Standard 6: Financial and Asset Management
The land trust manages its finances and assets in a responsible and accountable way.
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.
- 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.
E. Internal System for Handling Money
The land trust has established a sound system of internal controls and procedures for handling money, in a form appropriate for the scale of the organization.
Internal controls are a system of checks and balances that keeps any one person from having complete control over a financial transaction. Proper internal controls are crucial, not only to help protect the organization against theft, fraud and loss due to unethical or illegal behavior, but also to inspire confidence in donors, regulators and other board members. Controls may include requiring multiple signatures for large cheques, having one-person log in cheques received and another responsible for making bank deposits and requiring multiple bids for certain contracts.