|
Marian
Dykes, CPA 4651
Buford Highway Atlanta,
Georgia 30341 |
Phone
(770) 451-6910 Fax
(770) 457-0943 |
There
is always a need for good accounting records – especially when you are in a
position of trust. Legally this may
be referred to as a fiduciary relationship.
Directors and officers occupy a fiduciary relationship to the association
of which they are directors or officers. No
director or officer shall engage or participate, directly or indirectly, in any
business or transaction conducted on behalf of or involving the association,
which would result in a conflict of his own personal interests with those of the
association that he serves. As
State Judging Director one of your major responsibilities is regarding financial
affairs of NAWGJ. Your record
keeping responsibility is important for three reasons:
1.
you have been placed in a position of trust by your peers,
The treasurer should do her best to see that everything is done properly so that
there are no doubts about her integrity.
2.
you must have accurate data in order to prepare your tri-annual financial
reports.
3.
when your term as State Judging Director expires, your records must be
turned over to your successor.
The
State and Regional Judging Director always wants to do what is in the best
interest of the present and future NAWGJ members.
The financial affairs of each state and region must be conducted in a
businesslike way.
·
Maintain
accurate financial records.
Just a checkbook is not sufficient. In
addition, you should have some kind of accounting system.
In
looking after the financial affairs of your State you do not want to be
responsible for a big bundle of cash and you don't want to pay the bills with
cash either. Usually your state
will need two no more than two types of accounts:
1.
Current
Account -
This account is for the day-to-day business of NAWGJ - to deposit money as it
comes in and to write checks, as bills need to be paid. NAWGJ and your state
should be printed on the checks, along with the account number.
You may or may not want address and telephone information on your checks.
Putting a name on the checks is not advisable. Keep control
of your checkbook.
Once
a month, or more often if necessary, the financial institution will send you a
printed "statement" showing deposits (the money put in) and
withdrawals (the money taken out) during the previous month. These are called
transactions. They may or may not return your canceled checks, depending upon
their policy. They will be
marked "canceled" showing that the people you sent them to have cashed
them. They then become secondary receipts.
On
Current Accounts interest is generally not paid and fees are charged for
services. However, service charges are often waived on non-profit accounts.
It is a good idea to shop around to see what the service charges are and
who will give you the best deal. It
may be easier to continue to use the account set up by the previous SJD if it
has no fees than to set up a new account without fees.
2.
Non-Checking Savings Account
- This account is for the money NAWGJ does not need right away. You cannot write
checks on it, but you can withdraw any part at any time, or transfer any amount
to the Current Account. And because the institution is in effect
"borrowing" your money, it will pay you a rate of interest.
In most cases there are no service charges to operate a Savings Account.
The
financial institution will usually require a list of the officer positions in
the organization (i.e., President, Vice-President, etc.) with an indication of
who has signing authority. Each person with signing authority will be required
to fill out a Signature Card, so they can be checked against the signatures on
checks NAWGJ issues. NAWGJ must
have access to your account. An
authorization card can be obtained from your bank for all accounts – checking
and savings. The signatures of the
RJD and Secretary/Treasurer should be listed as Trustees.
This information must be updated when elections take place or there is
any change in office. Periodic
audits of authorization cards will be conducted.
If
the time comes when you no longer need an account for one reason or another,
tell the financial institution the amount of checks outstanding. Then the
financial institution will give you the balance in cash or arrange to transfer
it elsewhere according to your instructions.
It
is a good practice to close an account when you do not need it rather than
leaving it open with only a token amount. To do so means untidy bookkeeping for
NAWGJ with possible service charges being assed.
Money
for NAWGJ is received as either cash or as checks.
Cash
Receipts should be issued for all cash received. A Cash Receipt should include
the date, who the money is from, what the money is for and the dollar amount.
The sum of the Cash Receipts and checks should be equal to the bank deposit.
Cash that is received should be deposited as soon as possible. Some financial
institutions will provide a special lockable bag that can be deposited at night
or on the weekends.
When
checks are received make sure they are made out properly to NAWGJ. If a check is
made out to an individual, make sure they sign the check, then write on the back
of the check "For Deposit Only to the Credit of (Name of State NAWGJ)".
All
cash received should go through the bank account.
Cash received should never be used directly to pay a bill.
Instead, the cash should be deposited and a check issued.
And finally, never hold cash personally for any length of time. You are responsible for the finances of the State.
