Ten 'Do's' (continued)

1. Keep clear, accurate, detailed records of all money or other assets that pass through the association coffers. Records should be well organized for easy access and should be maintained for up to seven years. The association’s accountant can provide information on which records must be kept for how long.
2. Insist upon strong fiscal leadership and responsibility from the board and officers. Any board member should be clearly informed and able to answer financial questions from association members, auditors or regulatory officials.
3. Have a system of checks and balances within the organization to watch for and prevent mistakes, fraud and abuse.
4. Have a finance committee to assist the treasurer with oversight of budgeting, financing and investment performance.
5. Work to ensure that an audit committee, smaller than and separate from the finance committee, focuses on the yearly audit and resolves conflicts between auditors and finance committee. This can be an ad hoc or standing committee, depending on type and duration of activities and tasks.
6. Arrange to have regularly scheduled audits. Larger organizations should plan an annual audit; smaller ones may not need to have an audit more frequently than every other year.
7. Make sure the board reviews the annual audited financial statements, unaudited monthly or quarterly financial statements, and any unique finance reports.
8. Do ensure the board is, at minimum, aware of Generally Accepted Accounting Practices (GAAP).
9. Be ever mindful of the organization’s Current Ratio - Current Assets divided by Current Liabilities – in order to have a clear picture of where the financials stand in terms of profitability.
Completing these ten "To Do’s" regularly will help you guard against the types of exposure that have given many a conscientious but ill-prepared association executive a "run for the money."