The finanical side

The finanical side - Are you achieving your goals? That is...

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Nonprofits were coined in the USA, b/c as the government expanded and they began raising property taxes in the 1870’s, the government would tax exempt these foundations that worked for the good of society. Nonprofits proliferated substationally in the 30’s and provided a lot of the general welfare. Financial Management is comprised of highly technical subfields, including accounting, auditing, purchasing, budgeting, cash management, and risk management. It ensures that funds are well spent in the amounts and accounts budgeted, accounts for transactions, invest cash, purchase goods and services, manage inventories, borrow monies for short-term financing and long-term capitol projects, and manage risks to persons and properties by means of safety management and insurance coverage. In large organizations the CEO (Chief Executive Officer) rely on specialists, but in small local governments and nonprofits: the finance director is the one responsible. After the fiscal year begins, the budget is executed: purchasing, cash management, debt management, risk management take place. After the fiscal year ends an independent Certified Public Accountant conducts an audit of financial transactions. Both local governments and nonprofits perform all the financial management functions, but to different degrees and in different ways. Differences Btw Governments and Nonprofit Financial Systems: 1) they are subject to different accounting standards and use different metrics to measure financial performance 2) govern financial systems are usually more professional b/c: a) state laws regulate the financial management practices of local governments, i.e. investment instruments, conditions under which they can debit, accounting and balancing practices, and governments are required to do an annual post audit thru a independent CPA (Certified Public Accountant). Nonprofits are not subject to statewide regulations. b) City and county managers r more professional b/c they have more education and training. c) Local government officials belong to statewide professional associations that provide training, technical assistance, and peer support. No such affiliations are available for nonprofit managers. d) Nonprofits r not offered the range of technical services or assistance 3) The accounting practices of both governments and nonprofits are regulated by national accounting standards., but those standards do differ. For nonprofits these standards are set by the Financial Accounting Standards Board (FASB). For government these standards are set by The Government Accounting Standards Board (GASB). A fundamental difference between the two, can be seen in the differences of standards in “fund accounting”. GASB requires that the government accounting system by organized around the
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This note was uploaded on 08/29/2011 for the course PUBLIC ADM 101 taught by Professor Staff during the Spring '11 term at UNF.

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The finanical side - Are you achieving your goals? That is...

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