Treasurer s Tips for your Booster Club/Organiza8on

Transcription

1 Treasurer s Tips for your Booster Club/Organiza8on BY ROBIN SCHNAIDT, NUMBERS LLC ANGIE BLOSS TAMMY SCHMITZ, MA OCTOBER 2, 2017 **This is strictly an educa1onal and informa1ve session; no financial gains are promised. The class is offered for educa1onal purposes only not for legal advice**

2 My Background v 28+ years of accoun1ng experience v 15+ years providing accoun1ng and income tax services to individuals, sole proprietors, business owners, and non- profit organiza1ons v 7+ years school district accoun1ng experience 3 years as a Business Manager v Bachelor of Accountancy, University of North Dakota

3 Objec8ves v Address the fraud triangle and reasons people commit fraud v Review fraud cases and discuss internal controls that can be implemented to reduce the chances of fraud v Ques1ons

4 Officer Responsibili8es v SeTng up a bank account properly (upda1ng signature card as needed) v Properly accoun1ng for fundraising income and expenses v Analyzing the outcome of each fundraiser to determine its financial success/failure v Establishing and maintaining money handling procedures (internal control and fraud preven1on)

5 Internal Control procedures Safeguard assets Promote accountability Increase efficiency Provide reliable financial informa1on Protect members and volunteers Ensure compliance with applicable laws/regula1ons and Stop fraudulent behavior and prevent the\

6 Fraud Triangle Pressure Ra1onaliza1on Opportunity

7 1. Pressure v Mo1ve to commit the fraud v Financial pressure is usually a determining factor v Gambling habits, medical bills, credit card debt, spouse s unemployment, etc.

8 2. Opportunity v The situa1on allows fraud to occur v Weak or lack of internal controls or monitoring v Fraud usually starts small to see if it is caught and then grows, in amount and/or frequency

9 3. Ra8onaliza8on v The person jus1fies the crime in a way that is acceptable to his or her internal moral compass v The\ is treated as a loan v They feel inadequately compensated for their work

10 Fraud cases v A Santa Paula, CA, High School band booster club official pleaded guilty to stealing $22,000 and was sentenced to one year in jail followed by five years of probation. v The former treasurer of the Strawberry Plains, TN, Carter High School athletics booster club pleaded guilty to embezzling $33,000 from the organization and was sentenced to four years of probation. v An Elk River MN Treasurer of a youth football association has been charged with 5 felonies and 1 gross misdemeanor. Over $54,000 was taken without permission according to investigators, ranging from $50 to $2300 over a period of 3+ years. The person intended to pay the money back.

11 Items At Risk Of Fraud v Booster Club funds v Food v Gasoline v Credit/Debit Cards v Equipment and other supplies

12 Booster Club Funds v Cash v Checking account v Savings account v Pegy cash box

13 Internal Controls for Booster Club Funds v Run background checks on all volunteers and board officers that have financial capacity (handles cash and has access to bank accounts) v Use only pre- numbered checks v No one signs blank checks v Checks should never be wrigen for Cash v Payments over a certain amount require two signers (amount established by the board)

14 Internal Controls for Booster Club Funds v Incoming checks be stamped For Deposit Only upon its receipt v Require all cash collec1ons to be reconciled by two individuals. Both individuals ini1al the deposit slip v Funds received should be recorded and deposited at least weekly (daily if exceeding a certain amount established by the board)

15 Internal Controls for Booster Club Funds v Board treasurer reviews bank statement before it is reconciled by the volunteer v Conduct monthly reconcilia1ons by cross checking balances with hard copy receipts v Performed by someone who knows how to perform the task and has knowledge of the regularly occurring transac1ons v Duty should be rotated periodically so there is another set of eyes making the review

16 Food controls v Review actual expenses to budget v Develop a per person/per event food amount. v Compare food expenses between loca1ons and events

17 Gasoline v Varies between organiza1ons v Fraud tends to increase as gas prices increase v Review charges by vehicle v Tools for tracking miles, fill ups, typical trips driven

18 Credit/Debit Cards v Credit/Debit cards can be a high risk area v Can work well with proper controls v Need a policy addressing use and repor1ng v Provide board treasurer access to account for monthly review

19 Credit/Debit Card Controls v Credit/Debit card policy should contain: Require all original receipts Address missing receipts Track missing receipts Set up low credit limits Contact info to cancel a card, if necessary

20 Equipment and Supplies v Computers, equipment and supplies v Assets need to be tracked even if they are not capitalized and depreciated v Materiality (size of the item and it s impact on the financial statements)

21 Equipment and Supplies Controls v Bar coding v Inventory/asset worksheet v Control access (sign in/out sheet) v Surveillance

22 Internal Control Monitoring v Consistency is key v Even the best internal controls can not provide absolute safeguards against fraud v Key is to discover fraud right away before it becomes large

23 Internal Control Monitoring- con8nued v Assign one person who is ul1mately responsible for monitoring internal controls v Assigning more than one person leads to confusion or lack of oversight v Even the best internal controls can be eluded if there is no monitoring v Need to review receipts

24 Internal Control Monitoring- con8nued v Don t be happy with just a receipt, ensure validity and scru1nize for accuracy v Follow- up with volunteers/employees who are constantly missing receipts v Produce monthly financial reports and present to board of directors. Periodic reports should be given to all club members v Audit annually and compare current and prior years account ac1vi1es

25 Other Good Business Prac8ces v Establish policies for Board Code of Conduct, Conflict of Interest Policy (signed annually) and Records Reten1on v U1lize a safe deposit box for important docs v Do not permit one officer to hold mul1ple posi1ons at the same 1me v Acquire insurance to cover fraud, the\ and board mistakes v Board reviews IRS form 990 before filing

26 Ques8ons Follow- up ques1ons can be sent to: v Angela.bloss@ahschools.us v Elizabeth.burgard@ahschools.us v Robin@NumbersbyRobin.com