“AUDITS” Checks and Balances

2 1. End of Each Fiscal Year. 2. When there is a Change in Officers. Most People will ask….. …. When do I need to do an Audit?

Records Needed to Perform Audit  Checkbook  Savings, Checking, and Investment Account Statements, Canceled Checks, and Deposit Slips  Cash Receipts Journal  Cash Disbursement Journal  Dues Deduction Listing  Local Constitution and By-laws  Minutes of Local Meetings  Minutes of E-Board Meetings  LM-1  LM-2, LM-3, OR LM-4 Reports for Past Two (2) Years  IRS 990 for Past Two (2) Years  Budgets  Audit Committee Reports  Form 4’s for Past Two Years  Current Roster from National or WEB Site  Inventory of all Fixed assets (i.e.., Computer, Office Furniture  Payroll Tax Return, Forms 940, 941, and 1099’s Click below to View/Download this CHECKLIST

RED FLAG ITEMS  One Signature Checks Pre-signed Checks by ONE OFFICER Checks Written Out of Sequence Checks Written to CASH Checks written to INDIVIDUALS Advance Payment of Salary to Employees Unbalanced Checkbooks with no Deposit Records

Minutes Expenditures Should be Approved by Membership. Local Must Have Operating Budget which has been Approved by Membership. Expenditures Should be Approved by Membership Rather than Executive Board. Expenditures Must Have Prior Approval. Exception is If Expenditure is Included in Budget That is Approved by Membership.

Review Bills for Expenditures Verify Expenditures are Local Expenditures Verify Expenditures are Approved Dollar Amount Limit Should be Placed on Credit Cards Credit Cards Should be in the Name of the Individual Local Officer Use of Local Credit Cards Should be Defined in the Bylaws. Credit Cards

Should be Approved by Membership. Executive Board Cannot Approve Loans! Loan Cannot be more than $2000 per Officers/Employees. For any Loan, there Should be a very Clear Standard Criteria which the Local has Adopted. All outstanding advances in access of $2000 are considered by DOL as a loan. Loans AFGE does not Recommend Making Loans to Members. Recovery of a Defaulted Loan is Costly and Difficult. Keep in mind… What You do for One Member, You Must be able to do for ALL Members….

After the Checklist Documentation has been Collected, the Following Should be Accomplished….

Financial Accounts. (Record Institution Addresses, Account Numbers, Signatures and Balances.). Expenditures are Being Properly Authorized. (Documented and Reported on a Timely Basis.). Monthly Bank Statements have been Reconciled. Identify and Confirm Local’s...

What Other Outstanding Financial Obligations the Local Has. (i.e., Attorney and/or Arbitration Fees, Fines, Judgments, Vendors, etc.) If Required Reports have been Filed. (i.e., LM Forms, IRS Forms, Budget, and Audit Check that Bond Coverage is Adequate.) Determine...

Membership listing from National Office or AFGE Web Site, and Compare Members with Agency’s Dues Deduction Listing. Copy of Local’s Constitution and Bylaws. To insure that local expenditures conform to the requirements of these documents. Copy of Local Budget, to Verify That it is Realistic to Obligations and Income. Obtain...

Dues Structure is Adequate to Support the Local. Ledger for Direct Pay Members. (Direct Pay Members are on Current Roster.) Funds are Deposited Accurately and Timely. Payroll Taxes have been Withheld and Reported on IRS w-2 if Local has paid Employees. Required 1099’s have been Filed with IRS If Local has Paid any Individual(s) more than $599/Year. State, Local, and Federal Taxes have been Paid. and VERIFY… and VERIFY…

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