Parent and Booster Club Audit Training 2016

Presented By

Jan Coker, Director of Internal Audit Services

Just a reminder…

• Tyler ISD encourages and appreciates parental support for the District’s students. Our goal is to support parental groups with clear guidance. This presentation is a training covering basic techniques on booster club financial self-audits.

We Appreciate You

Training Goals

• Board Policy Requirements

• District Booster Club Guidelines • Audits• Information Sheet

• Annual Audits - Self-Audit Training• Select an Audit Committee• Audit Objectives• Organizing the Audit• Treasurer’s Preparation for the Audit• The Audit

Board Policy GE (LOCAL) Relations with Parent

Organizations

• GE (LOCAL) updates were issued September 9, 2015.

Board Policy Requirements

• By September 1, 2016, provide your organization’s audit report and audited financial statements to the campus principal. Financial statements should include all

assets, liabilities and expenditures. Audit should be completed by an audit

committee or at least two members of the club, including one non-officer. Club members performing the audit should not have checkbook signing authority.

District Booster Club Guidelines

• PTA & Booster Club Guidelines – Located on the district’s website– http://www.tylerisd.org/Domain/95

District Booster Club Guidelines• At the end of each school year, the club’s financial records be

audited by an Audit Committee.– At least 2 people with no check signing authority.– Include on committee at least 1 non-officer– The treasurer cannot be on the Audit Committee.

• Upon audit completion, report to general membership the audit’s findings and recommendations.

• Submit audit report and financials to the campus principal or designee. Submit by September 1. Effective beginning 9/1/2016.

District Booster Club Guidelines Continued• Sample audit review checklist located on pages 11-12

of the guidelines.• Sample audit report is provided at this training.• Sample Financial Report is located on page 13 of the

guidelines. • Also, by September 1, or as information changes,

submit the PTA & Booster Club Information Sheet to your campus principal or designee. Worksheet is located on pages 9-10 of the guidelines.

PTA and Booster Club Information Sheet

• PTA & Booster Club Guidelines, page 9• Provide updated form to principal annually by

September 1 and when information changes.– Organization’s name– Related Campus– Employer Identification Number– Mailing Address– Sponsor Liaison– Officer’s Names and Contact Information

Annual AuditsAudit Committee

• Select an audit committee to conduct a yearly audit of the club’s financial activities.– Question: Who can be on the audit committee?

• Audit Objectives– Verify accuracy of the Treasurer’s reports– Ensure cash balances are accurate– Ensure that established procedures for handling funds have

been followed– Ensure that all revenues have been appropriately received and

recorded– Ensure expenditures occurred in a manner consistent with

bylaws

Organizing the Audit• Time saver! Efficient organization of club

records under audit.• Example breakdown of audit responsibilities

for two audit committee members performing the audit.– Balance Sheet, Statement of Income and Expenses

(Income), Bank Reconciliations, Cash Receipts and Deposits

– Statement of Income and Expenses (Expenses), Checks, Disbursements, Debit Cards, Fundraisers and State Sales Tax, Federal Taxes

Treasurer’s Preparation for the Audit

• Treasurer has prepared a Balance Sheet and Statement of Income and Expenses

• Bank reconciliations are prepared and provided in consecutive order.

• Bank statements are provided in consecutive order.

Treasurer’s Preparation for the Audit

• All cash receipt forms, bank deposit slips, bank deposit receipts and check register are available and in sequential order.– Include listing of all deposits– Include an itemized listing of what budget

category/account the items were coded to on the Statement of Income and Expenses

– Bank deposit slips may be viewed online with online banking.

Treasurer’s Preparation for the Audit

• Have all cash on hand together that needs to be counted. (For Balance Sheet)

• Have a listing of inventory i.e. t-shirts (5 –small,25 – mediums, etc…)

• Provide the invoices for unpaid invoices (Bills Payable)

• Have all remaining check stock available• Have all debit cards available

Treasurer’s Preparation for the Audit

• Have a copy of authorized signers on the club bank account.

• Have front and back copies of all checks written printed.– These can be viewed online also.

• Have supporting documentation for the checks: invoices, receipts

Treasurer’s Preparation for the Audit

• Have budget approved by the membership or meeting minutes in consecutive order.

• Have documentation for bank withdrawals for change funds and subsequent change fund deposit records identified.

• Fundraisers – Provide invoices for value of items sold, corresponding deposits, and listing of remaining inventory.

