“Citizens Serving Communities”1 Wing Banker Program Consolidating Unit Finances Into Wing Finances C. Warren Vest, Lt Col, CAP Director of Finance, Virginia Wing

“Citizens Serving Communities” 2 Wing Banker Solution  What is the problem?  What is the solution?  What are the advantages and disadvantages?  What is involved in the implementation?  How are we doing so far?

“Citizens Serving Communities” 3 At the Unit  Situation Units maintain own bank accounts and finance records Units maintain own bank accounts and finance records Units submit own financial reports to wing Units submit own financial reports to wing Units operate iaw CAPR on cash basis Units operate iaw CAPR on cash basis Units depend on volunteer finance officer Units depend on volunteer finance officer  Problem Poor compliance because of misunderstandings of requirements and inadequate time and training Poor compliance because of misunderstandings of requirements and inadequate time and training

“Citizens Serving Communities” 4 At the Wing  Situation Wing operates iaw CAPR on accrual basis Wing operates iaw CAPR on accrual basis Wing consolidates all unit financial reports Wing consolidates all unit financial reports Wing subject to audit each year Wing subject to audit each year Wing has Administrative Assistant to help on daily basis Wing has Administrative Assistant to help on daily basis  Problem Inconsistency and inaccuracy in unit reports Inconsistency and inaccuracy in unit reports

“Citizens Serving Communities” 5 At National  Situation National operates on accrual basis National operates on accrual basis National consolidates wing reports National consolidates wing reports National subject to audit, OMB standards, and Congressional reporting National subject to audit, OMB standards, and Congressional reporting  Problem Auditors consider unit funds, taken together, to be material Auditors consider unit funds, taken together, to be material Qualified audit opinion because units not audited and not on accrual basis Qualified audit opinion because units not audited and not on accrual basis

“Citizens Serving Communities” 6 Independent Auditors’ Report (Pg. 1)  Type of reports issued: Qualified  Reason for qualifications: Financial statements do not include the accounts and financial transactions of units below Wings Note 2, pg. 10 (assets of $4,801,692; revenue of $7,070,052) Note 2, pg. 10 (assets of $4,801,692; revenue of $7,070,052) 2005 Financial Audit Opinion and Results

“Citizens Serving Communities” 7 Wing Banker Program Bring all unit financial transactions to wing Receiving and disbursing of funds AccountingReporting

“Citizens Serving Communities” 8 Advantages  Unit Out of the accounting and reporting business Out of the accounting and reporting business Unit still manages own funds by determining own expenditures and instructing wing Unit still manages own funds by determining own expenditures and instructing wing  Wing All accounting and reporting accomplished by wing iaw CAPR in lieu of units using CAPR All accounting and reporting accomplished by wing iaw CAPR in lieu of units using CAPR  National As close to accrual accounting for units as you can get As close to accrual accounting for units as you can get Wing audit includes all unit transactions Wing audit includes all unit transactions Unqualified opinion in wing auditUnqualified opinion in wing audit Unqualified opinion in national auditUnqualified opinion in national audit

“Citizens Serving Communities” 9 Disadvantages  Unit members may resent wing because they can no longer touch and feel their own money  More work at wing  In a large wing with units conducting numerous financial transactions, the transition will be more difficult

“Citizens Serving Communities” 10 Implementation at the Unit Each unit writes a check to wing for its entire bank balance and then closes bank account(s) Each unit closes its books and submits its final report for the year on CAPF 173 Thence each unit forwards bills, payment vouchers, and receipts to wing as received Units can be provided with deposit slips in order to make deposit and then must provide detail to wing headquarters Units can be provided with deposit slips in order to make deposit and then must provide detail to wing headquarters

“Citizens Serving Communities” 11 Implementation at the Unit  Maintain unit Finance officer  Maintain unit Finance Committee Unit has to instruct wing what bills to pay and should continue following the approval requirements in CAPR 173-1

“Citizens Serving Communities” 12 Implementation at the Wing Unit funds deposited in separate bank account from main wing account(s) May be at the same bank that wing uses May be at the same bank that wing uses Wing classes each transaction with unit designator in QuickBooks Pro This step is the key to the whole process! This step is the key to the whole process! Wing processes all unit transactions Units forward all bills and receipts/deposits to wing Units forward all bills and receipts/deposits to wing Wing pays all bills from unit funds account at wing Wing pays all bills from unit funds account at wing Wing makes all reports and is audited Wing makes all reports and is audited

