FINANCE NEWS: Finance divisions act as 'barriers'

Most finance departments are seen as barriers to the work of charities, providing useless, out-of-date information, a leading academic is to tell delegates at NCVO's financial management conference today (Wednesday).

Paul Palmer, professor of charity finance at South Bank University, will urge finance directors to modernise their role in response to increased public scrutiny of charity performance and a larger public service role.

"Long gone are the days when the voluntary sector could rely upon traditional book-keeping methods," Palmer will warn in his speech.

"The need to maintain public trust and confidence in the sector and the Government's plans to extend the role of voluntary organisations in the delivery of public services means that charities must embrace proactive methods of financial management."

According to Palmer, the image of the charity finance director should be "leading the core function in the charity as expert business manager and supplier of information". Colleagues should frequently ask for advice and they should have the "unqualified support" of trustees.

But the reality in most charities is very different, Palmer will warn.

"Charity staff see finance departments as placing barriers to their roles.

Budget managers complain that information is late and of no use while trustees do not engage when finance is on the agenda."

Palmer will urge finance directors to respond to increasing demands for accountability by the Government and the media.

"Voluntary organisations are under increasing pressure to be more transparent about what they do and be more responsive to the people they serve," he will say.

"Challenges such as the development of meaningful performance indicators and the pursuit of ethical investment policies in an unstable economic climate cannot be met without a good understanding of modern financial management."

In a survey of finance managers to be unveiled at the conference, NCVO found a demand for up-to-date briefings in key, rapidly changing areas such as allocation of core costs, risk assessment and updates on legislation.

The conference also sees the launch of NCVO's Good Financial Management Guide.

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