Self-Assessment Checklist Accounting Function                                   By Diana L. Sullivan, CPA, CGMAMake your N...
Temporarily restricted and permanently restricted funds are reconciled to the general            ledger monthly. Any TR fu...
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Tips and Tools for Great Financial Management: Self assessment checklist - accounting function (support material)

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Diana L. Sullivan, CPA, CGMA, Controller, Capitol Area Council, Boy Scouts of America

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Tips and Tools for Great Financial Management: Self assessment checklist - accounting function (support material)

  1. 1. Self-Assessment Checklist Accounting Function By Diana L. Sullivan, CPA, CGMAMake your NPT financially strong.Build confidence and credibility in your NPT in the community.Accounting Manager Sufficient formal accounting training Not-for-profit accounting knowledge Regularly acquires continuing education Leadership and communication skillsAccounting Staff Diligent, detail-oriented Follow instructions Seek help when they’re not sure how to record a transaction No employees who lack integrity are retainedRoutines Transactions are recorded and posted daily. Accounting staff “close” the month in the first ten days Staff “close” the year in the first couple weeks All disbursements require proper documentation and approvals. Checks are signed by someone outside of accounting, preferably a board member Budgets are checked as payments are made to ensure budgets are followed Budgets are compared to actual every month All budget variances >10% are explained Budget revisions are done when it becomes clear that a line item on the budget is unrealistic Purchases over a certain amount have to be approved before they are made All bank and investment statements are reconciled monthly to the general ledger accounts. Every person who donates or pays for an item receives a receipt. All balance sheet accounts are reconciled or “rolled forward” monthly. Accounting staff should be able to explain all the components of a balance sheet account. Advances and loans to employees are prohibited. Petty cash is handled on the “imprest” method – cash is replenished upon turning in receipts for all expenditures and reconciling the account. Board members or accounting committee volunteers receive a complete set of interim financials monthly. Documentation is kept of donations, especially any donations restricted as to purpose, and files are maintained on all restricted donations.
  2. 2. Temporarily restricted and permanently restricted funds are reconciled to the general ledger monthly. Any TR funds released are released for the proper purpose. Fixed asset subledger maintained monthly and depreciation recorded monthly. Transfers and interfund loans are reconciled monthly and are in balance. Any receipts to donors in which the donor received some value in exchange for their gift indicate the value of the benefit on the receipt. Subledgers are reconciled to the general ledger. Pledges receivable is presented on the financial statements with an appropriate allowance for uncollectible pledges. If the entity does not have expert payroll staff, payroll is calculated by a processing service and the service files all the tax returns and makes the tax payments. The payroll tax payments are verified. Form 990 is prepared annually by the due date or extension date by a qualified preparer. It is made available to the board for approval before it is filed. If the entity is subject to unrelated business income tax, the taxes are paid An “accountable plan” is used for business expense reimbursements, and expense reports are turned in and reimbursed monthly. Employees are paid overtime as necessary in compliance with the Fair Labor Standard Act. Employees are classified properly as to exempt and non-exempt status. Independent Contractors are classified properly. No employees are improperly classified as ICs. Accounting is responsive to board requests for information, and financial reporting is tailored to the board’s needs and desires.Oversight The board has recruited a qualified Treasurer. If possible, the Treasurer has a volunteer committee to oversee financial operations. If the nonprofit has an annual audit, the auditors report to the Audit Committee appointed by the board, and if that isn’t possible, directly to the board. The auditors, as they present the audit, have a closed “executive session” time, which provides an opportunity to discuss matters with the Audit Committee/Treasurer/Board with the staff NOT present. If the entity does not have an annual audit, the Treasurer and his committee members inspect large transactions and review a sampling of other transactions. All purchases require approval from someone other than the purchaser – for instance, the Scout Executive’s purchases should be reviewed and approved by a board member.

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