By depositing cash soon after receipt, you guarantee that your members’
money and other contributions are secure.
When
you have money to put into the NAWGJ accounts:
1.
Write on the back of each check the words, "For Deposit Only to the
Credit of (Name of your Account)" as well as your account number.
It is a good idea to buy a rubber stamp for this purpose.
2.
Complete a Deposit Slip to show the amounts of the checks and cash to be
deposited. List checks separately.
Be sure and put the date on the deposit slip.
Make two copies of the deposit slip.
3.
The bank will keep one copy of the deposit slip and the teller will give
you a copy of the Deposit Slip, stamped with the financial institution's name
and initialed on behalf of the institution. This is your receipt.
A
typical Deposit Slip looks like the illustration shown.
All
expenses should be paid by check, never by cash. A check is your written
instruction to pay some of your money to the person or organization named.
Bills
for to NAWGJ can be presented to the SJD or RJD as: an invoice or cash register
receipt that has already been paid; and an unpaid invoice where the SJD or RJD
pays the company directly. The SJD or RJD should never pay an expense unless
there is a receipt or invoice
as evidence of payment. When at all
possible, use a check rather than cash. This
will provide you with a secondary receipt.
When reimbursing a NAWGJ member for expenses, require them to complete an
expense voucher and attach a copy of the receipt to receive reimbursement.
Approval from your RJD is required for large expenditures.
Your State Board should have knowledge of large and/or unusual
expenditures
Expenditures
for depreciable assets over $200 should be made in consultation with the State
Board and receive written approval of the respective RJD.
Receipts
or invoices for an expense should include; date, name of individual or company
being paid, dollar amount, check number, and an indication of what the expense
is (example: rent, postage, etc.) When
receiving an unpaid invoice the SJD or RJD should pay the bill within two weeks.
The paid invoice should be marked paid with a stamp indicating the check date,
check number and amount paid.
Copies
of receipts must be submitted with each Tri-Annual Financial Statement.
When organizing your receipts, put all receipt copies for one category,
such as postage, one page. Label
the page with the category, total the amounts from that category, and transfer
that amount to the proper line on page 1 on the Tri-Annual Financial Statement.
If there are multiple items on the receipt, circle the NAWGJ items
included in the category. All receipts for the category must add to match the
corresponding amount shown on page one of the Tri-Annual Financial Statement.
Always
use a pen, never
use a pencil, and print or write clearly. Write
the figures close to the ‘$’ sign. Write the words starting at the extreme
left side
If
you make a mistake, do not try to correct it. Write void on the check and write
a new one. The
voided check itself should have “void” written across it, the signature
portion of the check ripped off and then attached to its stub.
It
is important to use only the checks that the financial institution has given you
because they are unique to your account. In the illustration above you will see
some strange-looking figures on the bottom left of the check (No. 7). These are
MICR numbers and they refer to your account number. They are printed in special
magnetic ink that is "read" automatically by the financial
institution's special sorting machines, so
always use the checks and deposit slips with the State’s number on them.
The
illustration shows the different parts of the check to fill in.
The
following relates to the check illustrated above.
1.
Date of issue (don't date on a Sunday)
2.
Number of the check - for your records
3.
Person or organization being paid
4.
Amount in figures
5.
Amount
with the number of dollars in words and number of cents in figures, as shown.
Start to write on the left and draw a line right across, as in the
example. Make sure that the amount
matches.
6.
Signatures
of signing officer(s). Always
sign your name the same way on the checks as you did on the signature card.
7.
A
spot to place a memo such as an invoice number or explanation of what
the check is for.
8.
MICR
figures.
Checks
should be signed only after being completely filled out.
The common practice of on signing officer pre-signing blank checks should
be avoided.
Petty
cash fund may be used for a special event for small expenses for which issuing a
check is not practical. To open it,
a check is written to “Petty Cash” is cashed.
When the money is paid out, a receipt must be obtained.
The receipt values plus the cash should always equal the original amount
of the fund. At the end of the
event, any remaining fund should be deposited and expenditures matched with the
check.
Generating
data for Tri-Annual Financial Statements can be done manually or with a computer
software package such as Quicken. Computer
generated statements have advantages such as freedom from math errors and
consistency in categorization. Always
report with gross amounts (before expenses) vs net (after expenses).
If
you are generating your financial statements electronically to
insure that your NAWGJ records are not lost, you should have a backup disk and
make a backup each time you update your records. It is also a good idea to keep
an updated hard copy of your records so you will have easy access to your NAWGJ
balance at all times.
