Managing Chapter Funds

Brent Woods, Esq., CAE, SPHRNIGP 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. Keeping financial records

2. Preparing accurate and meaningful financial statements

3. Budgeting and anticipating financial challenges

4. Safeguarding and managing the chapter’s financial assets

5. 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

• 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