Recommended Minimum Accounting Procedures
The accounting system used by the private organization should assure accomplishment of the following minimum requirements and procedures:
Fidelity bond coverage should be obtained for the custodian when cash assets of the organization exceed $500. These bonds must be purchased at the expense of the organization. Position schedule or blanket bonds, governing the position and not the individual by name, may be used.
A record of all property owned by the organization will be maintained. This record should describe the property, the date it was purchased and the original cost. A physical inventory of organizational property at six month intervals is recommended. Physical inventories will be recorded in the organization's records. Inventory overages and shortages and any drops or disposition of property will have the written confirmation of the governing body. An audit of any inventory and fixed asset overages and/or shortages will be made before an adjustment to the general ledger is entered. Where a sizable quantity of property is owned, consideration will be given to the appointment of a property officer to sign and be held responsible for the property.
Financial statements will be prepared quarterly and submitted to the governing body for examination and approval. A copy of each financial statement will be forwarded for review to the Commanding General, MCIPAC (AC/S, MCCS) as appropriate.
Treasurers or custodians shall be either elected or appointed by advisory bodies. The authority to withdraw funds from bank accounts, as established, shall be signed by the President or senior member of the advisory body and forwarded to the banking activity with a copy furnished to the treasurer or custodian. The appointment letter for the Treasurer or custodian will state his duties, responsibilities and authority for disbursing funds.
The treasurer or custodian will prepare financial statements reflecting the entire period, to consist of a balance sheet and statement of income and expenses. A copy thereof will be furnished to the Commanding General, MCIPAC (AC/S, MCCS).
When a treasurer or custodian is relieved, he/she will invoice to his/her successor funds, property, accounts and records of the activity; and his/her successor will receipt for them. A combined invoice and receipt will be used, prepared in quadruplicate and all copies signed. Distribution will be as follows:
- Cash receipts will be deposited in the organization's bank account, intact, as soon as possible after the date of receipt. A duplicate
deposit slip, stamped by the bank, will be retained as evidence that the deposit was made. - Disbursements will be made by check, except when a petty, cash fund is authorized. Checks payable to 'cash' will not be drawn. All canceled checks will be retained as evidence of payment. Signature blocks of voided checks will be cut out to prevent reuse and the checks retained as part of the organization's records.
- Bank statements will be reconciled with the book balance each month. This reconciliation will be in writing and will be certified by the custodian.
- A petty cash fund may be established upon approval by the governing body. Disbursements from this petty cash fund will be limited to minor expenditures, not to exceed an approved amount established by the governing body per single expenditure, that recur at such intervals as to render payment by checks inadvisable. A voucher will be issued for each expenditure and it is recommended that vouchers be serialized. Each voucher will be recorded in the appropriate expense account (not a petty cash expense account.) The approved amount of petty cash fund will be changed only upon written authorization of the fund governing body. Replenishment of the fund will be made at the end of each month or more often when considered necessary.
- All receipts and disbursements will be supported by adequate receipts, bills, invoices, and other generally accepted accounting documents. Separate document sets should be maintained for purchase requests with authorization, receiving reports, and invoices. Voucher files will be maintained for all receipts and disbursements and cross-referenced to payments or deposits. Vouchers will contain a brief description of the income received or expense incurred and will be signed by the custodian.
- Accounting records will be maintained on a current basis and all records and related documents preserved in such a manner so as to be readily available for audit.
Fidelity bond coverage should be obtained for the custodian when cash assets of the organization exceed $500. These bonds must be purchased at the expense of the organization. Position schedule or blanket bonds, governing the position and not the individual by name, may be used.
A record of all property owned by the organization will be maintained. This record should describe the property, the date it was purchased and the original cost. A physical inventory of organizational property at six month intervals is recommended. Physical inventories will be recorded in the organization's records. Inventory overages and shortages and any drops or disposition of property will have the written confirmation of the governing body. An audit of any inventory and fixed asset overages and/or shortages will be made before an adjustment to the general ledger is entered. Where a sizable quantity of property is owned, consideration will be given to the appointment of a property officer to sign and be held responsible for the property.
Financial statements will be prepared quarterly and submitted to the governing body for examination and approval. A copy of each financial statement will be forwarded for review to the Commanding General, MCIPAC (AC/S, MCCS) as appropriate.
Treasurers or custodians shall be either elected or appointed by advisory bodies. The authority to withdraw funds from bank accounts, as established, shall be signed by the President or senior member of the advisory body and forwarded to the banking activity with a copy furnished to the treasurer or custodian. The appointment letter for the Treasurer or custodian will state his duties, responsibilities and authority for disbursing funds.
The treasurer or custodian will prepare financial statements reflecting the entire period, to consist of a balance sheet and statement of income and expenses. A copy thereof will be furnished to the Commanding General, MCIPAC (AC/S, MCCS).
When a treasurer or custodian is relieved, he/she will invoice to his/her successor funds, property, accounts and records of the activity; and his/her successor will receipt for them. A combined invoice and receipt will be used, prepared in quadruplicate and all copies signed. Distribution will be as follows:
- Original filed with the original financial statement.
- Copy to President on senior member of governing body.
- Copy to newly assigned Treasurer or custodian.
- Copy to relieved Treasurer or custodian.