Your third role in financial governance (education finance) is using the financial reports for performance oversight. After the financial statements are reviewed and approved, you are the first user of these.
Your purpose here is to gain reasonable confidence (assurance) in the financial performance of the School Board, and of management.
You are also using financial reports to be confident in the faithful stewardship of funds, and as an indicator or evidence of ethical conduct. The school board is legally and ethically responsible for all money it collects/receives and spends. Thus, it is important to have systems that ensure funds are spent as planned, accurate records are kept, and the board receives the financial reports it needs.
In the real world, much of this is done at the same time as Role #2, reviewing and approving the financial statements, since when you ask questions of management and the auditor, their responses help you with both roles, understanding and actually using the financial reports. But for the sake of keeping roles clear, we show this as a separate role in the Handbook.
Whenever you receive financial reports from management, at least quarterly, the board will use these to monitor financial results and performance. There are a number of tools that you can use as you do this.
These tools are:
- Variance Analysis
- Financial Ratios
- Balanced Scorecard
- Scorecards and Dashboards