Financial Reports For Communal Organizations

The issues

Are officers of an organisation dealing with communal funds obliged to issue regular financial reports and provide an account of all money used and distributed by the organisation?

The Jewish Perspective

A. Community officials who are responsible for the fiscal affairs of charities, or any other communal organisations, must voluntarily provide a financial report to the public. This is true even if the officers are known to be honest and have been elected by the community to do their job. It is customary for a report be issued at least once a year. Although communal organisations should indicate their primary income and expenses, it is unnecessary to provide information of a highly detailed nature.

B. If an official is suspected of abusing communal funds, he must provide a thorough account for all funds under his control. This account should be supplied to a rabbi or other responsible member of the community who has been appointed to investigate the matter. He may refuse to provide an account in front of other members of the community, or to anyone who, he believes, is hostile to him and may be motivated by personal animosity against him.

C. Business partnerships that invest and disburse funds of various partners, must provide access to financial records, on demand, to all those for whose benefit they act. If documentary evidence suggests that the situation is different to which is described in their report, explanations must be provided.

D. At least two officials must be appointed to oversee disbursement of charitable communal funds if decisions must be made that require proper judgment on the part of the administrators, such as what to do with the funds, where to invest them, what to purchase, etc. Reliance should not be placed upon an individual in this situation, even if he is well known in the community as an honest person.

This is true whenever decisions are being made with communal funds, even if not directly for the purpose of a mitzvah. If two officers were appointed and one of them subsequently resigned, left the city or passed away, the community must appoint a replacement officer as quickly as possible.