Some Tips...
Volunteers are the lifeblood of any neighborhood association. Countless hours and energy are contributed monthly by dedicated volunteers to keep the associations alive and productive. One of the most challenging aspects of neighborhood work may be that of managing the association’s funds. Ironically, the more funds the association successfully raises, from whatever sources such as governments grants, donations, or profits from events, the more challenging managing and controlling them may be.
Volunteers are not, of course, expected to be professional money managers, accountants, or bookkeepers, but there are some steps an association should take to safeguard its hard-earned money. And most of these can be put in place relatively easily--saving volunteer time for getting results and raising even more money for more projects.
Following are some tips. Some of them may not seem to fit your organization’s style or. needs, but think of them in the context of a health (and maybe life) insurance policy for your association.
1.) Designate one person who has overall oversight of the funds. That is efficient and it makes accountability pretty clear. But don’t put that person in the position of having sole authority over the money without any controls. (It isn’t fair to him or her nor to the organization.)
2.) If you elect a treasurer, routinely turn that office over. Don’t keep electing the same person year after year.
3.) Consider having a finance committee composed of two, three or more people and headed by a chair. (Don’t make it “too” large though.)
4.) If you have several sources of funds, put different people in control of the monies separately and have them keep one overall financial person informed.
5.) Set up a good system of financial recording and reporting. This does not have to be complex. In fact, the simpler it is, the easier it is for everybody to under stand and oversee, and the harder it is to hide any irregular activities.
6.) Keep reporting on funds from separate sources separate from each other. (This may be required by your funding source.) But use a standardized recording and reporting system for all funds.
7.) Use a board member who has an accounting or bookkeeping background to set up and review the reporting system. If you don’t have such a person on your board, recruit one. If you can’t recruit one, set up a system and find an accountant to review it as a contribution to your group.
8.) Have the whole board review reports and make sure questions about them are welcomed and responded to satisfactorily. (This does not mean that all financial matters need to be examined within an inch of their lives.)
9.) Make sure that financial decisions are understood by the board, duly approved, and recorded somewhere—in clear, straightforward language.
10.) Don’t use funds from one source to pay an inappropriate expense with thee idea that it will be paid back when there is other money.
11.) Consider having separate bank accounts for separate pots of money. This can make tracking transactions and accountability easier, especially if you have significant funds.
12.) Reconcile all bank accounts monthly. Put the responsibility for reconciling in. different hands than those of the person(s) who is responsible for authorizing expenditures.
13.) Make sure all checks require two signatures. Don’t make exceptions even though the bank may not notice. Do not, repeat do not, sign a blank check. In order to make sure you can always find two signers in an emergency, you may designate three or four people for each account who can sign checks.
14.) Make sure all checks that are signed have some sort of back-up-documentation explaining and verifying what the check is being written for. A short, hand-written note is fine. Save the documentation by the check number it went with.
15.) Avoid cash transactions, especially withdrawals. If you do deal with cash, use a “two person” system as a safeguard and save receipts, ticket stubs and the like.
16.) If you are lucky enough to be handling amounts of $5,000 or more, it maybe worthwhile to investigate purchasing a fidelity bond which covers the person primarily responsible for the funds. (Contact an insurance agent to ask about how this works and what it will cost.)
17.) Use your coalition as your fiscal agent. That is one of the reasons it was set up and incorporated,: and it is bonded. (Alternately, you-might consider using another incorporated not-for-profit organization as your fiscal agent, but be. aware that in order to legally do this that organization must have some control over your funds.)