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Guide to the Fiscal Policies & Procedures Template
© 2012 CompassPoint Nonprofit Services Fiscal Policies & Procedures
Establishing good fiscal policies and procedures is more of an investment of time and attention
than money. Very small nonprofits or even all-volunteer groups can commit to the
conversations and documentation needed to establish sound financial policies.
Specific policies and procedures vary widely depending on the organization’s budget size,
staffing, and business model. There is no “one size fits all” template that will work for all
organizations. This guide offers a recommended structure for policies and procedures
as well as some questions to guide you in considering what is best for your organization.
Why are fiscal policies and procedures important for nonprofits
Maintaining meaningful and well-considered policies and procedures is a critical component of a
strong financial management system. They are used to establish an organization’s internal
controls and for ensuring compliance with regulatory standards, as many nonprofit funders
expect grantees to comply with specific policy and procedure guidelines. Documenting the
organization’s fiscal policies also serves as an important tool for clarifying roles and
responsibilities and ultimately for ensuring that the organization’s financial data is an accurate
and reliable basis for organizational decision making.
The suggested policy and procedural guidelines contained in this template are designed to:
Protect the assets of the organization;
Ensure the maintenance of accurate records of the organization’s financial activities;
Provide a framework for the organization’s financial decision making;
Establish operating standards and behavioral expectations;
Serve as a training resource for staff; and
Ensure compliance with federal, state, and local legal and reporting requirements.
How is this document organized
This document is organized into six sections, representing the significant components of a
financial management system: Accounting Procedures, Internal Controls, Financial Planning &
Reporting, Revenue/Accounts Receivable, Expense/Accounts Payable, and Asset Management.
Suggested policy areas are included under each header. Most organizations will have at least
some policies and procedures in each area, although not every policy included here will be
relevant for every organization. Similarly, some organizations will need to insert additional
policies that are specific to its area of work. Underneath each header is a section for both a
broad policy statement and for the specific procedures related to implementing the policy.
The goal of this tool is to serve as a basic framework and a starting point for discussion.
Although some sample policies are included, this document is designed primarily to be a
conversation starter, with prompting questions included in each section. Effective fiscal policies
and procedures drive out of three interrelated activities: 1) an informed discussion of the
organization’s potential areas of risk and system needs, 2) decision-making about an
appropriate level of policies and procedures to address those risks and needs, and 3)
documenting those decisions and revisiting them regularly.
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