Fiscal Controls
From tt-inc@inetia.com Mailing List

Some suggested fiscal controls during discussion on this matter:

Break the Chain, so that more than one or many individuals are required to embezzle or misappropriate. If a single person can receive the voucher, check the receipt, issue the check, and keep the books, then temptation is greater than if they must involve others to ignore the receipt, write the check, and make bad entries into the books.

Spot Audits, where the Treasurer, or grantee, never knows when someone will come to examine the books, check the facilities, compare the expenditures against what is physically present, or the books against receipts actually in hand, or spot check the receipts by calling the merchants to verify actual expenditures. Hiring local detectives to do perform unannounced visits to grantees if no Board member lives close by or can conduct these spot checks.

Using Bonded Accountants, where the Treasurer uses a bonded accounting service, which is motivated to keep the books straight else their insurance goes up, and the manager in charge gets fired. They double check what the Treasurer wants to pay, examining the receipts, and looking for patterns than might indicate mischief. This is a slight overhead, but on large grants might be just the thing!

Double Check, as in a second signature on large checks (a practice we already have in our Bylaws), or two names on the corporate account (a practice Brand is instituting in the corporate accounts he plans to set up), or one person received the vounchers and verifies them, another writes the checks.

Copy and Fax, where documentation on receipts and expenditures, bank account balances, etc., are made available to more than one person for audit and verification purposes.

Account Balance Check, where someone besides the Treasurer has authorization to check the bank account balances. Since this also gives the second person authority to withdraw, this might be the President, who is the second signature on large checks.