Nonprofit Operational Manual

Home Acknowledgements
Chapter 1
Introduction Why this Manual ? Who is this Manual for ? How to use this Manual What is a Nonprofit
Chapter 2
Your Nonprofit Overview Getting Started Regulatory Requirement for Forming and Operating a Nonprofit Regulatory Requirement for Nonprofit Tax Regulatory Requirement for Anti-Money Laundering and Countering the Financing of Terrorism
Chapter 3
Planning Overview Strategic Planning Work Planning Budgeting Monitoring and Evaluation (M & E)
Chapter 4
Management, Policy & Systems Overview Finanacial Management Management Staff and Volunteers
Chapter 5
Project Management Overview Strategic Plan and Organisational Projects Needs Assessment Concept Paper Full Project Proposal Project management
Chapter 6
Fundraising Overview Developing a Fundraising Plan
Chapter 7
Report Your Work Overview Annual Reporting Finanacial Reporting

Financial Reporting

Nonprofits have an ongoing obligation to report to the Corporate Affairs Commission (CAC) and the Federal Inland Revenue Services (FIRS) by submitting an annual financial report. Generally, all nonprofits must file their annual returns within six months from the end of their reporting period.

Good financial management and financial governance are at the core of nonprofit management. How accounting officers and the Board make use of financial reports is critical in delivering value for money and in maximizing the stewardship of organisational resources. For a financial report to be deemed to be good, it needs to be of sufficient quality and up to date.

You nonprofits financial report help you manage your organisation well by telling your stakeholders how you have spent the money you received, it can also help you attract money from other organisations or people who are interested in your activities. It helps regulators to see how what you have spent supports your work and the resources available to you at the end of your financial year.

Nonprofits report their income and expenditure on the basis of when the activity happens, rather than when you receive and spend the cash. The income and expenditure basis is called accruals based accounting. The accrual accounts requires a

  1. A Statement of Affairs which describes all of your sources of income and expenditure.
  2. A balance sheet which tells readers what cash you have in the bank and what other assets and liabilities you have.
In addition, notes to the accounts should be given which explain in more detail how your income and expenditure are made up, and give extra information about particular assets and liabilities or particular payments.
The following key issues should be considered in preparing your organisations annual financial report. Financial report must include:
To prepare an annual financial report, ensure that the following accounting compliance requirements are completed each month and filed properly.
RequirementDate PreparedPrepared - YesPrepared - NoComments
Payment Request
Payment Vouchers/Receipt of Payment
Cash Book
Bank Statement
Bank Reconciliation
Financial Report
Time Sheets

All of the above are documents (including contracts, project work plan, budgets etc.) are what the auditor will use in preparing your financial report.