[16192] in APO-L
Re: Gotta Problem (bonding of treasurer)
daemon@ATHENA.MIT.EDU (Amick Robert)
Thu Feb 6 14:38:25 1997
Date: Thu, 6 Feb 1997 12:37:20 -0700
Reply-To: Amick Robert <amick@SPOT.COLORADO.EDU>
From: Amick Robert <amick@SPOT.COLORADO.EDU>
To: Multiple recipients of list APO-L <APO-L@VM.CC.PURDUE.EDU>
In-Reply-To: <199702060124.SAA14037@spot.Colorado.EDU>
It is not unusual for organizations to bond treasurers who are accountable
for the financial transactions of the organization. This provides
assurances that the organization will not lose significant funding in case
there is a "breach of trust." While there is a cost for bonding based on
the amount of "insurance" required to replace funds, it may be worth it
should the need arise. You may have an advisor or an alum who can help you
get a good rate on a performance bond.
It is not uncommon for treasurers of voluntary or non-profit
organizations to "succumb to temptation" when handling funds, even though
there is no history of such behavior in their prior involvements;
especially if there are no oversights or safeguards present to prevent
such actions.
It is very easy to rationalize that "no one will miss it" or "I will just
use some of the money now and pay it back later." Many folks who embezzle
funds start out this way and once they get away with it, the path becomes
a "downward spiral" until they are in serious trouble.
To "keep honest people honest" you need to have safeguards built into
your bylaws which require weekly or at least monthly printed treasurer's
reports at exec meetings and chapter meetings, review of bank statements
by exec board as part of the weekly or monthly process, and as a failsafe,
bonding of the treasurer. If someone does succumb to embezzlement, the
chapter will lose no funds as they are reimbursed by the bonding company,
who in turn goes after the embezzler to recover their funds; and they are
very good at what they do if the need arises. An audit of each
semester's treasurers records by a qualified person such as a CPA is
essential.
Prerequisite training and orientation of new treasurers should be mandated
in bylaws so that there is a clear understanding of the procedures; a
"standing rule" in the bylaws might specifically detail how the office of
treasurer shall be conducted including the acceptance, receipting,
accounting for funds; mandated regular reports, bonding requirement,
audits, etc. A CPA alum or faculty member might help draft such rules.
Moreover, the criminal and civil penalties and consequences of violation
of those procedures should be made very clear. Prosecution and conviction
for embezzlement is generally a felony which carries substantial fines and
imprisonment, and is devastating for anyone seeking a career or
profession.
A signed statement of acknowledgement by the treasurer accepting the terms
and requirements for holding the office would not be inappropriate.
Use of one of the software accounting programs such as Quicken can also
be very helpful in displaying the exact and current status of the funds.
Some Universities require student organizations to deposit their funds in
a student office of financial services account which is managed by full
time staff members of the University and funds are disbursed according to
very strict protocols and signatures on voucher requests.
It might be desirable to perhaps have an "apprentice treasurer" or someone
who shadows the current treasurer who then becomes "treasurer-elect" for
the next term and can easily step into the position.
Other posts have suggested requiring dual signatures, safeguarding the
checkbooks and having strict policies for the acceptance and management of
funds. It is also not a bad idea to have more than
one person involved in handling chapter funds, such as a fundraising chair
who may also have ancillary responsibilities with the treasurer.
Someone suggested appointing an advisor as a liaison to specific officers
and certainly one for the treasurer is a good idea to help the treasurer
understand their role and to facilitate difficulties before they become
significant problems.
Part of the advantage of being an officer such as treasurer is to learn
the ethical and proper way to manage funds for an organization, so this
office should be a positive and useful learning experience for the
individual who is elected to it.
Best wishes in L,F,&S
Bob Amick, Advisory Board Chair, Gamma Theta Chapter, University of
Colorado at Boulder
