Things Financial

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Things Financial

• National Treasurers Presentation to the
• Alberta Division of the Navy League of Canada
  Annual General Meeting
• September 15, 2007

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As a Branch President

• You have lots to do
• Your focus is on youth
• Your know finance is important but there many
  other things

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However life can get exciting..
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So for the next little while..

• What is the state of financial internal controls
  in your Branch?
• Or to say it another way
• How well are you
• managing your money?

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Why bother?

• We have over 250 organizations
• Most are working well but we have problems
• Cowichan husband/wife stole money
• Calgary 2,500 stolen
• Edmonton 100,000 stolen
• Thunder Bay 10,000 stolen
• Ontario Division 15,000 stolen
• Northern Saskatchewan30,000 stolen
• These are the big ones!

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Statutory Duties of a Director

• A Director shall
• Act honestly and in good faith and in the best
  interest of the Navy League of Canada
• Exercise the care, diligence and skill of a
  reasonably prudent person when performing his/her
  duties as a director.
• This is the standard by which a Director is
  expected to carry out his or her duties

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Presidents Responsibilities

• Ultimate accountability for the overall
  performance of a Branch
• 1 Stewardship Oversee the conduct of business
  safeguard of resources
• 2 Measurement Measuring organizational
  performance
• 3 Leadership Setting strategic direction
• 4 Oversight Recruiting Board and staff (if
  any) and evaluating their performance
• All of the above have a financial component

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Financial Component

• 1 Stewardship Signing checks, authorizing
  expenditures
• 2 Measurement Ensuring financial are kept,
  reports produced
• 3 Leadership Developing implementing
  your financial plan (budget)
• 4 Oversight Audits other things

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Lets cut to the chase.
How do I stay out of jail?
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1 Financial Stewardship

• General Stewardship Oversee the conduct of
  business safeguard of resources
• Financial Stewardship Signing checks,
  authorizing expenditures

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The first thing to do!

• Never sign a blank check. Never. Never!
• Not when holidays are coming.
• Not when you are going to be away on business.
• Not when you absolutely trust the treasurer.
• Under no circumstance sign a blank check.
• Signing blank checks is not exercising due care
  nor diligence.

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While talking about checks.

• Check your check signing authority
• The person preparing checks should not sign
• The person benefiting from a check should never
  sign
• Its not about trust, its about taking due care

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The second thing to do!

• Always see a document that shows why you are
  signing a check.
• Maybe its an invoice
• Maybe its a receipt for reimbursement
• Maybe its a summary of travel vouchers
• Even if the treasurer is your mother
• and has a broken arm,
• ask to see the supporting
• documents.

Come on Mom!
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Third thing Bank Reconciliations

• Make sure your organization gets a bank statement
  every month.
• Have a reconciliation prepared. Compare the bank
  balance in your books to the bank balance on the
  statement.
• You must understand the difference between the
  two figures.
• Check checks that have been
• outstanding for more than a month

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Bank Reconciliation

• Branch Financial Records
• Balance first of month 475.23
• 304 53.75
• 305 125.00
• Deposit 250.00
• 306 25.10
• 307 254.76
• 308 15.00
• 309 100.00
• Deposit 500.00
• Closing Balance 651.62

• Bank Statement
• Opening Balance 350.00
• 304 53.75
• Deposit 250.00
• 306 25.10
• 309 100.00
• Closing balance 421.15

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1 Financial Stewardship

• Never sign a blank check
• Always see documentation
• Reconcile your bank
• Thats showing due care and diligence!!

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If you suspect trouble.

• Inform the next senior person in chain of command
• Be discrete until you have spoken to someone with
  experience
• Branch informs Division, Division informs
  National
• If it smells fishy to you,
• it probably is fishy

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2 Financial Measurement

• General Measurement Measuring Organizational
  Performance
• Financial Measurement Measuring Financial
  Performance
• Keeping records
• Reporting results

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Keeping the records

• Paper Ledger
• Synoptic Journal
• (Excel spreadsheet)
• Software
• Simply Accounting
• Quicken
• However you do it,
• make sure your accounts reflect reports

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Keeping Track (Journal)
Cash on Hand
Cash in bank
Date
Description
1 Jan 123.00 1543.76
Amount on hand at the start of the year
12 Jan 251.25
Proceeds from tag day
17 Jan -374.25 374.25
Deposited cash on hand
21 Jan -102.00
Reimburse President travel expenses (chk
123)
21 Jan -231.75 Division payment
for Navy League (chk 124)
25 Jan 56.00
Membership dues from branch members
31 Jan 575.00
Donation from J.B. Smith Inc
31 Jan -631.00 631.00 Deposit
cash on hand
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Keeping Track (Excel Spreadsheet)

