Financial Control or Chaos?                  Paul Konigstein                   January 16, 2013A Service   Of:            ...
INTEGRATED PLANNING            Advising nonprofits in:        www.synthesispartnership.com            • Strategy          ...
Affordable collaborative data             management in the cloud.A Service   Of:                        Sponsored by:
Today’s Speaker                                     Paul Konigstein                                       Senior Consultan...
Nonprofit WebinarsFinancial Control or Chaos?                         Paul Konigstein                       Senior Consult...
ABOUT US       • For more than a decade,         Accounting Management         Solutions, (AMS) has         provided accou...
FINANCIAL CONTROLS REIN    IN HUMAN NATUREThe chaos of disregarding financial controls.                                   ...
THE ART OF THE STEALBy JANON FISHERDecember 24, 2009A former payroll manager at the BrooklynMuseum pleaded guilty yesterda...
THE TENNESSEANFINANCE DIRECTOR ACCUSED OF FORGERYBy Duane W. Gang and Andy HumblesMarch 29, 2012The couple used the associ...
YOU DON’T TRUST ME!    Recognize this face?                           10
TRUST BUT VERIFY                   11
WHAT ARE FINANCIAL CONTROLS• Procedures designed to insure compliance with  organizational policies such as:   • Staying w...
BASIC PRINCIPLES• Separation of Duties – different people should  perform different steps in the process of  completing a ...
BASIC PRINCIPLES• Avoid conflicts of interest – avoid situations  where someone making a decision can benefit  financially...
CONTROLS ON PAYROLL• Verification of employee existence• Verification of hours worked• Verification of payment calculation...
CONTROLS ON         ACCOUNTS PAYABLE• Verification of vendor existence and  qualification• Verification of goods/services ...
CONTROLS ON PURCHASING• Purchase orders – check for problems  BEFORE you are obligated to pay• Competitive bids – obtain l...
CONTROLS ON GRANTS• Verification of grant agreement• Reasonable expenses• Allowable expenses• Allocable expenses• Start an...
CONTROLS ON      GRANTS AND DONATIONS• Verification of funds received• Verification of pledges• Verification of multi-year...
CONTROLS ON           EARNED REVENUE• Cash counting procedures• Match revenue to participant records• Fixed prices• Custom...
CONTROLS ON BUDGETS• Budget managers justify budget to CEO and  CFO.• Variances from budget reviewed and explained  monthl...
CONTACT INFORMATIONPaul Konigstein  Senior Consultant  Accounting Management Solutions, Inc.  pkonigstein@amsolutions.net ...
Find listings for our current season          of webinars and register at:            NonprofitWebinars.comA Service   Of:...
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Financial Control or Chaos?

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Learn how to creatively meet your nonprofit's need to avoid financial chaos by setting reasonable limits on payroll, accounts payable, grants, and fundraising without impeding your organization's work.

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Financial Control or Chaos?

  1. 1. Financial Control or Chaos? Paul Konigstein January 16, 2013A Service Of: Sponsored by:
  2. 2. INTEGRATED PLANNING Advising nonprofits in: www.synthesispartnership.com • Strategy • Planning (617) 969-1881 • Organizational Development info@synthesispartnership.comA Service Of: Sponsored by:
  3. 3. Affordable collaborative data management in the cloud.A Service Of: Sponsored by:
  4. 4. Today’s Speaker Paul Konigstein Senior Consultant Accounting Management SolutionsAssisting with chat questions: Hosting:Jamie Maloney, Nonprofit Webinars Sam Frank, Synthesis PartnershipA Service Of: Sponsored by:
  5. 5. Nonprofit WebinarsFinancial Control or Chaos? Paul Konigstein Senior Consultant
  6. 6. ABOUT US • For more than a decade, Accounting Management Solutions, (AMS) has provided accounting support and financial management leadership at the consulting CFO, controller and accounting manager level to dynamic companies throughout the Northeast. 6
  7. 7. FINANCIAL CONTROLS REIN IN HUMAN NATUREThe chaos of disregarding financial controls. 7
  8. 8. THE ART OF THE STEALBy JANON FISHERDecember 24, 2009A former payroll manager at the BrooklynMuseum pleaded guilty yesterday to embezzling$620,000 by cutting paychecks to phony staff.According to the charges, Newton created threefictitious employees, "Brooklyn," "BrooklynMuseum" and "ZXY," to direct-deposit 38 checksinto his personal account between April 2005 andJuly 2008. 8
  9. 9. THE TENNESSEANFINANCE DIRECTOR ACCUSED OF FORGERYBy Duane W. Gang and Andy HumblesMarch 29, 2012The couple used the association’s credit anddebit cards.The organization had $1.9 million in annualrevenue. The amount stolen represents morethan a third of the association’s annual revenue. 9
  10. 10. YOU DON’T TRUST ME! Recognize this face? 10
  11. 11. TRUST BUT VERIFY 11
  12. 12. WHAT ARE FINANCIAL CONTROLS• Procedures designed to insure compliance with organizational policies such as: • Staying within budget • Using assets to achieve organizational objectives • Adhering to donor restrictions
  13. 13. BASIC PRINCIPLES• Separation of Duties – different people should perform different steps in the process of completing a transaction.• Two sets of eyes on each transaction – a corollary to separation of duties – at least two people should be required to complete a transaction. 13
  14. 14. BASIC PRINCIPLES• Avoid conflicts of interest – avoid situations where someone making a decision can benefit financially from the outcome.• Documentation – keep a record of what you did, how you did it, and why you did it. 14
  15. 15. CONTROLS ON PAYROLL• Verification of employee existence• Verification of hours worked• Verification of payment calculation• Verification of taxes paid 15
  16. 16. CONTROLS ON ACCOUNTS PAYABLE• Verification of vendor existence and qualification• Verification of goods/services received• Verification of payment calculation• If no purchase orders, verification against budget 16
  17. 17. CONTROLS ON PURCHASING• Purchase orders – check for problems BEFORE you are obligated to pay• Competitive bids – obtain lowest price to preserve more money for the mission 17
  18. 18. CONTROLS ON GRANTS• Verification of grant agreement• Reasonable expenses• Allowable expenses• Allocable expenses• Start and end dates• Burn rates• Administrative compliance 18
  19. 19. CONTROLS ON GRANTS AND DONATIONS• Verification of funds received• Verification of pledges• Verification of multi-year grants• Verification of donor requirements 19
  20. 20. CONTROLS ON EARNED REVENUE• Cash counting procedures• Match revenue to participant records• Fixed prices• Custom services supported by contracts 20
  21. 21. CONTROLS ON BUDGETS• Budget managers justify budget to CEO and CFO.• Variances from budget reviewed and explained monthly. 21
  22. 22. CONTACT INFORMATIONPaul Konigstein Senior Consultant Accounting Management Solutions, Inc. pkonigstein@amsolutions.net 516-270-5070 www.amsolutions.net 22
  23. 23. Find listings for our current season of webinars and register at: NonprofitWebinars.comA Service Of: Sponsored by:

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