Treasurer’s Preparation for the Audit

• Prior Year Financials• State Sales Tax Reports and Confirmation of

Filing with the State• Confirmation from the IRS that Federal Taxes

Were Filed

The Audit

Financial Statements

• Balance Sheet• Statement of Income and Expenses

ABC Booster Club

Balance Sheet

As at June 30, 2016

Current Assets

Cash $ 3,605.00

Cash On Hand 35.00

T-shirt Inventory 300.00

Total Assets $ 3,940.00

Current Liabilities

Bills Payable $ 325.00

Total Liabilities $ 325.00

Net worth, June 30, 2015 3,865.00

Surplus (Loss) (250.00)

Net worth, June 30, 2016 3,615.00

Total Liabilities and Net Worth $ 3,940.00

ABC Booster Club

Statement of Income and Expenses

For the Year June 30, 2016

Income:

Members' Fees $ 2,305.00

Fundraising Income 500.00

Bank Interest 100.00

Donations 150.00

Total Income $ 3,055.00

Expenses:

Fundraising Expense $ 400.00

Business Expense 380.00

Events Expense 2,500.00

Bank Charges 25.00

Total Expenses 3,305.00

Surplus (Loss) for the Year $ (250.00)

Balance Sheet Steps

• Verify Balance Sheet “Cash” is the same amount as the final cash amount on the last bank statement for the period under review.

• “Cash on Hand” - Count all cash on hand.• “T-Shirt Inventory” – Verify reasonableness of

inventory value by reviewing the remaining inventory worksheet and amounts paid for that inventory.

• “Bills Payable” – Verify amounts of unpaid invoices for period audited.

Balance Sheet Steps

• “Net Worth, June 30, 2015” – Trace to prior year’s balance sheet amount for June 30, 2015.

• “Surplus (Loss)” – Does this tie to the surplus (loss) on the Statement of Income and Expense?

Bank Reconciliation Steps

• Verify bank reconciliations are performed within 30 days of the bank statement ending date.

• Verify beginning and ending bank recon balances to monthly bank statements.

• Verify outstanding items from prior month cleared in the following month. – If not….why?

Cash Receipts and Deposits• Check addition and subtraction on cash receipts and

corresponding deposits.• Compare deposit slip amounts to those listed in the

bank statement.• Verify that income has appropriate backup (cash

receipts, cash count form). Total amount collected should match amount deposited in the bank.

• Verify receipts are allocated to the correct budget/account category on the Statement of Income and Expenses.– Members’ Fees– Fundraising Income

Cash Receipts and Deposits

• Verify checks received from parents or vendors are deposited in 1-3 business days.

• Create a spreadsheet with each deposit listed and verify cash receipts are presented in a timely manner to the person depositing funds.– Also, compare cash receipt dates with the date of

deposit on the bank statement.

Checks

• Inventory remaining - check stock to confirm all unused checks are present and in sequential order.

• Is the last check issued and the first check available in the check stock sequential? If not, why?

• Confirm check stock is retained in a secure place when not in use.

• Determine if any checks were voided.– Were they retained in the records?

Checks

• Who are the authorized signers on the bank account?– Former officers should not be signers– District employee sponsor should not be a signer

Disbursements• Review canceled checks to ensure agreement of payee name,

endorsement and check amount.– Can be printed front/back by the bank for the audit.– Reviewed online.

• Review canceled check to ensure check has two signatures and the signatures are from authorized signers.

• Verify check sequence • Trace checks to supporting documentation• Trace disbursements to budget approved by the membership or in

meeting minutes• Verify expenses are allocated to the correct budget/account category.

– Fundraising Expense– Business Expense

• Change funds used? Confirm money was withdrawn from bank and later redeposited.

Debit Cards

• Determine if debit cards are being used and who the authorized users are. Ask if the debit cards are being passed around to unauthorized users.

• Trace supporting documentation (receipts) to bank statements.

• Trace debit card disbursements to budget approved by the membership or in meeting minutes.

Fundraisers and State Sales Tax

• Evaluate each fundraiser individually.– Products Sold and State Sales Tax

• Was state sales tax collected for taxable items sold?

– Was applicable sales tax paid to the State of Texas?

• Were state sales tax reports prepared and filed timely?– Look for receipts or confirmation of filing.

Federal Taxes

• Were taxes filed?– Look for a confirmation page from the IRS or for

the following:• E Postcard• Form 990 EZ• Form 990

Audit Report Examples - Handouts

• Report Example A – no exceptions• Report Example B – exceptions with

recommendations– Note: Immaterial exceptions could be listed on

the report without providing a recommendation.• Example: Check #5257 did not have 2 authorized

signatures as required by the Booster Club by-laws. The check only contained 1 authorized signature.

Sample Financial Reports - Handouts

• PTA & Booster Club Guidelines– Page 13– Balance Sheet Handout– Statement of Income and Expense Handout

What Does Your Campus Principal Need by September 1, 2016?

• PTA and Booster Club Information Sheet• Audit Report• Financial Statements

– All assets– All liabilities– All revenue– All expenses

• Time period the audit should cover – prior school year

Questions???

Thank You