Any chapter system of recordkeeping needs to provide information for chapter leadership and membership, as well as a base of data on which to project budgets and plan for present and future activities. Good accounting should provide for comparisons of income and expenditures with budgeted expectations. It should be flexible enough to adapt to chapter growth and changing chapter priorities.
Your accounting system should have the following characteristics, in proportion to your chapter size:
- Information and Documentation: Your system should be able to show any amount of information and documentation in a reasonable amount of time.
- Support: You should be able to support that information with any journals or ledgers.
- Sense: Your chapter accounting system should make sense to non-financial people as well as to the Treasurer.
- Internal Control: Your system should safeguard against possible mishandling of funds. Two important ways to do this are a) require two signatures on checks, and b) require that expenditures over a certain dollar amount be authorized by the chapter coordinator/president or treasurer.
Internal Control Suggestions
The following are some suggestions for monitoring the internal financial controls of your chapter funds:
- All income should be logged on to a Cash Receipts Journal as soon as possible after it is received.
- All checks should be stamped with a “deposit only” stamp.
- All receipts should be deposited in the bank on a timely basis.
- If your chapter keeps a savings account in addition to a checking account, all deposits should be made through the checking account and then transferred to savings.
- All disbursements should be made by check.
- Checks should be prenumbered and accounted for monthly.
- A minimum of two signatures should be required on all checks.z
- Voided checks should be defaced to prevent subsequent use, and attached to the back of the check stub or in a place where all voided checks are kept.
- All disbursements should be properly supported by invoices and/or receipts and documented with check number and date of check. If your chapter requires precise bookkeeping, or you have a budget which tracks spending by category, develop an expense reimbursement form for activists to use when submitted requests for reimbursement on projects or activities.
- Budget review, a comparison of actual to budgeted expenditure and income, should be done frequently – for a large chapter on a monthly basis.
- All excess cash should be kept in an interest-bearing account with two signatures required for withdrawals or transfers.
- Expenditures over a certain dollar amount should require approval.Projects should have a budget which is approved in advance.
- Bank statements should be reconciled on a monthly basis. It is a good idea to have any statements or records involving the organization’s finances sent to a separate address from the treasurer – perhaps the president or chapter secretary.
NOTE: It is important to understand your chapter as a fiscal entity – you must file certain forms with the IRS; if you pay any individuals (even on a contract basis) you may be liable for filing certain state or local employment taxes; if your chapter owns a computer or has a small office with furniture of other equipment, you may be required to file property tax forms in your state. If your chapter has a PAC, there are very strict requirements for filing which carry fiscal penalties for not doing so. Once your learn what forms are required in your state for your chapter’s activities, and what deadlines exist for filing these reports, make very specific lists of this information for distribution to all officers. Most state laws make all officers liable for fines and penalties if the laws are not followed, so it’s in everyone’s best interest to see that these requirements are met.
Your chapter should have a written financial policy – what level of savings your chapter should have, whether new projects should be self-supporting or will draw on cash reserves, and what reports are expected of the fiscal officers of the chapter — these are just a few of the things to decide as a group in advance of a crises.