Finances nobody can inspect

Why it is hard to see

Because in almost every case nothing is being concealed.

The treasurer is honest, overworked, and would gladly explain any of it to anyone who asked. The accounts exist. They are available on request. What is missing is not access — it is anybody exercising it, and a format in which exercising it would tell you anything.

Three things produce that:

Summary reporting. The meeting is told the balance and whether the year was tight. Both are true and neither is checkable. A member cannot tell from a headline figure whether this year’s costs were covered by income or by something that will not recur — which is the one thing they most need to know.

Concentration. Financial knowledge accumulates in whoever does the work, and it accumulates fast, because nobody else touches it. That is not a power grab. It is what happens to any task nobody shares. But it produces a community where two people can answer a question and thirty-eight cannot form one.

And the social cost of asking. In a community, requesting to inspect the accounts reads as an accusation against a volunteer who is already doing more than their share. So people do not ask, which the group experiences as trust, and which is functionally the same as having no audit.

The tell is not secrecy. It is that nobody could construct a question, because they have never seen the shape of the thing.

What to check

Ask who has looked at the accounts in the last year, other than the person who keeps them. If the answer is nobody, transparency is nominal regardless of policy.

Ask for a figure the summary does not contain. How much of last year’s income was recurring? What is the reserve as a proportion of annual costs? A community with genuinely inspectable finances can produce these. One with a reporting habit cannot, and finding out takes a fortnight.

Check the bus factor. If the person who keeps the books stopped tomorrow, how long before somebody else could answer a question about a specific transaction? Under a week is healthy. “We would have to reconstruct it” is the finding.

If it is already happening

Do not start with an audit. Framing it as verification puts the treasurer on trial for a structural problem they did not create, and the group will spend six months on the relationship instead of the format.

Start by adding a second pair of eyes to an ordinary task. Someone else reconciles the account each quarter, alongside rather than instead. This is dull, unthreatening, and it fixes the bus factor and the inspectability problem simultaneously.

Change what gets reported, not how often. Add two lines to whatever the meeting already receives: what proportion of income was recurring, and what the reserve covers in months. Those two numbers turn a report into something a member can have an opinion about.

And say why. A treasurer who hears “we are introducing oversight” hears an accusation. A treasurer who hears “you should not be the only person who could answer this if you were ill” usually agrees, because it is the thing they have been quietly worried about.

What prevents it

Transparency as the default state rather than an available request, and reporting in a form that supports a question. The distinction that matters is not whether members may see the accounts. It is whether anybody could tell, from what they routinely receive, that something had begun to go wrong.

Sources & further reading

1. 1 RCOS stress test — Opaque Community Finances — the specification this page puts into plain language
2. 2 Freeman, J. — The Tyranny of Structurelessness (1970/1972) — information is power — a community where two people can read the accounts has two people in charge
3. 3 Money & the community economy — what a reserve fund is for, and the question that reveals the most

Written by EcoHubs members, with AI assistance for drafting and editing, and reviewed by a person before publication. Facts are checked against the sources listed; anything we could not verify is marked. How this is written