Springfield Historical Society, Inc. Audit Procedure. Audit Committee: Gene Venable Elizabeth Lundberg Leigh Callaway Audit, February 5, 2010

Transcription

1 Audit Committee: Gene Venable Elizabeth Lundberg Leigh Callaway 2009 Audit, February 5,

2 Audit Goals: 1. Assure that the financial statements of the follow generally accepted accounting principals 2. Assure that the financial statements of the are consistent with its mission and organizational structure 3. Assure that adequate financial controls are in place and are being effectively followed regarding: a. Cash receipts and disbursements b. Bank statement reconciliation c. Budgeting d. Cash flow and investing e. Reporting f. Inventories 4. Assure that State and Federal reporting is current and complete Financial Statements: 1. Income & Spending Report a. Income Categories by functional organization b. Spending Categories by functional organization c. Year End Balances i. Cash ii. Checking iii. CD s 2. Fund Balances Report a. General b. Memorial c. Scholarship d. Total Accounting Principles Cash Basis: 1. Cash receipts (revenues) are recognized at the time of receipt 2. Cash disbursements (expenses) are recognized at the time of disbursement 3. Chart of accounts reflect the functional organization for operational revenues and expenses 4. Chart of accounts for non-operational revenues and expenses reflect the nature of the investment accounts 5. Accrual accounting items such as A/R, A/P, inventories, COGS, retained earnings etc do not exist 6. Account balances reflect the net results of book entries of cash receipts and disbursements in accounts at a point in time 7. Fund balances represent the net of cash transactions allocated to funds at a point in time 2

3 Financial Controls: 1. Treasurer s Guide details procedures and control points 2. The constitution and By-laws details financial controls for a. Budgeting b. Spending c. Reporting d. Auditing 3. Book inventory report details counts by storage location State and federal Reporting: 1. IRS Form 990-N the e-postcard is due annually starting in 2008 by May 15 th. This report is usually filed in February and is based upon the audited financial statements. 2. New Hampshire Department of State Corporate Division Certificate of Revival New Hampshire Nonprofit Corporation due every five years. Last filed 08/15/2008. Business Name: Springfield Historical Society, Inc. # Fees were paid for 1995, 2000, 2005 filings not made. 3. New Hampshire Department of Justice Office of Attorney General Charitable Trust Unit Annual Report Form NHCT-2A due May 15 th each year. This report is usually filed based upon the audited financial statements in January. Audit Review Steps: At the outset of the audit each member of the audit team will take one of the first three items in the list below. The balance of the items in the list will be taken on as individuals finish their first item. 1. Accounts Balance tie-out using the Reconciliation Summary Report (marked with number 1a). The RecSum report serves as a focal point for tying our reports and statements: a. Use the following reports in this audit step: i. Prior year audit report (this is the starting point of the audit process) ii. Current year Treasurer s Annual Report iii. Reconciliation Summary Report (marked with number 1a) iv. Monthly income and expenses Cash Acct (marked with number 1b) v. Monthly income and expenses Checking Acct ( marked with number 1b) vi. Monthly income and expenses CD 860 ( marked with number 1b) vii. Monthly income and expenses CD 990 ( marked with number 1b) viii. Acct Transactions Checking (marked with number 1c) ix. Acct Transactions CC 860 (marked with number 1c) x. Acct Transactions CD 990 (marked with number 1c) b. Verify that the opening balances in the Reconciliation Summary Report tie out to the prior year audit letter financial reports. c. Verify that the ending balances in the Reconciliation Summary Report tie out to the current year Treasurer s Annual Report. 3

4 d. Verify that the net change in total balance in the RecSum report ties out to the current year Treasurer s Annual Report. e. Verify that bank statements (in 3-ring binder) and Reconciliation Summary Report opening and closing balances agree for each account: i. Checking ii. Two CD s (one memorial fund CD and one scholarship CD) f. Tie out the changes in account opening, activity, closing balance and the Change amount in the Reconciliation Summary Report with the changes in the reporting system reports for each account (Use reporting system reports marked with the number 1b): i. Cash ii. Checking iii. Two CD s (one memorial fund CD and one scholarship CD) g. Verify that each bank account has been reconciled with the reporting system for each account (Use reports marked with the number 1c and verify that each entry cleared status is R): i. Checking ii. Two CD s (one memorial fund CD 990 and one scholarship CD 860) h. Verify that the total receipts and total disbursements in the RecSum report tie to the Total Income Categories and Total Expense Categories, respectively in the current year Treasurer s Annual Report. Verify that the Grand Total is equal to the Net Change in both reports. 2. Cash Receipts Review a. Note that from an account perspective Cash Receipts include: i. Cash and Checks received ii. Interest earned iii. Transfers into an account increase the account balance; but are not considered income. b. Use the following cash receipts reports marked with the number 2: i. Receipts by category- Cash ii. Transfers In by category- Checking iii. Interest Income- Checking iv. Transfers by Acct- CD v. Interest Income - CD c. Review the above reports checking for the following: i. Assure that Category and Classification 1 are indicated on each cash receipt to assure that income will be completely identified. Dues must have a year in Classification 2. ii. Assure the memo field indicates the check # and date of check. If cash, who collected it and when/where. iii. Assure that fund names are properly indicated in Classification 1 to assure that fund balances will be correct. The fund name usage rules are as follows: 4

