Fiduciary Responsibilities and Financial Training

• Fiduciary Duties of District Board Members
• Making Informed Decisions
• Importance of Financial Planning
• Sources of Operational Funding
• Financial Policies and Procedures
• Audits
• Internal Controls
• Fundraising

Every board has three core legal and fiduciary responsibilities for governance: ensuring that the organization is following its mission, setting policy and financial oversight. This module focuses on the last of those essential responsibilities.

As public officials, supervisors are charged with assuring proper management and expenditure of public funds. All district fund sources are considered public funds. These include fees collected, funds received from county, state or federal sources and money collected through fundraising activities (if applicable) to deliver or administer programs or activities. Public funds must be spent for programs and activities that are consistent with the district’s mission to promote and support soil conservation and the protection of natural resources. 

(From the “Little Book of Boards” by Erik Hanberg and the Delaware Supervisors’ Handbook)

Each supervisor should be knowledgeable and aware of the needs of the district office and be willing to work with various funding sources to obtain the necessary support to achieve district objectives. The financial plan and/or budget, along with the a few key financial documents should be reviewed periodically to stay informed.

Financial documents that should be reviewed monthly: 

• Balance Sheet Income Statement (also called Profit & Loss, or “P&L”)
• Annual Operating Budget (& periodic comparison of budget to actual revenue and expenditures)

Other documents that are available to review:

• Transaction Detail Report 
• Monthly Bank Statement & Reconciliation 
• Timesheets & Employee Leave Records

Here's a quick video from the Washington Center for Nonprofits that describes things that you should look for in the balance sheet and income statement to support good decision-making:

The board is responsible for the annual budget and financial plan, which should cover all aspects of the proposed conservation program. (The budget and financial plan are a component of the annual plan of work, which will be covered in greater detail in another module.)

The financial plan is used for presentation to various funding sources including federal, state, and county governments, and should include operating funds, equipment and staffing needs, etc. 

Elements of a Sound Financial Plan: 

The key purpose of financial policies and procedures is to provide a system of checks and balances that ensure that monies are being managed responsibly and to avoid fraud. Recommended policies and procedures include:

• The original bank statement must be maintained at the district office.
• All district checks must bear an authorized signature of a board member. It is recommended that at least two people are authorized to sign checks for each cash account.
• Two people (apart from the treasurer and financial staff, and including at least one board member) should review and approve the transaction list each month.
• Treasurer and/or authorized check signer reviews supporting documentation for checks and credit card purchases.
• District financial staff periodically reviews bank reconciliations.
• District financial staff periodically verify all cash receipts were deposited.The financial statements given to the board should be maintained with the minutes as documentation of what was actually reviewed.
• Supporting documentation (invoices, receipts, etc) must be maintained in the district office and must be kept in an organized manner by the finance person. 
• Cash should be deposited in a timely manner. 
• District should have a financial bonding policy that includes the board. 
• No district check may be signed with a blank payee line or amount. 
• No debit cards will be allowed. 
• Use of signature stamps for check-signing purposes is not recommended. If a district uses a signature stamp, there must be an approval policy in place to define appropriate use.

Internal controls are policies and procedures designed to provide reasonable assurance that assets are safeguarded against unauthorized use and disposition. 

The Conservation District Board of Directors is responsible for establishing and maintaining a system of internal controls over the accounting procedures as well as over all assets belonging to the Conservation District.

The following is a of internal controls that should be in place in every Conservation District in Delaware. Please refer to the Accounting Procedures Manual located in each District office for detailed information: 

Fundraising by Delaware’s Conservation Districts tends to be limited to the Envirothon and to small charitable campaigns. For some districts throughout the country, fundraising makes up a substantial portion of their operating budget. Many districts, for example, run an annual native plant sale. Here are some fundraising considerations: 

Also see NACD Resources “Fun Ways to Fundraise” and “More Dollars for Your District”

• The Washington Center for Nonprofits has a training series for nonprofit boards called "Finance Unlocked". Three videos from the series provide an introduction to balance sheets, income statements and oversight in five minutes or less.  You can find the videos here .

• What do you look for (whether at each meeting or periodically) to ensure that the district is in good financial health?
• Are there any areas within the budget that require additional attention or clarity?
• Does the district have any financial needs- additional funding, more diverse funding sources, etc.- to be successful?