Skål International USA

Transcription

1 Skål International USA 2014 Audit Report Washington, DC February 20, 2015 ATTENDEES: Eric Braendel, SIUSA Administrator Ed Davis SIUSA Vice President Finance Richard Knorpp, Immediate Past - SIUSA Vice President Finance Anthony Cosenza, SIUSA Auditor Arthur Allis, SIUSA Auditor 1. PURPOSE OF THE AUDIT A systematic review of the financial records and accounting procedures of SIUSA was conducted on February 20, The SIUSA Auditors conducted this review in order to provide an independent examination. 2. AUDIT PROCESS The auditors reviewed records with the Vice President of Finance, Ed Davis, Immediate Past Vice President of Finance, Richard Knorpp and the SIUSA Administrator. The records provided to the auditors included the checking account, savings accounts, general ledger, expense reports, invoices and Florimond Volckaert Fund. QuickBooks, our accounting system was projected on a screen, easily visible. Inquiries re: any accounts or details were immediately visible. Hard copies of invoices and expense reports were readily available. 3. FINANCIAL RECORDS REVIEWED TAX RETURNS 2013 Tax returns were completed by Orizon Certified Public Accounts and were filed on October 29, SIUSA is not required to file Forms 940 and 941, since SIUSA has no employees. STATE OF NEBRASKA Corporate Income Tax Non Applicable Annual Report to Secretary of State State Withholding Forms Non Applicable Annual State Withholding Transmittal Non Applicable Annual State Unemployment Tax Return Non Applicable Other State/Local Business Taxes/License Non Applicable INSURANCE Insured through Gallagher Grace/Mayer Insurance Agency (GGMIA) in Omaha, NE Crime - SIUSA Clubs - $2, Crime - SIUSA - $

2 Directors and Officers Liability - $10, General Liability - $1, Total Premium - $15, SIUSA does not receive a breakout on Liability Coverage applicable to SIUSA and SIUSA Clubs. The auditors consider SIUSA as one of the units. The following insurance cost breakdown is based on 44 units (43 SIUSA Clubs and SIUSA) Directors and Officer Liability SIUSA Clubs - $9, SIUSA - $ General Liability SIUSA Clubs - $ SIUSA - $36.00 Totals based on above assumption: SIUSA Clubs Total - $14, (42 x $347.00) SIUSA - $ CONTRACTS SIUSA has a contract with the American Bus Association as the administrator of the organization. LITIGATION There are no pending or threatened litigation at this time BALANCE SHEET (Checking and Savings Accounts) SIUSA accounting system is QuickBooks. The SIUSA Administrators, VP Finance, and the SIUSA President each have access to the system, which is hosted at SIUSA headquarters. This allows crosschecks between each of these entities. The auditors like the transparency but would recommend that this access be made read only. Are all bank statements reconciled on a timely basis? YES, with detailed supporting spreadsheets. Reporting on a timely basis YES (verified by testing). The SIUSA Administrator has been forwarding copies of reports to 2014 Auditors, David Barela and Anthony Cosenza on a monthly basis. Verify all checks received have been deposited promptly YES (deposits are made in the (GOA) General Operating Account at least weekly. Only Eric Braendel, SIUSA Administrator opens the mail, deposits checks and posts. The GOA and savings accounts are maintained with Wells Fargo Bank. Funds from the Omaha Federal Credit Union in Omaha, NE have been moved to the Wells Fargo savings account. The funds in the amount of $107, were transferred on July 7,

3 SIUSA s interest for 2014 was $ Savings account interest of $26.84 savings accounts and $ interest from CD. Omaha Federal Credit Union earned.10% and the Wells Fargo Savings Account earned.10% INVESTMENT FUNDS Verify investments are in compliance with SIUSA Bylaws, MOI and BOD approvals YES. FDIC Insurance Coverage Be certain bank account balances do not exceed FDIC $250,000 limit YES. Review if funds are invested at maximum interest rate levels available - Yes. ACCOUNTS RECEIVABLE Verify listing of current Accounts Receivable with General Ledger YES. The auditors requested and reviewed a sample of (3) three clubs to determine the accuracy of the accounting procedures. These clubs were Chicago, Minneapolis and Pittsburgh. It was determined that all entries were consistent with acceptable account procedures and were posted in a timely fashion. Identify Accounts Receivable, which may not be collectible There were no Account Receivables that were not collectable. INVENTORIES (Jewelry, Awards, Officer Pins, etc.) A list of the inventory was presented to auditors. The inventory shows a list of products of January 1, 2014 and as of December 31, The value of product as of December 31, 2014 is $11, We recommend that a year-end inventory be verified next year. FIXED ASSETS None INTANGIBLE ASSETS SIUSA website has a cost of $26,660, which is being depreciated over a 15-year period, equal to $ per year, according to the Statement of Financial Position dated December 31, 2014 Other Assets Verify Fixed Assets correspond with values shown in the General Ledger The only fixed asset identified is a Dell laptop computer purchased in It is being depreciated over a 5-year period equal per year, according to the Statement of Financial Position dated December 31, The laptop is currently in possession of Vice President of Administration Toni Koster (2015). ACCOUNTS PAYABLE Verify listing of all current Accounts Payable with General Ledger and all items are valid payables YES Select a sample of Accounts Payable and request verification from vendor The list of Account Payables consists of Clubs that have over paid on their account and funds SIUSA is holding from the treasury of several clubs that have been disbanded. 3