5 1. Interest on Checking General Fund 2. Investment Income Scholarship Fund CD or Memorial Fund CD 3. Membership Dues- General Fund 4. Book Sales General Fund 5. Card Sales Scholarship Fund 6. Contributions to designated fund or General Fund if not designated Contributions- Classification 2 raffle is designated Scholarship Fund 7. Grants Meeting/Events (goes to General Fund by subtraction) iv. Assure that cash receipts entries were properly recorded in the Receipts by category- Cash report utilizing a sampling of bank deposit receipts together with check copies or check images stored on the computer. Dues forms are also available for further clarification. 3. Cash Disbursements Review a. Note that from an account perspective Cash Disbursements include: i. Checks written, debits or online bill payments ii. Transfers out of an account decrease the account balance; but are not considered a disbursement. b. Use the following cash disbursement reports marked with the number 3: i. Transfers Out by category- Cash ii. Disbursements by category- Checking iii. Transfers by Acct- CD c. Review the above reports and check for the following: i. Assure that Category and Classification 1 are indicated on each cash disbursement to assure that the expense will be completely identified ii. Assure that fund or functional names are properly indicated to assure that fund balances and reporting is correct will be correct. The guideline for this is as follows: 1. Advertising Meetings / Events 2. Fees- Administrative 3. Postage Follows the function or fund associated with the activity 4. Printing- Follows the function associated with the activity 5. Scholarship Awards- Scholarship Fund 6. Speaker- Meeting / Events and includes grant application spending 7. Supplies- Follows the function or fund associated with the activity iii. Review a sampling of the bill payment folder to assure that entries were properly recorded and coded with Category and Classification 1). Use the report Disbursements by category- Checking. 4. Financial Reports Review a. Audit Step 1 tied out the Treasurer s Annual Report totals with the RecSum report and the RecSum report to the system generated reports. This review will look at the detail of the Treasurer s Annual Report. 5

6 b. Assure that the published financial reports tie out to the financial system generated reports that are attached to it: i. The Treasurer s Annual Report letter contains a quarter to quarter and a fullyear to full-year box that is linked to a spreadsheet report. The spreadsheet report should tie out to the system generated reports. ii. The multi-year report of balances and Income and Spending should tie out to the system generated Net Worth reports that are attached and to the functional spending report. iii. The functional Income and Spending report has income and spending details should tie out to the system generated reports c. Assure that the budget in the Income and Spending report agrees with the latest approved budget. d. Assure that spending was contained within (did not exceed) the approved spending budgets. 5. Assure that reported budget is supported by board approved budget minutes. Use the SHS Sending Budget Chronology report (marked with the number 5) and the board minute folder in the review. 6. Assure that regular cash forecasts are done. (See the budget folder.) 7. Review book sales and inventory using the following reports for adequate tracking: a. Book inventory report (marked with the number 7). b. Book Sales report (marked with the number 7). 8. Note state and federal reporting submissions: a. IRS Form 990-N E-Filing (annually). View the PDF file in the IRS folder of the Historical Library. b. NH DOJ Annual Report (based upon audited results). View PDF file in the Financial Reports folder of the Historical Library. c. NH DOS Form NP-3 (5-Year Report) Audit End Product (deliverables): This marks the end of the audit process 1. Mark the Financial Statements footnote: Audited (date) and names of audit committee 2. A letter to the President detailing the audit findings. Create PDF file of the Audit letter and financial statements and to the board and audit committee. Save the PDF file to the Audit folder of the Historical Library. 6

