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AARST Financial Management and Record Keeping
Financial planning, for both current and future needs, is vital to an association today. Sound fiscal management is a must for a successful association.
Mailing Address
The mailing address for AARST will be the address of the Management Association. The Management Association shall hereafter be referred to as the Agent.
Cash Receipts
The Agent shall deposit all monies received in the name of AARST into the general operating account. A daily Cash Receipts Journal shall be maintained that identifies the payer, date received and source of the income (dues, pamphlets, conference etc.) If the Agent receives monies with no clear purpose attached (invoice statement or purchase order) it is the responsibility of the Agent to identify such receipts immediately for proper accounting purposes. A copy of all checks received is to be maintained in the AARST files.
A fee of $25 will be charged for any returned check.
The current accepted methods of payment are: company or personal check, money order, certified check and credit card (Visa or Master Card only). The Agent shall process credit card payments. The Agent shall be reimbursed for the monthly processing fee charged by the credit card company upon submission of the monthly statement, until AARST has the capability of accepting and processing credit card receipts in it’s own name. Once AARST has the ability to process credit card payments, all payments shall be processed through AARST.
The Agent shall distribute a monthly Cash Receipts Journal to the Financial Committee within 10 days after the end of the month assuming that the Bank Statement has been received and reconciled.
Cash Disbursements
The Agent shall receive all original purchase invoices for payment. The original invoice is to be maintained in the AARST files as supporting documents. All invoices are to be paid in a timely manner, taking advantage of any discounts or early payments that are offered, assuming that there is money in the account to cover such early payments.
All checks generated by the Agent are to be forwarded to the AARST Treasurer for signature and mailing. Each check is to be accompanied by a copy of the invoice or other supporting document.
In the event that the Treasurer is unavailable to sign the checks in a timely manner, the checks with supporting documents are to be forwarded to one of the other signers on the account. AARST shall always have a minimum of two authorized signers on every account. At the present time there are three signers, the Treasurer, President and the Secretary.
A limited number of sequential checks (10) are to be retained at the Treasurers office for situations that may arise requiring immediate issue of a check. These checks will be sequential, but out of the normal sequencing. It is recommended that the last ten checks in the order series be located in the Treasurers office. Should a check be issued by the Treasurer he shall follow the same steps set up for the payment of invoices by the Agent.
The Agent shall maintain a daily Cash Disbursement Journal. It shall identify the Payee, detail of the purchase and the date and amount of the AARST check issued.
As with the Cash Receipts Journal, the Agent shall distribute a monthly copy of the Cash Disbursement Journal to the Financial Committee within ten days after the end of the month assuming that the Bank Statement has been received and reconciled.
Note: It is our desire to open bank accounts that can be serviced nation wide in order to eliminate the need for changes due to geographic location of the Agent or Treasurer. This may be as simple as using a bank that permits online transactions.
Purchase Orders
AARST is to develop a policy for the ability to make purchases. This could include a purchase order system. It is to be documented what dollar amount may be ordered by a Board member in the name of AARST without prior, formal Board approval. AARST shall only be responsible for those monies properly allocated under this system or by Majority Board approval.
Expenses shall only be incurred in the name of AARST by the Agent or a Board member under these guidelines.
The exception to this may be the Annual Conference Chairman who may or may not be a Board member. In this case a budget is to be given to the Chair, which he shall adhere to. Going outside the specifications set-up will require Board Approval.
Bank Statement Reconciliation
The Agent shall maintain the bank account. The Bank Statement shall be mailed directly to the Agent. A copy shall be forwarded to the Treasurer upon receipt. The bank statement is to be reconciled by the Agent upon receipt in order to maintain correct account balances at all times. A copy of the original statement with reconciled bank statement shall be forwarded to the Financial Committee for review and approval.
Profit Centers
The AARST finances will be reported as Profit Centers and as a total. The current profit centers shall be General Operating, the US EPA Publications, the Annual Conference, the Radon Reporter and the Website. Profit centers may be added by the Agent with the approval of the Financial Committee.
