Recently I had the good fortune to catch up with my good comrade Michael Jones, Chair, Resident's Finance Committee.
I was keen to talk to him, as an accountant, about what does good financial management look like for residents? And thankfully Michael was obliging to share with me his thoughts from a resident’s perspective….
There was no surprise that the top of his list was regular and transparent consultation with residents DURING the budgeting review process, including them as part of the journey in the development of the new budget.
Don’t just preach the outcome and expect it to be accepted.
He suggested that the Village Manager can play a vital role in supporting the Finance Committee to identify those people in the village with relevant experience or past financial acumen that could benefit the Committee.
He also offered the following tips:
- That operators and Village Managers, together, should undertake sound consideration for both the long and short term requirements of the village and share this review with the Finance Committee so as to provide long-term peace of mind about future financial provisions.
- The operator should establish sound financial management systems – not just to meet compliance matters but to also work towards best practice finance processes and systems.
- The operator as part of their financial management system should consider regular update meetings with their Finance Committee, this could be a short monthly meeting (catch up on recent changes, raise issues as they arise etc) and then a more comprehensive meeting quarterly to go through the financial statements together.
- Providing transparent financial statements on a regular basis helps to build trust between residents and the operator and reduce the unproductive time that it can take to locate answers to questions the Village Manager is not aware of.
- Finally, the operator, particularly those where decisions are mostly made remotely, must include the Village Manager in all decisions that may impact a resident’s finances or the assets of the village. It is also a great idea that from time to time the remote accounting support team are invited to attend a meeting with the Finance Committee to ensure that an open dialogue and mutual understanding is maintained.
Whilst these may seem logical tips and actions, the resident association representatives and regulators continue to share with me that the majority of concerns raised with them relate directly to inadequate financial transparency or poor financial management systems.
With time on your side, start the process early and consider reviewing your current process to include some of Michael’s suggestions.