7 Teasurer Responsibilities & Controls (Constitution & By-Laws): The TREASURER: a. Shall be responsible for the safekeeping of all society funds and for maintaining financial records in a manner that is consistent with the fiduciary responsibilities to contributors, comparable with budgeted spending categories and documented with sufficient audit trail, b. Shall collect dues, contributions and grants and deposit all monies received with any reliable banking company in New Hampshire in the name of the Springfield Historical Society, c. Shall prepare a budget for the ensuing year and present it to the board for its approval, d. Solely shall disburse funds to the extent that the category amounts do not exceed the full year approved budget amount for the categories. In the absence or incapacity of the treasurer another officer or board member may fulfill the duties of the treasurer, e. Shall report each quarter to the board the year-to-date spending against the full year approved budget, f. Shall aid the president in naming an audit committee in January of each year. The audit committee shall be comprised of two members and it shall be responsible for completing the annual financial audit by March 1 st, g. Shall issue an annual report based on the calendar year to the board at the January meeting and to the membership following the board adoption of the auditor s report at the April meeting, h. Shall as required in April, file the annual report to the New Hampshire Attorney General Charitable Trust Unit with payment of the required fee 7

8 SHS Mission Statement (Constitution & By-Laws) The mission shall be to bring together people interested in history, and especially the history of Springfield, New Hampshire. Understanding the history of our town is basic to our way of life. It gives us a better understanding of our town and promotes a better appreciation of it. The society s major function shall be to collect material which may help to establish or illustrate the history of the town, the area, its settlement, its development, its progress and its population. It shall collect printed materials such as letters, diaries, journals, histories, genealogies, biographies, memoranda, reminiscences, roster, records, account books, charts, and surveys; museum material such as pictures, photographs, paintings, portraits, prints, and material objects illustrative of life, conditions, events and activities of the past and present of the town of Springfield, New Hampshire. Whenever feasible, the society shall preserve historic buildings and sites, disseminate historical information, gather and maintain cemetery records, mark historical buildings, sites and land trails and provide scholarships to deserving applicants who are residents of Springfield and attending institutes of higher learning. SHS Organization Structure Officers (Constitution & By-Laws) The officers shall be president, vice president, and secretary who shall be elected for a term of one year; and a treasurer who shall be elected for a term of three years. The officers and directors shall constitute the Board of Directors. Board (Constitution & By-Laws) The Board of Directors shall consist of the four elected officers plus three members of the society. Upon the formation of the society, to accommodate for the staggered election of the three members to the Board of Directors, a drawing of straws will determine which of the three will serve a 1, 2, or 3 year term. Standing Committees (Constitution & By-Laws) Whenever feasible the society shall attempt to have the following committees: a. GENEALOGY COMMITTEE responsible for gathering genealogical information and answering inquires. b. HISTORICAL SITES COMMITTEE responsible for establishing the historic validity of sites proposed for marking, and for marking those same sites. Markers for public sites shall be provided by the society. Markers for privately owned property will be available from the society at cost. All dates, copy, and deeds will be provided by the owner, and edited and verified by the committee. c. MEMBERSHIP COMMITTEE responsible for membership drives. d. MUSEUM COMMITTEE shall be responsible for collecting, cataloging, and preserving books, manuscripts, newspapers, and other historical materials and objects, for exhibits, and for the 8

9 care and upkeep of the society building or meeting area. The museum committee shall be chaired by the curator. e. PUBLICITY COMMITTEE responsible for finding ways and means for publishing studies, newsletters to members, bulletins, books, printed material using the society logo, and publicity to newspaper and other media available. f. SCHOLARSHIP COMMITTEE responsible each year for organizing the scholarship program. g. PROGRAM COMMITTEE responsible for planning and executing the quarterly meetings. This includes booking the speaker, arranging for grants if applicable, securing the meeting place, developing script for ad and placing ad in the Kearsarge Shopper and in local newspapers, notifying town communications coordinator for placing the ad/notice in the town website, news and town bulletin board, arranging refreshments, setup of hall seating and equipment and takedown of hall seating and equipment. The treasurer helps with grants and ads. (This committee is not yet in constitution and by-laws) Officer, Board & Committee Assignments Officers for Board for President, Patsy Heath Caswell Vice-President, Donna Denniston Secretary, Laila Jonsson Treasurer, Brandt Denniston Janet Booker Cathy Richardson Cynthia Bruss Standing Committees: Members: Audit Gene Venable Elizabeth Lundberg Leigh Callaway Curator and Museum Julie Slack, curator Ed Belfield Nancy Bower Gertrude Heath Ann Neilsen Peter Neilsen Genealogy- Not assigned Historical Sites Patricia Caswell Membership Not assigned Nominating Janet Booker Trudy Heath Janet LeBrecht Publicity assigned to program committee Book Sales Janet Booker Card Sales Patricia Caswell Trudy Heath Newsletter Patricia Caswell Program Donna Denniston Scholarship Gertrude Heath, chair Donna Denniston Cathy Richardson Webmaster Brandt Denniston 9