Effective Date: October 24th, 2022
1. Purpose of the Financial Policy
1.1 The EKF Charity organization acknowledges the crucial role of financial management in the achievement of our mission. This Financial Policy is not merely a set of rules, but a comprehensive framework designed to ensure the responsible, transparent, and ethical management of our financial resources. It is a testament to our commitment to financial integrity, accountability, and stewardship. By following this policy, we demonstrate to our stakeholders that their trust in us is well-placed, and their investments in our mission are managed with the utmost care and diligence. This policy underlines our unwavering commitment to efficient financial practices that enable us to make a meaningful impact on the communities we serve.
2. Budget Planning and Approval
2.1 The budget is not just a financial plan; it's a strategic tool that translates our vision and goals into tangible financial actions. EKF Charity will develop an annual budget that reflects the organization's goals and objectives. This budget is a result of careful deliberation and planning to ensure that our financial resources are allocated efficiently and effectively to achieve our mission.
2.2 The Finance Committee holds the responsibility for preparing the budget, ensuring that it aligns with our strategic priorities and available resources. However, for added transparency and accountability, the budget must receive the approval of the Board of Directors. This multi-step process guarantees that the budget is well-considered, realistic, and consistent with the organization's objectives. The board's approval is a critical safeguard that ensures our financial decisions are in alignment with our mission.
3. Financial Record Keeping
3.1 Accurate financial record-keeping is the foundation of accountability and transparency. At EKF Charity, we are committed to maintaining complete and accurate financial records, including ledgers, accounts, and financial statements. These records are not just administrative tools; they serve as the backbone of our financial reporting and a historical record of our financial activities. Accurate record-keeping ensures that our financial data is reliable and provides a transparent view of our financial health.
3.2 Our record-keeping practices are not only in compliance with applicable laws but also adhere to the best accounting practices. By meticulously retaining and managing these records, we establish a clear audit trail, making financial information readily available for internal and external reviews. This diligent approach allows us to demonstrate our commitment to transparency and accountability to our donors, regulators, and other stakeholders.
4. Financial Responsibility
4.1 Financial responsibility is a core principle that guides our actions. It involves the proper authorization, documentation, and prompt recording of financial transactions. This practice is not just about maintaining financial order; it's a safeguard against errors, improprieties, or mismanagement of funds. All financial transactions, regardless of their size or scope, are subject to rigorous scrutiny to ensure that they are authorized, documented, and recorded in a timely manner. By following these steps, we establish a robust control system that minimizes the risk of financial irregularities.
4.2 Access to the organization's financial resources is restricted to authorized personnel only. This tight control ensures that funds are used for their intended purposes and minimizes the risk of unauthorized or inappropriate use. By limiting access to a select group of individuals who are well-versed in our financial policies and practices, we reduce the potential for fraud or misuse of funds, fostering a culture of financial responsibility within the organization.
5. Revenue and Income
5.1 Financial sustainability is a key objective for EKF Charity, and a fundamental aspect of achieving this sustainability is diversifying our sources of income. Over reliance on a single funding source can expose the organization to financial risks. Our strategy includes actively seeking diverse income streams, such as grants, donations, sponsorships, and earned income. This diversification not only provides financial stability but also reduces the risk associated with dependency on a single source of funding. It ensures that we have a steady and diversified inflow of resources to support our mission.
5.2 A critical commitment of our financial policy is the dedication that all income, grants, and donations received by EKF Charity will be allocated exclusively for the charitable purposes and objectives of the organization. This commitment reinforces our dedication to advancing our core objectives and ensures that the financial resources we receive are used judiciously. It's a fundamental aspect of maintaining trust with our donors and stakeholders, as it guarantees that their contributions are deployed for the intended purpose.
6. Expense Management
6.1 Prudent expense management is an integral part of ensuring the financial sustainability of EKF Charity. We are committed to managing our expenses in a manner that ensures financial sustainability and program quality. Prudent expense management encompasses setting financial priorities, monitoring spending, and seeking cost-effective solutions to fulfill our mission. By following this approach, we maximize the impact of our programs and ensure that our financial resources are used responsibly.
6.2 As part of our commitment to prudent financial management, significant expenditures will be subject to review and approval by the Finance Committee. This additional layer of scrutiny guarantees that substantial financial commitments align with our mission and values, and are made responsibly. By involving the Finance Committee in the approval of significant expenses, we ensure that financial decisions are well-informed, well-considered, and consistent with our strategic objectives..
7. Financial Reporting
7.1 Transparency in financial reporting is a cornerstone of our financial policy. EKF Charity is committed to producing regular financial reports, including income statements and balance sheets. These reports serve as a window into our financial health, allowing our stakeholders to have a clear view of our financial status and our progress toward our mission.
7.2 Financial reports are provided to the Board of Directors and relevant stakeholders. This practice maintains a clear line of communication and fosters trust among our key decision makers and supporters. By providing regular financial reports, we demonstrate our commitment to transparency, accountability, and openness.
8. Audit and Review
8.1 Maintaining the integrity of our financial records is a fundamental part of our financial policy. To achieve this, EKF Charity's financial records will be subject to an annual external audit. This external audit is a third-party review conducted by qualified auditors who verify that our financial activities align with the highest standards of transparency and accountability.
8.2 The results of the annual audit will be transparently shared with the Board of Directors and our donors. This commitment to disclosure builds trust and confidence among our stakeholders. It assures our supporters and contributors that we are managing our financial resources with the highest level of integrity and accountability.
9. Financial Controls
9.1 Adequate financial controls are a critical safeguard against fraud, mismanagement, or misuse of funds. EKF Charity is committed to establishing and maintaining these controls to protect our financial resources. Financial controls include processes and mechanisms to ensure that financial transactions are properly authorized and recorded, that assets are safeguarded, and that resources are used for their intended purpose.
9.2 As part of our financial policy, we are committed to regularly reviewing and updating our financial controls. This is a proactive measure to ensure that our control measures remain effective in safeguarding our financial integrity. We view this as an ongoing process to adapt to evolving challenges and risks, thereby maintaining the highest level of financial responsibility.
10. Reserves and Investments
10.1 To secure the financial stability of EKF Charity and to ensure that we can cover unforeseen expenses, we are committed to maintaining adequate financial reserves. These reserves serve as a safety net, ensuring that our mission can continue, even in the face of unexpected challenges. By maintaining reserves, we demonstrate our responsibility to our mission and our commitment to long-term financial sustainability.
10.2 Investments made by EKF Charity will align with the organization's investment policy. This policy prioritizes safety and liquidity to protect our financial assets while enabling us to fulfill our mission. This approach ensures that investments are made with a focus on preserving our financial resources and enabling us to respond effectively to our mission's evolving needs.
11. Compliance and Transparency
11.1 Legal compliance is not just a requirement; it's a core aspect of our financial policy. EKF Charity is dedicated to complying with all applicable laws and regulations regarding financial management. Compliance is a fundamental part of our commitment to transparency, accountability, and good governance.
11.2 To ensure transparency, financial information will be made readily available to stakeholders. This commitment to openness allows our supporters, partners, and the public to access critical financial information, further bolstering trust and confidence in our financial stewardship. It demonstrates our unwavering dedication to ethical and transparent financial management.
This Financial Policy is not merely a document; it's a living testament to our commitment to responsible financial management and transparency. It forms the backbone of our financial stewardship and will be periodically reviewed to ensure it remains relevant and aligned with the financial goals and objectives of EKF Charity.