AUDITS Checks and Balances Most People will ask

“AUDITS” Checks and Balances

Most People will ask…. . …. When do I need to do an Audit? 1. End of Each Fiscal Year. 2. When there is a Change 2

Records Needed to Perform Audit Click below to View/Download this CHECKLIST ¨ Checkbook ¨ Savings, Checking, and Investment Account Statements, Canceled Checks, and Deposit Slips ¨ Cash Receipts Journal ¨ Cash Disbursement Journal ¨ Dues Deduction Listing ¨ Local Constitution and By-laws ¨ Minutes of Local Meetings ¨ Minutes of E-Board Meetings 1. LM-1 2. LM-2, LM-3, OR LM-4 Reports for Past Two (2) Years 3. IRS 990 for Past Two (2) Years 4. Budgets 5. Audit Committee Reports 6. Form 4’s for Past Two Years 7. Current Roster from National or WEB Site 8. Inventory of all Fixed assets (i. e. . , Computer, Office Furniture 9. Payroll Tax Return, Forms 940, 941, and 1099’s 3

RED FLAG ITEMS One Signature Checks Pre-signed Checks by ONE OFFICER Checks Written Out of Sequence Checks Written to CASH Checks written to INDIVIDUALS Advance Payment of Salary to Employees Unbalanced Checkbooks with no Deposit Records 4

Minutes • Expenditures Should be Approved by • • Membership. Local Must Have Operating Budget which has been Approved by Membership. Expenditures Should be Approved by Membership Rather than Executive Board. Expenditures Must Have Prior Approval. Exception is If Expenditure is Included in Budget That is Approved by Membership. 5

Credit Cards • Review Bills for Expenditures • Verify Expenditures are Local • • Expenditures Verify Expenditures are Approved Dollar Amount Limit Should be Placed on Credit Cards Should be in the Name of the Individual Local Officer Use of Local Credit Cards Should be Defined in the Bylaws. 6

Loans AFGE does not Recommend Making Loans to Members. Recovery of a Defaulted Loan is Costly and Difficult. • Keep Should bein Approved by Membership. mind… What • Executive Board Cannot Approve Loans! You for One • Loando Cannot be more than. Member, $2000 per Officers/Employees. • For any Loan, there Should be a very Clear Standard Criteria which the Local has Adopted. • All outstanding advances in access of $2000 are considered by DOL as a loan. 7 You Must be able to do for ALL Members….

After the Checklist Documentation has been Collected, the Following Should be Accomplished…. 8

Identify and Confirm Local’s. . . • Financial Accounts. (Record Institution Addresses, Account Numbers, Signatures and Balances. ). • Expenditures are Being Properly Authorized. (Documented and Reported on a Timely Basis. ). • Monthly Bank Reconciled. Statements have been 9

Determine. . . • What Other Outstanding Financial Obligations the Local Has. (i. e. , Attorney and/or Arbitration Fees, Fines, Judgments, Vendors, etc. ) • If Required Reports have been Filed. (i. e. , LM Forms, IRS Forms, Budget, and Audit Check that Bond Coverage is Adequate. ) 10

Obtain. . . • Membership listing from National Office or AFGE Web Site, and Compare Members with Agency’s Dues Deduction Listing. • Copy of Local’s Constitution and Bylaws. To insure that local expenditures conform to the requirements of these documents. • Copy of Local Budget, to Verify That it is Realistic to Obligations and Income. 11

and VERIFY… • Dues Structure is Adequate to Support the Local. • Ledger for Direct Pay Members. (Direct Pay Members are on Current Roster. ) • Funds are Deposited Accurately and Timely. • Payroll Taxes have been Withheld and Reported • • on IRS w-2 if Local has paid Employees. Required 1099’s have been Filed with IRS If Local has Paid any Individual(s) more than $599/Year. State, Local, and Federal Taxes have been Paid. 12

This concludes our Power. Point® presentation. We hope you have found this presentation useful. Any recommendations or suggestions are appreciated. Please send email to nstfeedback@afge. org. 13