4 STATEMENT OF ACTIVITIES REVENUE Verify revenue trails and income shown in General Ledger are correct Accounts from clubs were reviewed. Entries via QuickBooks show that general accounting procedures are being adhered to. DISBURSEMENTS Review all disbursements to verify they have been disbursed in compliance with approved contracts, By-laws, MOI, and BOD/Minute approvals Disbursements are made on the 15 th and end of the month Verify all disbursements have proper supporting documentation/receipts and approvals The auditors determined there is documentation and applicable approvals to support all disbursements. Verify VP-Finance is being provided with a copy or access to Monthly Disbursement Journal. The VP-Finance has generated these reports and confirmed he is distributing these documents to the Board of Directors and Auditors on a monthly basis for review. EXPENSE REIMBURSEMENTS Verify that all expense reimbursements have been approved by VP-Finance and the President, and appropriate receipts are attached. Items without receipts should be reasonable amounts, i.e., gratuities, etc. We tested many invoices and determined the approval procedure was followed. All expenses must be approved by the Vice President Finance before being forwarded to the SIUSA Administrator for disbursement of funds. They are then approved by the President and require the President s and Vice President Finance s signature. The Auditors found in some cases that expenses were not submitted on a timely basis. We recommend the enforcement of expenses being submitted within 30-days after the event. The delay impedes the efforts of the VP-Finance to submit an accurate Statement of Activities. Verify that expense reimbursements have been made in accordance with By-laws; MOI and BOD approvals The auditors checked expense reports and determined the approval procedure was followed and proper support documentation was supplied. Verify unauthorized expenses have not been reimbursed (i.e., shoe shines, massages, alcohol, excessive phone or internet charges, private limo transfers, etc.) All expense reports are being reviewed by the Vice President Finance Our examination found no evidence of reimbursement for unauthorized expenses. It should be noted that Board Members reported in kind expenses where they used credit card and airline rewards to cover expenses and they would absorb mileage charges, parking, tolls, Internet fees, foreign transaction fees, meals, hotels and etc. again saving travel funds for SIUSA. Some board members were also able to plan company business trips to coincide with SIUSA meetings and were able to charge some related costs to their employer.. 4

5 BOARD MEETINGS Verification of correct number of room nights billed as approved by BOD and VP- Finance There were no variations to this policy SIUSA (AGM) Annual General Meeting, NAASC AGM and Skål International Congress Verify that excessive nights lodging have not been reimbursed There were no reimbursed expenses for excessive lodging Verify other expenses are appropriate (meals, gratuities, ground transportation, etc.) Reviews of expense reports indicate expenses were reimbursed only for legitimate expenses GRATUITIES The SIUSA gratuity and tip guideline is 15%. This policy is being adhered to. AIRFARES Coach fare is reimbursable; however, the airfare should be a promotional fare and not economy plus or full coach. Non-promotional airfares should be documented All Airfares are reviewed and are in compliance. The Auditors did not find the use of first or business class reimbursed for SIUSA travel. Air tickets purchased should be supported by a copy of the airline E-Ticket receipt showing the confirmation number, flight itinerary, ticket number issued by the airline, form of payment, and ticket cost, attached to the expense report. Receipts were attached. HOTEL ACCOMMODATIONS Standard accommodations, not mini-suites or suites (exception may be approved by BOD for President at SIUSA/NAASC Congress and Skål International Congress) This policy is being adhered to. Many Board members have hotel room supplied by the clubs, saving SIUSA funds. Awards have also been used for accommodations. MILEAGE - Verify that mileage reimbursements are for appropriate mileage for each trip. Rental cars may be less expensive. Last year the auditors noted a number of trips in which it would have been more economical to rent a car versus mileage reimbursement. A MapQuest printout showing estimated distance and verification of mileage are submitted to support mileage reimbursement. DAILY MEAL ALLOWANCE Our review of expense report revealed that we are in compliance with a daily meal allowance 4. ADMINISTRATION Skål INTERNATIONAL FILINGS Verify Form 3 was filed Done 5

