The Michael Paul Wein Charitable Foundation

"Underpromise and Overdeliver"

internal control

REVIEW OF INTERNAL CONTROL

copyright Michael Wein, cpa 1996-2005 - all rights reserved - copying of this document is expressly forbidden without the written permission of the copyright owner

FOR EACH SMALL (PETTY) CASH FUND:

1-Is the fund always kept at a constant, specific amount (total of vouchers plus cash)?

2-Is the responsibility for each fund vested in only one person?

3-Is the custodian independent of other duties and other individuals that handle cash or cash items?

4-Are the records that are kept for each fund inaccessible to others until the fund is reimbursed?

5-Does the custodian obtain a formal receipt or factura (date, amount, what was bought, reason, etc.) for each payment made?

6-does each payment also require the signature of the recipient of the payment on each receipt?

7-Are formal receipts reviewed and/or approved by someone other than the custodian prior to replenishing fund?

8-Are formal receipts cancelled in some way so that they cannot be re-used after each fund is replenished?

9-Is amount in each fund counted by someone other than the custodian at least once a year?

10-has a maximum amount (over which no cash expenditure can be made) been set for each fund?

MONIES RECEIVED:

1-is a record kept of checks (and identifiable cash) received, so it can be reviewed for omissions?

2-are any offering baskets (from the moment they are about to vanish from public sight) kept in the joint presence of two officials until they are counted and recorded?

3-are the receipts from any offering baskets counted and recorded by persons other than the cashier, treasurer, etc.?

4-are the recorded amounts (see items #1 and #3 above) compared to the records of deposits to banks?

5-is the entire offering deposited intact without reduction for expenses of any sort?

6-does someone other than the cashier make the deposits to the bank?

7-is the person who makes such deposits instructed not to cash checks for the cashier?

8-are all outside persons aware that pre-numbered duplicate receipts are to be given for monies received?

9-are duplicate receipts compared in any way to the records which, in themselves, are to be compared to deposits?

MONIES PAID OUT BY CHECK:

1-are all checks kept in checkbook until issued, not pre-signed until issued, and issued in chronological order?

2-are voided checks stapled to checkbook and retained therein?

3-are checking account reconciliations done by someone with nothing to do with cash procedures or check signing?

4-does that someone (item #3 above) receive the bank statements directly from the bank?

5-during reconciliation, are paid checks examined for date, name, and endorsements consistent with the cash records?

6-are signatories limited to those who have no access to cash, check or cash receipts, or other cash records?

7-is the practice of drawing checks payable to "cash" (or similar names) prohibited or extremely curtailed (and even then allowed only under specific circumstances)?

8-are the checks prepared for signature by someone other than a person involved in the receipt of checks or cash?

9-does supporting data accompany checks when they are submitted for signatures?

10-are the supporting data effectively perforated or otherwise canceled after payment to prevent subsequent misuse?

11-has the board specified a minimum amount over which each check must be counter-signed?

MONIES PAID OUT IN CASH:

1-monies for expenses must not be paid out of cash received prior to its being deposited in banks!

2-is each item paid for in cash supported by documentation (where normally available) explaining who, what, when, and why?

3-are all expenses that are paid for in cash, reimbursed by a check made payable to the fund's custodian, and then only in the EXACT amount of the total of all expenses at that time being reimbursed at that specific time?

NON-MONETARY ASSETS:

1-are permanent listings (including descriptions, serial numbers, dates and costs) maintained for assets of significant value (such as office furniture and equipment and the like)?

2-does anyone compare the permanent listings (item #1 above) to the physical asset itself on an annual basis?

GENERAL:

1-are monthly financial statements prepared in reasonable detail so that the board of directors can review for omissions of receipts and for inappropriate expenditures and for variations from budgets?

2-does the board secretary understand that any financially-significant event should be recorded in the minutes?

3-does each member of the board know that it is each member's responsibility to ask the financial person for additional information regarding finances whenever a question arises in the individual member's mind?

4-are annual meetings of the entire membership scheduled each year at some constant time of year?

5-are financial statements provided to all non-board members, to help them review the organization's performance?

6-are the board of directors elected annually by the membership to ensure turnover among directors?

7-are the officers and responsibilities within the organization rotated periodically to ensure fresh ideas and fresh energy?

8-are non-board members of the organization allowed access to board meetings to ensure members' input?

9-are the duties and responsibilities of each financial person in the organization spelled out in sufficient detail?

10-are the duties of each person in the entire organization rotated after a specified period of time?

11-are the duties of each person taken over by another person during a vacation period (which is required at least annually)?

12-is an operating budget prepared annually, and are variations between budgets and actual results explained monthly?

13-is a double-entry bookkeeping system in use? 

14-are excess funds, if any, handled appropriately so as to maximize income thereon?

15-are all financial records and minutes of meetings available to all members of all of the organizations' constituencies so as to maintain transparency?