1 Cathy Etheredge-Brigida, CPCM, CFCM, Fellow Research Triangle Park Chapter Kim Rupert, CPCM, CFCM, Fellow Battlefield Dulles Chapter Penny White, Fellow Space City/Houston Chapter Sam Smith CPA, Chief Financial Officer, NCMA Why it’s Always Important to Watch the Numbers

2 Overview of the Cash Management Function Safeguard assets. Deposit funds. Pay bills. Maintain records. Prepare budget. Prepare and submit reports The job is straightforward, but the responsibility and accountability are significant.

3 Safeguard Assets Separation of duties is essential. Person receiving funds should not be the same person that deposits it or accounts for it. Registrar Receives the funds on site. Records who paid what when, and in what form (cash, check, credit card). Retains a copy of the receipts record. Signs over funds to Treasurer. Treasurer Deposits funds in bank. Records deposits in ledger. Retains deposit slips in accounting records.

4 Deposit Funds Resist the temptation to “launder” funds. Deposit exactly what you receive. Do not write a personal check to cover cash. Do not use cash received to pay expenses – use checks. Deposit slips should specify amounts for checks and cash. Credit card receipts are deposited directly to your bank account

5 Use of Credit Cards Important to have a credit card option Some companies and agencies can only pay for training with a credit card –Used for NES, webinars, seminars, dinner meetings, golf tournaments Accept company and personal credit cards for payments Credit card receipts are deposited directly to your bank account Have a chapter policy on issuing credit card refunds HQ can assist in recommending a merchant account provider –Remember different providers have different fee structures so need to determine how and how often your chapter will accept credit card payments

6 Use of PayPal Easy to set up, affordable, convenient Prepayment for Chapter events –Decision to attend made/confirmed Accommodates planning and guarantees –Fee deposited into Chapter’s PayPal account Accommodates government purchase card Accommodates debit and credit cards Payment to vendors facilitated –No refund policy due to fee charged –Limited access to Chapter’s funds

7 Use of “Square” Easy to set up, affordable, and convenient Accommodates payment at the Event –Decision to attend last minute Deposits are direct into Chapter’s account –Accommodates debit and credit cards Sends receipt to Chapter and Attendee –No means to pay vendors –No penalty for “no show” (unless publicized)

8 Pay Bills Always obtain and retain documentation (ie. invoice). Pay timely to avoid damaging NCMA’s stellar credit rating. Pay via check, credit card or PayPal. Have a policy and procedure in place for approving expenditures. What can individual officer spend w/o higher approval? Who approves expenditures? President? Board? At what levels? Chapter may obtain credit cards or debit cards for its officers. –Warning: This creates risk! NCMA highly discourages this step

9 Maintain Records Check Register – (includes both cash receipts and disbursements) Bank Statements and Reconciliations Monthly Financial Reports – (original to chapter board) Supporting documentation for all income and bank deposits – (e.g. registration lists for paid chapter events reconciled to deposit) Supporting documentation for all payments – (e.g. invoices, expense claims) Chapters are encouraged to use Quicken (provided at no cost by NCMA). Annual Financial Report – (Original sent to National) Annual Audit Report – (Original sent to National) Chapter Property – (purchase, disposal, assigned to) –Establish a chain of custody procedure for year end transfer

10 Establish a Budget A simple forecast of income and expenses. Time phase so you understand your cash flow month-to-month. Monitor progress against budget periodically, and revise forecasts. –Set up process for approval of expenses outside of the approved budget BEFORE the expenditure is incurred –Set up a process for approval of authorized expenses Should be developed with the leadership team as part of annual planning process.

11 Prepare and Submit Reports Statement of activities (income statement) must be provided to the chapter’s board each month in a timely manner. Statement of financial position (balance sheet) can be produced less frequently. Chapter Annual Report, including financial report and audit report as attachments, must be submitted to NCMA by August 31. –Report to cover the fiscal period July 1 – June 30 –Important to meet deadline in order to be included in the National Office Group Tax Return.

12 Refunds Issue refunds in the same way that the funds are received. Do not refund a credit card payment via check. You can refund cash via check.

13 Taxes Chapter is a subordinate organization covered under IRS group ruling issued to NCMA. As a 501(c)(6) organization we are normally exempt from federal income taxes. Exception – Unrelated Business Income Tax – e.g. advertising revenue. Chapters should have their own Federal Identification Number, contact National Office for assistance. Obtained by filing Federal Form SS-4. If contacted by IRS regarding tax audit, filings, or request for information: refer to National Office (CFO).

14 Chapter Audits (NCMA Policy 5-7) Chapters shall conduct an audit of their financial records each year. An independent person, who is not a chapter officer or was otherwise involved in the financial management of the chapter during the period being audited, must conduct the audit. The auditor can be any person who has the skills necessary to conduct the audit (professional audit firms are not required). The audit shall address all items specified in NCMA’s “Chapter Financial Audit Form”, found on the Chapters Tab of the NCMA Resource Page. The audit report shall be submitted to the chapter president and the NCMA Chief Financial Officer by August 31 (attached to Chapter Annual Report

15 Red Flags: Signs of Trouble Financial reports not presented to chapter board of directors each month. Financial reports not submitted to national on time at end of year. Bills not being paid on time. Checks not being deposited timely. Treasurer not returning calls, s or attending board meetings. Unexpected reductions in bank balances. Avoiding or not cooperating with annual audit. Insistence on remaining treasurer year after year A review of the year end chapter financials shows unusual/non- recurring/material items or expenses exceeding those expected at that revenue level; unusually low revenue levels. “No” answers on the audit checklist on selected questions. NCMA HQ awareness of internal issues at the chapter including information provided to NCMA HQ by chapter members or chapter event attendees.

16 National Office Audit of Chapter Records NCMA now conducting random audits of chapter financial records Chapters can be selected at random, or audit can be based on the red flags Audit conducted by NCMA CFO

17 For further assistance Mr. Sam Smith, CPA NCMA Chief Financial Officer 800/ x1104

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