6 Verify annual dues payable to Skål International have been paid on a timely basis to eliminate any penalties The auditors agree SIUSA is in compliance in compliance. On July 21, 2014 SIUSA purchased 111, EUROS ($152,702.20USD) at an exchange rate of (Wells Fargo Commercial Exchange Rate) (Live Exchange Rate ). The funds were transferred to Skål International as partial payment on SI Dues for This transaction was authorized by the SIUSA Board during the summer board meeting on August 8, Skål International issued a credit to SIUSA of 250 Euros for the advance payment. This purchase eliminated any exchange loss in Although there was preliminary authorization by the SIUSA board in regard to the purchase of Euros. The auditors would recommend a vote to authorize final approval prior to the actual purchase. Since this is the single largest transaction SIUSA makes during the year final approval should be made prior to the purchase and not at a board meeting after the purchase has been made. The declining Euro further influences this decision. FLORIMOND VOLCKAERT FUND Separate ledger should be maintained for the fund This is in compliance. In 2014, 39 clubs contributed $19, Verify all receipts have been deposited and forwarded to Skål International A separate bank account is not maintained for Florimond Volckaert Fund receipts; however, SIUSA maintains a separate General Ledger accounts to account for fund receipts and disbursements. These funds are routinely periodically sent to SI. Select sample of Club donations and verify the amount submitted to the FVF A list of Clubs was provided to the auditors. BUDGET Review current year and proposed budget to determine if it seems to be realistic The budget is realistic and SIUSA was in the black for 2014 showing a surplus of $29,791. The 2013 financial reports were sent to Skål International. The financial reports are distributed to the BOD and Auditors on a monthly basis and are revised to meet the need of the organization. It is due to this review SIUSA was able to prepay 2014 dues by purchasing Euros at a guaranteed rate thus saving the organization a substantial sum of money BOARD MINUTES Review all Board Minutes for any issues that could have financial impact The Board Meeting Minutes are posted on the SIUSA website on a timely basis and no later than 30-days after a Board Meeting and reviewed during the year by the Auditors. 6

7 SIUSA ADMINISTRATOR Verify Executive Director is not holding the same position with another Skål member organization The Contract with the ABA creates a completely separate entity for this position. The SIUSA administrator does not hold this position with any other Skål organization. Other Activity The SIUSA Board on a conference call dated December 18, 2014 voted to change accounting firms from Orizon in Omaha, NE to McGladrey in Washington, DC. The decision was made at the recommendation of the SIUSA administrators. The administrators are familiar with the new firm as they use them for other associations they manage. Although similar in costs Orizon had charged additional fees usually included in the overall service package of most firms. The auditors were asked by President Banks to offer a recommendation in regard to the 2015 election for SIUSA president and vice president of region 4. Although we were asked to make a recommendation we felt pertinent information may have been withheld from us. Specifically, s from the clubs that were asking for SIUSA to review the candidates in question. The auditor s recommendations were made to the board based on the information provided and past precedent. In regard to the office of president the auditors agreed with the decision made by Skål International and those instructions were followed by the board. In regard to the vice president of region 4 we again agreed with the instructions provided by Skål International in an dated 26 November However President Banks, in our opinion, felt greater clarification was needed and asked the president of SI to rule further. The SI - President stated it was a matter for SIUSA to handle. That meant the SIUSA board became involved in a qualifications of membership. That responsibility is usually held between the club and Skål International, not SIUSA. The auditors feel that this was a precedent that should not have been set and recommended the SIUSA accept the instructions provided by Skål International. It is suggested whenever a club has a disagreement in the way an issue is being handled by SIUSA that they include the auditors in the discussion. The auditors serve as the member s representatives and should be included in all disagreements. This will make it easier for the auditors to intervene on behalf of the clubs and members. Respectfully Submitted, Anthony C. Cosenza (SI-Chicago), SIUSA Auditor Arthur Allis (SI-Tucson), SIUSA Auditor 7