“Citizens Serving Communities” 13 Implementation Steps  Open new bank account for unit funds  Create new account in QBPro for bank account  Create new subaccounts in QBPro One for each unit One for each unit One for wing headquarters (optional) One for wing headquarters (optional) One for “unclaimed deposits” One for “unclaimed deposits” Make these subaccounts under the new bank account Make these subaccounts under the new bank account NOTE: You do not need any new liability, capital, income or expense accounts.

“Citizens Serving Communities” 14 Receiving a Unit Bill  Make sure you get adequate documentation To identify the unit To identify the unit To identify the expense To identify the expense  Book it normally as an account payable making sure to class it to the unit NOTE: If the unit is paying a corporate aircraft expense, you cannot class it both by N-number and by unit. Class it by unit.

“Citizens Serving Communities” 15 Receiving a Unit Deposit  Make sure you get adequate documentation To identify the unit To identify the unit To identify the income To identify the income  Book it normally as account receivable or income received making sure to class it to the unit  Deposit it in proper unit subaccount You cannot mix receipts for different units together in one deposit You cannot mix receipts for different units together in one deposit

“Citizens Serving Communities” 16 Paying a Unit Bill  Make sure you have necessary approvals Unit, including Unit Finance Committee if over $250 Unit, including Unit Finance Committee if over $250  Open bill payment screen Select all bills for only one unit Select all bills for only one unit Select that unit’s subaccount for source of funds Select that unit’s subaccount for source of funds Close bill payment screen Close bill payment screen  Repeat previous step for each unit with bills to pay

“Citizens Serving Communities” 17 Printing Checks  On “checks to print” screen select all checks that pay only unit bills  Load checks for the unit funds bank account in the printer  Print checks NOTE: Your best opportunity to make a mistake is loading the wrong checks into the printer.

“Citizens Serving Communities” 18 Reconciling Bank Statement  You will find a deposit that you know nothing about  Book it as “Miscellaneous Income” New sub-account under acct called “Unclaimed Unit Deposits” New sub-account under acct called “Unclaimed Unit Deposits”  Class it to “VA???” or something indicating unit is unknown  Credit it to “Unclaimed Deposits” subaccount

“Citizens Serving Communities” 19 Reconciling Bank Statement  Proceed with reconciliation in normal manner NOTE: All activity in unit subaccounts will roll up into the lead account that matches the bank account.  Once you identify your “unclaimed deposit,” either correct original entry or make adjusting journal entry

“Citizens Serving Communities” 20 Unit Report

“Citizens Serving Communities” 21 How Are We Doing?  Virginia Wing received approval to try the program on an “experimental” basis in August 2005 and started the transition on September 1, 2005  All Virginia Wing units were in the program by the end of FY 2006  Virginia Wing was audited by Wilson Price for FY 2006 and received an unqualified opinion that included all unit funds

“Citizens Serving Communities” 22 Other Wings  Originally the transition was planned to incorporate all wings over three years, FY 2007 through FY 2009  Numerous wings volunteered to transition early  By June 4, 2007 twenty-four wings (46%) had begun the transition  All wings are now expected to complete the transition by the end of FY 2007, two years earlier than originally planned

“Citizens Serving Communities” 23

“Citizens Serving Communities” 24 Wing Action Items  Already accomplished (31 July 2007) Open bank account(s) for unit funds Open bank account(s) for unit funds Create checking/savings subaccounts in QBPro Create checking/savings subaccounts in QBPro Create classes in QBPro Create classes in QBPro Distribute forms, deposit slips, procedures, etc. Distribute forms, deposit slips, procedures, etc. Answer units’ questions Answer units’ questions

“Citizens Serving Communities” 25 Unit Action Items  Write last checks to vendors – 15 August 2007  Deposit or transfer remaining funds to wing – 31 August 2007  Submit authorized approval list and policies to wing – 31 August 2007  Submit zero balance bank statement(s) to wing along with final CAPF – 31 October 2007

“Citizens Serving Communities” 26 Questions?