TS-RDC-01
Trust & Stewardship
Risk, Data & Compliance
CORE
Compliance
v2.9.7
Multi‑scenario financial stress‑testing documented
Assesses whether the organization regularly conducts financial stress-testing to evaluate its resilience to adverse scenarios. This helps identify vulnerabilities, prepare contingency plans, and ensure sustainability. It quantifies liquidity runway under severe but plausible and reverse scenarios over a multi-year horizon and informs reserves policy, going concern assessment, and a board-approved viability view.
Assessment Questions
- Describe your organization's process for financial stress-testing. Is this process documented and formally approved?
- Do you model stress impacts on monthly cashflow and liquidity runway (months) over 3–5 years? Provide the runway chart.
- Provide your reverse stress test: what precise combination of events causes insolvency/breach of reserves policy, and what actions prevent it?
- List early-warning indicators and thresholds; show the pre-approved playbook for each trigger.
- How does your organization ensure its stress-testing framework remains relevant? Describe model governance (versioning, peer review) and independent validation.
- What Shariah-compliant standby liquidity options exist (e.g., Qard Hasan, Murabaha trade facility), and are they documented/approved?
Evidence Requirements
- Documented financial stress-testing policy and procedure.
- Stress-test model file (cashflow-based) with version history and change log.
- Assumptions register (macro, donor, programme, FX, inflation) with sources and approval.
- Data lineage map showing inputs from finance system, fundraising CRM, payroll, grant schedules.
- Reconciliation note from model baseline to latest management accounts and audited statements.
- Validation report (internal audit/external) and management response.
- Trigger dashboard and playbook approval record.
- Minutes of meetings (e.g., Board, Finance Committee) where stress-testing results and corresponding actions were discussed.
Scoring Guidelines
| Level | Rating | Description |
|---|---|---|
| 5 | 5/5 | Dynamic, board-owned stress-testing with severe-but-plausible calibration, regular reverse stress tests, and independent validation. Model governance is mature (version control, back-testing). Results directly drive reserves targets and strategic choices. |
| 4 | 4/5 | Integrated stress-testing (3-5 years) with liquidity runway, reverse stress-testing, and agreed early-warning indicators/playbooks. Board minutes show decisions based on stress outcomes. |
| 3 | 3/5 | Documented annual stress-testing with at least 3 scenarios and 12-24 month cashflow view; reviewed by SMT and summarised to Finance/Audit Committee. Partial linkage to reserves. |
| 2 | 2/5 | Minimal or ad hoc stress-testing, often reactive. Scenarios are basic and analysis is limited. |
| 1 | 1/5 | No financial stress-testing conducted. |
Discussion (1)
Administrator
2026-03-07 11:07:50.154752
📋 **Version updated: 1.0.0 → 2.9.7** **Changes:** Updated islamic_references from mizan-297.json
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