““AUDITSAUDITS””Checks Checks and and BalancesBalances

2

1.1. End of Each Fiscal Year.End of Each Fiscal Year.

2.2. When there is a Change When there is a Change in Officers.in Officers.

Most People Most People will ask….. will ask…..

……. When do I need . When do I need to do an Audit?to do an Audit?

Records Needed to Perform Audit

Checkbook Savings, Checking, and

Investment Account Statements, Canceled Checks, and Deposit Slips

Cash Receipts Journal Cash Disbursement Journal Dues Deduction Listing Local Constitution and By-laws Minutes of Local Meetings Minutes of E-Board Meetings

LM-1 LM-2, LM-3, OR LM-4 Reports

for Past Two (2) Years IRS 990 for Past Two (2) Years Budgets Audit Committee Reports Form 4’s for Past Two Years Current Roster from National or

WEB Site Inventory of all Fixed assets

(i.e.., Computer, Office Furniture Payroll Tax Return, Forms 940,

941, and 1099’s

Click below to View/Download this

CHECKLIST

RED FLAG ITEMS

One Signature Checks

Pre-signed Checks by ONE OFFICER

Checks Written Out of Sequence

Checks Written to CASH

Checks written to INDIVIDUALS

Advance Payment of Salary to Employees

Unbalanced Checkbooks with no Deposit Records

Minutes• Expenditures Should be Approved by

Membership.

• Local Must Have Operating Budget which has been Approved by Membership.

• Expenditures Should be Approved by Membership Rather than Executive Board.

Expenditures Must Have Prior Approval. Expenditures Must Have Prior Approval. Exception is If Expenditure is Included in Exception is If Expenditure is Included in Budget That is Approved by Membership.Budget That is Approved by Membership.

• Review Bills for Expenditures

• Verify Expenditures are Local Expenditures

• Verify Expenditures are Approved

• Dollar Amount Limit Should be Placed on Credit Cards

• Credit Cards Should be in the Name of the Individual Local Officer

• Use of Local Credit Cards Should be Defined in the Bylaws.

Credit Cards

• Should be Approved by Membership.

• Executive Board Cannot Approve Loans!

• Loan Cannot be more than $2000 per Officers/Employees.

• For any Loan, there Should be a very Clear Standard Criteria which the Local has Adopted.

• All outstanding advances in access of $2000 are considered by DOL as a loan.

LoansAFGE does not Recommend Making Loans to AFGE does not Recommend Making Loans to

Members. Recovery of a Defaulted Loan is Members. Recovery of a Defaulted Loan is Costly and Difficult.Costly and Difficult.

Keep in mind… What Keep in mind… What You do for One Member, You do for One Member, You Must be able to do You Must be able to do for ALL Members…. for ALL Members….

After the Checklist After the Checklist Documentation has been Documentation has been

Collected,Collected,

the Following Should be the Following Should be Accomplished….Accomplished….

• Financial Accounts. (Record Institution Addresses, Account Numbers, Signatures and Balances.).

• Expenditures are Being Properly Authorized. (Documented and Reported on a Timely Basis.).

• Monthly Bank Statements have been Reconciled.

Identify and Confirm Local’s...Identify and Confirm Local’s...

• What Other Outstanding Financial Obligations the Local Has.

(i.e., Attorney and/or Arbitration Fees, Fines, Judgments, Vendors, etc.)

• If Required Reports have been Filed.(i.e., LM Forms, IRS Forms, Budget, and Audit Check that Bond Coverage is Adequate.)

Determine...Determine...

• Membership listing from National Office or AFGE Web Site, and Compare Members with Agency’s Dues Deduction Listing.

• Copy of Local’s Constitution and Bylaws. To insure that local expenditures conform to the requirements of these documents.

• Copy of Local Budget, to Verify That it is Realistic to Obligations and Income.

Obtain...Obtain...

• Dues Structure is Adequate to Support the Local.

• Ledger for Direct Pay Members. (Direct Pay Members are on Current Roster.)

• Funds are Deposited Accurately and Timely.

• Payroll Taxes have been Withheld and Reported on IRS w-2 if Local has paid Employees.

• Required 1099’s have been Filed with IRS If Local has Paid any Individual(s) more than $599/Year.

• State, Local, and Federal Taxes have been Paid.

and VERIFY…and VERIFY…

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