Standard 6: Financial and Asset Management
The land trust manages its finances and assets in a responsible and accountable way.
Background
Sound financial and asset management is critical for a land trust. Federal and provincial laws have financial reporting requirements, and financial records should be available to donors upon request. Poor financial management may jeopardize the future of the land trust and its land conservation programs. It could even lead to legal challenges against the land trust. Even a small land trust with modest revenue and expenditures should have annual budget and periodic financial reports, although the format of these may be simple. Organizations with larger budgets must follow specific reporting formats. Assuring sound financial management is one of the core responsibilities of the full board, no matter who keeps the books or prepares financial reports.
Relevant Law
- Society Act, RSBC 1996, c. 433, s. 39, 41.
- Canada Not-for-profit Corporations Act, SC 2009, c. 23, s. 179-194.
- Society Act, RSBC 1996, c. 433.
- Canada Corporations Act, RSC 1970, c. C-32.
- Society Act, RSBC 1996, c. 433, s. 30.
PRACTICE
C. Financial Reports and Statements
The board receives and reviews financial reports and statements in a form and with a frequency appropriate for the scale of the land trust's financial activity. At a minimum, small land trusts should review financial statements annually; larger land trusts should review financial statements quarterly.
Background
The objective of maintaining accounting records is to be able to present a clear snapshot of the land trust’s financial condition at any given time. This picture is presented in the form of financial statements. The review of timely and carefully prepared financial reports is the only way for a board to be properly informed about the organization’s financial condition. Board members should review and approve the statements at regular intervals, generally at least quarterly. In larger organizations, staff (sometimes in conjunction with a board member) usually reviews financial statements monthly.
Assessment Questions
CLTA Assessment Questions
- How often does the board review financial statements?
