Standard 6: Financial and Asset Management

Transcription

1 2004 VERSION OF STANDARD 6 Standard 6: Financial and Asset Management The land trust manages its finances and assets in a responsible and accountable way. A. Annual Budget. The land trust prepares an annual budget that is reviewed and approved by the board, or is consistent with board policy. The budget is based on programs planned for the year. Annual revenue is greater than or equal to expenses, unless reserves are deliberately drawn upon. B. Financial Records. The land trust keeps accurate financial records, in a form appropriate to its scale of operations and in accordance with Generally Accepted Accounting Principles (GAAP) or alternative reporting method acceptable to a qualified financial advisor. C. Financial Reports and Statements. The board receives and reviews financial reports and statements in a form and with a frequency appropriate for the scale of the land trust's financial activity. D. Financial Review or Audit. The land trust has an annual financial review or audit, by a qualified financial advisor, in a manner appropriate for the scale of the organization and consistent with state law. E. Internal System for Handling Money. The land trust has established a sound system of internal controls and procedures for handling money, in a form appropriate for the scale of the organization. F. Investment and Management of Financial Assets and Dedicated Funds. The land trust has a system for the responsible and prudent investment and management of its financial assets, and has established policies on allowable uses of dedicated funds and investment of funds. G. Funds for Stewardship and Enforcement. The land trust has a secure and lasting source of dedicated or operating funds sufficient to cover the costs of stewarding its land and easements over the long term and enforcing its easements, tracks stewardship and enforcement costs, and periodically evaluates the adequacy of its funds. In the event that full funding for these costs is not secure, the board has adopted a policy committing the organization to raising the necessary funds. (See 6F, 11A and 12A.) H. Sale or Transfer of Assets (Including Land and Easements). The land trust has established policies or procedures on the transfer or sale of assets, including real property. (See 4C, 9K and 9L.) I. Risk Management and Insurance. The land trust assesses and manages its risks and carries liability, property, and other insurance appropriate to its risk exposure and state law. The land trust exercises caution before using its land to secure debt and in these circumstances takes into account any legal or implied donor restrictions on the land, the land trust's mission and protection criteria, and public relations impact. Land Trust Standards and /February 2017/Page 1

2 STANDARD 6 DECONSTRUCTED INTO ELEMENTS Standard 6: Financial and Asset Management The land trust manages its finances and assets in a responsible and accountable way. A. Annual Budget The land trust prepares an annual budget that is reviewed and approved by the board, or is consistent with board policy The budget is based on programs planned for the year Annual revenue is greater than or equal to expenses, unless reserves are deliberately drawn upon B. Financial Records The land trust keeps accurate financial records Financial records are kept in a form appropriate to the land trust s scale of operations and in accordance with Generally Accepted Accounting Principles (GAAP) or alternative reporting method acceptable to a qualified financial advisor C. Financial Reports and Statements The board receives and reviews financial reports and statements in a form and with a frequency appropriate for the scale of the land trust's financial activity D. Financial Review or Audit The land trust has an annual financial review or audit, by a qualified financial advisor, in a manner appropriate for the scale of the organization and consistent with state law E. Internal System for Handling Money The land trust has established a sound system of internal controls and procedures for handling money, in a form appropriate for the scale of the organization F. Investment and Management of Financial Assets and Dedicated Funds The land trust has a system for the responsible and prudent investment and management of its financial assets The land trust has established policies on allowable uses of dedicated funds and investment of funds G. Funds for Stewardship and Enforcement The land trust has a secure and lasting source of dedicated or operating funds sufficient to cover the costs of stewarding its land and easements over the long term and enforcing its easements The land trust tracks stewardship and enforcement costs The land trust periodically evaluates the adequacy of its funds In the event that full funding for these costs is not secure, the board has adopted a policy committing the organization to raising the necessary funds. (See 6F, 11A and 12A.) H. Sale or Transfer of Assets (Including Land and Easements) The land trust has established policies or procedures on the transfer or sale of assets, including real property. (See 4C, 9K and 9L.) Land Trust Standards and /February 2017/Page 2

3 STANDARD 6 DECONSTRUCTED INTO ELEMENTS I. Risk Management and Insurance The land trust assesses and manages its risks The land trust carries liability, property, and other insurance appropriate to its risk exposure and state law The land trust exercises caution before using its land to secure debt and in these circumstances takes into account any legal or implied donor restrictions on the land, the land trust's mission and protection criteria, and public relations impact Land Trust Standards and /February 2017/Page 3

