After a year of upheaval, Ivan the new treasurer managed to get his work audited by Ernie Gere. In addition to the audit, Ernie also helped us by explaining how he went about it. Ivan distributed Ernie's report at the board meeting in January 2014. "At the request of...
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December 4, 2003
Stu Dornblaser and John Underwood audited the SPVCA treasury books. They made strong recommendations for better control of funds.
South Ponte Vedra Association
Audit Comments
For the Year ended September 30, 2003
To: Joe Hutnan
From: Stu Domblaser
Re: Review of Financial Statements at 9/30/2003
Date: December 4, 2003
The audit committee consists of John Underwood and myself. I take responsibility for the review of the financials and he has generously agreed to again file the tax returns for the organization. I reviewed the bank statements and the documentation of the receipts and disbursements and I feel the statements fairly reflect the position of the Association at September 30 of each year and fairly reflect the receipts and disbursements for the years presented.
We want to express our appreciation to Bill Malcolm for doing an excellent job of maintaining the books and records and recording them in the computer.
With the changing of officers, this is probably a good time to remind everyone of what we practice to provide some measure of internal control. Normally, the person keeping the books should not be a check signer. Since we permit this for convenience and do not require two signatures, it is very important to try to involve at least two people
in each transaction. Here is the basic rule: Every check written must be supported by a receipt (or invoice) or, when it is impossible to get a receipt, a signed check request from an individual other than the check signer. In addition to this, we have a tradition of having the president review and initial all of the disbursement supporting documentation. This review should be performed at least quarterly, preferably monthly. During 20022003 there were only a few instances where the documentation rules were not followed (e.g. the Harbor Shuttle checks). The presidential review was done for the first half of the year only.
Good internal control would dictate that the association follow one of the two following policies: (1) have check signers be persons other than the bookkeeper (presently the treasurer) or (2) require two signatures on every check. Neither of these has been followed in the past for reasons of convenience and we are fortunate to have always had treasurers of the highest integrity. However, I feel compelled to point out for your consideration that internal control over the association’s cash is weak without one of these. Though not as good as the two procedures mentioned above, control would be improved if a person other than the Treasurer opened, reviewed and initialed the bank
statements each month. Reconciliations are reviewed annually at the time of the financial review by an independent person.
I recommend that the bank account be reconciled each month during the year and adjustments made as needed.
There is no verification of cash deposit details by a second person. One improvement might be to have the persons collecting money at the door sign or initial the sign-in sheet and, even if it doesn’t reconcile, attach this to the deposit listing. Unfortunately, any approaches to providing good control here are cumbersome and not very practical. We are also fortunate to have money collectors of good integrity.
Before any payment is made to an individual for services a form W-9 should be obtained if not already on file. If name does not indicate that it’s a corporation, inquiry should be made.
When the Association pays for fire or medical training, any re-imbursement by the county should be returned to the Association. The receivable for this should be reviewed periodically by the Board and reminders made as needed.
A listing of insurance policies is attached to the financial statements. There is still a need for the Association to document Association assets by video or camera in case of a disaster.
Thank you for the opportunity to review the records. Please don’t hesitate to call on either of us if you have questions.
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