financial control or chaos?
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Sponsored by: A Service
Of:
Financial Control or Chaos?
Paul Konigstein
January 16, 2013
Sponsored by: A Service
Of:
Advising nonprofits in:
• Strategy
• Planning
• Organizational Development
www.synthesispartnership.com
(617) 969-1881
info@synthesispartnership.com
INTEGRATED PLANNING
Sponsored by: A Service
Of:
Affordable collaborative data
management in the cloud.
Sponsored by: A Service
Of:
Today’s Speaker
Paul Konigstein Senior Consultant
Accounting Management Solutions Assisting with chat questions: Jamie Maloney, Nonprofit Webinars
Hosting:
Sam Frank, Synthesis Partnership
Nonprofit Webinars
Financial Control or Chaos?
Paul Konigstein
Senior Consultant
ABOUT US
• For more than a decade,
Accounting Management
Solutions, (AMS) has
provided accounting support
and financial management
leadership at the consulting
CFO, controller and
accounting manager level to
dynamic companies
throughout the Northeast.
6
FINANCIAL CONTROLS REIN IN HUMAN NATURE
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The chaos of disregarding financial controls.
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THE ART OF THE STEAL
By JANON FISHER
December 24, 2009
A former payroll manager at the Brooklyn
Museum pleaded guilty yesterday to embezzling
$620,000 by cutting paychecks to phony staff.
According to the charges, Newton created three
fictitious employees, "Brooklyn," "Brooklyn
Museum" and "ZXY," to direct-deposit 38 checks
into his personal account between April 2005 and
July 2008.
THE TENNESSEAN
FINANCE DIRECTOR ACCUSED OF FORGERY
By Duane W. Gang and Andy Humbles
March 29, 2012
The couple used the association’s credit and
debit cards.
The organization had $1.9 million in annual
revenue. The amount stolen represents more
than a third of the association’s annual revenue.
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YOU DON’T TRUST ME!
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Recognize this face?
TRUST BUT VERIFY
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WHAT ARE FINANCIAL CONTROLS
• Procedures designed to insure compliance with
organizational policies such as:
• Staying within budget
• Using assets to achieve organizational
objectives
• Adhering to donor restrictions
BASIC PRINCIPLES
• Separation of Duties – different people should
perform different steps in the process of
completing a transaction.
• Two sets of eyes on each transaction – a
corollary to separation of duties – at least two
people should be required to complete a
transaction.
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BASIC PRINCIPLES
• Avoid conflicts of interest – avoid situations
where someone making a decision can benefit
financially from the outcome.
• Documentation – keep a record of what you
did, how you did it, and why you did it.
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CONTROLS ON PAYROLL
• Verification of employee existence
• Verification of hours worked
• Verification of payment calculation
• Verification of taxes paid
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CONTROLS ON ACCOUNTS PAYABLE
• Verification of vendor existence and
qualification
• Verification of goods/services received
• Verification of payment calculation
• If no purchase orders, verification against
budget
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CONTROLS ON PURCHASING
• Purchase orders – check for problems
BEFORE you are obligated to pay
• Competitive bids – obtain lowest price to
preserve more money for the mission
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CONTROLS ON GRANTS
• Verification of grant agreement
• Reasonable expenses
• Allowable expenses
• Allocable expenses
• Start and end dates
• Burn rates
• Administrative compliance
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CONTROLS ON GRANTS AND DONATIONS
• Verification of funds received
• Verification of pledges
• Verification of multi-year grants
• Verification of donor requirements
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CONTROLS ON EARNED REVENUE
• Cash counting procedures
• Match revenue to participant records
• Fixed prices
• Custom services supported by contracts
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CONTROLS ON BUDGETS
• Budget managers justify budget to CEO and
CFO.
• Variances from budget reviewed and explained
monthly.
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CONTACT INFORMATION
Paul Konigstein Senior Consultant
Accounting Management Solutions, Inc.
pkonigstein@amsolutions.net
516-270-5070
www.amsolutions.net
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Sponsored by: A Service
Of:
Find listings for our current season of webinars and register at:
NonprofitWebinars.com
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