Finance Sub Committee Terms Of Reference

Finance Subcommittee Terms of Reference

The Finance Subcommittee is a standing committee established by the [Organization Name] to provide focused oversight and guidance on all financial matters. These Terms of Reference define its purpose, composition, responsibilities, and operating procedures.

Purpose

The primary purpose of the Finance Subcommittee is to assist the [Governing Body/Board of Directors] in fulfilling its fiduciary responsibility for the sound financial management of [Organization Name]. This includes ensuring the organization’s financial stability, accountability, and compliance with all applicable laws, regulations, and accounting standards.

Composition

The Finance Subcommittee shall be composed of at least [Number] members, appointed by the [Governing Body/Board of Directors]. Membership should include individuals with relevant financial expertise, such as:

• Individuals with experience in accounting, finance, or auditing.
• Members with knowledge of budgeting and financial forecasting.
• Individuals familiar with non-profit financial management (if applicable).

The [Governing Body/Board of Directors] will appoint a Chair of the Finance Subcommittee from among its members. The [Treasurer/Chief Financial Officer] will serve as an ex-officio member of the committee but will not have voting rights.

Responsibilities

The Finance Subcommittee is responsible for the following:

• Budget Oversight: Reviewing and recommending the annual budget to the [Governing Body/Board of Directors]. Monitoring budget performance throughout the year and identifying potential variances.
• Financial Reporting: Reviewing and approving financial statements before presentation to the [Governing Body/Board of Directors]. Ensuring the accuracy and completeness of financial information.
• Audit Oversight: Overseeing the annual audit process, including selecting the external auditor and reviewing the audit findings and recommendations. Monitoring the implementation of audit recommendations.
• Internal Controls: Reviewing and assessing the effectiveness of internal controls over financial reporting. Identifying and recommending improvements to internal control procedures.
• Investment Management: Developing and recommending investment policies to the [Governing Body/Board of Directors]. Monitoring the performance of the organization’s investments and ensuring compliance with investment policies.
• Risk Management: Identifying and assessing financial risks facing the organization. Developing and recommending strategies to mitigate these risks.
• Compliance: Ensuring compliance with all applicable laws, regulations, and accounting standards.
• Financial Policies: Reviewing and recommending financial policies and procedures to the [Governing Body/Board of Directors].
• Long-Term Financial Planning: Developing and reviewing long-term financial plans to ensure the organization’s financial sustainability.

Meetings and Reporting

The Finance Subcommittee shall meet at least [Number] times per year, or more frequently as needed. Meeting agendas and minutes shall be documented and distributed to all members. The Chair of the Finance Subcommittee shall report regularly to the [Governing Body/Board of Directors] on the committee’s activities and recommendations. The subcommittee must inform the [Governing Body/Board of Directors] of any concerns or recommendations immediately should they arise.

Authority

The Finance Subcommittee is authorized to request information from staff and external advisors as necessary to fulfill its responsibilities. However, the subcommittee’s recommendations are advisory and subject to approval by the [Governing Body/Board of Directors].

Review and Amendment

These Terms of Reference shall be reviewed and updated at least annually by the [Governing Body/Board of Directors] to ensure their continued relevance and effectiveness.