This section serves to remind the VOPE of the requirements for transparency to members and donors in their financial reporting. Examples of annual financial reports and project-specific financial reports are provided.
"The financial statements(orfinancial report) are a formal record of the financial activities of a business, person, or other entity. The financial policy and procedure manual of your organization will specify when and how the financial report is published and presented to stakeholders. Relevant financial information is presented in a structured manner and in a form easy to understand. They typically include basic financial statements, accompanied by a management discussion and analysis.” Depending on relevant local legislation, the financial statements may need to be audited before they can be presented to stakeholders.
Elements typically included in the financial statements:
· abalance sheet reports on an organization’s assets,liabilities, and ownership equityat a given point in time;
· an income statement reports on an organization’s income, expenses, and profits over a period of time;
· a profit and loss statement provides information on the operation of the enterprise; and
· a statement of cashflow reports on an organization’s cashflow activities, particularly its operating, investing and financing activities.
If a VOPE hosts a special event (such as a conference) or takes on a specific donor-funded activity (such as an evaluation conference, or producing a journal), it may be necessary to produce a special financial report (audited or unaudited) which discloses the project-specific income and expenditure, and especially reports to donors what their financial contributions were used for.