Bridging the Gap

1. Bridging the Gap Presenters: Janice Butler and Carlene Anders Long Term Recovery Conference

2. Transparency: Financial Controls and Policies • How to Protect your Organization • Auditor Recommendations • Importance of Information Access

3. TRANSPARENCY:The release of information that is relevant to evaluating institutions. —Ann Florini, Brookings Institution

4. Being transparent with relevant information is how nonprofits demonstrate accountability. —GuideStar

5. Board Responsibilities • Wisely use Donor and/or Grantor Funds • Establish, Maintain, and Monitor Proper Internal Controls • Prepare and Report Accurate Financial Statements

6. Auditor’s Two Main Concerns • SEGREGATION OF DUTIES No individual should be in a position to perpetrate, conceal errors or commit fraud in the normal course of their duties • Custody of Assets • Authorization/Approval • Recording/Reporting • MONITORING • Evaluate Whether Controls are Present and Functioning • Evaluate, Communicate and Correct Deficiencies in a Timely Manner

7. For small organizations segregating duties is difficult To maintain the integrity of your non-profit, guidelines must be in place and monitored. One suggestion is to have the staff member maintain receipts, invoices, approve and pay expenditures while a board member (treasurer) obtains the monthly bank statement and performs the monthly bank account reconciliation.

8. BOARD MEMBER MONITORING PROCEDURES • Initial and Date to Indicate Bank Statements have been Reviewed • Monitoring for Direct Deposit of Employee Paychecks • Review Bank Statements for Unwarranted ACH Payments • Review Detail Payroll Summaries and Reconcile to Bank Account Information • Expenditures should have proper documentation (Receipts) • Disbursements/Payments Should be Properly Documented and Cancelled • Stamped to Indicate: • Approval (Staff Member) • Check Number • Date Paid • General Ledger Coding • Invoices Should be Stored and Maintained to Comply with the Open Records Act

9. Before Signing the Check To Further Ensure Integrity, a Two Signature System Can be Implemented • Staff Member - If Paying from a Statement • All Invoices Should be Attached • Any Prior Balance Should be Researched to Determine Whether it has Already Been Paid • If Paying from a Copy, Research if it has Already Been Paid • Board Member - DO NOT Sign Checks Unless the Designated Individual has Indicated their Approval for Payment • Only Sign Checks if Appropriate Documentation is Attached and Matches the Check Payee and Amount

10. Review Monthly Financial Reports • Periodically Review Budget to Actual Comparison Report • Amend Budget as Needed! • Review Profit and Loss Statement • (aka Income Statement) • List of Revenues and Expenses for the Period • Balance Sheet • Lists Assets, Liabilities, and Equity as of the Last Day of the Period • Check Register – Lists Checks/Deposits for the Period All Board Members

11. Recent studies show that an increasing number of donors are going on-line to research their giving decisions. Many nonprofits have responded by providing easy access to relevant information on their Web sites and on trusted third-party sites. - GuideStar

12. Mission Statement and Program Information • Board List • Staff List • IRS Letter of Determination • Annual Report • Audited Financial Statement GuideStar Suggestions for Your Website

13. Regular Updates with Current, Detailed Program and Evaluation Information. • Board Members’ and Key Staff’s Names and Titles with Brief Biographic Information for Each of These Important Leaders. • All Annual Reports and/or IRS 990’s • Every Audited Financial Statement or Audit Letter • The Organization’s IRS Letter of Determination for 501C3 Status In Addition, Organizations Should Post

14. Questions? Thank You and Godspeed