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Guide to Conducting an Internal Financial Review

School support organizations (booster clubs) should conduct a financial review of the organization’s financial practices each year. This review is intended to ensure that appropriate financial policies are in place, and that each organization is following these policies.

Step #1: Gather financial documents including:
  • Copies of all written financial policies
  • Copies of treasurer’s reports for the year (or other period) to be reviewed
  • List of all bank and investment accounts, including names of persons authorized to sign on each account
  • Copies of all bank and other financial statements for the period to be reviewed
  • Copies of all bank and investment account reconciliations for the period to be reviewed
  • Cash tally sheets / Cash receipts journal
  • Invoices, receipts and other documents
  • Documentation of any restrictions on the use of any particular funds or donor gifts
  • IRS letter documents including most recent Form 990, IRS letter recognizing tax-exempt status, and IRS letter assigning an EIN (employer identification number) to the organization.
Step #2: Review financial documents and processes.
  • Check the organization’s EIN (employer identification number) as assigned by the IRS against the EIN used on the organization’s bank and other financial accounts. Make sure the school’s EIN is not being used.
  • Check names of persons authorized to (a) approve transactions and (b) sign checks, against:
    • persons authorized to conduct these activities in the organization’s minutes; and,
    • bank records indicating who is authorized as a signatory.
  • Check to ensure that the same person(s) who sign checks are not the same/or only persons reviewing monthly bank statements.
  • Check all bank reconciliations to determine that the beginning balance of one month is the same as the ending balance of the previous month. Also note whether the balance listed on financial statements is the same as the balance listed on the treasurer’s reports presented to the organization.
  • Pick one month and perform a bank reconciliation using the original records. If you find a discrepancy between your reconciliation and the reconciliation provided by the person who performed the original reconciliation, research the discrepancy to find the error or explanation for the discrepancy.
  • Count all cash in petty cash accounts to ensure that the count agrees with the books.
  • Check to see if the organization carries fidelity bond coverage on people handling the organization’s funds; if insurance is not held, propose that the organization consider obtaining bonding coverage.
Step #3: Review income and receipts.
  • Determine if the deposits listed on the financial reports provided to the organization match deposits listed on bank statements.
  • Check to see if cash tally sheets match the amount of cash reported as received from an event on financial reports, and also match the deposit indicated on bank statements.
Step #4: Review disbursements.

Test to be sure that payments made were properly authorized – by a line item in the approved budget, an approved amendment to the budget, or an appropriate vote authorizing the expenditure. Test purchase orders to be sure that they were properly approved and match the actual disbursement or invoice. Review records to ensure that there is an invoice, receipt or other appropriate written documentation for each disbursement, and that the amounts match.

Step #5: Review Tax/information returns.

Review financial records to ensure that appropriate federal (IRS Form 990) and state income tax/information returns have been timely filed.

Step #6: Review financial control systems.
  • Check to evaluate whether financial duties have been appropriately separated. Although it can be difficult for small organizations to separate financial duties, certain separations are essential for appropriate financial controls. These separations protect both the organization, and the individuals handling the finances. Specifically:
    • Individuals with signature authority should NEVER approve the transactions/disbursements for which they sign. All expenditures should be approved in an annual budget, as originally approved or amended, or by a vote of the board or membership as appropriate. All disbursements should be documented by an invoice, receipt or other appropriate written documentation.
    • The individual(s) with signature authority may reconcile bank statements. However, at least one additional officer or director should review monthly bank statements, or bank statements may be included with the treasurer’s report to the board/membership.
    • Finances should be reviewed annually by an audit committee that consists of two or more individuals who do not routinely handle the organization’s finances, such as by being a signatory on the accounts.
    • Cash should always be counted by at least 2 persons at/near the time received, and then recounted by the treasurer or other individual prior to deposit.
Step #7: Review reporting systems to ensure adequate information is provided for the organization and its officers/directors to make reasonable decisions.
  • Are reports from the treasurer timely and complete?
  • Are financial policies, including separation of financial controls, being followed?
  • Are all records being gathered (invoices, receipts, cash records, checks and disbursement records, bank records, treasurer’s reports) so that they can be reviewed as needed, and only discarded in accordance with the organization’s record retention guidelines?
Step #8: Write a report.

