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Governance
| FAE
Finance Committee Minutes 3/12/04 |
| Members
Present: |
Ilene
Persoff (by teleconference) |
| Other: |
Allan
Blum, Gary Kameth, and Mel Zachter of Loeb & Troper |
| Staff: |
Louis
Grumet, Lynn Chambers, and David Haar |
| Location: |
NYSSCPA
Office 530 Fifth Avenue, 5th floor New York, NY 10036
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The
meeting was called to order at 9:05 A.M. This was a joint
meeting with the NYSSCPA Finance Committee.
Internal
Control Review
Allan
Blum of Loeb & Troper gave an overview of the internal
control review process, and discussed the work that was
done in the different departments. Mr. Blum then discussed
the report, which began with an overview of the organization.
Mr. Blum noted that while the Finance Department had written
policies and procedures, an overall operational manual
didn’t exist. It was recommended that this manual
be prepared. Loeb & Troper noted that there were no
major deficiencies in the internal control within the
organization, but there were recommendations for certain
conditions:
A.
Finance Department issues:
1.
In addition to stamping a check stub paid, the invoices
should be stamped paid as well.
2. Not all check requests contain two signatures,
and it’s recommended that Finance reject any
paperwork that doesn’t have two signers.
3. Signed checks are returned to the accounts payable
clerk for mailing. Due to a necessary segregation
of duties, this responsibility should be given to
someone else. In addition, the Director of Finance
should review paid checks for alterations before distribution
to Accounting Department staff.
4. While a purchasing policy exists, it’s seldom
adhered to. It is recommended that a purchase order
system be fully implemented.
5. Returned checks from vendors should not be left
with an accounts payable clerk, but should be held
by an Accounting Manager for investigation of the
problem.
6. Currently both bookkeepers have the authority to
create vendors in the system. This function should
be moved to a higher level.
7. It was noted that lockbox checks not deposited
by the bank were being given to the affected department
for research. It is recommended that all checks be
immediately deposited, and a copy given to other departments
for posting resolution.
8. It was noted that Accounting Department personnel
can enter new employees and change pay rates in the
payroll system. It was recommended that this function
be limited to Human Resources.
9. The same Accounting Department employee both reviews
payroll and prepares the payroll bank reconciliation.
These duties should be separated.
10. It was observed that staff members receive transit
checks. It was recommended that instead of distributing
a physical check, the net amount of staff members’
pay be increased by the amount of the transportation
allowance.
B.
Other Departments’ Issues:
1.
Membership Department – First, all membership
representatives issue credit to a credit card account,
but only one individual should be responsible for this
function. Second, personal member information, such
as credit card information, social security numbers,
birthdates, etc. is stored in unlocked cabinets. This
data should be stored in a secure manner. Third, credit
card machines used by the Accounting Department are
left on a desk, and it was recommended that they be
held in a locked cabinet.
2. Chapter Department - The invoice copies mailed as
support of chapter payments are not reviewed by the
Accounting Department, and they should be.
3. Other Recommendations - Fiscal reports should be
expanded to increase their usefulness to the Board.
4. Peer Review Function – First, old files are
in the Society’s office, but peer review documents
should be held only for the recommended retention period.
Second, the Society has previously fallen behind in
the peer review process, and should be careful to adequately
staff this function. Third, the recommendation was made
to strike names and firms reviewed before report submission
to the Board.
5. Legal Department - It was recommended that the process
of reviewing, filing and data basing all contracts be
sped up.
6. Foundation for Accounting Education - First, all
contracts currently held by FAE are not reviewed by
the Legal Department, and it’s recommended that
this be done. Second, it was recommended that the Foundation
take advantage of multiple year discounts at seminar
locations. Third, all conditions listed for the Membership
Department also exist for the Foundation.
Mr.
Blum concluded by stating that internal controls were
in place, and that management sets a good tone for the
operations of the organization.
Review
of Budget for Fiscal Year ending May 31, 2005
The
second part of the agenda concerned a discussion of changes
to the FY 2005 budget. Ms. Chambers noted that due to
a revision of the original draft budget, two new positions
as well as the plan to expand the number of Trusted
Professional issues would be eliminated to offset
the projected deficit. Mr. Grumet was told that these
initiatives could be presented to the Board during its
October meeting. The draft budget was then unanimously
approved for presentation to the Board of Directors in
April.
There
being no further business, a motion was made to adjourn
the meeting at 11:10 AM.
Respectfully submitted,
David Haar, NYSSCPA staff
Approved by NYSSCPA Committee Chair 4/1/04
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