Budge&ng&Planning

Culture

Repor&ng&Monitoring

MOUNTAIN HEART NEPAL FinancialSustainabilityCheck-up

Opera&ons

BoardGovernance

LEVEL1 LEVEL2 LEVEL3

Challenged Stable Healthy

BUDGETING&PLANNING

• Income Statement created for each line of project

No Maybe Yes

• Review Income Statement for each project No MaybeYes-Probability%ofsuccessusedto

netdownrevenueforecast

• Organization complies with Social Welfare Council quarterly reporting

No Maybe Yes

• Program total expenses Review Maybe Yes Yes

• Income Statement created for Unrestricted and Restricted funds

NoMaybe

Yes

OPERATIONS• Financial System Manual Software and single data entry Software and double data entry

• Financial Staffing – Chief Financial Officer (CFO) None

Yes-butCFOismore

transac&onalthanstrategic

Yes-experiencednonprofitCFOwith

strategicskillset&managingHR,Opera&ons&IT

• Financial Staffing - Treasurer Using him as the Controller Controller, manages transactions and closing process well

Controller and has extensive accounting knowledge

• Financial Staffing - Auditor An accountant with degree Registered accountant (any class) Experienced chartered accountant (Class A)

• Banking Bankrela&onshiptransac&onalBankrela&onshiptransac&onal

&strategic

Oneprimarybank

• CreditAvailability Self-funded Grant-funded or Grant-funded and fundraising

• CashFlowForecas&ng OnlywhenneededCashflowactualvs.budget

monthly

Monthlyplusgoforward6month

forecast

• RevenueRecogni&onProbably cash basis and recognize all when received Quarterly

As received and then released per organisation guidelines

• CostAlloca&onsNot allocated unless grant programs

Some costs allocated to departments and programs

Indirect & General and Administra&ve allocated to departments and programs

• Executive Committee Review Asneeded Quarterly Monthly

• Board Review Asneeded Quarterly Monthly

• Month-EndClosingProcess Inconsistent Notupdatedregularly Detailedandevolving

MOUNTAIN HEART NEPAL Financial Sustainability Check-up

LEVEL1 LEVEL2 LEVEL3

Challenged Stable Healthy

REPORTING&

MONITORING

• BankAccountReconcilia&ons-When Quarterly Monthly Bi-monthly

• BankAccountReconcilia&ons-Who

Accountant who issues A/P checks

Not the accountant who issues A/P checks

Not the accountant who issues A/P checks; Treasurer reviews and signs off

• CashTimingofPaymentsPayrolltaxesmaynotbepaid

&mely

Payroll&mely;A/Psome

paidoutsideoftermsPayrollandA/Ppaid&mely

• FinancialReportPrepara&on 30-60daysabermonthend Within30daysabermonthend Within10-15daysabermonthend

• Crea&onofFinancialDashboards No MaybeYes-&edtoKPI(KeyPerformance

Indicators)instrategicplan

• BalanceSheetAccountReconcilia&ons Annual Quarterly Monthly

• Endowment-Admin Program Officer Accountant Treasurer

• Opera&ngReserves Typicallydonothaveavailable NotmonitoredMonitoredandmeasuredto

benchmarks

• Opera&ngReservesAmount Lessthan3months 6months Over12months

• AnnualAudit Revieworcompila&on Yes Yes

BOARD

GOVERNANCE

• BoardMee&ngFrequency Irregular Quarterly Monthly

• FinanceCommijeeRole Asneeded SemiAc&ve-quarterly Ac&ve-monthly

• BoardRole/ResponsibilityClarity

Inexperiencedboard;lackof

strongleader;commijeestructurenotusedwell

Competentboard;finance

commijeereviewsreports&asksgoodques&ons

Knowledgeable&strategicboard;

strongcommijeestructure

• FinancialReportssenttotheboard Annualorwhenasked Quarterly Monthly

• Actualvs.Budgetrepor&ng/explana&ons

ForTotalRevenueandTotal

Expensesonly;noBalanceSheet&CashFlowrepor&ng

QuarterlyMonthlywithinsightsincluded

(e.g.,whatdothenumbersmean)

• RiskManagement Notaddressedunlessissuearises Focusedonlyonreac&veissues

Managementiden&fiesrisks

annuallyandboarddiscussesandapprovesmi&ga&onstrategy

MOUNTAIN HEART NEPAL Financial Sustainability Check-up