• First Column Date
• Second Column Cash
• Third Column Bank
• A column for each type of receipt
• A column for each type of disbursement
• A column for description

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Keeping Track (Computer Software)

• Quicken, Simple Accounting
• Glorified Synoptic Journals
• Advantage Can prepare financial
• statements , etc
• Disadvantage Must learn system and invest in
  set up
• Recommended for larger branches (or treasurers
  who are already familiar)

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Now you have financial records

• Decide what information is required. (At least
  same as annual reports.)
• Keep good records
• Then prepare reports that are meaningful to your
  team

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Transform Data into Information

• What information do you need to manage?
• What information is required by law?
• What information do you need to hold people
  accountable?
• What information do you need to report to
  parents? To partners? To other
• levels within the Navy League?

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Your Reports

• Make sure your reports are meaningful.
• Avoid WADITW
• Review monthly, in depth every 3 months
• Track actual receipts and
• disbursements against budget
• Recommend reporting same
• accounts as annual report

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KISS Accounting

• What you own
• Less what you owe
• Equals what you are worth
• Money received during the year
• Less money spent during the year
• Equals increase in worth

Balance Sheet
Income statement
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Statement of Receipts and Disbursements

• Amount in bank at start of year
• Add receipts during the year
• Subtract disbursements during the year
• Should be bank at the end of the year
• Form Navy League (62)E 01 Sep 05
• Instructions Navy League (61)E 01 Sept 2003

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Statement of Assets and Liabilities

• Assets (what you own)
• Liabilities (what you owe)
• Form NL(62)E 01 Sep 05
• Instructions NL (61)E 01 Sept 2003

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3 Financial Leadership

• General Leadership Setting strategic Direction
• Financial Leadership Ensuring financial goals
  are established which reflect your strategic
  direction

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3 Financial Leadership(continued)

• Developing and implementing your financial plan
  (budget)
• Your annual program drives your budget
• Understand what you get for what you spend
• Assign responsibilities for
• authorizing monitoring
• Formal review at least
• half way through year

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3 Financial Leadership (continued)

• Branch Presidents Role
• Help the Branch Treasurer implement good
  stewardship
• Spend time with your Treasurer
• Develop plans and associated budgets
• Implement good stewardship
• Have audits done
• Report results of activities
• (including finances)

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4 Financial Oversight

• General Oversight Recruiting
• Board members and evaluating their performance
• Financial Oversight Arranging for audits (and
  other things)

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Its in the Book!

• Each Branch shall provide
• an audited statement of all monies received and
  disbursed during the preceding fiscal year
• a budget containing estimates of receipts and
  disbursements for the current year
• to its Division within 60 days after end of its
  fiscal year
• Navy League By-Laws, Article 6.17

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Professional Audits

• Audit engagements cost a lot. Only audit when
  necessary. For example
• Are you incorporated and is an audit mandatory?
• Do you have a bank loan and does the bank require
  an audit?
• If not, review engagements costs
• less and normally meet the need.
• However, must get approval
• of your board

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So what do you do?

• Figure out if you need audit. If not, get Board
  approval for a review.
• First choice Do you have a professional
  accountant on your board to do a review
  engagement for free? If not, get one.
• Second choice Go to your
• province web site.
• CGA Certified General Accountant
• CMA Certified Management Accountant
• CA Chartered Accountant

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What about a non-professional?

• Understand some branches are using them
• Suggest approach is acceptable in some cases
• However, Directors need and Treasurers should
  want a good audit
• Therefore make sure auditors know their job
• Remember.

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4 Financial Oversight (continued)

• Another Job Selecting right people for financial
  duties
• Strongly recommend getting someone with financial
  background
• Do your part to ensure
• financial controls work
• Treasurers cry easily!

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Other Oversight Stuff

• Charity Registration
• Alberta Lottery Fund
• Casino Revenue
• New DND funding model
• Education Foundation

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So what is Financial Governance ?

• Four responsibilities as Branch President
• Stewardship
• Leadership
• Measurement
• Oversight
• While all are important,
• Stewardship is the key!

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As a Branch President, you have the
responsibility to establish a strong stewardship
culture in your branch
Stewardship
Stewardship
Stewardship
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Discussion

• How is your Branch doing?
• How can you do better?
• How can your Division help you do better?
• How can National help Division help you?