2022 Edition
Financial Management (CA-FIN) 6: Financial Management System
Positive financial outcomes are achieved through a financial management system that receives, disburses, and accounts for funds consistent with sound financial practices.
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VIEW THE STANDARDS
Purpose
The organization's ability to achieve its mission is based on sound financial management practices that ensure efficient, data-informed use of its resources.1
The organization's practices fully meet the standard, as indicated by full implementation of the practices outlined in the CA-FIN 6 Practice standards.
2
Practices are basically sound but there is room for improvement, as noted in the ratings for the CA-FIN 6 Practice standards.
3
Practice requires significant improvement, as noted in the ratings for the CA-FIN 6 Practice standards.
4
Implementation of the standard is minimal or there is no evidence of implementation at all, as noted in the ratings for the CA-FIN 6 Practice standards.
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Fundamental Practice
CA-FIN 6.01
Accounting records are kept up-to-date and balanced on a monthly basis, as demonstrated by:
- timely reconciliation of the bank statement and subsidiary records to the general ledger;
- up-to-date posting of cash receipts and disbursements;
- monthly updating of the general ledger; and
- review of the bank reconciliation by a person other than the person who performs the reconciliation and is not authorized to sign checks.
Related Standards:
Interpretation
 Subsidiary records include, but are not limited to: accounts receivable, accounts payable, and fixed assets.1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
- The organization has an occasional, minor problem in compliance such as short delays in posting receipts and disbursements or slightly overdue updates to the general ledger.
3
Practice requires significant improvement; e.g.,
- Bank reconciliation is not regularly reviewed by two people as required.
4
Implementation of the standard is minimal or there is no evidence of implementation at all.
CA-FIN 6.02
The organization uses the accrual method of accounting, at least at the end of the year.
1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement.
3
Practice requires significant improvement.
4
Implementation of the standard is minimal or there is no evidence of implementation at all.
CA-FIN 6.03
Oversight and management of the organization’s accounting system require:
- a financial officer or business manager to maintain the financial accounts who has prior accounting and bookkeeping experience, as well as a degree in accounting or business administration, and/or is a chartered professional accountant, chartered accountant, certified general accountant, or certified management accountant;Â and
- all personnel who use the system to receive initial and ongoing training on its use.
1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
- Ongoing staff training needs strengthening.
3
Practice requires significant improvement; e.g.,
- The organization has a qualified financial officer, but the system is deficient in some significant regard, such as lack of training for some personnel.
4
Implementation of the standard is minimal or there is no evidence of implementation at all.
Fundamental Practice
CA-FIN 6.04
An organization that assumes fiduciary responsibility for, or disburses client funds:Â
- segregates client funds from other organization funds; and
- protects client assets.
Related Standards:
Interpretation
Organizations should manage client funds in accordance with applicable rules and regulations. This may include for example:- daily deposits of client funds;
- credit balances on accounts;
- uncashed checks;
- funds left in client deposit accounts; and
- trust account reconciliation.
NA The organization does not assume fiduciary responsibility for, or disburse client or non-fee-for-service funds to service recipients.
Examples:Â Examples of the types of funds that organizations may assume responsibility for or disburse to clients include:Â
- allowances for children and youth in out-of-home care;
- funds under the control of the organization in guardianship cases; and
- benefits when the organization serves as the representative payee.
1
The organization's practices reflect full implementation of the standard.
2
Practices are basically sound but there is room for improvement; e.g.,
- Procedures for segregation of funds or protection of client assets need strengthening.
3
Practice requires significant improvement; e.g.,
- One of the elements is not addressed at all.
4
Implementation of the standard is minimal or there is no evidence of implementation at all; e.g.,
- The organization has no written procedures, and adequate protection and guidelines have not been developed to protect assets of persons served; or
- There have been instances in which funds for which the organization had a fiduciary responsibility appear to have been misused, e.g., assets or funds have been inappropriately co-mingled or disbursed inconsistently.