BIG BROTHERS BIG SISTERS OF THE BLUEGRASS, INC.
LEXINGTON, KENTUCKY
DESCRIPTION OF INTERNAL CONTROLS
I.
INTRODUCTION
It is the intent of Big Brothers Big Sisters of the Bluegrass, Inc. to provide for internal
controls that will reduce the risk of employee error or fraud. To insure this, the
segregation of duties and responsibilities of staff, bookkeeper and treasurer will set up a
system of checks and balances that will protect against errors or fraud.
Big Brothers Big Sisters of the Bluegrass internal control system consist of:
A. CASH RECEIPTS
1. Bonding – Under the agency’s employee dishonesty insurance policy, the
Executive Director, the Office Manager and the Executive Committee are bonded
annually.
2. Incoming Mail – Agency mail is received daily by the Office Manager. All mail
addressed to Big Brothers Big Sisters is opened and stamp dated. All mail
addressed to individuals or other agencies is placed in their mail slot. Invoices are
forwarded to the Office Manager and reviewed by the Executive Director for
payment approval and delivery to the bookkeeper.
3. Cash/Checks Log Book – All cash/checks received are recorded in cash/checks
logbook by the Office Manager.
4. Cash Receipts Acknowledgements/Thank You’s – All cash/check and in-kind
donations to the agency are acknowledged by thank you letters, usually sent
within five working days.
B. BOWL FOR KIDS’ SAKE FUND RAISER
1. Receipts from Bowl For Kids’ Sake received on the day of bowling are counted
by a staff person at the bowling center and recounted and verified by the Office
Manager when received in the office.
2. Acknowledgements are sent to each bowler when all bowlathons have been
completed to acknowledge all contributions collected for each bowler.
3. The Office Manager is responsible for preparing the bank deposits in duplicate,
making deposits and taking duplicates to the Bookkeeper.
4. Pledges received after the bowlathons are mailed directly to the bank by the
donor. Central Bank processes those donations, makes a deposit directly to the
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Internal Controls
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BBBS account and forwards an online and written list of all deposits to the Office
Manager.
C. DEPOSITS
1. Deposit Procedures 2. Comparison of Cash Receipts Log to Deposit Slips – The Office Manager is
responsible for preparing the bank deposit in duplicate, making deposits and
taking duplicates to the Bookkeeper.
D. DISBURSEMENTS
1. Invoices – Invoices and/or request for payment/reimbursement are received and
reviewed for accuracy and receipt of goods by the Executive Director. Approved
invoices are forwarded to the Bookkeeper for payment.
2. Check Preparation – Bookkeeper types/writes checks for approved invoices.
3. Check Signing Policy – All checks require dual signatures by an authorized
officer of the Board: President, Vice President, Treasurer, Secretary, Past
President and/or the Executive Director.
4. Storage/Control of Checks – The Bookkeeper retains all checks in their office.
Additional checks will be ordered as needed.
5. Reconciliation – Bank statements are mailed to the bookkeeper directly from the
bank unopened for reconciliation. Any discrepancies will be reported to the
Treasurer and the Executive Director. The Treasurer and Executive Director will
periodically review bank reconciliations.
E. PAYROLL PROCESS –
Big Brothers Big Sisters of the Bluegrass employees are paid on the 3rd and 17th of
each month.
1. Payroll Preparation – All full-time employees are paid yearly salaries. All
salaries are approved by the Board of Directors. A letter setting all salaries is sent
to the bookkeeper in January of each year or at the time of employment. Payroll
is submitted for direct deposit twice each month.
2. Payroll Distributions – All employee pay stubs are picked up at the bookkeeper’s
office, reviewed and distributed by the Executive Director.
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Internal Controls
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F. PERSONNEL CHECKS
1. Background checks – As per agency personnel practices and policies all personnel
undergo a police check, records check, drug screen and personal interview before
being hired.
G. PAYROLL AUTHORIZATION
The Executive Director notifies the bookkeeper in writing of any payroll
authorizations/terminations as changes occur.
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Revised August 2006