US EPA Publications. The publications on hand shall be inventoried at the end of each month. The inventory on hand shall be reported to the Agent and the Financial Committee. A monthly adjusting entry shall be calculated and recorded to reflect the current value of the publications on hand.
A separate profit center shall be created to properly record the income and expense pertaining directly to the publications. This is intended to provide documentation that will enable AARST, at any point, to evaluate if this is a profitable venture that should or should not be continued.
Annual Conference. A separate profit center shall be created to properly record all monies received and disbursed relative to the Annual Conference. This will allow AARST to evaluate the true profit/loss generated by the conference.
General Accounting. The general profit center will be for the normal accounting of revenues generated by membership dues, offset by the administrative and general operating expenses.
Radon Reporter. Advertising space is being sold in the Radon Reporter. A separate profit center shall track the income and expenses allocated to its production and mailing. This will help AARST establish adequate advertising rates to keep the newsletter in a profitable state.
Website. Advertising space is being sold for the AARST website. A separate profit center shall track the income versus expenses of its production. As with the Radon Reporter, weighing the cost of production against the income generated will allow AARST to determine advertising costs necessary to keep the website profitable.
Chart of Accounts
The current AARST Chart of Accounts shall be expanded to more clearly define and detail expense and income descriptions and to enable separate profit centers to be constructed. The Agent shall expand the Chart of Accounts on an as needed basis or at the direction of the Financial Committee.
Monthly Financial Reporting
The Agent shall keep the Board advised of the financial condition of the association through monthly financial reports. In addition to the reports already addressed such as the bank reconciliation, cash receipts journal and cash disbursements journal several other reports shall be prepared by the Agent on a monthly basis. The Treasurer shall report the monthly financial status of AARST to the Board of Directors in a timely manner.
Profit & Loss Statements
The Agent shall generate profit and loss statements on a monthly basis. This profit and loss statement shall be reported by profit center and in totality. The format for all reporting shall show monthly actual and budgeted, and year-to-date actual and budgeted, and year to date variance figures.
Other Financial Reports. The Agent shall also prepare a Balance Sheet and a Cash Flow Statement. The Financial Committee or the Executive Board may request from the Agent any other interim financial report or detail necessary to conduct it’s business.
All financial statements are to be prepared by the Agent and submitted to the Financial Committee by the tenth day after the end of the month. The Financial Committee shall independently review and approve these reports. Once the Treasurer has secured the approval of the Financial Committee he shall present the financial standing of AARST to the Board of Director in a timely manner.
Agent Fee. The fee structure for the Agent at this writing is based upon an hourly fee. A method of tracking the Agents billing time such as a time card will be required on a monthly basis. This report is to be submitted to the Treasurer for review and approval before the invoice is to be processed. The Agent shall submit an additional expense billing monthly with no carry-over into the next billing period in order for AARST to know where it stands regarding amount owing the Agent. Actual invoices only shall be accepted for expense reimbursement.
Miscellaneous. The Agent shall not be responsible for the accuracy of any accounting or financial information dated prior to the commencement date of service to AARST. The Agent shall be responsible for the accurate and timely accounting of all transactions recorded during its contracted service as Management and Financial Agent to AARST.
The Agent shall have a working knowledge of the Association’s Declaration and By-Laws and other governing documents.
The Agent shall cooperate with an audit committee or accountant doing an audit or review of the association’s financial records.
The Financial Committee of AARST shall approve the accounting software used by the Agent. It is recommended that AARST be in possession (ownership and registration) of the same software. AARST shall purchase and upgrade its software in conjunction with the Agent. A current backup copy of AARST financial data shall be maintained by the Agent for AARST at all times and shall be stored at a location determined by the AARST Financial Committee.
Respectfully submitted by
The Financial Committee
Gail Manning, Chair
STANDARD OPERATING PROCEDURE
Notice: This document is intended to be a living document and shall be reviewed and amended as deemed appropriate with the approval of the Board. This Standard Operating Procedure document is approved by the AARST Board as of June 7, 2001. Secretary or authorized officer signature: __________________________________GH
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