History of the 5 piece drum set
... the historical financial performance in some detail albeit the lack of a balance sheet within the GLS report does mean that the financial picture is incomplete. 2.2 One of the key issues is that the GLS report is angled very much at financial reporting in the style of commercial organisations. This approach is entirely acceptable in the context of the brief given to GLS but in terms of reporting, and assessing, the work of the Centre the purist approach to financial performance needs to be integrated with indicators to demonstrate the effectiveness of delivering the Centre’s charitable work and objectives. In this context, for example, the performance of the Centre needs to be measured in wider terms than simply the reporting of a net profit or a loss. 2.3 The trustees will want to consider how to advance on the work of GLS in order to provide a more complete picture of the performance of the Centre. This approach will be particularly relevant given the strategic aims and objectives as articulated in the business plan including the intention to secure bursary funding for those clients unable to pay for the full cost of Counselling and other services. 2.4 It is not clear what resource/cost savings are afforded, in terms of year-end audit and accountancy work, by way of the ‘interim’ work and reporting done by GLS. The trustees may want to consider this further when looking at how best to develop the financial management, reporting and forecasting at the Centre. 2.5 The GLS report contains a ‘health warning’ because of the fact that the figures reported do not reflect any opening and closing accruals and prepayments. It would be helpful if GLS could provide details of the opening accruals and prepayments from their 31March 2002 files. The information is summarised in the 31 March statutory accounts but more detail is required to enable the values to be incorporated into the management accounts. Once the opening values are available it will be relatively easy to arrive at the closing values. 2.6 Looking at the GLS report as a template for future reporting there are three particular issues aspects of the GLS report which need to be borne in mind: · There is a need to incorporate comparisons with budget · There is a need to incorporate key performance indicators to help manage the operations of the Centre · The reporting needs to look forwards as well as backwards – i.e. there is a need to include forecasts of future activities. 2.7 Given the costs of involving GLS for such review work the trustees may wish to consider how best to involve GLS in the future in order to secure the optimum benefits from the firms expertise. The GLS work has been very useful to the trustees over recent times particularly prior to the appointment of the current Chief Executive. 3. Suggestions for developing the Financial Management, Reporting and Forecasting within the Centre. 3.1 The GLS review work has demonstrated that the basic financial reporting, and the underlying financial records, are sound. The Centre’s business plan clearly articulates the strategic and operational objectives and sets out the assumptions on which the budgets are based. The Centre’s reserves are relatively good compared with Relate Centres generally. These circumstances provide a very good framework around which to develop the financial management, reporting and forecasting procedures commensurate with the ambitions of the trustees. 3.2 It is recommended that, in order to develop the financial management, reporting and forecasting at the Centre the following steps should be taken: 1. A Finance Committee should be formed to operate as a sub –committee of the board of trustees; 2. The financial reporting package, to be produced on a quarterly basis, should be based on that produced by GLS but should also include – · Comparisons with budget · Full accruals · A balance sheet · Key performance indicators - e.g. average client contributions average cost per unit of work appointment wastage rates capacity utilisation ‘market penetration’ · Forecasts (income, expenditure, cash and key performance indicators) for the remainder of the current financial year – partly to confirm the integrity of budgets. · A concise, but comprehensive, written commentary, on the actual and forecast financial activities to assist the trustees in interpreting the information and to develop any actions required. 3. A cut-down monthly reporting package should also be developed. In time it may be that the full quarterly package can be produced on a monthly basis. 4. In addition the external auditors should be asked to provide a formal management letter each year after concluding the audit. The management letter should set out any areas of weakness within financial controls and other areas in order that appropriate action can be taken. Also, the external auditors should be invited to one of the meetings of the Finance Committee, after completeing their audit work, in order that trustees can liaise directly with the auditors about their work at the Centre. 3.3 A cardinal issue is that of ...