Internal Controls in Nonprofit Organizations
Sometimes we may think that taking time to review or reevaluate the internal control processes of our organization is a waste of time. The review of these can guarantee us the maximization of financial resources and human capital. Let’s begin by defining in a simple way what is Internal Control. Internal Control is the set of rules, principles, processes, procedures, organized and related to each other and together with our work team will constitute a means to achieve organizational objectives. We can say that Internal Controls are the basis on which the operations of the organization rest; it is also considered an instrument of efficiency.
The importance of Internal Controls is to protect the resources of the organization avoiding losses due to fraud or negligence, to ensure the accuracy and veracity of the financial data, which are used by management in making decisions. Internal Controls also provide that activities and resources are directed to the fulfillment of the objectives, mission, and vision of the organization. In the same way, they are guaranteeing efficiency, efficiency, and economy in all operations. The Internal Controls are an integral part of the financial systems, planning, as well as the operational information of the organization. The responsibility of establishing, maintaining, and perfecting the internal control system corresponds to the highest authority of the Organization (Board of Directors / Executive Team). This management team should make sure that each manager of areas or departments complies with the established controls.
It is necessary to have an internal control system in place to achieve the goals of growth, diversification and, above all, make reliability on the part of the person who delegates the funds to the organization. Evaluate how your organization is in the area of Internal Controls if you determine that adjustments and/or changes are necessary, we encourage you to work on it as soon as possible. At Pecunia Group, we have identified that this has been the difference for many non-profit organizations in increasing the receipt of funds by federal and state agencies.
I also invite you to read about the Importance of Project Management for Non-Profit Organizations and its benefits!
** This article is also published on LinkedIn Pulse