Growth & Jobs | Community champions urged to embrace strong financial systems for sustainable impact

MARTIN GOODEN, consultant JN Money Services, says it is important for community-based organisations (CBOs) to have effective financial management systems in place to ensure accountability, transparency, and long-term success of their organisations.

He was addressing members of civil society organisations who participated in a financial literacy workshop held at the Courtleigh Hotel, in Kingston recently. The workshop was part of a series organised by the JN Foundation in collaboration with the Caribbean Development Bank (CDB) and the Government of Canada funded Local Engagement and Action Fund. Other workshops were held in Manchester, Ocho Rios and St James.

The initiative supports ongoing national efforts to equip CBOs with the competencies to establish and maintain formal banking relationships and design effective financial management systems, as well as skills to better meet donor requirements.

A 2024 beneficiary assessment done by the CDB’s Basic Needs Trust Fund in Guyana, Jamaica, and St Lucia identified the need for non-profits to prioritise capacity development to strengthen their financial management and financial literacy skills. The report emphasised that the achievement of long-term sustainability for these groups depends on structured financial management training.

Gooden stressed that, like any other organisation, it is important for CBOs to maintain financial discipline.

“Your income is usually limited, but your expenses can feel unlimited,” he noted. “That’s why having a well-structured financial management system is not just good practice, it’s essential.”

A financial management system, he explained, includes both the software and processes used to handle an organisation’s income, expenses, and assets. Beyond technical tools, it represents a culture of responsibility, timely reporting, and strategic planning.

Gooden outlined seven key features that every effective system should include: clear roles and responsibilities, internal controls and policies, budgeting and planning, record keeping and reporting, audits and reviews, formal banking arrangements, and asset management.

“It starts with clarity,” Gooden said. “Define who manages the finances, assign the right people for the right roles, and ensure they understand what is expected of them,” he said.

He encouraged organisations to select competent individuals for key roles, such as treasurer and assistant treasurer, adding that honesty and responsibility are vital, especially for those who authorise transactions on bank accounts. He also warned against the dangers of lax controls and poor oversight, sharing a cautionary tale of joining an organisation whose accounts were years behind.

“Delayed reporting affects decision-making and erodes trust. Timeliness matters,” he emphasised.

Gooden also stressed the value of internal financial controls to prevent theft, fraud, and misuse of funds.

“Some people only get involved to benefit personally. Proper systems can prevent them from succeeding.”

He also underlined the importance of maintaining proper documentation, such as organising receipts, invoices, and proof of payments to demonstrate transparency to donors, auditors, and stakeholders.

“When questions arise, you need to have documented proof ready. That’s how you earn confidence,” he said.

Bank reconciliation was also highlighted as a critical practice that is often neglected. “You must match your records to what the bank reports every month. Reconciliation isn’t just ticking boxes; it’s your first line of defence against financial anomalies,” he advised.

Conflict of interest policies, approval processes, and the proper handling of petty cash also formed part of his advice to the community stakeholders.

“It’s not just politics,” Gooden said of conflicts of interest. “It’s relevant in every organisation. Declare your interests and recuse yourself when necessary.”

Participants were encouraged to be good stewards of the funds entrusted to them.

“Transparency builds trust. Trust attracts support and with support, your organisation can thrive.”