The American Kennel Club’s structure as a “club of clubs” is unique among not-for-profit organizations. In addition to the AKC’s main charge to govern the sport of purebred dogs and uphold the integrity of the registry, we also provide valuable guidance to clubs in such areas as hosting events, enlisting new members and helping clubs set up their governance structure.
When it comes to a club’s administrative activities, one of the most critical posts in any club is that of treasurer. Without sound financial stewardship, clubs are not able to properly advance their missions by holding dog events or conducting public outreach. Nor can they donate money to the community in such diverse ways as scholarships or donating K-9’s in areas where they are sorely needed, etc.
The typical “job description” of a treasurer includes tasks such as collecting and recording all monies due to or belonging to the club, depositing monies in accounts on a timely bases, using monies to pay the club’s debts, reporting on the status of monies at meetings and compiling an annual report. These activities are very crucial to the club’s fiscal health and should only be conducted by those with experience in this area and not be left to chance.
Unfortunately, when things go awry with a club’s financial situation it is very difficult to rectify. The AKC does not exercise jurisdiction in these matters because it is impossible for us to properly investigate cases that would require the legal authority to subpoena bank statements and other private records. It is crucial that clubs take preventative measures. I have listed below, what we believe to be the best blueprint for success when dealing with club monies and what has been recommended by major auditing companies:
Ensure that the club’s treasurer is bonded against loss of funds (visit www.bond007.net for more information on a treasurer bond).
Perform a periodic audit of the treasurer’s records to:
Ensure proper invoices (or other documentation) adequately support any payments.
Verify that bank reconciliations are performed accurately and timely.
If possible, it is preferable to have a person approving invoices different than the individual preparing and/or signing the checks. Similarly, it is desirable to have an individual reconciling the bank accounts who is different from the person preparing and /or signing the checks. Segregation of these tasks provides a more desirable level of internal control.
Consider establishing an audit committee of club members not involved in preparing or signing checks. Their role would be to annually review the details of all cash receipts and disbursements.
The Treasurer should prepare a quarterly balance sheet and an income statement. This should include an itemized listing of all cash receipts and disbursements during the quarter.
In the area of cash management
All cash receipts should be deposited timely.
Bank accounts should be formally reconciled each month on a timely basis.
Follow up on any checks outstanding for more than 3 to 6 months.
Consider requiring a second authorized signer for all checks over a prescribed dollar amount, usually $250.
Consider investing excess funds in an interest bearing account or certificate of deposit.
In an ideal world, we wouldn’t have to worry about these matters. Yet from a practical standpoint, it is essential that we not bury our heads in the sand and all make it our business to put sufficient internal controls in place within each of our clubs. By reviewing and embracing as many of these points as possible, clubs will go a long way towards ensuring the financial stability and integrity of their treasuries and enable members to continue the important work they do for the benefit of purebred dogs.
Sincerely,
Ron Menaker
Chairman