What should financial policies be subject to?

Financial policies should indeed be subject to regular review and amendments to ensure they remain relevant and effective in a changing financial environment. This approach allows organizations to adapt to new regulations, financial challenges, and changes in organizational goals or strategies. Regular reviews help ensure that the policies continue to align with best practices and meet the needs of the organization, stakeholders, and regulatory requirements.

Moreover, continuous improvement is a fundamental principle of sound financial management. By reviewing and revising policies regularly, entities can address any shortcomings, incorporate feedback, and leverage lessons learned from past experiences. This process enhances accountability and transparency, fostering public trust and ensuring that financial resources are managed responsibly.

Other options suggest practices that may not support the dynamic nature of financial policies. For instance, major overhauls every five years could lead to outdated policies remaining in effect until the next significant review. Annual audits by external reviewers are beneficial for validating compliance and effectiveness but do not inherently ensure the policies will be revisited or updated as needed. Unilateral changes by staff could lead to inconsistencies and a lack of governance over financial management, undermining the intention behind having established policies.