Tri-Annual
Statements must be filed in a timely manner.
Failure to do so not only delays receipt of your state’s funds, but
will delay disbursements of all states.
The
budget should be the regulating factor for the state’s activities.
The budget is a statement of the organization’s planned expenditures
and income based on the approval and commitment of the state.
Use the budget as a guide for the state’s activities during the year.
When
approving the budget, the State must commit to raising the necessary income, for
without the budgeted income, the State cannot spend as it had planned without
incurring a deficit. Thus, when
total expected income is not achieved, total expenditures must be cut.
The
Equipment Inventory form should be completed at the close of each fiscal year.
All equipment still in your possession with original cost over $200
purchased with NAWGJ Funds should be listed.
Equipment items purchased in this fiscal year with cost over $200 should
be added to the list. Equipment items disposed of during this fiscal year should be
noted.
Since
the NAWGJ State Board will regularly make decisions on how to spend the money it
has, it is important that the SJD bring to meetings a summary of the previous
year' s expenses and receipts. This will give the State Board a base from which
to work. Distribute Financial Statements and special events statements
such as Judges Cup, State Clinics, etc. to state board.
In addition it is advisable to publish Financial Statements and special
events statements such as Judges Cup, State Clinics, etc. in state newsletters.
Once
a month you will receive a "statement" statement
listing all transactions that took place within a certain period of time.
They may or may not return your canceled checks, depending upon their
policy. The
statement indicates the balance in the account at the end of the previous month
and then a list of "entries" each of which represents a credit
(deposit), debit (check), service charge or interest.
You should request that your bank use the end of each month as your
statement cut off date.
You
should check your records against the statement for each account. See which
checks have not been cashed and what deposits are not on the statement. This
process of checking your records against the statement from the financial
institution is called "reconciliation". This process helps you to
assure that your records are correct and that the financial institution has not
made a mistake.
Verify
all amounts on the statement with amounts noted in the checkbook.
If there is a problem and
the statement does not agree with your records, contact your institution right
away so the mystery can be solved. Many
financial institutions have a strict time limit for correcting errors.
To
perform this bank reconciliation (page #2 of Tri-Annual Repot), follow these
steps:
A.
Bank Statement
1.
Outstanding
Deposits
a.
List
all deposits not listed on your Bank Statement that you have made since the
statement was dated.
b.
Total
these outstanding deposits.
2.
Outstanding
Checks
a.
List
all checks which are not returned to you and are not listed on the Bank
statement but which are recorded in your checkbook
b.
Total
these outstanding checks.
3.
List
the balance from your latest Bank statement
4.
List
the total outstanding deposits from line A(1)(b)
5.
Add
these two lines.
6.
List
the total outstanding checks from line A(2)(b)
7.
Subtract
this amount from your sub-total.
B.
Check book
1.
List the balance that you show in your checkbook.
2.
Add or subtract any errors you found after going through the checks and
checking the addition or subtraction.
3.
Subtract service charges and/or DM (debit memos) such as check printing
charges. These should be listed on
your reports as expenses.
4.
Add interest for the period if you have an interest bearing account (be
sure and include as income on page #1).
5.
Your checkbook balance. ** Line A(7) and Line B(5) should be the same or
you have made an error or are overlooking something.
6.
If these two lines are the same, transfer the Actual Checkbook Balance
(line B(5) to the bottom line of the Recapitulation on page #1 of Tri-Annual
Report.
The
records of the State should be kept in an orderly fashion in a safe place.
Retain for at least seven
years any records that support tax deductions.
These records include canceled checks, expense records, employment and
other contracts, and tax-related forms. The
Treasurer should keep a separate file folder for: statements and canceled
checks, invoices and receipts, deposit slips and cash receipts and financial
reports. A separate set of files should be kept for each year.
Store based on the dates
of financial statements. On the box
mark dates included and mark date these records can be disposed.
Purchase documentation for significant assets such as computers,
furniture etc should be keep for the life of the asset.
The records of the State
should be kept in an orderly fashion in a safe place where they will not be
damaged.
Looking
after NAWGJ financial affairs is mostly a matter of common sense and remembering
to write down the details of each transaction at the time it occurs so that your
don't have to try to catch up later.
The
entire text of this lecture can be found at www.wutka.com/marian
Good
luck!
Resources:
SJD
manual
SJD
Filing Financial Reports by Mary Ann West