Chapter Treasurer Jason R. Minard, CIA, District Advisor Ann - - PDF document

5/2/2017 1

Chapter Treasurer

Jason R. Minard, CIA, District Advisor Ann Cohen, IIA Sr. VP Chief Financial Officer Donna Wiley, Manager, Chapter Relations

Agenda

• Legal Issues
• Chapter Internal Fraud
• Safe Guarding the Profession
• Safe Guarding Chapter Assets
• Internal Controls and Oversight
• Financial Management
• Group Activity

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Quick Poll

• Presidents
• President-Elect / Vice Presidents
• Treasurer
• Board Member
• Other Chapter Position

Quick Poll

• What type of organization are IIA chapters

considered?

– 501c(3) – 501c(6) – Unsure

• Chapters are exempt from:

– Sales Tax – Income Tax – Both – Unsure

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Chapter Legal Issues

• Tax-Exempt 501(c)(6)

Association

– Exempt from paying Federal Income Tax – Does not apply to SALES TAX

• Chapter Funds Management

Policies and Procedures (Handout)

Chapter Legal Issues

• Chapters have a 4 ½ month period after year end to

filing the necessary IRS forms

• Chapters with a May 31st ending have a filing deadline of

October 15th

• Types of Forms

– FORM 990-N (US ONLY) – FORM 990 OR 990EZ (US ONLY) – FORM 990T

• Required for tax on unrelated business income

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Chapter Internal Fraud

• Four incidents in three years
• Three convictions w/restitution
• Ranging from several thousand to more

than $80K

• Factors - Economic pressure and
• pportunity
• Trust is not a control

Safeguarding the Profession

• These instances place the profession under

scrutiny

• Importance of leading by example
• Manage chapters like you would your own
• rganization
• Identify your own process and control gaps
• Ask yourself if “trust’ is part of your control

process

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Safe Guarding Chapter Assets

• Chapter Leaders should:

– Demonstrate responsible cash management – Exercise good judgment in holding and preserving chapter funds

• IIA strongly recommends each chapter should:

– Have an audit committee (members should not be an officer or governor)

• Annual requirement for independently reviewed

financial statements

• Have an adequate verification process for

disbursement requests to prevent external fraud

INTERNAL CONTROLS AND OVERSIGHT

• Review Treasurer’s Position Description
• Implement some of the recommended Best

Practices *

• Ensure proper Segregation of Duties*
• Adopt guidance provided by the Treasurer’s

Manual

• Watch for Red Flags*and elevate any

concerns

• Ensure an Independent Review is completed

each year

• 2017-2018 North American Chapter Manual

* Handouts

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BEST PRACTICES FOR INTERNAL CONTROLS

A few examples:

• Produce financial reports on a regular basis
• Reconciliations are a key detective control
• Require verbal contact/confirmation for

disbursement requests of certain transactions

• Review signature cards and other means of

providing account access on an annual basis

Note: The full list of Best Practices for Internal Controls can be found in the Chapter Manual.

SEGREGATION OF DUTIES

• Chapter duties should be segregated so that

no one individual has the ability to do all or multiple activities as summarized below:

– Custody or access to chapter assets – Authorization or approval of transactions affecting chapter assets – Recording and reporting of transactions

• Not a ‘one size fits all”
• Based on size, structure, volume of

transactions

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TREASURER’S MANUAL

Banking Procedures Cash Receipts / Disbursements Reporting & Record Keeping Treasury Policy Chapter Treasury Job Description Ethical Guidance & Expectations Financial Reports …& more!

RED FLAGS FOR CHAPTER DEFALCATIONS

• The IIA Code of Ethics
• Ethical Guidance and

Expectations

– Ethics@TheIIA.org

• Red Flags for potential

defalcations document

– NA Chapter Manual

Note: The full list of red flags for potential defalcations can be found in the Chapter Manual.

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Financial Management

• Annual Budget Procedures

– Budgeting at a loss?

• Standard Chart of Accounts
• Annual Report of Income & Expenses

– Due August 31st – Independent Reviewer – New Template – Mandatory requirement – Suggested template for review of financial records – Prerequisite for receiving the Chapter Allotment

• Chapter Allotment

– $9.00 per member or a minimum of $1,350.00

Annual Report of Revenue and Expenses Mandatory Template

Annual Report of Revenue and Expenses

To: ChapterRelations@theiia.org cc: District Representative and District Advisor Due: August 31 Chapter Name / Submission Date: Completed By (Officer’s Name): Reviewer's Name (Print) / Date: Reviewer's Signature: Accounting Method Check if change from prior year ฀ Cash ฀ Accrual ฀ INSTITUTE OF INTERNAL AUDITORS ‐ (Insert Chapter Name) STATEMENT OF POSITION For the years ended May 31, 20__ and May 31, 20__ 20__ 20__

16

Due August 31, 2017. Chapters needing an extension should contact IIA HQ prior to this date. Chapters not submitting an accurate, independently reviewed report by October 15, 2017, will forfeit their chapter allotment.

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Financial Management

• Chapter Insurance

– Comprehensive general liability insurance ($1,000,000) which covers all chapters – Not-For-Profit Organization Liability Insurance

• also known as Directors and Officers Liability

Insurance – Premiums are split between Headquarters and the chapter.

• $100 deducted annually from

chapter allotment

– $50/$50 for each type of insurance

Chapter Treasury Session

Group Activity