effectively
  2. Matching resources and activities
  3. Supporting field staff / managers
  4. Ensuring that finance staff and programme staff work together
  5. Supporting other stakeholders

In big NGOs, senior managers play a similar role to donors to their field offices: you may also find the donors section useful.


1. Making sure that resources are used effectively

  • Creating an organisational culture that takes financial management seriously (e.g. by inspiring staff to stay committed to an NGO's values and leading by example).
  • Developing practical approaches that staff can use to analyse and respond to social problems.
  • Setting up internal controls that encourage staff to make good judgements and decentralise decision-making as much as possible.
  • Checking that internal controls are followed in practice.
  • Taking an active role in internal controls (e.g. signing off salary payments and authorising major payments).
  • Setting up structured approaches for ensuring dialogue with beneficiaries (e.g. regular financial reporting to beneficiaries) and checking to see that they are followed in practice
  • Monitoring the quality of the organisation's work.
  • Approving realistic budgets for the organisation's operational activities.
  • Monitoring financial reports, including income and expenditure accounts and the balance sheet.

The first golden rule of NGO field work is: NGOs have to maintain a respectful dialogue with the people they aim to help. Otherwise, you risk not helping them effectively.

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2. Matching resources and activities

  • Leading the process of developing a realistic annual budget and making sure that it includes enough income to cover all planned expenditure.
  • Regularly reviewing financial reports, including budget monitoring reports and the balance sheet (e.g. most NGOs review these every month).
  • Regularly forecasting cash flow, making sure that all parts of the organisation have enough cash to pay for their activities and investing any cash reserves.
  • Implementing the financing strategy approved by the board.

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3. Supporting field staff / managers

  • Recruiting staff with the right skills, experience and commitment for key field roles.
  • Making sure the right number of staff are employed to carry out all of the organisation's activities.
  • Ensuring that all staff understand their financial management responsibilities.
  • Communicating strategies, policies and procedures effectively to staff (in simple ways that make it easier for them to do their jobs).
  • Ensuring that staff have the right incentives, time, skills and support to carry out their financial management responsibilities.
  • Providing training and learning opportunities - and making sure that staff have the time to make use of them.
  • Holding staff to account for the decisions they take and the results of their actions.

The second golden rule of NGO field work is: NGOs depend on their field staff and have to empower them to make good judgements. Everything depends on how you work with your field staff.

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4. Ensuring that finance staff and programme staff work together

  • Employing finance managers and staff who have strong interpersonal skills and a commitment to your organisation's values, as well as technical skills.
  • Making sure that finance staff / managers are always involved in decision making and budgeting, from the earliest stages of any new project.
  • Actively considering the financial management implications of all major decisions.
  • Encouraging finance staff to develop a greater understanding of programme work (eg by regular visits to field activities).

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5. Supporting other stakeholders

  • Supporting the trustees, e.g. providing them with financial information and helping them understand financial management issues.
  • Monitoring relationships with donors and partner organisations and ensuring that the financial aspects of these relationships are in line with broader approaches.
  • Presenting donors with realistic and honest strategies, plans and reports about your organisation's work.
  • Meeting your legal obligations (eg supporting the annual audit and preparing returns for government departments).

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All NGOs have a responsibility to be honest about the limits of what they can achieve. Otherwise donors and trustees are encouraged to think that NGOs can achieve amazing results overnight – and then they expect them!

Resources

Mango's integration checklist  – check to see how well integrated financial management is into your NGO's culture.

See the section of Mango's Guide entitled A new management agenda