1. Wing Banker Solution Consolidating Unit Finances Into Wing Finances C. Warren Vest, Lt Col, CAP Director of Finance, Virginia Wing Robin M. Vest Wing Financial Analyst, National Headquarters (Lt Col, CAP)

2. 2 Wing Banker Solution What is the problem? What is the problem? What is the solution? What is the solution? What are the advantages and disadvantages? What are the advantages and disadvantages? What is involved in the implementation? What is involved in the implementation?

3. 3 At the Unit Situation 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 173-1 on cash basis Units operate iaw CAPR 173-1 on cash basis Units depend on volunteer finance officer Units depend on volunteer finance officer Problem 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

4. 4 At the Wing Situation Situation Wing operates iaw CAPR 173-2 on accrual basis Wing operates iaw CAPR 173-2 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 Problem Inconsistency and inaccuracy in unit reports Inconsistency and inaccuracy in unit reports

5. 5 At National Situation 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 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

6. 6 Independent Auditors’ Report (Pg. 1) Type of reports issued: Qualified Type of reports issued: Qualified Reason for qualifications: Financial statements do not include the accounts and financial transactions of units below Wings 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

7. 7 Wing Banker Solution Bring all unit financial transactions to wing Receiving and disbursing of funds AccountingReporting

8. 8 Advantages Unit 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 Wing All accounting and reporting accomplished by wing iaw CAPR 173-2 in lieu of units using CAPR 173-1 All accounting and reporting accomplished by wing iaw CAPR 173-2 in lieu of units using CAPR 173-1 National 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 audit Unqualified opinion in wing audit Unqualified opinion in national audit Unqualified opinion in national audit

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

10. 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

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

12. 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

13. 13 Implementation Steps Open new bank account for unit funds Open new bank account for unit funds Create new account in QBPro for bank account Create new account in QBPro for bank account Create more new accounts in QBPro Create more new accounts 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.

14. 14 Receiving a Unit Bill Make sure you get adequate documentation 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 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.

15. 15 Receiving a Unit Deposit Make sure you get adequate documentation 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 Book it normally as account receivable or income received making sure to class it to the unit Deposit it in proper unit subaccount 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

16. 16 Paying a Unit Bill Make sure you have necessary approvals Make sure you have necessary approvals Unit, wing, and maybe Finance Committee Unit, wing, and maybe Finance Committee Open bill payment screen 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 Repeat previous step for each unit with bills to pay

17. 17 Printing Checks On checks to print screen select all checks paying only unit bills On checks to print screen select all checks paying only unit bills Load checks for the unit funds bank account in the printer Load checks for the unit funds bank account in the printer Print checks Print checks NOTE: Your best opportunity to make a mistake is loading the wrong checks into the printer.

18. 18 Reconciling Bank Statement You will find a deposit that you know nothing about You will find a deposit that you know nothing about Book it as “Miscellaneous Income” Book it as “Miscellaneous Income” New sub-account under acct 5420000 called “Unclaimed Unit Deposits” New sub-account under acct 5420000 called “Unclaimed Unit Deposits” Class it to “VA???” or something indicating unit is unknown Class it to “VA???” or something indicating unit is unknown Credit it to “Unclaimed Deposits” subaccount Credit it to “Unclaimed Deposits” subaccount

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

20. 20 Reporting to Units Report Navigator Report Navigator Accountant & Taxes Accountant & Taxes Transaction Detail by Account Transaction Detail by Account Modify Report Modify Report Filters Filters Date (define period of interest) Date (define period of interest) Account (select unit subaccounts) Account (select unit subaccounts) OK OK

21. 21 Questions?