Financial Management Checklist A. INTERNAL CONTROL Question Title * I. General Internal Control a. Organizational chart exists which sets forth the actual lines of responsibility. b. Duties are separated so that no one individual has complete authority over an entire financial transaction. c. An accounting procedure and policies manual exists, is implemented and effectively communicated to employees including volunteers. d. The policy covers approval authority for financial transactions. e. A chart of accounts exists. f. The chart of accounts allows tracking expenses by nature and function. (i.e program expenses vs administrative expenses) g. An approved budget is in place to control expenses. h. The management regularly compares actual expenses to budgets. i. The organization’s activities have been audited within the past 2 years by another government agency or independent public accountant. j. A surprise internal audit is conducted once or twice a year. None of the above Comments Question Title * II. Internal Control - Cash Receipts a. Official receipts are issued for all cash receipts b. Official receipts are used and recorded sequentially c. Inventory of unused official receipts is regularly conducted at least twice a year d. All cash receipts are deposited intact to the bank account under the name of the Organization, and on a timely basis e. Cash is deposited by the person independent of recording functions f. Un-deposited cash and official receipts are secured in a locked drawer or vault None of the above Comments Question Title * III. Internal Control - Disbursements a. Duties are adequately separated, different persons authorize vouchers, prepare checks, sign checks, and record transitions. b. Vouchers are pre-numbered and are required for each disbursement. c. All disbursements are properly supported by evidence of receipts/invoices and approval of authorized employee. d. A policy exists that outlines maximum expenditures that an authorized employee may approve. e. Bank accounts and signatories are authorized by the board of directors or trustees. f. Pre-signed checks are prohibited. g. Bank accounts are reconciled monthly by a person independent from authorization and check signing functions. h. Paid vouchers and supporting documents are appropriately marked or stamped paid to prevent duplicate payments. i. Cancelled or void checks and vouchers are stamped “CANCELLED” and properly filed. j. Inventory for checkbooks (complete according to serial numbers) are regularly conducted. k. Inventory for vouchers (complete according to serial numbers) are regularly conducted. l. All checks issued are supported with a voucher. m. Drawing of checks to cash or bearer is prohibited. n. Two signatures are required on all checks or on checks over stated amounts. o. Bank checks are used and recorded sequentially. p. Check or cash vouchers are designed to capture necessary details and processes including: Payee, preparer, check details, date, check numbers and amount, appropriate account titles and journal entries, approval for payment, recipient, date received, and supported by acceptable third party documents None of the above Comment Question Title * IV. Internal Control - Petty Cash Fund a. Separate amount of cash is set aside for small expenses known as petty cash or revolving fund. b. Only one person can distribute petty cash funds. c. A policy exists that outlines the maximum amount to be paid out from petty cash. d. Unannounced count of petty cash funds is made by an individual other than the custodian. e. Petty cash is reimbursed by check. f. Petty cash vouchers are written in ink to prevent alteration. g. Cash is safely kept in vault or locked drawer. h. Replenishment is done at specific level or balance. None of the above Comments Question Title * V. Internal Control - Payroll a. Contracts and written authorization are on file for all employees covering rates of pay, withholdings and deductions? b. The organization has written personnel policies covering job descriptions, hiring procedure, promotions, and dismissals. c. Written policies exist for leave of absences, holidays, and other benefits. d. Adequate timekeeping procedure, including the use of timeclock or attendance sheets and supervisory review and approval, are employed for controlling paid time. e. Other key payroll and personnel duties such as payroll preparation, salary authorization and personnel administration are adequately separated. f. Wages are paid at or above the minimum wage. g. Payroll and personnel policies governing compensation are in accordance with the requirements of government agencies. None of the above Comments Question Title * VI: Internal Control - Property and Equipment a. There is an effective system of authorization and approval of capital assets expenditures and an accounting system for disposals. b. Property and equipment is stored in a secure place. c. The organization has established policies covering capitalization and depreciation, acceptable in accordance with generally accepted accounting principles . d. Property and equipment are recorded in a fixed asset ledger ledger that lists description of each item, serial number, location, date of acquisition, cost or fair value if donated, useful life, depreciation and accumulated depreciation and is regularly updated. e. Fixed asset ledger is periodically reconciled to the general ledger. f. The organization conducts physical inventory annually and update the fixed assets and general ledger. g. Differences between book records and physical counts are reconciled and records are adjusted to reflect shortages. None of the above Comments Question Title * VII. Budgeting - Internal Control a. The annual budget is prepared before the start of the year. b. The annual budget is reviewed and approved by the Board. c. The annual budget is implemented throughout the year. d. Actual vs budget report is prepared at least annually. Comments Question Title * VIII: Internal Control - Financial Policy a. The organization has a financial policy approved by the Board. b. The financial policy is documented and faithfully implemented. None of the above Comments Next
