Galvin and Associates

Some boards do not actively monitor the financial condition of the organization. This is one of their legal duties as a board. They should make sure all money is protected from fraud and is managed well. They should make sure the organization is financially stable. This lack of attention can result from an organization having a large enough reserve in place or enough cash coming in that there is not much to worry about. But boards should ask for longer range financial forecasts and any assets that might be at risk. A budget is a management tool. As such, a governing board will tend to overlook variances on the budget reports and focus on the bottom line and the bigger picture. A managing board will tend to review the regular budget reports in finer detail to assure that the organization stays out of financial trouble.

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