Finance represented in decisions
This criterion evaluates whether financial expertise (internal finance lead, trustee-treasurer, or external advisor) is appropriately and independently represented in organizational decision-making processes. It assesses the extent to which financial considerations and professional financial advice inform strategic and operational decisions, ensuring financial sustainability, responsible resource management, and compliance with internal controls. **Definitions:** * **Major Decision:** Any decision exceeding Scheme of Delegation (SoD) thresholds, creating new ongoing costs, affecting reserves or liquidity, or entering commitments >12 months. * **Independent Representation:** The ability to provide professional challenge (aligned with *Qist* - Qur'an 4:135) without undue influence, with direct access to trustees and a protected escalation route. * **Key Forums:** Board, Audit & Risk (A&R) Committee, Senior Management Team (SMT), bid/pricing panels, and programme approval boards.
- How does the organization ensure that competent financial expertise (Kafāʾah) is formally included in strategic and significant operational decision-making processes?
- Describe the role and authority of the finance department or officer in reviewing and approving new projects, budgets, and major procurements.
- How do you ensure restricted funds are not used for unrestricted costs, and how is this checked during project approvals?
- What are your liquidity and reserves 'red line' triggers (e.g., <X months reserves) and what automatic escalations apply?
- Provide your Scheme of Delegation and monetary thresholds requiring finance sign-off; how is compliance monitored?
- How is the finance lead’s independence safeguarded (access to Board/A&R, escalation, conflicts per CC29)?
- If finance is outsourced/volunteer-led, do you have an SLA specifying turnaround times and independence?
- What are your targets for forecast accuracy and meeting attendance, and how did you perform in the last four quarters?
- Give two examples where finance advice altered, deferred, or halted a proposal (evidence of material influence).
- Minutes of board, management, or committee meetings showing the presence and input of a designated financial expert.
- Major decisions log/register (with SoD threshold, finance reviewer, date, and outcome).
- Bank mandate and payment authorisation policy.
- Latest monthly reconciliation pack (bank, control accounts, restricted funds) with review evidence.
- Organizational charts and terms of reference for committees that mandate financial representation.
- Policies and procedures requiring financial review and sign-off for expenditures, projects, or strategic plans.
- Strategic planning documents that include detailed financial modeling, risk assessments, and sustainability analysis.
- Job description for the senior finance role, highlighting responsibilities in strategic decision-making.
- SoD and approval matrix.
- Proposal/board-paper template with required financial annex (budget, funding source, full cost recovery, cashflow, sensitivity/scenario, VFM, procurement route).
- Finance sign-off register/log.
- Quarterly forecast vs. actual reports and rolling 12-month cashflow.
- Post‑implementation reviews.
- Audit & Risk Committee ToR and minutes.
- External auditor/independent examiner management letter and action tracker.
- Finance training records.
- Board skills matrix evidencing recent and relevant financial experience.
| Level | Rating | Description |
|---|---|---|
| 5 | 5/5 | Finance expertise fully integrated. ≥95% attendance; 100% sign-off. Forecast accuracy ±5%. Material influence evident in ≥80% of minutes (proposal modified, mitigations mandated, deferred, or rejected). |
| 4 | 4/5 | Good representation. ≥85% attendance; ≥95% sign-off. Forecast accuracy ±8%. Scenario analysis in ≥75% of major decisions. Rolling forecasts used. |
| 3 | 3/5 | Basic input. Sign-off mandatory >£X (e.g., 1-2% turnover). SoD in place. Finance attends ≥70% meetings. Small charities (<£250k): Quarterly pack + Treasurer sign-off + External review. |
| 2 | 2/5 | Minimal finance representation. Decisions often made without adequate financial consideration. Below thresholds for 3/5. |
| 1 | 1/5 | Finance expertise regularly excluded from important decisions. |
Related Criteria
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