Achieving Financial Transparency for Dioceses- Requirements of a Financial Management System
Financial controls are actually a subset of internal controls and typically refer to segregation of duties. The right financial controls ensure that the person entering invoices to be paid, for example, is not also able to mark the checks for payment or cut the checks without someone else’s involvement in the process. It is important that such processes are in place throughout a diocese, however, this becomes challenging in smaller parishes where there is only a part-time bookkeeper using a manual or moderately automated system. The financial controls need to be documented and monitored, especially if using a manual method. A computerized application through which these “duties” can be limited and the controls enforced with the system security, therefore, is an ideal solution. Dioceses might examine the economies of scale created by centralizing processes and – if possible – provide access for smaller parishes to computerized solutions that they may not be able to afford on their own.
Faced with the ultimate responsibility of the entire diocese, such a financial control system needs to possess certain attributes to ensure fiscal needs are met. Requirements for an enterprise-wide solution include:
• Effective and efficient processes – System should eliminate duplicate entry; automate manual processes; provide economies of scale; provide services from within the diocese finance department to all areas of the diocese (e.g., payroll). Investment is best in an application that can be rolled out and phased in over time to provide a costeffective solution with economies of scale. A vertically focused solution embedded within a leading mid-market application platform adds tremendous value, because it is
designed to be scalable to serve diverse needs while providing a set of industry-specific functionality (e.g. chart of accounts structure and adherence to key financial reporting standards).
• Reliable financial statements and accounting records – Software should provide a strong audit trail and reporting tools that enable easy ad-hoc as well as management-style report generation.
• Safeguard assets – A solution should provide the tools to manage investments and revolving loan funds as well as physical (fixed) assets; offer an audit trail and the ability to enforce financial controls.
• Adherence to management policy and procedures – System should, again, provide an audit trail and financial controls, as well as automated workflow and business rules to help prove that mandated procedures are being followed.
Check back next week as we discuss some of the benefits for Dioceses.
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