Wing Banker Solution Consolidating Unit Finances Into Wing

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)

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

At the Unit n Situation n n Units maintain own bank accounts and finance records Units submit own financial reports to wing Units operate iaw CAPR 173 -1 on cash basis Units depend on volunteer finance officer Problem n Poor compliance because of misunderstandings of requirements and inadequate time and training 3

At the Wing n Situation Wing operates iaw CAPR 173 -2 on accrual basis n Wing consolidates all unit financial reports n Wing subject to audit each year n Wing has Administrative Assistant to help on daily basis n n Problem n Inconsistency and inaccuracy in unit reports 4

At National n Situation National operates on accrual basis n National consolidates wing reports n National subject to audit, OMB standards, and Congressional reporting n n Problem Auditors consider unit funds, taken together, to be material n Qualified audit opinion because units not audited and not on accrual basis n 5

2005 Financial Audit Opinion and Results Independent Auditors’ Report (Pg. 1) n Type of reports issued: Qualified n Reason for qualifications: Financial statements do not include the accounts and financial transactions of units below Wings ü Note 2, pg. 10 (assets of $4, 801, 692; revenue of $7, 070, 052) 6

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

Advantages n Unit n n n Wing n n Out of the accounting and reporting business Unit still manages own funds by determining own expenditures and instructing wing All accounting and reporting accomplished by wing iaw CAPR 173 -2 in lieu of units using CAPR 173 -1 National n n As close to accrual accounting for units as you can get Wing audit includes all unit transactions n n Unqualified opinion in wing audit Unqualified opinion in national audit 8

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

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 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 10

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

Implementation at the Wing Unit funds deposited in separate bank account from main wing account(s) n May be at the same bank that wing uses Wing classes each transaction with unit designator in Quick. Books Pro n This step is the key to the whole process! Wing processes all unit transactions n n n Units forward all bills and receipts/deposits to wing Wing pays all bills from unit funds account at wing Wing makes all reports and is audited 12

Implementation Steps n n n Open new bank account for unit funds Create new account in QBPro for bank account Create more new accounts in QBPro n n One for each unit One for wing headquarters (optional) One for “unclaimed deposits” Make these subaccounts under the new bank account NOTE: You do not need any new liability, capital, income or expense accounts. 13

Receiving a Unit Bill n Make sure you get adequate documentation To identify the unit n To identify the expense n n 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. 14

Receiving a Unit Deposit n Make sure you get adequate documentation To identify the unit n To identify the income n n n Book it normally as account receivable or income received making sure to class it to the unit Deposit it in proper unit subaccount n You cannot mix receipts for different units together in one deposit 15

Paying a Unit Bill n Make sure you have necessary approvals n n Unit, wing, and maybe Finance Committee Open bill payment screen Select all bills for only one unit n Select that unit’s subaccount for source of funds n Close bill payment screen n n Repeat previous step for each unit with bills to pay 16

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

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

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

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

Questions? 21