4 STANDARD 6 TRACK CHANGES Standard 6: Financial Oversight and Asset Management The lland trusts are responsible and accountable for how they manages itstheir finances and assets in a responsible and accountable way. A. Annual BudgetFiscal Health The land trust preparesdevelop an annual budget that is reviewed and approved by the board, or is consistent with board policy reflects the land trust s annual The budget is based on programs planned for the yearand activities Annual revenue is greater than or equal to expenses, unless reserves are deliberately drawn upon Develop and implement a strategy to address any deficit-spending trends Assess the nature and variability of revenue and seek to diversify funding sources Build and maintain sufficient operating reserves to sustain operations Build and maintain dedicated or restricted funds sufficient to cover the long-term costs of stewarding and defending the land trust s land and conservation easements o If funds are insufficient, adopt a plan to secure these funds and a policy committing the funds to this purpose B. Financial Records The land trust keeps accurate financial records Keep Ffinancial records are kept in a form appropriate to the land trust s scale of operations and in accordance with Generally Accepted Accounting Principles (GAAP) or alternative reporting method acceptable to a qualified financial advisorother Comprehensive Basis of Accounting (OCBOA) C. Financial Reports and Statements The board receives and reviews financial reports and statements in a form and with a frequency appropriate for the scale of the land trust's financial activity DC. External Financial Review or AuditEvaluation The land trust hasobtain an annual financial review or audit, review or compilation by an independent certified public accountant or a qualified financial advisoraccounting professional, in a manner appropriate for the scale of the organization and consistent with state lawland trust ED. Written Internal System for Handling MoneyControls The land trust has eestablished a sound system of written internal controls and accounting procedures, for handling moneyincluding segregation of duties, in a form appropriate for the scale of the organizationland trust, to prevent the misuse or loss of funds F. Investment and Management of Financial Assets and Dedicated Funds The land trust has a system for the responsible and prudent investment and management of its financial assets The land trust has established policies on allowable uses of dedicated funds and investment of funds G. Funds for Stewardship and Enforcement Land Trust Standards and /February 2017/Page 4

5 STANDARD 6 TRACK CHANGES The land trust has a secure and lasting source of dedicated or operating funds sufficient to cover the costs of stewarding its land and easements over the long term and enforcing its easements The land trust tracks stewardship and enforcement costs The land trust periodically evaluates the adequacy of its funds In the event that full funding for these costs is not secure, the board has adopted a policy committing the organization to raising the necessary funds. (See 6F, 11A and 12A.) H. Sale or Transfer of Assets (Including Land and Easements) The land trust has established policies or procedures on the transfer or sale of assets, including real property. (See 4C, 9K and 9L.) IE. Risk Management and Insurance The land trust Routinely assesses and manages its risks so that they do not jeopardize the land trust s financial health and its ability to carry out its mission and legal responsibilities The land trust carriescarry general liability, director s and officer s liability, property, and other insurance, all as appropriate to its the land trust s risk exposure and or as required bystate law The land trust exercises caution before using its land to secure debt and in these circumstances takes into account any legal or implied donor restrictions on the land, the land trust's mission and protection criteria, and public relations impact Land Trust Standards and /February 2017/Page 5

6 STANDARD 6 REVISED CLEAN Yellow highlighting indicates new practices or new practice elements Blue indicates designated accreditation indicator elements Standard 6: Financial Oversight Land trusts are responsible and accountable for how they manage their finances and assets. A. Fiscal Health 1. Develop an annual budget that reflects the land trust s annual programs and activities 2. Develop and implement a strategy to address any deficit-spending trends 3. Assess the nature and variability of revenue and seek to diversify funding sources 4. Build and maintain sufficient operating reserves to sustain operations 5. Build and maintain dedicated or restricted funds sufficient to cover the long-term costs of stewarding and defending the land trust s land and conservation easements a. If funds are insufficient, adopt a plan to secure these funds and a policy committing the funds to this purpose B. Financial Records 1. Keep financial records in accordance with Generally Accepted Accounting Principles (GAAP) or Other Comprehensive Basis of Accounting (OCBOA) C. External Financial Evaluation 1. Obtain an annual financial audit, review or compilation by an independent certified public accountant or a qualified accounting professional, in a manner appropriate for the scale of the land trust D. Written Internal Controls 1. Establish written internal controls and accounting procedures, including segregation of duties, in a form appropriate for the scale of the land trust, to prevent the misuse or loss of funds E. Risk Management and Insurance 1. Routinely assess and manage risks so that they do not jeopardize the land trust s financial health and its ability to carry out its mission and legal responsibilities 2. Carry general liability, director s and officer s liability, property and other insurance, all as appropriate to the land trust s risk exposure or as required by law Land Trust Standards and /February 2017/Page 6