Internal Controls and Financial Reporting for Executive Boards Eva Rooks, MA Health Services Administrator/Trainer Health Systems Quality Assurance Division Washington State Department of Health

Executive Boards’ Financial Oversight Handling money in a secure manner Helpful policies and procedures to increase safety Red flags of financial trouble Financial reports Safeguarding financial data Resources

Handling Money in a Secure Manner Checks: Unissued checks should be in a secure location Checks made to “Cash” or “Bearer” should be prohibited Abbreviated payee names should be prohibited Voided checks should be cancelled and retained

Handling Money in a Secure Manner Checks: Restricted endorsements (For Deposit Only) should be placed on all check remittances upon receipt Follow up on outstanding checks Supporting documents (invoices) should be marked as paid with the check number when the check is prepared

Bank statements: Opened and reviewed by the Executive Board Bank reconciliation should be reviewed, initialed and retained by the Executive Board monthly Handling Money in a Secure Manner

Bank statements: Review the bank statement and reconciliation for interbank transfers, missing and voided checks. Review cancelled checks for authorized signatures, unusual endorsements and alterations. Handling Money in a Secure Manner

Policies and Procedures Expenses: Gas and other expenses should be closely reviewed for irregularities Non-reimbursed expenses should include parking tickets and moving violations.

Policies and Procedures Procedures: Date stamp all incoming mail Credit card statements should be reconciled like a bank statement, be accompanied by receipts and reviewed by the Executive Board

“Red Flags” – Embezzlement / Fraud Financial difficulties Living beyond ones means Regularly comes to work early and leaves late Works nights and weekends Seldom absent or on vacation Comes into the office during days off Asks others to hold work while away from the office

Review Reports Sent to DOH Balance Sheet Prior Year Comparison Profit & Loss Prior Year Comparison Budget Status Report General Ledger, with bank reconciliation Misc. other reports

Safeguarding Financial Data Backup computer files should be stored in a location secure from fire and theft A Washington State Patrol background check should be obtained on all employees Employees with access to cash and other assets should have fidelity bond insurance

Resources Washington State Ethics Board Ethics Help Line: Your current CPA or accounting firm

Questions?