The financial review/audit report should document at a minimum:

  • Steps taken in the financial review
  • Current fund(s) balance and balance sheet
  • Comments, if any, on any concerns or discrepancies found and the audit committee’s recommendations to correct these concerns or discrepancies.
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Three Questions before any ASK©

Laura Fredricks

Dec 06, 2019

Before you make your best ASK there are three very important questions you need ASK yourself. Think of this exercise as goal setting which many of us do at work and at home. If you never set a goal you never achieve that goal. If you never ASK you never get what you want. 

Setting goals is a must when you need to ASK. Once you set your goals you can filter out all of the unnecessary things that might prevent you from ever making your ASK. For instance, if you keep second guessing why you are asking, instead of what YOU are going to ASK, you never get to the ASK. Setting these goals will keep you focused on what you should be focused on, your ASK. It also makes you more prepared. When you are more prepared you are more confident. When you are more confident your ASK becomes more attractive to the person you want to ASK 

Setting your goals also allows you to set the playing field. In the process of making your ASK, knowing what you need, when you need it, and who you can give it to you prepares you for whatever response you may receive. Setting your goals makes it harder for the person you are ASKing to catch you off guard, change the conversation, or give you a surprise answer. If you go in knowing how to articulate your own needs, you’ll always be in control of exactly what you will say. 

Knowing EXACTLY what you want to say and practicing your ASK words will ease your tension and anxiety that can come up when you ASK. It will help you feel more confident about how the conversation will go because you have prepared the conversation. Anxiety is known as the “fear of the unknown,” and if you’re ever anxious before making a huge pitch, it’s because you’re afraid of how it might go. We can easily do away with those fears if you just take a few minutes to ask yourself and answer the following questions. 

Ask yourself these questions before making any ASK to ensure your success: 

1) What do you want? 

Be specific, and keep it brief. If you are ASKing for money, then you need a specific amount. There is a world of difference between ASKing for “an increase” and ASKing for “$10,000.” When you make any ASK you need to have a crystal clear idea of exactly what you want. This is your first simple goal. Don’t over complicate it. Don’t over explain it to yourself in your head. If you are ASKing someone to do something for you, such as pick you daughter up after school then just ASK “Can you pick up Chrissy today after school at 3:00 pm this would be so helpful to me?”  Most of us overcomplicate the ASK by going into extraneous details about why you can’t do it, how you are overworked, overburdened, and how your schedule is overwhelming. Finding the right balance between specificity and brevity is important. You want to be specific enough that it is a concrete goal, but keep it simple enough so it is attainable and you do not get lost in extra details. 

2) When do you want it? 

Know the specific time or date of your ASK. There is a HUGE difference between “I’d love you to consider this by next week” and “Can I call you next Tuesday at 10 am so that we can go over the details and sign the agreement?”  This is your second simple goal. You should have absolute certainty that your ASK contains the exact time frame that you want your ASK to come to a conclusion. If you don’t I assure you that a week will turn into a month. A month will turn into two or three months and now your ASK is so old the person has forgotten what you ASKed. You might get what you ASKed for, but you might not get it at the time you wanted it. By laying out the specific time frame of when you want it you make time WORK for you not against you. 

3) Who can give it to you? 

This third simple goal is so important and is over looked so many times. This goal requires you to write down in priority order who you have the best chance with ASKing and getting exactly what you want. Sure, many of us make a list or have it in or heads of who we would like to ASK, who we should Ask but are those people the right people to ASK? By right I mean are they the ones who know and trust you the best and have the means and inclination to say yes? So many times we go to the people who we assume are the easy ones such as the ones who won’t be confrontational or the ones who have said yes before. They may be on your list but when you ASK the order in which you ASK is VERY important. If you need money for a start-up project you should go to the person who could give you the largest amount first, who knows and trust you, and has the means to do so. If you ASK this person half-way through your fundraising I guarantee they will give you a lesser amount because they were not ASKed first. You actually do this every day without recognizing that you do. When you are unhappy with a purchase or frustrated with a service what do you do? You ASK to speak to the manager. You don’t waste time speaking to people who work for the manager because they do not have the power to fix it. The manager does. So when you ASK for what appears to be “larger” things, and often they involve money, remember your third goal – ASK people in priority order who can give you exactly what you want.

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