Financial Management Activities

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Module: Financial Management

Financial Management

Broad Aim
The aim of this module is to give participants an overview of the role of managers in controlling financial resources.

Training outcomes
By the end of this module, participants will be able to:
Identify the main elements of financial management and assess whether the financial management in their station is adequate •Identify the financial policies needed in a radio station •Develop a budget

Do a cash flow projection
Develop and interpret a variance report

Activity 1.: Problems with managing finances

What are the main problems that your station has with managing money?

What do you want to learn about managing money?

What is financial management?

Financial management is about planning income and expenditure, and making decisions that will enable you to survive financially.

Financial management includes
financial planning and budgeting,
financial accounting
financial analysis,
financial decision-making and
action

Financial planning is about:
Making sure that the organisation can survive
Making sure the money is being spent in the most efficient way •Making sure that the money is being spent to fulfil the objectives of the organisation •Being able to plan for the future of the organisation in a realistic way. Financial Accountability

In non-profit organisations, the money that you are using is held in trust – on behalf of the community that you serve. The money is not the personal possession of the individual staff members. They have to account for how they used the money, to show that it was used to benefit the community.

In a profit-making organisation, it is easy to hold management accountable. We simply ask: did they make a profit?

In a non-profit making organisation we ask: did they use the money to benefit the community in the best possible way?

Financial accountability can be broken down into two components: Financial Accountability
Being able to account for the way the money is spent to:
donors
boards and committees
members, and
the people whom the money is meant to benefit
Financial Responsibility:
Not taking on obligations the organisation cannot meet
Paying staff and accounts on time
Keeping proper records of the money that comes into the organisation and goes out of the organisation

Activity 2.: Financial Policy Game

Use this space to make notes from the game:

Activity 3.: Financial policies
Individual work (10 min)
To ensure that finances are properly controlled, all organisations must have policies. Look at the table below and give your organisation a tick if it has got a policy on these things. Give yourself a tick if you know the policy.

Policy Organisation has policyI know policy
Banks accounts –
who can open it, what bank to use, etc,
operating and
signing cheques, withdrawing money
Budgeting
Who develops the budget
How it is developed
Who authorises it
Non-budget expenditure
Who can give permission to spend money on items not budgeted for Petty cash
Who can spend it
For what
Receipts and deposits
When to deposit
Acquisition and disposal of fixed assets
Payments and cheque requisition
Staff loans
Who can get loans
Limits
How often
Use of private motor vehicles
Rate of repayment
Car hire
What class of car
For what purposes
Long distance travel
When you can fly (instead of using taxis, or private transport) Class of flights
Travel allowances
What the organisation will and won’t pay for

Group Work (45 minutes)
What policies do most of the stations represented in your group have and which do they not have?

Identify one or two policies that your group wants to discuss what issues would the policy cover? What rules or guidelines would you set for radio stations?

Activity 4.: Budget Role Play

What went wrong in the role-play?

What should...
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