Managing
Chapter Funds
Brent Woods, Esq., CAE, SPHR
NIGP Executive Director for
Business Operations and Finance
Board Responsibilities
You are a fiduciary!
This means that you are LEGALLY
responsible for the organizations finances.
Chapter Fiscal Responsibility
1.
2.
3.
4.
5.
Keeping financial records
Preparing accurate and meaningful financial
statements
Budgeting and anticipating financial challenges
Safeguarding and managing the chapter’s
financial assets
Complying with federal, state, and local tax and
reporting requirements
Chapter Fiduciary Responsibility
• Conflict of Interest Policy
• Identify and protect chapter from ethical dilemmas
• Protect chapter from perception that individuals
are benefiting from chapter assets
Sample conflict of Interest policy can be found in the Chapter Online
Resource Guide under the Legal-Tax headline.
Internal Control
Chapter Board of Director’s is expected to
exercise reasonable diligence, case and
good judgment in safeguarding the
chapter’s assets.
Must establish sound internal controls
manual - system of policies and
procedures that minimizes the likelihood of
misappropriation of chapter assets or
misstatement of chapter accounts
Internal Control: Policies
Banking
•
Bank account not belonging to an individual but in Chapter’s name
•
One person write and sign checks, another to authorize/approve
invoices – one person should not do both
•
Under no circumstances should the treasurer “pre-sign” blank
checks for future use by others
•
Monthly reconciliation on chapter bank accounts (the person who
records cash receipts and disbursements should not perform the
bank reconciliations
Internal Control: The Hand-Off
• Change signature cards at financial institutions by
removing former officers and adding new ones
• If required by state law, update corporate
resolution papers to reflect the names of the new
officers
• Ensure the outgoing chapter treasurer reconciles
the chapter’s checkbook balance to the most
current bank statements (should be performed
monthly).
Internal Control Check List
Complete listing found in the Chapter Resource Guide under the Finance heading.
Ask yourself these questions:
1.
Are your books balanced monthly and reviewed by the executive
board?
2.
Does the treasurer provide support documents for each transaction
recorded?
3.
Have all relevant federal, state and local tax forms been filed?
4.
Are all expenditures approved by an authorized person?
5.
Are the duties of writing checks and reconciling the bank
statements segregated?
Internal Audit Committee
Purpose: Conduct random audits of chapter
books and records during the year
(those not involved with the Treasurer’s function should perform it)
Perform the following procedures:
• Review financial records or receipts and disbursements at
least every 6 months
• Review internal control procedures to ensure compliance
• Report findings and any recommendations for improvement
to the chapter president
External Audits
• Less than $5000 – every 5 years
• Between $5000 - $100,000 - at least every 3 years
• Greater than $100,000 – at least every 2 years
• Revenue over $500,000 and 1 employee - annually
(amounts for annual revenue)
The reasoning for more frequent audits is so that
officers will generally still be in the rotation when the
audit occurs. Ensures vigilance about fraud.
Duties of a Treasurer
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Meeting with the outgoing treasurer to review, procedures, financial
records and checking and investment accounts
Obtaining new signature cards
Reviewing past income and expense accounts
Work with board on budget committee to finalize yearly budget
Verify accuracy of invoices and other expense statements before issuing
checks
Making deposits regularly
Preparing NIGP’s Chapter Financial Form (and/or preparing the
Chapter’s 990)
Having checking account statements reconciled and signed by two
members of the board (neither from the same agency or in direct line of
authority) – account statements should agree with ‘cash’ on the balance
sheet
TIPS
• Have bank statements sent to someone
other than the treasurer
• During internal audits require bank
statements not just spread sheets
• Make sure the treasurer reports monthly or
bi-monthly statements to the board
• Make sure you put together internal
controls on your finances
• Check out resources in the On-line Chapter
Resource Guide under the heading
Finances