This is a phrase I used to hear quite a lot as a kid growing-up in eastern NC. It was a simple phrase that meant keeping your finances in order. Our recent CEO Roundtable focused on financial challenges in AENC associations.
Thank you so much to Lew Ebert for graciously hosting the CEO Roundtable on June 16th at the North Carolina Chamber. And to David Piscorik, who facilitated the meeting. David is the director of auditing services at Stancil & Company, which is a local CPA firm in Raleigh. David shared many of his experiences from auditing associations and guided us through the bevy of financial issues that we all face today.
The first issue we discussed was in managing multiple bank accounts and the administrative burden that this puts on an organization. A healthy discussion ensued and a few key pointers came from our discussion. Unless the organization has restricted funds that are required to be held in a separate bank account, then multiple bank accounts should be used at the convenience of the organization, not as a burden to the organization. If you are using the “bucket” approach to segregate your funds for various programs / activities, then consider setting up sub-accounts on your general ledger and maintain only one bank account. This will provide the best of both worlds, as you get to visibility of separate funds, while lowering the administrative burden of maintaining and reconciling separate accounts.
The conversation segued into a discussion on FDIC coverage. Currently, FDIC provides coverage up to $250,000 per entity on its deposits. If your organization has cash in excess of this coverage, does this mean that I have to open multiple bank accounts? The group shared ideas on how to mitigate this risk and discussed the CDARS program that many banks now offer. CDARS, the Certificate of Deposit Account Registry Service is a program that provides a convenient way for safety-conscious investors to access FDIC insurance on its deposits. The CDARS service places your funds into CDs issued by other members of the CDARS Network giving you the extra FDIC coverage you need and the organization receives just one regular consolidated account statement.
Several other topics were discussed during the 90 minute meeting that range from complex UBIT tax issues and multiple entity structures, to broader discussions on board member responsibilities and how to best educate new board members.
Lastly, David was asked to share some of his insight on what other Associations are encountering these days. One of the things David mentioned was that given the difficult economic times encountered in the past two years, many associations have considered having a review engagement conducted in lieu of an annual audit and have an audit conducted on a three year cycle. David explained that a review engagement is significantly less in scope than an audit and can save the Association anywhere from 30%-60% from the cost of having an annual audit conducted. It is important to note that a review does not express an opinion on the financial statements; however, it does provide limited assurance regarding any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with GAAP.
David was kind enough to provide a copy of his latest seminar titled “Accounting Metrics and Measurements for NPO’s”, which can be found on their website at: http://www.stancilcpa.com/presentations.html
I want to thank David for donating his time to be with us at the June CEO roundtable and he has been so kind as to donate his time to answer any additional financial questions as well. He can be reached at 919/872-1260 or via email at dpiscorik@stancilcpa.com. Thanks David!
In conclusion, I would like to share with you a policy statement regarding financial issues in association management conducted by the Association Forum of Chicagoland’s Board of Directors. It can be found at : http://www.asaecenter.org/Resources/whitepaperdetail.cfm?ItemNumber=12193 I hope that you find this article interesting and leads to much SUCCESS!
Posted by thompi217 
