California CASA Board Meeting

Audit Committee ReportOctober 2013

FY June 2013 Financial Statements and Audit

• Financial statement audit and report finalized by Ricciardi CPAs with a “clean” audit report.

• No issues, concerns or irregularities to report in respect of the June 30, 2013 financials.

• Ricciardi letter to BOD:– No difficulties encountered in performing the Audit.– Any identified misstatements were corrected by

management.– No disagreements around accounting policies, audit matters,

etc. were encountered.

Editor note: Great Job CALCASA Staff!

FY June 2013 Financial Statements and Audit (Cont’d)

• Ricciardi letter to Management:– Although Ricciardi does not audit the effectiveness

of internal controls, no material weaknesses were identified during the course of the audit.

– Observations:• General Ledger review: Recommend general ledger

review by a secondary person on a monthly/quarterly basis.

• Status: BOD Treasurer reviews monthly and Audit Committee member reviews quarterly, but no “evidence” of review (i.e. sign-off, email, etc.).

FY June 2013 Financial Statements and Audit (Cont’d)

• Ricciardi letter to Management:– Observations (cont’d):• Employee credit cards: Recommend a secondary review

of all employee credit card charges. • Status: CEO reviews and approves the employee credit

card charges, but no secondary review by BOD member is in place.

FY June 2013 Financial Statements and Audit (Cont’d)

• Ricciardi letter to Management:– Observations (cont’d):

• Preparation of financial statements: Recommend that CALCASA prepare its own financial statements and makes all necessary adjusting journal entries without assistance from Ricciardi CPAs.

• Status: The recommendation has not been implemented as it is the Board’s opinion that there is no cost/benefit in implementing. The Quickbooks financials prepared monthly by CALCASA’s bookkeeper are sufficient for reporting out to management and the Board.

FY June 2013 Tax Returns

• Currently in process.• Expected date of completion is 10/31/2013.

Double Check Signing Policy

• Current policy: Checks greater than $500 require two signatures, one must be a BOD member signature.

• The $500 threshold creates extra work and slows the payment process.

Double Check Signing Policy (Cont’d)

• Stats - On average:– 221 checks written per year– 56 of the 221 are greater than $500 (roughly 25%)– 40 of the 221 are greater than $2,000 (roughly

18%)– 9 of the 221 are greater than $5,000 (roughly 4%)– Of the 40 over $2,000, 19 checks are rent to

Preservation Park and health insurance to California Choice.

Double Check Signing Policy (Cont’d)

• Recommended new policy:– Require double signature for disbursements equal to or

greater than $2,000, AND which are also “non-routine.”

– “Non-routine” defined as anything other than 1) payroll, 2) health insurance and 3) head office rent.

– Expected outcome with new policy is only roughly 20 checks will require double signature.

– Remove requirement that one of the signatures must be a board member, and expand it to an “authorized” officer. Executive Committee has the authority to “authorize” an officer in this capacity.

Other Considerations

• Consider controls around other types of disbursements (i.e. online bill pay)?

• Reaction: CALCASA does not currently engage in a lot of online payments.

• Considering setting up online bill pay for California Choice, Preservation Park and VISA.

The End.